Neil here. With the holidays upon us and the end of the year fast approaching, I wanted to take some time to talk about 2021.

As an angel investor, I think it’s important to set aside some time to plan out my strategy each year. It’s part of how I keep my skills sharp and continue to improve.

And if 2020 taught us anything, it’s the power of preparedness.

This year was remarkable in many ways, but what stood out to me most in 2020 was the rapid adoption of tech in business. In short, the coronavirus pandemic forced most companies to adapt to remote work – and those that couldn’t suffered. Brick-and-mortar business was one of COVID’s biggest casualties.

But it’s not all bad news. Three industries emerged as frontrunners this year, and they’ll be the ones to watch keenly in 2021. I expect to see substantial growth in all three of them – and that means huge returns for investors.

Let’s dive in.

Health tech is priority #1 now.

It should come as no surprise that consumers and businesses alike are planning to prioritize healthcare next year (an unprecedented public health crisis will do that). In particular, startups leveraging the power of artificial intelligence and machine learning to bring healthcare into the future are starting to heat up.

PitchBook’s most recent Emerging Technology Outlook noted that e-pharmacies – companies that ship prescription medications to your door – will also pull in record levels of funding next year. The reason is simple: Consumers have gotten used to staying home, and have seen the benefits of avoiding crowded errands.

Which brings me to my next point…

Education technology – edtech for short – is about to balloon.

Kids in the U.S. and abroad have spent the better part of 2020 learning from home.

The hardware and software that made this possible were critical life rafts that kept the system afloat… But they were far from perfect. These suboptimal solutions were a major source of frustration and confusion for educators, parents, and students alike.

In the new year, look for startups that aim to solve the privacy issues, logistical challenges, and class divides presented by the current system. The pandemic won’t go on forever, but many students and even some schools will likely continue to learn from home for the foreseeable future. (As for what this tech will do to the tradition of snow days… I’d rather not discuss it.)

It won’t just be kids staying home, either…

Remote work is a permanent part of our lives now.

While many people will go back to the office as soon as it’s safe, a recent Visual Capitalist survey showed that 98% of employees would prefer to continue working from home, at least part-time, for the rest of their careers. That same survey reported that about 82% of company leaders will allow it.

Realistically, that number will be much lower. An Upwork survey released this month estimates that one in four Americans will continue working remotely through 2021. That’s more than double the percentage that worked from home before the pandemic.

This paradigm shift will require software and hardware solutions that make teleworking easy, efficient, and reliable. Keep an eye out for startups that solve some of the unique challenges faced by remote workers, like employee management software, new and improved virtual meeting capabilities, AI-powered HR departments, and more.

. . .

By most measures, 2020 was one of the most bizarre, frightening, and chaotic years in recent history. International trade wars, a vicious and deadly virus, and the most contentious Presidential election to date contributed to a general consensus that this year is a bit, well, cursed.

The silver lining is that chaos breeds innovation. I like to think of the startup ecosystem as a volcanic island. An eruption, like COVID-19, inflicts widespread damage and destruction, but leaves behind some of the most mineral-rich, fertile soils on earth. With a little time and rain, those soils breathe life back into the ecosystem with renewed vigor.

We’ve been through a lot this year, but on the other side is the promise of rebirth. Entrepreneurs are already jumping into the ring in droves to solve some of the unique problems we face today. In fact, new business applications are shattering records already, with a 78% leap in submissions recorded between June and September of this year.

That means we can probably expect to see an order of magnitude more deal flow in 2021 than we saw in 2020. Rapid tech adoption and innovation mean that we could see more opportunities to invest in the next unicorn than ever before.

As always, the advice I want you to take into the new year is to do your due diligence and follow the deal-making dogmas we talk about so often. Look for startups that solve problems in large markets. Look for founding teams with relevant experience and track records. And stick around… because we’re about to enter into one of the most disruptive and exciting eras in recent history.

We’ll talk soon.

Until next time,

Neil Patel