I’ve had the song “It’s A Great Day To Be Alive” by country singer-songwriter Darrell Scott stuck in my head for weeks, and it seems fitting. Yes, there are still some very “hard times in the neighborhood,” but we’re also closing out 2020 with a very bright light at the end of the tunnel.
Speaking with venture investors and entrepreneurs, the outlook the reporters at Crunchbase News and I have heard for 2021 is also overwhelmingly optimistic. Perhaps it’s just Silicon Valley’s usual reality distortion field at work, but I think not. Millions of Americans will be vaccinated against COVID-19 even before the year is out, with tens or potentially hundreds of millions more set to receive shots in the first half of 2021.
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We can finally again envision a future that while never quite the same “normal” we knew before 2020, looks brighter. It’s a future that entails less uncertainty—politically, economically and socially. It’s one in which we can start to see—and hug—family and friends again, one in which going to the grocery store isn’t a carefully calculated risk, one in which small businesses and masses of unemployed Americans start to plot the road to economic recovery.
Venture investment in hard-hit sectors like travel is already starting to tick up. The shift to remote work means many of us will have more flexible work arrangements and has also spurred renewed investment interest in cybersecurity and enterprise software. Digital health has seen record venture investment this year and is only expected to grow in 2021. Hiring in the tech sector took a hit this year but is expected to surge in 2021.
I hope we’ll see the tech and venture industries continue to become more diverse next year, an issue that’s particularly important considering the industry has been one of the few economic bright spots this year. Diversity in the startup world means not only funding more women and underrepresented minority entrepreneurs, but also spreading Silicon Valley’s wealth around to more places.
“Early-stage startups based outside of core tech hubs like the Bay Area, NYC and Israel will have a better chance at securing funding in 2021,” he said in predictions shared with Crunchbase News. “Traditionally, VCs and angel investors have preferred to invest in startups that are physically close to them given the preconceived notion that you need to be in the same room to collaborate effectively. That’s changing as investors have gotten more comfortable with handling prospective investment discussions and portfolio company interactions entirely through digital means, and as founders get more confident in starting up with distributed teams.”
At the same time, cities like San Francisco and New York that have become increasingly anti-tech in recent years may start to see some of that sentiment change. “Local hostility to tech startups will wane as the need to create jobs and tax revenue surpasses the political benefits of being anti-tech in cities like San Francisco, Seattle, and New York,” Tusk Venture Partners founder Bradley Tusk said in a recent 2021 predictions piece shared with us. “The effects of startups leaving major tech hubs like San Francisco for climates that are friendlier to business (lower taxes, less regulation, less hostility) will start to be felt.”
Tusk also told me in a recent chat that he expects the COVID-19 vaccines themselves to shift the narrative around tech to be more positive.
More than anything, I predict that 2021 will be a year in which venture investment in innovation continues to grow, driven by the remarkable success story of the COVID-19 vaccines. The Big Tech companies will probably continue to serve as a political punching bag for both Democrats and Republicans, but lawmakers and the public will have a greater appreciation for the benefits of an innovation ecosystem that has delivered life-saving vaccines in record time.
Vaccine-maker Moderna is essentially a startup, having been founded less than a decade ago. As Noubar Afeyan, Moderna’s co-founder and chairman, puts it, the company’s success is “a powerful reminder of what is possible when we journey forth, armed with propositions that may—in just a decade—go from outrageous, to obvious, to lifesaving.”
Illustration: Dom Guzman
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