Goodbye and good riddance 2020. What will we see in 2021?
10 emerging trends for the next 12 months
No one expected what 2020 had in store for us. For far too many, the reality was bleak. 2021 will be the year we get vaccinated, rebuild, and collectively decide what we want our long-term future to look like.
But the Black Swan year of 2020 also inspired better personal habits (I know I’ll be washing my hands more often) and drove fundamental changes to how we use technology to improve our lives, which were frankly long overdue.
Each January I like to reflect and share where I believe the world is moving and where Lightspeed is investing. For 2021, I see 10 key trends emerging:
* Mental health apps are on the rise
* Social shopping becomes part of US popular culture
* Networking will be (mostly) virtual
* Consumers are the new creators
* The pace of work will only increase
* The lines between B2B and B2C are blurring
* Our ears will be as important as our eyes
* Tech will grow more diverse in every way
* Hybrid work environments will be the new normal
* The future will be happier
Here’s how I see these things breaking out over the next 12 months.
1) Mental health apps are on the rise.
Today one in five people report feeling anxious or depressed- that’s double the number from the previous year. That people are worried about their future and the health of their loved ones is not surprising. But the global pandemic has also brought about a much-needed public discussion of the importance of mental health, as well as innovative ways to foster it.
In part due to COVID, demand for healthcare apps grew 200% last year. But unlike other parts of the tech economy that declined from their pandemic highs in the second half of the year, telemedicine and mental health apps continue to rise in downloads, engagement and retention. We are now prioritizing our mental health in a way we did not previously. At Lightspeed, we see a bright future for startups like Calm*, Real, Maven and others that are helping people nurture their own mental wellbeing.
2. Social shopping becomes part of US popular culture.
2020 saw a dramatic increase in eCommerce, which now accounts for ~20% of retail spend. People will be spending less time in brick-and-mortar stores but they are looking for a more social experience than eCom alone can give them. Live shopping is the answer as people have more time available that can be spent on Live, the technology allows Live shopping anywhere to be possible and users now have a higher comfort level to be on video (as we saw last year through Zoom). As a result, we foresee a sharp growth curve for social shopping apps, which integrate shopping, payments, chat, and live video.
Lightspeed China partner James Mi saw this coming five years ago when he invested in Pinduoduo. Now that social shopping app has nearly 600 million users in China and is valued at more than $93 billion. As people spend more time live streaming from their phones and using payment solutions from Apple and Amazon, social shopping will begin to take hold on this side of the Pacific.
The future of shopping will likely be seen in multiple companies and in multiple forms: recreating the shopping mall, a QVC / HSN 2.0, Twitch for shopping or a new format entirely. What we know is it’s here and very quickly becoming part of pop culture.
3. Networking will be (mostly) virtual.
I used to spend a lot of time walking into conference rooms with hundreds of people in them. Obviously that wasn’t the case in 2020. Last year businesses discovered that live-streaming conferences allows them to reach wider audiences and meet people where they live. It also allows attendees to pick and choose whom they want to network with (ie, no longer being waylaid by some stranger as you’re heading to the bar).
While we don’t believe the $1 trillion+ business events market will go entirely virtual after things return to normal, we do believe future conferences will be a hybrid of in-person and digital events. That’s one reason why we see a bright future for virtual networking apps like LunchClub* as they allow people to make connections, find mentors, discover new partners, or learn something new.
4. Consumers are the new creators.
One area that got a huge boost in 2020 was the creator economy. As people sheltered at home, they sought out new and more innovative forms of digital entertainment. As a result, apps like Cameo*, Outschool*, Substack, and Twitch, which enable creators to reach fans instantly in a more personalized way, had a huge year.
While engagement leveled off after last Spring’s peak, the entire creator ecosystem experienced a step change in 2020. The new base now forms the foundation from which these apps will grow moving forward. Cameo, for example, saw tremendous growth over the holiday season. We believe that’s just a taste of what’s to come in 2021.
5. The pace of work will only increase.
As most of us slowed down during the pandemic, restricting our activities to the essentials, the world of work sped up. The phrase “Let’s discuss this in the office next Monday” morphed into, “Let’s chat about this now on Slack.” Last year I sent messages to work colleagues via text, email, Slack, Zoom, Hubilo*, Hopin, Lunchclub*, WhatsApp, Facebook Messenger, Instagram, Snap*, Skype, Houseparty*, Telegram*, LinkedIn, Twitter, Cameo*, Clubhouse, Chief, Popshop* and even Alexa. I found I could message even faster by transcribing messages over audio devices.
Even when we all return to a hybrid office/remote working environment, we believe the rate at which business is conducted will continue to accelerate. We are excited to meet companies building in this fast-paced environment.
6. The lines between B2B and B2C are blurring.
This year we’ll see more consumer companies emerge where you least expect them. Enterprise companies will see the value in having a more consumer-oriented approach. HealthTech companies like Maven that started B2C and moved B2B will once again move to offering a B2C option. EdTech companies will realize consumers are willing to pay a premium for a higher quality education. Customers will demand that FinTech startups offer a better consumer experience . Even public transportation services that used to be subsidized by the government will emerge in new forms like scooters and e-bikes that consumers are willing to pay for themselves.
Across every industry, younger consumers are demanding a higher quality experience, while companies focus on owning the end-to-end customer relationship. Over the next decade, all B2B offerings will need to cater to consumers.
7. Our ears will be as important as our eyes.
While many startups continue to focus on capturing a larger share of consumers’ eyeballs, forward-thinking enterprises are also focusing on people’s ears. From Alexa to podcasts to meditation apps like Calm, audio will be an increasingly important platform for business. As far back as 2017 I wrote about how voice will be a game-changer for many enterprises; my belief is that audio will be even more integrated with the technology we use today. With the explosive growth of podcasting and other ear-centric apps, audio content is becoming the first and last thing people consume each day.
8. Tech will grow more diverse in every way.
It’s simple: Diversity helps people make better decisions. When you’re able to draw upon a wider range of individuals, experience, geographies, and opinions, your options become broader and your outcomes improve.
To take my own portfolio as an example: All 12 companies have senior female executives, and half have female founders. Three quarters of them are located outside Silicon Valley, and three are outside the US. The importance of geographic diversity should not be ignored. Finding innovative founders who understand consumer fit can happen anywhere in the world.
This year companies will continue the steady progress brought to light by the #BLM movement of 2020. And more banks like Goldman Sachs will announce that they will not take companies public without a woman on the board (and, frankly, that needs to happen a lot sooner than at the IPO stage).
9. Hybrid work environments will be the new normal.
Before 2020, many people had never tried working from home. Today, many can’t imagine work life without it. The number of remote workers in the US rose from 3% to 42% last year. We believe this behavior will stick in modified form over the long term.
We now have tools to enable a better work-from-home experience (the Zoom stock price says it all). Aside from allowing employees to avoid long commutes and to spend all day wearing sweatpants, remote work allows digital-first companies to hire the best people no matter where they live. And more than half of people surveyed by Flexjobs in September 2020 say working from home has made them more productive. Many people do miss seeing their colleagues (myself included!) but a hybrid solution, post pandemic, offers the best of both worlds.
10. The future will be happier.
If there was ever a year we needed more happiness, 2020 was it. Multiple surveys report that overall happiness has been on the decline since 2000. Professor Ed Diener, aka “Dr. Happiness,” was one of the first academics to study happiness scientifically. He found that people could increase their level of happiness through the right combination of thoughts, actions, and circumstances.
We believe technology has a significant role to play in fostering happiness — whether you’re a creator making money doing something you love, forging new relationships in the physical or digital world, listening to a fascinating new podcast, playing games that delight you, having access to a meditation guide or a therapist in your pocket, or going on a social shopping spree.
Companies that zero in on how they can make the world a little better for their customers are those that will thrive in the years to come. And that may be the best news of all.
In 2021 and onward, Lightspeed is excited to invest in the change-makers building tomorrow’s companies today. If you are building a company in any of the above areas, I would love to hear from you. My email is email@example.com.
* Denotes a Lightspeed portfolio company.
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