Why Investors Shouldn’t Use Airtable as a CRM

Table of Contents:

1. How much do you love learning tech?
2. How valuable is your time?
3. Stick to your Circle of Competence
4. No-code doesn’t mean no-work
5. Flexibility can be dangerous
6. Out-of-the-box integrations and automations aren’t always easy
7. Choose a Relationship Management system designed for investors

Airtable is a popular cloud-based no code platform for building connected applications that share data across an organization. One can think of Airtable a bit like the cloud version of Excel but with slightly more structure (like a relational database), lots of third-party integrations and a more customizable user interface. Airtable is used by teams doing everything from Sales and Marketing to Product and Finance, and it is particularly popular among startups because of its flexibility and relatively low price.

Airtable even has templates like the Dealflow Template, intended for investors to track new opportunities and keep a system of record for industry contacts and company connections. There’s no doubt that Airtable is a powerful tool and we’ve seen plenty of small investment teams, including family offices, venture funds and even corporate M&A teams attempt to use Airtable as their own custom CRM.

How much do you love learning new tech?

Unfortunately, few investment teams find success using Airtable as their CRM system, for various reasons that we will outline below. That’s not to say that there aren’t some investors who have found success with Airtable, but they are rare. As an investor, if you are planning to build your own CRM with Airtable, you have to absolutely love building and maintaining your own software solutions.

Some folks (even investors!) thoroughly enjoy learning new tech and iteratively working to solve their own problems. If that is you (or someone on your team), perhaps Airtable is the right system for you to manage your investment relationships. 

We believe however, that for most investment teams, the optimal CRM system will work right out-of-the-box and empower investors to focus on great capital allocation, as opposed to building software.

How valuable is your time?

The funny thing about Airtable is that all things considered, it’s actually a lot more expensive than it seems.

A small investment team might try the Airtable ‘Pro’ plan, which is about $24 USD per month per user when billed monthly ($20 USD per month billed annually). This includes 20GB of attachments and 50,000 records per database, which is probably enough for an investment team of a few people. For a team of 3 you’re paying about $720 USD per year (assuming you pay annually).

The problem is that this isn’t the actual total cost. 

The actual total cost is all the time spent learning how to use Airtable well enough to be able to build a functioning application. This includes both the cost of the time and effort itself, as well as the opportunity cost. Not to mention the time required after you’ve built the application to maintain it (bug fixes, troubleshooting, upgrading, etc.). For every investor or investment team we’ve ever encountered, the actual total cost is orders of magnitude (i.e. 100x+) higher than the price of Airtable.  

This is because there is a fairly steep learning curve to Airtable. 

Our experience suggests that for someone who isn’t a computer programmer but knows Excel or Google spreadsheets well, it takes somewhere around 6 to 8 weeks of nearly full-time work to learn Airtable well enough to build a useful business application. Especially during the first couple of weeks, you’re likely to be pulling your hair out and cursing at the computer.

 

Once you’ve learned Airtable, you’re probably still not even halfway to having a functional business application. Depending on the complexity of the CRM you’re building, it could be another few months to actually build and test an app. Of course, following all of this work, you or a member of your team will be stuck maintaining whatever application you’ve built to ensure it keeps working.

Things can get even more difficult if you agree to let a member of your team build your CRM system and that team member later leaves the team. Who will support it then?

Stick to your Circle of Competence

As an investor, you should heed the words of Warren Buffet and Charlie Munger when you find yourself getting the itch to build something using the latest no code platform – “stick to your circle of competence”.

Most small investment teams have relatively well defined requirements when it comes to relationship management software. In particular, the need for a simple and easy to use system that functions in the context of ‘investing’, is usually near the top of the requirements list. 

Unfortunately, when investors start shopping for a relationship management system, most of the CRM systems they encounter are designed for Sales and Marketing teams.  

Many investment teams don’t have dedicated IT support or access to developers, nor do they want to be involved with managing their back-office tech stack. This makes it all the more important to find something simple that works with minimal customization.

No-code doesn’t mean no-work

Airtable is super flexible, which makes it highly customizable. Since it is also a no code platform, it can be quite tempting to try to build exactly what you think you want. You start making decisions about database design, work flows, integrations, user experience, etc. that seem sensible. You’re now the acting Product Manager, Designer, No Code Developer and QA for your new business application. 

Unfortunately, you’re most likely not skilled in all of these roles and if you’re an investor, these are probably not areas where you can add the most value to the business. Since managing relationships is a rather mission critical capability for most investors, relying on a custom application, built in-house by someone without extensive software product experience, is a risky endeavor.

Flexibility can be dangerous

The application design decisions factored into most CRMs on the market today have been made for a reason and are often based on many hours of research, testing and iteration. Each small feature may have been the result of considerable user data analysis (i.e. A/B testing). 

Getting the data relationships wrong or adding too much functionality into Airtable can make it so confusing and disorganized that it becomes unusable. A good example of this problem is not constraining CRM users when they enter new data into the system. 

It may seem like a good idea when you’re building the app to take advantage of the ability to let people enter virtually any information they want about new potential investment opportunities. This is easy to do in Airtable by adding custom fields. 

However, new custom fields created by one user may have absolutely no meaning to another user. As more new custom fields are added, users increasingly have to sift through unknown data types and strange data relationships created by individual users in order to run reports. It’s not long before a ‘feature’ that was intended to provide flexibility has made the application annoying to use and difficult to maintain.

To avoid these types of design problems, you need to know your requirements extremely well at the beginning of the project, otherwise you are forever adjusting, appending, modifying tables/fields and other parameters to suit your needs.

Using Airtable as a CRM is actually not that much different than using Excel or Google Sheets (in the Cloud) as a CRM (it is a bit better). It might be okay for lists of contacts but it’s likely to get messy over time and it probably won’t be what the business needs to scale.

Out-off-the-box integrations and automations aren’t always easy

One of Airtables strengths is its app marketplace and the ability to interface with many third-party software vendors, which includes the likes of GSuite, Zapier, Mailchimp, Slack, etc. (a more complete list can be found here). This enables you to enhance a CRM by adding some of the basic functionality in third-party applications via Airtable integrations. 

The Airtable platform also supports no-code native automations, with many third-party applications that enable you to create ‘IFTTT’ (If This Then That) workflows in your CRM. A good example of this would be to trigger an email when a Google Forms response is received. 

The challenge with Airtable’s integrations and automations however, is that they are great at getting you started with something simple and opening your eyes to the possibilities, but when it comes to the actual day-to-day use of a CRM, they are just too basic. 

Suppose you want to be reminded when it is time to email or call a high priority contact, or you want to do lead scoring based on the number and type of interaction you’ve had with certain leads. On the surface, when you look at the available third-party Airtable integrations, this type of functionality seems possible. However, if you were to attempt to actually implement these capabilities you’d find that they are tough to achieve unless you are able to do some coding.

Choose a system that is designed for investors

The good news is that there are relationship management systems out there that are designed specifically for investors, including private equity, search funds, family offices, corporate M&A and other investment teams. There is no need to go through the trouble of learning, designing, building and maintaining your own CRM system. 

While many relationship management systems for investors are expensive, Galaxy offers a simple and cost effective relationship management system designed for small deal teams in corporate development (M&A), private equity, venture capital, investment banking and family offices. With Galaxy, you get the low price point of Airtable without the high cost of customization.