In the past, founders without coding experience faced a steep learning curve when it came to updating their software or developing an app. Often they relied on hiring full-time programmers or expensive industry consultants. Over the last few years though, low-code/no-code (LCNC) development platforms have exploded in popularity, allowing those with little to no knowledge of traditional programming languages to build and test applications using templates or drag-and-drop features.
These tools have especially resonated with early-stage companies that are strapped for resources. Gartner has predicted that use of LCNC will rise from about 25% of applications in 2020 to 70% in 2025.
For founding teams, it’s tough to ignore the successful LCNC case studies popping up across multiple industries, especially with the ongoing talent wars for experienced software engineers. (It’s estimated that the shortage of engineers in the US will exceed 1.2 million by 2026). But in the midst of this, some have questioned the trade-offs between easy innovation and scalable development. After all, things can get broken when you move fast, and using LCNC applications still requires careful consideration of your existing infrastructure, strategic priorities, and any associated costs of development.
Here are three important questions that startups should be asking before dipping a toe into the LCNC pool:
1. What does your startup offer, and what type of digital experiences are you creating for your customers? There are a lot of solutions that promise LCNC can be used to develop an MVP (minimum viable product), but startups need to take this with a grain of salt. LCNC applications are not a “silver-bullet” that allow you to simply click a few buttons and create an MVP without any level of IT involvement. This is especially true if you are a startup and the end-product you’re selling is software.
While low-code and no-code are often lumped together, they are different approaches with different applications. It’s true that a startup can include no-code tools as part of an overall tech stack for building an MVP, but no-code by definition has its limitations. In order to scale the application, you will need traditional IT/developers/engineers to get to the finish line. If you are a tech-centric startup, you really can’t use no-code to scale.
Often, a startup’s founding team includes developers or engineers. If yours doesn't, you will need to outsource the full development of an MVP and market ready application to traditional developers. Even if you work with a digital engineering firm that partners with an LCNC vendor, the software will not be developed entirely with LCNC.
The reason for this is simple: customization. For any startup, it’s the user experience (UX) that will distinguish an offering, and if you’re confined to an LCNC application’s templated framework it will be nearly impossible to create a product that is differentiated. This shouldn’t dissuade startups from the LCNC path, but it helps to have an honest discussion of how to elevate beyond the basics to help your product stand out.
2. How far along are you in your startup journey? When is a startup not a startup anymore? That depends, but it usually comes down to scale. In the early days, it’s helpful to baseline the level of IT knowledge and resources within your company. In those early days, you may not have the resources to hire an army of developers, and this is where low-code can play an important role. For example, if you can’t hire a full-stack developer, you can hire a backend developer who can leverage low-code tools for front-end development.
Defining and building a company culture from the beginning is important for any startup. Some of that comes from the founders defining the mission/vision/values of the company. Other parts of the culture are defined by creating, early on, systems that allow founders to track and transfer knowledge and processes as the startup scales. Low-code can play an integral role in this, enabling the development of tools that standardize how the company operates (work management, internal approvals, etc.).
3. Are you taking a “build” or “buy” approach to your digital architecture? Successful startups understand the importance of operational sustainability, and part of that is establishing core systems that can be automated over time. These core systems will need to evolve, especially as you build out and start to manage sales, marketing, and customers in your prospect pipeline. This usually happens after you get to 50-100 employees.
For most startups, their core competencies are not building their own core systems, so the focus needs to be on building the product they will sell. This means buying/investing in core systems like CRM and other specialized point solutions for internal processes (communication, task management, project management, etc.).
But caveat emptor: Because the ease with which SaaS can be implemented, software costs can add up quickly. This includes the time and resources needed to manage and fully optimize the return on investment (ROI) of all of these investments. Low-code can really help startups here by enabling teams to easily prototype and build solutions for internal processes and operations that are customized to their company and team.
Once you scale to a certain size, you will absolutely need to invest in core systems (cloud resources, ERP, data platforms), but for internal operations, low-code can continue to fill the gap.
Low Code, High Stakes
As with all good things, LCNC for startups is best used in the correct context. There are some things it is good for, and others where its inherent limitations must be understood and considered. For any startup today, competition has never been higher, and in the current economic environment, startups need to be smart at balancing speed to market and capital efficiency. This is true whether you are seeking venture funding, or you have already closed a venture round and are trying to scale. The stakes for startups are extremely high knowing where and when to employ LCNC solutions is critical to avoid missteps.