Marie Kondo for the Enterprise
How no-code tools can spark joy for enterprise architects
This post is part of a series on B2B low/no-code written for Charge by Indraja Karnik, a full-time MBA student at Columbia Business School. Prior to B-school, Indraja was a Senior Product Manager at Appian. By building this investment thesis publicly, she wants to create a resource for others like her who are trying to break into VC.
As we continue our exploration into B2B low/no-code technology, let’s quickly recap what we’ve established so far:
- Low/no-code tools should be evaluated on a spectrum of ease-of-use vs. power.
- The target user must be defined more precisely than “citizen developer,” with specificity on the level of technical ability and business knowledge required.
- These two points should not contradict each other (ex. can’t expect a novice to be successful with a powerful but complex tool).
Industries and Functions
The apex predators in the B2B low/no-code ecosystem are the Low-Code Application Platforms (LCAPs) because they can target large enterprises in any industry; LCAPs by nature are comprehensive solutions to build mission-critical applications. But the majority of low/no-code providers are services — targeted solutions for specific purposes. They must be more focused and discerning in their go-to-market approach.
Some low/no-code services align themselves to particular industries, like retail or healthcare. Take a look at Accern, which offers a no-code AI solution primarily tailored to financial services ($13M Series A round in 2020 led by Fusion Fund). Other low/no-code services go after specific business functions, like operations or marketing. Check out Modern Logic, a no-code automation tool specifically for compliance & fraud prevention teams (KYC/AML workflows). There are even low/no-code tools for engineers (a.k.a. dev tools) — see Draftbit, which helps accelerate native mobile app development using a visual builder.
This strategy of focusing on a specific industry/function helps early-stage companies gain traction by offering the following advantages:
✅You can optimize the balance of ease-of-use vs. power.
✅You can tailor experiences for your citizen developer.
✅You can hone your marketing and sales pitch.
Bottom line — it is much easier to go to market.
At this point, you might be thinking: “cool, I’ll just focus on low/no-code services that are aligned to <insert favorite industry here>.”
Of course, taking such a targeted approach will result in a narrower share of the overall B2B no-code market. This can still result in a generous payoff for services operating in lucrative industries. But I believe there is an opportunity cost in the long run.
Challenges in Enterprise Architecture
The modern enterprise is bursting at the seams, supporting on average a whopping 1200 cloud-based applications [2]. It’s fractal growth is in part due to the indiscriminate adoption of microservices. Microservices are a methodology for enterprise architecture where applications are designed and built as a suite of smaller, independent services [3]. While microservices have many advantages, they also inherently make the overall architecture more complicated — each piece of the puzzle is easier to understand, but the bigger picture is fuzzy.
The point is microservices should be used thoughtfully and enterprise architects know better now. But will history have to repeat itself before we apply this lesson elsewhere? I predict that the challenge of sprawling enterprise architectures will be exacerbated by a new trend — the rapid adoption of “plug-and-play” tools, including low/no-code.
As discussed previously, low/no-code providers aligned to specific industries or functions can create a compelling story for clients by focusing on how their product will alleviate pain points or energize the business. In the short term, this approach can help establish market share and build momentum, especially with smaller customers. But to scale revenue, B2B low/no-code providers will be looking to land a whale, a big enterprise company. And to do that successfully, they will need enterprise architects on their side.
Enterprise architects will be looking for things like:
- Flexibility & Extensibility (ex. data can be imported from and exported to anywhere)
- Security & Governance (ex. user and group-level permissions for who can view versus edit data)
- Scalability & Infrastructure (ex. fast, automated deployments with alerts)
The burden of proof will be on low/no-code providers to convince enterprise architects that they can not only empower digital transformation, but also declutter at least part of their IT stack.
Look, that’s a tall order. LCAPs have an inherent advantage here due to their holistic nature, but even they can’t build everything at once. So what should a scrappy, young low/no-code company do?
Land and Expand
I believe it is possible to get the benefits of an industry-specific approach while still positioning yourself well for the future. The key is to focus on a broad use case and translate it across industries and business functions. Let’s apply my hypothesis to Qrvey, a soup-to-nuts data analysis solution in a no-code package.
Qrvey lets you prepare raw data for analysis through Extract-Transform-Load (ETL) actions; synthesize and present insights with customizable reporting widgets; and trigger automatic workflows using the out-of-the-box rules engine. So, instead of using Trifacta for ETL, Tableau for reporting, and Alteryx for workflow, customers can get all that value in one neat box. Since the data analysis use case is relevant for multiple business functions, Qrvey can land a contract for an enterprise customer in one department and, with successful outcomes, expand to other departments at the same customer.
Enterprise architects will be pleased by Qrvey’s comprehensive solution because it simplifies their architecture. CTOs will be pleased to say that they led digital transformation across multiple business functions, like sales, marketing, HR, etc. And Qrvey wins too! By focusing on the use case, Qrvey is able to take the same product to large enterprise customers across verticals, such as healthcare providers looking to improve operational efficiencies of hospitals and retail companies looking to implement dynamic pricing.
Companies that can take a use case and port it across verticals have the potential to be unicorns. The hardest part of this will be keeping focus on that use case. If you don’t believe me, ask Looker co-founder Lloyd Tabb. He attributed their success to “[waiting until they] had a crisp thesis on what the problem was — and then [going] directly at it” (note: I highly recommend the full interview 🤩).
Conclusion
We’re reaching the inflection point where we can finally start translating our research into B2B low/no-code to a concrete investment thesis. Today, we have seen that the long-term growth potential of low/no-code companies depends not only on how they can empower digital transformation, but how well they can transcend industry or function. This amends our former statement that low/no-code tools should be evaluated by ease-of-use vs. power to include another dimension: extensibility. While this dimension can initially be constrained to deliver ease-of-use and power, the extensibility of the use case will determine a company’s trajectory🚀.
So for this investment thesis, we will create a heat map of opportunities by use case, where ease-of-use and power will determine the target user but extensibility will determine the long-term potential. Next time, I will talk about methods for use case discovery and introduce a framework to evaluate them on these dimensions. Stay tuned!
This post was written by Indraja Karnik, MBA candidate & VC Fellow at Columbia Business School, and edited by Brett Martin, investor at Charge.vc. If you are working in or thinking about the B2B low/no-code space, we’d love to connect. Get in touch with the team@charge.vc !
Bibliography
[1] Bosilkovski, Igor. “Artificial Intelligence Startup Accern Raises $13 Million In Series A To Help Enterprises Adopt AI More Easily.” Forbes, Forbes Magazine, 28 May 2020, www.forbes.com/sites/igorbosilkovski/2020/05/28/artificial-intelligence-startup-accern-raises-13-million-in-series-a-to-help-enterprises-adopt-ai-more-easily/.
[2] Nichols, Alex, and Jesse Wedler. “‘No Code’ Will Define the next Generation of Software.” TechCrunch, TechCrunch, 7 July 2020, https://techcrunch.com/2020/07/07/no-code-will-define-the-next-generation-of-software/.
[3] Fowler, Martin. “Microservice Trade-Offs.” Martinfowler.com, martinfowler.com/articles/microservice-trade-offs.html.
[4] “The Inside Story of How This Startup Turned a 216-Word Pitch Email into a $2.6 Billion Acquisition.” First Round Review, 2 July 2019, firstround.com/review/the-inside-story-of-how-this-startup-turned-a-216-word-pitch-email-into-a-2–6-billion-acquisition/.
