Host: 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.

Matt Bornstein: If you looked at the competitive landscape, it was almost silly.

Martin Casado: 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.

Matt Bornstein: 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.

Martin Casado: 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.

Matt Bornstein: 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

Sarah Wang: 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?

Martin Casado: 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,

Sarah Wang: feels like forever ago.

Martin Casado: Llama 3.

Matt Bornstein: That was actually pretty good.

Martin Casado: 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.

Matt Bornstein: 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 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 they 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

Martin Casado: 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 GP group. Um, and 90% of the meeting was him saying no to things,

Matt Bornstein: which which which is just like like for 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 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

Sarah Wang: 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.

Matt Bornstein: 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 if 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.

Martin Casado: 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 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 think? Like I'm like, when you're not in the office, he's like, what do you mean? You know, I al I also remember by the way when we had the lunch after we did the investment and you know I was talking about something about like like internet days that were similar. He was like, I was five 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.

Martin Casado: 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.

Sarah Wang: 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

Matt Bornstein: 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 like don't you have to show like you know

Sarah Wang: 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-serve starts to peter out. Michael looks me dead in the eye and it's like self-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 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 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

Matt Bornstein: 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 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 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.

Martin Casado: 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 the team for the C. you know, at at the B you could argue, God, just bet on vertical momentum. 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 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

Matt Bornstein: and I know it sounds vague but like things like this it just it's it's almost a baso Bezosish thing which 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 [] 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.

Martin Casado: 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.

Sarah Wang: 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 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.

Matt Bornstein: 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. 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.

Matt Bornstein: 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 of kind of backdoor strategy um was really inspiring and they they took a lot of heat for it.

Martin Casado: So Martine, how do 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 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?

Matt Bornstein: 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 so maybe talk about that actual expansion because it was it was

Sarah Wang: 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 that engine 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

Matt Bornstein: well they all they also spend 40% of the time recruiting. 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.

Sarah Wang: 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.

Matt Bornstein: 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? Or or that you observe in person.

Sarah Wang: 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

Martin Casado: 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

Matt Bornstein: 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. Like I think this is so crazy, right? Like the magnum opus of like you know startup or just like totally

Matt Bornstein: 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. But like yeah which like which by the way is the only guilty guilty. Yeah, it's the 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 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 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."

Martin Casado: 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 untalked 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.

Matt Bornstein: 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.

Sarah Wang: 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 you know so I think there's also like this kind of like you know cultural perseverance to the naysayers which I I actually really respect on both sides.

Sarah Wang: 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,

Matt Bornstein: 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 Entropy, 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.