May 28, 2024 • 1hr 9min

Howie Liu - Building Airtable - [Invest Like the Best, EP.375]

Invest Like the Best with Patrick O'Shaughnessy

In this episode of Invest Like the Best, Patrick O'Shaughnessy interviews Howie Liu, co-founder and CEO of Airtable. Airtable is a no-code app platform that allows teams to build customized workflows on top of shared data. The company was founded in 2013 and is now used by over 300,000 organizations. Howie discusses Airtable's approach to integrating AI, his views on horizontal vs. vertical software, and key moments in building the company.

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Key Takeaways

Airtable's platform approach allows customers to build customized applications and workflows, making it well-positioned to integrate AI capabilities
Horizontal but deep platforms that are customizable will likely be more successful than narrow vertical solutions in the AI era
AI integration should focus on process transformation, not just adding features to existing products
Improving the quality, consistency and ease of use of AI outputs will be key to driving broader adoption
Airtable evolved from a "pure Lego kit" approach to providing more structure and templates while maintaining flexibility
Major inflection points for Airtable included initial product-market fit, successful monetization, rapid scaling, and adapting to changing market conditions
AI capabilities may enable more customized, personalized software but platforms that allow customization will still be valuable

Introduction

In this episode of Invest Like the Best, Patrick O'Shaughnessy interviews Howie Liu, co-founder and CEO of Airtable. Airtable is a no-code app platform that allows teams to build customized workflows on top of shared data. The company was founded in 2013 and is now used by over 300,000 organizations. Howie discusses Airtable's approach to integrating AI, his views on horizontal vs. vertical software, and key moments in building the company.

Topics Discussed

Airtable's Approach to AI Integration (3:07)

Howie explains that Airtable is well-positioned to integrate AI capabilities because:

It has an existing distribution base with over half of Fortune 500 companies as customers
The platform approach allows customers to customize workflows and integrate AI where it's most valuable
Having structured data and workflows provides the necessary ingredients to unlock value from AI models

He emphasizes the importance of getting "scrappy" and working closely with customers to identify killer use cases for AI integration. Howie states: "It's not just what we have, it's also our posture, attitude, and really getting in there and getting our hands messy with the details. That's a lot of what I'm spending my time on now."

Horizontal vs. Vertical Software in the AI Era (5:22)

Howie outlines three categories of software:

Broad but shallow products like Microsoft Office
Very verticalized solutions for specific industries
Horizontally applicable but deep platforms like Airtable

He argues that the third category is well-suited for the AI era because:

It allows customers to build customized applications for their specific needs
AI models are both broadly and deeply capable, similar to human intelligence
A flexible platform enables customers to exploit AI capabilities across many use cases

The Future of Customized Applications (9:31)

Howie discusses the idea that AI could enable highly personalized, customized software for individuals. He believes this is "definitely true to a great degree" but not to an extreme. He cites Salesforce as an example of a successful platform that allows extensive customization while providing a template and best practices.

Howie predicts AI will accelerate this trend in two ways:

Making it easier to build custom apps through AI assistance
Enabling AI-powered workflows within apps

Improving AI Capabilities and Adoption (39:25)

Howie identifies key areas for improvement in AI models:

Higher quality outputs more consistently
Easier prompt engineering
Multimodal capabilities (handling various input/output types)

He emphasizes that improving quality and consistency, even for existing capabilities, will be transformative: "I think what a lot of people underappreciate is that even just doing better at the same domain of problems that we can solve today, but doing better and doing it more consistently well and on the prompt engineering point, doing so without having to require fine tuning or a lot of advanced prompting... will all of a sudden make it even more broadly useful."

Airtable's Evolution and Crucible Moments (43:09)

Howie recounts key inflection points in Airtable's history:

Initial product development (2012-2015): Focusing on market timing and product quality
Achieving product-market fit: Seeing organic growth and retention
Successful monetization: Proving people would pay for the product
Rapid scaling (2020-2022): Adapting to increased demand during COVID-19
Recent market shifts: Adjusting to changing customer priorities and building a repeatable go-to-market engine

He highlights the challenge of scaling the organization rapidly, growing from low hundreds to over 1000 employees in just a few years.

Difficult Decisions and Trade-offs (53:58)

Howie discusses the tough decision to conduct two rounds of layoffs, despite having significant cash reserves. He explains the rationale:

Enabling continued hiring in strategic areas
Moving faster with a smaller, more agile organization
Executing more like a startup to capitalize on AI opportunities

He emphasizes the importance of smaller, tighter-knit teams for rapid iteration and customer-focused development.

The Role of Capital Allocation (1:01:28)

Howie reflects on his evolving role as a leader of a profitable company. He cautions against viewing it purely as a "spreadsheet game" of allocating resources. Instead, he advocates for:

Remaining detail-oriented and embracing the craft
Being involved in thematic design and key decisions
Balancing micro-level focus with a macro view of the entire business

He admires leaders like Mark Zuckerberg who stay deeply involved in product details even at massive scale.

The Impact of Supportive Actions (1:05:20)

Howie shares two impactful moments of support in his entrepreneurial journey:

His parents' support for taking the entrepreneurial leap despite limited resources and understanding of the tech world
A small personal check from Lucas (founder of Crowdflower) that extended his runway just enough to reach the next milestone

He expresses gratitude for the incremental experiences and people who helped him reach each new stage in building Airtable.

Conclusion

Howie Liu's journey with Airtable demonstrates the power of building a flexible, customizable platform that can adapt to changing technology landscapes. As AI capabilities continue to advance, Airtable is well-positioned to help customers integrate these tools into their workflows. The company's evolution from a "pure Lego kit" to a more structured yet still flexible platform highlights the balance between providing guidance and enabling customization.

Key lessons for entrepreneurs and business leaders include:

The importance of market timing and product quality in the early stages
Focusing on real customer value and use cases when integrating new technologies like AI
Balancing rapid growth with building sustainable foundations
Making tough decisions to maintain agility and focus, even when resources aren't constrained
Staying involved in product and customer details even as the company scales

As AI continues to reshape the software landscape, platforms that enable customization and seamless integration of AI capabilities are likely to thrive. Airtable's journey provides valuable insights for navigating this evolving terrain.