The 2011 fictional book “Ready Player One” previewed our world in the year 2045: A dystopian society gripped by economic stagnation where children go to virtual school, food is paid for online and delivered to doorsteps, and people mostly shelter in place and live their lives digitally. Sound familiar?

With the rapid change to our lifestyles, brought on by the current pandemic, real-life tech isn’t waiting until 2045 to hack into every industry. It’s not only weathering the current crisis with better business models but setting itself up for the future by becoming indispensable for businesses and individuals alike.

While the world is suffering, many digital-first companies just got 3-4 years of user growth in 2 months through forced adoption of their tech. Simply put, the future is coming faster.

Through cash on hand and lean business models, the tech industry is surviving the Covid-19 crisis

While industry revenues are dropping across the world, cash remains king. People are shopping less, businesses are spending less, and we’re all waiting for a sense of normalcy to return. In the meantime, the lifeblood of businesses is money, and it’s drying up for many of them.

Cash-rich businesses, however, can continue to operate through a slowdown in sales. Additionally, when it really hits the fan, they can acquire desperate competitors who didn’t have a large enough rainy-day fund. The tech industry is generally better positioned for slowdowns due to the nature of its low cost, high-value digital services products. In 2016, JP Morgan published a small business report which showed small business cash buffers by industry. I’m betting the numbers aren’t much different today:

This seems obvious from a cash-burn standpoint: Tech companies can hold digital assets, and rarely have expensive real estate warehouses stocked with unsold inventory. Most of their salespeople interact digitally rather than in-person, reducing personnel costs. Being infrastructure light and having low overhead leads to better cash flow and retention.

When you look at large businesses in the stock market, tech companies dominate the cash-reserves leaderboard. The numbers below are from Mid-March 2020:

Through user growth, tech businesses are positioning for the future

Consumer-facing retail and service companies that position themselves digitally have a tremendous competitive advantage of their peers. How big? Consider this: over 80% of people start their next purchase with an online search. And by 2021, mobile devices will influence over $1.4 trillion in locally based sales.

I expect this pandemic to only accelerate these trends as more consumers get used to shopping for everything from clothing, food, goods and services online. Not only will the e-commerce retailers’ benefit, but the service providers will as well: going digital used to be a new line of business for industries, but in this environment it may be the only option to stay open for business. The tech companies will be the backbone and provide solutions to every other industry for digital transformation.

Take a look at some of the businesses who are selling digitally in this crisis:

Business to business solutions abound as well: Tech companies were there to provide solutions as we work and shelter in place. As a result, Salespeople and Schoolkids alike were forced to adapt Zoom meetings, collaboration over Slack, and sharing documents in the cloud. There’s no question that executives are seeing the cost-cutting solutions, and it’s expected many of these solutions will be here for the long run.

Our world continues to change, as it always has. Bain consultants wrote a smart piece worth reading on the importance of accelerating digital transition HERE