SAN FRANCISCO—Jake Medwell and Drew Oetting, roommates in this city’s Russian Hill neighborhood, usually start each morning with an intense partner workout and shots of apple cider vinegar. This past Tuesday began with a frantic phone call from the State Department.
The government wanted surgical masks—hundreds of millions of them, to satisfy a potentially catastrophic shortage at home and abroad for protective gear against the coronavirus. Messrs. Medwell and Oetting, 30-something venture capitalists with investments in logistics companies, have in a week cobbled together an operation that has become an improbable gateway to hundreds of millions of protective supplies stored away in warehouses, factories and garages across four continents.
A world-wide hunt for masks, gloves and other equipment rests in part on ragtag efforts like this one. The roommates are juggling their day jobs to lend a hand to health-care providers and government agencies that are short of the needed supply. Dressed in hoodies at standing desks set up on the kitchen island, they scour the globe for hidden troves, negotiate pricing with the sometimes unseemly characters hoarding them and help arrange delivery.
Their negotiations are carried out in hectic phone calls and WhatsApp messages, with occasional appeals of “bro,” and “dude,” mixed with some pidgin Spanish. They call strangers “buddy.” Mr. Oetting, borrowing from the parlance of Silicon Valley, summarizes the task as “hacking together supply.” Both say they are motivated by a sense that their business skills can be applied to a greater purpose.
Cathy Ross, deputy director of the Hawaii Department of Health, says when first introduced to the team she was skeptical, but now is in contact with them about supplies almost every hour she’s not asleep. The first shipment of 200,000 top-line masks, is due to arrive in the state next week from China. “It has been fast and furious,” Ms. Ross said. “This is not a time to be risk-averse.”
It can take calling in a decade of favors to get the goods. One contact, investor Robin Chan, introduced them this week to the former presidential candidate Andrew Yang, who helped get them hooked in to get supplies to the State of New York in just 48 hours.
The team calls themselves “Operation Masks,” which they incorporated as a charity. It isn’t taking fees for its efforts.
“This is a tsunami,” Mr. Chan said, “and we are just trying to build some row boats.”
The U.S. faces a desperate shortage of coronavirus-fighting equipment. Federal officials said last month they had reserves of only 12 million respirator masks, yet projected demand for 300 million.
The Department of Health and Human Services estimated earlier this year that the U.S. could need more than 3.5 billion face masks if a pandemic took hold domestically, which it did with a vengeance this month.
The problem is compounded by the decentralized nature of the U.S. health-care system. Whereas hard-hit nations like Italy and China can buy equipment for their whole country at once, U.S. hospitals less frequently band together.
Prices for the coveted N95 mask, preferred for its ability to block out viral particles, have shot up this month from around $1 apiece to $5 or more, depending on the supplier, buyers said. A single hospital may burn through tens of thousands a day.
“States are competing against each other,” Mr. Yang lamented in an interview.
Some countries are willing to pay almost any price. Andy Tian, a Beijing-based financier helping find idle factories, said: “The competition is simply everyone in the world.”
Operation Masks is one of a handful of unlikely efforts to spring up in just the past week. Two Yale University dropouts run a nonprofit organization called Helena, bankrolled by retired private-equity billionaire Ray Chambers, that is dispatching former soldiers to check out depots of goods in warehouses in the New York metropolitan area. Another group, Project N95, is amassing little-known suppliers in China and elsewhere to stock large U.S. health-care systems, representatives said.
The efforts are frenzied, and often end in disappointment. Shipments sometimes don’t show up, or what is delivered isn’t up to U.S. standards. The market has become almost entirely prepayment, meaning hospitals must assume considerable risk up front. Products of manufacturing giant
are the gold standard, and fakes proliferate.
Tommy Hendrix, a retired Army officer working with Helena, rushed from his home north of Manhattan on Tuesday to check out an unmarked warehouse full of tens of thousands of masks for cash on delivery for New York hospitals. He ferried a sample to City Hall, for approval by health staff. It was rejected as offbrand and unsafe.
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“It does have this sketchy, very icky feeling,” Mr. Hendrix said. “There’s a certain sort of person who thinks they are very cool because they hoarded 10,000 masks in their garage.”
Henry Elkus and Sam Feinburg, who founded Helena and between them boast eight semesters at Yale, spent part of Monday in Mr. Feinburg’s blue Tesla driving through industrial parts of Culver City, Calif., in search of a 20-million-unit trove of masks. As they arrived at the address given to them, they received a text message: The masks were no longer for sale. “An awful lot of the supply channels right now are not what you would describe as ‘above board,’ ” Mr. Feinburg said.
The technology industry is by fortune of geography particularly well positioned to help. Most of the industry’s biggest names are based in the San Francisco Bay Area, where local regulations put in place for wildfire season mandate that large employers keep protection gear on hand.
donated some 720,000 masks from what founder Mark Zuckerberg called its “emergency reserve.”
separately pledged to donate 10 million and five million masks, respectively. Representatives of the companies separately wouldn’t comment on the origins or time frame for delivery of the supplies.
The mysteries around where the supplies might be hidden—and who is able to get them—have sparked something of a parlor game in Silicon Valley circles, with industry executives teaming up, and occasionally competing, to land orders.
The game, or at least part of it, is played in Messrs. Medwell and Oetting’s actual parlor, where they live and work together at venture firm 8VC.
The effort began last Monday, when Mr. Oetting, 29 years old, heard from a small logistics company that normally moves pricey goods like cashmere sweaters. With the luxury market in free fall, the company suddenly had access to loads of masks and ventilators and wondered if Mr. Oetting knew of anyone in need. On a whim, he shot off a text message to a high-school classmate, Zach Wahls, now an Iowa state senator. Mr. Wahls messaged a few contacts at the University of Iowa hospital.
One texted him back within minutes: “Are you for real? This is too good to be true.”
The roommates—so close they once dated the same pair of sisters—blasted out word to their wider network of warehouse owners and disparate manufacturers in places like Brazil, Vietnam and Saudi Arabia. Almost immediately they were overrun by dozens, and then hundreds, of calls and text messages—some legitimate, and some less so. Some strangers sent photo evidence that seemed uncomfortably close to a ransom note, of masked strangers in front of rows upon rows of pallets.
Borrowing on free legal help from business partners, they set up a formal charity to help hospitals and governments request and pay for supplies. They help procurement departments and several state health organizations, who are usually accustomed to waiting 90 days to pay bills, to transfer millions of dollars in an instant to close a deal. The issue, they say, isn’t only one of money but of speed and software.
Around 2 p.m. on Thursday, after the roommates split identical takeout salmon lunches, Mr. Medwell, 31, got a text from a friend that read, “I have a supplier, guys.” The promise: 38 million masks, in Singapore and Vietnam, ready to move, top-shelf stuff, 3M.
Mr. Oetting rolled his eyes. “It’s always 3M,” he said. The team punted the deal to contacts at the State Department for vetting.
Recently Mr. Medwell heard from a longtime contact in Mexico claiming to have 90 million masks hidden in storage, and wanting to know what price he could expect.
Mr. Medwell responded, “People will pay anything.”
Write to Rob Copeland at email@example.com
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