I'm Alexei Oreskovic, Business Insider's West Coast bureau chief and global tech editor. This week kicked off with a very special day. Not only was Monday the celebrated 4/20, it also marked my five-year anniversary at Business Insider. It's been an incredible honor covering the exciting world of tech for BI's smart and loyal readers.
What stories would you like to see us write more about? What companies or technologies are you excited about? Drop me a line at email@example.com .
This week: Netflix's downturn plan cash, credit, and content.
We got our first peek at how Big Tech is holding up against the coronavirus fallout on Tuesday, and it confirmed what the parent of any quarantined teen could have told you: People are spending a lot of time on Netflix and Snapchat.
The two internet companies reported booming user growth numbers for the first quarter. Netflix added nearly 16 million new paying subscribers, while Snapchat's audience increased by 20% to 229 million daily users
The real surprise was how well Snapchat's advertising business performed. A feared ad revenue meltdown, caused by big brands and small businesses frantically slashing their marketing expenses, has not yet happened.
That's good news for all the other ad-dependent internet companies out there, like Twitter, Facebook, and Google. And indeed, all of those stocks got a nice sympathy bump after Snap's earnings crossed the wire. But there's reason to be cautious. Snap noted that its 44% revenue growth rate in Q1, decelerated to a 15% clip during the first 19 days of April. And it slowed to 11% in the most recent week.
Yes, Snap's revenue is still growing, but the trendline is rapidly losing altitude. Perhaps that's why Snap stressed that in addition to the $2.1 billion in cash on its balance sheet, it has access to a $1 billion credit facility a reassurance that, by its very necessity, might seem concerning.
Netflix, which has $5 billion in cash on its balance sheet, also felt compelled to mention on its conference call that it has an undrawn $750 million unsecured credit facility.
Netflix also touted another notable rainy day fund, of sorts.
With film production halted throughout the industry because of the virus, streaming video services like Netflix, Apple, and Disney+ will face challenges satisfying their viewers' appetite for new content.
Not to worry, says Netflix. Thanks to a library of thousands of titles it has amassed, the company has an advantage over streaming video rivals confronting the "shortage of new content."
As far as shortages go, this one is a decidedly first-world problem. But it's also a fitting expression of our quarantined times. Netflix has stockpiled something more valuable than cash or credit. It's got content.
Even a toothbrush needs a halo effect
An electric toothbrush may seem like a humble building block for an empire. But for Simon Enever, the 32-year-old founder of Quip, the toothbrush is the bridge over which an army of products, from floss to tongue scrapers, will conquer the broader oral care market.
As Melia Russell reports, Quip's dental masterplan has suffered a few setbacks , many of which occured just before the coronavirus struck. Now the startup has refocused, laid off some staff, and put some initiatives on hold. And Enever says the company is better positioned to get through the coronavirus storm.
As a standard-bearer for the new breed of direct-to-consumer brands, Quip is sure to be closely watched in the months ahead.
Read Melia's full story here:
Former employees of Quip, a $170 million electric toothbrush startup that cut 10% of staffers weeks before the coronavirus hit, say a range of issues could frustrate its ability to ride out the pandemic
Tech workers are sweating...
With 22 million Americans filing unemployment claims in the past month, anxiety about layoffs is running high.
The anonymous social network Blind surveyed nearly 7,000 tech workers for BI in March and in April asking: "Are you concerned your job security will be negatively affected by the economic trends stemming from the Coronavirus?"
Those who answered "yes" are depicted in blue in the chart below. The results show a wide disparity in opinion among workers at tech companies.
At Expedia, a staggering 95% of workers surveyed expressed concern. (The company, which is closely tied to the devastated travel industry, had already laid off 12% of staff in February.) Worries at Lyft shot up over the past month, while Facebook workers appear to be keeping relatively calm.
Check out the full survey results, which you can read here, from workers at Apple, Salesforce, and numerous other big tech companies.
Sound bite of the week:
"Our biggest problems generally don't have market-based solutions and the true solutions often aren't aligned with profit maximizing activities the way they are currently defined."
Former US presidential candidate Andrew Yang, responding to Marc Andreessen's essay prescribing a surge of entrepreneurial projects to solve big problems like climate change and pandemics.
Not necessarily in tech:
That's a wrap. Thanks for reading, and remember, if you like this newsletter, tell your friends and colleagues they can sign up here to receive it .
- Marc Andreessen's essay on building things overlooks a key point, according to former presidential candidate Andrew Yang: 'Our biggest problems generally don't have market-based solutions'
- Former employees of Quip, a $170 million electric toothbrush startup that cut 10% of staffers weeks before the coronavirus hit, say a range of issues could frustrate its ability to ride out the pandemic
- A Silicon Valley lawyer who works on tech offerings thinks the IPO window could reopen later this year. But he says only a very small group of companies will be able to go public.