The good news is you’re already on the market, and hopefully generating revenue, which is why you went the no-code MVP route in the first place. The bad news is that in every single investor’s eyes, you’ve constructed a hastily duct-taped together product using someone else’s fly-by-night tech, so you’ve already got two big strikes against you.
Let’s make sure you don’t get that third strike.
First Question: Should You Raise Money?
Like I said, I’m not going to stop you.
I myself am building a no-code MVP, Teaching Startup — a project to make more and better entrepreneurs — and I’ve been able to quickly get to producing revenue, engagement, and growth, both in number of customers and breadth and depth of product features. But I’ve never crossed the streams, so to speak. I’ve never raised money on non-traditional tech, and never built an MVP with the sole intent to raise money from outside investors.
So I spoke with a number of investor friends of mine. Most of them, as you might imagine, are quite bearish on the prospect of funding anything based solely, or even mostly, on no-code (even if it came from me, an aside they were all eager to add).
I have to admit that I agree with them — but that’s more for philosophical reasons than technical reasons. I’ve raised money myself and also with other founding teams, but I’ve always said that raising money should be a last resort, not the first option.
If you don’t need outside investment to get to a revenue-producing stage, you’re better off using that revenue to hone the product-market fit, then riding product-market fit to market traction, then building on the product’s traction to start scaling.
But technically, my experience with both MVP strategy and no-code tools has me convinced that raising money for either (or both) will eventually stop being the exception and start becoming the norm. The no-code tools are only going to get more robust. Markets are only going to become more accessible at earlier stages of MVP development.
So if you’re going to be ahead of the curve, I’ll meet you there, and give you a handful of dos and dont’s based on my own experience building MVPs with no-code, raising money for traditional tech, and a smattering of what my investor friends told me.
Don’t Build Around No-Code Features
A few weeks ago, I wrote a post warning not to build a no-code app for no-code’s sake. In other words, like any technology, no-code lets you do a lot of cool things quickly. But don’t be like that green developer and think that just because you CAN build something that you should.
Investors know, probably better than anyone else, that if you can build it quickly, so can anyone else. This is especially true with no-code. They’ll be vetting you and your product based on how novel and powerful your solution is, not how quickly you can get features to market.
Do Chase Customers and Revenue
Look, the best and most awesome thing about both no-code tools and MVP strategy is that they allow you to get to market, onboard customers, and generate revenue quickly and inexpensively. But that means you have no excuse not to have customers and revenue before you pitch, and if you don’t, the implication is you never will.
Do Have History
Like I said, I’m not raising money for my no-code project, and I likely never will. But if I were going to, I would point to its history — Teaching Startup is just over two years old, with customers going all the way back to day one, signaling a good track record of retention.
In fact, the no-code platform part of the product didn’t come online for a year, and that signals that the value proposition isn’t in the novelty of no-code, but in the strength of the idea and the efficiency of the execution.
Don’t Expect a High Valuation or a Big Early Round
Ultimately, I think there are two valid reasons to raise money around no-code or an MVP.
- The venture has customers, revenue, and growth, has found product market fit and traction, and now needs to be “made real.”
- There is a barrier to market entry that requires something outside of the tech — a sales force, hardware, a service market — something that needs a physical infrastructure under it.
But these are generally small, foundational spends. An investor isn’t going to write you a check to get from no-code to $1 billion in revenue. They may write a check to get your no-code to real code plus whatever it might take, on a shoestring budget, to get your startup to a place in which a follow-on round will get you to $1 million in revenue.
In other words, the initial check will be small and the equity you give up will be large.
Do Map a Path to Scale
The first question every no-code or MVP skeptic asks is: “When does it break?”
You’ll need to know exactly how the platform you’ve built can grow with you. What happens when you go from a handful of customers to a million? And what happens if that happens overnight?
Those are good and rare problems, but those questions need answers, and the answers need to be both technical and tactical. All technology has limits, especially no-code, and all tech teams have backup plans for when things do indeed break.
Do Plan to Recode
Yeah, you may think you will never need to convert your no-code to an actual coded solution, but there’s almost no way investors are cutting checks unless you have a plan to do just that. Plus, you’ll want ownership of the intellectual property of your solution, and no-code is a lot of things, but it’s not your code.
Any pitch should forecast the time and money necessary to bring the solution from no-code to real code, and that time and money should be carefully documented using trustworthy resources with fixed milestones and deadlines.
In other words, at some point, you’re going to need to spend that time and money you avoided spending by using no-code and an MVP strategy. Someday, the promise of no-code and MVP might allow you to put this transition off indefinitely.
But you’ll have a tough time trying to convince any investor of that today.