Life in the time of covid-19

I run a private Slack group for Fintech nerds, and Covid-19 has been a hot topic there. I posted a rant there, and thought I’d post it publicly as well. So here are my thoughts on all this.

Current Situation

• This is a global pandemic, and we are all in a bad situation. There is no doubt about that. So we should all accept that and move on to figuring out what we can do.
• From a public health perspective, I don’t have much to say. Listen to credible sources wherever you are (obviously not Fox News). Avoid travel. Wash hands. Work from home. Cancel large events.
• From a personal perspective, do the best you can to take care of your friends and family. Try to shield at risk folks (older people with co-morbidities) as much as you can. I put my affairs in order a long time ago, so I have no worries about being run over in the street tomorrow.
• From a business perspective, it is really hard to predict anything right now. Business data is backward looking, and its pretty useless right now. Stop forecasting, stop pipeline analysis, stop demand forecast. Just grow the pipeline, sales, customers as much as possible. And survive the next few months.
• My startup Sila is well funded. We are planning to keep headcount and burn as low as possible. Goal is to survive till at least 2022 in a very bad general economic situation.

Near Future

• I think we are already in a recession. Q1 growth will be flat at best, Q2 will be negative. With Trump sticking his head in the sand, even Q3 might not see a recovery.
• Every restaurant in Italy is shut today. Only Pharmacies and Food markets are open. And this is a country with an aging population and 135% debt-to-GDP.
• Several other countries in that boat as well. So we will see a financial crisis by the fall. Maybe sovereign debt crisis. I think Deutsche Bank will finally go bust this time. Some Italian banks too most likely. They will all get bailed out of course. But you can only bailout so many people. And ordinary folks are pretty tired of bailouts after the last time around.
• This is a supply shock. No amount of money printing will stop a virus, and after the virus is gone, no amount of money printing will create a new factory, or new food, or anything of real value. For that we will have to get people back to work. At least 98% of people will survive, hopefully many more. But we have to get them back to work efficiently.

Possible outcomes

• My dream is that this crisis will catalyze the creation of a new financial system, one where the central bankers answer to ordinary people, and prioritize the needs of individuals and businesses, not the survival of banks.
• What will happen when cities in lockdown run short on food? How will the millions of Americans in the 1099 economy survive in lockdown? What happens to the Uber rider, the TaskRabbit doer, the neighborhood cafe Barista? Many many small businesses will shutdown. What happens to their employees? How about the 118k kids in the NY public school system who will be homeless when schools shutdown for months ?
• Which leads to my final fear. In my darkest moments I worry about the breakdown of law and order.

Then I get back to work, cause I am Indian and thats my Dharma.

About the author

Shamir Karkal is the co-founder and CEO of Sila. A software engineer turned finance and banking expert, Shamir previously co-founded Simple and headed the Open Platform at BBVA. As a serial entrepreneur and fintech investor, he’s deeply involved in building the fintech ecosystem and proud to have been an angel investor in TransferWise, EarnUp, MPOWER Financing, Fabric Insurance, and others. He is also a volunteer at iSpirt.