We don't need to compete with anthropic

and open AI on models right now. The

interface between the human and the

model is the key thing.

>> If you looked at the competitive

landscape, it was almost silly.

>> I asked Michael, I was like, what do you

think about cloud code? And he said

something to the extent, look, we are

going after the biggest market in the

world. You're always going to have

formidable competitors. That does not

scare us.

>> As founders, we all want to be ambitious

and we want to push like to the maximum

point the paro frontier, but like you

have to kind of know what the curve is.

>> For us, the decision to invest in curs

was actually pretty obvious. You

remember Andre Karpathy was using it. It

was clearly a phenomenon. It was clearly

like a known brand.

>> They went and got all the users in

record time. Now they have the asset,

the data, the knowhow to build their own

models. You really couldn't do the flip

of that unless you started as a frontier

lab. They were definitely a couple of oh

moments like remember when

>> so to kick off I actually wanted to take

us back to early 2024

and you know obviously you guys led the

deal in I think it was May of 2024 that

year. Um, but can you walk us through

what was going on in the Q1, Q2 of that

year and maybe how you guys started

working with Curser well before uh we

ever partnered officially with them?

>> So, you have to sort of transport

yourself back to late 2023, early 2024.

Um, I went back and looked it up. The

leading models at the time were GPT40,

Claude 3, and Llama 3. Like,

>> feels like forever ago.

>> Llama 3. [laughter]

>> That was actually pretty good.

>> That was great. Yeah, it was a great

model. um you know change in strategy

obviously now um

>> the leading uh coding harness was

copilot by like a mile right this this

was like the consensus thing Microsoft

was doing their Microsoft thing right

they had copilot they had office you

know they had vs code all of these

things combined they were going to

somehow win AI um and and so it was

clear that AI coding was sort of working

but it was a different universe compared

to today right like like you had the

sort of early signs that you could you

could do meaningful

work with AI, but agents didn't really

exist. You know, loops didn't really

exist. Reasoning didn't really exist at

the time. So, it's sort of sort of a

crazy time.

>> That's there was a continuum of like

companies going after coding, right? So,

on one hand, you had those that like the

only way to win coding is to build a

base model and it has to be a coding

specific one. And on the other hand, you

had, you know, very preciently, by the

way, companies just focus on agents,

>> right? And like cursor was somewhere in

between.

And and not only models, there were a

million companies doing plugins, too.

And both of these were very reasonable

things to do done by very smart people,

right? Like that that's what's so

interesting about these new spaces. It's

like smart entrepreneurs show up and do

really interesting things. And in this

case, model training was very a very

reasonable thing to do because the

models weren't that good at coding yet.

And there was sort of a theory that if

we focus on this and do a coding

specific model, it'll that's the

breakthrough. people doing plugins on

the other side were sort of saying hey

like let's not toss out the whole IDE

like that would be a crazy thing to do

but like the interface between human and

and model is really important so so

plugin is a great place to go um you

know it just kind of turned out that the

thing that cursor was doing was the

right thing to do right they like like

us they were very bitter lesson pilled

you know at the time they would have

said oh there's no need for us to go

train our own model of course that

changed later for different reasons

which we're going to get into later in

this podcast but it's like we don't need

to compete with anthropic and open AI on

on models right now. Um the interface

between the human and the model is the

key thing and this is something that

that I remember Michael and Aman saying

like a lot and saying just saying very

clearly from the earliest days of of

cursor saying code in the future will

look like pseudo code like I remember

Michael making this point a lot like

when you look at old you know like

computer science papers there's a

section it's like here's the algorithm

not in code but in like pseudo code

which you know I'm sure many people um

you know are used to and you know we

don't exactly write in pseudo code now

but probably you could like probably you

could just take the pseudo code, you

know, block from an old paper and and

like the models now would implement

that. This is like really what the

cursor guys thought from the very

beginning. And they've proven to be

exactly right about this, right? It's

like this sort of natural languageish

specification like

>> pairing the programmer's intent down to

the minimum possible spec. That's what

really sort of matters now. So, so

anyway, so we're in we were in this

world as Martine said, we, you know,

we're talking to a ton of very smart um

very interesting people working on

coding in various ways. Um you know the

cursor team kind of stood out because

not only did they sort of align with the

things that we thought about the world

um more importantly smarter people than

us you know you know engineers working

at at the time the leading AI companies

like OpenAI, MidJourney, Replicate a

bunch of others. Um you know all all

kind of use this and subscribe to this

model. Um and the team frankly just

seemed kind of special right like they

had an unusual degree of focus. Um, I

remember we we we got Michael to come

pitch our our GP group. Um, and 90% of

the meeting was him saying no to things,

>> which which which is just like like for

[laughter] for like founders out there

working on products that you love. Like

>> VCs will always ask you kind of dumb

questions about other things you might

do or things you're related to or

whatever. And [laughter] Michael

literally just sat there and like very

politely listened to all the questions

and said, "Hm, interesting. No, like

we're not going to do

>> Wait, wait, actually on that point, can

I ask you guys a question?" Um because I

remember that meeting so vividly when

you brought uh Michael in for the A and

one of the things that he said no to was

actually and you know to your point on

like there were a lot of plugins, right?

And so there was this maybe more

consensus thought that a VS Code fork

versus the plugin into VS Code would one

would be better for enterprise and it

wasn't the former it would be the

latter. Um, and I recall I think it was

you Martin or maybe it was both of you

asking him, "Well, are you going to get

enterprise customers with this medium?"

Right. And he looked at all of us in the

eye with high conviction and you know,

well, I'm going to turn it back to you

and like what did you think of his

answer and um what gave you guys the

conviction to take a pretty n I would

say a pretty contrarian bet at the time.

They actually had a very reason

articulation for why where they were in

the design space makes the most sense.

So for example um why wouldn't you build

a coding specific foundation model. So

what they said at the time uh was it

turns out that you don't speak to these

models in code. You speak to these as

humans and natural languages. Therefore

the the model has to like understand

like the the breadth of human experience

in language, right? And so you know that

means in order to build a coding model

you're actually building you know a

frontier language model and that's just

a very hard thing to do. And then of

course you know there are other

companies doing it and there much more

focused problems like t complete to do.

So I think every one of their decisions

was was very reasoned in our opinion. Um

they were also very product focused um

which you actually don't see a lot in

AI. So they they really believe that you

can build a product, the product, you

know, if it's really good will be

adopted, which by the way is very

similar to how Elon thinks.

>> Um, and that dictated a lot of their

decisions. Like if you really believe in

the product, you would never do a

plug-in because then you're part of

somebody else's product. If you really

believed in the product, you wouldn't do

enterprise early, you do it later

because the product itself is the kind

of go to market motion. And so there was

a I would say and and Matt let me know

you would agree tremendous clarity on

exactly what type of companies they the

type of company they were and the

decisions that they said or uh were all

fell from that consistently right where

many of the companies we saw were kind

of these pastiches of we'll try all of

these different things we're not quite

sure what's going to work you know so

their plugins and their services and

their whatever whatever whatever this

was a product company going after what

they considered to be a product problem.

Yeah. No, I think that's exactly right.

And and and I think they had the

ambition and the courage to kind of do

the maximal form of what the product

would look like, right? Like I think,

>> you know, as founders, we all want to be

ambitious, right? And we want to like

push like the to the maximum point the

paro frontier, but like you have to kind

of know what the curve is. And they and

they just kind of knew what the curve

was, right? And didn't get distracted by

the by the sort of non-product things.

Um, I remember uh I when we were trying

to convince the cursor team to let us

invest in their company. Um, uh, I asked

Michael once what he did for fun like

outside of outside of work. And I was

like, he didn't understand the question.

He's like, what do you mean? [laughter]

Like I'm like, when you're not in the

office, he's like, what do you mean? You

know, [laughter]

I al I also remember by the way when we

had the lunch after we did the

investment and you know I

[clears throat] was talking about

something about like like internet days

that were similar. He was like

>> I was five [laughter]

and we're like

>> but but like I mean what's amazing about

not just Michael but all the founders is

like even though they were pretty young

when a lot of these things happened like

they actually were kind of students of

of all this history which is a trait

that we see Alex Trampel talks about

this a lot. We see this across all of

our top founders that they're like able

to study and really learn from what's

kind of happened before.

>> Um I'm going to turn the question back

on you. Um I I think Matt would agree

for for us the decision to invest in

cursor at the was actually pretty

obvious. Um the the the team was

phenomenal. It was incredibly focused.

All of us were users. Um like we you

know like half the team actually used

cursor. Uh you remember Andre Karpathy

was using it. It was clearly a

phenomenon. It was clearly like a known

brand. the growth was asmmptoic. So from

an early stage investor is a pretty

straightforward decision. It was a much

less obvious decision for a growth

investor. And so like I think probably

what you heard in that first meeting

maybe was a little bit dissonant with

how you'd growth invest but then you

very very quickly led the next round. So

maybe talk through how you kind of like

got past the typical growth evaluation

and and got conviction. Yeah, I mean I

think the timelines are so compressed

here. It's crazy to think back on

because I remember you guys led the A in

May, June, right? early summer and by

October we had done we did the B and so

it was clearly just vertical liftoff and

there were a couple things that summer

right you you guys talked about Andre

Carpathy tweeting about them but they

went on Lex um incredibly thoughtful uh

discussion of how they thought about

their vision for like coding going

forward um and so I think it comes back

to Martine something you said which is

they were just reimagining everything

right and you you know you just talked

about this as well Matt I um

>> but you can't you can't write growth

memos that way. Like [laughter]

>> never mind you. So you know you got the

bug you know cuz you were calling us and

we were so how did you convince David

George [laughter]

>> like don't you have to show like you

know

>> Yeah. You know it's so funny because and

I think you had to think out of the box

for this one. I mean, of course, the the

momentum was vertical, but there were so

many things that they defied

conventional thinking where I remember I

the first time, you know, Martin, you

introduced me to Michael, we got a

coffee that day, you know, as Michael,

you know, they move quickly. Uh, so I

pulled some stuff together for them,

right? Because we're um, you know, we're

trying to show them, hey, this is the

next stage of what growth looks like.

And there's so many conventional pieces

of conventional wisdom that they just

completely broke. Like we would say,

hey, we'll help you find a sales leader

because, you know, previously it made

sense to start layering a sales leader

at 25 to 50 million of ARR when self-s

serve starts to peter out. Michael looks

me dead in the eye and it's like self-s

serve is not petering out, right? And so

then you start to pull these drivers

that you're like, oh, these assumptions

that would go into any growth model

historically, you can't have that

asmmptoing at 25% growth in five years,

right? And so I think a lot of the

growth investment decision at the time

was throwing out some of the assumptions

that we would typically make on how a

company would, you know, eventually

start to slow growth. Um, I'm very glad

that we did that. Um, and then the

second piece is we should talk about the

competitive landscape, right? Because

you mentioned co-pilot. I was I was

actually going to say and actually I I I

think Matt deserves a ton of credit here

which is we talk about now in retrospect

how it was a pretty easy decision on the

series A but you know you know Matt Matt

Matt led the early deal and he saw

something uh a lot of people didn't

which was this which is if you looked at

the competitive landscape it was almost

silly which is you had a large incumbent

which is Microsoft that had a company at

scale that had the open weights

[laughter] and they own VS code so

everything

you know everything would say that

there's just no way that you could

survive relative to this this this one

single competitor. We'll talk about the

other ones um later. And I and I think

that also was one thing you said about

Michael was what I witnessed. It' be

great to hear Matt, which um and I even

remember when Matt said this early on,

he was like, you know, they have a good

answer for everything, which when you

have founders that are students of what

they do, they're very consistent in

their answers. Um, and you know, and

this this is not listen, I I think when

we did the deal, it was pretty obvious,

but it wasn't so obvious six months

before. Uh, you know, and Matt and the

team had that deep conviction way back

then. And I think for every one of these

races there there are mirrors of that.

Anyways, is this is this

>> Yeah, totally. And look, I mean, people

think venture capital is like an

individual sport. Like, it's not at all

at all. I mean, our whole team was

working working on this at the time. Um,

you know, I think it was over a year. We

literally had a cursor team on our team

like within our team.

>> Was great, Ro was great, you know, you

you led the team. I mean, it was

>> So, but but yeah, no, you're exactly

right. I mean,

>> I I mean, these guys are crazy smart,

right? They're like off the charts sort

of just just raw intelligence.

>> Yeah. um they're able to do this thing

we talk about a lot like context switch

between tech and markets um really

really seamlessly and and and um they

like in ingest data right whether it's

historical data or like things happening

in the market and act very very quickly

which you which you said before Sarah

>> but spec but spec I agree with that but

specifically

>> it was just kind of crazy to think

you're going to fork something from

Microsoft who owns the thing [laughter]

>> and then you're going to you know

compete with them with smaller models

Even they own the opening eye weights

and they have enterprise sales force and

they have

>> greatest yeah enterprise distribution

ever

>> you know it's so interesting right it's

it's like

>> they [laughter]

have 100 million developers

>> they own everything they literally own

every piece of that like

>> you know it's it's so interesting right

because like that's definitely the

conventional wisdom and like it's

usually correct the conventional wisdom

in many of these cases um you know one

of the data points at the time was it

was actually um Marco on our team set up

a dinner where Aman John sat right next

to John Schwman and um they talked like

a lot about cursor and I I think John's

thing was like oh yeah I tried cursor

but like our code base I think he was at

anthropic at the time like our our like

monor repo just like immediately killed

it right it's like I couldn't even load

the code base and and like I think like

the next day Aman came back he's like oh

we made some changes like here you can

and not only is like speed of iteration

but like

>> you know we just look for these little

data points where it's like like

actually like doing a plugin or or just

like writing on top of VS Code is not is

clearly not going to work because like

the smartest people in the world have

tried it and it doesn't work right so

it's like so these guys were sort of

listening to

>> and and historically we as a team have

always

bet on the independent in in a large

market right if there's a leading

independent we'll always bet even if the

incumbent seems very scary I do think

it's worth talking about competition

because my you know my experience with

all of our experience with cursor is

that there was always like a looming

existential threat and we almost forget

about it. But like you know, of course,

Copilot was the big one and then

remember the whole Windsurf thing. So

like Windsor actually did this very

smart thing where they went to YC and

there was a lot of YC users using it. So

you kind of had this kind of whole

movement on Windsurf um and you know

Cognition was a phenomenal company

actually was making real waves with

agents and they've done a great job with

that. And then you had the first version

of cloud code um that came out and like

that was kind of like a you know uh a

competitive thing and so like you kind

of go through like there was always some

competition and and one thing I would

say and I would love again to actually

hear your perspective on is like it is

such a pleasure to work with founders

that are entirely unfased.

>> You know like normally like you know

founders have this things happen are

calling and they're kind of freaking out

and whatever. Um they were 100% unfazed

by the competition.

>> Yeah. Paranoid but unfazed. I'll never

forget um you know and we we we've been

lucky to do I think all of all of their

rounds starting from the A. Um but the

one

>> we invest in every cursor around

>> we did. Yeah. With I think increasing

amounts of dollars. But um

>> Sarah Sarah coled the B and the C.

That's real conviction. That was a

harder conversation to convince

>> I was going to say the C

>> the team for the C. you know, at at the

B you could argue, God, just bet on

vertical momentum.

>> That was actually was

>> obvious the who grows from four to 50 in

like four months or whatever, but this

the um or actually no, it was it was the

D. So Claude Code, not to take us on a

time travel trip again, but Claude Code

came out May 2025 um with a splash. You

know, it wasn't the pickup wasn't right

away, but obviously formidable. Um and I

remember there was around um I think a

couple months after three months after

that and I asked Michael I was like what

do you think about Claude Code and he

said something to the extent actually

you know exactly what you're saying here

which is look we are going after the

biggest market in the world there's

going to be competitors in fact there's

been a rotating cast of characters from

the very beginning co-pilot Microsoft

co-pilot was the first one cla code is

one of a rotating set of characters and

you know we think in big markets you're

always going to have formidable

competitors that does not scare us um

and you know I just remember being

>> yeah somewhat blown away by the clarity

of that comment um the lack of fear

right there's there's humility as well

like it's humility mixed with bravado

and I just think that is kind of the

winning combo when you're going after

these juggernauts like that

>> and I know it sounds vague but like

things like this it just it's it's

almost a baso Bezosish thing which like

if you're smart and right like it

actually like gives you I think the

confidence and the focus to to like have

that kind of attitude when you when you

have this like mega competitor sort of

coming after you.

>> Yeah.

>> Then I'll say I will say they were

definitely a couple of oh [ __ ] moments

but they were always around models. Like

remember when Opus 45 came out? Like

we're all on vacation and I think

everybody in the world class was like oh

[ __ ] [laughter] all

>> that's true.

you know, these things are moving much

much faster um uh than any of us

thought. And then I think the same thing

when the pre-release of Mythos came out

and people had access to it. These

models were getting so good so fast. And

I think another thing that the cursor

team probably doesn't get, you know, the

the level of credit for um is to the

extent they cannibalized themselves so

dramatically in like a Reed Hastings

type way in a matter of two years,

right? So they were first an IDE and

then they you moved to an agent platform

then they moved to a model platform and

it's very very tough for you know

founding teams to actually have to

discipline.

>> Yeah. Tab was the big thing when we you

know Karpathy had that famous uh post. I

guess he has a lot of famous posts where

he's like tab tab tab. Yeah. Exactly.

Like that kind of doesn't matter that

much anymore.

>> Yeah. I actually think that's a good

segue to maybe some of the other

strategic decisions they made along the

way um around business model and um to

your point on oh [ __ ] moments I don't I

don't know if they would consider this

that because I don't think the vagaries

of Twitter impact them as much um

>> as their as the investor [laughter]

>> yeah as the rest of us just like

scrolling all day but um it was probably

summer of 25 uh where there There's a

lot of [ __ ] written about their gross

margins, etc. And then of course, you

know, post the Opus 45 maybe Janu

January period. I mean, we should all

talk about that because that was kind of

those are both different but interesting

times.

>> Yeah. I mean, one thing else I uh is I

just feel like X is driven by like tail

chasing adrenaline sinking in shot and

Freud and

there tends to be a massive disconnect

by what people say on X and like how the

business is actually doing and so even

though there was a lot of this

>> the business tended to do very well and

it's so interesting is so much of this

often comes from investors especially

things talking about like business

quality

But text transformations always precede

figuring out the business. Like if you

guys remember the internet, like we

didn't even figure out how to monetize

it for a long time. [laughter] Forget

margins, making any money at all, right?

And here you've got like unlimited

demand, unlimited growth and and

margins. So, you know, I think this

tends to be, you know, a e exit its own

kind of echo chamber as people say it,

but also b every single wave you have

investors trying to say something that

sounds smart, which is like picking

apart, you know, the business model of a

nent tech transformation and I just

think historically they've always been

proven wrong.

>> Yeah. Yeah. For sure. I mean I I you

know I think I'm going to borrow this

quote from something you said Martin but

you know first comes the technical

transformation then comes the business

model and in this case like I think the

the strategy where they went and got all

the users in record time now they have

the assets the data the knowhow etc to

build their own models right you really

couldn't do the flip of that unless you

started as a frontier lab

>> um and it you know it's clearly paying

off in this combo that we'll talk about

later. But um I think seeing that kind

kind of backdoor strategy um was really

inspiring and they they took a lot of

heat for it.

>> So Martine, how do you think Curser

really became a salesdriven company or

or a company that's good at sales

because you know early on I think I I

told Michael a few times too. It's like

oh you better invest in sales. He's like

nope not [laughter] going to do that.

They literally set up enterprise

atcursor.com. It's like if you're an

enterprise, send your inquiries to this.

But but like but obviously now they're

very good at sales, right? And and and

or go to market in generally like how

how do you think they made that jump?

>> Yeah, it's it's a great question. So

here' be my best guess. Um which is they

they are very much a students of

whatever they do. They're very

thoughtful every raise, you know, um

every product decision. Um and I I think

as they learn more about the market,

they realize that the margins were in

the enterprise. So very classically if

you view your competitive set say the

large labs the large labs will basically

subsidize or give away the single serve

tier. Um but then they actually have

they command great margins in third

party and they command greater margins

in the enterprise and you know is really

at scale and and as the company has

always gone they decided okay like so

you know for future viability we need to

go into the enterprise that's where a

the bulk of the spend is but also a lot

of the margin the margin tends to be the

value here. we've created a great you

know top offunnel

engine and so um you know this is

existential and this important and then

when they decided to do it they really

went in and that's the f that may be the

fastest grad of a sales team in the

history of the planet right I mean um I

mean you know you were you were very

involved Sarah for example on recruiting

[laughter]

so maybe talk about that actual

expansion because it was it was

>> yeah I mean it's um it's so neat to see

you know that expression how you do

anything is how you do everything. You

you really see it. So much of what you

guys are talking about and how they

thought about product etc. um was

reflected in how they did hiring and go

to market hiring in particular and we

got to shout out Jordan and Roman and

their their team there who in the early

days built that from that that engine

from scratch. They're just the most

incredible you know some of the most

incredible people I've ever worked with.

Um but we've all ever worked with and um

>> well they all they also spend 40% of the

time recruiting.

>> Yeah. Yeah. Exactly.

>> Which is amaz which is amazing for for

for technical product founders to spend

40% of the time recruit. I've never

actually seen it before. Absolutely. And

it is so effective and like a company

really is the team that you build and

they took this to heart. Like everybody

talks about it. Everybody talks about

like doing a class route. It's entirely

different where it's like how often was

Oscar, you know, hey, I'm on a redeye to

Europe to close some like literally like

ice near it was constant.

>> Totally. And you know, there was that

great piece that Bri wrote about their

hiring practices that everyone should

read. Um, a lot of that focuses on their

edge hiring, like the work study, all

this stuff, right? But even on the go to

market hiring when the thought that they

would put into hiring a single AE,

right? And of course, like this is

nothing new, but just the back channel,

back channel, back channel ethos, they

had that to a tea. They knew exactly

what they were looking for in founding

AES. You know, I remember we would go

there and sit in their office for eight

hours helping them source stuff like

that. And they weren't like, oh, we want

to do it the old way. We're like that

that's not going to we're building a

company in a new way, right? So, we want

very specific AES that um fit this

profile. We're going to go get them.

we're not just going to wait for people

to walk in the door. All of those things

that have been written a bit on the edge

side, they did that on the go to market

side and clearly to phenomenal results.

I mean, they got to over 50% of the

Fortune 500 and

>> I think faster than anyone we've ever

seen.

>> Can you talk about specifically how they

applied the lessons in hiring to to like

AE hiring because this is something I

think our founders deal with a lot like

like you know I you know dealt with this

a lot personally like like like how how

do you actually make that jump and like

what what lessons really do carry over?

>> Yeah. Yeah. Or or that you observe in

person.

>> No. Yeah. And and you know hopefully I

think this has been written about so

hopefully it's not sharing alpha but the

way that they think about sort of epochs

of a person's career or of a company and

who was the key dial in making that

happen. I love this intense research

period that goes on where it's like hey

this these are the top 10 companies who

have seen great in this type of selling

and then let's go a level deeper. Here

are the top 10 teams within those

companies and then here are the one and

number one and number two single AES who

drove that change and accounted you know

again back channel back channel back

channel right like who their boss their

boss's boss and their boss's boss's boss

would say this is a superstar AE and of

course in the early days it was like can

they deal with some uncertainty because

you don't want someone who can just run

a playbook at this point maybe they can

get those people but in the early days

right the founding AE set was super

strong and I think figuring out what

does the best look like at what period

of time and then which individuals drove

that that's so applicable for

engineering obviously product building

but on the go to market side as well and

um I think that nailing the right star

who did it at the right time is really

hard I mean it narrows the base that you

can hire from completely but because you

know I think Jordan Roman and the early

team got that right they just were able

to scale it quickly without losing the

cursor culture

Yeah,

>> which you know a lot's been written

about the cursor culture. I'm curious,

you know, maybe you guys can share your

own um impression of it.

>> You know, I I mentioned earlier that

like

you know, kind of coding was all that

they did. It my impression at the time

and and like we you know, the the the

founders could could correct us on this

like my impression at the time is they

weren't doing that because they're

obsessed with work and I think they're

still not doing it because they're

obsessed with work. literally just like

love writing code and love systems and

and like I think the three of us sort of

you know can feel that way at times too

right like that that's like a very very

understandable thing and that seemed to

be the driving cultural you know kind of

impetus at at at the time is a very

small team everybody had that had that

attitude and like we're orienting

towards the future of like what is this

actually going to be and that kind of

like you know from an edge standpoint

and a product standpoint like very

narrowly focused on what they were

trying to accomplish and like how how to

run the team

>> but there's This is a huge paradox cuz I

totally agree. I 100% agree. However, if

you actually detailed their actions

later on, that's not the conclusion

you'd get to like what do they spend

their time on? It was like recruiting,

go to market, understanding business

models, bisdev. And so, in a way,

>> again, I like just totally agree. And

again, on one hand, you have

>> a very product focused team that comes

from the tech that literally wanted to

build products that they that they

wanted to use. Listen, I I think that

high-powered founding teams work on

exactly what is needed by the business

and I think they did a very good job and

I think it allowed them to navigate the

most uh competitive market we probably

ever see. Has there been a more

competitive market than coding then? I

mean, it's just it's hard to imagine.

There's so many companies

>> database wars.

>> Yeah. I mean, you have very intense

competition in like relatively narrow

markets. I mean, databases are huge, but

compared to coding, I actually think

it's much smaller, right? like for like

I mean coding is kind of the meta

category right like like it's like all

expression of like human thought in like

economic form is kind of like coding

>> I mean imagine like starting competing

with Microsoft ending ending up

competing with say anthropic you know

both of these kind of you know mega

companies with tremendous amount of

capital and power and distribution in

the meantime you evolve like ex like

fundamentally your product approach and

you change your go to market and then

you engage in the most complicated M&A

of all time and all in a matter of two

years. [laughter]

Like I think this is so crazy, right?

Like the magnum opus of like you know

startup or just like totally

>> there's definitely something to what

you're saying, right? Like in the

beginning these guys were incredibly

focused on the product and literally

enriching their own lives. Like

literally they would be coding for fun.

Like when I finally got them to admit

they did something for fun, it was like

oh that's also coding. [laughter]

>> But like yeah which like

>> which by the way is the only

>> guilty guilty. Yeah, it's the [laughter]

only fun left to any of us by the way,

you know, now that the models have like,

you know, brought the post scarcity

future to us. It's like coding is like,

you know, the last fashion. Um,

>> you know, and but but like there was

always awareness or at least I always

thought talking to Michael like he was

always aware of the game if if that

makes sense. Like like he truly was and

they were all truly in love with coding

and creating great products, but like

they kind of knew that building an

enduring company or great company isn't

just about product obsession. And I just

got the sense he always kind of

understood that and and like was

thinking a couple of

>> Yeah. Listen, if your goal is changing

software, that's a critical it's

critical to get the business right.

Yeah.

>> Yeah. I was going to add an anecdote

that's not related to um them coding,

but the other thing that you know we've

sort of seen across a number of

founders, but Michael and Sale and Aman,

they they sort of embodied this is this

again how you do anything is how you do

everything, right? And so of course this

detail attention to the product very

artisan there's craftsmanship right

overused taste they have taste in spades

but it extended to how

>> not only they did hiring on the edge go

to market side but even the space they

created the events they throw like I

remember walking into their office and

thinking wow in my early 20s I would not

have paid attention to putting I don't

know twinkle lights here they famously

no shoes right but you'd go in you'd put

on your slippers and it would feel you

feel at home like hence why everyone was

there working all the time because

you're like this feels great like home

and they um you know they it was very

hege the Scandinavian style and I

remember going to their second office

when they finally um expanded and

complimenting them on a couch or

something cuz I think I was redoing my

own house at the time and they were like

oh yeah we got that from a secondhand

like very hegeay uh furniture dealer and

so they were going after a specific look

and feel. And I just was struck by that

because I was like, "Wow, that is not

how I remember

guys [laughter] in their early 20s, like

thinking about the space that you create

and are in, how that leads to the

product and, you know, mind space you're

in."

>> Yeah, there there's there's actually a

nice adjacency here to a lot of the

decisions they made. So, so marketing

was a very obvious one. They were very

very particular like we use X, that's

not our voice. We're not spammy. We made

so many suggestions. I remember we're

like, "Oh, like let's do this event. No,

that's not our style." Mhm.

>> So they're very good at saying no for

sub. Um I will say that they were also

very good about this when it came to

personnel. Like if if there wasn't a

fit, they make the hard decision pretty

quickly.

>> Um you very very rarely see this with

early founding teams and they they're

very consistent about that. And so I

would say it's almost this kind of un

talked about probably greatest strength

of the company is that once they made a

decision it doesn't matter how hard that

was whether it's deciding not to enter a

market deciding to like be very limited

in what they're doing like they kind of

follow through or like you know uh who

who would stay in the company who

wouldn't stay in the company and so you

know kudos to them for actually you know

having the the the courage and the

tenacity for these tough decisions

>> which is sort of an Elonish trait. too.

>> It's also very Yeah, I I actually think

that these these two company I mean we

just like you know talk about the M&A a

little bit um are very good fits are

very good fits on

>> on like a technical level right like

Elon has a compute they have the

distribution and the data um on a vision

level they both think that you know code

is the path to changing all of compute

and maybe all of humanity uh but also on

a cult culture level right they're very

product engineering focused very very

very um very product engineering heavy,

very fast iterating, you know, they make

hard decisions very quickly. And so, I

mean, I've been involved in a lot of M&A

and uh I would say this is probably the

best fit I've ever seen as far as just

the full package.

>> Yeah, couldn't agree more. I mean, there

there's a funny analogy with our

experience with on the SpaceX side. I

remember we met them in 2019. Back then

it was fully a launch business, but the

SpaceX team was like, "No, we're going

to launch global communications. We're

going to power the internet for everyone

in the world." They had no, you know,

nothing at the time, no Starlink

satellites in the sky. And of course,

they they did it right. And if you think

about the Cursor team, um, telling us

and, you know, they actually beat every

forecast they ever gave us. But,

>> oh, by a lot.

>> There's just so many Elonish

characteristics of moving fast, going

after large markets, winning them in the

feet of impossible competitors, you

know, Comcast, right? Right. in in the

Starling case um that there's so many

parallels totally different venues

obviously but um fascinating to see that

>> there's another thing I would say also

um which I think between kind of Elon

and and and cursor like SpaceX and

cursor is like in both cases the

consensus was decrying the death of both

companies so many times [laughter]

>> you know so I think there's also like

this kind of like

>> you know uh you know cultural

perseverance to the naysayers which I I

actually really respect on both sides.

>> Actually, I do have one other real

question I wanted to ask you guys.

Cursor is also really good at doing M&A

like like doing

me. Yeah. Yeah.

>> Yeah. I would love to know a little bit

more like from your perspectives like

why why they were and what the

philosophy was and all that.

Um so I will say listen so uh there is

such a war for talent

um right now that the companies that

have figured out how to do uh talent via

acquisition can really get ahead. I mean

there's just a lot of advantage there.

And so the early motions that they did

were of of that nature which is like

really good team you know they'll just

go ahead and do the acquisition. And

what was really nice about Cursor, they

were just never worried about like

operational complexity. They're just

like it doesn't matter how messy it is,

we'll go ahead and do it. They also

didn't really worry too much about their

ability to set culture because they were

just so good at it. Like again, like

that was just part of it. Um it wasn't

until later like the Graphite

acquisition where they started thinking

about acquisitions in terms of strategic

direction. Um and of course that was a

much larger acquisition. Um and you know

listen I I think um the company was so

fast like

who who knows to the extent that they

would have figured out how to integrate

all of these things and execute on them

in in the limit um just because like you

know like now they're part of a very

large acquisition but I will say that

they approached these in the same way

that they approached everything which

was incredibly thoughtful. They had a

plan. They executed quite well. And so

this may be the most concentrated

company in the history of companies

having done M&A,

>> you know, admitted everything else.

>> Yeah, I was going to say I feel like

there's this badge of honor now when a

CEO of a company says I have exfounders

in my company.

>> Um, and I think it should be a badge of

honor, right? I don't know how many what

that stat is for Curser. Do you guys

know? Um, but I remember and they have

so many great founders there, but uh I

remember when they brought on Tito from

Koala and then Adam Ward on the talent

side

>> actually and just seeing firsthand the

leverage that they got from bringing in

someone who was a founder CEO

effectively but slotted really well into

the cursor culture and just take that to

great heights and add to the

acceleration like I think that playbook

you know I don't know I'm sure they're

not the ones who started it per se in

this new Genai era But they certainly

are, I think, one of the best examples

of how to integrate founders really,

really well into your company.

>> It's funny, right? Because Anthropic

kind of gets that tag a lot now. It's

like, oh, like exec at company A just

went to take an IC role at Enthropy, but

like cursor kind of did this first and

they weren't just like slotting people

into IC roles. Like they're actually

building the company this way, which I

Yeah. I thought it's very it's very um

unconventional, but but like really

>> it's actually operationally incredibly

complex.

>> That's a conventional wisdom.

>> Yeah. Yeah. Yeah. And I I think it's

actually true. I mean, I think it's not

that they, you know, um did something

that people think is hard but is

actually easy. I think it's actually

hard and they just managed to pull it

off, you know, credit to them.