In July of 2020, CapitalG’s Jesse Wedler and Alex Nichols wrote in TechCrunch that an emerging trend called “no-code” had the potential to “define the next generation of software.“ Defining no-code as software that enables process efficiency and democratizes functionality by “abstracting complexity and centering around a visual workflow,” they wrote that no-code had “the power to touch every software market and every user across the enterprise.” Soon after that guest post appeared, general partner Laela Sturdy engaged in a follow-on discussion with TechCrunch to explore her bullishness on the sector in more depth.

Since then, leaders like UiPath have experienced record-shattering IPOs, while high-growth startups like Unqork and Webflow have continued to redefine what’s possible using no-code technologies. Given no-code’s remarkable two-year transformation from a scarcely discussed concept into a rapidly maturing multibillion-dollar sector, TechCrunch recently checked back in with Laela and Alex to discuss what’s driving the sector’s continued success, which use cases have the potential to support multiple winners, and the most promising opportunities for new entrants in the space. We’re delighted to repost Alex’s and Laela’s full comments below.

TechCrunch: Has no-code/low-code lived up to the hype it had generated back in 2020? How much has adoption increased since then? Are these numbers in line with the growth you expected?

While we’ve seen the hype cycle slow down a bit, breakout no-code companies have emerged over the last year spanning automation (UiPath), web development (Webflow), internal tooling (Retool and Unqork), and other areas.

No-code/low-code is the continuation of a trend that’s been happening for decades with tools like Excel, which empower non-programmers to build powerful tools via visual interfaces. The backdrop is more attractive than ever before for platforms serving that purpose.

On the demand side, we’re seeing robust demand for software, limited technical resources for custom builds, and huge numbers of critical processes being run out of spreadsheets. Additionally, advancements like increased API surface area and enterprise adoption of cloud are making it more possible than ever to build and deploy powerful applications.

Where are you skeptical about no-code/low-code? Which aspects are overhyped?

No-code is not going to replace software developers. Much like industrial automation technology, we believe no-code solutions will emerge in areas that are critical but less central to a company’s competitive differentiation (data dashboarding, integration, contract automation, procurement approvals, etc.). Instead, companies will be able to apply those important and constrained resources to the areas most impactful to their businesses.

Which no-code/low code developed apps excite you the most?

We’re extremely excited about our portfolio companies UiPath (automation), Webflow (web development), and Unqork (enterprise internal tooling). We’re also very excited about vendors enabling easier development of dashboards and internal apps, such as Stacker, Retool, Airplane, and others

What are some of the obstacles no-code/low-code still has to overcome?

Startups selling to enterprises have to navigate IT’s comfort levels around allowing business users to integrate with important data sources in a safe and compliant manner.

Has the no-code/low-code market already started paying off or do you see it as more of a long-term bet?

There are certainly already large winners (UiPath, Notion) and many exciting growth-stage companies (Webflow, Unqork, Retool, Zapier, Airtable, etc.), but we expect to see multiple waves of opportunities in the coming years given the large horizontal nature of the opportunity.

A lot of these low-code apps, particularly in the collaboration world, look and feel philosophically similar. Is low-code/no-code going to be particularly susceptible to consolidation and winner-take-all competition?

We don’t think no-code is more susceptible to winner-take-all competition than any other software market. Of course, there are scale advantages to brand and customer love (Webflow, Notion, and Zapier are examples of this), but there are so many different sub-categories under the broad no-code umbrella that we believe there is opportunity for many large winners.

What are some of the biggest changes that have happened in the no-code/low-code market since our last survey in August 2020?

There are more high-growth breakout companies than when we last discussed the sector in 2020.

How does the no-code/low-code market compare now to our last survey in August 2020? Has it grown more competitive since? Has pricing increased?

As with most software categories, the level of competition and valuation have both increased substantially since the beginning of COVID. We’re still seeing an exciting number of early-stage no-code opportunities.