UnlocksJanuary 7, 2022
The periods following crises have been some of the most prosperous in history, often catalyzing bold investments in science, former enemies, and the comity of man. So, with a 2021 cocktail that included a pandemic and an insurrection, I’m expecting Champagne and cocaine for a good decade.
A cornerstone of sustained prosperity is the unlock: unleashing a leap forward with a new approach. Thinking different, if you will. An external shock compels us to leverage existing resources in fresh ways. In these moments, it’s less about new or more than it is about rearranging the materials we have at hand.
Unlocks are often inspired by new technology. But 2021 may inspire unprecedented unlocks via billion-year old tech — a nucleic acid molecule in a protein coat, too small to be seen by light microscopy, able to multiply only within the living cells of a host. More commonly referred to as a virus. The “Pandemic Dividend” could be significant.
In the U.S. we fetishize tech billionaires, elite universities, and incarceration. We’ve long been a global outlier, imprisoning far more of our citizens than any other country. The U.S. spends $88.5 billion a year on prisons — more than we spend on the Department of Justice, IRS, EPA, and NASA combined. What do we get for that money? Incarceration increases infant mortality by 40%, and a child with an incarcerated parent is five times more likely to go to prison themselves. The real expense of incarceration in America is closer to $1 trillion a year. And yet nearly two-thirds of federal prisoners are convicted again within two years of release, one of the highest rates in the world. It turns out that the U.S. prison system mirrors many of the “5-star” substance abuse rehabs in my hood (Delray Beach), which should be labeled recidivism centers: They seem to be aiming to create lifelong customers.
The virus may help us kick the habit. The inability to socially distance and poor sanitary conditions meant Covid spread four times faster in prisons than on cruise ships. In response, the U.S. Bureau of Prisons released 36,000-plus inmates to home confinement to reduce the spread — more than 20% of federal prisoners.
States have largely failed to follow suit, but they should. When states significantly reduce their prison populations, crime rates fall faster than the national average. Between 1999 and 2012, New York and New Jersey downsized their prisons by 26% — and violent crime dropped 31% and 30%, respectively. Diversion and rehabilitative support programs reduce recidivism.
Last month, the Justice Department said thousands of inmates released because of the pandemic would be allowed to remain in home confinement — a literal unlocking that could be the catalyst for serious progress. Among other things, it will put more desperately needed men back into lower-income homes.
Siloing in place meant we started getting everything delivered. Grocery aisles have been dispersed to our homes, saving us time and reducing traffic and emissions. And we’re likely just getting started.
Our current food delivery model is inadequate and inefficient. Perishable food transits from holding location to holding location, spoiling on shelves or in our homes and refrigerators. Millions in R&D has been spent on predicting how and when we’ll shop, so bananas will be luteous when we show up to the store. Delivery is greener: A University of Washington study found grocery delivery trucks produce up to 75% less carbon emissions per customer than driving to the store when they’re efficiently routed.
The “dark store” model could increase efficiency further. Here’s a strategy rapid-delivery companies including Jokr, Getir, and Gopuff are leveraging: They’ve decentralized the supermarket across a network of hyperlocal grocery stores, then e-pedal fresh produce to homes within a 1-mile radius in 15 minutes. Reducing the last mile to within a short pedal’s distance (vs. the average 6 to 9 miles with traditional delivery) conserves time and energy, while more groceries are packed into fewer trucks on the back end.
Grocery could also be the foundation for a more robust last-mile delivery infrastructure that could supplant the inefficient package-delivery model we have today, a relic of a time when overnight delivery was a high-margin service, not the price of entry.
Unlocking widespread grocery delivery will do more than save us trips and gasoline. It could improve the diets of the 19 million Americans who live in food deserts (places where the nearest grocery store is more than a mile away). Obesity rates are high in these areas, where fast food restaurants are cheap and ubiquitous. There are roughly 39,000 grocery stores in the U.S. vs. 247,000 fast food restaurants. But there are 300 million smartphones.
Rethinking the grocery supply chain could help address our obesity problem, something we frequently choose to ignore out of fear of cancellation and hurting other people’s feelings. Four in every 10 Americans are obese. For children, it’s 1 in 5. Obesity impairs immune function, increases risk of heart failure, and increases Covid fatality. Thirty percent of Covid hospitalizations are attributed to obesity.
It’s been well covered, but that’s because it’s a big deal. Remote work saves people and businesses time and money. Let’s do the math:
The average commute time in the U.S. is 26 minutes each way. It takes the average American around 20 minutes to get ready for work. Remote work removes that commute (52 mins), and with no suit or hairdryer to worry about likely cuts getting-ready time in half (10 mins): That’s 62 minutes saved per day. The National Bureau of Economic Research estimates the value of time to be 75% of the after-tax mean wage rate. For the typical American knowledge worker, that comes out to $30 per hour, thus saving:
- $155 per week (5 hours 10 minutes)
- $620 per month (20 hours 40 minutes)
- $7,440 per year (10 days 8 hours)
Longer term, this trend will provide greater flexibility in housing, transportation, and workforce composition. There’s little rational basis for knowledge work to be structured like 19th century factory employment, and the remote work unlock will liberate us from that archetype. Many frontline jobs cannot be done remotely. But for those that can, the benefits are real. Remote work has unlocked time that can lead to a healthier and more prosperous life.
When the virus hit, we reduced bureaucratic complexity and sent a $1,200 check to every American citizen earning up to $75,000/year, no questions asked. You didn’t have to apply for eligibility or register your personal information with a government authority or wait in a line — the money just arrived. We also expanded child tax credits and food stamp programs. It transformed many of the lives of lower- and middle-class people and cut the number of Americans living in poverty in half.
We should continue to embrace simplicity in policy and apply it to other areas, specifically our tax code. Most Americans don’t have the time or means to navigate the complex administrative maze that is the U.S. tax system. The wealthy, on the other hand, pay lawyers, accountants, and advisers to navigate by starlight. Some of the brightest people in my professional circle do nothing but help me and other wealthy individuals avoid obstacles of our own making (the tax code). They should be doing something else. Simplicity unlocks human capital.
Artificial barriers benefit those with the resources to circumvent them, and the rest of the nation is then left to bear the burden: We lose $189 billion per year to tax avoidance. And complexity makes policing tax evasion harder as well. In 1960 the IRS audited 3.2% of U.S. tax returns. Today it audits 0.21%, despite increased spending. Adjusted for inflation, the IRS spent $34 for every tax return filed in 1960. Now that figure is $51.
We’ve also let corporate actors evade their responsibility to fund the infrastructure on which they build their empires. In the early 1900s corporations and individuals contributed an equal share of taxes to the economy. Today individuals pay 8% of U.S. GDP in taxes and corporations pay 1%. In 2016 more than half of U.S. multinational corporate profits were booked in tax havens abroad.
In sum, complexity is a tax on the poor. We need to close the loopholes in our tax system and implement a simpler mandate. A semi-flat tax of 10% (<100k), 20% (<$1m), and 40% (>$1m). People would be shocked if we had the sack to ask everyone to pay taxes, and for exceptionally wealthy people to again pay what they paid through most of the 20th century. Simplicity could be an unlock that helps bring economic equity and amass the resources to restore any great nation’s ballast: its middle class.
The Iron Throne
The biggest potential unlock stems from the reshaping of a $4 trillion sector: health care.
Pre-Covid, less than 1% of doctor’s office visits were virtual; now that number is more than 30%. We used to sit in the waiting room for anywhere between 20 minutes and 2 hours for a doctor to confirm we were sick and then write us a note to enter a pharmacy and spread more disease. Now we put a Q-tip up our nose while watching Boba Fett and wait 15 minutes for a red line to appear.
The opportunity to disperse health care to our homes, smart speakers, and phones could not only save billions of hours, it could disperse preventive care to tens of millions of Americans who only access care once a problem has become more expensive/dangerous to treat. This warrants its own post — coupled with the vaccine research spillover — as they could be the silver lining that rivals the size of the cloud.
What’s Your Unlock?
What’s gotten you here today won’t get you where you need to be tomorrow. The ground beneath us has shifted. But there is opportunity everywhere … for each of us. We can look at the crisis, the changes in our economy and technology, and ask: What is the unlock? For me, it’s simple. In 2014, when my boys were 4 and 7, I spent 211 days on the road. Pre-Covid, the idea of charging someone to do a virtual talk, attend board meetings, or teach a university-level class remotely was nearly unthinkable.
So my unlock is an easy one and (admittedly) a function of privilege: Until they’re out of the house, I’ve decided I won’t spend more than 50 days a year away from my boys. They were born yesterday, and tomorrow they’ll be gone. All my bullshit virtue signalling about being a great dad will be just that — bullshit — unless I log the hours. Note: There’s no such thing as quality time with kids. Just time, as the moments of real engagement are elusive and unexpected.
As we register our losses, can we also find the courage to be more expressive and loving with the people who matter to us? Can we command a better sense of the finite nature of life and forgive ourselves and others for our mistakes? Can we no longer take our liberties for granted, and acknowledge that to enjoy these freedoms without contributing is infantile? Can we demonstrate more grace?
What is your unlock?
Life is so rich,
P.S. Looking for unfiltered insights into tech, business, politics, culture, and more? Apply to attend Pivot MIA today! Hosted by me and my co-host, Kara Swisher of New York magazine’s Pivot podcast, this brand-new, three-day conference will assemble the hottest names across various industries for cutting-edge conversations at two of Miami’s most stylish venues, the Faena and 1 Hotel. It’s happening February 14-16 — don’t miss it.
P.P.S. If it takes 10,000 hours to master something, I’m definitely an expert at Twitter feuds. Speaking of which, Malcolm Gladwell is guest lecturing on the Product Strategy Sprint with Adam Alter. Sign up now.