The Startup Adding $1M ARR Every Week

But

First thing from rewriting Google Sheets is I would say don’t don’t rewrite things. We rewrote Google Sheets because it’s a crazy scale. And so, you know, if you have something that has a 100,000,000 plus users, which is what it had at the time, I think it’s now like a billion users, it really matters that the thing is awesome. And so it’s worth the effort of, like, 30 to 40 engineers for a couple years to, like, get it right right. But I would say for the audience for this show, which assumes more founders, like, rewriting is, like, a horrible idea.

It’s, like, pausing time. If

So for the startup people out there, I think try to pick the right thing to start is, like, a little bit better advice. So one lesson I did take for this is for Warp, for instance, we built it the hard way to start. Meaning, like, you know, I could kinda see around the corner, like, if we built it on sort of web tech or whatever, we’re gonna run into a bunch of performance problems, which is a lot of what we were trying to fix with the the Sheets rewrite.

Like, good engineering matters, but I think it’s highly dependent on, like, where you’re at in the stage of building a thing. And so, yeah, rewrite if you have, like, crazy product market fit and, you know, 100,000,000 plus users, it needs to be perfect. If you’re really early, I think rewrite is a little scary.

I guess if you literally have no one, fine. But my take is, like, in startup land, speeds everything. And the antipatter that I’m looking out for is, like, okay. I was a Google engineer building for tons of scale and then go to a found a company, and, like, it’s very easy to get, like, anchored on sort of the beauty of the engineering and trying to get the engineering perfect. And if you don’t have a product that anyone cares about, I think, like, that’s a crazy place to be spending your time at the beginning of a company.

It should all be around, like, can I build something that people wanna use? And there’s a engineering mindset mistake I think that people will make where it’s like, well, they don’t wanna use it because the performance isn’t, like, 30% better. That’s that’s not a good place to spend time.

I think Google’s a risk. Like, I would never have said that five, ten years ago. I find myself using ChatGPT more and more. And so I think they have big innovator’s dilemma problem. This isn’t directly answering your talent question, but I think it’s more of, like, incentives where it seems like they’re really slow on AI is, like, my take.

I’m definitely not impressed by how Gemini is, like, integrated into their consumer products. I think Gemini as a model is good. It’s in, like like, the three models that we care about at Warp are Gemini, GPT-five, and Claude. So it’s it’s like there. I don’t know. They had a lead. They wrote the paper on transformers. It’s not an awesome outcome from my standpoint. And then from, like, a talent perspective, there’s still a ton of very, very smart people at Google. Just seems like a super risk averse place to me right now.

Like, the people I know who I respect a lot, to be clear, are by and large staying at Google because they are they’re super well compensated. And it’s like a very, very, like, cushy thing, but they it tends to, like, keep around the sort of, like, people who wanna take fewer risks. So I don’t know. I’m not I’m not loving what I’m seeing from the outside, but I I I had an awesome experience working there back when I was an engineer. Sell all of my position in Google.

Sell it. I I I

Yeah. So here’s the bull case on Google is they have they have crazy distribution. They have a crazy brand. They have amazing infrastructure. So it’s like, I don’t think Google’s, like, beyond hope. But, like Crazy distribution, crazy brands.

Waymo is awesome, by the way. Have you been in a Waymo? Waymo is crazy. Waymo is very, very been, but I think it’s Waymo is Waymo is the is the coolest product I’ve been in in a long time. I really like Waymo. And that could

Yeah. Yeah. But they have like a I think the culture is super slow. And so I don’t think a super duper slow culture. They’re going against very, very aggressive, fast moving companies. Like, I think OpenAI’s execution on ChatGPT is really good. But maybe the inertia of just being so big and having such distribution is enough. I don’t know.

The two leaders are GPT-five and the Claude models. And so we measure them. Like, first of it’s like it’s not so much gut. It’s like we literally we we have a whole bunch of benchmarks. We run SWE bench. We run Terminal bench. Claude and GPT-five are the two best. Claude, they have, like, different personalities, which is kind of interesting. Like, when you’re using them for coding, like, Claude’s a little friendlier. GPT-five is, like, a little bit more, like, let me do a whole bunch of thinking.

Take it takes a long time is my my biggest issue with it, but then it tends to come back with something that’s really good. And at the moment, Gemini, which is on two five, and I I’m sure they’re working on Gemini three, is not as good.

I would say that GPT wins consumer. I don’t know who wins enterprise.

I think developers is open. I’m biased here because the the situation that I want actually is competitive dynamic with the at the model layer for all the coding models. I don’t know that anyone has, like, a super strong moat at the API layer, just to be totally

Yeah. So just in the development space, I think the market is gonna be there’s gonna be two pieces to it. So there’s gonna be, like, a set of interactive productivity tools. So think of, like, things that developers literally are using. You’re sitting there. You’re telling an agent what to do. You’re like, hey. Write this code for me. Help me understand this production problem. And then there’s gonna be a set of automation tools. That’s gonna be more like, okay. Crash came in. What was the root cause of it?

Is there a PR that can fix it? And it’s gonna do it automatically, and you’ll have some developer who’s reviewing it. Those are gonna be the two the two classes of things. I think over time, the automation is clearly, like, a better market, the more valuable thing. Companies are gonna wanna, like, just pay for stuff that automatically creates software. It’s a huge market. It goes into the labor spend a little bit. But I think the productivity piece is also I don’t see it being I’m just guessing at time frames here.

Five years is a long time with these AI models, just to be clear, but in the next few years is what I see happening. So those are the two big the two big buckets. And and I think more and more will go into automation.

They use Warp. We’re now fully into, like, the coding agent space. Like, history of the company, obviously, we started as a as a terminal, but the terminal form factor is the preferred form factor for doing agentic work at this point. Whether you’re using, like, a terminal app like Claude Code, In Warp, you just literally use the GUI app to do it. And so every single coding task we do starts with a prompt, which is the big shift in productivity that’s happening right now. We don’t necessarily finish every task with a prompt.

There’s certain things that are too hard. It doesn’t matter which which tool you’re using. But everything starts with the prompt, then we try to get all the way to completion if we can with prompt.

That’s funny. It sounds kinda stupid. It’s like, oh, start with a prompt. The general thing is, like, are you starting with some expression of human intent? And, like, I I’m using prompt for shorthand of that. And, like, it’s more than just you’re writing some paragraph or something. It’s like what’s gonna matter more and more is the total context that the model has available to it. And that context is gonna come from more and more places, not just gonna come from, like, a person saying to do something.

But, yeah, I think, like, generally, if you’re doing something creative and it’s not totally deterministic what needs to be done, there needs to be some expression to the computer from a builder to do the thing. It’s not gonna read your mind. So, yeah, I think it’s, even that sounds kinda stupid, I think that is the thing. When we look at, like,

If you’re comparing it to developer productivity tools, like, a million percent, yes. The budget for, like, developer productivity tools is not that big. It’s like people paying for Postman or what like, I don’t know what your, like, your old school developer tool is. It’s like a small dollar amount per seat per month, and you’re using it to increase the productivity of someone who you’re paying, like, $200,000 a year.

Maybe. I mean, again, I think, like, thinking of it per developer is thinking of it through the productivity lens. Like, you’re thinking of it in terms of, how do I multiply a developer’s output? I think at some point, you just get into the lens of, like, what’s this software worth to my business, which is a lot. Like, every company at this point, to a greater or lesser extent, is, like, a software company. It’s the biggest lever that they have. And so it’s gonna be orders of magnitude more that companies are willing to pay for these types of tools.

Because they’re just it’s not it’s not a productivity tool.

In terms of whether we’re seeing productivity gains, I think no one knows. Like, there’s a bunch of studies that show not really. Like, I again, I would I would be, like, a little more nuanced. So if you are using Lovable, then, yeah, of course. Like, you’re going from, like, I can’t do anything to I’ve built an app. That’s, like, insane. And so the cases where it’s, like, zero to one, yes. I think when you go into the professional development environment, which is, like, where Warp is focused, there’s a bunch of studies that show, not really.

It’s sort of, like, the noise that’s created by people who are attempting to use, like, a vibe coding technique on a production code base kinda outweighs or can slow you down. And so I think that’s the big problem with it right now, and this is what we see when we talk to companies. It’s like they all kinda rush to deploy some sort of, like, agentic coding solution. No one really knows if it’s working. And whether it’s working or not depends a ton on, like, how you use it.

And so you can’t just vibe code with it. I’m not a huge vibe coding person to begin with. And so there’s, like, a way you have to use it in order to get productivity gains. And then it needs to be figured out how you’re gonna measure those. Would

So great question. In, like, the prosumer market, there’s, like, strong product market fit, but it’s not I would say it’s not a great market. Meaning, like, they’re very high churn, price sensitive customers who are building things that don’t have a ton of economic value. In the enterprise market, I actually think the thing that has most product market fit is, like, autocomplete, which is not the sexiest type of AI. It’s not agentic AI. It’s like Cursor’s original product or even Copilot. If you’re doing, like, hand editing of code, it’s, like, clearly helpful to have the thing, like, show you the gray text and kinda read your mind.

When you get into, like, Warp or Claude Code or Cursor’s agent or yeah. Even I think cognition’s its own beast, honestly. It’s like a it’s more of, like, an automation thing. I think it’s, like, really early in that market, and people there’s, like, a lot of, like, intuitive signal that it’s helpful, and there’s a ton of willingness to pay. But in terms of, like, will companies get measurable impact from it? It’s gonna happen. Like, it’s gonna be transformational, and it sometimes is transformational now, but not with every coding test and maybe not in the aggregate.

Does

Favor is the higher quality. And this is counterintuitive. Like, it actually causes a lot of problems with people who don’t know what they’re doing in a professional environment. So if you are a newer engineer or a more junior engineer or maybe just, like, not that sophisticated of an engineer, it’s a problem to me because you wanna use these tools the most, but they end up producing code that you don’t understand or that can’t be shipped or they won’t get through code review or they contain security bugs.

Whereas to successfully use these tools, you need to be, like, more sophisticated, smarter, more experienced. And if you can do that, you can get a crazy productivity gain, but you already kinda need to know what you’re doing. So I think it’s a little bit counterintuitive. Like, I would much rather have senior developers using these tools. There’s a little bit of a paradox in that they don’t necessarily wanna use these tools. Like, they feel like they can do the thing themselves. But if you get a senior developer who’s really good at at wielding these tools, it’s very powerful.

I think we’re gonna have less. I think we’re gonna have fewer, more senior engineers who are managing the work of a lot of agents.

In terms of collapsing of all the roles, if I had to, like, design a role for the uber person who builds with AI, it would be, like, a product oriented senior engineer. We see a lot of, like, product managers and designers who will use the tools to make prototypes, and that’s actually very cool. But to get stuff to production, I think what you want is, like, someone who, like I said, more sophisticated than the agent. And I think there’s a real cap on what a product manager or designer is able to build with this stuff right now.

So I guess short answer is I don’t really think so. And if there was, like, a role I would design, it would be a product minded engineer.

Yeah. So our motion is PLG. So I think I’ve, like, overstated, like, how these tools aren’t working that well for real devs. They are working well for real devs. In real you just you need to learn how to use them right. What does that mean, learn how to use them right? Yeah. So if you’re like, someone building in a sort of naive way, and I kinda blame vibe coding for this, like, what you’ll do is, you’ll be like, build me this thing that looks like x.

And the build me this thing that looks like x doesn’t tell the agent how the thing should work, at least from, like, the engineering side. And so if you do this on, like, a big complicated code base, it fails. Or, like, it produces something that just, like, wastes a bunch of your time. It might, like, iterate and go in circles for hours and finally get you something that, like, seems to work from a user perspective, but it won’t be something that you’ll actually want to release.

So to make it work in a production setting, it’s like you need to tell it how to build it, and that means you need to understand the code. And so it’s just it’s very liable to, like, kinda lazy usage, which doesn’t work well.

I think it’s a totally fair concern if you’re doing it the same way on, like, a code base that matters. Yes.

I tell you?

margins matter? I think, like, yes, Definitely. If only because let’s say your users cost you money. It just gets super duper expensive the faster you grow. And that’s like so you can’t have that. Are you positive margins? Not right now. But not like, we’re we’re working on it. It’s really, really costly. I mean, so to talk about, like, the pricing stuff, here’s the fundamental problem with pricing these AI products is, like, consumers expect like, if you’re going for the pros members, let’s say, a second, not the enterprise.

The enterprise, we’re we’re margin positive. But on the consumer segments, it’s like it’s very, very hard. They expect something that looks like SaaS pricing. So they expect, like, you know, $20 a month, $50 a month. $50 a month is a lot. You get more than that starts to get into, like, their comparing to, their gym membership or something. Right? The more they use it, the more it costs you. So the better your product market fit in a sense of, like, the product is getting better, the, like, worse your business is from, like, that perspective.

And to some extent, I think it’s actually fine to subsidize, like, if you’re subsidizing users who are going to turn into enterprise leads. But I don’t think it’s, like, super smart to subsidize people who are building, you know, personal websites where there’s no strong economic incentive.

Yeah. I think to an extent you do that. At some point though, it’s like, if you’re growing so fast, Warp is not growing really fast. We’re earning, like, you know, million dollars in ARR every week. You’re doing a million a week? Adding of net new ARR. Yeah. Can you just say that again? We’re now adding a million net new ARR every week or even less. Honestly, recently, it’s accelerating. People love the thing. However, it’s like, yeah, you can count sorry. Do the accounting for it however you want.

You know, from our perspective, we wanna be growing that in a sustainable way. So I I think it’s crazy to just be like, no. Margins don’t matter. At some point, you’re gonna run out of money if you’re growing really fast. And though we could probably go raise more money, like, for sure. But can I ask you, like, how would how are you thinking about that as an investor when you’re seeing a company like Warp that’s growing? We’re growing extremely quickly. I think we’re still, like, I think as outlier growth.

How do you think about how sustainable that growth should be?

Know I’m not supposed to be interviewing you here, but like, do you think that there’s some inherent lock in that they have that other companies don’t have?

Yeah. I think the competition from the model providers is a big is an issue, but it’s like, why start a company? Yeah.

So I guess, like, I’m not gonna speak for, like, the whole coding app industry, but for Warp, it’s like a different product. So every other single product out there is either a clone of Versus Code, which, again, is Codex or Cursor or Windsurf or whatever. They’re all the same product, or they are terminal apps. And I do think, like, even if you believe that it’s, like, really cheap now to clone software, it’s really not cheap to clone Warp. We were building this thing for five years, and it’s a very, very differentiated product experience.

I don’t think that’s enough. Maybe I feel like there’s, like, a VC trope right now around, like, well, products not a moat. I think that that’s, like, kinda bullshit, especially when everyone else in the market has the same product. So I I’ll speaking for Warp, I actually think we can differentiate on the product quite a bit. If you believe though that it’s all just like they’re all the same thing and it’s like whoever has the most money wins, I guess I see what you’re saying, but I don’t agree with that.

Product quality with some amount of, like again, I don’t wanna, like, say, like, lock in it, but there’s stickiness in the product. There’s stickiness in features where it’s sticking it.

So there’s stickiness just in, like, the product experience itself. It’s like, okay. I’ve become accustomed to this thing. There’s stickiness a little bit in the fact that, you know, we have a ton of users. We have way way more users than than Claude Code, for instance, or Codex. We have 700,000 users because we’ve been doing this for five years. That’s not stickiness, but that’s like there’s a great funnel. Do you have more users than Claude Code? I’m, like, 98% sure of that. Yeah. So I can tell you part of the reason I believe that is because of where we sit in the stack.

I can actually see how many people are using Claude Code and Warp. And I can see the trends of all these other products, which is, again, is an interesting thing about where we are, and it’s not super high volume. What trends are you seeing? So every time one of these model providers puts out a thing, whether it’s Claude Code or Codex or Gemini, you see, like, a temporary spike in their thing. People using it within Warp. And I think the nature of the developer market, which is kind of over I don’t know, underappreciated, overlooked, whatever, is like, developers just wanna try the newest thing.

Always. It’s a fragmented market. They wanna try newest thing. Again, this can work against Warp as well. But all of these other things are basically equivalent. Like, they’re all the same product, whereas Warp is not. And I can see I you can see the spike. You can see it settle down. I don’t think, like, the model providers based on the data I’m seeing are winning here. I think, honestly, if I look at the space, the one that comes up the most is Cursor. I think Cursor’s execution is really good.

I I think their their fundamental products of, like, autocomplete is really, really good. They’re like a better version of Copilot. And Copilot it’s actually it’s a again, I think it’s a testament to what startups can do. Like, Copilot had their product. And you might be like, why did Cursor win? Cursor won because their thing was, like, better. It worked better. It provided, like, more accurate suggestions, and developers care about that. So that that wedge was really good. The switching cost into it was really low. And then Cursor, think, has been really fast with enterprise.

I don’t think Cursor’s, like, agent product is that awesome. They’ve done a really good job. Everyone knows Cursor.

Yeah. But this is, like, the repeated story with bigger companies who don’t have the same pressure to innovate. Yeah. They were asleep at the wheel. They had Copilot. It’s not as good. It’s literally it’s like a bunch of, like I I know the the guys at Cursor. They’re, some smart people from MIT who are, like, they were actually working on something else, and then they just kind of out executed on the autocomplete part, which, again, I don’t think autocomplete is the future, so I don’t feel like I’m, like, seeding competitive ground here to Cursor.

The future is more, like, developed by prompt, but really, really good execution on their part.

people in the, like As far as I know, like, they are they are paying massively for talent.

Yeah. I do. It’s like a super competitive space. Like, I think we can offer because we’re, like, earlier, like, we can offer more equity. They can probably offer more cash. But, yeah, it’s like a crazy, crazy space that we’re in right now. Very competitive. Which, again, I think I think reinforces the, like, the importance of senior engineers is not going down. It’s never been more competitive for us to hire someone good.

Do you you mean in terms of, like, the VC valuation or what people are getting paid or just the whole the whole thing?

Yep.

you I think it’s like, do you fundamentally believe that this is transformational technology? If you do, I think I mean, it’s crazy, but it’s, like, not crazy. I think it’s I’m a skeptical person by nature, but I am a full believer that AI is gonna change every single business. So there’s gonna be some big losses, I put it that way, but there’s also gonna be some big winners.

I think it’s gonna depend a bunch on what industry you’re in, what the short term impact is. I think for highly competitive, unregulated things, like if for startups, for SaaS businesses, I think it’s gonna change everything. For knowledge workers, if you’re not in a regulated industry, I think it’s a big deal.

I think what I mean is, like, if you’re working at there’s a few different angles. There’s the business angle and there’s the worker angle. I think the cost to start a sort of software driven business is gonna go way, way, way down. That’s one thing. I think from a worker perspective, if you are working at a place like I’m gonna pick a random company, Salesforce, and there’s no real regulatory blocker for the deployment of AI and you’re in, like, a competitive market, AI is gonna be deployed really, really rapidly and change what daily work looks like.

I think if you’re in, like, the healthcare industry or the government, and it’s like, I’m still filling out paper forms when I go see my doctor right now, It’s less a question of, like, is the technology transformational than, like, are the incentives there to deploy the technology? And, like, I worry that it’s just gonna

I think it’s more like a ten. I think, like, again, the technology is gonna run way ahead of the deployment of it just because the deployment of it takes a long time. You’ll see the deployment go fast in industries where there’s not a lot of barriers. This isn’t, like, the most profound point in the world, but if you go to the DMV, you’re still gonna be dealing with, like, some annoying old school stuff because it’s just hard to deploy technology in certain areas. So

We’re doing it now. Maybe you could tell me as a VC it’s stupid, but, like, you know, we send a big check to Anthropic. We send a big check to OpenAI. If I pay you a dollar, how much goes to Anthropic? I don’t know if I wanna, like, explicitly, like, say that right now, but, like, they get a lot of like, let’s say they get they get a dollar. Let’s just let’s just say let’s say that for a second. And so I don’t know if I’m gonna get in trouble with investors or whatever for Dude, do care

No. But let’s let’s let’s not put let’s say it’s it’s taking a lot of it. And so what what we’re doing, again, because it’s growing so fast, which I think is good, I think it makes sense to be like, how do we make the the usage of these models more efficient? How do we change our pricing so that it’s, like, more aligned with customer value so we make more money as users use Warp more, not less money as users use Warp more? It’s a big focus for us right now.

The trick is, like, can we do it without harming growth? You know, that’s, like, where this question of, like, maybe the smarter thing for us to do is is to, like, just take it to a certain point, keep growing, raise more capital. What does that what does Andrew say? Andrew says we are in an awesome spot and should, like, get the margins a little bit better and then raise more capital, basically.

That’s

such a VC thing

Basically, he Andrew’s not in there being like, well, what? We could change the number of requests we offer on this plan by why. It’s he’s like, you know, he’s like, we’re doing awesome. We have a thing people love. Don’t fuck that up. First of all, like, don’t fuck that up. Make the product even more compelling. Because I will say even we’re not competing on price. Like so here here’s where I would be worried about margins if I were, like, in this space. If we were, like, we’re reselling Claude for, you 75¢ on the dollar or whatever, it’s like, what’s the point of being in that business?

We’re not perceived as inexpensive. We’re like like a premium product for people who are doing serious coding, and it’s still very expensive because we’re somewhat inefficient in terms of how we do it. If we were competing on price, I would say, like, let’s just find a different business. Or you have to you have gotta be really strategic and find the right cohorts that are paying that are, like, super profitable. And so Andrew’s like, just try to make the product as awesome and different as possible. Try to get the enterprise motion going as much as we can because those are better customer segments.

Don’t mess up the growth. Be sensible with the margins so that we’re not just, like, incinerating VC capital willy nilly, but, like, we’re in a very cool spot.

Your is so funny right now. You’re looking at the guy

That’s like what doing a startup is. It’s like,

So I okay. To give Andrew more credit, now I I feel like I’m gonna piss Andrew off in this interview. Andrew’s very, very smart. He’s an awesome investor. Brilliant. Brilliant.

way smarter than me, by the way. I think if we had to prioritize, we would say, don’t don’t screw up the revenue growth, but there’s nuance. And, like, I think it’s very easy to go on a podcast and be like, revenue growth, revenue growth, whatever. It’s like, no. We have to, like, also make some progress on the margins because, like, if you’re a smart investor, you’re gonna wanna leak. And, like, the way the way to think about the margins at least is, like, there’s an immediate concern with burn, which probably we can get more money.

I think the bigger long term concern is, like, are you a below market reseller of intelligent tokens? That’s not a good business to be in, and so we don’t wanna be in that business. But I don’t believe that. And so it’s like, do what you need to do right now to, like, get the thing to a, you know, good enough spot without screwing up growth is kind of the the main point.

End state’s not obvious because it totally depends what happens in the model market. Somewhere there’s gonna be margin. Right? Like, Anthropic has big margin on their API business right now. What I’ve heard is 60% margin on Anthropic’s API. I’ve heard 50% on OpenAI’s. I again, I’ve heard this. I don’t know if it’s exactly right or not, but if there were no margin anywhere in this stack, I think it’s really bad, but there’s margin. The question then is like, well, who’s gonna who’s capturing that? And I think it depends.

If the model providers are really competitive, even better would be like some open source model that’s like good enough, I think the app layer is gonna get a lot of value. If you think that it’s gonna be like one model provider runs away with it, then that’s like horrible for us. I don’t think that’s gonna happen. I think that’s there’s too many smart people who are working on building these models. So our bet is, like, there’s competition. It might look like g cloud, AWS, Azure level competition, or it might look like actually, like, open source, like, database competition, and then we’re gonna have an awesome business.

But I don’t know. Do you think it’s

I don’t think open either, if I’m being honest. The reason I don’t think open, like, is that it’s just so damn expensive to build these things. And so what’s the economic incentive? It’s not like open source software. People, like, make the analogy, like, oh, open. I’ll take the word open and apply it to open models. Open source software works because it’s a bunch of, like, hobbyist developers who are giving their time to build something really hard. Open models, somebody’s gotta spend all the money to, like, make the thing competitive.

But here here’s the flip side. Here’s the way it could work is, like, it could get to a point where just, like, for coding, let’s say our domain, it’s basically solved. Meaning, like, models that are good enough and you don’t need the frontier model. And what actually starts to matter is, like, how good are you getting context in from a company? How good is your interface? How good is your automation, like, in orchestration stuff? And that’s not crazy to me. Like, it’s crazy to me that the Frontier model would be open, but it’s not crazy to me that there’s, like, a good enough model that is open.

Yeah. I mean, I that’s not how I frame it. I would frame it as, like, coding may literally be solved, which is a crazy thing to say. But, like, at the model layer, it might just be the level of intelligent token is, like, good enough that if you feed it a code base and a prompt and a bunch of context, it can make the right coding change. And you don’t need this year’s this year’s model to use a Elvis Costello reference to to actually get the good to get the good results.

So I I would look at it more like that. And then, yeah, if there’s competition or you could do model routing, like, if you’re, like, squeezing margins like that, I think it’s a more precarious place to be. But I think that, you know, the price per intelligence for any fixed level of intelligence is definitely falling. I love Elvis

This this this is a fun recording. Oh, yeah. Yeah. No. Trust me. This I’m a little scared of my level of transparency in this, but whatever. Oh, don’t worry. It’s fine.

should see you should see my team. They’re

Wow.

very bullish on OpenAI. I’m like For no good reason. Like, other than like, I think that they have the the I think they have the magic consumer product, the next generation of it, and it’s worth so much.

That’s interesting.

I mean, mean, hasn’t I I haven’t gotten the VC transfer of wealth to me yet. It’s not exactly why I’m in it, but, let’s see.

So I have done I have done the the formal processing before. I didn’t do it with Warp. I did it with the company before Warp, where when we went out to raise a series a, we, like, you know, flew out to Silicon Valley and pitched, like, 20 firms in, like, a week or whatever. Kinda took the best term sheet and then, like, got in bed with investor. And I did not think that process led to an amazing result. And so with Warp, I really tried not to replicate that.

Like, the way I did it with Warp was as I was developing the idea, I was talking to a few investors I knew who I’d known for a really long time who just when I was like, I’m ready to do this idea, we’re like, we love the idea. We wanna invest. So not every founder is gonna have that opportunity, but if you have that opportunity, I think that’s way preferable. And then for the subsequent rounds of Warp, which were Dylan Field led the a and Sequoia led the b, that was all preempted.

And so those were How does

So Dylan was a small angel investor at the seed. And then from the get go, he was, like, just super excited by what we were doing. I think some extent of, like, pattern matching with, like you know, our thesis was, like, reinvent, like, a horrible tool that developers spend all their day in. So I think that that, like, resonated with him. And then we were doing well, but still very early. And he came and was like, I’d like to lead your a. And I was like, okay.

And then Andrew wasn’t that different. We were still really early. Can I ask how big how big was the a? We raised, like this was in 2021. It was like a $17,000,000 a. Wow. Things have changed, by the way. We’re you know, we started it back in, like, the dinosaur era for, a five year old company.

Well, so Dylan introduced me to Andrew because, you know, Andrew’s on Figma’s board and Andrew and I really hit it off. And again, it wasn’t we didn’t need the money at at that time. We were it was just a totally different time in the company. We were like, you know, it was a free product at that point with good user growth, but not really like a good business model or not a biz like, we weren’t even monetizing. You weren’t monetizing at the b. We were not monetizing at the b.

This is this was so this was another frothy crazy period. Right? So this was, like, pre AI. And I I don’t know if I speak for Andrew, but I think an Andrew again was, there’s some amount of pattern matching, like and then I think he liked me. And I think he liked that we were building a really hard app in a big market, and so they invested very early. How much did he invest? Well, how much was the round? That was a $50,000,000 round, which I think by the way is gonna he’s gonna look very smart.

Talked about it for a long time. Like, again, I’m like again, I’m probably unusually transparent for founder here, but, like, we’re a terminal company, which is not a real market, just to be clear. And so it’s very much like, we’re displacing a free product. The thesis of Warp was like, hey. There’s this there’s this tool that, you know, every developer uses every single day that kinda sucks, and it like, I still believe this. There’s a much better version of this that could exist. It’s actually very hard to build.

It’s gonna take a bunch of capital to build to get, like, people to work on it. There’s a non obvious business model. Like, the business model that we started with was, like, collaboration, which makes sense from, like, my background on Google Docs and Figma. To some extent, we got lucky that AI came along because that’s, like, a way it, like, took us from being, like, a really, really nice user interface product to something that’s truly transformative for people’s work. But, like, the general initial thesis is kinda right.

It’s and that, like, this product sucks and it’s used by everyone and something better should exist. And so I think that was, like, the bet, and then we’ll figure out, like, how to how to, like, build a great business around that. And it’s turned out you know, I don’t know if AI is gonna be like, I think Vertica is out on Apple or companies in AI like you’re talking about. But from a, like, does this thing really help people do their job better standpoint? It’s like, it proved to be right.

And not even a huge user base either, just to be clear. Like, when they did that round, we were in the thousands of Wow. And now we’re, like, you know, I think we’ll hit a million of active users, active developers this year. And we’re now, obviously, we’re growing our revenue super duper fast, but it was, like, really, really risky. And I I mean, I wonder if Andrew thought it was if he reflected on it, was like, what am I doing? But, like, I don’t know. I think it’s actually gonna work.

No. No. I think, like like, incredibly risky

Yeah.

And that’s by the way, like, again, if from a founder perspective, getting to work with someone who’s super secure and confident is a huge, huge advantage compared to working with someone who is like, you know, like, the more junior person who doesn’t have the wins. I I like I feel like investors’ insecurity will bleed into the relationship. Oh, so much.

Right. That’s what you want. Like, again, that’s what want. It’s great. It’s necessarily easy to get. And, like but, like, if you have someone who’s really confident, it’s just it’s, like, he’s in a role of, like, supporting me, not pressuring me. And I think that was

A little. Here here’s here’s what Sequoia like, I’m I’m a huge Sequoia fan. Here’s what Sequoia has done well for us. So there’s, like, a halo around the brand. Right? So, like, from a recruiting perspective, it’s good. From a, like, customer conversation perspective, it’s sometimes good. I’ll give you, like, a really tangible example. We were getting user reports that were being blocked by CrowdStrike. So CrowdStrike’s like this security software. Right? Which kind of makes sense. Like, we’re at that layer of the stack. Like, we do all this crazy stuff to make Warp work on people’s computers.

So we’re like, oh, fuck. We’re getting blocked by CrowdStrike. That’s like really, really bad. And it’s like we’re we saw all of our uses start to go down at certain companies. And so I reached out to Andrew. I was like, can you help me here? And then that day, I was on the phone with the president of CrowdStrike. And he’s like, I’m looking into it. I don’t think that we’ve actually done anything. I think this is a configuration issue. Because we ended up being blocked at Salesforce of all places.

You know, that I don’t think you get that if you if you have, like, your kinda random VC firm. But the connections there are real. It’s freaking cool. Right? That’s like, that’s a Chico. And I I was I was telling my my I told my wife that, and she was like, oh, that that is, like, pretty cool. So that’s an amazing story, my take of, like, why Sequoia is awesome. I absolutely

Honestly, no. But I think, again, I think I’m like a little lucky here in that, like, I’m second time founder. I had, like, some access to people I knew. I think we’re gonna have to do one of these, like, competitive ones at some point. Well, maybe. Yeah. But to you

uninterested.

But yeah. It’s like I I I have a very simple perspective to this. If

No. We’re we’re

a ton

So I think it would be, like, kinda arrogant to be like, oh, I hate this. Like, it’s like, no. It’s it’s cool. People you’re running a business and people are interested in giving you money. I think that is not the default case for most people in the world. And so, like, for me to be like, oh, I don’t that’s so annoying. No. It’s great. It’s it’s awesome to have the interest. From a, like, how to manage it as a founder, I just basically don’t take the calls right now.

I’ll do them once in a while to just, like, gauge, like, the market and, like, where we’re at. But I have a strong feeling that, like, when we do it, I’m not gonna do it based on an inbound email. I’m gonna do it based on, like, either existing investors or they’re gonna introduce me to someone who I like, I’m optimizing for the relationship. Right? And so it’s hard to get that from just, like, a sales pitch over an email. I thought we

mean,

I knew we were gonna get along. My I’m concerned that I’ve been, like, too open, but I think it’s gonna be interesting for people listening. Like, I’m very I’m very unfiltered.

Marc Benioff is my cousin. So yes. So take that for what it’s what it’s worth. But, yeah, he’s a he’s a significant investor. No way. Benioff’s your cousin? Benioff’s my second cousin. Yeah. I was, you know, I have pictures of me and him hanging out as a kid when when I was a kid, and he was at he was at USC, so I grew up in LA. And I have very distinct memory. Like, he was always, like, like, precocious as a business person. I have very distinct memories of him picking me up from my house as a kid, he had this white BMW convertible.

My parents being like, that’s your cousin Marc. He’s gonna be really successful. Or maybe he was already, like, at Oracle being kind of successful, and I remember riding around with him. But, yeah, he’s my cousin.

I’ve heard him on your

Well, he was he’s been in all of the funding rounds. I don’t know. I wanted, like, I wanted some variety. And plus, like, Marc’s Marc’s awesome, but Marc’s not, like, sitting down with me and being, like, here’s here’s how to think about, like, your customer base. Marc’s not, like, closing candidates for me. I just wanna be be clear. Whereas, like, you know, Andrew or even Dylan sometimes will help do that kind of thing. So Marc’s awesome. Andrew and Dylan will close will close

Well, candidates, yes. Customers, not so like, I haven’t been asking them to do that. But, like, yeah, if I’m like, we have this incredible engineer who I wanna join the team, can you explain to them why they should join Warp? About a million percent. Do you not do that for portfolio companies? Do I? Yes. But do most other VCs? That’s like one of the things that I’m actually wanting. The other VCs I have are like I have Greg from BoxGroup and Eric from GV, and I trust them all to be like pretty cool.

He’s good. I mean, I worked with him at Google. So it’s like there’s there’s just very, very long relationships here that I have with these people in terms of trust. I mean, you burn that

Like, that that’s not a thing I’m afraid of saying. Like, they they need to, like, get their like, I’m saying it all the time. Like, you know, I have a 18 old son. Right? And he’s his new favorite thing is to talk to our we have Google Home. And, like, we’ll be like, hey. You know, hey, Google. What’s a what’s, like, a horse sound like? And he’ll be like, meh. And so he walks around. He’s like, Google. Google. Whatever. And, like, the thing is, like, broken half the time.

And I’m like, I don’t get it. It’s like, I know the technology to do this well exists. I get better results from, like, speaking to Warp. And, like, it’s just such a thing with the company so fucking slow that I can just see myself in the meetings where the various product managers are like, how do we get Gemini into this thing? And then it’s like some Gemini org. It’s like some PM is coming in, we’re like, we can’t put it in because it’s, like, not translated into 70 languages.

Or I can just imagine the conversations there, which is, like, why, again, why I like starting a company. It’s, like, way faster.

WhisperFlow is integrated in Warp. That’s how you talk to Warp. Yes. Amazing. Okay. Great product.

No. It’s it’s it’s it’s a crazy, like, not not invented here or, like, whatever. Like, I don’t I don’t know what’s going on at these huge companies. And that

Oh god. I I’m not like, in my space, not really any of them. Not to be a jerk, but it’s like they all Microsoft? I guess. But they like I think that they kinda screwed up Copilot. I don’t really know what Amazon is doing. Like, they they put out a coding thing, which people seem to like, okay. Google is not great at developer stuff, just period, from my time there. And Apple is always just, like, super duper slow. So I don’t know. I I guess Microsoft, if you put a gun to my head of, like, who’s I’m just talking about MySpace, who’s doing the best.

I don’t think any of those companies are doing a great job. As as I insult all of our potential acquirers, but, like, I it’s just, like, I I just don’t. Like, I I think that it’s, like, there’s a big company thing that’s a real problem.

They’re they’re they’re going shopping. Again, I don’t totally get the strategy. I’m not I’m not plugged in on, but it’s interesting. My theory there is that the founder just loves certain products, like, loves, like, the browser company’s product. And they’re like, okay. This is available. I will buy it. For

a super super cool product. But yeah. No. It’s I don’t I’m a small I’m a small investor in the browser company, and I know Josh, actually. But it’s a yeah. Crazy market.

No. I mean, well, I would listen to this episode. I would be like, oh, this guy is interesting.

Do you know Granola? Do you know Chris? Yeah. Have you heard of that product? So he’s a friend of mine. I’m a small investor in that company. The way he thinks about it, I knew he I knew him at his last company too. He’s building really cool AI native stuff, so I think he’s doing a great job. It’s like get get rid of the black box in Zoom is like a very interesting it just makes the product experience so much better, so I like it.

it?

I could see if that’s the pitch. I you’re not making it the most compelling pitch, so I could see why maybe you passed. Yeah.

I probably I’ve, like, historically waited a little too long to hire people to, like, be leaders on the team. So my my default like, for instance, I, like, with someone else on the team, basically, like, ran our growth function at Warp for a few years. And I think there’s value to that. Like, it’s better to, like, try and do something yourself as a founder first before hiring someone for it. But there’s also lots of people who know how to do stuff way better than I know how to do it, and so I may probably waited a little too long on on that.

We hired a great growth person who’s, like, been awesome.

to xAI? I would integrate x. They they approach us all the time to put out their coding models, but I need I need some reason that it’s, like, measurably better because every time we wanna add one of these. I hope that they have a competitive thing in my space. I don’t really know. I I think it’s great, though. I want I I want more models out there. And so I’m pro the existence of x, although we don’t use it anymore.

I’ve said it before in this interview. I’ll say it again. I’m very, very bullish on OpenAI because I think they have a winning consumer product. Anthropic is maybe the best AI lab, like, from a research perspective and from, like, the like, their models are incredible. I think it’s a big problem not to have the consumer product there. And so I don’t know, is an API business a gigantic business? So they’re gonna have to really win on these, like, enterprise vertical businesses, and maybe they will. I hope not.

Like, we’re competing with them. It’s a frustrating thing as someone in the coding space and are a customer of them. But I I think OpenAI with ChatGPT is gonna be gigantic.

I know you’re a lovable investor. I don’t have I this one, I truly don’t have a strong take on. I will say from, again, from a selfish perspective, I think it’s much better to be in the market for professional developers in the enterprise market for code gen than I do think it’s being a, like like, essentially the no code code market. I don’t know which of those products is the best. I don’t really use them. Is, like, your Webflow totally dead? Yeah. I think here here the argument for Webflow, it’s like Webflow in particular, I don’t we used to use it.

We moved off it. Like, they need to leverage the fact that they have this great hand interface for building websites, but, like, I don’t think you really need that. So I think Webflow is really, really in a ton of trouble. Yeah.

because, like

So so, like, the bull case on these is, oh, wow. Anyone can build something. That’s cool. And then I think you naturally have to ask questions like, okay, cool. What are they building? And I worry that what they’re building is like the next gen of WordPress or Squarespace or Webflow. And like, the business case for those types of apps is not that awesome to me. And so that’s why it’s like, I think you wanna be if you’re in, you know, the the coding market, I think it’s way cooler to be in the market for, like, building the really hard to build apps that have billions of users than the, like, the you know, some someone’s, like, Shopify store.

And by the way, I think Shopify could also, you know, be big in this space eventually.

This is gonna sound crazy, and this is not a thing I’ve thought through. But, like, at some point, like, I would like to have, like, some kind of, like, impact outside of technology, maybe in politics. I think I would, like I don’t think the world wants me in politics. I think that, like, the way that I, like, think of things is probably not very appealing to most people, but I I, like, hate what’s going on politically, I’ll just say in The US.

And if I could have, like, some bigger positive impact, it’s not just, like, starting a business, I would do it, but I don’t I don’t really think most Americans probably want me in politics, but that’s like I would love to have some big positive impact on our country, to be honest.

So we have a cool cap table with a combination of, like, operator investors. I think having having someone like you I don’t if I say you. Probably you. Like, you’re you’re you seem to have, like, the big you who who can think through, like, the one of the challenges we have is, like, breaking through the noise. And so I think someone who has that superpower would be a great person to attack. Not not my best answer, but I thought it was a that was my favorite

all the answers. Okay. Cool.

Yeah. It’s it’s that type of thing. Just to be honest, like, I’m getting older. I think we’re at this really interesting spot where we’re on the precipice of, like, amazing crazy technology that truly could, like, help a ton with health care or help a ton with people’s prosperity or learning or whatever. And on the flip side, I think we’re at this very precarious, like, political spot, and I feel like those two things are, like, racing each other. It’s super unstable. We’re not, like, a spot of equilibrium.

My hope is that the technology like, the advances in technology can really, really have a big impact. I think if I had to pick one area where I’m most interested, most hopeful as well is, like, in health, like, that would truly be transformative for, like, you know, me and my family and just, like, having some sort of real medical progress. But I’m also scared because it’s, like, it’s, like, a very, like, unstable situation right now in the world, in my opinion. Well,

like I I don’t know. I was being very, very honest. It’s like it’s really incredible technology, and it’s like it’s like never been a worse time to deploy it, in my opinion. So I hope that the that the sensible people kind of can get the technology deployed so that it really is helpful to people.

Thanks for having me. I I knew this was gonna be really fun, and it didn’t disappoint. It was awesome. Thanks for having me.