European startup savior Bending Spoons has announced their acquisition of the no-code Airtable. At it's peak, the no-code database platform was worth 10x that, before a strategic pivot in 2023 that focused the company's efforts on the enterprise.

The commentariat will have the world believing that Airtable is yet another victim of the AI revolution. They'll say that Airtable was simply not needed because people can build build their own apps and workflows with their trusty LLM.

But that ignores everything that came before AI.

Airtable (alongside Notion) were the darlings of the no-code movement that boomed from the late 2010s until 2023. Entire businesses were built around no-code platforms, largely aimed at helping SMBs automate workflows and build custom solutions to their problems. This was revolutionary, because bespoke software was formerly reserved for the enterprise.

In hindsight, it's really surprising that Airtable was very public about their shift to an enterprise GTM back in 2023. The Fortune 500 have fleets of engineers building and maintaining custom software. If they're using no-code tools like Airtable, it's to manage the scraps. Those projects that weren't deemed important enough by the CIO to get on the yearly budget are made possible with bubblegum, duck tape, and Airtable.

Relatively speaking, these enterprise customers surely have the highest contract values and, on the surface, that's really exciting to executives who are looking to squeeze every ounce of juice from the company. There's nothing wrong with going after these whales, but doing it at the expense of the small fish is a huge gamble.

In 2022–2023, they laid off over 1,000 employees over 2 rounds of cuts. During the 2nd phase, their founder and CEO Howie Liu said:

...the cuts will be company-wide, with the largest layoffs hitting product and sales teams that were focused on selling and servicing smaller clients. “We are realigning to go after bigger use cases, and therefore bigger deals. We want to consistently get customers with million-dollar-plus spend rates, versus supporting lots of little ten-thousand-dollar customers from a sales touch standpoint.”

Not only did they choose to go upmarket, but Airtable was actively hostile towards their SMB customers. In 2023, they effectively doubled their pricing on lower tier plans, and since then there have been other policy changes to make the product more expensive for SMBs. Here's a quote from an irrate customer, straight from their community forums:

I've been a customer for more than 3 years, and have spent 1000s of man hours optimizing the system for our needs, and we just got a message that's basically saying that we have 3 weeks to move to another platform, or pay more than twice the money you've been paying just in order to keep things running.

Three years on, Airtable is dealing with the consequences of poor strategy. They pushed a good chunk of revenue out the door, changed their messaging so that prospects go elsewhere, and then discovered that very few enterprises are willing to pay millions of dollars per year for overflow projects and prototypes.

As the AI boom happened, people were building more software than ever, and still needed a place to store all of their data. Mind you, these builders were looking for free and cheap database solutions for their new apps and workflows. Airtable was nowhere to be found, because they turned off all of their marketing targeted at this cohort. In that void, slightly more technical database solutions like Supabase became the LLM's recommendation, further eating into Airtable's growth.

Around this time, Reforge's Unsolicited Feedback podcast interviewed growth leader Elena Verna about Airtable's shift. She was confused by the choice, calling out that most of the company's growth came from SMBs, and most of these SMBs fall in love with the product because of it's self-serve nature. And when you choose to have a sales-led GTM, she believes it's because there's something about the product that users need to be told by a representative from the company.

On the same episode, Fareed Mosavat (formerly Direct of Product at Slack) mentioned some stats about Slack's enterprise deal flow:

97% of our $100K+ enterprise deals started as free. Something like 65% had paid PLG small teams before we engaged them at all with the sales team. The fuel for the enterprise business was the PLG.

Verna went on to mention how the "shift" was a bad idea. You always need to layer one GTM on top of the one that's already working, not replace one with another.

That's exactly what happened at Airtable. Sure, it is still self-serve today, but looking through the messaging, through the logos on their homepage, they are all-in on enterprise sales. And now that their PLG to enterprise pipeline has dried up, the founders have no choice but to sell. It's a downward spiral that's direct fallout of poor marketing strategy.

I'd be foolish if I didn't mention how tech's disrespect of marketing (as a discipline) continues to bite them in the ass. Silicon Valley believes that "distribution" (aka owned channels) is all you need to grow a company. With some humility, they'd read some of the literature coming out of marketing science think tanks like the Ehrenberg Bass Institute, and learn that brands only grow when they can acquire new customers. Selling more to existing customers (like Airtable's enterprise GTM) is the path to stagnation and death.

Bending Spoons knows this. I'd wager their team is well-versed in the works of Byron Sharp and others. Every company in their portfolio has tremendous brand equity, and built their original businesses on the back of a self-serve GTM. They'll return focus to the SMB segment, build goodwill with those buyers, and build a healthy business.

So, no, AI didn't kill Airtable...poor bets did.