What Did We Learn About No-Code in 2021

What Did We Learn About No-Code in 2021

Simon Jenner

Sunday, 19 December 2021

It's the end of the year and time for us to look back at the year and what we learned about the no-code market

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As 2021 comes to an end I can’t help but reflect on the changes in the no-code eco-system. For instance, this time last year we had to start every every presentation with an explanation of what no-code meant. Now… not so much.
We have always focussed on the effect that no-code has on the early stages of the founder’s journey; that bit where they try to break out from ‘Idea Stage’ and launch their first product. 2021 allowed us to work with hundreds of these founders from all over the world and I wanted to share what we learned. 
If you want to launch your own no-code tech startup why not join our Pre-Accelerator on 26th January here: https://millionlabs.co.uk/no-code_pre-accelerator
The Type of Founder Has Changed
Our founders don’t look like other founders. No-code and remote working has de-centralised ‘Startup’ from major tech hubs and allowed in people that would have otherwise been excluded. That means that our founders are more diverse in every way. About a third are women, more than half are not white. The average age of our founders is still floating around 45 but the deviation from that age is far higher than is evident in other funds and programmes… 
However, focussing on diversity hides some really interesting trends. For instance, more than 80% of our founders are flying solo, something that is normally discouraged in the investment community. Most founders have small project budgets ($3,500 - $5,000) and are working part time to extend their runway until they find product-market fit (no-code has created a boom in ‘side-hustles’). Almost all of our founders would gladly describe themselves as ‘non-technical’ and most are working on startup ideas that are deeply personal to them. That leads me on to my second point… 
The Type of Startup has Changed
This industry of investing into startups is really only looking for ‘Unicorns’ and that’s fine. It’s an industry that was invented in Silicon Valley back in the 80’s and that has tracked the leading edge of technology ever since. However, behind the leading edge is a huge market for startups that could succeed if they could only get started. 
Those startups focus on national markets or market niches, not global scalability. They look to use well understood business models and well established technologies to solve existing problems rather than innovating something utterly new. Almost all of the projects we have worked on this year focus on niche markets and delivering early revenues and profitability rather than seeking to create enormous user bases that can be monetised later.
Where maybe 100,000 startups receive Series A every year there are millions of small tech businesses whose launches been enabled by no-code. They have more in common with traditional startups in the retail, logistics and engineering markets than they do with Silicon Valley. They cost around the same to build (thousands rather than millions of dollars) and are likely to grow to be small to medium sized enterprises. This is important. National economies are supported by small businesses, not by non-tax paying Unicorns. 
The Nature of Failure has Changed
Founders have always (reasonably) seen technology as the barrier to entry for their startup but it’s a small mountain to climb in comparison with winning their first customers. As no-code projects tend to be built on a shoestring many get launched and then languish for want of marketing. However, they don’t die. The cost of keeping the lights on is so low that they often simply trade on, growing little by little, while the founder does something else. 
If you remove the cost of technology it becomes really easy to launch a startup before really considering whether you should. This has created another interesting trend. Founders are often launching products into markets already filled with existing no-code applications. Some areas, like recruitment tech, tele-medicine and angel networking platforms are so busy that we now have the tragedy of the commons: so many startups are competing on the same patch that not one of them is winning. 
What they are doing is creating a lot of work… which reminds me…
Don’t Encourage Your Kids to Become Developers
There is no doubt that there is a lot of demand for no-code developers. The amount of applications being developed by agencies has more than doubled in the past year with no-code taking up the lion share of that growth. Million Labs has been under constant capacity pressure even with the number of no-code agencies more than quadrupling across 2021. 
With that level of demand you would imagine that the cost of development resource has increased, but it hasn’t. Back in October 2020 the average applicant for a developer job at Million Labs was charging $60 an hour. By September 2021 that average had fallen to $35 per hour. There’s an obvious reason: supply is growing even faster than demand.
It costs about $10,000 and takes 16 weeks of full time training to teach a junior java developer. It takes around 16 hours and a few hundred dollars to teach a no-coder. One weekend of dedicated work and an individual is qualified enough to start building basic apps. The number of available freelancers is astonishing. 
The arrival of no-code means that the bottom just fell out of the development market. While there will always be a need for people working at the leading edge of technology those roles will get squeezed as no-code expands. The job of ‘developer’ is moving towards becoming the ‘call centre associate’ of the future.
The way software is made has changed forever and people are starting to pay attention. 
The World has Woken Up to No-Code
In 2021 awareness of no-code rocketed. Google trends shows the upward trajectory of a booming new area in tech. Bubble’s $100m raise might have been a watershed moment for the community, but it’s one of many major investments into the market in 2021. The list of no-code platforms closing raises at significant valuations is huge: Airtable, Formstack, Sigma, Bryter, Leapwork, SnapLogic, EasySend, Unit21, Attest, Stacker, Funnel…
There were also a number of interesting acquisitions. There was a lot of buzz in the community about SAP acquiring AppGyver and Zapier buying Makerpad, but there have been many more interesting transactions as business service companies sweep up no-code tools like Panopoly, AppWay and 8080 Labs. 
All of this points to the inevitable inflection point where no-code finds its way into the enterprise market. That’s what AWS is betting on, releasing tools like HoneyCode and SageMaker Canvas. These are not tools aimed at Startups. They are aimed at enabling the integrators, developers and service businesses that make our biggest companies tick. 
Where Do We Think The Puck is Going?
It’s clear that no-code is here to stay and will have the continuing support of both private investors and major software vendors. The result can only be that the complexity of solutions that can be delivered through configuration rather than coding will continue to grow. The cost and time it takes to deliver applications will continue to reduce. The supply of ‘qualified’ no-coders will explode. We are moving into an era where bespoke products are available to anyone.
Knowing that the barrier to entry for tech startups has been removed tells us that there will continue to be an explosion of new tech businesses. The support that these companies need is different than any other business that has come before them. Trying to make them fit into traditional service structures from venture and banking is a mistake. We need to lay down new rails for them to run on. 
The success of no-code founders will drive the rejuvenation of economies and so it is important for governments to be aware of this trend. Old programmes focussed on digital skills gaps are out of date. They are training resources for rolls that will soon be defunct and paying ten times as much as is required to create developers and new businesses. 
This time next year we wont be telling people what no-code means and we won’t need to tell them what it can do. By next year no-code will be the beating heart of the tech industry. 

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