Tomasz Tunguz - 5 Predictions for 2021

If you were forwarded this newsletter, and you'd like to receive it in the future, subscribe here.

5 Predictions for 2021

Dec 16, 2020 04:00 pm

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.


Read in browser »
share on Twitter Like 5 Predictions for 2021 on Facebook


 

Recent Articles:

Do You Lose Sales Opportunities Because of Sales Execution or Product Insufficiency?
The Three Questions to Ask When Hiring Your Startup's Head of Sales
Where to Start if You're Curious about Macroeconomics Today
Top 10 Learnings from Startups to a $100M+ ARR General Manager, Linda Tong
Rediscovering the Power of the Command Line
Copyright © 2020 *|Tomasz Tunguz|*, All rights reserved.
You signed up to receive Ex Post Facto blog posts by submitting your email on tomtunguz.com

Our mailing address is:
Redpoint Ventures
3000 Sand Hill Rd
Menlo Park, CA 94025

Add us to your address book


Want to change how you receive these emails?
You can update your preferences or unsubscribe from this list.
 

Older messages

The Three Questions to Ask When Hiring Your Startup's Head of Sales

Wednesday, December 16, 2020

If you were forwarded this newsletter, and you'd like to receive it in the future, subscribe here. The Three Questions to Ask When Hiring Your Startup's Head of Sales Dec 14, 2020 04:00 pm Mark

Top 10 Learnings from Startups to a $100M+ ARR General Manager, Linda Tong

Friday, December 11, 2020

If you were forwarded this newsletter, and you'd like to receive it in the future, subscribe here. Top 10 Learnings from Startups to a $100M+ ARR General Manager, Linda Tong Dec 09, 2020 04:00 pm

Rediscovering the Power of the Command Line

Thursday, December 10, 2020

If you were forwarded this newsletter, and you'd like to receive it in the future, subscribe here. Rediscovering the Power of the Command Line Dec 08, 2020 04:00 pm I remember sitting in the second

Building a Product-Led Growth Machine: Office Hours with GC Lionetti

Tuesday, December 8, 2020

If you were forwarded this newsletter, and you'd like to receive it in the future, subscribe here. Building a Product-Led Growth Machine: Office Hours with GC Lionetti Dec 06, 2020 04:00 pm On

How a Merger of Salesforce and Slack Would Change the SaaS Landscape

Friday, December 4, 2020

If you were forwarded this newsletter, and you'd like to receive it in the future, subscribe here. How a Merger of Salesforce and Slack Would Change the SaaS Landscape Nov 25, 2020 04:00 pm The

You Might Also Like

#207 | Agentic Commerce, Energy Theses, State of Gen AI, & more

Sunday, November 24, 2024

Nov 24th | The latest from Scale, USV, Madrona, Menlo Ventures, Redpoint, and others ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏

$12K/mo AI App for grandmas

Sunday, November 24, 2024

Starter Story Sunday Breakfast ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏

🎓 Learn from these legends to supercharge your 2025

Sunday, November 24, 2024

And save 40% while doing so with our greatest Black Friday deal ever! Black Friday_Header_2 Hey Friend , This Black Friday, you get the biggest, most lucrative sale we've ever offered—and with it,

The ultimate guide to founder-led sales | Jen Abel (co-founder of JJELLYFISH)

Sunday, November 24, 2024

Learn how to master founder-led sales with Jen Abel of JJELLYFISH: tips on outreach, leads, closing deals, and hitting your first $1M ARR ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏

🗞 What's New: ~40% of young adults get their news from influencers

Saturday, November 23, 2024

Also: "File over App" for digital longevity ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏

Initiator Creator - Issue 145

Saturday, November 23, 2024

Initiator Creator - Issue #145 - ( Read in browser ) ​By Saurabh Y. // 23 Nov 2024 Presented by NorthPoll​ This Week's Notes:​ ​Content-rich designs looks more convincing I just love how Basecamp

🛑 STOP EVERYTHING 🛑 BLACK FRIDAY IS NOW!

Saturday, November 23, 2024

This is your sign to take action—2025 could be your breakthrough year, but only if you start now. Black Friday_Header_2 Hey Friend , This is getting serious. We're handing over $1700 in value as

What’s 🔥 in Enterprise IT/VC #421

Saturday, November 23, 2024

Thoughts from Goldman's PICC + optimism for 2025? ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏

I'm blue

Saturday, November 23, 2024

Hey, ​ ​ tl;dr – I've decided to delete all my Twitter posts, lock down my account, and leave the platform. And I'm going all-in on Bluesky, which (in the last month) has become 1000x more fun

🚀 Globalstar to the Nasdaq

Saturday, November 23, 2024

Plus $RKLB CEO becomes a billionaire, DIRECTV $SATS debt deal called off, TEC's $160M Series B, and more! The latest space investing news and updates. View this email in your browser The Space