Indie Hackers January 18, 2021

Sequoia's investment in Zapier confirms automation is having a moment

Nicky @NMilner

Background: Last week, The Information announced news no one expected. Sequoia Capital, the famed venture capital firm that has backed companies like Apple, Google, LinkedIn, Instagram, and WhatsApp, had found a "backdoor" into investing in Zapier, a workflow automation SaaS solution.

The facts: When Sequoia purchased shares in Zapier from the company's founders, it solidified Zapier's valuation of $4 billion, a figure representing more than 40x Zapier's annualized revenue.

Context: Zapier is a company that allows users to integrate and automate communication between the SaaS applications they use. As one Reddit user put it best, "Zapier has over 1000 integrated apps, which is far more than any other "connector" out there, including automate.io which has perhaps 100." Teams use it mostly for triggers and actions.

The numbers: Gartner, Inc. projects the market for Robotic Process Automation (or RPA) to reach $ 1.89 billion in 2021, an increase of 19.5% over 2020. And the market will continue to grow, gaining double digit increases through 2024, despite (or perhaps even helped by) the COVID-19 pandemic. In 2022, 90% of large organizations globally will have adopted RPA in some form.

Anvil - DocuSign challenger - receives Google funding

Synthesis: No one has time these days to sign digital PDFs. In June 2020, Anvil, a paperwork automation platform that enables users to "complete docs without picking up a pen", raised $5 million in a seed funding round led by Google’s Gradient Ventures.

TechCrunch interviewed Anvil CEO Mang-Git Ng who mentioned that Anvil (priced at $99/month) helped Sunrise Bank customers apply for $127 million worth of PPP loans as the pandemic has increased demand for their services:

“The overall trend that we’ve been seeing is that people in these industries are thinking about going more digital, but generally speaking, the people who are at the forefront of that tend to be in larger organizations where squeezing a little bit more operational efficiency will save a ton of money. But as we’ve gone into lockdown, everybody has to figure out how to do things remotely and the solutions that help people do things remotely are definitely pushing to the forefront.”

The takeaway: Even Microsoft is chasing the RPA market opportunity, rebranding their Microsoft Flow product to "Power Automate" in late 2020, and expanding the feature set by adding Task Mining.


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Question: What does enterprise software activity have to do with Indie Hackers?

Answer: Successfully automating various business processes is rarely simple or straightforward. RPA sequences can be endlessly varied across users, and requires a champion who has:

  • a clear understanding of both 'before' and 'after' processes;
  • the tech savviness to develop and apply the "trigger-and-event" logic.

Background: Each industrial revolution precedes social chaos. The gap between machine intelligence and human intelligence will grow wider as industries from Finance to Transportation are radically changed. According to Gizmodo, solving this challenge could give rise to "Centaurs", a human and AI collaboration for solving complex problems.

The takeaway: There are boundless opportunities for supportive applications, services and info-products to assist end-users with their automation objectives. Use of templates like the ones Anvil provides will proliferate, and user forums or communities for peer-to-peer support will continue to add value for new adopters.

The new frontier: Conventional risk management strategies don't adequately accommodate machine learning or algorithm-based decision-making systems, and there are very few standards in the space. This means risk management is another area ripe for exploration. Here's why:

  • Deloitte forecasts that Algorithmic Risk, is a real concern. If decisions are being made in a "black box", they can be vulnerable to potential bias (intentional or accidental), errors and frauds.
  • Documentation of the old and new processes become critical. Once a process goes "underground" because it's been fully automated, the institutional knowledge can easily be lost, especially once staff have moved on to other responsibilities.

According to Forbes, the global robotic process automation market size is expected to reach $6.81 billion by the end of 2026. "Every month in 2021, we should expect either an M&A deal or VC investment in an RPA company."

Last word: While large enterprises are sure to drive a high percentage of this growth, the small-to-medium enterprise (SME) sector is a highly desirable target for growth of RPA companies and products. However, to successfully address the SME sector, organizations will need to rely on the simplification of UI/UX design, and on the expansion of the software-and-services ecosystem.

  1. 1

    The problems with integration and automation as a service:

    • Code must be updated whenever a third party API is updated
    • Server costs can increase rapidly
    • If a third party API has a bug, the client will blame you and expect you to fix the problem
    • If the automation fails 1 time out of 10000 the client will focus on the losses caused by the failed transactions
    • Customer service can take more time than expected if the automation does not have a 100% success rate
    • A lot of code to maintain as the number of integrations increases
    • It's hard to test and debug problems in a network of complex systems that are mostly controlled by other people, when there are millions of transactions

    That's why it's important to choose wisely... Some integration and automation services are not worth the headaches.

  2. 1

    I see this not only as automation having great moment, but also the API market.

    I went to APIdays conference in 2019 and the conclusion was that selling APIs is for sure a business. They even projected it to grow beyond the Web in the upcoming years.

    I think there are a lot of opportunities in the API business for us indie hackers!

    1. 2

      Can you share some opportunities you are thinking about?

      1. 2

        Well let me share some companies that are in that market (at least I consider them to be) that inspire me.

        OpenCageData

        https://opencagedata.com/
        Their product is pure API and it's very simple. Think of an app that has to convert location names (citites, streets etc) into geographic coordinates. They provide this service.
        This one in particular I came to know in the APIdays conference. Here is the talk where the founder talks about it: https://www.youtube.com/watch?v=zvgVjcKVIpg

        Mux

        https://mux.com/
        An API for developers to build video. This is actually an idea I had at some point, but never moved it forward :). Dealing with video is very hard and those guys built a business on making it simples via APIs.

        Imgix

        https://imgix.com/
        I think this is brilliant. They provide a simple thing that a lot of people need: adjusting pictures. Like, resizing, changing format etc. And it's all API. There is a case study of how Unsplash uses it, at https://www.imgix.com/customers/unsplash

        Nylas

        https://nylas.com/
        I used this service in a company I worked for. We wanted to integrate our customers' email inboxes into a software. But accessing people's email inboxes is hard because the protocol to read emails, which is IMAP, is quite hard to use because of several reasons (e.g. very old specification, lots of extensions, lots of quirks from different email providers, protocol itself makes it difficult).
        So they built a product that just makes it easy to consume an email inbox. It's a REST API, which every developer knows how to use. It makes it dead simple.

        Pusher

        https://pusher.com/
        They provide realtime capabilities for your software. If you'd do it yourself, it would probably be difficult to scale up your infrastructure. They did it for you. Just use their API and you're fine.

        And lastly, here is a marketplace for APIs! https://rapidapi.com/

        Although these are not my own ideas, they're certainly inspiration for me and I hope they serve as inspiration for you as well!

    2. 1

      I agree! I read an article recently that implied that freely accessible APIs might replace some of the use of open source tools. Do you think that’s a feasible direction for the industry?

      1. 1

        Interesting idea. You have a link to the article?

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