20VC: Windsurf Founder on Will Model Companies Own the App Layer | Why Moats Do Not Exist in a World of AI | Why the Notion of Single Person $BN Companies is BS | Lovable vs Bolt & Cursor vs Windsurf: How Does it All End with Varun Mohan

22:46I think everyone outside looking in is like, CUDA is the real vote or something like that. I think that's just inaccurate. When you look at large companies like OpenAI and Thropic, Google, let's say Google if they were buying Nvidia. I know that they build their own TPUs. They spend tens of billions of dollars on chips. Are you telling me if CUDA didn't exist, they would not use Nvidia GPUs? No, they find a way to write assembly the lowest level code and make that run on the GPUs. It's that expensive for them. The reason why people use it is just awesome. They've made it really capable at doing low floating point math.

23:18They've made the interconnect really good. The computer's really fast. And every year, they have a ticking time bomb on their head. If they don't make the hardware, they interconnect kind of the memory bandwidth much, much faster every year, they're gonna lose. Like their profit margin is gonna shrink, right? And AMD will be on their case. That's a little bit of a surprising sort of feeling. like in video doesn't have the same properties of a company that a company like Google has, but it's still one of the most valuable companies out there. I agree totally in terms of the most for startups. If you have two companies starting start line today, but if one of them becomes part of a very large company, say an open AI or an anthropic, and they suddenly have distribution and they have brand and they have resources which buys chips at scales that are unparalleled compared to what any other startup can do.

24:05suddenly seven powers becomes increasingly prominent and most exist, no. I think the reason why some of this wisdom is potentially not correct is, I think speed is still important in that case. And the reason why is like, why does a startup ever win? Why does a startup ever win in an important category? Why did Google win in the early 2000s when Microsoft was already a behemoth at that point? If a company has good insights and is able to out execute strategically another company, they will win in a space. I would argue that distribution is more important in speed. This and you're the multi -billion dollar founder.

24:39So please correct me. But I might partnership agreements is really what propelled Google in the early days to be so successful. And this also that there were lots of companies in the category and they had the best product. And for that reason, a lot of people wanted to partner with them. Maybe let me put it this way. Our space is like very, very valuable. But if you actually look at a lot of the hyper -skillers, their products in the category are not amazing products. Even though they have a lot of distribution already, why is that? And I think it's actually because it is hard to marshal together a talent to actually go out and execute in this category very quickly Right, we're the kind of company we're right now.

25:10We're shipping a major release every one to two weeks Name a large company that is able to learn that quickly Why do companies suck as velocity of development when the market is as hot as it is today? I think it's existential dread a startup has existential dread on whether or not they can survive if they don't ship fast enough if they don't learn fast enough. Right? If I'm inside a behemoth, like I'm inside Amazon, and Amazon has a product in our category right now. Do you think the employees working on this are worried if they will have a job in six months if they don't ship a great product?

25:43If we had shipped the same quality product that some of these hyperscalers have shipped, we'd be out of the market a year ago, but they probably still have their jobs right now. It's the seven days a week that's becoming the norm again and so they can value, huh? We're an in -person company actually right now, like a 100 % in -person company. Can you build a company today remote as efficiently as the in person seven days a week Silicon Valley Specialness that you're seeing return to the Valley again. I think it's just it might just be a little bit harder Right, I think you need to be a much more Principled company to start with.

26:16It's just an unfair advantage if a company is able to get their engineers kind of in the same room and on the same page every five minutes if necessary, right? It's an unfair advantage on speed compared to a company where people are on different time zones. Like, you don't know when you can reach out to someone. Right now, if it's two or three p .m., everyone at the company can be kind of like brought into a room at that very moment. It just makes your flexibility a lot faster. And in the early days, Harry, when I was talking about how obvious it is that your first idea or your ideas are not going to be accurate, you should be able to pivot extremely fast and kind of like Marshall everyone at the company has quickly as possible.

26:54Do you think in your category brand power is important? People associate with being a Windsor fuser or a Cursey user. Do you think brand has that same power that it does in other categories? I would like to obviously, I think having a large brand is just helpful. It enables you, as you ship more and more new products for more and more people to be able to use it and not have to build that, build the user base up from scratch. But if I just was to remind everyone, you know, kind of like a year or two ago, probably in Silicon Valley, GitHub Co -Pilot was the product that everyone was talking about at that time.

27:29If I was to talk about it a year ago, actually a bit over a year ago was the Devon launch, and I think for three to six months I was not hearing anything but Devon from everyone. And I think it's like in our category We need to prove ourselves almost every day. If in three months, we don't ship something amazing to our users we will become irrelevant to a lot of them, right? If we don't actually, like, keep up with the pace of innovation, we will become irrelevant. So I think it's a little bit of, if you can maintain, if you can continue to innovate at breakneck pace, the brand is definitely helpful, but I don't think the brand gives you the right to move slower as a company.

28:06But should these businesses not be valued inherently less or the much lower multiple, if that sustenance of value is able to deteriorate it's more quickly than ever before. As you mentioned, as you mentioned, GitHub, Copilot, brilliant examples. And then suddenly have a reduction of value so fast, should they be valid in the same way? So I think there are still qualities of our company that we haven't really talked about of like having a large enterprise business, being a wall -to -wallet, very large Fortune 500 companies, right? And being able to work properly for large teams, which has inherent switching costs for the business, right?

28:41Not the same class of switching costs as some of the products like sales force yet, I don't think we built that out. There's a trade -off where if you focus so hard at making your product a switch off of, if you also don't improve your product fast enough, people will just switch onto the better product, despite the fact that it's hard to switch off of your product, great. I always remember seeing a tweet from Tom Blomfield, who's a friend of mine, and he was like, I didn't really get this space. I was a curse, he used a nice switch to win stuff, and it was like better or just as good or, like he switched to win stuff for this one project.

29:11I've no idea if he stayed. I'm not making a comment, Tom, don't kill me. My question to you was like, how do you think about switching costs and retention? And is it that easy to switch between the two? We need to innovate on features and product fast enough that we were able to build differentiated experiences for four folks. That actually takes a lot of work, right? Like as I was saying, like most of our products that we end up building don't end up working. And even though we're shipping releases every couple of weeks, some of the more complex pieces of technology that we've shipped, they take months to have a lot of work.

29:41actually shipped. So I'll give you an example. A couple of weeks ago, we shipped a model that was comparable to some of the frontier models at the agentic workload. And our model, SweetOne, is much faster, much cheaper for us to run and capable of operating over a large code base as well. And we were able to do that by learning from our users on how they use the product internally. And that was not a single month kind of experience for us. It took us many months to actually build out that that model internally. But these are the kinds of, and now it processes hundreds of billions of tokens of code a day, that single model, right?

30:10And it's running on our own GPUs. But this is like one of those things that it takes time to kind of build out these capabilities, just like how maybe, you know, for everyone in the audience and folks like Tom, he probably never heard of our company 10 months ago and used our product 10 months ago. These things change extremely quickly, but you're totally right. The fact that it can change this quickly means that you need to be ultra vigilant. The same reason why no one had heard of us in Silicon Valley, like maybe 10, 12 months ago. And now, like a lot of folks have heard of us, the same thing can happen in the other way too.

30:39You mentioned the strength of enterprise in your business. How much of your revenue slashes today as enterprise versus bottom top? Yeah, so I would say like over 50 % is actually enterprise. What are the biggest questions less than the things that enterprises care about when they buy you? I think there's maybe a handful of things. I think the first thing is a lot of enterprises and large companies. This is something that's not very obvious to folks outside looking They have a lot of Java developers and for the Java developers, actually most, most large companies have a lot of code in Java. They use an I .E.

31:12called IntelliJ as part of the JetBrains family. So this is like an interesting fact, even though we have the Windsorf Editor, we still support plugins into all the JetBrains I .E .s and it has the same functionalities as the Windsorf Editor. The reason why we forked to the VS Code Editor was because we didn't have enough flexibility to build out the UI that we wanted to give out the new agentic experience, but we were able to give that out entirely in JetBrains in the plugins. I'll give you an example, JP Morgan Chase, who is a customer of ours. Over 50 % of their developers are JetBrains users inside the company.

31:43For those people, we're able to support all of their developers. We're not a product that's only for their VS code users, so they can move over to Windsor. That's an interesting fact that I think outside looking at people don't really understand that for the enterprise, there are lots of these IntelliJ users that we need to satisfy. When we go into an enterprise, we don't want to tell them, hey, only 40 % of your users can use our product. We want to make sure all of their developers can use our product. Do you think your customers will have more or less engineers in five years time? It depends on the type of customer.

32:11And the word engineer is going to become a very flexible word, as I was saying. As the technology gets better and better, people that are technical adjacent are going to be using Windsor as well. And we're already seeing this, by the way, at some of the companies. But what does engineering five years time mean? If I was to explain it to an engineer, if you were to go over time, just for an engineer, right? If you go back 50 years, everyone is writing assembly, then after that, they're writing C. And by the way, people still write assembly though. After that they write C, then it's like C++, then Java and Python.

32:41And then now a lot of people writing JavaScript, right? And ease of programming has gone up, but a lot of the people that write JavaScript have no idea how to write assembly at this point. So I think it's going to be something along those lines, right? There will be people that are able to operate purely on a natural language -based abstraction. and the AI tools are able to explain to them how different components of the software stack work so that even though they're operating on top of natural language, they're able to still be valuable to the company. But then ultimately down the line, there will always be production critical applications.

33:11Let me give you an example. Let's say I'm JP Morgan Chase and I'm building my transaction processing system. You probably don't want to vibe code then, right? Like Harry, if you give me $100, probably you don't want to like lose $100 and for me to not get the $100, right? I'm going to complain and that's some transaction processing system that's running in JP Morenches, that is probably doing millions of transactions or billions of transactions a day. And for that, you probably want someone that can go all the way down to the weeds and validate this actually makes sense, because that's core to the way the business operates.

33:39You're going to have a spectrum of people, right? People that can operate purely on top of natural language and their building capabilities and technology and apps inside companies, but then people also that can go to the weeds, go down to the weeds. Now, how many people need to go down to the weeds? Probably fewer than there are today. Do we have PMs? I'm always told that PMs are CEOs as a product. And many have said that actually, we're not gonna have PMs anymore. 11 labs, I had that, I had a growth on the show the other day, I was like, we're at PMs. Do PMs have a role in five years? I think the expectation for PMs is not going to be down the line.

34:11It's not going to be, I tell someone to go and build something. It's going to be, you should go out and build it too. There will be, need to be a lot more agency on their side. But the benefit is these AI tools are going to give them that capability. Right, let's say you do have a technical PM that is that undersense code and that can write code. They are even more deadly now than they were in the past. You don't need to give them a team of 10 people to prove out their idea. One of the things that I kind of don't like about PMs probably in nowadays in a lot of cases is they spend so much time writing docs to try to convince the organization to do what they what needs to be done.

34:43But instead they should just go and build a version of what they want to get done and then prove to the organization that that's what needs to get done. Why do you need to spend so much time and maybe in your organization, playing a game of throats, right? It doesn't really make a ton of sense. Did we skip the design stage and go straight to prototyping in the future? Probably the ability to very quickly mock up a design that is consistent with the design inside your company and prototype it is going to be much faster, right? Like internally right now when we build apps, we're not very, very quickly going to Figma at the very beginning if the app can be built very fast inside.

35:18And then obviously if it's core to our product experience, We're going to go out and design the layout and make sure it's to our standards. But rapid prototyping, we can definitely skip like a laborious design stage right now. I'm just fascinated. Where all of it converges together? As we said, you meet the loveables and the bolts in the middle, and then the figmas are coming in now and actually saying, hey, turn design into code and kind of coming in from outside. I'm trying to figure out what this kind of mess looks like in five years' time respectfully. for me. Yeah, I think it's a fair question.

35:49Maybe one thing is for people outside looking in, the things that the loveables and figmas do is like maybe a very small fraction of what software is, like ultimately, like most software is not just like a website that has like some back end attached to it, right? There's complex database systems software out there. There is all of this infrastructure. Most of Google is not the front end of Google. Like think about how much work goes into Google. Google is probably one of the most complex pieces of technology. There's a very complex re -ranker. There's this database called Spanner. That's a geographically consistent database that exists that's probably tens of millions of lines of code.

36:24All of those things, there's no one that's designing something in Figma for modifying the Spanner code base inside the company, but we would like it so that they're using Windsorv to actually go out and do that. We don't sit and think about what these other companies are doing all the time. We're sort of thinking about what are all the ways in which software engineers spend their time and how do we make them much more efficient. So you're totally right that I think the design stage a lot of things are going to get disrupted inside, but maybe one point I just wanted to add is that's maybe just the tip of the iceberg on what a software developer ultimately does.

36:54I was going through some of your tweets as well and you said, async remote agents will happen and I just wanted to double click on that first. Can you expand on how you think about this and which tasks will be automated first? I think what's most likely to so the idea of async remote agents if you were to look at a product like Windsor, Windsor is actually a local agent that runs runs locally and it can do very long -running tasks. You can migrate an entire codebase from one version to the next and it should be able to do that without you having to touch your keyboard once you once you instruct it to, which is very, very powerful.

37:28But this idea of being able to do asynchronously is also very powerful. You can imagine like just firing something off from your phone and it just generating a like a pull request for you. But I think one of the complexities of this is is there's a building products in our category, is I think there are three things that really are important. There's latency, so how long it takes to get the response back? There's quality, right, which is, what is the correctness? And then correctability. How quickly can you make a change? And I think people kind of feel like if the technology's really good, they can kind of ignore these facts, but it's really, really important.

37:58If you build an asynchronous experience, and it takes 10, 20, 30, maybe a couple of hours to go out and build something, people's expectations on the output are gonna be really high. Your quality has to be really, really high. And if the quality is not high, it better be easy to correct. But it's not very easy to correct. Like when the workflow of how people build software, if all I do at the very end is I create a pull request around GitHub, which is the final way that people review the code. And even 20 % of it is wrong. Let alone 10%. I wrote, it has to be at least 90 % correct. People were like, it needs to be 99 % correct.

38:31I think they might be right. Because if even 10 % is wrong, people lose faith in the product because they waited hours to get the result, right? And they need to bring it back in locally and modifying something that is 90 % correct is not that easy because you need to understand the 10 % that is wrong. Also, which takes time too. You're still human time limited at that point. So my rough feeling on things is what are going to be done asynchronously remotely are things that where the task is so easy that it can actually get it done properly. Like the complex tasks are still going to get done in Windsorff in the short term.

39:03just because things that are complex and require a lot of rapid iteration, it's unlikely that you're going to do something asynchronously. Wait 30 minutes, go and look at it and get up, and then decide, hey, it's not correct and bring it back. The feedback loop is too slow at that point. To what extent do users care about latency have you found? Very much. I'll give you an example. Like, even for a tab product, 10 milliseconds, which is like the product that gives you not only the auto -complete, but the automatic refactors as the user's typing. every 10 milliseconds affects a percentage points in acceptance rate for the product.

39:36When we think about these async remote agents that have to be incredibly responsive, that have to be correctable, what form factor do they take? We mentioned that earlier, just pinging off a message, how do you envision the right form factor and what that will take? It's not super clear, right? It's possible that the right form vector is you need to fire this off from your ID because people are in their work state, in their ID. Now, the question is, how common is the use case that people want to fire things off from their mobile phone? And then if they do, is it fine for it to just be on Slack?

40:09Do people want to continuously talk to something on their mobile phone? I think the answer is maybe not because if I get thousands of lines of code changes, I don't know how to review code very effectively on my phone. And then in which case, like, I don't want to interact with something on my phone back and forth. So maybe I'm game to do one and done interactions on my phone, and then it'd better be 100 % correct. And I'll go back to my laptop and be like, no, it's correct. And then stamp it and then approve it and merge the code. So there's a lot of trade -offs here. When we talk about the right form factor for these remote async agents, it kind of makes me think about something that Satya said.

40:43And I did write it down because I wanted to make sure that I got it right because I didn't want to miss quote Satya. But he essentially said that obviously apps will collapse into agents and become just databases with business logics. Do you agree with him in that respect? But Salesforce becomes a database that agents just crawl all over, a HubSpot the same, and you basically have that utility value you reduce to just databases. I'm trying to think about why I think that's not exactly true, but you're totally right that I mean, you know, for any company, their entire state could be distilled down to a database, right, for any company.

41:15I don't know if I completely buy that in the short term, these complex applications like Salesforce and Workday completely get replaced by another company that just builds a database in an agent operating on top of it. A lot of complex workflow has been built around the idea of using Salesforce. I'll give you an example. When we built our sales team, everyone already knows how to use Salesforce down the line. And now we built custom workflows inside Salesforce. And you're right, those are all database transitions, but they affect the way humans operate with software. It's very unlikely to me that what's gonna happen is Salesforce will get de -throwned by a company that is just a database with an agent operating on top of it.

41:50It's just there's too much inertia for the company building out these complex workflows. And maybe here's the final piece and maybe why I believe that. I don't think agents are good enough today that you can kind of just let them operate on top of a database and write to the database automatically write to the database without human supervision for some arbitrary workflow, right? Right now we're still in the stage right now where these agents are mostly reading from data sources. They're not like modifying things at scale. And that's just because maybe we don't have the trust the systems deeply enough right now.

42:24Do you think we are overly optimistic about the progression of the agent landscape? Obviously, as a venture investor, do you think we give a shit about today as agents? Do you think we are overly optimistic about where we are? This is going to be the most obvious statement, but I think people think these systems are way more capable than they... Like a lot of investors might believe they're more capable than they are today. And I'll give you an example. My goal here is not to kind of downplay anything here. But I remember last March when the Devon launch came out, everyone was giddy with excitement of the idea of software engineers getting replaced.

42:58A bunch of investors were like, oh, there's no reason to ever hire a junior developer. You will have this. And now we're very far from that right now. I don't think, or at the time, we were very far from actually replacing a junior developer with an asynchronous AI agent. But I think what people don't understand is even if the technology is not there yet, I don't think they grasp how quickly the exponentials are improving, which is that in six months, what is capable of these models is gonna be very different than what is capable today. I think people are, it's very hard for people to understand that.

43:26Like what I just said about agents and the fact that they're really good at reading systems at scale, but people who entrust them to make rights to systems to internal databases at scale, that will probably change in six months. Because eight or nine months ago, people were not using agents, a ton. Yeah, I think people underestimate the speed which these things improve. What do you think in 12 months will be crazy that we don't have today? Like you said there about kind of the transition and models bluntly improving so fast in such short time frames. If you think about what we do today that we would consider crazy that will be a reality in 12 months, what do you think it would be?

43:58I think a lot of things that maybe I understand the software development landscape a lot better is how and 10 these tools are gonna be is gonna be, I think, shocking to people. I think right now, if I was to say one of the biggest problems of these tools is mostly they help in the code writing experience, they're not helping in a lot of different aspects of the software development and lifecycle, which is software developers design software, right? They deploy software, review software, build, navigate. They do a lot of debug tests. They do a lot of different things. And I think the reason why it's mostly been kind of siloed to one or two areas is actually when you look at a software engineer and their job at a company, they look at a lot of distinct data sources.

44:35They look at like a logging system. They might look at a database. They might do all these other things. And I think these agents are going to get access to all of this data and all of this data, your browser data, all of this stuff. And I think what's going to be possible is debugging very complex tasks. Designing systems is going to be something that these agents are going to give much more leverage for than they are today. And I think this idea that software engineering, there's like a part of software engineering that AI is not going to touch because it's too hard. I think it's just going to be wrong.

45:03I think every aspect is going to become 10 times more effective. Can I ask you a really hard one? You mentioned Devon there. If you look at say a cursor, what have they done well that you've learned from? And what do you think they've maybe made a mistake on that you've learned from? I don't know. I don't know about a mistake, but I think for them, just actually, I think they took a really good approach on building high quality UI UX that actually proved to be what people really loved. And I think that's very impressive that they were able to do this right off the bat. I think that's not actually what our initial intuition was.

45:35And I think they actually did well. What do you mean by that? It wasn't where you placed importance in terms of that initial UI UX being seamless? Yeah, I think for us to go ahead and build Windsor, we actually felt that we needed a massive technical breakthrough of a new product experience. I think that was the only reason why we decided to go out and build, to have our own ID. If we didn't do that, I think we're the type of company that would not just go out and build UI UX just for a much better experience by default unless we had great technology. I like to think of ourselves as like we're a technology company and I think we ship product to maximize the amount of technology that our users can consume Productively and we want UI UX that is not harming people's experience of our product To what extent is the quality of your customer experience Defined by the software that you create the UI the UX Versus the model progression that lies beneath it being open AI and throttick Yeah, I think I think you can't downplay the fact that that the ladder is very helpful, right?

46:37The frontier model is getting getting getting more and more capable every new capability unlocks maybe a new type of product experience that wasn't capable in the past, but I think it's a little bit of both right Maybe to put it kind of lately like we were the first agentic IDE experience when we launched Windsorf We were the very first ones obviously now that idea is not very it's not non -consensus like it was the obvious thing to do But these models like Sonnet had existed for quite a while, but it actually took us some work to actually put together, like using these models, but also using our own models internally to make this a usable experience with the UI, you actually be able to review all the software very quickly before people actually, the product experience kind of took off.

47:17So I think it's a, it's maybe a little bit of both, but I don't want to underplay how much the models actually affect, you know, the value people get from these experiences. People often compare the model landscape to the cloud landscape, The thing that I find challenging about that is cloud, you generally stick to it. You're on AWS, you're not switching between AWS and Google and anyone else. To what extent do you think model landscape will be one way you have a preferential relationship with an AWS as well, then cloud or anthropogroponial and models versus actually you just work between many different model providers and you switch between them for different functions.

47:52I think you're right. The space is very early is the reason why it's kind of like the switching costs of these category is not very high, right? Moving from one model provider to the next, it's very low switching costs. And by the way, that's because there's no state in these models for the most part. So for the most part, it is almost like a Twilio -like experience where it's like send text message and you kind of send a text message, but maybe I could send text messages with a lot of different applications. But I don't take that as a big negative. I think what that means is we're still evolving in this category.

48:21Down the line, you could imagine models can actually internally keep a lot of state about a user, about all the data they have inside their company, about all the data they use locally. If you were to look at a lot of large code bases, they are actually getting to billions of tokens of code. What if that's actually something stateful that you can inject and inject and inject context about this from a particular model provider? Like I'm sure there are ways in which they can increase their switching costs down the line as the technology gets better and better. But I think this is what it comes down to, right, Harry?

48:50In a category that is evolving so quickly, and when the models are improving so quickly, It is actually bad for them to over invest in ways in which they can increase switching costs. That doesn't make sense because let's suppose they did do that, but they missed the next improvement in the model. They didn't do test time computer or something. They would be behind it. And then it wouldn't matter that they increase the switching costs. Ultimately, the analogy to cloud providers is not accurate right now. They don't have the same properties. It's not the same kind of business right now, but could it be down the line?

49:18I think it could. Today models do have non -commoderized properties. Anthropic is often hailed as being better for developers, for example. To what extent do we actually see the complete commoditization? I mean, there are literally 12, 13 different providers in China who are racing faster than ever. And we'll reach some asymptotic utility point where all of them hit the same level. And I'm sure the US will be the same. To what extent do we hit that versus? No, no. And Thropic is the one for developers X is the one for whatever else. Yeah, I think it is unlikely that in the short term, you will have like an ability for one model provider to just run away with a particular category.

50:01If the category is like very valuable, it's unlikely that that's the case. Now, I do believe in things like the scaling hypothesis, which is to say with more scale, you are able to build better and better models. You do have like your hands tied up if you're operating with less capital in the category, the nature of the game. But I don't think we're anywhere near the point in which you're gonna have someone who is the defining leader of having a great model And no one else can touch it for for years and maybe the the reason for that is actually because six months from now If a new technique exists and someone else finds the new technique They're able to do it in a much more efficient way and if they're able to do it in a much more efficient way It means that if you just miss it and you're still applying your previous technique You're gonna be behind them.

50:43So it's almost like Unless you believe that one company is going to get all the capital in the world and no one else is ever going to get the capital in the world, and one company has a monopoly on all great ideas. It is unlikely that you're going to have someone that is able to run away with something in the short term, if that makes sense. Given the commoditization of that model layer, as we said, and no one being able to run away, to what extent the model providers have to move into the app layer to have any form of differentiation. Yeah, maybe in the API side, I think there are lots of ways you can build better APIs for a lot of different applications.

51:20And you can kind of focus on the applications you do support. And an example of this is, like let's say you are kind of working with a company like us, and we were using a model provider. When we output code, maybe a lot of the code looks the same as existing code. And you can actually optimize from a latency perspective to help our workload versus another workload that exists for images out there. and you can be a much better kind of vendor to us than another company. So there is maybe specialization you can have on different axes to provide a better experience. But as you can see, you are seeing like these model companies actually going up to the Applayer too in whatever apps they see are like valuable to them.

51:56I think you're seeing a little bit of both. People have too many opinions about what the right way to do things are and I think you have to be rational on what the best way to win is. And I think that's the only thing that matters. Finally, I do just have to talk to them I taught you for a long, long time. Dario the other day was talking at some event or conference or whatever. And he was like, 2026 will have like solo billion dollar companies without doubt. I just wanted to touch on this with you. Do you agree with that? No, I don't believe in that. Please explain. It's really an university essay, discuss.

52:27I mean, I think the solo billion dollar company would imply that no one else cares. Like we live in a capitalist market, so there's competition. And if you're able to do something with one person unless you're just a thousand times smarter and more capable than everyone else, like someone with two people that are as smart as you are probably going to be able to do your idea. And if they do, that's going to compress your margins, that's going to compress your ability to be the pervasive brand out there. That's going to compress your customer acquisition cost or increase your customer acquisition costs.

52:55Like it seems like very hard for it to be the case that a single person is going to be able to run away with a billion dollar product without continued investment. The implication of that is like, no one else cares about this, but magically you're able to do well. What do people who believe this to be true get wrong? What are they fundamentally mistaking? I actually, I've never understood this idea of like a single person is going to be able to build a billion dollar company. I've never kind of understood it. But I mean, because what is a company? A company is the sum of the discounted cash flows over time and like down, down the line, like you're going to need people probably.

53:28Or if the AI is so good that you don't need people, like at some point, I would just wonder, are like, what are you really contributing? And is the AI building the whole thing in which gets like, I don't know, actually, that would reduce the, that would increase competitive pressure because everyone also will have access to the AI too. Can I ask you, you know, you've been across multiple different cycles of the business, ups and downs. When did you question your love for it most? I think we often say like, oh, I'm always inspired. I'm not inspired every day to do what I do. Some days I am. I'm like, was there a period where you were not?

54:00And how did you get through that period? I think every time, basically every time we needed to make a strategic pivot, like actually it's before the pivot that it's probably the most anxiety inducing, because you feel like something could be much better than it is, but you are not acting on it. And I think that is potentially the part that is the most kind of gut wrenching. It's actually an interesting point when we pivoted from exofunction to codium. I actually think post pivot was the freest I've ever felt, because I'd written off in my head, both me and my co -founder, that we're likely gonna fail.

54:33But at least we're likely going to fail in something that we believe in. In the past, yeah, we were making a couple million in revenue, but I know what it means to be like a very large successful company. You need to be able to make billions in revenue, right? We were so far away from that outcome that it was almost like, yeah, this feels very hard to do. But after pivoting, we had a new lease on life. I actually feel like for us and for me, the part that is the most anxiety inducing is when we believe we could be doing much better, but there's random inertia friction that is preventing us from doing the right thing.

55:04And even if doing the right thing has a low probability of success, actually starting to work on it is the most free experience that I feel like I've had at the company. I heard you say once an interesting statement. You said, you wait until you're drowning in a role before you hire for us. And I just thought it was really interesting because I was always brought up on the value of board members as being they highlight hires that you need to make six months ahead so you don't have a bottleneck in six months time. How do you think about those two seemingly opposing ideas? You know, I guess we've had cases where I would say it's a little bit of an anti -pattern on that one.

55:44Like for instance, when we, before we hired our VP of sales, we actually closed some very large enterprises inside the company without any salespeople, some very large enterprise, but because we were able to do that inside the company, We were able to feel the pain of what enterprise sales would look like inside the company and also it proved to the person We were going to hire a gram that we were an awesome company to potentially work at so I think it's it's an interesting trade -off where Maybe there's a belief that I have that domain experts are awesome But if inside the company you're not able to get get an outcome that is 1 % 10 % as good Inside the company.

56:19It's probably not the right time to go out and make the hire Like maybe let me put it this way, the concise way to actually answer this. Startups don't fail because they look like messes inside. Startups fail because they don't do the right thing well enough. That is the reason why they fail. People love to say, hey, like, I don't have this role and that's why I'm not working. And it's like actually when you look at the most successful companies, they look like train wrecks inside. What I think is important there is as long as you are doing the basic things that make your product very successful, I think you can actually make these hires as necessary.

56:51I don't think it's like critical that you make them six months in advance. The worst thing for me would be making higher and for them to not be important on day one and just to be, hey, chill out over here and wait for the next three, six, 12 months because then they're going to manufacture something to work on and I won't really care about what they're doing. Final one for a quick file. What did you believe on management that you've changed your mind on? So for me as an example, I brought in this incredible person, Julien, he led workplace in Europe for 10 years. And I always believed, dude, arrogant is a young person.

57:22I could read Eli Gil's high growth handbook, and I know how to manage people. And it's bullshit. The wisdom and experience this guy brought from 15, 20 years leading teams is so nuanced and granular. I learned so much from him about management every day now. You can't learn it in a book. I've changed my mind on that. What would your change of mind be on management? Maybe the biggest change of mind I did have was how large your team is is not a function of like output. And actually, ruthless focus is the only thing that matters. So you can have a lot of people, but the answer is if those people are not ruthlessly focused on one thing, you are going to be very, very not successful.

58:00Like it is, it is much easier to run a company that is focused, that has only one thing that matters, than it is to run a company with the same amount of revenue with five things that matters, that with five different priorities. In retrospect, that always feels obvious. But at a startup like ours, where there's so many things we can do, there's always a couple of shiny things. You can always open Twitter and it's like, X is solved. Y is solved. Z is solved. But actually, I think being able to say no to things and to focus on the one thing that matters with many people and ruthlessly optimizes, optimizes that.

58:33It's very hard. But when you can actually get that right, you can make magic happen. I could talk to you all day. I do want to do a quick fire and I have some great quick fire questions for you So I'm gonna start with one of that I'm adding fuck these ones Neil Mator I love him as an ambassador and I'm an ambassador So I didn't see the same Neil made to the UC what makes him so special for you as a founder His ability to analyze companies and be very intellectually flexible is actually pretty remarkable The breadth of knowledge that he has about all these different businesses but also to understand what makes them work, what are some of the ways they could improve, and how that could be applicable to us is actually very awesome, and he's a very kind person with this time.

59:14You would assume, given the fact that he works with so many companies that he would not have a lot of time, but he is extremely generous with this time. Who do you not have on your board that you would most like to have on your board? Actually, I would love to have someone like Scott Cook on our board, a CEO and founder of an extremely successful software company, I had a handful of conversations with them and every time I walk away just with a deep understanding of just competitive dynamics and just what it takes to run a very enduring long -term successful business. That is a great shout. I haven't had that before.

59:44If you had to make windsurf open source tomorrow, how would you feel and what would you do instead to win? You know, I feel like that's a question I've been getting recently. I don't think it would affect much if we had to make it open source because most of the work that it's kind of like the thing I said before, right? You know, Google is, yeah, they have a front end, but the front end is just a single box. And if they open source, the front end of Google, I don't think anything would really change about the world. That box to the UX for that was not really the big deal. I am aware of the fact that co -pilot has done that, but most of our logic is actually in the back end, ultimately.

1:00:17So I don't think that it would change a ton. I also don't think it would change our adoption of the product. Like most of the differentiation has nothing to do with the fact that the front end is actually open source or not. You have a sibling, they're 18 years old and they ask you, should I go to university? What should I study and how should I position myself fast for this new world of work? What do you advise them? Just focus on problem solving, right? How do you like breakdown problems? Be a high agency individual. And I think computer science largely speaking is just the study of problem solving.

1:00:47Maybe what doesn't matter as much is did you learn x language or y language? But can you break apart a problem into their distinct pieces and actually going and execute on them is probably the most important thing. What was one thing that you think OpenAI did wrong that you've learned from? Oh, maybe naming. Let's go with naming on that one. Penaltimate one, you can change one aspect of your CEO ship. What do you need to change most? I think there are probably some details I shouldn't be actually looking at very deeply that fundamentally don't matter about the long -term success of the company.

1:01:21I'm a person that's very neurotic and I like to understand everything that's happening internally, like what we're spending money on at a level that probably doesn't matter. And that's just like waste cycles in my head that could be put to better use. Final one for you, you can be known for having one impact on humanity. What impact do you want your future generations to say? Varun, my grandfather, he did X. I think the mission of our company is very exciting, and I wouldn't say it's just me, but the team is, is we want to reduce the time it takes to build technology by 99 % and if we are able to play a meaningful role of how that could shake out in the future, I would be extremely excited about that.

1:02:00Very innocent as I said, I had so many things from Lemory, from Neil. I was so looking forward to this. You've been fantastic. Thank you so much for putting up with my base level of knowledge and I so appreciate it, man. No, this is fantastic, man. Thanks, but. That was so much fun to do. Now we would love it if you left a review for the show. it makes such a difference. You can do it on YouTube, you can do it on Spotify, you can find this on YouTube at 20VC. Also, I want your feedback. Ping me, Harry at 20VC, that's 2 -0 -VC .com. I want to make the show as good as possible for you. But before we leave you today, I love seeing the team come together to make this show happen.

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