Why Low Code is Interesting as a Concept and as a Business Model
'Low code' is the trend towards building software with a minimal amount of code.

It's more prevalent than you might think. For example, Xcode, the iOS development platform lets you see the canvas you’re building for. You can drag-and-drop the UI components you need directly. When you're trying to visualize what 'Low Code' is, this is a pretty good mental model:

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Low Code is a way to turn a business process into a competitive advantage. Here's what I mean by that:

Have you ever been to one of those mini-conferences where the speaker promises to teach you how to make money in real estate by profitably flipping houses? No? Just me? It's ok, let me save you $2,000. The main advice is:

  • Work ON your business, not IN your business.
  • Turn everything into a repeatable process.


This is actually pretty good advice for people as well as companies. It jives pretty deeply with with one of my personal values: Lifelong learning.

Working on automating processes helps you keep pushing your life/business forward because you:

1) Learn to do something new
2) Then learn how to automate it so you can free yourself up to:
3) Do step 1 again

Low Code is a way to turn a business process into a competitive advantage because if you invest the time to build a machine that solves your problem for you, you can move on to solve harder problems, while your competitors are stuck a couple steps back solving the same problem over and over again.

'Low Code' is A Way to Think About Getting Ahead of Your Problems
Low Code is actually a long-term approach to problem solving. It's long-term because the thing you're always tempted to focus on right now is the current problem. You actually have to sacrifice the short-term for a couple of iterations so that 5 steps down the line you can step out of the process and let it run without you.

Building a tool that builds the tool you need is inherently meta.

It goes another step meta when your business IS helping other businesses automate their business.

And that is what Appian does. $APPN .

This is a powerful business model, because as Appian helps its customers gain a competitive advantage, those customers are able to accelerate their business and... use Appian more to automate their next project.
North Star Capital's avatar
Glide Apps (Private) is personally my favorite no code tool. https://www.glideapps.com

I’ve built a couple projects on there and will be launching a business which leverages Glide in the next couple of months!

The no-code space is certainly exciting because it opens up the paths of entrepreneurship to so many more people. Excited to see the continued growth of this space!
Nathan Worden's avatar
Keep us updated about your launch! That’s super exciting.
Gaurav Mishra's avatar
Funny! How I was testing some low code platforms in morning and this popped up. You're a mind reader @nathanworden :)

When we talk to the customers and enterprises; Outsystems always wins hands down over Appian. While $GOOG trying hard with Appsheet acquisition to compete (they signalled their partners that this is the biggest focus next year for them in GCP); outsystems is still the darling.

Unfortunately, outsystems is still privately held. The last article posted in 2018 said they're north of 100 million dollars and increasing revenue 40% yearly. I assume they'd be about 200 million right now while Appian is about 270 million. Pretty close!

With the options we've $APPN is a great buy.
Nathan Worden's avatar
Ooo yes good point @gmishra Outsystems is one I would be interested if they were to go public.
Nathan Worden's avatar
I got a great question from @drew in a DM asking about conviction on Appian going forward, and whether their revenue growth rate (15% Compound Annual Growth Rate for the Trailing Twelve Months) justified such a large position size in my portfolio (14% of my Commonstock portfolio).

My TL;DR answer is:
Probably not. The work I'm continuing to do analyzing the Low Code space and Appian is part of my 'continually verify' habit. I'm not looking to add any more Appian at the moment, but I'm also not looking to sell.

While there's a good argument to be made for trimming my position in Appian and investing it in a higher growth company, I find when I do that personally I get into a pretty short term mindset.

Investing has been life-changing for me, and the way I've made money has been finding businesses that take a long term approach and continually get better and better over years and years. 15% CAGR over the last year isn't that exciting, and by no means does Appian have the potential to be a crazy winner like say Amazon/Netflix/Tesla. But Appian fits into my portfolio really well as a company I'm proud to own.

I typically don't trim my positions that are doing well. If they unexpectedly surprise me, I take that to mean "This company has the capacity to unexpectedly surprise." Few companies have that ability to surprise, and I'd rather be wrong about betting on winners that have shown this potential than to guess at others that haven't even shown this capacity yet.
Ryan Mahony's avatar
I agree Nathan, any comment as to the professional services revenue declining YOY because that is what is bringing the overall revenue growth down. I believe investors are really looking at the Subscription revenue growth with the 90% Gross margins. I’m not sure what the professional service revenue is from, is it on premise consulting services for app development? Has the company begun to pivot away from this or just not prioritize this side of the business?

Nathan Worden's avatar
@ryanm Correct, the 'Professional services' revenue is one-off on premise jobs that are just a one time thing. The company knows that's not where the future of the business is and they are putting a lot more focus on signing up clients for their ongoing subscription services. They're starting to focus more on automating processes too, which fits into a subscription model- because Appian can then just perpetually charge for, say, a necessary API pipelining service, and will just take care of that data stream on an ongoing basis.

So yes, I actually see the professional services revue declining as a good thing.

Where I would get scared is if Appian's subscription revenue growth started flat-lining or declining. That would be a bad sign.
Bogdan's avatar
Two companies that I'm practically very keen on are practically opening a lot of possibilities for the non-coders:
Notion, and the fact that their docs/tables/ etc. are embeddable, allowing people to build web-apps: https://mannyyang.medium.com/how-to-build-a-notion-web-app-with-almost-no-code-for-free-5d7c460e946d
Airtable, as CEO Howie Liu explains, the platform’s familiar end user interface actually belies a transformational application powered by a flexible, relational database. And we’re creating this application platform for teams within any company to build their own useful business process using an end-user interface that feels like a spreadsheet but is actually powered by a relational database and all of these other powerful pieces that we give you to build a useful, tailor-made application.” https://openviewpartners.com/blog/airtable-low-code-no-code/#.X--VuOlKjOQ
Chers!
Nik Carpentieri's avatar
Other interesting (non-public) no code platforms: Airtable and Bubble
Jonathan Gregory's avatar
Microsoft with its Power Apps platform is a game changer. I am currently exploring the product and believe that I could become a citizen developer by working on automating processes. Low code is going to bring about a lot of innovation and improved productivity for businesses trying to improve performance and accelerate growth. $MSFT

Power Apps is a suite of apps, services, connectors and data platform that provides a rapid application development environment to build custom apps for your business needs.
Austin Cox's avatar
I'm definitely bullish on companies that make technology more accessable to those who grew up with it. Not every millennial understands coding for creation or data analysis, but I think companies that can provide easy ways for consumers to implement that, like Appian and Alteryx, have a bright future ahead of them
John Whitney's avatar
Austin - this is the “Bull Gates” aka Bill Gates strategy.... what did Windows followed by Office due to $MSFT market cap? It got rid of DOS

I see the same thing for Databases.
Joyanta's avatar
just to note concept of Low Code and IDE/plug and play are possibly closely linked (though I do not know much about what is strictly 'low code'). What you are demonstrating with Xcode, the iOS is an an example called IDE (drag and drop etc to build UI) and it is nothing new I am afraid. The concept of WinForm, WebForms, WPF by Microsoft Visual (all declining tech; but note MS has the best IDE in the industry, for java u have eclipse etc) are more than 15 years old. Now if you look at say Wix, Shopify or even some earlier CMS they have effectively made a low code environment. CMS made coders life easier and now likes of Shopify, Wix makes plug and play across services such as Asana for country specific tax (vat in UK for example), payments systems (including after pay etc). IDEs are ok but the really interesting part is the end users can basically configure things across services on the fly, with seamless documentation/you tube next to you.

Test drive wix and find out. I have.
Nathan Worden's avatar
Yep, Low Code is nothing new, just like the idea of automating a repeatable process is not new. But that doesn't mean it's not a good idea. I was thinking about companies that are trying to help other companies better/faster/stronger, and I think Appian is one. But I think you're totally right about Shopify and Wix too- they are making it easier for small businesses to create simple websites and very basic apps. Appian is different because they are working with much bigger enterprises with much more complex needs for their apps.
Joyanta's avatar
Sorry i did not meant to say 'It is not a good idea'. In fact Appian would be really good to 'proof of concepts easily and quickly' within certain domains (and I am sure they continuously increase the domain expertise). Proof of concepts would be a really good way for them to get into organisations (often lead by consultancies who also has Appian expertise). Once the senior manager sees fancy graphs quickly, which then can interact with, they don't just throw that away the proof of concept, they extend it assume the budget gets an approval. Heck I might buy this :)
Nathan Worden's avatar
haha yeah I think I also responded too strong-

Good points about Appian being used as a proof of concept.
Joyanta's avatar
just checked Appian Corporation interesting, they have IDEs which allows them to integrate many existing services further down the stack (which are are standardised) to produce something interesting for the end client. I wonder if they have consultancy arm to implement custom logic or UI etc -- cool https://community.appian.com/learn/courses also https://www.glassdoor.co.uk/Job/appian-jobs-SRCH_KE0,6.htm

At one of big fours, few years back I was developing a portal with a data science consultancy. For the UI used d3, angular, Microsoft Power BI etc and backend in python and .net. While that was 'custom proof of concept', I can see this solution would would be useful but I am sure they target specific verticals (and that would also make sense).
Nathan Worden's avatar
Yeah, and 'Low Code' tools will never replace d3, Angular, Python, .net, etc. -- really its just another tool to be used in specific situations. There's always a tradeoff when it comes to picking your tool.

In my mind the right job for a low code solution is a problem that has been well established and solved many times before, and so now it's time to create a tool for the tool.
Joyanta's avatar
exactly, hence the consultancy arm. Also i would expect what ever you do via plug and play, generates some code in the background .. may be python, and you/consultants should be able to change it programmatically (and bill 1000 GBP per day). If that indeed the case they would have say python runtime as a dependency (sure u can do that with D3 etc). Remember that FX trading systems IDE years ago (i forget the name), you can do drag and drop and under the hood it was c# code (and has dependencies on .net framework etc).

basically commoditise well established processes, which is cool!!!
Arjun Banerjee's avatar
Jinx! Appian's in @stockdweebs watchlist this week
Nathan Worden's avatar
haha nice, I mean, on a day where $APPN is down 9%, might be worth taking a look!
Grace Gruber's avatar
I think the no-code idea is awesome. I could see why platforms like Webflow are a pain to developers but for your average Joe / non-tech entrepreneur, platforms like this are awesome. Definitely going to be interesting to see how this space grows in the medium-term.

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