Telehealth, robotics, and online conferencing are among the sectors seeing a surge in demand
By Scott Kirsner | Boston Globe | March 18, 2020
For most people who get it, Covid-19 resembles the flu.
But for many parts of the region’s innovation economy, the impact of quarantines, a travel freeze, and event cancellations is going to feel like a heart attack. Some will recover; some won’t.
I asked entrepreneurs and venture capitalists to help me read the tea leaves. Are there some companies that might actually thrive in this environment?
Travel sites such as Kayak, TripAdvisor, Hopper, and Lola topped the list of those that will struggle through an unpredictable period when business people are staying home and consumers are anxious about cruise lines and flying. A lot of food-delivery services will see orders surge, but those that focus on office consumption, like Boston-based ezCater, which specializes in large orders, will probably watch revenue tail off as many workplaces go dark.
Stefania Mallett, ezCater’s CEO, says the company is experiencing a drop in orders from “the minority of companies where people can work from home,’’ but it’s seeing typical volumes from businesses where employees are still in the office — and still need to eat.
If there are “good’’ and “bad’’ columns, in terms of how the coronavirus outbreak affects businesses that are trying to grow, “nearly everybody goes into the bad column,’’ says Russ Wilcox, a venture capital investor at Boston-based Pillar. “We live in a complicated web of money flowing around, and as soon as a chunk of the economy gets turned off, the whole web shakes. Strange things will happen.’’
“In general, companies need to hunker down and prepare to weather a tough recession for a period of time,’’ says Maria Cirino, a founder of .406 Ventures in Boston.
“Colleges and universities will be the big losers,’’ predicts Helen Greiner, a founder of the robotics company iRobot and a Massachusetts Institute of Technology alumna. Students will start to wake up to the merits of taking online courses and earning certifications and degrees that way, while traditional education institutions “will still have to pay for their extensive housing and facilities,’’ she says.
And “as more people quarantine and reduce exposure to others, robots that help get stuff to their door,’’ helping warehouses to operate more efficiently, “will continue to be in hot demand,’’ Greiner expects. She adds that she wouldn’t be surprised “if a dozen startups were already working on a disinfecting robot for schools, offices, and hotels.’’
Since late February, Owl Labs, of Somerville, has seen a 60 percent increase in sales and a 67 percent increase in traffic to its website, says Mike Paffmann, a spokesman. What do they sell? A compact tabletop videoconferencing system that focuses on delivering high-quality audio and video and has a 360-degree camera that focuses in on whomever is speaking.
At LogMeIn in Boston, both “demand and use are spiking,’’ according to Craig VerColen, vice president of corporate communications. The company’s software facilitates virtual meetings, training sessions, and webinars. (In February, LogMeIn laid off about 300 employees, a few months after being acquired by private equity firms.) LogMeIn recently put together a package of software it calls the Emergency Remote Work Kit, offering it free for three months to schools, municipalities, and health care providers.
Perhaps not surprisingly, at Amwell, a Boston telemedicine company formerly known as American Well, “we are all-hands-on-deck managing inquiries,’’ says Holly Spring, vice president of corporate communications. Amwell works with about 240 health care systems to “make sure telehealth is seen and used as a first line of defense,’’ Spring explains.
Last week, the company was seeing a 30 to 40 percent surge in urgent on-demand patient visits through its technology, which includes a mobile app patients can use to have live video conversations with doctors.
Peter Kolchinsky, an investor at the biotech investment firm RA Capital Management in Boston, says he won’t be surprised if the telemedicine sector gets more wind in its sails in 2020. Companies developing antiviral medicines, diagnostic technologies, and vaccines could also benefit from additional investment and market demand — though Kolchinsky expects much of the antiviral and vaccine work to be supported by government agencies such as the Biomedical Advanced Research and Development Authority, BARDA, part of the Department of Health and Human Services.
“Government needs to either fund vaccine development or else incentivize it by clearly communicating a willingness to pay a profitable price for a specified number of doses to whoever succeeds in developing a vaccine,’’ says Kolchinsky, who earned a doctorate in virology from Harvard. “BARDA can do both.’’
Artificial intelligence and analytics software to deliver better intelligence, faster, about how viral outbreaks are spreading will get greater focus, says Michael Greeley, an investor at Flare Capital Partners in Boston. “In a world where intensive health care services may be rationed, we need better analytics to triage cases’’ and to improve how facilities are being utilized, Greeley says.
And then there’s Biobot, a Somerville startup that’s developing ways to analyze sewage in wastewater treatment facilities to detect viruses like this novel coronavirus, to understand how outbreaks are spreading and where they are most intense.
“In some diseases, people excrete viruses before they show symptoms, meaning that sewage can provide an early indicator of disease spread before people start seeking care,’’ Biobot cofounders Mariana Matus and Newsha Ghaeli wrote on a blog post last week. (Initially, Biobot has been working with governments to look at evidence of opioid usage that can be found in wastewater.)
Startups that tie into the theme of “cocooning’’ could find growth in the current climate, says Wilcox. “Being at home will remind people how much they want to feather their nest,’’ he says, including by buying furniture and home décor.
And startups that offer “live, digital-enabled home exercise,’’ like Peloton or Cambridge-based Hydrow, which makes a rowing system, could also see increased sales.
If you go full-on prepper or Mad Max, Wilcox says there’s a scenario in which people want to invest in “decentralized services’’ for their homes — their own backup generators, solar power systems, or even water-treatment gear.
George Colony, CEO of Forrester Research in Cambridge, says the firm expects providers of technology consulting services and tech hardware to feel the most pain in the near term, as big businesses pull back on investment. But Colony says that online education, cloud-based software and services, and speedy 5G wireless infrastructure could benefit a society in which it’s increasingly unpredictable where learning and work happen.
“Technology is always improving at a fairly predictable rate,’’ Colony says. “But what lags is culture, capital, and human behavior. When all those things catch up to the technology, you get a thunderstorm, and we really move forward. This is a moment for that.’’
