As a mini-tradition here on this blog, at the end of each year, I attempt to briefly summarize and contextualize the big events that happened in the world of tech and VC. It’s impossible to touch on everything, so for reflecting on 2021, I’ve tried to distill the points down to the most brief, digestible nuggets. While you likely don’t have the time or energy right now to read a longer-form narrative, I also don’t have that time or energy to reflect too much beyond this right now.
And with that, here we go: When I look back at tech and VC in 2021, I will view it through the lens of it being “The Tipping Point” year. Below, I will briefly attempt to tie this together, so here goes!
First, our nation’s scientific sector, mainly Big Pharma and Biotech, “tipped over” toward being perceived as a hyper-critical component of our nation’s backbone. Contrast this with years of negative press, price discrimination, political attacks, lawsuits, etc. – now, I’m not saying they’re all saints (see: Sacklers), but looking at the ledger, 2021 brought us a cocktail of new weapons (mRNA, mAB, forthcoming antiviral pills) with which to attack and manage Covid-19 and its onslaught of variants.
Second, and related to the first, is that the effects of the end of globalization tipped over into real issues our nation experienced. It’s one thing to have supply chain issues for consumables, but it’s not the end of the world. On a longer arc, I am very excited about the trend toward repatriation of production onshore, which will likely accelerate our shift toward automation (like a wholly automated coffee shop) and other production technologies (ex: 3-D printing etc.). But for now, we are stuck. It’s hard for find new/used vehicles. Shipping takes longer, after many have been addicted to on-demand. And most acute, right now, we haven’t been able to 1/ produce cheap Covid testing (despite other countries figuring this out) and 2/ ramp up production for antivirals. Sadly, these are connected – while the efficacy of these antivirals are amazing, they need to be given early on in contracting Covid, but with testing being hard, and manufacturing the pills behind in production, the overall impact of these are yet to be seen.
Third, the retail investor tipped the scales against the experts and incumbents. This tipping over came in various forms, mostly notably in the Gamestop saga fueled by Wall Street Bets on Reddit (and almost in the ConstitutionDAO saga). It’s a bit of a stretch, but I could make the case the mainstreaming of crypto fits into this, as well, fueling more widespread digital wealth accumulation through stalwart instruments (such as Bitcoin, Ethereum), hot new tokens (such as Solana), and the explosion of NFTs.
Fourth, our economy tipped over into a more permanent inflationary environment. Looking back, this should’ve been obvious after years of QE and tons of Covid-stimulus money. Thankfully, planned rate increases for 2022 are in the works, it’s unlikely we will see any more stimulus for a long time. In the background here, the advent of remote work via Zoom combined with more mobility to move within the country is a welcomed option for many who need to stretch the value of their dollars. A year ago, folks in the Bay Area would privately mock the “flight to Miami” – a year later, many folks I know have either moved there or visited multiple times for events. Orthogonally, much of this paragraph can likely be attributable to the groundswell for crypto and “web3” in 2021, as developers and creators are not only hoping to rebel against technology data aggregators, but also arming themselves financially as a hedge against this potentially toxic mix of fiscal and monetary policies.
Fifth and final, the “technology sector” tipped over as *the place to be* for investments. There are so many examples of tech tipping the scales in 2021. In crypto, Coinbase went IPO, OpenSea was my pick for breakout startup of the year, crypto funds booked unbelievable returns, and the absolute flurry of venture dollars rushing into new web3 projects on a scale never seen before. Tech firms went IPO at a torrid pace in 2021, breaking traditional mental models of “how big” something can be in terms of market cap and returns. All of this motivated many of the leading venture firms to begin restructuring their own firms to be prepared for 2022 and beyond. Specifically, major VC firms have been restructuring to 1/ handle crypto tokens, 2/ extend their reach into bio/pharma, 3/ to strengthen their position to hold valuable stock beyond IPO, and 4/ to scale assets to compete with the big cross-over funds who have more capital and data. And on an individual level, parts of the “Great Resignation” have infiltrated this sector – I believe we can expect more folks to look for something new, even in tech and VC.
When I reflect back on 2021 later in life, I will remember it as a “tipping point” year, a year in which the drastic changes of our times hardened into a new reality that will likely persist for many years ahead. Time to plan accordingly.