Over the summer while I was working at an early stage VC fund, I kept seeing companies come across my desk that were building “no code” platforms that to me… quite frankly sounded like nonsense. At first it seemed too good to be true but when I took a deeper dive, I saw that “the nonsense” was ACTUALLY opportunity to meet a huge need.
Why my interest was piqued?
As a founder who has been affected by the pain points that no-code B2B SaaS development platforms are solving, I deeply understand the impacts of this solution on the market and the opportunity. I saw the solution for the problem that many entrepreneurs, business execs, and teams were facing.
Let’s take a step back…What is No-code?
No-code platforms allow folks without any coding or technical expertise to create anything from a web app, website, database, etc. without traditional computer programming. The platforms' drag-and-drop components enable non-technical teams to create applications for their businesses and decrease costs and time associated with the development of these products.
These platforms provide an unprecedented opportunity to democratize and increase access for companies to build software without the high cost of developers.
However, no-code platforms do come with restraints. As companies scale and need to sophisticate to meet the needs of their customers, the no-code B2B platforms do not allow for as much functionality and customization of the application. Low-code platforms can provide a solution to this challenge but require technical skills. Even with those restraints, there is a shift occurring in the market from low-code platforms to no-code platforms due to its low barriers of entry.
My Thoughts (for the VC kin): MY THESIS ON THE FUTURE OF NO-CODE
Setting the Stage: The B2B SaaS market is estimated to generate $105 billion in revenue by the end of 2020 and with median SaaS company multiples running from 4.6x to 9.49x, the industry has ideal market size and growth for VC investment. Snowflake’s success as the biggest software IPO, raising $3.4 billion only further validates the tailwinds of the industry.
In My Opinion: There is a whitespace in this industry to be filled by no-code B2B SaaS platforms. For context, less than 1% of the world and 2.5% of the U.S. population are programmers and with the rising need for application and development solutions there is a massive opportunity for the no-code platforms to rise to the challenge. The increased demand for no-code solutions is reflected in the expected growth of the space from $3.8 billion in 2017 to $21.7 billion in 2020.
The Players: We are at a critical point to scale the utilization of no-code platforms to meet the needs of three important users.
When you need a graphic to talk about industry players, why not use the USA Women’s Soccer team.
1) Non-Technical Teams within Large Corporations who are already working with one off tools to solve work flow problems
2) Small and Medium Size Businesses(SMB) with under 10,000 customers who will leverage no-code platforms to solve user experience and engagement problems for their customers
3) Non-Technical App Founders who through no-code platforms can build their idea at a substantially lower initial cost
Industry Firm Landscape: Companies that have been here, companies that are innovating, and companies that are new to the space
Market Validators: Wix (valued at $1B) and SquareSpace (valued at $1.7B) did the hard work of educating and validating that there is a market for these platforms. They have benefited from the need of these tools through + billion dollar valuations.
Innovators: We continue to see innovation thrive as the need for accessible development skyrockets by players like Airtable ($355M Raise), Retool ($75M Raise), and Hive ($16M Raise).
New Kids on the Block: The innovation continues as newer players like Index ($2.6M Raise) and Kissflow ($1M Raise) are working with important key users like corporations, SMBs, and non-technical founders.
FINAL THOUGHTS
From Snowflake’s IPO, to long-term market validation by established players like Wix, to new players like Index (who are founded by Latinos BTW), we are seeing that the space is fertile and a HUGE burgeoning opportunity. Take a second look at these deals, speak with founders, and recognize the opportunity.