We are hearing that a COVID-19 vaccine could be on the way sooner than later, and that means we could be returning to normal life some time in 2021. That’s the good news. The perplexing news, however, is that each time some positive news emerges about a vaccine — and believe me I’m not complaining — Wall Street punishes stocks it thinks benefits from us being stuck at home. That would be companies like Zoom and Peloton.
While I’m not here to give investment advice, I’m confident that these companies are going to be fine even after we return to the office. While we surely pine for human contact, office brainstorming, going out to lunch with colleagues and just meeting and collaborating in the same space, it doesn’t mean we will simply return to life as it was before the pandemic and spend five days a week in the office.
One thing is clear in my discussions with startups born or growing up during the pandemic: They have learned to operate, hire and sell remotely, and many say they will continue to be remote-first when the pandemic is over. Established larger public companies like Dropbox, Facebook, Twitter, Shopify and others have announced they will continue to offer a remote-work option going forward. There are many other such examples.
It’s fair to say that we learned many lessons about working from home over this year, and we will carry them with us whenever we return to school and the office — and some percentage of us will continue to work from home at least some of the time, while a fair number of businesses could become remote-first.
Wall Street reactions
On November 9, news that the Pfizer vaccine was at least 90% effective threw the markets for a loop. The summer trade, in which investors moved capital from traditional, non-tech industries and pushed it into software shares, flipped; suddenly the stocks that had been riding a pandemic wave were losing ground while old-fashioned, even stodgy, companies shot higher.
As TechCrunch reported that day, shares of Peloton fell sharply. On Friday the indoor cycling company closed at $125.46 per share. On Monday, after the vaccine news had been digested, Peloton was worth just $100.01 per share, off just over 20%.
Zoom was a similar story. It closed Friday worth $500.11 per share. By the time regular trading ended on Monday, Zoom was worth just $413.24 per share, off a little more than 17%. The next day Zoom lost more altitude, closing at just $376.01 per share, off nearly 25% from its pre-vaccine news Friday close.
Other shares also took lumps: Etsy dropped $25 per share, Wayfair tumbled, and even the mighty Amazon lost a little value, as investors weighed the future of e-commerce. The BVP Nasdaq Emerging Cloud Index dropped over 5%, showing how steeply some stocks lost ground thanks to optimism that the pre-COVID world might be reachable inside of 2021.
Positive vaccine news punishes pandemic-boosted companies like Zoom, Peloton, Etsy
But while investors were more than willing to drop select tech stocks, successive positive vaccine news has met rising COVID-19 numbers, pushing the early selloff bite into increasingly mild territory.
Since the start of November 9, the legacy Dow Jones Industrial Average index is ahead of the tech-heavy Nasdaq composite, but not by more than a point or two; investors voted with their feet, but more cut the valuation of overhyped stocks more than voted that the global tech industry was passé.
Remote work isn’t going anywhere
While the market may react to each vaccine announcement negatively for certain stocks, Box co-founder and CEO Aaron Levie jokes that it’s not necessarily an accurate bellwether of tech trends like work from home.
“I would say that first of all, I would rarely look at the stock market reacting as a kind of predictor for what the future of technology is going to be in a market.”
Levie says that it’s inevitable that we are moving to a world of more flexible work, and while different companies may have different approaches in terms of percentage in the office versus home, he says that all of the executives he has spoken to about this overwhelmingly are telling him remote is going to be some part of their work approach even after the pandemic ends.
“I have not talked to a single CEO or CIO in this entire pandemic that believes that things are going to go back to where they were a year ago. And my data points are in the hundreds of CIOs that we’ve spoken with. In general, everybody believes that the future is a hybrid workplace, and just depending on what industry you’re in, and depending on what kind of culture you have, you’re going to have a different kind of point on the sliding scale of how remote or how in person your company is going to be,” Levie said.
What we’ve learned about working from home 7 months into the pandemic
At the New York Times Dealbook conference, Google CFO Ruth Porat talked about what it could look like when employees start to return to the office, and she says they will be working out that office/work-from-home approach that Levie described.
“Our expectation on return to office, which is frankly substantially more complicated than moving everyone to home, is that we’ll end up in a hybrid work environment, some in the office, some at home,” she said. While the company believes that there is an innovation lift when people can come together, that doesn’t mean every employee needs to be in the office every day.
“We believe that innovation benefits from people coming together. [ … ] It’s about serendipity and it’s about collaboration not just within your team, but across teams, so we do look forward to getting people back in the office. That being said, working from home is working and there’s a productivity lift in not needing to come into the office. And so we’re going to continue to experiment with what is that mix,” she said.
And the data agrees
While you could argue that some anecdotal evidence doesn’t necessarily prove that working from home is here to stay, perhaps some data from consulting group KPMG will help convince you.
In July and August, the firm surveyed 315 CEOs at large companies across the globe, of which 100 were in the U.S., about a range of topics including what the future of working might look like post-pandemic. The survey found that 76% said that they will continue to build on their use of digital collaboration tools, a number that confirms what Levie had found to be true in his discussion with customer executives.
What’s more, 68% said that they plan to downsize their offices based on what they have learned during COVID. Less office space would suggest more people continuing to work from home. This fits with research from Dion Hinchcliffe, an analyst at Constellation Research, who has been studying working from home trends for many years.
“Five days a week in the office will now be rather unusual. Most people will go into a downsized office whenever it makes sense (client meetings, team get-togethers, all-hands) and work from remote where that makes more sense, which is most of the time. I get a strong sense people will go into an office 1-2 times a week to connect with the mothership but otherwise work from home or client offices,” Hinchcliffe told me.
It’s worth noting that blue collar workers, who have continued to go into work throughout this pandemic, have not reaped any of these benefits, and in fact quite the opposite.
“The former’s lives haven’t changed much and they remain on the front lines in transportation, hospitality, retail and manufacturing. Their lives have gotten harder and more dangerous, and not for the better as many of their jobs had to be eliminated and aren’t coming back. This is part of a relentless hollowing out of this class of workers,” he said.
Work gets done at home, too
We have learned that we can get work done while at home too, and due to the length of this current forced work from home engagement, Hinchcliffe says many workers have created spaces that will make it easier to continue doing that, even after we get the go-ahead to return to the office.
“Too much time and investment has been put into making workers productive at home now, and everyone has discovered the flexibility to work anywhere is terrific. Workers have additionally either built out remote workspaces at home or even expanded their homes to better accommodate remote work — the CIO of Home Depot told me their home renovation/addition business is booming because of this,” he said.
Karen Mangia, vice president of customer and market insights at Salesforce and author of the book, “Working from Home, Making the New Normal Work for You,” says that the tools are in place and this is an opportunity to permanently shift how we think of work.
“The organizations that use the current climate as an opportunity to examine and to transform culture, communication and trust will extend work from anywhere well into the future. And they’ll be rewarded with higher employee engagement and loyalty in return,” she said.
We have learned too much along the way to simply go back as it was before. All of the tools we are using to work together when we’re apart will still be valuable even when we come back together, and it’s clear how we think of work is going to be changed by this experience forever, no matter what Wall Street may think about it.
Amid pandemic, returning to offices remains an open question for tech leaders
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