Building Web Apps with Just English and AI (with Vercel CEO Guillermo Rauch)

0:00Hello acquired listeners and welcome to another great episode of ACQ2 today. We have Guillermo Roush the founder co -founder and CEO Guillermo. What's the right terminology here all of the above everything the man behind Versel aside from all the big fancy numbers valued at over three billion dollars and Amazing customer list and blah blah blah. We wanted to turn the question to you and say how do you describe Versel? Versel is the infrastructure platform to build and deploy modern web applications Something that's personal that is infused into the company is I'm obsessed with developer experience with performance and with design so the platform is a way of deploying the best possible web applications with ease For the average visitor of the internet what it means is that every time you go to a link if If it's fast if it's delightful, it's likely to be built on Versel Yes, so but I'll give you an example think back to November 2024 US election and you're checking out news sites or refreshing you want to know the latest and greatest you need real -time data And so whether you're going to Washington Post What they're going to I don't Minnesota start Tribune or the innovators of the space like polymarket perplexity All of those are built on Versel and so increasingly whether it's a startup or whether it's established enterprise They're leveraging Versel to build innovative products or later in the month, right like Black Friday e -commerce You need to scale you need to serve tons of traffic.

1:40You need to have really good experiences So household names like Bose or Fanatics Supreme and the up and comers the new brands like Axel already got tow or ragable So those companies are all building on Versel and hopefully delivering products that people love all right So sounds today like very successful widely deployed everyone sort of accepted It's this amazing product and platform that we should use it was not always that way so take us all the way back to 2015 or even before and and how did this start? Yeah, it's gonna crazy to go back in time the company has grown so much now, but The original idea was simple So there were a million ways to build a website or a web application There still are a million ways to build a website or web application But none of them that met the quality bar of the giants of the web It was almost like Versel was a democratization effort if you think about companies like meta or Google or Amazon They build really fast They try lots of things they experiment a lot and their experiences are highly dynamic and tailored to every visitor But the web at the time was actually super static It was really difficult for customers to stay online The cloud was coming up, but the cloud was exceedingly difficult to use like it felt like you needed a PhD And this was my personal experience because when I started this company I didn't set out to build exactly what you see now I started trying to build a website and I reached for the latest and greatest again My aspirations were super bold super ambitious.

3:18It has to be like Google or Amazon quality And what is the latest and greatest at this point in 2014 -15 that you're you're thinking oh this might sell my problem Yeah, so Google had just open source Cooper netties An incredible sophisticated way of deploying infrastructure and managing it and Meta had open source react Which is a UI libraries for it's the engine that powers user interfaces the narrative at this time It's like all the web is fast like there's React there's Kubernetes like all this stuff is open source. It's out there really Exactly, but think about the average developer or think about the company that's going through digital transformation What tools do they grab for if they grabbed those tools they would have to spend months Quarters configuring them assembling them into their own platforms But for sale was born to basically automate all of that We wanted to bridge that gap between the availability of open source technology and you creating delightful experiences that you could publish really fast One distinction also was we started out very general you could deploy anything on for sale But where I personally found sort of like this true DNA of my own Person journey was focusing on front end development So for many many years ever since I was like 12 or 13 years old I kind of became obsessed with refining The side of applications that are customer facing I built a platform that focused a lot on that So I built the infra it delivers your applications globally really fast really well optimized But also this framework next Shias which now has 1 .3 million monthly active developers and Next Shias is all about giving you the tools and the perfect guard rails To build those awesome front end experiences and it builds on React So it's sort of the Standard now for how a lot of developers build the fastest web applications in fact to give you some context Anytime you use any modern AI tool whether it's chat GBT operator or clause or mid -journey all of those are built on next Shias So it's sort of become the gold standard for front end and did you start next Shias?

5:32Yes, you wrote the first line of code It was an open source thing and absolutely it was out of personal frustration to be honest because again think of it this way The ways of the future had already been discovered the papers had been published the open source And had happened thanks to Google met and many other companies But to actually put that into practice it felt like you needed a PhD Sometimes the metaphor that I give people is look like things like react or like the engine And people need a car to go from A to B and so next Shias and Versel became that car or even like that space shuttle to the cloud Both the lighting developers, but also businesses because for the business if you use next Shias and Versel The website is faster it makes you more money It converts at higher rate and against looking back what made a versel unique is that we We did both is like the vertical integration between software and hardware We build the tools for the developers and we build the highly optimizing infrastructure in the cloud for it And it was somewhat controversial The way that people would use the cloud back then was oh, okay, I'll choose AWS Or I'll choose Google Cloud and Versel builds on top of AWS But it was basically like choose your own adventure for how to build the app It's kind of silly that you would tell companies well Go shopping on GitHub For some open source framework and spend months Binding it to your infra that's so funny.

6:52Yeah, I remember back in those days like you know There were companies are like oh, we're gonna you know host Kubernetes for you What are we funded one when I was at majority? It was actually great outcome, but like Great gonna host Kubernetes, but like what are you gonna do? You know, you're an e -commerce company like Thanks. I've got Kubernetes like that doesn't help me, you know Well, Kubernetes engineers were fetching half a million to a million dollar salaries because they were so rare and so valuable and all these companies were like Well, apparently we got to figure out Kubernetes right one way to think about it is Versel hired them also you don't have to if you're building a cool web application or if you're facing Strong competition, right?

7:34Like you have to modernize really quick You have to adopt AI features you have to build new interfaces You want to cut to the chase you don't want to be managing clusters You don't want to be writing your own frameworks In fact some of the companies that I mentioned it was so interesting like they were developing their own next shs's We cannot develop the last framework so companies would not have to do their own adventure In fact, the joke I would make at the time was by standardizing on next shs Now you have access to all the stack overflow questions and answers that every other developer has run into so for the enterprise It made a lot of sense like a standardizing tooling You can recruit talent that is up to speed it with the tool and it's all open source and now it's even more so because the LLMs Are experts in next shs and react so it's like you're joining this global zeitgeist of knowledge and wisdom Okay, I'm obsessed with this idea of why did the opportunity for any given company exist and Hopefully this isn't too political of a question in the web development world But why is it that the opportunity for next js was there did react miss the mark in Creating the right level of abstraction.

8:47Did they create something way too powerful way to configurable way too heavy and It required someone else to come along and build the actually usable interface for the masses What a great question. There's a couple of things that happened one was that the community took this weird detour towards a static applications Which always befuddled me. I'm not saying I'm some kind of genius that saw the future but I was so puzzled because when I grew up One thing I loved doing was reverse engineer how the greatest things on the internet were built I remember when Gmail first came out I just nerded out for months try to understand how it works And so I mentioned that verse L exists to give you the suit Yeah, didn't you build like a web sockets library?

9:31Yes, prior to verse L socket that I owe I became obsessed with real -time Communication I became obsessed with democratizing how this greatest applications worked If you know how Google works if you know how Facebook dot com newsfeed works and They're highly dynamic. That's how they attract and retain users Why were people building static frameworks to react? It puzzled me because investors were chasing a lot of those frameworks. I was like why are you funding that and I quietly kept building this next shares thing that was focused on dynamic It was focused on rendering in the cloud as opposed to on the device and I also knew Very firmly that if you rendered in the cloud You were taking the burden of experiencing a website off of the device mobile kept getting bigger and bigger and bigger and You just want to give people the thing that they want and mobile as fast as possible I wanted to sort of offload all that Rendering and compute to the cloud and so that's the first alpha opportunity that I found Everybody else is focusing on static and sort of like the very very fat client Approach and I focus more on cloud and I focus more on dynamic which is by the way Way harder for me.

10:47So scaling up the infrastructure and Making it secure making it multi -tenant Doing all of that took years to perfect. So it's a very long bet And to your point react was also very low level and that also helped us I remember talking to a lot of really large sites at the time I think it was red thin. They were creating like really cool abstractions on top of react for their needs So there was also that opportunity to bridge the gap and give you the complete toolset to actually be productive It's interesting should react have had a next JS like layer From the start absolutely and Facebook actually had it It was just how they actually use the tool and this is something that happens in open source, which is And it happens low with papers Like the company will and to their credits like doing a great service to humanity like they'll give you some details And then others that are super important gradients are left out not intentionally and if you think about how Facebook actually used react they had their own next JS internally It's a lot of work to actually maintain massive open source projects like this So yeah, I think ultimately the market spoke And what they wanted was dynamic over static In a complete end to end framework with server site rendering over just the low level component And so then did you conceive of these two things at the same time the library of next JS and then the Very complex infrastructure for hosting it that would become versatile I started with the infra because I was obsessed with the idea that all the developers should do Is push code receive web application Anything that sits in between in the form of configuration Creating clusters filing tickets with it was nonsense.

12:37It was pure alpha for a metagrab and so First came the infra the mistake that I made initially was it was too general I was trying to deploy everything on their the Sun And when I actually made it true to my story of like focus on the front end Guillermo like that's where you know your expertise lies in some way you can credit and meme To the genesis of this story. There was this meme going around that Using front end was like solving this massive blackboard of math equations The front end ecosystem loves to be very self deprecating so they make a lot of jokes about like their own job And if you paid attention to the memes you would arrive to next JS because it was so difficult To actually get started building this projects That's when like the idea later arrived to like hey, I can create a front end framework And it's gonna play really really well with this infrastructure To concretize this idea for listeners the show Of just getting some of the crap out of the way where you write code you deploy it You receive application back I asked a developer friend in prep for this episode What was the first sort of magical experience you had with Versailles?

13:51And he said he specifically remembered the moment where he realized all of his Git branches were automatically deployed as previews And he could just go and in real time play with The code he had just written even though he didn't actually spin up a whole environment and deploy it Can you tell me about the origin of that feature and did you conceive that to be as needle moving as he experienced it as a user? I didn't realize that it was gonna be so powerful to give people URLs even before the hit production So what I knew for a fact is that obsession of I told you like keystroke to live application Like even Down to like a mathematical measurement like how many milliseconds should it take And I was gonna bring it down from weeks Which I had experienced in my previous job from weeks and conversations with humans To a developer pressing enter on a terminal or running git push.

14:47That was my obsession What I underestimated and it's been a wonderful gift for our business is that Companies value even more the ability for their developers to collaborate with other personas in the organization So when that git branch gets automatically deployed and you have that URL now everybody in the company can participate in building software Oh, it ends that horrible thing that I remember you going through when I worked as a developer where you're like Yeah, I can only show you on my machine and actually my machine is doing something weird right now Let me come over to your desk in an hour holding my laptop hovering over your desk so you can see what I'm talking about There's a lot of silly things that it still happened like developers fighting one staging machine There's a huge security risk by the way to dev and test environments in the cloud that they're like computers that are like just there With developers running tests in them whereas versels Preview environments.

15:48This is what we call this URLs are completely a femoral and secure And so you have all this horror stories of developers having to wait for hours in order to show somebody Sometimes is the developer shows their client as a freelancer sometimes his companies cooperating internally collaborating internally The other one that's crazy is you know, I had a conversation last week with a CIO of one of the largest banks in the world And they don't have this technology so instead what they do is they set up meetings They say okay next week. Let's coordinate a calendar of like 12 people And someone will screen share their machine to show the feature they're working on Yeah, it's nuts and they don't even get to test it on on the real thing that they should be testing on you can take this URLs I can put it on my phone and now I can experience what the end user will experience which is you know most people on the internet are on their phones Most developers are on their desktop.

16:48It's kind of silly One of our largest e -commerce was telling me like 90 % of my traffic is mobile Thank god for those URLs. I can load up the site before it goes out On that phone and have the developers face reality the developers sometimes like we are the most coddled people in the planet sometimes Besides the you know corporate lunches and whatnot. We have this massive mega computers You know the m4 m5 power super mac and then okay Are you actually relating to that end user that's gonna visit Your campaign your application your internal tool most likely in a mobile device and for cell is basically solving that problem as well That's great All right listeners.

17:31We want to thank a new friend of the show plaid The name is likely very familiar to you after our recent acq2 episode odds are you've used plaid before Without even maybe realizing it if you've ever linked your bank account to apps like robin hood Venmo or chime You're one of the millions of people like one in every two Americans who've already used plaid I feel like I've grown up in the tech industry alongside plaid There are so many modern experiences that are powered by them and at its core plaid isn't just about making it easier to connect to your bank It ends up being the backbone for thousands of companies building faster safer and more seamless financial experiences So whether it's reducing fraud speeding up onboarding or turning old school banking processes into something that feels instant and effortless plaid is making it happen So last year plaid rolled out some powerful tools think cash flow data for better credit decisions anti fraud tech with AI and analytics for bank payments and this year They've leveled up again with major updates across all three of those product lines Yep, they're even helping businesses manage things like direct billing for your subscriptions So the bottom line is plaid is making it easier for companies to build smarter safer and more personalized financial experiences that just work If you're building financial tools or infrastructure plaid's data analytics can give you a serious edge Whether it's fighting fraud underwriting smarter or managing payments more efficiently So if you want to learn more about how plaid created one of the biggest networks in financial services today Listen to our recent acq2 episode with plaid's founder and CEO Zach Paray and our thanks to plaid Okay, so we've been living in this like early Versel company history land There's always a few magic moments in a company's history as we move through the progression to today Where you really went from feeling like I don't know if this is going to work to oh my god People love it and I now believe this is going to work.

19:26What were some of those along the way for you? I think the most prescient one that blows my mind still to this day is the launch of v0 Which is our AI assistant for web development. It's crazy. You're giving me an example nine years into the company's history Yeah, when did this happen? Yeah, so v0 is truly like a startup within a startup The way that it happened is this large -language models became really good at coding They became really good at our tools as I mentioned. They've been trained on our tools They've been trained on next .js react is truly a blessing But we saw an opportunity to sort of disrupt how web applications are built So v0 transforms prompts So English descriptions Into working applications and user interfaces And it's a true disruption in that it's not code first.

20:19It's code last Anybody with an idea can cook you come to v0 You type in what you want it's time to cook And so to give you context on this right like we launched it as a research Preview in September 23 We're very early because we're so excited about what language models were able to do with code It took us 10 months to get to 1 million in AR and then 14 days to get to 2 million And then 20 more days to get to 4 million In that pays continues in the trajectory. It should something that I've never seen in my life before And I've been involved with successes like next shares and whatnot I mean, this is to the point where we are that company that is making the hyperscalers run out of GPU capacity In their world's largest regions.

21:07So it's been fascinating to be a part of this Okay, so how does it work? Why are you running out of GPU capacity? So Think of it this way to create a next shares application. Which is made it as easy as possible for developers But it still takes what like several steps setting up tools whatever Now you just open a website you go to v0 .dev You type in a prompt and all of that process that before was reserved to a couple million developers that exist on the planet Now the top of final is hundreds of millions of billions of people Anybody can create software with this and the kicker is this and this is what's my hum moment with this tool By the way, I've been doing front -ends since I'm almost in diapers like that's how crazy like I've been in the arena for a while It can create code better than what I can do by hand One of the hum moments was I recreated my own personal blog Which of course I wrote with next shares and the output of what v0 created was better It was better in a responsive way so like it was better in both desktop and mobile And it had better accessibility capabilities I had forgotten to set up some configurations and some tags and some code that came naturally to visit V0 knows everything and remembers everything The rate of application creation is something that has maybe like quadrupled For vrcell sign ups are through the roof and it's also because this type of the final Is people that before could have mixed as a vrcell vrcell is infrastructure at the end of the day right is it's really great for developers.

22:43This is great for everybody So funny so vrcell you have a corporate journey ahead of you of going from a developer brand to almost like a consumer brand I think developers will become this more common skill if you will development itself Think of it as like anything that was done by humans The then machines took over like translation Google translate is a really good example for me because first of all Google translate sort of originated transformer architecture as an interesting side effect But taking something in language a like Argentinian Spanish and converting into English No longer requires human specialization a lot of software processes software development processes are like that They're like translating intent into working code And my take is that development will go from being a role that translator was a role to a skill That a eyes will increasingly dominate a eyes are awesome at summarization translation and their awesome at writing code Now what's really cool to is that the taste of the human being The direction of the human being sets And the creativity of the problems that they want v0 to solve those are still intact those are extremely valuable And the other thing we're seeing at vrcell is that we've inspired other companies to pursue and create their own v0's Literally just a couple days ago.

24:12I heard about the v0 for CAD It's going viral in social right now computer automated design correct. So like For architects and for 3D printing and whatnot That company's using for cell because with open source The secret sauce of how we built v0 So v0 has been this double interesting disruption right on one level It's making for cells so approachable to everybody And on the other hand because it's infrastructure components are open source It's inspiring other companies and startups to go after the disruption of other industries You tweeted the other day about e0 e -mail zero and I was I saw that's zero Hell yeah v0 for email v0 for CAD v0 for medicine in fact there's a v0 for medicine called open evidence that is built with next shs and for cell There's this open source framework that we created called a isdk So think of it as the tools to build your own v0's And so it massively benefits versel if the world gravitates towards this expert ais and by the way This is not just business strategy of sorts.

25:22I remember when jensen said Most companies will refactor themselves into token factories You have some expertise you have some taste you have some opinion of the world within your organization for us That was web development design engineering. So we created v0 Just going to be e0 for email. There's going to be Finance v0 so I'm really really excited about what's happening right now And it's not just our success is a sure success of the community What is v0? Did you guys create your own foundational model? What is your infrastructure? What actually is the product that you're providing? Yeah, so many years ago I tried a product that failed and it's called next shs live So next shs live was the idea of helping you run the entire development environment of next shs inside a web browser And my aspiration was because frontend is all about what the user sees Can we actually cut out the design process?

26:19Can we design with code? And it turned out not to work so well because Even though we're targeting this persona that is very visual you still need to learn a lot of code So v0 is like us learning from the past or us trying next shs live again. It was like our Newton and this is our iPhone Right Part of v0 that's very unique is that we can run the rendering environment We can run sort of the foundations of next shs and versel inside the web browser And we combine that with the state of the art foundation models That we steer towards becoming experts in web development. So I mentioned how Visio is an expert in web accessibility Visio people tell us has good taste like the design that outputs Looks better than the average thing that sometimes people go slop Instead of outputting slop We created all these guard rails in the form of evals and benchmarks and prompts and rag We're even creating custom design systems There are tailored for AI and by the way, this speaks to the disruptions can happen even in the framework space Rouch G myself from 10 years ago Maybe it wouldn't be so successful today because I was creating frameworks for humans We're doing now is starting to create frameworks for ais Design systems for ais just to make sure I understand through these rules and evals and prompts and trying to remember everything else you said rag are you imbuing Versel employees taste Into it to make sure that the output always adheres to the taste level of your When I created next and it became so successful literally every company in the planet was begging me for support Support and training support and training support and training and I was like guys I'm creating infrastructure over here.

28:09I want to scale myself I don't want to go and teach everybody one by one how to hold this thing And that dream remained elusive for many years the idea that I could go myself to every company And you've probably seen that I still go to a lot of conferences I meet with a lot of developers. I meet with enterprises But it just doesn't scale. I want to send my best engineers to this company You know we employ the tech lead of react we employed the next shs team The zvelt team all these open source projects and these people have pretty full invoices as you can imagine They support tens of millions of developers and so you're exactly right.

28:49We are Inbuing the preference data the demonstration data of what they think is the best way to build software So it's our answer to how you actually make support Advice audits migrations at scale Sustainable and efficient a lot of you are using v0 Because it's really good as an immersion property to migrate from legacy frameworks To next shs and modern technology Which I imagine had to be a sales hurdle for you for a long time Of they really want to but gosh they just can't find this dev schedule time to actually rebuild the whole thing on vorsail Another hum moment and I literally made a fellow industry practitioners jaw drop the other day Is that you can get on a call with a prospect And you can build the web application of their dreams in that call It's just nuts We take a screenshot of their current website Build on legacy technology We throw it into v0 In outcomes the high performance version that otherwise would have been a sales pitch It would have been a trust me bro We can do this together.

30:01We can bring in an agency Literally is happening within calls so sales cycles for verseler shortening customer delight and trust is going up They shared this links the way that people work is changing a lot of our customers are now sending this v0 links The groundhog they have myself is like how can I make people collaborative with links Instead of words or dogguments or whatever right so this v0 links are how The conversations are happening. Oh, can you change this can you change that okay? Here's the new v0 for this So for the sales team solutions engineering team those people they feel so empowered They feel like they can actually cook as opposed to wait until you know our arrangements are made and in conscious or signed We get to software much much faster It's such an interesting fork in the universe of your company because what if LMS hadn't happened at the moment that they happened are you guys will still be a plenty successful company But your time would be spent differently the company would be moving in a different direction right now This opened up this whole different world for you.

31:08I think if LMS hadn't happened You know I almost felt that we're gonna hit the diminishing returns On all those Developer experience ideas that we had so when you think about developer experience to make it very crisp to listeners Developers need very fast feedback loops If not they're the most the people in the planet they get distracted they get out of the zone they lose that flow You know mythical flow zone that they love and so next season for sale obsessed with like okay What are the Classical software engineering techniques that we can use to optimize those processes For example, we partnered deeply with AWS's serverless infrastructure team for those deployment Previous instead of creating massive amounts of redundant infrastructure and clusters that cost millions of dollars We create serverless functions under the hood is a very specialized infrastructure innovation But at some point we're gonna hit the limits literally of the speed of light That's how fast we're gonna give developers feedback And we're still far away from that by the way like hitting those limits is like we saw that Supersonic plane yesterday.

32:19It's hard Engineering to get to the limits of physical reality But I saw the writing on the wall and I was very excited about it by the way because I was like I talked to a cutting edge database company there day The feedback loops for their developers today are 60 minutes They're doing a versatile POC it cuts them down to two So to make something that fast for some of the Highest leverage individuals on the planet best paid individuals on the planet is incredible returns for the organization But the writing was on the wall that we can bring it on the two We can bring it down to two seconds And then at that point the limiting factor becomes How many humans on the planet can do this job And this is what v0 is revolutionizing We can bring so many more people into the world of building software And now they can piggyback on this infrastructure has been Battle tested by some of the largest companies on the planet.

33:14It's fascinating I'm sure we'll come back to a lot of this v0 AI stuff. I do want to ask you some Company building topics sort of advice for other founders out there There's a lot of engineers who have a dream of creating something that is too prompt an open source project and a for -profit corporation The devil is in the details and many people fail at doing this well What would be your advice for people on how to think about doing that well My number one priority is to be excellent at one thing I want to be world class at one thing people call it like dominating a niche So when I started out of Versel and then I focused on making the fastest websites the fastest front -ends If fastest storefronts that's when things have started working for me Being a jack of all trades doesn't work in this world Both developers and the most discerning enterprises they just want the best product in the category and Versel became that for front -end and from there We can expand outwards and provide a lot more services to developers We call it the transition from being a front -end cloud to being a developer cloud You know developers are asking themselves for more from Versel And I think I had it upside down in the beginning I thought well, I have to give them everything instead.

34:35It's actually much better established it dance with a customer You give them enough that they love the product and then they should be the ones polling product out of you And so developers for many many years would say like can it get a database on Versel You know say we're not ready yet. We're not ready yet. Can you do more back -end on Versel? We're not ready yet. We're not ready yet And now we're ready because you viewed yourself as very tightly coupled to next JS for you know the first six seven years of the company right Exactly We focus a lot on next JS in front and frame works that had the same shape if you will There's others for example.

35:10We support Svelt That a power's company's like logitech on Versel It powers come as like a Kia So there's others is not just next JS, but this were all Frontend focused frameworks and what's happening now is people are saying well, I want to build more I want to build more of the back -end for my checkout process I want to build the entire back -end for my SaaS application I want to build the back -end for how I process the tokens coming out of the AI models And now Versel is giving them that but we started out focused and then expanded from there And so that I think is something a lot of entrepreneurs miss Which is they feel like the initial presentation of the product Has to match one to one the size of their ambition and our ambition was to disrupt all applications Even not just web and behind so anything that runs on a phone for example But if we didn't start with something that was world -class and small in the beginning I think we wouldn't be here today and to maybe ask the question a different way There's a great business model around Versel and there's zero Revenue generation around the open source project of next JS Did you ever think about doing it differently?

36:24Never absolutely not so open source for me has always been my life When I was in Argentina Open source was sort of my ticket out of Argentina and into the world I always wanted to build the best possible technology I couldn't fathom as a developer today If I'm starting an application imagine if the framework was proprietary It just doesn't make sense And we're doing it again by the way, so I mentioned the AISDK We saw an opportunity to democratize building applications like chat gpt We knew that there wasn't going to be just one AI rule at all right The web is all about decentralization It's about you have your own domain Name literally your own domain where you set the rules and Versel is so aligned with Making the web better Making it reach more places more surfaces The deployment model of the web the deployment model of the web is that you don't have to ask permission You don't have to ask for a license from anybody And web is where disruption happens to right so chat gpt was a website Built with next JS it was that research preview that someone put out into the world And so I'm very excited to continue to do this so AISDK To give you a contest went from a hundred thousand downloads a week To now almost a million downloads a week in about a year Is the second Most popular way of getting AI into a JavaScript or front -end application after open AI second largest AI module And there's actually no direct business model for it We want the developer adoption we wonder feedback when their community we want to get our brand out We want to learn we want to learn from as many people as possible And then when they decided build and deploy their application They'll probably choose Versel Because they know that we have sweated the details of the parts of infrastructure that they don't care about Some people do on some level there is an a key I effect to do of like I enjoy the process of learning I metaphor that I view sometimes is that You know you have to do it at least once so that you learn what it's like to create this infrastructure Is that going to school?

38:35But if you think about the successful companies out there That share the same business model as Versel Like snowflake like data bricks like data dog The value they give to the world is that you've given them the heavy lifting of infrastructure And you pay for what do you use if an application on Versel is a small Then you don't pay a lot If an application takes over the world You pay more So it's a very fair deal to developers and they understand exactly what they're paying for Okay, so one more question along this line I'm a founder. I'm considering something with this business model Would you caution me against taking it all the way to logical extreme where I say every single thing I do is open source And I'm the best in the world at you know creating the infrastructure and the hosting and the deployment So I can just trust that I open source everything that I do and I'm not giving away too much of the golden booth The bottom line is that part of the HS mentioned Most companies in the world want to offload The infrastructure burden to Versel So having that piece be open source so that we teach you how to set up 20 global regions of infrastructure with hundreds of microservices each Open source actually hits the managing returns there It gets so mind boggly complex And most of the software engineering that goes into that by the way is operational Rather than based on the source code It's the monitoring is the upgrades is the rolling systems is the staging techniques Actually, I would argue that's not where open source even shines for that matter Open source shines when it gives you a programming model So next Shies the finds and declares the application The way we think about this at Versel which is actually quite disruptive is Infrastructure has to be an output of the application Most companies that reach for the cloud start with the infra We're inverting that We tell you here's the next Shies framework focus on the application You're going to be multi -cloud you're going to have the ability to self host yourself Or we've also taken that burden here's Versel as an option And Versel doesn't need to be open source.

40:47I think it wouldn't bring value to that audience When you were Creating the business model Were there any companies they had perfected this that you're like oh this is the inspiration We should just do that or how much of this was innovative because the open source business model Basically used to suck. There were successful companies out there You know like red hat the company around it is just support. You're just selling support. It doesn't scale Totally There weren't a ton of examples to be honest I think the closest thing is probably data breaks or GitHub GitHub is a lot about collaboration and it builds on Git as an open source component They didn't create it.

41:25So I think that's a big difference But they give you this urls to code So there is a huge parallel there instead of Versel gives you urls to working applications I'll argue that code over time will become less important as it becomes a domain of AIs But GitHub is a phenomenal example of that part of the pre -production side of Versel And then on the infrastructure side Companies like data breaks or snowflake where in the data breaks case you adopt an open source component like spark And then they have a highly optimized compute engine For that component in the cloud and you can totally do the DIY yourself, but scaling global clusters of compute Very difficult job that sort of the secret sauce of Versel For the parts of the application that deal with the run to the serving the securing of the application the dvls mitigation The making sure that it stays up during massive spikes of traffic.

42:25That's a beauty of Versel It is a beautiful business model There's actually like a lot of stuff you got to do for this to be viable right like for corporations to trust you To be their infrastructure you can't just be like oh, I'm a seed stage startup, you know, it like Hey supreme come trust me with your infrastructure like what were inflection points there like when did you feel like whoa We got a customer that it was hard to get them to trust us and how they trust us I feel like it's when it rains at pours because it's now happening a lot You know there's all this banks that are migrating to Versel I think by the way I'll give credit to the crypto space So what happens to Versel by the way is Whenever there's a new wave of technology and this has been a blessing and also Sometimes a challenge Anything is new and disruptive people tend to build it on Versel Why because they're motivated by the speed at which they can get their idea out So if you're building on crypto and you're building on AI most of this startups are choosing for sell Crypto though was fascinating because it attracted literally the worst darkest actors in the internet So it really made us triple down quadruple down 10x on security services and products From the careful encryption of the vaults of how people store the secrets to connect to their databases and backends or wallets and all kinds of cryptographic Details that this company's need As well as the traffic the hardest most difficult thing about the internet and running infrastructure is that you have to discern between good traffic and bad traffic And we set out to do security the Versel way The Versel way is that it's zero configuration is secure by default And we needed to be secure by default because I think something is different between us and the CDNs for example For context Versel builds in the CDN and WAF capabilities that You typically would have to like go to another Infrastructure provided to get the decommi cloud flare blah blah blah yeah The difference between the legacy once of the non cloud ones or the outside the cloud ones like acommi cloud flare is that because they don't host the application You know they filter out all the traffic.

44:44It's hard to save their even doing good job sometimes Whereas Versel has to filter out a hundred percent of the malicious traffic instantly Otherwise, it's your own problem correct That you're incentive is aligned to be a really really good CDN correct crypto really put us through the ringer and And I love that to be honest, you know, I look back and so for example Solana is really hot right now Solana hosts all of their web properties We're like the web two face two web three for a lot of these great blockchains and crypto companies All of the large NFT companies picked Versel and you could imagine also just the massive upswing of traffic right like there is a meme coin that that goes hot There is an NFT that goes hot there is a new cryptocurrency that goes hot But it bolstered our security to the point where we have industry leading response times for example in ddo s mitigation We do it within seconds Our competitors do it in minutes Sometimes and we see this because sometimes customers layer on another CDN in front of Versel, which is not necessary And so we see the attacks coming from the CDN and we're like what we were supposed to protect the customer That was fun and yeah, you learn a lot by being exposed to all of this I gotta say there is a delicious irony to the fact that these fortune 500s that are signing these big multi -year enterprise contracts with you And effectively using Versel for their own digital transformation and changing their workplace and their culture is benefiting from being hard and DeDoS attacks from the crypto world, but there's another fascinating effect The way that we've gotten into large enterprises sometimes is because they acquire No, but intended acquired podcast they acquired a disruptor they acquired a innovator I wouldn't be surprised if there is you know in the next 10 years more of a merger Between crypto and traditional finance that's happened a lot with AI You know next Shs has become the common language that it speeds up M &A I also give credit to react for this when you acquire a next Shs powered company Your integration times go down to like what you copy and paste some files into another repository Why because the infrastructure is an output of the application literally the job of integrating Companies becomes Integrating the two front -ends the back and serve is there plugable The more people standardize on this tooling There is this like greater than the some of the parts effect that happens And we're starting to see it in the form of M &A where the startups get really really really big and intimidating to their Incompent competitors and they get bought and of course There's also enterprises realizing I need to hop on this train.

47:32This is how I get talent This is how it retains talent. This is how I move faster. It's been awesome to see that we have Global impact and it happens with the brands that I love my favorite automobile company From Germany uses for sale and it's just delightful. So all right, which one? I think we don't have it logo rights for that one, but like Have we covered it on acquired or not you could probably extrapolate from Versailles sort of design and taste. Yeah, that's pretty awesome Great. We won't push you into something uncomfortable there One question that's been a fun one for us to ask here on acq2 the last few episodes is What is something that you believe as a leader or a founder or a technologist that you have real conviction in and you feel others don't?

48:18Yeah, I think there's an easy one for me here because I experienced it over the last couple weeks that Reaffirm my conviction. I think CEOs especially technical CEOs Can and should be involved in every aspect of the business Whether it's closing a deal Whether it's looking at the numbers of the last quarter and tuning sales quote as in sales compensation Whether it's informing future product roadmap whether it's pricing discussions I'm involved in every aspect of the business and and how many employees are you? 550? Okay Maybe also for context Versailles is now at about well last number with this close was we hit a hundred million dollars in annualized revenue may 2024 growing 80 % year over year in revenue and Developers using versailles more than doubled over the past year So we're operating at a significant scale and I think the role of the CEO and the conception of the CEOs evolving and changing companies are becoming a lot more transparent It's about optimizing the information flow within the company rather than creating silos of information We're doing it a little bit different here at Versailles.

49:35How do you stay that involved with 550 employees? I think using our own product has been a massive acceleration I don't need to get brought up to speed on things I'm in direct connection with the developer community. I talk to customers and whenever I find time I use V0 I use versailles. I'm staying very grounded on on the reality of the product So there is just no time being wasted on like briefing executives The expectation is that you understand the customer deeply understand the product deeply We try to hire people for every area of versailles that have a technical background that have used versailles in the past if possible And so we tend to move really fast We optimize our entire product and platform Around product velocity right so the way that the company behaves Is the way that the product behaves When I'm seeing success with some of the largest more established brands household names When the CIOs CTOs CIOs come to me They don't want a specific aspect of our technology.

50:43They want us to teach them how we build They want us to export how versailles works They can tell that we're moving fast And so by continuing to make the company and the product a sort of symbiot a Two -way street I think this is how we're saying really fast and lean Makes sense So an outside observer would then say there's got to be some trade -off here How can you possibly hire executives that you want to empower as much as possible But you also want to be extremely involved. How do you deal with that trade -off? I think the fast exchange of feedback is huge right of course The executive is the one that's on the line that is responsible for a set of Numbers KPIs outcomes or everyone and call it But I'm involved in giving them high quality feedback.