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Startups are transforming global trade in the COVID-19 era

Global trade watchers breathed a sigh of relief on January 15, 2020.

After two years of threats, tariffs and tweets, there was finally a truce in the trade war between the U.S. and China. The agreement signed by President Trump and Chinese Vice Premier Liu He in the Oval Office didn’t resolve all trade tensions and maintained most of the $360 billion in tariffs the administration had put on Chinese goods. But for the first time in months, it looked like manufacturers, importers and shippers could start to put two difficult years behind them.

Then came COVID-19, at first a local disruption in Wuhan, China. Then it spread throughout Hubei province, causing havoc in a concentric circle that eventually engulfed the rest of China, where industrial production fell by more than 13.5% in the first two months of the year. When the virus spread everywhere, chaos ensued: Factories shuttered. Borders closed. Supply chains crumbled.

“It has had a cascading effect through the entire world’s economy,” says Anja Manuel, co-founder and managing partner of Rice, Hadley, Gates & Manuel LLC, an international strategic consulting firm based in Silicon Valley.

The crisis has caused a drastic contraction in global trade; the World Trade Organization estimates trade volumes will fall 13-20% in 2020. And spinning activity back up could be tricky: Even as China starts to get back online, the slowdown there could reduce worldwide exports by $50 billion this year. When factories do reopen, there’s no guarantee whether they will have parts available or empty warehouses, says Manuel, who also serves on the advisory board of Flexport, a shipping logistics startup. “Our supply chains are so tightly-knit and so just-in-time that throw a few wrenches in it like we’ve just done, and it’s going to be really hard to stand it back up again. The idea that we go back to normal the moment we lift restrictions is unlikely, fanciful, even.”

Getting to that new normal, though, is a job that a number of logistics startups are embracing. Already on the rise, companies like Flexport, Haven and Factiv see a global trade crisis as a setback, but also an opportunity to demonstrate the value of their digital platforms in a very much analog industry.

Zoom sued by shareholder for ‘overstating’ security claims

Zoom has been served with another class action lawsuit — this time by one of its shareholders, who says he lost money after the company “overstated” its security measures, which led its share price to tank.

The video conferencing giant has seen its daily usage rocket from 10 million users to 200 million since the start of the coronavirus pandemic, which forced vast swathes of the world to stay and work from home. As its popularity rose, the company also faced a growing number of security and privacy problems, including claims that Zoom was not end-to-end encrypted as advertised.

Zoom’s later admission saw the company’s share price fall by almost 20 percent.

Shareholder Michael Drieu, who filed the suit in a California federal court on Tuesday, said he and others have “suffered significant losses and damages” as a result. According to the complaint, Drieu bought 50 shares priced at $149.50 but lost out when he sold the shares a week later at $120.50 per share.

Zoom did not respond to a request for comment.

It’s the latest class action served against Zoom in recent weeks. Zoom was slapped with another suit last month after Zoom’s iOS app was found to have shared data with Facebook — even when users did not have a Facebook account.

Zoom has doubled down on its efforts to improve its image in the past week, including a promise to improve its encryption efforts and by changing its default settings to prevent trolls and intruders from accessing Zoom calls without permission, coined “Zoombombing.”

Just today, former Facebook chief security officer Alex Stamos said he joined Zoom as an advisor. Zoom also said it has enlisted security experts and leaders to advise on the company’s security strategy.

Salesforce co-CEO Keith Block steps down

Salesforce today announced that Keith Block, the company’s co-CEO, is stepping down. This leaves company founder Marc Benioff as the sole CEO and Chair of the CRM juggernaut. Block’s bio has already been wiped from Salesforce’s leadership page.

Block stepped into the co-CEO role in 2018, after a long career at the company that saw him become vice chairman, president and director before he took this position. Block spent the early years of his career at Oracle . He left there in 2012 after the release of a number of documents in which he criticized then-Oracle CEO Mark Hurd, who passed away last year.

Industry pundits saw his elevation to co-CEO role as a sign that Block was next in line as the company’s sole CEO in the future (assuming Benioff would ever step down). After this short tenure as co-CEO, it doesn’t look like that will be the case, but for the time being, Block will stay on as an advisor to Benioff.

“It’s been my greatest honor to lead the team with Marc [Benioff] that has more than quadrupled Salesforce from $4 billion of revenue when I joined in 2013 to over $17 billion last year,” said Block in a canned statement that was surely not written by the Salesforce PR team. “We are now a global enterprise company, focused on industries, and have an ecosystem that is the envy of the industry, and I’m so grateful to our employees, customers, and partners. After a fantastic run I am ready for my next chapter and will stay close to the company as an advisor. Being side-by-side with Marc has been amazing and I’m forever grateful for our friendship and proud of the trajectory the company is on.”

In related news, the company also today announced that it has named former BT Group CEO Gavin Patterson as its President and CEO of Salesforce International.