The COVID-19 Sindustry 90-Day Forecast
6 minute read
- A contraction of the words Sin and Industry
- Any particular branch of economic or commercial activity with a strongly negative public image or stigma; the activity may be legal, illegal, or partially legal depending on the circumstances or geographic location
In my professional career, I’ve been involved (either directly or indirectly) in the development and launch of hundreds of new products and services. In many cases, what appears like an “innovation” in a “legitimate” industry was a long-standing practice in the Sin Industries, or Sindustries for short. What industry originally popularized e-commerce? Pornography. What groups initially invested in cryptocurrencies? Organized Crime. You get the idea. In all the coverage of the economic impact of COVID-19 / Coronavirus on the global economy, analysts rightfully focus on the most critical targets: Healthcare, medical devices, transportation, food, employment, and energy. But what about those industries people aren’t talking about? What about those industries you won’t read about in an MBA case study?
It shouldn’t surprise us that these industries tend to be so innovative – not just resilient, but what Nassim Taleb would term anti-fragile. Whether legal, illegal, or a mix of both hardly matters. They operate primarily out of the spotlight but are accustomed to massive shocks to their businesses – whether from government regulation, police actions, or civic-minded individuals and groups.
To brand all these industries “Sinful” is a bit unfair – only a tiny number are wholly illegal. However, the stigma surrounding them can be just as powerful. That’s how I picked the list: Negative public opinion, whether it’s deserved or not.
Why am I doing this? Two important reasons.
First, if history is a guide, we can expect the Sindustries to adapt and innovate more quickly than their more respectable counterparts – they possess stronger survival instincts. They’ll find the new opportunities that those other leaders can exploit…if they’re willing to listen.
The second reason is more ominous. In times of crisis and chaos, we are vulnerable. The media – both traditional and social – are rightfully fixated on the urgency of hospital beds, ventilators, economic impact, and “bending the curve.” While we’re distracted, criminals are taking advantage. If we don’t protect ourselves against more than the virus, we are in more danger than we realize.
It’s time to overcome our distaste for some (many?) of these industries.
How to read the forecast.
I’ve highlighted 23 Sindustries below. Each one features a summary of the most significant factors impacting them during the pandemic and their likely responses. The first set of Sindustries will likely benefit in the short term, the second will see mixed results, and the third will struggle.
PART 1: Sindustries likely to BENEFIT from the disruption.
|Firearms||Decisive governmental actions (seen as threats to personal freedoms) will boost gun sales in the United States, though probably only to the small percentage of people who already own firearms.|
|Pornography||The pornography industry is already well ahead of any other rival in digital content delivery. More time at home will increase consumption, even if new content production slows.|
|Burglary and Fencing||With many businesses closed, burglars will be able to steal unmonitored equipment and supplies because struggling businesses may not be able to afford to maintain security measures. Local police will be too busy responding to pandemic-related calls to do much to prevent them.|
|Hackers||With an increased number of people working from home (and using less-secure technology platforms), hackers will be able to exploit many more vulnerabilities.|
|Industrial Espionage||Rapidly changing situations and confused communication inside large organizations can open the door for watchful parties to exploit gaps in security or employees’ willingness to help.|
|Counterfeiters||Always quick to see the value, counterfeit products will crop up to meet the demand for medical supplies, PPE, chemicals/sanitation products, etc.|
|Organized Crime||Much of organized crime already takes place in cyberspace. Lax security from newly WFH (Work From Home) employees will lead to a boom in the theft business. Furthermore, organized crime tends to adapt quickly to changing conditions.|
|Personal Injury Lawyers||While sidelined for the moment, personal injury law firms will exploit the confusion to bring suit in multiple areas (employee law, health, safety, ineffective medical care, etc.)|
|Marijuana Dispensaries||Often classified as “essential businesses,” these suppliers should see an increase in business as people spend more time at home and suffer from anxiety.|
|Sex Toys and Lifelike Dolls||A newfound need to “socially distance” will likely increase the purchase and use of sexual stimulation devices, leading to innovations in more lifelike options if the aversion to physical closeness persists.|
|Cults and Extremist Groups||Extremist organizations flourish in crises as they can quickly adapt fear and panic, redirecting it to their memberships.|
PART 2: Sindustries likely to have both BENEFITS & DRAWBACKS from the disruption.
|Alcohol||Liquor store sales will spike; sales to bars and restaurants will dry up. Supply chains will struggle, especially in beer (cans are more expensive than kegs.)|
|Tobacco||Respiratory diseases should make smoked tobacco products (including vaping) less appealing, but quitting is difficult, and the impact should be modest (if at all). Longer quarantines may lead to increased sales in other forms of chewed and trans-dermal products.|
|Prostitution/Escort||Prostitution and escort services will be much more difficult in the short term. Practitioners will attempt to switch to “virtual parties” to maintain income. Some percentage will not return to the “in-person” version after the pandemic because they find success with virtual meetings and experience lower risks.|
|MLM Businesses||Many multi-level marketing businesses rely on personal connections and in-person persuasion techniques. The survivors will be digital-first business models and those that focus on “health” products.|
|Street Gangs||Street gangs operating in the open are exposed when few others are out on the streets. Their operations (as well as violence) should be lessened during quarantines. Many tech-savvy gang members will turn to cybercrime as an alternative to street violence.|
|Drug Dealers||Person-to-person transportation will be severely challenged in the short term. Additionally, supply chains from overseas and across borders will suffer due to closed borders. “Homebrews” (dangerous in many cases) will fill part of the gap.|
|Pawn Shops / Payday Lenders||Government stimulus packages will blunt the need for short-term, high-interest loans in many areas. However, no amount of stimulus will be able to address individual/family issues thoroughly.|
|Cryptocurrencies / Non-Fiat Currencies||In a crisis, consumers flock to “safe havens” rather than (what they perceive as) risky new ventures. However, the situation may accelerate some governments to create their digital currencies, normalizing the behavior and paving the way for broader adoption.|
PART 3: Sindustries likely to STRUGGLE with the disruption.
|Gambling||In-person gambling, both in tribal and corporate casinos, will nearly cease – especially given the population demographics (older) of those most at risk. Online gambling (both legal and illegal) will replace some, but not all, of the gap.|
|Home Party Businesses||In the short term, home party businesses will struggle. Online/virtual parties are much less personal and do not allow for the same level of socializing and peer pressure.|
|Online Dating & Sex||Person-to-person apps (e.g. Tinder) will suffer in the short term. Virtual “hookups” and dating are not as compelling.|
|Street Performers and Panhandlers||With foot and automobile traffic severely curtailed, those who make their living asking for handouts from passersby will struggle to earn enough.|
- Star in your own peep show. Look for ways to make the “virtual” experience more compelling – audio is a must, and video is quickly becoming one. But think about real-time user feedback and interactions. Adult “peep shows” provide rich user interaction and experiences and should be the “bar” to strive for.
- Lock the doors. Just because “everyone is pulling together” and the biggest fear on your mind is getting sick doesn’t mean criminals aren’t looking for opportunities. That means both physical security (surveillance of shuttered businesses), cybersecurity (password management, video platform vulnerabilities, etc.), liability protection (follow employee policies, etc.), and product validation (guard against counterfeiting).
- It’s time for some experimentation. Times of change open peoples’ minds to new experiences and ways of doing things. Don’t miss the opportunity to try a “crazy idea” that you’ve been thinking about or revisit an idea that didn’t gain traction in the past.