5 Predictions for 2021

Every year, I make a list of predictions and score last year’s predictions. 2020 is a year that defines the long tail events, twelve months in which black swan after black swan event seemed to hit the press. Each morning I held my breath as I checked the news wondering what headline could top yesterday’s bombshell.

Here are my predictions for 2021

  1. Working remotely for a year changes how we work forever. Meeting in person remains important for advancing careers, critical meetings, and team cohesion, but the days of the 9-5 daily commute from Monday through Friday are gone for most knowledge workers. Two days per week in the office? Three days per week in the office? Working remotely for a quarter instead of taking 20 days vacation? I’m not sure where it will settle, but working patterns won’t return to pre-2020 behaviors.
  2. 2020 becomes the decade of data. The 2010s were the decade of software and SaaS, the era when Salesforce become the first SaaS company to sail past the $100B market cap mark. The 2020s will be the era of data companies boosting massive markets. Database startups, data movement startups, data quality startups, data lineage startups, machine learning startups will be the zeitgeist of the decade as they shape the next wave of massive innovation.
  3. M&As and IPOs continue at torrid rates. The stated long term, low interest rate policy of the Fed maxes out DCF models, whipping a frenzy around high growth companies. The merry retail investors using Robinhood bolster the passive investment wave, and their market-shaping forces sustain stratospheric multiples in the public markets. Acquirers, emboldened by higher stock prices, brace themselves and outbid each other with premium multiples for high-growth startups.
  4. Blockchain technologies become mainstream driven by the adoption of national reserve banks. The US Dollar continues its decline as the global currency of trade. In response, other national reserve banks introduce Blockchain based currency creation and control systems.
  5. Product-led growth becomes the standard GTM for software and infrastructure companies. The path to the enterprise starts in the mid-market which builds a strong foundation for serving the largest customers in the world. More companies adopt the idea of qualifying buyers through a product embracing the benefits of product-led growth including faster sales cycles, greater ARR per employee, and quicker account expansion make PLG the dominant GTM strategy.

Scoring last year’s predictions:

  1. The direct listing becomes the standard path to IPO. Wrong. Most high-profile IPOs have followed the standard procedure, rather than direct listings. The IPO market hasn’t been this hot since at least 2012, but likely since the dot-com era. And IPOs represented the largest share of venture-backed exits in dollar terms in the last decade.
  2. The M&A market continues to surge. Sort-of. 2020 venture-backed M&A volumes are basically the same as 2019, but I think the spirit of my prediction suggested 2020 would eclipse 2020, which it hasn’t.
  3. Distributed work becomes the norm. Correct, but not for the reasons I anticipated. I thought the remote trend would be a powerful recruiting advantage; I didn’t foresee a global pandemic obligating companies to work remotely.
  4. Public software multiples remain at elevated levels. Dead on. Current forward multiples have set records. Companies with greater than 30% annual growth trade at 25x forward revenue, a figure that would have been met with unadulterated incredulity five years ago.
  5. The fundraising environment remains strong. Correct. 2020 could be the best yer ever for startups. 2021 could be even better, particularly since fundraising momentum is now a global phenomenon. European and Asian startups enjoy fundraising markets with seemingly insatiable demand for growth, paralleling the US market.

So, 3.5 of 5 in 2020, which is pretty good! I hope everyone has a great end of the year. If you have other predictions, please send me a tweet. I’d love to hear them.

Ingrid af Sandeberg

Elected one of Sweden’s most influential people in AI ??? Founder | Advisor | Investor | Business builder | Board member | Explorer.

4 年

From the "data start-up" perspective, #2 seems pretty spot on so far. Six months ago, no one was discussing data quality/ data monitoring. In mid-Q1, the topic is so hot it almost melts the snow off the streets of Stockholm (in spite of -10°C...)

回复
Joseph L. Nyitrai

RevOps Analyst / Data Scientist / BI Engineer

4 年

And the advancement of remote work will start to equalize knowledge worker salaries across borders, bringing a whole new level of disruption. Most high-GDP governments will react with protectionism, some - Sweden, Canada - will get a bit more constructive and forward-looking.

回复
Deirdre Mahon

Marketing Leader | PLG | Growth | GTM Strategy

4 年

Nice one. Also great that you scored yourself. 100% agree re. the Produc-led growth point and also ditto on the data one, although I think that trend has been bubbling for some years now.

回复
Russell Artzt

Co-Founder CA Technologies; Executive at Zoominfo, Inc.

4 年

The data category is certainly exciting. One of the best parts of reading predictions for the new year is confirmation bias, especially on something you have spent years building in preparation for the emerging new category, believing that the time would come. It almost feels liberating, as if the future has finally arrived.

要查看或添加评论,请登录

Tomasz Tunguz的更多文章

  • The Implications of the Wiz/Google Deal

    The Implications of the Wiz/Google Deal

    Is tech M&A back? Google announced its intention to buy Wiz for $32b today. If approved by regulators, it would be the…

    6 条评论
  • Halving R&D with AI & the Impact to Valuation

    Halving R&D with AI & the Impact to Valuation

    Engineering teams within AI application startups are much smaller than a classic software company - maybe half the size…

    8 条评论
  • The Mirage in the Software Clouds

    The Mirage in the Software Clouds

    Public SaaS companies’ growth rates have halved since 2023, as David Spitz pointed, from 36% to 17%. Why? There are…

    12 条评论
  • This Analysis Cost 27 Cents

    This Analysis Cost 27 Cents

    Monday’s analysis cost about 27 cents to produce. This little screenshot is of Claude Code, the product I use now to…

    9 条评论
  • Positioning Startups in the Age of AI

    Positioning Startups in the Age of AI

    How do you position and scale an AI company in a rapidly evolving market? Join us for an in-person Office Hours session…

    6 条评论
  • How Much Is A Venture Firm Worth?

    How Much Is A Venture Firm Worth?

    A small spin-out from a publicly traded behemoth launched with the ambitious vision of transforming their entire…

    5 条评论
  • Why War & Peace Is Killing Your Data Budget

    Why War & Peace Is Killing Your Data Budget

    Imagine if every time you edited a document, the word processor forced you to retype everything that had been written…

    3 条评论
  • A Founder's Guide: Essential Management Advice for Startups

    A Founder's Guide: Essential Management Advice for Startups

    As startups scale, effective management becomes the difference between chaotic growth and sustainable success. After…

    10 条评论
  • Lopsided AI Revenues

    Lopsided AI Revenues

    Which is the best business in AI at the moment? I analyzed Q4 revenue data from publicly traded companies across…

    8 条评论
  • Four Marketing Principles That Redefine Markets from Klaviyo's Former CMO

    Four Marketing Principles That Redefine Markets from Klaviyo's Former CMO

    During a recent Theory Office Hours with Kady Srinivasan, former CMO at Lightspeed Commerce, Dropbox, and Klaviyo, we…

    5 条评论

社区洞察

其他会员也浏览了