No-Code for Startups

Table of Contents:

‍

No-code is already changing how tech entrepreneurship works by making it much faster and less expensive to launch your product. No-code is a great fit for startups because:

Learning and adapting quickly is critical in early-stage ventures. Building fast means that you can make several iterations on your product before your competitors even launch their first version.
Not having to hire expensive coders (and building faster) means that the cost of building your product goes down significantly. Additionally, this means less (or sometimes no) reliance on investors.

Many startups end up using no-code for two key reasons:

Proof of Concept (PoC) builds
Production-grade software products

The key distinction here is how long a team intends to use the software they build. For some teams, the right option is to build something in no-code only for the validation phase. In this case, they know they’ll either falsify their hypothesis and move on to other concepts, or successfully prove it and rebuild in another stack.

The founder of one venture studio that adopted no-code in 2020 explained his decision to build with this approach in this way:

"Ultimately, our focus is on outcomes, not features. Our goal is to produce great outcomes for our partners and participate in them, or fail quickly so that we and our partners don’t spin our wheels on ventures that won’t succeed." ‍‍

For others, no-code frameworks will continue to be a good fit as their in-production apps scale.

Common No-Code Use Cases for Startups

As we discussed above, no-code is best for launching products that take an existing technology and adapt it for a new market or use case. Here are just a few examples of the most common kinds of products we see startups use no-code for:

Two-sided marketplaces:

Two-sided marketplaces (e.g. Airbnb for x) are one of the most common kinds of client needs that we see. These platforms allow two groups of users to communicate and transact with each other in some way. No-code is a good fit because marketplaces require common, everyday web functionality (e.g. user signups, profiles, search, transactions, etc.) rather than new technological solutions. This means that developing these apps with traditional code isn’t needed. And just as importantly, most marketplaces are unique, which makes it difficult to build a one-size-fits-all solution.

AI applications

The world is abuzz about AI and for good reasons. It’s likely that tools such as GPT will completely transform how a lot of modern work is done. As a result, an emerging use case for no-code that we see is creating applications around AI. In those applications AI is used to power the core of the application (e.g. creating marketing content) while no-code is used to power all of the other ancillary features that the application needs (e.g. interfaces, user authentication, payments, etc.).

SaaS products

The SaaS model is a proven one – you build a product that serves a need of a particular audience and you charge them a monthly fee for using that product. These have been traditionally built with code, but no-code is well-suited for building a lot of SaaS products since the key functionality needed (user authentication, subscription payments, complex data structures, etc.) are all doable with no-code. We constantly see no-code SaaS use cases that serve both consumer and business use cases.

How to Talk to Investors About Your Startup Built with No-Code

One question we often get is how will investors view my product built in no-code? Based on our experience working with startups who received funding from investors, we recommend you make the following points to build confidence and understanding:

No-code helps you move quicker than your competition: the good news is that if you're talking to early-stage professional investors (vs. friends/family), you're usually talking to angels and micro-VCs who are typically quite risk-tolerant. They have to be in order to be in the seed-stage investing game, where most startups fail and only a few drastically increase in value. They are able to tolerate technology risk for the ability to "move fast and break things" (i.e. the idea that you should adapt to the market quicker than others, even at the cost of imperfect tech in the beginning).

Thus, we’d recommend that you emphasize your speed advantage, and how you'll be able to listen to your customers and change your product in a few hours/days instead of weeks/months.
You are not married to your no-code stack: as you describe both the benefits and costs of no-code for your startup, you may want to mention that overall you just want to use the right tool for the job. And if you need to switch to code at some point (e.g. if you need to scale), you’re willing to do that.

The bottom line when talking to investors about your no-code startup is this: they want to make money. To make money, they invest in companies that are either growing quickly or have the promise of growing quickly. Focusing on making decisions that will enable you to grow quickly is much more important than focusing on investors, who will ignore all of the technical "flaws" of your platform when faced with a prospect of investing in a rapidly scaling startup.

Scaling a Startup Built with No-Code

Besides the question of what to tell the investors, there is a related but different concern of what actually happens once a startup grows and raises money using a no-code platform like Bubble. Here are the scenarios we've seen:

Scenario 1: startup company starts on no-code, planning to only use it for an MVP but ends up staying on it. In the process they figure out that no-code gives them a massive speed/cost advantage, which means they can hit profitability quicker, and they don't end up raising money (or end up raising less money).

Scenario 2: company starts on no-code for their early prototype but then migrates away to conventional development once they raise $xM. Reasons for migrating include: a.) wanting to own the code, b.) scale/performance requiring more custom tech infrastructure, and c.) a fear of approaching technology differently than almost every other startup out there.

Scenario 3: company starts on Bubble, raises $xM, hires engineers and migrates some of their product to code (e.g. backend infrastructure), while leaving the rest in no-code (e.g. front-end UX) and integrating the two. This allows the company to retain some of the speed advantages of no-code, while still rapidly delivering product improvements to customers.

Our Prediction: The Rise of the Long-Tail Startup

If you take a spin through venture capital (VC) websites, you’ll notice some common language – phrases like “bold ideas”, “huge, growing markets”, and “breakthrough technologies”. It quickly becomes obvious that VCs are only looking for companies that have the potential to become behemoths. Businesses that could go from non-existence to an IPO in under a decade.

That’s because most of the companies they invest in fail, which means that they have to make a significant amount of money on the ones that succeed. A common benchmark is 10x - if they invest $4M on a $20M valuation, they expect that company to eventually be worth at least $200m.

So what about entrepreneurs with ideas that are just not big enough? Imagine that you’re a rare plant enthusiast. You enjoy looking at and collecting them. You have an idea for a startup that’s a rental marketplace similar to Airbnb, but that will allow people to stay in houses that have rare plants in them. It will function similarly to Airbnb but have a few distinguishing features, including the ability to showcase and filter by plants in the listings.

First, the bad news. If you present an idea like this to a venture capitalist, you’ll probably get a polite response and then never hear from them again. They’ll quickly size up the market and decide that it’s not going to become one of the unicorns they spend their days chasing.

There is, however, more good news than bad. Firstly, assuming you can build the product, you’ll have a much easier time selling it than a more generic platform. That’s because you already have ties in this community, know exactly what its members want, and can deliver a very tailored experience. And once the first few people experience it, the word can spread much quicker than in a broader community.

But now your startup can use no-code tools like Bubble to build a full Airbnb for your niche audience in just a few weeks without code. And not just a very simple, minimal version – a full version with payments, messaging, reviews, and, of course, the tailored plant-related features that are needed in order to make this particular Airbnb a success.

This means that in the coming years we’re going to see thousands of “long-tail” software startups thanks to no-code. In other words, companies that will use tailored tech to serve a narrow niche. These startups probably won’t reach unicorn status but their low cost structure (some will consist of just one person) will guarantee that they’re able to stay profitable and serve their audience in a way that no generic product ever could.

No-Code for Businesses