Our 2021 Predictions Report Card: How Accurate Were We?

Posted on January 12, 2022

Each year we pause to reflect on what happened in the tech and VC space and share new predictions for the coming year. Last year, we shared 10 forecasts and tech trends that we expected to see in 2021, and now we’re looking back and judging how accurate our predictions have been.

1) The hybrid model of in-person and remote work will create multi-billion dollar opportunities for startups entering the space – Dan AbelonFrances Schwiep, and Kyra Durko

Our Prediction: Correct

As employees worked remotely for the majority of 2020, we predicted that innovations for hybrid and fully remote team members would advance as companies tried to keep their staff fully involved and engaged.

We were accurate on this prediction. We’ve seen a number of companies enabling fully remote work becoming billion-dollar companies. One of them is Remote.com, a global HR solution that is also a part of our portfolio, which raised $150M on a $1B+ valuation this year.

2) Subscription software will drive a hardware renaissance – Colin Beirne and Vinay Iyengar

Our Prediction: Somewhat Correct

We argued that hardware would bounce back due to the increase of subscription-based business models that generate predictable revenue streams. We thought that because of the new tooling and a renewed ability to sell hardware, companies would jump on the chance and sell their products by attaching hardware to subscription software.

Our prediction on this one was somewhat accurate. A recent Deloitte survey found that the pandemic led to a surge in fitness, with 14% of smartwatch or fitness tracker device owners having purchased their fitness gadgets after it started. This trend could be seen in the product offerings of companies such as PelotonWhoop (a TSV portfolio company), and Ergatta, which all sell pieces of hardware meant for exercise use along with a software subscription. But exercise and recreational companies don’t necessarily mean a hardware renaissance. For example, Peloton’s sales have recently slowed as more people are heading back to the gym.

3) The shift to SPACs could upend the traditional IPO and direct listing process – Lindsey Gray

Our Prediction: Mostly Incorrect

With a record number of SPACs happening in 2020, we thought this increase would continue into the next year and remove the historical stigma around SPACs.

While we saw a lot of SPAC activity in 2021, we don’t think the stigma went away and ultimately the year ended with SPAC activity on the decline. There were projections of SPACs outnumbering IPOs in 2021, and in fact overall SPAC IPOs outnumbered traditional IPOs this year, but it was much less of a buzzword than we had expected it to be and SPAC activity was very heavily weighted towards the first half of the year.

4) Politics will creep further into daily decisions and technology – Colin Beirne

Our Prediction: Somewhat Correct

We had predicted that people would begin to vote with their wallets more and support companies that stand outright for values similar to their own, such as Hobby Lobby or Patagonia.

Although this is still true, political effects on daily decisions mostly stayed the course. Companies continue to speak out on social and environmental issues and take a stand on what they value, and consumers are actively showing their beliefs by supporting companies with similar values. For only the second time, notable brands Target and Walmart chose to close their stores on Thanksgiving day, a tradition that stuck from the first year of the pandemic. But there weren’t significant political increases seeping into daily decisions and technology.

5) Social networks will fracture based on shared interests and affinities – Andy Kangpan

Our Prediction: Incorrect

Similar to the adoption of Parler, we expected to see social networks become polarized based on beliefs and political associations. We argued that multiple platforms would pop up, each catering to different systems of thought and shared interests.

We were fairly off on this one. Although Parler and Gab have been widely adopted by highly conservative groups and were used by some as a means for planning the Capital riots back in January, a majority of the political conversation continued to take place on more broadly adopted platforms such as Twitter and Facebook. There was also no emergence of new and popular one-sided partisan social networks.

6) The ability to create will continue to become more democratized – Villi Iltchev and Frances Schwiep

Our Prediction: Correct

With the development of open-source, low-code, and no-code tools, there’s a diminishing need for extensive developer experience to be a developer. We argued that these community-developed tools and resources would become the foundation for building commercial products.

We think we hit the mark on this one. We’ve seen this hold true in a number of ways, including the development of open-source projects, for which we keep an index here on our website. The media has also picked up on the low-code/no-code trend along with big financial institutions such as Goldman Sachs.

7) Healthcare, supply chain & manufacturing, and education will be re-imagined in a post-COVID world – Colin Beirne and Matt Jacobus

Our Prediction: Correct

We expected specific industries that haven’t experienced significant change would be exposed during COVID-19 and forced to innovate and improve. With healthcare, we thought companies would begin to implement telehealth into regular healthcare, as people start to realize some doctor visits don’t need to be in-person. We expected the pandemic to expose the significant need for faster production. We predicted that technology would become widely adopted for education as schools realized the abilities it gave students and teachers.

We saw this come to fruition in 2021. Telehealth investments increased substantially in the first half of 2021, with a record quarter in Q2. We also saw how COVID-19 disrupted the supply chain, and 2021 proved to be a revealing year for the need to improve the industry. Lastly, education tech companies had already raised $9.5B in funding by July of 2021 and continue to see an influx of funding as the educational model continues to evolve with the ongoing pandemic.

8) COVID-19 will drive more awareness, interest, and development in the life sciences, resulting in better tools, diagnostics, and therapeutics – Dusan Perovic

Our Prediction: Correct

COVID-19 exposed a threat that we were underprepared for, and as a result of this, we expected to see a resurgence of awareness, interest, and investment in life sciences.

It’s evident from investments in biotechnology and life sciences that this prediction was accurate. Venture funding in biotech companies increased from over $82B in 2020 to $120B as of December 1, 2021, which includes our own investments into biotech companies, such as Appia BioXilisCajal Neuroscience, and Kallyope, to name a few.

9) The instability and massive unemployment COVID-19 caused will create greater diversity in the ways people earn and save money – Dan Abelon

Our Prediction: Correct

We believed that the pandemic’s effect on employment would create a resurgence of traditional gig economy companies, which would cause a wave of new technical innovations and the development of networks for many types of workers to monetize their skillsets.

This prediction was reasonably true. We’ve witnessed a “Great Resignation” that showed a record-breaking total of 4.4M Americans quitting their job in September 2021, up from 4.2M in October. COVID-19 created a wave of being unemployed due to childcare or health concerns, and with workers quitting 9-to-5 corporate jobs, they’re moving to alternate methods of making money. One area that thrived during the pandemic was the digital creator economy. As of November, Influencer marketing was expected to pass the $3B mark before the end of 2021, and over 50M people considered themselves to be creators.

10) The globalization of entrepreneurship will accelerate technology and scientific progress – Dusan Perovic and Colin Beirne

Our Prediction: Correct

COVID-19 encouraged global collaboration where entrepreneurship and science involve everyone in the world working together. Take the Pfizer BioNTech vaccine, for example. The virus was first sequenced by a Chinese lab, which allowed pharmaceutical companies from Germany and American to develop the vaccine.

This one wasn’t too far from the truth. With remote work increasingly becoming the norm, it’s allowed for more global collaboration between companies. Two examples from the TSV portfolio include Whoop, which has stated its plans to expand globally, and GitLab, which continues down the course of seeking to become a truly global, remote organization with an increasing presence in Asia. There have also been discussions on the media about tech companies based in China with plans to grow globally.

How’d we do? Overall, we view most of our predictions as fairly accurate, with a few that missed the mark. Each year brings its surprises, especially in the ever-evolving technology space, and it’s interesting to look back on what we thought the world would look like a year ago.

See here for a post on what we predict is in store in 2022!

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