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Episode: I got rejected from YC (4x)…. now my side hustle is worth $1.16B

Author: Hubspot Media
Duration: 01:12:47

Episode Shownotes

Get our Business Monetization Playbook: https://clickhubspot.com/monetization Episode 658: Sam Parr ( https://x.com/theSamParr ) and Shaan Puri ( https://x.com/ShaanVP ) talk to Replit founder Amjad Masad ( https://x.com/amasad ) about the massive opportunities with AI Agents. — Show Notes: (0:00) Replit origin story (9:27) Replit's 10-year overnight success (12:27) Rejected 4x

by YC (17:28) Personal essays from Paul Graham (20:17) "i hacked into my university to change my grades" (25:55) Rickrolling into YC (35:25) Shaan builds a food tracking app in 30 seconds (43:19) Magic School: An AI application for educators 4M users in 1 year (47:31) Amjad on Agents (49:53) Building moats in a goldrush (54:53) Replit is Shopify for software creators (1:05:11) The most gangster story in Silicon Valley — Links: • Amjad essays - https://amasad.me/ • Replit - https://replit.com/ • Codeacademy - https://www.codecademy.com/ • Do What Makes The Best Story - https://amasad.me/story • Magic School AI - https://www.magicschool.ai/ • 11x AI - https://www.11x.ai/ • Synthesis Tutor - https://www.synthesis.com/tutor • The Sovereign Individual - https://tinyurl.com/4w6ns7b2 • 7 Powers - https://tinyurl.com/382ch557 — Check Out Shaan's Stuff: Need to hire? You should use the same service Shaan uses to hire developers, designers, & Virtual Assistants → it’s called Shepherd (tell ‘em Shaan sent you): https://bit.ly/SupportShepherd — Check Out Sam's Stuff: • Hampton - https://www.joinhampton.com/ • Ideation Bootcamp - https://www.ideationbootcamp.co/ • Copy That - https://copythat.com • Hampton Wealth Survey - https://joinhampton.com/wealth • Sam’s List - http://samslist.co/ My First Million is a HubSpot Original Podcast // Brought to you by The HubSpot Podcast Network // Production by Arie Desormeaux // Editing by Ezra Bakker Trupiano

Full Transcript

00:00:00 Speaker_03
This is the first AI agent thing that has been a mind-blowing moment for me, where I am not a programmer, I am not a coder, but I can now create software.

00:00:10 Speaker_02
Well, that's insane.

00:00:11 Speaker_01
There are apps built on Replicant Agent that otherwise would take probably $100,000 of developer time. and you can build it in $25 paid to Replin. It's pretty wild how fast these companies are scaling.

00:00:26 Speaker_01
I don't think in the history of Silicon Valley we've seen anything like that, even in the Web 2.0 era.

00:00:30 Speaker_03
So what is a fast ramp for an AI company? What's impressive that broke the frame of how long things would take?

00:00:36 Speaker_01
I would say reaching 10 million in three or four months. ARR. Oh my God.

00:00:46 Speaker_02
Can I ask a blunt, crude question? How can I use your software to become a billionaire?

00:00:51 Speaker_01
I would say building.

00:00:53 Speaker_00
Okay, so how do we want to start this? So Amjad, you, you're awesome. So you have, you're today

00:01:09 Speaker_03
in a position that I think a lot of people want to be in. You're doing the Silicon Valley dream. You had this idea. You go through YC. You've now raised hundreds of millions of dollars. You're valued at a billion-dollar valuation. So that's today.

00:01:23 Speaker_03
But then the cool thing about your story is that didn't seem likely 10 years ago. It is a very unlikely success story. And yeah, you went through YC, but you were rejected a bunch of times.

00:01:35 Speaker_03
Like, yeah, you're in Silicon Valley now, but you started off coding in an internet cafe in Jordan. That's what's interesting to me. And we asked you beforehand, we're like, hey, what killer stories could you come on the podcast and tell?

00:01:45 Speaker_03
And you go, you wrote this. So I'm going to read a word for word, and then I want you to tell us the story. You go, rejected four times and rickrolling into YC, raising tons of money and meeting amazing billionaires. Let's do the first part.

00:01:55 Speaker_03
Rejected four times and rickrolling into YC. Can you tell the story?

00:01:59 Speaker_01
Yeah, so I left my job at Facebook in 2016. And Repl.it has been a side project for a while, and it's been growing. I've been working on it nights and weekends. It grew to a point where the server cost was meaningful.

00:02:21 Speaker_01
I guess I have to start a company around it. And so I went to my manager at Facebook and I was like, look, I have this side project. Can we make it somehow a project at Facebook? And we looked into that.

00:02:32 Speaker_01
I sent Zuck an email at the time and he ignored me. Like, okay, I guess I have to start a company. And so, yeah, I quit my job, applied to YC the first time. We did the whole thing. We did the form and the video and all of that.

00:02:50 Speaker_01
And we didn't even get a call or anything like that. It was just like we got the rejection letter. And so I was like, OK, I have this Facebook stock.

00:03:02 Speaker_01
some savings, I sold the Facebook stock, I put half of it in Bitcoin, and then half of it into the company, just for us to live. How much money was that? It was like 70K or something like that. What was the original product of RedBlet?

00:03:21 Speaker_01
It was basically an editor and a console. You could type code there and you can run it.

00:03:33 Speaker_02
All right, so when I ran my company, The Hustle, I think we had something like 2 million subscribers and we made money through advertising.

00:03:39 Speaker_02
We didn't actually make that much money per person reading the newsletter because advertising in general is kind of a crappy business model.

00:03:46 Speaker_02
And so I remember sitting down and I'm like, what are all the different ways that I can make money off The Hustle that aren't advertising?

00:03:52 Speaker_02
And so to make sure that you don't make this mistake, Sean, me, and the Hotspot team, we went and looked at a bunch of different ways to monetize your business.

00:04:01 Speaker_02
And we put it all together in a really cool document where we lay it all out along with our research. And we call it, very appropriately, we call it the Business Monetization Playbook.

00:04:11 Speaker_02
Go to the description of this episode and you're gonna see a link to that Business Monetization Playbook. It's completely free. You just click the link and you can see it. Back to the episode.

00:04:24 Speaker_03
By the way, Sam, have you ever used Repl.it?

00:04:26 Speaker_02
I was using it today before this. It's magical. And also your tweets describing what it is, like, for example, your doctor saying, you know, he wants me to track my sleep.

00:04:35 Speaker_02
So I just uploaded the PDF that he wanted me to fill up, fill out into Repl.it and it made an application so I can upload it much easier. Yeah, it's like pretty magical. Sean, are you able to use it? It's definitely out of my league still.

00:04:46 Speaker_03
Both me and Sam have joked around because we both have maybe five or six times false started of like, I'm going to learn to code this summer.

00:04:54 Speaker_03
It's like a New Year's resolution thing where you just keep saying you're going to do it, and you do 20% of it, 30% of it, and you give up. You know, we buy the Udemy course, learn Python the hard way, then you start doing it.

00:05:05 Speaker_03
And nothing really ever stuck. And one of the biggest problems was that nobody really talks about this. You think learning to code is like learning Spanish, it's like learning a language. You're like, okay, so how do I need to say the thing?

00:05:14 Speaker_03
But before you could even do that, it's like, oh, I'm supposed to download this program, so I need to download an editor. And then I need to download all these packages to be able to use the thing.

00:05:23 Speaker_02
That's where I stop.

00:05:23 Speaker_03
And then you need to, and it's like, just setting up the environment is so goddamn confusing to a beginner that you don't even get to do the part where you actually write the code and be able to, and then it's like, oh, how do I run the code?

00:05:34 Speaker_03
I got to host it somewhere. Now I got to learn how to do hosting and cert, like, what is that? And so there's all these things around it that were confusing. Repl.it solved all of that, which was amazing.

00:05:42 Speaker_03
And I actually did your 100 days of learning to code. It's actually made it really easy. If I didn't have kids, I would just be doing a lot more because you solved that problem for me. And I know I'm asking you about the YC rejection.

00:05:54 Speaker_03
I want to come back to that. But to give Sam maybe a little more of the context, I think, correct me if I'm wrong, maybe I'm making this up.

00:06:00 Speaker_03
I think the reason you wanted to have this kind of online editor, online environment where it's all hosted there was because

00:06:07 Speaker_03
When you were younger, you were living in Jordan, and I guess you used to go try to learn to code out of an internet, or go try to code out of an internet cafe, but that means every time you go, you have to set everything up for the first time, because it's not your home base, it's not your home computer where you set it up once and it's there.

00:06:22 Speaker_03
Is that true? Is that why you felt the problem, like 10x what a normal person would feel?

00:06:27 Speaker_01
Yeah, basically every time I wanted to do a little homework, I have to spend an hour setting up the environment.

00:06:35 Speaker_01
At the time, the web was moving so fast until we had Google Docs, and we had Gmail, we had this client-side JavaScript application revolution. And I'm like, okay, why can't I type code into the browser and run it?

00:06:50 Speaker_01
And I started looking around, and it turns out nobody solved this problem. There were some experiments, and it was kind of crazy to me because it was almost like finding a $100 bill in New York Grand Central Station.

00:07:07 Speaker_01
It's like, oh, I found an idea that nobody's paying attention to. And is that true? Because it's kind of crazy. The world is big. There's a lot of programmer.

00:07:16 Speaker_02
That seems like an obvious thing. I mean, I'm a total outsider. So my question is like, was there some technical challenge to that?

00:07:21 Speaker_02
Because that seems like, I guess it's easy to say things that are successful are obvious ideas looking back, but like, yeah.

00:07:28 Speaker_03
Well, it seems like there's probably two things, right? There's the technical challenge of being able to make this all work in a browser, right? That was not obvious.

00:07:35 Speaker_03
But then there's, it seems like the second thing was, I keep going back to the internet cafe thing because it's sort of like the hardship made the problem, like,

00:07:44 Speaker_03
unavoidable to you, whereas anybody else who learns to code, if you're just doing it at home in America, you might do that setting up once, maybe you have a little bit of the problem, but you're not running into it face first every day as if you were working out of Internet Cafe.

00:07:59 Speaker_01
Yeah, absolutely right. I mean, you know, Paul Graham talks about it all the time. It's like, you know, the best startups are solving your own problem. And I felt that problem really deeply, and I started working on it. I discovered why it's hard.

00:08:14 Speaker_01
Well, it's hard to run different languages in the browser. You can run JavaScript, but you can't run Python, for example. So we started writing interpreters, writing compilers to run on JavaScript.

00:08:26 Speaker_01
And then it took us a couple years, had a few languages running. It was a pretty rough prototype. my friends and people at school and I'm like, okay, this idea has lags and so let me work on it more. And then 2011 had a breakthrough.

00:08:44 Speaker_01
And the breakthrough was, we were the first to compile Python, Ruby, a bunch of languages to JavaScript, and run them straight into the browser. And that went super viral. So we open sourced it, we put it up on Hacker News.

00:09:00 Speaker_01
And that was my first experience of going viral on the internet, which is, I was like, oh my God, this is an amazing rush.

00:09:10 Speaker_03
Can you put that in context for a non-engineer? Is the thing you guys did, is it on a scale of one to Satoshi Nakamoto solving the double-spend problem, how hard of an invention was that?

00:09:22 Speaker_02
That was the nerdiest analogy you ever could have came up with.

00:09:26 Speaker_03
That's what I'm here for. So was it genius or was it just that nobody had taken as much time as it would take to do that? Where was that breakthrough? How would you describe that breakthrough?

00:09:37 Speaker_01
It's definitely not on the order of the double spend problem where it's a fundamental invention. It was like pushing a huge rock up a mountain. It took so much grit and just obsession to be able to hack the browser in order to run

00:10:04 Speaker_01
things that the browser wasn't supposed to run, wasn't designed to run. And so I would say it is solving hundreds of problems as opposed to solving like, you know, one invention. Perfect, perfect.

00:10:19 Speaker_03
Yeah. So you're working on it as a side project for a number of years.

00:10:23 Speaker_02
That's a long time, by the way, Sean. Can you imagine like having a side project that's a hobby that takes three hours a night with little, I mean, doing it for two years is kind of a long time, no?

00:10:33 Speaker_03
Dude, the only two things I've ever done that with is this podcast and my kids. And there's really no way out of the kids thing.

00:10:38 Speaker_02
And the podcast was a hit right away.

00:10:40 Speaker_03
The podcast gave me results right away, so it actually doesn't count. You were doing this without the kind of like financial rewards or fame rewards or any other major rewards during that time.

00:10:49 Speaker_03
How many years did you do this side project thing and what kept it going?

00:10:53 Speaker_01
2009 was the original idea. 2011 was the breakthrough and went viral on Hacker News. I think that was the first time I felt a little bit of fame, a little bit of return on investment.

00:11:12 Speaker_01
I remember Brendan Eich, the inventor of JavaScript, and was the CTO at Mozilla, I was like, wow, this is amazing. A kid in Jordan made this fundamental breakthrough in browser tech, and I'm getting this recognition. That's pretty cool.

00:11:30 Speaker_01
And also, some articles I wrote about it, people talked about it in conferences. And so all of that was evidence for my O1 visa to come to the States. Basically, my entire adult life, I'm working on this. Which is crazy, right? How old are you now?

00:11:46 Speaker_01
I am 36. Wow. I think. You've been working on this since you're 21, I think. Yeah, 21. Yeah, that's a while.

00:11:53 Speaker_02
That's your whole life. Your whole adult life.

00:12:03 Speaker_01
And, you know, it continued to like, you know, incrementally improve my life. So it wasn't this, you know, working in a room for 11 years and nothing happened.

00:12:13 Speaker_01
So I get this visa to the United States, and I go work at Codecademy, and they use the open source work that we did, right? And a bunch of companies in the US, there was like this boom in like MOOCs. if you remember that, Udacity, Coursera, whatever.

00:12:29 Speaker_01
And a lot of them used the open-source version of Repl.it to create interactive courses. And suddenly, the world opened up to me. I'm getting job offers all over the place, and I have choices where to go.

00:12:47 Speaker_03
Naval has this great quote where he says, people always ask him about like, you know, how to build a great network or networking. What are your tips for networking?

00:12:54 Speaker_03
And he's like, my only tip for networking is do something great and watch your network will appear overnight. People will immediately come to you because you've done something great, right? You didn't go try to get a coffee with Brendan Eich.

00:13:05 Speaker_03
You build something really cool that the creator of JavaScript and Mozilla Browser was like, hey, that's awesome. I want to reach out and get to know you. And I think that's actually how you

00:13:13 Speaker_03
Back to the YC thing, I think that's how you ended up getting into YC later was Paul Graham actually just thought what you were doing was cool. But like, let's go to the YC part.

00:13:20 Speaker_03
So you quit the Facebook job, half the money in Bitcoin, half the money in your startup, applied to YC, rejected. That was the first rejection. What were the other rejections?

00:13:32 Speaker_01
VCs wouldn't talk to us, or we'd get meetings with VCs. Some of them are yawning, and I think one of them slept. It was just not interesting to them.

00:13:45 Speaker_02
Dude, I had that happen one time as well. A guy literally fell. He was literally 80, and it was Friday at four, and it was warm in the office, and he fell asleep mid-pitch. Yeah, it was like a cold day. It was warm inside.

00:14:00 Speaker_02
So I was like, yeah, I mean, like, I was like, you deserve this. But dude, what what did they not see in you? Because like, it's so easy to be to look back in the past, but like, you seem like you got the it factor. This seems like such an obvious idea.

00:14:15 Speaker_02
You worked on it for two years. Smart people are talking about it. Like, what were you what were you missing? What was the case against it?

00:14:20 Speaker_01
Well, I think, you know, Silicon Valley is like probably the most meritocratic place in the world. But it is also status driven. At least then, it was very status driven.

00:14:31 Speaker_01
Like if you look at the white people who got into YC, like with Stanford dropouts and things like that. And I think since then, YC has improved and gets international people and all of that. But my background wasn't really interesting to them.

00:14:46 Speaker_01
I didn't have any fancy colleges or any of that. Also, being married a couple was somehow like something that they thought it was a disadvantage.

00:14:58 Speaker_03
You didn't match the patterns. You didn't match the Stanford pattern. You didn't match the co-founder relationship pattern. You didn't match the trend of what categories have big exits. You weren't on trend at that time.

00:15:10 Speaker_01
Right. Yeah. And so continue to apply to YC. Every season of YC, we'll send in the application. Our thesis evolved more and we felt like we had started making some money. Some people started paying for our service.

00:15:25 Speaker_01
We had an API at the time that people paid for. A lot of educators and people learning to code started to pay for Repl.it. like maybe 10 grand a month. It was enough to sustain us at that point. It was like the ramen profitability.

00:15:44 Speaker_01
But before YC, the person who actually, the first one to bat on us was Roy Bahad from Bloomberg Beta. So I knew him from my Code Academy days. And it was such a, the meeting with him was so refreshing. Like he was like just a straight shooter.

00:16:02 Speaker_01
He would tell me like, here's where I think you know, the idea or the category is hard. You know, here is where I think the valuation should be. And it was like the first meeting, he just gave me everything he was thinking about.

00:16:17 Speaker_01
He didn't obscure anything. And I was feeling really good about it. And so, yeah, he gave us $500,000 on a $6 million valuation. So that was the first check we got.

00:16:28 Speaker_03
Nice.

00:16:29 Speaker_01
Good for him.

00:16:30 Speaker_03
And then how did you eventually get into YC?

00:16:34 Speaker_01
So basically, we're grinding and the product was getting better every week, and I started writing articles about what we're solving. We're solving pretty hard problems. and Hacker News was really excited about what we're doing.

00:16:53 Speaker_01
And Paul Graham reads Hacker News a lot, probably still to this day. And one day, like December 2017, I wake up, there's a DM on my phone, and it is Sam Altman. And he's like, hey, I run YC, and we're interested in what you're doing.

00:17:12 Speaker_01
I'm like, dude, I know who you are. You don't have to tell me you run YC. And he's like, okay, let's meet, come to this address. And it wasn't the YC address, I was a little confused. And so I go there, and it was the OpenAI office in the mission.

00:17:28 Speaker_01
And so I meet him there, and we talk a little bit, and then he turns his computer around, he's like, this is Paul's email. He emailed Sam and told him, this company is very important, you should reach out to them.

00:17:43 Speaker_01
And he's like, okay, talk to PG, I'm going to give you his email, talk to him, and then maybe we can work on something to get you into YC. which was really fascinating. He's a great writer.

00:17:58 Speaker_01
We talked about Repl.it, we talked about the problems of setting up an environment, the problems of hosting an application. It turns out, after he sold Viya Web, he started working on something like Repl.it. He started working on an editor.

00:18:15 Speaker_01
You write some lists, of course, And by the way, Paul Graham is the founder of YC. At the time, he was starting to retire and Sam was running YC.

00:18:27 Speaker_01
And so, you know, we had this email relationship where he wrote me essays, essentially, on the problem we're solving.

00:18:35 Speaker_03
By the way, were you were you intimidated? You know, Paul Graham writing essays to you privately. Are you like, is that high stakes replies there for you?

00:18:43 Speaker_01
Yes, I would spend hours crafting the emails and trying to be as good of a writer as I can. But one thing about me is I was never nervous about meeting famous and established people. And I think that helped me over time because

00:19:05 Speaker_01
you know, I can be myself and I can talk to them at the same level as opposed to like being a fanboy or, or, you know, why, what, why was that?

00:19:12 Speaker_03
What, what, were you just oblivious to it or you just had a different mindset about it? What was the reason?

00:19:18 Speaker_01
Yeah, I felt like my life was taking on this trajectory that was not to be too superstitious, but it was this force. And I felt like everything's going to be great, and it's going to be hard. But I'm meeting all these people.

00:19:38 Speaker_01
Things are opening up to us. And so when I go and meet people, my mindset is like, I want to impress them, and I want to be able to get money from them, or I have a goal.

00:19:50 Speaker_01
And I think having a goal when you're meeting someone actually puts you in a very different mindset than fanboying and just being very excited about the meeting.

00:20:02 Speaker_02
Have you guys seen that? Do you guys know the director Guy Ritchie? He's that like British director. He's got this great story. He was on some podcast and Joe Rogan and he was like, you know, I just want to be the director of my own life.

00:20:15 Speaker_02
And I want to live my life like a movie. And what you're describing is sort of like that, where you're like, I just, I am destined for greatness. And like, we are taking on this amazing problem. And like, we are going to do wonderful things.

00:20:29 Speaker_02
And it will be hard, but we will triumph. And I think that's actually great. That's a great story to tell yourself. And I think it's very motivating. And it makes life more exciting. I think that's really cool.

00:20:39 Speaker_01
Yeah, so I actually wrote a blog post. The title is do what makes the best story.

00:20:47 Speaker_01
And the idea is like when you're faced with decisions where there's no obvious answer, like a fork in the road where the pros and cons are sort of the same, the heuristic I use in my life is like, what is a more interesting story?

00:21:03 Speaker_01
And obviously, Elon talks about this, the most entertaining outcome is most likely. Yeah, I wasn't thinking about it in terms of entertaining, but in terms of what makes the story interesting.

00:21:15 Speaker_01
If my life was a movie, what would be exciting about that story?

00:21:26 Speaker_02
All right, so a while back, we had Gary Tan. He's the president of Y Combinator, which is the most successful incubator of all time. We had him on the podcast and he said that the future of businesses is creator-led.

00:21:36 Speaker_02
And that's why I'm interested in the podcast Creators Are Brands. Creators Are Brands explores how storytellers are building brands online. They're going to cover the entire creative process. They're going to talk about navigating brand partnerships.

00:21:49 Speaker_02
They're going to talk about what you need to know about growing your social media platforms. Everything you need to know on this topic, Creators Are Brands is the pod. So, check it out wherever you get your podcasts.

00:21:58 Speaker_02
Again, it's called Creators Are Brands with Tom Boyd. All right, back to the episode.

00:22:07 Speaker_01
For example, when I was in college, I was coding all the time, and I wasn't really going to class. And so I was failing a lot, not because I was failing the exam, because they would bar me from the exam because I wasn't showing up.

00:22:23 Speaker_01
And I decided to hack the university to change my grades.

00:22:29 Speaker_03
And we're not talking like metaphorically, like a life hack. You actually hacked into the servers and changed your grade. Is that what happened?

00:22:36 Speaker_01
Yeah, I went into the basement. I spent like two weeks. I did the, what's his name, the famous inventor, Michelangelo or something like that. I did his sleep, polyphasic sleep, where you work for hours and then you sleep 15 minutes.

00:22:51 Speaker_01
And it was sort of like I was writing on the wall. It was like a full-on insanity. Were you angry? Why did you decide to act?

00:23:01 Speaker_02
I know so many smart people who work so much harder to cheat or get around the thing than just doing the thing. And there's like, 50% of the time, they end up being losers. And then 50% of the time, they are, in fact, the greatest.

00:23:14 Speaker_03
They're on this podcast.

00:23:15 Speaker_01
Yeah. Well, I think it is ADHD. You can't sit in class, but if you're interested in something, you're going to hack and work on it a ton. But the servers at the university crashed, and it crashed on my record.

00:23:37 Speaker_01
So one of the administrators there gave me a call, and he said, look, there's like this there's some anomaly in the record of your exam in school and it's crashing our databases. Do you know anything about it?" And I was like, what's the anomaly?

00:23:57 Speaker_01
And he's like, there's a field in the database that says you're barred from the exam and your grade should be 35. That's the default grade of failing the exam. And instead, my grades were like 75, 90, whatever. That's what I entered into there.

00:24:20 Speaker_01
And I didn't understand that there was another field. By the way, that's not good design for a database. And so since then, there was a fork in the road. I could lie, and I think I could get away with it and just say, that's a bug on your side.

00:24:41 Speaker_01
But I was like, what's the most interesting story? Is they catch me and it becomes a story that people talk about. And I was like, okay, I'm just gonna come clean and just tell them what I did.

00:24:55 Speaker_03
So you're like, better than getting the grade would be getting the reputation.

00:25:00 Speaker_01
Yes, exactly.

00:25:03 Speaker_03
So you tell them and then what happened, they kick you out?

00:25:06 Speaker_01
No, so I'm kind of a convincing person. So I go the next day, and it's like all the deans there, and they're discussing my case, and they're trying to find out what I did. And they're all computer science deans.

00:25:22 Speaker_01
So I went in there, and I changed the subject to technical aspects of the hack. And I drew on the whiteboard and show them what I did and all of that. And they were very impressed. It's like a Goodwill hunting moment. Yeah.

00:25:37 Speaker_01
And my reputation back then is like, I'm a loser. I'm failing everything. I don't show up to class. And it is kind of like Goodwill hunting. And then they say, OK, you have to go talk to the president because I think he's going to make the final call.

00:25:54 Speaker_01
So I go to the president, and he's a very intellectual person. And we talk, and I tell him, look, I have this talent, and I feel like it was undiscovered, and I feel like I was treated unfairly. And I used the university as my sandbox. I came clean.

00:26:13 Speaker_01
I didn't mean to. to do anything bad. And he gave me the Spider-Man line. He's like, with great power comes great responsibility. And it actually affected me. And I was like, OK, I think I need to do something in order to pay back.

00:26:36 Speaker_01
And I told him, I'm going to work this summer for free to make sure I secure your databases. And so they let me off the hook and they're like, okay, yeah.

00:26:46 Speaker_03
What a great story, dude. That is an amazing story. Sam, by the way, would you ever want to compete with Amjad at anything?

00:26:52 Speaker_02
No, this is like this mentality. This is, uh, it's scary. Like, yeah, I would not want to. You're like, excuse me, Dean, have you heard of the word prodigy?

00:27:05 Speaker_03
You're like, my talents haven't been used well at this university. I accept your apology, Dean.

00:27:11 Speaker_02
It's like, why are you failing me? Yes.

00:27:17 Speaker_03
Yes. That's so good. OK, so I love the principle, do what makes the best story. I love the hack story. That's amazing. How did we get here? We were talking about YC.

00:27:28 Speaker_01
Sam is like, yeah, you should do YC. Actually, the batch starts tomorrow. Why don't you fill an application? It's just a process you have to do, and we can do a late interview tomorrow. And I'm like, fuck, I want to fill the application again.

00:27:46 Speaker_01
You made me do it like four times. I don't want to do it again. And so I kind of do a bare bones application about Rappler. I'm like, yeah, man, I don't wanna do the video.

00:28:00 Speaker_03
So I pasted a YouTube link, and we go the next day, Haya and I. By the way, for people who don't know, the YC application is like one page, it's like six or seven questions, but then they say, upload a video, two or three minutes, you're talking about your startup.

00:28:15 Speaker_03
So that's the video part. And then the interview is 10 minutes. where there's rapid fire. So you have like 10 minutes and it's like this make or break thing. It's less than a lunch, you know, like there's less than a job interview. It's more intense.

00:28:27 Speaker_03
So you're waiting around for that.

00:28:29 Speaker_01
Yeah. I mean, my view was they recruited us to YC. Like, why are you making us do this stuff? Right. And so.

00:28:36 Speaker_02
Yeah, I was gonna ask that. They're acting like... Paul Graham's like, you know, maybe I could pull some strings.

00:28:42 Speaker_03
I know a guy.

00:28:43 Speaker_02
Yeah, like, you're the guy. So, I don't understand what they're... They're bullshitting. I don't get it.

00:28:50 Speaker_01
Well, I think they wanted to just go through the process. It's like the process applies to everyone. And I respect that. So, you know, they call us to the interview and I walk in and there was Jared and Adora and all these amazing YC partners.

00:29:13 Speaker_01
And there was Michael, he was the CEO at the time. And I shake their hands and I shake Michael's hand and I felt like his grip was a little too hard. I was like, okay, that's fine. And then I go sit down on the chair.

00:29:26 Speaker_01
And the moment I sit down, Michael looks at me. Why did you recall us? Oh my god. And I'm like, you know, we applied several times. And I thought it'd be fun to do. And I thought this interview was just formality.

00:29:44 Speaker_01
And he's like, that's not how you get into YC. And he was very, very angry. Well, it turns out when we're sitting outside, though, we're getting rickrolled inside, right?

00:29:55 Speaker_01
So imagine their mindset, looking at the application and getting the rickroll song. And then they give us a very tough interview.

00:30:06 Speaker_03
In that moment, did you, it's like, and that's when I realized I fucked up. Like, did you realize like, how I'm coming across? Like, what was your mindset there?

00:30:15 Speaker_01
Like, they must be thinking X. I was nervous. I was very nervous. regretful immediately.

00:30:21 Speaker_03
Yeah, because you probably it's like, oh, here's this entitled, just another tech entitled guy. When they don't know you're like immigrant from Jordan who's like scraped his way here, right?

00:30:32 Speaker_03
They don't, the reality and how you were coming across weren't connected in that moment.

00:30:37 Speaker_01
No, they weren't at all. And so, you know, we go outside and I tell hi, okay, this is done. Let's call an Uber and get back to work. Like we don't need to get into YC. So I call an Uber. And just before I arrive, I receive a call.

00:30:54 Speaker_01
And I take the call, and it's like, hey, it's Adora. You've got to come back. The kickoff is about to start. And I was like, what? Are you sure? She's like, yeah, come back, sign the paperwork, and get started. So I was stunned the whole day.

00:31:11 Speaker_01
We go to the dinner, and I'm phased out and all. But it was really exciting. And people who's never been to the YC office and Mountain View, it's all orange, bright orange, and the lights and everything. It feels like a cult-like environment.

00:31:29 Speaker_02
Isn't it like, I think I've seen the inside, doesn't it have like a steeple or isn't one of the rooms is a triangle, like a church almost?

00:31:38 Speaker_01
Yeah, yeah, exactly. And Sam gets up and tells us what the experience is going to be. It's like, this is the hardest time you're going to work. You better tell your friends and family that you're going to go away for three months.

00:31:50 Speaker_01
You can't help them move or all of that. You just got to be focused on work. So Haiyan and I took it very seriously. I was like, okay, these three months are very important for the success of the company.

00:32:04 Speaker_01
And we transformed the product in these three months. It went from a simple sort of editor output to a place where you can host applications and build real things, and all in three months.

00:32:14 Speaker_01
And we were working 12-hour, 13-hour days, and it was only three of us at the time. Our first employee actually was was sort of a runaway kid. He grew up in California, a little down south, and he didn't want to go to school.

00:32:34 Speaker_01
And so he leaves his home, he goes to Hack Reactor, and he becomes a programmer. And he was 18, he was looking for a job. I knew the guys at Hack Reactor, they used Repl.it. And I'm like, send me your best programmer.

00:32:48 Speaker_01
And he's like, look, this kid is a little awkward, but he's the best. Yeah, and basically I like him because it mirrors kind of my life story a little bit. Where's this guy now? But we got him some liquidity after six years of working.

00:33:05 Speaker_01
I felt that's the right thing to do because he was kind of burnt out and didn't want to continue. So I called my brother in Jordan. I'm like, look, you gotta come out here when I see you need to. And he's a programmer.

00:33:18 Speaker_01
I taught him programming when he was a kid. And I was like, you gotta come help us. And he's still with us today. And I called my friend from Code Academy, Moody. He's still with us today as well. I'm like, you gotta help us.

00:33:31 Speaker_01
Like, you know, you could do it remotely. And so we assembled like a team of five people essentially. And so we go really hard and we were like one of the hottest companies in YC at the time.

00:33:43 Speaker_03
And can you give some sense of the scale of it now? Like, you know, I invested in it a year ago or so, two years ago, something like that. I don't know when, but the numbers were off. You had user growth.

00:33:56 Speaker_03
First, your graph looked like a hockey stick because you zoom out and it ignores all of the little like years where nothing was really going on. But you have this crazy growth, but the crazy thing about it is that your growth was developers.

00:34:09 Speaker_03
So it's like, you know, one developer user is worth, I don't know, 10, 20 times just like a normal internet user. But you had this crazy hockey stick growth of developers.

00:34:19 Speaker_03
Can you talk about, can you just say a couple of, like, permission to brag, can you say a couple of brag-worthy stats that would impress us?

00:34:25 Speaker_01
Yeah, so Repl.it was very easy to get started with. And so people would start using it in college or high school and continue using it for many years. And so it was sticky for especially junior developers when they're starting out.

00:34:40 Speaker_01
And it was spreading on its own, word of mouth. There was a viral component to it. People can share a URL, and then suddenly you're in the same environment as them. And then we have this multiplier coding experience. And so people were collaborating.

00:34:58 Speaker_01
And also COVID was really great for us because we were, I think, the only collaborative editor experience And so a lot of people were remote and needed something to work with each other.

00:35:11 Speaker_01
And so Repload was adopted at the time, and so the growth was off the chart and the servers were going down. The marginal user in any web app is sort of like zero, zero cost.

00:35:23 Speaker_01
But for us, we tried to optimize it a lot, but it was still on the order of like $1 to $5 a month. But I have to admit, it was hard to monetize at the time, because developers are actually not used to pay for things.

00:35:42 Speaker_01
Now they kind of are paying for things because of AI. But at the time, they weren't paying, and then As we added limits and things like that, they felt like they can move on and set up their own developer environment.

00:35:59 Speaker_01
It took a lot of creative thinking to figure out how to charge for people. Ultimately, AI was the thing that people are paying for. The reason is, the productivity benefit of AI It's obvious.

00:36:16 Speaker_01
And people are like, okay, this saves me time and makes me a better developer. And so people are paying for it right now.

00:36:21 Speaker_02
Well, can you give any indication on how many users or how much revenue the business has?

00:36:27 Speaker_01
Signups, we have more than 30 million, I think 35 million users right now. In terms of active users, it kind of fluctuates, but two to three million a month.

00:36:41 Speaker_01
probably 100,000 apps hosted on Repl.it, because you can build an app and deploy it all in one environment. In terms of revenue, I can't share right now, but especially this year, it's been exponential growth. Sam, check this out.

00:37:00 Speaker_03
This agent thing, I gotta show you this. You haven't used this, right, Sam? So yesterday, I was like, I'm going to mess around.

00:37:09 Speaker_03
I was doing research for this, but I was like, I just got like sucked into Repl.it and I started doing that, stopped doing research.

00:37:14 Speaker_03
So I go and I go to Repl.it and it's changed because now when you before when you would go, it would be like, here's a coding screen with a blinking cursor. And it's like, write some code. And I'd be like, Oh, cool. I don't really write code.

00:37:28 Speaker_03
So I don't know how to use this product. Exactly. Maybe I could learn to code. Maybe I could, you know, pay somebody to build something on here. But whatever, I was stuck. So now, you open up replit, and it just it's like chat GPT, it just goes,

00:37:43 Speaker_03
So what would you like me to create? And so I go on there, watch this. So I go, I'll give you the exact prompt. I said, build me an app that will text me every morning asking how I ate yesterday.

00:37:52 Speaker_03
Let me answer via text message and then track the results on a monthly calendar grid. If texting doesn't work, you could also use WhatsApp or something else. Okay, so basically, on the right here is just like the chat.

00:38:02 Speaker_03
And it just goes, absolutely, let me propose what we'll build. And then it just kind of like explains to me like a project manager, it goes, I'm going to help you create a food tracking app through SMS messaging with a calendar visualizations.

00:38:12 Speaker_03
We'll start with the SMS. Later, we can add WhatsApp as an alternative. Like, okay, okay, prioritizing things. That's interesting. And then it goes, the Apple send daily messages, blah, blah, blah. And it goes, how would you like me to proceed?

00:38:23 Speaker_03
And it's like, there was like, you know, add more features, change the instructions, or like, go ahead and build the prototype. So I clicked build the initial prototype. And then literally, I don't know if you can see this, but like,

00:38:33 Speaker_03
it starts like auto scrolling as it's writing code. Like this is all just a code it's generating. So like, you know, like I'm not doing anything. I'm literally sitting back with popcorn while this is happening. So it's like, here's your calendar grid.

00:38:46 Speaker_03
And it's like, uh, Hey, I need, I'm going to use Twilio for the SMS. It decides I'll use Twilio for the SMS. Can you go to Twilio and give me your account and your phone number so that it'll like, we use Twilio for sending SMS.

00:38:58 Speaker_03
So I go to Twilio, I give it my SMS, and then it's made. It literally made the thing exactly how I wanted it.

00:39:05 Speaker_02
So this works now?

00:39:07 Speaker_03
Yeah, I actually got stuck on the Twilio step, because Twilio has to verify my phone number, so it hasn't verified it yet. But in Twilio, I see it tries to send me the message, and it just says, awaiting Twilio verification to be able to use this.

00:39:20 Speaker_03
So I'm a little bit stuck there, which is a common thing with agents, I feel. almost absolutely incredible. And then kind of frustrating at some point where you have to like, you know, fight through some walls.

00:39:31 Speaker_02
Well, I think I'm going to tweet it. I think he said, I want people to be able to build an app faster that they can just Google the answer to a question. And that's exactly what happened. Well, that's insane.

00:39:40 Speaker_01
So this screenshot is the agent looking at the result is trying to verify. This is not the running app. If you click run, you can get the running app.

00:39:49 Speaker_03
It says the top took a screenshot and then it shows it to me. It's like, hey, is this how you want it? And I was like, oh, because before it had it where it was like not the right month. I go, oh, put the month on top.

00:39:58 Speaker_03
Like, don't say monthly food tracker, right? December. And then it also said, like, hey, would you like any other style improvements? I can make it broader. I can change the color scheme.

00:40:06 Speaker_03
And I'm like, dude, this is literally better than an employee, right? First, it's instantaneous. Second, I don't have to pay somebody to sit in the desk to sit around waiting for me to do something.

00:40:18 Speaker_03
I had an idea on a whim, go to REPA, and did the thing with the agent. There's been a few mind-blowing moments for me in my tech career.

00:40:29 Speaker_03
I graduated 2010, so I'll start at that point, where it's like, the first time I took an Uber, I was like, holy shit, that was amazing.

00:40:36 Speaker_03
I pushed a button, a car showed up, the guy got in, I didn't even have to pay for, like, it just paid through my phone, that was magic. And I could see him on an app getting closer and closer to the restaurant. That was like one of them.

00:40:47 Speaker_03
You know, ChatGPT for sure was another, where I could just, you know, tell it to make something, it would write something, it would write it for me. This is another one of them. This is the first AI

00:40:56 Speaker_03
agent thing that has been a mind-blowing moment for me, where I am not a programmer, I am not a coder, but I can now create software.

00:41:06 Speaker_02
This is amazing. Can I ask a blunt, crude question? How can I use your software to become a billionaire? Because I see this and I'm like,

00:41:17 Speaker_02
The ridiculous analogy that I use is I feel like an artist sometimes where I feel like I have the ability to conceptualize certain things, but I can't paint.

00:41:27 Speaker_02
It's like I can't fucking paint what I want to paint that's in my head because I literally don't have that skill set sometimes.

00:41:32 Speaker_02
And so I'll be working on stuff and I'm like, dude, I want this to do this, but I got to go talk to this developer and I don't want to have this conversation. And that's just like a pain in the ass.

00:41:40 Speaker_02
And so you basically are making it so I can finally express myself easily.

00:41:45 Speaker_03
I like how you're on the first date. You're like, how can I get you to take the clothes off? You're like, how do I use your thing to get really rich?

00:41:53 Speaker_02
I mean, that's basically like, like, you had on the document, you're like, here's just here's the opportunities just use replica do X, Y, and Z. And I want to go through that. Because this is amazing.

00:42:06 Speaker_02
There's a viral clip on YouTube or Twitter or a bunch of places where it's the headline, which we probably have used, which is billion-dollar one-person companies or something like this.

00:42:16 Speaker_02
You're the closest person to this, probably, to that question, to answer that question.

00:42:22 Speaker_01
Yeah, so there are apps built on Replicant Agent that otherwise would take probably $100,000 of developer time. And you can build it in $25 paid to Repl.it. I will say that there's limitations, right? It is not perfect.

00:42:41 Speaker_01
This is the worst it's going to be. It sometimes gets stuck with problems. You need to have some skill in prompting figure it out. And it sort of like teaches you over time because it tells you what it's doing as it's editing the code.

00:42:58 Speaker_01
And so over time, you're learning how to use it. You're actually learning how code works. You're learning how, maybe you're not learning how to exactly type code, but you're learning the different components and where things could go wrong.

00:43:09 Speaker_01
You're learning about database. We have like database. You can go in and look at the tables and look at what's happening. And so the vision for this is that that's all you need. That's all you need to build an entire startup.

00:43:23 Speaker_01
And every day we're inching towards that. And I talked about pushing the boulder up the hill. And I think that's one of my

00:43:32 Speaker_01
one of my talents is like, okay, what are the problems that you can make progress on every day and every week, such that, you know, in a year time, you have this exponential progress, and the product is so much better.

00:43:45 Speaker_01
The other thing is, we're riding this wave of the foundation models getting better. So every time they get better, we plug in a new foundation model, and the product is suddenly better.

00:43:55 Speaker_01
So you're riding this two exponential curves, which is like the engineering we're doing, but also the underlying models and infrastructure is getting better. So I think in a year's time, it's going to be really mind-blowing.

00:44:07 Speaker_01
In a couple years' time, I think we're going to see stories like someone getting super rich making an app in Repl.it that sort of goes viral. So we're adding Stripe integration right now.

00:44:20 Speaker_01
You can already use Stripe on Repl.it, but we're adding integration that makes it super easy to start monetizing your app.

00:44:32 Speaker_02
So, I'm obsessed with being transparent about money, particularly with ultra high net worth people. The reason being is that there's not a lot of information on this demographic.

00:44:41 Speaker_02
And so, because I own Hampton, which is a community for founders, I have access to thousands of young and incredibly high net worth people. We have people worth hundreds of millions and sometimes billions of dollars inside of Hampton.

00:44:52 Speaker_02
And so, every year, we do this thing called the Hampton Wealth Report where we survey over a thousand entrepreneurs and we ask them all types of information about their personal finances.

00:45:01 Speaker_02
We ask them about how they're investing their money, what their portfolio looks like. We ask them about their monthly spend habits.

00:45:06 Speaker_02
We ask them how they've set up their estate, how much money they're going to leave to charity, how much money they keep in cash, how much money they're paying themselves from their businesses.

00:45:14 Speaker_02
Basically, every question that you want to ask a rich person, we went and we do it for you and we do it with hundreds and hundreds of people. So if you want to check out the report, it's called the Hampton Wealth Report.

00:45:25 Speaker_02
Just go to joinhampton.com, click our menu, and you're going to see a section called Reports, and you're going to see it all right there. It's very easy. So again, it's called the Hampton Wealth Report.

00:45:33 Speaker_02
Go to joinhampton.com, click the menu, and then click the Report button, and let me know what you think.

00:45:41 Speaker_03
So Sam said, how do I get rich? And you're like, disclaimer, it's not fully there yet. But

00:45:47 Speaker_01
Now you still have to answer the question. I mean, the question is like, what kind of applications? It's like, what are the ideas? What kind of applications you can build? I would say AI applications are growing really fast.

00:45:59 Speaker_01
Like the revenue ramp in some of those AI applications is kind of crazy. Can you tell the story of Magic School? I thought this was really interesting. Yeah. So Magic School is like an AI application for educators.

00:46:12 Speaker_01
It's basically like helping them use foundation models and LLMs to do their work, to do assignments for kids to have an interactive AI experience. And so it's like a full suite of AI for educators. The guy who created it was a teacher, right?

00:46:30 Speaker_01
The guy who created it was a teacher. He took some time during COVID to learn how to code and he started using Repl.it. And him and I think another person built the initial thing totally on Repl.it.

00:46:45 Speaker_01
And because you can go from the idea all the way to deployment, and it immediately started growing. These AI apps, when the adoption starts happening, it goes super viral. You don't need a ton of marketing.

00:47:00 Speaker_01
And the revenue ramp was one of the craziest ones I've seen, especially for education.

00:47:04 Speaker_03
Yeah, it was like a known thing. It was like hardest thing you could do, selling into schools, into teachers. They're overworked, they're underpaid, they don't have the time to like figure out your new tool. But this thing is great.

00:47:14 Speaker_03
So if you go to it, it's basically like, because teachers spend a lot of their time not in the classroom, it's after school is done, they have to grade papers, they have to create the lesson plan for the next day, they have to create the quizzes or the multiple choice tests, and they have to like, so they have to constantly do this.

00:47:30 Speaker_03
And there was these platforms like TeacherPayTeachers where

00:47:34 Speaker_03
I could just, if I don't want to make it myself because I'm tired after the school day, I might be able to go buy one for nine bucks from another teacher who teaches fifth grade science in some other state.

00:47:43 Speaker_03
And I would take that and I would buy it that way. What magic school did was it was like, cool, generate a quick, you just say like, I want to, I teach, you know, fifth grade biology. I want to do a pop quiz about you know, how mitosis works.

00:47:57 Speaker_03
And then it'll basically create either a lesson plan or a quiz or, you know, a student, like, interactive, like, you know, workbook that they need to create or whatever.

00:48:07 Speaker_03
And so it lets a teacher not have to spend, you know, four hours a night creating the materials that they need just to teach class, because AI can do it for them.

00:48:15 Speaker_03
And this thing looks, I don't know these guys, I don't know anything about them, but it says, you know, over 4 million educators are using this. which are 4 million educators and their students, which I don't know if they're counting.

00:48:25 Speaker_02
Well, if you go on similar web, they have millions of monthly uniques. So that's like a really big thing.

00:48:29 Speaker_03
I think they raised like 20 million bucks, too.

00:48:31 Speaker_02
Yes. I mean, that's like a pretty huge signal.

00:48:33 Speaker_01
So they launched in, I want to say, July 2023. So they're a little over a year. And do you know that these SaaS metrics are like how long to get to whatever, like 100 million or whatever?

00:48:50 Speaker_01
The AI apps, and I would say Magic School is on that trajectory, is just like that. The curve is all the way straight up.

00:48:59 Speaker_02
This is kind of weird, but maybe this is a feature of yours, that you helped this company become potentially one of the faster-growing companies of all time, and you only earned $20 a month from that.

00:49:17 Speaker_01
Honestly, that's why VCs struggled with it for a long time, so that there's some logic for why it is hard to monetize these things and capture some of the value. I will say, I invested in Magic School, so there's some of that.

00:49:33 Speaker_01
And with AI, I think we're going to be able to capture at least a little bit more of that value.

00:49:41 Speaker_01
If people are monetizing these apps on Repl.it via the agent, there's a way I think where we can potentially take a cut out of that, especially if we make it super simple to start monetizing an app.

00:49:53 Speaker_01
And also like if once we reach scale, you know, it is like chagrin, like you don't need a lot of skill to do that. And it's going to get easier and easier.

00:50:01 Speaker_01
Once we reach scale and you have, you know, millions of people paying for this, and it's not just like 20 bucks, you're going to pay incremental, uh, after you finish your credits. So we give you monthly credits.

00:50:12 Speaker_01
And then afterwards, if you want to continue, you can like buy more credits.

00:50:15 Speaker_03
Are there other companies like magic school, like cool companies like that? You've seen that maybe we haven't heard of that are using AI. Yes.

00:50:23 Speaker_01
I'm very excited about agents right now. I think I predicted earlier this year on a podcast that this is going to be the year where agents are born, and next year is where agents are going to scale.

00:50:41 Speaker_01
There's this company called 11x, and 11x creates AI SDRs. Basically, you don't need to hire SDRs. There are some companies that feel like they can bootstrap their sales without SDR.

00:50:57 Speaker_01
You can have one AE and that AE account executive is running these tens of AI SDRs. And the revenue ramp on 11x was also crazy. It's pretty wild how fast these companies are scaling.

00:51:14 Speaker_01
I don't think in the history of Silicon Valley, we've seen anything like that, even in the like Web 2.0 era.

00:51:19 Speaker_03
So what is like a fast ramp for AI, for maybe not 11x specifically, but just for an AI company, what's impressive that kind of broke the frame of how long things would take, but you've seen it now?

00:51:31 Speaker_01
Yeah, so I would say reaching 10 million in three to four months. Oh my God. That's wild.

00:51:41 Speaker_03
Yeah, we, I invested in Jasper, which was like one of the early kind of chat GPT wrapper type of companies where they was like, hey, like marketing, you know, you need to write a blog post, you need to write a description for a product or whatever.

00:51:55 Speaker_03
And so you could use it for writing any kind of marketing copy and they're, graph was, I'd never seen it. It was like in 10 months or 11 months, they scaled like 50 million in annual recurring revenues.

00:52:06 Speaker_03
It was like, I've never seen anything even remotely close to that. It was, it brought up a question like, is this sustainable? Is this like, what is happening here? Like, this is, I've just, it doesn't compute.

00:52:17 Speaker_03
But it definitely broke my frame of what is possible because I'd been working, you know, in Silicon Valley since, you know, 2011, 11, 12. And that just, that wasn't a thing. You would never see a graph like that.

00:52:29 Speaker_02
What are some other companies that have gotten to that 10-ish million or similar trajectory in three-month type of businesses?

00:52:36 Speaker_01
Guy Podjarny Yeah, so I wanted to give a disclaimer about this, which is the big question in the investor community right now is the modes question. That started around the time that ChatGPT came out

00:52:54 Speaker_01
sort of this condescending way of looking at a lot of these companies.

00:52:58 Speaker_01
It's like, if you can create a GPT wrapper in a month, then a lot of other people will create GPT wrappers in a month, and you're going to be competing on price, and the margins go down.

00:53:10 Speaker_01
Yes, the ARR is great, but Anthropic is capturing, or OpenAI is capturing most of the ARR, not you. You're kind of like a middleman, And I think it's totally a valid question.

00:53:27 Speaker_01
Now, I think modes develop over time through strategy and technical excellence. So, I mean, some of these companies can go down pretty fast, and there are examples of that right now. But I think you can start building technical.

00:53:46 Speaker_01
With Repl.it, again, this idea of pushing a boulder up a hill. We have this runtime environment, we have this infrastructure, we have the deployment, we have databases, we have all these integrations.

00:54:00 Speaker_01
It's the only one in the world that is an end-to-end environment to make software. To catch up with that, it's going to take years. But technical advantage is also not a long-term moat. Again, it's a big question. I don't think it's answered yet.

00:54:16 Speaker_01
There are strategic things you could do. If you reach scale, if the switching costs are high, that may be a way to have sustainable moats.

00:54:26 Speaker_02
You know what's crazy, Sean? I hate using the D word, democratize. I think that's such an overused Silicon Valley word. Don't do it.

00:54:35 Speaker_03
Don't do it.

00:54:36 Speaker_02
But this is actually one of those few examples where for the longest time, building a website or a web app, you just literally couldn't. And so now you are making the technology that everyone can do it.

00:54:49 Speaker_02
And so what I think is guys like Sean and me or people like us who have an audience, it's like, Why don't we just... Why aren't we constantly launching companies using this technology?

00:54:59 Speaker_02
Because our ability to get users, because we just get on the microphone and talk about it, that's actually a competitive advantage. Whereas being technical is no longer... It's still an advantage, but it's not as much as before.

00:55:14 Speaker_02
It's like getting customers now is actually the only hard part, which is still hard, but it's way easier if you're popular.

00:55:20 Speaker_01
Yeah, so the playbook I would use is I would go into some inefficient market or industry. So a deal from Magic School went into this hugely inefficient industry, which is schools and education. And by the way, another product is Synthesis Tutor.

00:55:45 Speaker_01
which is also going viral right now and they have also this revenue ramp that's kind of crazy.

00:55:52 Speaker_02
Both Sean and I invested in that company.

00:55:54 Speaker_01
I think all three of us did. Yeah, and for a while they had this thing where they had educators on the payroll and whatever. They replaced all of that with AI. Now the kids sit in front of the iPad and they're talking to the AI and learning really fast.

00:56:15 Speaker_01
So basically, find an industry where you're familiar with and just build the GPT wrapper to automate some of the work there. And you could do it 100 times and one of them will take off.

00:56:29 Speaker_03
Yeah, it's the era of the idea guy now. It's our turn. It's our turn to shine, right?

00:56:33 Speaker_03
Because now the limits and the value creation is, do you understand a problem well enough to know how to take this really powerful magic wand and point it at that problem and be able to make that more efficient?

00:56:45 Speaker_03
And then, of course, do all of the other hard things. Go get customers, make it sustainable, build a good team, do all the normal entrepreneurship stuff. But it seems like more than ever,

00:56:55 Speaker_03
having a great idea is the key unlock to doing these things because building has become easier. And I'll give you my personal epiphany that I had while I was doing this. So I invested in Repl.it mostly when I just thought, you seemed really smart.

00:57:10 Speaker_03
And I saw a growth curve of developers using it. And I thought, oh, cool, I've experienced this problem before.

00:57:16 Speaker_03
a one-stop place where I can come in, write the code, host it, all the stuff you talked about, like don't have to download Java, don't have to do any of that shit. That appealed to me at the time.

00:57:27 Speaker_03
I think, actually, in the same way that Synthesis took AI and actually almost really 10x-ed the value prop of the business, I think you guys are doing the same. So here's my quick pitch, which is now that I think of Repl.it as

00:57:42 Speaker_03
Basically what Shopify was for creating online stores, I think Repl.it is that for creating software. So to me, you guys are Shopify for software. I'll give you my example. I recently celebrated a milestone that was both

00:57:59 Speaker_03
I was proud of it and really embarrassed also. So a few years ago, I started an e-commerce brand, and we just crossed $50 million in revenue, kind of like cumulative lifetime revenue. Half of it was this year, but $50 million total.

00:58:12 Speaker_03
And I was like, wow, $50 million, that's great. I had never created a business that had done $50 million in revenue, so that was like a personal pride point. At the same time, I was telling it to a friend of mine who's not an entrepreneur.

00:58:24 Speaker_03
He's like, yeah, man, I would love to learn how to make websites and make products in manufacturing. And I was like, Oh, I don't know how to do any of that. Like I was, I was like this, this brand that is a 50 million in revenue for me.

00:58:39 Speaker_03
I don't, I just stacked Alibaba times Shopify. I've never manufactured a product in my life. Still don't know how to. And I've never made a website that's actually used by customers, still don't know how to.

00:58:51 Speaker_03
But I was able to skip all the work and get to the brand part, like do the thing where we created a product that people liked and it's a successful company now. And I thought, wow, Repl.it's going to do that for the software space.

00:59:03 Speaker_03
And I was like, it used to be that the job was software engineer. And now it's going to be software creator. It's like I can be a creator of software without being a programmer myself.

00:59:14 Speaker_03
That little shift is a big shift because of the way I think about it. I don't know how many developers there are. I think GitHub has like 100 million or 200 million accounts. So I'll just use that.

00:59:23 Speaker_03
Like there's 200 million, let's say, developers, you know, software engineers in the world. Well, now there's going to be two billion people that can create software. Because if you got the internet, you got your phone, you can create software now.

00:59:35 Speaker_03
You can just tell the agent, make me an app that does this, make a tool that does this.

00:59:40 Speaker_03
And so you 10x the number of people that can create software in the same way that Shopify and Alibaba 10x or more the number of people who could create products and go sell them like hard goods. That's how I see what you're doing.

00:59:54 Speaker_01
Yeah, so even at the start of Repl.it, there's our initial seed deck, and the deck kind of has this Elon Musk-style master plan. And it was like, we build a platform, we grow it, and then AI is going to make the thing a lot more accessible.

01:00:15 Speaker_01
Because our mission was make programming accessible, then we updated our mission. It was create a billion programmers. And so the moment that even GPT-3 came out, I was like, this is the thing.

01:00:30 Speaker_01
threading on Twitter about how AI agents will just change how programmers work. This is the deck, so 2015.

01:00:36 Speaker_03
I don't even know if OpenAI was a research lab at that time, maybe. Definitely, there was no chat GPT, but this is your master plan deck. We're going to grow by building tools for teachers and students.

01:00:48 Speaker_03
We're going to build a simple network and AI-assisted interface that blurs the distinction between learning and building. evolve into a platform where people can learn, build, explore, and host applications.

01:00:56 Speaker_03
Like talking about AI back in 2015 in your actual pitch deck.

01:01:00 Speaker_02
Dude, it's also clear how Codecademy was highly influential to you. Because I remember years ago, Sean said, everyone tries to learn how to code. I used Codecademy, and it was a pretty cool interface. And it's very similar to what you're describing.

01:01:14 Speaker_01
You know, at some point, I kind of lost hope in courses. Because we have 100 days of code, we're telling users that to use our application, you need to invest 100 days. That's kind of crazy.

01:01:31 Speaker_01
There isn't any successful company in the world where you need 100 days to learn it. And so that's when I changed my mindset and I said, okay, it needs to be ChatGPT-like. It needs to be just a prompt. And we started building that earlier this year.

01:01:49 Speaker_01
And now that's all we're focused on. We want to create new programmers. Existing developers, great, they have a lot of tools. But we want to go after the citizen developer, right? Everyone is a developer. And I think that's what you're talking about.

01:02:05 Speaker_01
You go from like 100 million developers in the world, well, I think it overstays the number. It's probably more, 30 million. And so what does the world look like when anyone with an idea could make something?

01:02:18 Speaker_01
And one of my favorite books is The Sovereign Individual. The thing I really was excited about is this idea of ideas become wealth. And so you no longer have the bottleneck of making something. That's where we're headed.

01:02:33 Speaker_01
And this is what you're talking about, Sean, is like the, it's the time for idea guy.

01:02:38 Speaker_01
And like, maybe that's, you know, tongue in cheek, and like maybe the way to talk about it in more precise terms is that people who can find these gaps in markets, people who have expertise in certain areas,

01:02:57 Speaker_01
that they can tell there's inefficiency, and they can create an AI application that can immediately plug that.

01:03:04 Speaker_02
I saw this video on Twitter the other day. It was of a snake that got its head chopped off, and it floated around and bit the tail of its own body. And then the body reacted. Your employees, are they thinking that they're doing that to themselves?

01:03:20 Speaker_02
When you make jokes, when you talk about, you don't need to hire all these programmers to do all this stuff. Are they sitting there with their hands in their pocket like, does that mean us?

01:03:35 Speaker_01
I always wanted the company to be super lean. And so for a long time, we're like 10 people. But now we're like 70 people.

01:03:45 Speaker_01
I'd rather not hire a lot more people because I think that, again, the efficiency for programmers, so look, citizen developers are going to go from zero to, say, 10x. And so they're going to become more and more productive.

01:04:07 Speaker_01
The moment we automate all of software engineering, I think that's sort of like the moment of AGI. So I think it's like a little far away. And the reason I say this is because once you automate software, then the agents can rebuild themselves.

01:04:24 Speaker_01
And you go into this loop of increased intelligence. Every version builds its next version, builds its next version. And so this is what they call intelligence explosion that would lead to the singularity, right?

01:04:38 Speaker_01
So it's like a pretty crazy time when we automate all of software engineering. And so I think it's coming. I don't know if it's 10 years or 15 years, but I think that's the time where the world really radically changes.

01:04:51 Speaker_03
Have you met anybody in the tech industry that blew you away, either personally or maybe you've read about them, maybe you met a friend of a friend, told you a story, because I saw a picture of you with Jensen. You know, you've met Paul Graham.

01:05:05 Speaker_03
I know that you're like connected in the AI circles. You met Sam Altman. In addition to building the tech, I love the characters and I love the stories is why every, you know, Elon snippet of how he runs his companies goes viral and shit like that.

01:05:17 Speaker_03
What are your favorite kind of inspiring stories or crazy stories that you've either experienced directly or read?

01:05:24 Speaker_01
You know, one of the curious story when we're raising from A16Z, Mark invites me to breakfast at like 10 a.m. at his house. And so I go there and I expect like I'm going to talk about the business.

01:05:37 Speaker_01
And so we spend like two or three hours talking about politics and the world and like all sorts of things that are interesting to him. And I felt like this guy is like, is more than just a technologist, he's a philosopher.

01:05:50 Speaker_01
And so right now, he's going out and he's talking about this stuff. His Jorog interview went super viral. And he's always had these interesting ideas about the world.

01:06:00 Speaker_01
And the interesting thing about A16z is his partner, Ben, is sort of like the executor, sort of the executive. He wrote the hard thing about hard things, where he teaches you about what it means to run a company. It's painful. It's hard.

01:06:15 Speaker_01
And what it means to hire executives, what it means to scale a company. And so you have this duo of the doer and the philosopher. And I think that's really amazing. And I think they have really big plans and almost just getting started.

01:06:32 Speaker_03
Dude, if I was the doer, I would just hate the philosopher. I'd be like, are you going to do anything? What are you talking about politics for right now? It's got to be the worst to be the doer and the doer-philosopher relationship.

01:06:40 Speaker_01
Right. You know, I think Sam was interesting to kind of meet him, talk to him, because he's very effective. The first time I met him, or maybe not the first time, but he was on his computer as I'm talking.

01:07:01 Speaker_01
And so I'm talking, I was like, yeah, we're fundraising. I want to talk to A6NZ. I'm a really big fan of Mark. And he was typing on his computer. OK, I introduce you to Mark.

01:07:12 Speaker_01
Um, and, and, and then, you know, when you send Sam emails, it's like pretty quickly replies with like a, you know, a couple of words or like a couple of sentences. So I saw how effective and fast you can be.

01:07:26 Speaker_01
And that, that I'm not like that, you know, I'm trying to be more like that, but I am someone who really values the quietness. to think about ideas and to think about strategy and things like that. So I'm not always on top of communication.

01:07:42 Speaker_01
It actually makes me a little, it's overwhelming. But I think seeing these people at least inspired me to be a little more like that.

01:07:55 Speaker_03
You tweeted out this story that I loved about.

01:07:57 Speaker_03
You said, the most gangster story in Silicon Valley is Steve Jobs buying Pixar for $5 million, investing $50 million, and operating at a loss for a decade, so much so that he had to cut personal checks to make payroll, and somehow turning it around to a $7 billion exit.

01:08:14 Speaker_03
Why did you like that story?

01:08:15 Speaker_01
You know, there are people who are overrated in Silicon Valley, and I think there are people who are underrated.

01:08:22 Speaker_01
Like, I think people think about Steve Jobs in terms of like, yeah, the flashy things, iPhone, the iPod, you know, coming in stage and doing that. The thing I like about the Steve Jobs story is when he was lost in the desert for 10 years.

01:08:35 Speaker_01
So he left, he was fired from Apple. And then he created two companies that were failing the whole time. Like NeXT Computing, NeXT Computers, and Pixar were literally failing. They didn't do anything. They weren't selling.

01:08:51 Speaker_01
He was just investing more and more of his money. I think he was going to go broke. But he kept going for 10 years. How do you do that? And I'm a person who, like we talked about in my story, where I want to be able to go the distance.

01:09:07 Speaker_01
I think going the distance is an advantage for entrepreneurs. And Pixar became this hugely valuable company. And it goes from making no revenue to making billions of dollars and going public over a couple of years. And Next Computers saved Apple.

01:09:27 Speaker_01
Apple was having a problem with OS. Intel, they had the chip before, I don't know, they made it internally or something like that. And then everyone was moving to Intel. Intel was the best computing chip and they wanted their computers to be fast.

01:09:43 Speaker_01
And so they needed a new operating system. They went to the market, they tried to acquire companies, they couldn't find a great operating system. And NeXT Computing had a great operating system. So they bought.

01:09:59 Speaker_03
I didn't know that. I thought next was just a failure. I didn't I didn't even realize it actually. I thought they just bought Steve back acquire, but it wasn't an acquire. It wasn't just acquire.

01:10:07 Speaker_01
No, I mean, Objective C, for example, you know, next computing was really obsessed with this idea of object oriented programming, and they innovated a lot on what that means.

01:10:18 Speaker_01
And, you know, it is based on Unix, but it has a lot of interesting features on top of that. So it saved Apple because Apple was otherwise not going to be competitive without these new chips. Right.

01:10:30 Speaker_03
Well, dude, I know we kept you half an hour over. I apologize for that. But this was amazing. This was one of my favorite episodes in a long time. And I'm not just saying that. You can go check out the other episodes. I don't say that at the end.

01:10:41 Speaker_03
So this was awesome. Thanks so much for coming on. Where should people... Twitter is the best place to follow you?

01:10:48 Speaker_01
Yeah, Twitter. Amos Hod on Twitter. And Replet Handle on Twitter as well. Just R-E-P-L.

01:10:57 Speaker_02
Dude, thank you very much. You're the best.

01:10:59 Speaker_01
Of course, of course, my pleasure.

01:11:19 Speaker_02
Hey everyone, a quick break. My favorite podcast guest on My First Million is Dharmesh. Dharmesh founded HubSpot. He's a billionaire. He's one of my favorite entrepreneurs on earth.

01:11:28 Speaker_02
And on one of our podcasts recently, he said the most valuable skill that anyone could have when it comes to making money in business is copywriting. And when I say copywriting, what I mean is writing words that get people to take action.

01:11:41 Speaker_02
And I agree, by the way. I learned how to be a copywriter in my 20s. It completely changed my life. I ended up starting and selling a company for tens of millions of dollars and copywriting was the skill that made all of that happen.

01:11:52 Speaker_02
And the way that I learned how to copyright is by using a technique called copywork, which is basically taking the best sales letters and I would write it word for word and I would make notes as to why each phrase was impactful and effective.

01:12:04 Speaker_02
And a lot of people have been asking me about copywork. So, I decided to make a whole program for it. It's called CopyThat. CopyThat.com. It's only like $120 and it's a simple, fast, easy way to improve your copywriting.

01:12:16 Speaker_02
And so, if you're interested, you need to check it out. It's called CopyThat. You can check it out at CopyThat.com.