I accidentally ended up in New Zealand during corona. here’s what I learned
Exactly a year ago on May 13, 2019, the only thing I knew about New Zealand was that Lord of the Rings was filmed there. Oh and that there were more sheep than people from a 4th grade social studies project.
It was just around the time I was starting my second company, and we wanted to try something different: a fully remote team. New Zealand looked like a great location to spend some time. It was English-speaking, relatively close to our supply chain in China, and seemed to have amazing nature, hiking, beaches and sailing. A combination you really can’t find outside of the SF/Bay Area.
It seemed like a lot of other folks had the same idea before me. New Zealand had a visa specifically for founders focused on positive global impact to move to the country to start and operate their businesses from here. The Global Impact Visa was the brainchild of two brothers from California who moved to NZ after selling their company. It is a partnership between Immigration New Zealand and the Hillary Institute for international leadership. To get the visa, you have to apply and be invited to join the Edmund Hillary Fellowship (EHF). After 3 years, if you had engaged and contributed to NZ and the EHF community, you could apply for permanent residence. Seemed like a sweet deal.
I got accepted to EHF, got the visa in February, and in early March, when America started seeing the first cases of the virus and western countries started seriously considering closing borders, I decided to hop on a plane to New Zealand. I arrived in Auckland airport on March 18. The next day New Zealand closed its borders to all non-citizens. At the time I remember thinking that coming here was either a good move or a really really bad one.
At first it was pretty bad. I had to stay cooped up in a cramped city apartment for 2 weeks of self-isolation, and right as it was ending and I was looking forward to exploring the whole country went into one of the most severe lockdowns worldwide. And not knowing anybody in the country made it not just a physical isolation but a social one as well.
And it stayed this way until restrictions began loosening in early May. In that time New Zealand managed to do something remarkable: eliminate pretty much all new cases of coronavirus. There have been no new cases reported all of last week. This is impressive because it shows you what’s possible. If you have decisive leaders, a trust in government and most importantly a respect for science, you can defeat coronavirus (and anything else for that matter). It’s impossible to know the result if the same approach had been applied in the US, but we likely would’ve had fewer deaths and less of an economic impact than what we’ve seen to date.
How come it worked in New Zealand? One major factor is that the country is already pretty well socially distanced. There are about 5 million people. Slightly bigger than the population of Los Angeles. Spread over an area the size of Colorado.
Another big reason is the strong social contract between the government and its people which allows the people to trust the government and sacrifice when necessary for the good of the entire country. When coupled with openness, transparency and compassion you have the key to defeating corona and anything else for that matter. You can see this in other countries that have successfully controlled: Germany, Taiwan, Singapore, and the Scandinavian countries.
I’ve been thinking about what we in the US can learn from New Zealand and other countries like it because we’ve clearly fumbled. With 4.25 percent of the world population, we have 30 percent of attributed pandemic deaths so far. I think the key lesson is this: when people have high trust in the government to do the right thing for them, that country functions effectively. In a post-corona future, I believe more great companies will be built outside the US because of this. Unless we reverse course.
What does this mean exactly? It’s pretty easy to demonstrate using 2 different types of workers at a hypothetical tech company. Employee #1 does intellectual stuff sitting behind a computer and employee #2 does menial stuff like packing boxes in a warehouse or driving people around when he gets summoned through an app. The first gets shuttled around, fed, educated, massaged and fitness trained. The second is squeezed for more work, paid less over time, given no health insurance, and eventually pushed out when he gets too sick or injured to work. Now who do you think is more likely to start a new company?
When you have a bunch of #2s and they are treated poorly over a long enough time, they get angry and start revolting. Exhibit A is all the gig-economy workers who are protesting Amazon, Uber, Instacart etc. All this disruption makes it even harder for #1s to start their companies or to just do their work.
Somehow many people in our government think that our country should be run like this hypothetical tech company. So you have 44 million people without health insurance, and another 44 million who are saddled with college debt. That’s close to a third of our population that’s been given the short end of the stick. However our nation differs from companies in one important respect: you can’t fire citizens. So they stay with you and continue to make themselves and their plight known.
It’s no coincidence that the most talked about proposals from the Democratic primary a few months ago were Universal Basic Income, Universal Healthcare and College Loan Forgiveness. It’s mind boggling that the richest country the world with the best universities and the best healthcare somehow manages to saddle huge swaths of the population with student debt and refuses to provide them adequate healthcare.
It’s crazy not because it’s morally repugnant but because it’s economically inefficient. In the same way that all great companies provide benefits to all their employees because they understand the important cultural signal this sends about the symbiotic relationship between management and employees, all rich countries also provide such basic services.
But when such systems really shine is during pandemics. In the same way that the biggest stock market winners have been the big tech companies with great benefits and strong internal alignment, the biggest winners in corona virus will be the countries that have a strong social contract with people that has allowed everyone to go into lockdown quickly and efficiently and eventually come back out on the other side. It’s easy to ask people to take such measures when their downside is capped.
In the US, going into lockdown has an uncapped downside for the vast majority of people. You lose your job, then your health insurance. God-forbid you get sick because then you have to pay out of pocket or be saddled with debt, risk getting evicted if you can’t pay rent, and end up living in a tent on the streets of SOMA. This is a very real and present risk for many people in the US. Which is why so many people are resisting lockdowns, or trying to end them prematurely: it’s the only rational thing for them to do to not end up homeless and in debt. And their plight ricochets across all social strata: whether it’s Jeff Bezos who gets his house graffitied and derided in the press or your takeout and groceries that don’t get delivered. Or the overloaded hospitals which not only can’t treat you because of staff shortages but actually spread coronavirus because of inadequate treatment facilities for the overwhelming number of patients. So not only do these people negatively impact society, but they cause negative externalities on everyone else.
So how does all this affect future innovation? Well, a more equitable nation is just more stable and more predictable. And when you have the choice of where to start a business, you want to control your risks. It’s ironic that Covid19 has the worst effects not just on people who have pre-conditions, but nations as well.
I hope that we don’t take the idea of American Exceptionalism too seriously. Believing that this too shall pass, and everything will be ok. In today’s global, internet-connected world, companies can be created anywhere, operate fully remotely, and take advantage of talent arbitrage to hire cheaply in developing nations. Networks matter, but as long as you are already in the right networks, where you physically are in the world matters less. This means that the era of Silicon Valley and great American companies may be over. Unless we use this pandemic to create a country that is fair and equitable, we may see the 100+ years of American economic dominance coming to an end.
Special thanks to: Max Manakov, Jared Griffin, Daria Zhao and Iryna Pentina for reading drafts of this.
