Startup Spotlight #13: 10 Times Cheaper, 20 Times Faster

Today’s featured startup hasn’t just created another run-of-the-mill SaaS company — they have revealed the future of custom software development.

Dec 05, 2024

Cogna has created a platform that enables client companies to develop “highly personalized” software tailored specifically for their internal use — essentially, internal platforms designed to automate business processes.

Typically, companies either use pre-built platforms that require extensive customization (or compromises in functionality) or develop tailored solutions through external contractors or in-house teams — often a costly and time-consuming process.

Cogna positions itself as a middle ground between these extremes. The startup doesn’t supply ready-made solutions or directly develop software; instead, it offers a platform that allows companies to create custom software uniquely suited to their needs.

Using Cogna, companies can achieve their software goals 20 times faster and 10 times cheaper than hiring external developers.

Here’s how it works:

1. Internal stakeholders describe the software they want to create to Cogna’s AI assistant. They define:

• Objectives the software should achieve,

• Tasks it needs to handle, and

• Pain points in the current process.

2. The AI generates a flowchart and suggested feature set for the software. Clients can:

• Exclude or adjust features, and

• Provide feedback on requirements in natural language.

3. Once finalized, the AI designs the UI for the software. Clients can also request modifications to these designs.

4. Finally, the client clicks a button to deploy the software, which integrates seamlessly with their IT infrastructure, including internal databases and third-party tools.

If further adjustments are required, the AI can modify the software to add features, tweak algorithms, or enhance UI elements.

Although the software is AI-generated, technical support is provided by Cogna’s human specialists, available 24/7 to troubleshoot and assist with any issues.

Having launched just last year in the UK, Cogna has already secured a seed funding round of £3.76 million ($4.83 million USD).

What’s the Gist?

If you think about it conceptually, Cogna hasn’t just created another SaaS — they’ve revealed the future of custom software development!

In theory, nothing stopped them from building this platform exclusively for their own use. They could have charged clients the same rates typical for custom development while leveraging the platform to reduce their own costs.

However, the real challenge lies in how much time and effort custom development companies spend communicating with clients — trying to understand all their needs and making endless revisions to accommodate last-minute changes in requirements.

At its core, programming for custom development rarely starts from scratch. Instead, it usually involves assembling software from pre-built library components, which are then tailored to the client’s specific needs.

Ironically, the true value of custom development isn’t in the coding itself but in helping clients integrate the final product into their IT infrastructure and addressing any issues that come up during its use — from fixing bugs to rolling out enhancements.

Cogna has essentially shifted the most time-consuming and routine-heavy aspects of custom development onto their platform. Clients can define their software requirements through a dialogue with the platform. The platform’s AI assistant then assembles the software using pre-built blocks. This leaves Cogna to focus on their core value: ensuring the software integrates seamlessly and functions effectively, all backed by their dedicated technical support.

This approach allows Cogna to deliver the same benefits as a custom development contractor — but with far less time and effort spent on each client and with a leaner team. This makes it much easier to scale!

The internal platform development market is enormous. Companies currently allocate $4.5 trillion annually to building, maintaining, and upgrading their corporate IT infrastructures. A significant portion of this budget is dedicated to internal platforms.

77% of companies with over 500 employees have in-house developers who, among other tasks, work on internal platforms.

These developers spend between 30–45% of their time on internal platforms, with larger companies devoting even more resources to this area.

Unsurprisingly, businesses are willing to pay for solutions that help streamline and accelerate internal platform development.

Here’s some other startups that are at the forefront of this space:

• Retool: A platform for building internal tools using pre-designed blocks; raised $141M.

• Appsmith: An open source low-code platform, that up to now has raised $51.5M.

• Crowdbotics: Uses AI to create technical specifications and build platforms, with options to outsource missing components; raised $68M.

Cogna takes things further by emphasizing rapid, AI-driven development of fully functional internal platforms.

Key Takeaways

The overarching trend seems to be creating solutions that accelerate and reduce the cost of internal platform development.

The market for internal platforms is not only massive but also growing, as companies must digitize their processes to stay competitive. Cogna’s example highlights how AI can push this trend forward.

For established custom development companies, Cogna offers a new scaling model, one built around focusing on automation and high-value services.

While internal platform development might not seem “sexy,” it’s a lucrative and relatively untapped market, offering ample opportunities for startups willing to prioritize profits over market buzz.

Company info

Cogna

Website: https://www.cogna.co/
Last funding round: £3.76 million, 07.03.2024
Total funds raised: £3.76 million over 1 round