There are around 2 million apps on the iOS App Store, according to Lifewire. The market intelligence firm IDC bets this is just the beginning, estimating that by 2023, across all operating systems, “over 500 million digital apps and services will be developed and deployed using cloud-native approaches.” Citing this statistic in a September 14 blog post, CEO Howie Liu promoted his company Airtable — the workplace collaboration and productivity platform — as a tool that will help create many of these new apps. That same day, Airtable announced it had raised a $185 million Series D round at a $2.6 billion valuation, more than doubling its $1.1 billion valuation in late 2018.
In 2019, there were nearly 24 million software developers in the world — not nearly enough supply to keep up with the demand for these forecasted 500 million apps. Although visual programming interfaces have been around for decades, this discrepancy drives the resurgence of low-code and no-code software: tools that enable people without conventional software development experience to build simple apps using little or no code respectively. No-code application development platform Unqork recently raised $207 million in Series C funding. In 2019, no-code platform Bubble raised $6 million and Siemens bought low-code platform Mendix for $700 million. Airtable launched in 2015 with the goal of providing easier, mobile-friendly spreadsheet-like databases. Since its $52 million Series B round in 2018, it has realized that its spreadsheet interface can also serve to help more people build their own apps without code.
The pie is big enough for these startups and for Big Tech incumbents like Microsoft and Google to coexist, but not enough for each company to continue growing at the same rate.
Airtable has a slew of potential competitors, each navigating its own greenfield and planting its own seeds. It competes amongst a well-funded workplace productivity software market that includes startups like Smartsheet, Monday, ClickUp, Coda, Notion, Zoom, Slack, and Asana, all converging in the same direction as Airtable. Zoom and Asana in particular have acquired more capital by going public. For now, the pie is big enough for these startups and for Big Tech incumbents like Microsoft and Google to coexist, but not enough for each company to continue growing at the same rate. The market has limits — even if every company buys productivity software, they’ll likely stick to only a few favorites rather than purchasing them all. That makes it all the more urgent for Airtable to establish itself as a formidable leader in the market by leveraging Big Tech’s usual tricks — namely, mass integration across products — against them.
Big Tech smells an opportunity
With over 200,000 companies now using Airtable, investment interest in its latest round could be driven by its revenue growth. According to Forbes, Airtable was on track to make $20 million in revenue in 2018; in 2020, the SaaS company database Latka estimates Airtable’s revenue is around $33.5 million. But these figures are still peanuts compared to the Big Tech competitors — Microsoft’s productivity software, including Office 365 and Excel, made $11.8 billion in revenue in FY Q2 2020. And this year, Microsoft, Google’s Area 120, and Amazon have each launched their own competitors to Airtable: Lists, Tables, and Honeycode, respectively.
The pandemic has exacerbated the need for organization and automation to get work done.
In order to succeed, Airtable will need to differentiate itself from these heavyweight competitors by connecting companies with each other through its product. And it will need to do this fast, as Microsoft, Amazon, and Google leverage their current software and integrate each Airtable competitor with its existing suite of software, used by millions of customers. These giants can also push their Airtable alternatives aggressively using their sizable sales teams, and undercut Airtable’s pricing. Microsoft has most recently used these tactics effectively to slow momentum for even a high-growth company like Slack. And of course, Amazon is famous for using similar tactics to weaken competitors like Diapers.com: It cut the price of diapers for sale on Amazon before acquiring Diaspers.com’s parent company and raising the price of diapers back up.
The pandemic has exacerbated the need for organization and automation to get work done; Airtable reports closing multiple seven-figure deals since the pandemic. To Microsoft, Google, and Amazon, building an Airtable competitor is a relatively small bet, with the payoff of potentially preventing their many customers from joining the hundreds of thousands of companies who have given Airtable a try.
Out of Airtable’s trillion-dollar rivals, Microsoft has had the most relevant experience in attempting to build low-code and no-code software. Lists, which was originally a feature in Microsoft’s intranet product Sharepoint, has been integrated into Teams and Outlook. Microsoft introduced its PowerApps platform in 2015, which enables people to build internal apps for company use. It now integrates with GitHub and Teams. In 2016, Microsoft announced its workflow automation software, Flow. The others have been quick to adapt this year — Amazon launched AppFlow and QuickSight earlier this year, before Honeycode. Google acquired Appsheet and has integrated it into its Google Cloud offering.
These products’ user interfaces all share similarities with Airtable’s, but Google’s Tables and Amazon’s Honeycode are still in beta. Forrester Senior Analyst John Bratincevic writes of Honeycode in CDO Trends, “I found the Honeycode development experience initially approachable, but ultimately nonintuitive, especially concerning UI. For example, binding UI components to enter simple text into the database proved absolutely confounding to me — I have faith it can be done, but I still haven’t figured out how.”
Airtable CEO Liu refuses to declare war; in an interview with Exponential View, he says, “The better metaphor is that we’re trying to go out there and plant as many seeds as quickly as possible before other farmers, i.e., Amazon, Google, Microsoft, eventually go out with their agribusiness farms, and try to plant even more aggressively than us.” With the competition from these tech giants making Airtable’s expansion more urgent, he believes the opportunity isn’t so much about targeting an existing market as it is about establishing a new one.
Horizontal integration as an antidote to monopolization
Vertical software integration — when a company creates a cohesive user experience by integrating its software (for example, how Teams connects with Microsoft products) — is the first threat each of these companies can make against Airtable. In March 2017, Microsoft released their competitor to Slack, Microsoft Teams. Despite Slack’s head start, Microsoft Teams announced it had 13 million daily users in just two years — surpassing Slack’s 10 million. This was the result of its availability to the existing 85 million Office 365 active users at the time, its enterprise sales team, and its massive partner ecosystem. Ultimately, these advantages will be available once again as Microsoft defends against Airtable. Microsoft Teams works well with Office 365, and the rest of the Microsoft ecosystem. If the company’s Airtable competitor, Microsoft Lists, can meet its existing customer needs and is similarly integrated, it’s natural that customers might not even consider trying Airtable.
If Google Tables comes out of beta and integrates into G Suite, its 2 billion users may have less of a need to ever try Airtable. However, there is a chance Tables does not get the support it needs from Google, which is also known for not supporting even its promising products — for example, Google will be shutting down its low-code App Maker product on January 19, 2021. Tables has some hurdles to get through before becoming a serious threat to Airtable; similarly, Amazon’s Honeycode has yet to emerge from beta.
Aside from a more developed product and a smoother user experience, Airtable’s existing templates and app ecosystems are perfect for people who want to hit the ground running. More importantly, Airtable has already started laying the groundwork to deal with the vertical software integration strategies used by Google, Microsoft, and Amazon: horizontal software integration. In this context, horizontal integration — generally referring to mergers between two organizations in the same industry performing similar operations — refers to improved connectivity and collaboration between platforms operating in the same industry. Slack has leaned on a similar strategy, launching two game-changing features — Slack Connect and Shared Channels — that allowed users to talk and work with people outside of their companies through Slack, without the need to switch to another communication or collaboration platform.
Instead of trying to compete directly with Microsoft, Slack has refocused on making a better chat product, and expanding what each person can do inside Slack’s chat room interface without having to click off of it. Stratechery’s Ben Thompson calls this the Slack social network. Slack’s horizontal integration has paid off — as Sameer Singh highlights, “The adoption of shared channels has grown from 15% of paid Slack customers in January 2019 to nearly 30% in January 2020. Adoption of shared channels among its largest customers (those paying more than $100,000 a year) is now a staggering 89%.”
How Airtable can hold — and expand — its ground
Liu told Fast Company that the goal for Airtable is to become a tool for intercompany collaboration as well as an online community, like Slack Connect. Using its funding announcement, Airtable has put the spotlight on three features that set the foundation for horizontal integration — Apps, Sync, and Automations. Sync, in particular, can make it easier for companies to share specific, live information without needing to share anything confidential or internal.
Airtable’s Sync feature enables live segmented or full views of a database to appear in a separate database. It enables information to flow from a “single source of truth” to other databases, between teams or organizations. And it addresses a huge pain — McKinsey estimates that knowledge workers spend 20% of their time searching for information. For anyone who knows the pain of searching for a sheet they don’t have access to, copying and pasting between sheets, or other manual data entry work in spreadsheets, Sync makes life a lot easier.
A tweet from Airtable shares its vision for the Sync product, involving “collaborative network around your organization’s data,” and linking databases from different companies together. Projects between service providers and clients, or strategic partners, come to mind. Sync bears closest resemblance to Slack Connect; this will be the most important feature to Airtable’s growth and enables people from different companies to do more work together in Airtable.
With Airtable’s Automations feature, users can create trigger-action workflows to send custom notifications, assign work, all within Airtable. Triggers involve records in Airtable — the equivalent of a row in a spreadsheet — and actions including sending email, creating or updating a record, or sending a Slack message, amongst many others — which can reach people outside of Airtable and bring them back onto the platform.
Airtable’s Apps extend its core product’s capabilities by integrating Airtable with popular services — the SendGrid App can send emails to contacts in a table, Jira Cloud imports Jira tasks and epics, and the Gantt app helps visualize project timelines. With only 55 apps available, the App Marketplace is relatively small at the time of writing. As it grows, Airtable is hoping Apps will help enable users to do more work entirely within the Airtable spreadsheet interface, limiting their need to seek out new software ecosystems like Microsoft Office and Google Suite.
Airtable’s spreadsheet design helped it gain users early enough to leapfrog into the bigger no-code and low-code game, but to adapt, nothing is sacred: Liu told 20 Minute VC that in five years, Airtable will no longer look like a spreadsheet. If Airtable succeeds at evolving its platform to meet the needs of its users, it may also choose to partner with these companies like Slack does with Honeycode, operating its automations under the hood, beneath user interfaces. The constraint for any productivity software company will always be how many users and companies are willing to buy into each company’s different platform for the long term, and with competition from startups like Asana and giants like Google and Microsoft, Airtable’s ability to stay broadly useful may depend on its ability to prove it can coexist within the platforms of its larger, better-funded competitors.