Mar 27, 2020 - Economy & Business

The coronavirus dip is worse than anything startups predicted

Illustration: Rebecca Zisser/Axios

For the last couple of years, startups have been preparing for a recession, but the coronavirus pandemic and its effect on the economy are unlike anything they predicted.

Why it matters: Even companies that had recession plans and have been modeling burn rates, cash flow, and dips in business are throwing those projections out the window and taking drastic measures.

Case in point: TripActions, a company whose app lets employees book their business travel, laid off three hundred employees this week — roughly a quarter of its staff, per Protocol.

  • Last October, co-founder and CTO Ilan Twig told Axios that the company had been preparing for a recession with cash in the bank and modeling potential decreases in business travel.

Between the lines: Whatever TripActions predicted about a recession was much milder than what it’s facing right now, as business travel has essentially dropped to zero across the U.S.

"This situation is one that virtually no one was prepared for," says Shift co-CEO George Arison, whose company recently announced salary cuts and furloughs.

  • "I mean, who would have ever thought that our entire economy would be 'shut down' for a month or longer?"

The big picture: Companies are rushing to stretch out budgets for as long as possible, given the fog of uncertainty hanging over the economy.

Go deeper: Sequoia Capital calls coronavirus "the black swan of 2020"

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Zipline drones deliver masks to hospitals; vaccines could be next

Zipline's drone drops medical supplies via parachute. Image courtesy of Zipline.

Zipline, a California drone company, has made its U.S. debut by delivering medical supplies to hospitals in North Carolina under a pilot program honed in Africa.

Why it matters: The effort, made possible by a waiver from the Federal Aviation Administration to Novant Health, is the nation's longest-range drone delivery operation and could demonstrate how drones could be used in future pandemics, Zipline officials said.

NHL unveils 24-team playoff plan to return from coronavirus hiatus

Data: NHL; Table: Axios Visuals

The NHL unveiled its return-to-play plan on Tuesday, formally announcing that 24 of its 31 teams will return for a playoff tournament in two hub cities, if and when medically cleared.

Why it matters: Hockey is the first major North American sports league to sketch out its plans to return from a coronavirus-driven hiatus in such detail, and it's also the first one to officially pull the plug on its regular season, which will trigger ticket refunds.

Rising home sales show Americans are looking past the coronavirus

Illustration: Aïda Amer/Axios

Americans are behaving very differently than they have in previous recessions — convinced that the coronavirus pandemic will soon pass, many continue to spend money as if nothing has changed.

Driving the news: The latest example of this trend is the Commerce Department's new home sales report, which showed home sales increased in April despite nationwide lockdowns that banned real estate agents in some states from even showing listed houses.