How Replit Agent made $1M on day one (then $250M in a year)

0:00We went from $2.5 to $250 million in one year. Did you say $2.5 to what? To $250. In one year. Did you get audited? The first time you came on this podcast, Replit's revenue was like $3 million. I feel like I've heard that you guys are close to $500 million in annual revenue now. We're on our way to a billion this year, I'll just say that. He was deadlifting before it's cool. He likes sales before it's cool. He's got range. My guy's got range. The idea of like losing some kind of a competitor is like the worst billing in the world.

0:32I'll call, I'll show up to their office, we'll do whatever we need, and we rarely lose deals. Are there any interesting trends that you're seeing in AI and on the Replit platform? I think for the first time, because the making software is cheaper, you can actually create a multi-million dollar business, not have to raise venture, not have to grow the team a whole lot. Do you think that we are like 12 months or something like that away from like a world changing dramatically? I think we are in the singularity. I just Googled it, how many billionaires are under the age of 40? There's only 71.

1:03Really? Of all the people under 40, you are probably in the top 1,000 richest ever. You just made this day. Look at that smile. I'm having mixed feelings, Sean. Dude, so the first time you came on this podcast, I'm pretty sure Replit's revenue was like $3 million or $5 million. It was like something like that. Because by the way, this was not 10 years ago. This was like two years ago.

1:35Yep. You guys are close to $500 million in annual revenue now. Is that, I mean, blink twice if I'm in the right ballpark. We're on our way to a billion this year, I'll just say that. Oh, on your way to a billion. How could I have missed it? Off by $500 million. So I'm unprofessional. I didn't, I don't know the exact numbers. Say the exact jump of like, I remember when I invested, it was something like two or three million bucks. Yeah, and it stayed two or three million bucks for a few years as we were like navigating what to actually do. We went from $2.5 to $250 million in one year.

2:07That was between 24 and 25. 2.5 million to 250 million in one year. Did you get audited? We did. We actually passed a PwC audit a couple of months ago. That's crazy. And by the way, you know, we're gross margin positive, which is, you know, something that is rare in the industry, but by a good amount as well. And we're very, we're very precise in how we calculate on rate.

2:39When you grow from almost nothing to a billion dollars in revenue in 24 months, what type of like, there's like all these logistical questions I have. Like, what type of relationship do you have to have with your bank? Like, did you prepare your bank where you're like, you know, that's your question? How's your banking relationship? Dude, there's so many like logistical questions. Like, for example, are you like, what are you doing with that cash? And how are you managing spending it and investing it as fast as you're making it?

3:10Things like that. Like, there's so many logistical questions around literally it's sort of like when Pablo Escobar was a drug dealer. He was saying, like, we can't get enough rubber bands for the money. Like, we don't know where to like store the money. Like, there's these like logistical questions that I'm curious about. You know, the theory for one of the potential creators of Bitcoin is that he invented Bitcoin because he was making so much money, he didn't know where to keep it. Like, there's this story called the mastermind about this guy who I think grew up in Rhodesia and that was Zimbabwe.

3:47And he was a hacker. He was a computer hacker. And he invented a lot of encrypted technology. Very well-known guy. He ended up getting into criminal online activities, selling drugs online, one of the first to do that. And he generated so much cash, he actually had ships with bullions of gold just in the international waters, just doing circles. Oh, wow. And so there's a lot of- This is like Paul LaRue, right? Paul LaRue. Paul LaRue, yeah. Paul LaRue. And there's a lot of circumstantial evidence that he was potentially writing Bitcoin because it was like, oh, I don't know what to do with this money.

4:24So we're not there yet. But- How did Paul LaRue make the money? He was, he created the first, like, delivery online drug store. Like, do you remember, Sean, like, in the early dot com where, like, you would get spammy emails where it's like, buy Viagra online? The early days, as in yesterday? Yesterday, early in your morning yesterday. Earlier today, yeah. I remember that. He, like, kind of pioneered that. Is that right? I mean, he was one of the biggest guys. He was the first, yeah.

4:54Like, thousands of domain names. He was sending millions of emails a day. He was basically one of the first spammers, like, internet marketers. Yeah. And the monetization engine was selling drugs. And now there are a lot of startups that are doing it, you know, quasi-illegally, where they have a lot of doctors that are sort of approving those prescriptions and things like that. But, yeah, he did it fully illegally and was wanted by the FBI and drug control and DEA and all of that for many, many years.

5:29And they caught him around the same year that Satoshi disappeared, around the same time, actually, that Satoshi disappeared. Going from 2 million to now close to a billion in run rate. It's got to be a bit of an out-of-body experience for a founder. Walk us through, like, the interesting parts that are not, like, the game that's happening on the field, but maybe just of the founder experience. Like, dude, we had to figure this out. Dude, we didn't know this. I remember waking up and realizing the chart had jumped 10x, whatever. You know, give us some of that. Well, first of all, I have such high expectations of myself and my team that at any given point, whatever progress we made, the question is, why haven't we made more?

6:11You're like the Asian pet mom of startup world. I am the Asian mom of myself more than anyone else, which is, I don't really recommend. It's kind of a miserable way to live. But, you know, it's sort of like, I was like, of course, we're going to make this much money. Of course, the company is going to grow this much. It was always the plan. It was always in the cars. It was always the vision. I'm also naturally paranoid. And so I was fully expecting it to reverse at any given point. And so it was like, how can we make sure this revenue is sticky?

6:42How can we go up market, go to the enterprise, make sure our customers are getting a great experience, make sure that things that they create is not slop. It is secure. It is, we're creating trust, not just in us, but like in the whole space. And that's this vibe coding things is possible, including doing podcasts like this. It's not only possible, it's viable to build businesses. And so the first reaction is adrenaline and like, let's get to work. Like, this is an opportunity. Like, if we had sold or failed before we, you know, before the breakout point, I would have been, you know, probably depressed about it.

7:22But not as bad as you now have the wind in your back. And if you fail, it is fully on you. You kind of, you've lost. Like, it's almost like someone passing you the ball and there's no one else in front of the basketball ring. And you could dunk, you could do whatever you want. And then, and then you somehow do a two shot and fail. Right. So that's the feeling. It's incredible pressure from everyone, from the market, from even investors went from, hey, you got to do a little layoff.

7:58You got to cut burn to go invest, put money, do it. You know, it's like, it's like a thrill of success only lasted like, you know, a week or two. And then became sort of the reality of like, how do you keep this motion going? And how do you, how do you scale it? And the first thing that starts to break is people, when you have a supply and demand imbalance, companies are knocking on our door. It's like, hey, we want to buy this product.

8:29Like our, our employees are using it. Like, how do we get an enterprise deal? And we're like, yeah, we have one person who does three other things, but also, also doing sales. They, they're like trying to close deals as fast as they can. It was like, okay, I've never done sales. Like, how do you actually do sales? But, but there's something about the universe where these people land in your, in your life at crucial points. Not always, but, but sometimes. And we had, we had a VP of sales that came to us at the, at the moment when the company was, was really in its darkest moment.

9:06We were about to do a layoff and, and I'm sitting in this meeting room and I'm asking him like, why do you want to join us? His name is Patrick Purvis. He, he had previously was a VP of sales at Zoom. Info exited, took, took a couple of years sabbatical, independently wealthy guy. And I was like, look, the company kind of sucks. Like, why do you want to come here? And you're like, for my last interview question, why? And he's like, look, I spent the past few years reflecting. I want to do something meaningful.

9:37And your mission of empowering people and democratizing software just seems one of the most important things to do. And I was like, okay, welcome to the team. But it's not, it's not, we don't want anyone for you to sell. All right, guys, here's the thing about side hustles. Everyone wants one, but most people overthink about it and they never actually launch anything. But because of AI, you can go from idea to your first sale in only seven days. My old company, The Hustle, they just dropped an AI side hustle crash course.

10:09So basically what The Hustle did was they looked at things that me and Sean and HubSpot CMO Kit Bounder, they looked at stuff that we said and they broke it all down into simple bite-sized steps. Which means you're going to get a guide that gives you everything you need to launch a side hustle without any of the guesswork. So you can get it right now. You can scan the QR code or click the link in the description. Now, back to the show. How grim did things get? How low was the bank balance or how many months did you have left?

10:39What was the darkest hour? Yeah, well, as you call it, being the agent parent, I was also kind of financially responsible. And so we never had like, we never was like, oh, we're weeks away from not making payroll. So when we did the layoff, it was more like about extending the runway. Maybe not runway, but like, you know, founder delusion takes people far. And I think you have it more than anyone, right? Because you were like 10 years you've been working on this thing, right? It wasn't like 10 months. You just kept going, soldiering forward. But on our last podcast, I remember you said like, I think if there's one thing I might

11:12be good at, like you were just pretty humble about it. Be like, I think, I guess reflecting, like I can keep pushing the boulder up the hill for a long time. Like I just have high pain tolerance, I think. That seems like it's been helpful. So maybe it's not the bank balance, but like did the doubts or the delusion or the, is this ever going to happen? Yeah, I think the worst part about it is the belief that your team have in you, your vision, your leadership. And when that goes away, you can see it in their eyes.

11:43And that is the most hurtful and depressing feeling. And so after we did the layoff, the layoff is a bubble bursting event. What did you scale down to from where to where? So we actually wasn't that big. It was like a third. So we were like 120, went to now to 90 or something like that. And but by the end, we were 60. By the end, in like three months, we were 60. And so we we lost 50 percent of our team. But most of it was voluntarily.

12:16And and the reason is because suddenly, you know, I've been for years getting in front of everyone and talking about this vision and mission. And suddenly it just sounded like lies and sounded like I don't know what I'm doing. And we had also at the same time moved our office from San Francisco to Foster City. We got a huge office. I like really knew that we're going to we're going to hand it off in scale. But I was off off by a few months. So we had already gone to this office.

12:48And so the office was empty and cold and kind of dark. And so every day I go to work and just like the mood is super dark. And I know that at the moment I'm going to get to to my my desk, someone's going to walk over again. They're going to tell me they're quitting. And so every night I've like whatever sleep I got was like, OK, who's going to quit the next day? And it just kept happening. And that was that was really draining. And for me to put on a face and tell everyone that things are going to be OK was incredibly

13:24hard. However, there were a group of people that were working on Replit Agent. Replit Agent is is the breakthrough product that we created. It actually created a breakthrough in the entire industry because this was remember, this was before Claude Code or anything came out. We showed the world that it was possible to build end to end coding agents. And the people inside that team had almost a secret. We're on the precipice of a of a breakthrough. We were all kind of dogfooding it and playing with it and having a lot of fun with it.

13:54So whenever I go to the office, everything is depressing except this one room called the war room. And I walk into the war room and the mood is intensely different. Everyone is super pumped. They know we have created something that's going to be super valuable. So I had this this night and day, almost schizophrenic feeling of, you know, large parts of the company and the business totally lost faith in me and the company. And then a small part that were totally engrossed on in the possibilities of of AI and what we

14:27were inventing. Sam, can I just say, forget the numbers, man. What he just said was like the realest shit someone said on this podcast in a long time. The way you describe that feeling as the founder, when you walk into the to the office and your shit's like you don't have the hot thing right now. Right. And you've been telling everybody and you could see when they start to lose faith. I've experienced what you just said. You just like describe my childhood trauma as a founder. I didn't even realize I didn't even know till you said those words. I was like, I have felt that it's depressing.

14:59Then somebody emails you for like, hey, can we meet tomorrow? You know, you're you know, they're about to quit. And you're like, it just got harder. And I don't have in me to convince them to stay. Like, why would they stay? Why would they stay? Yeah, exactly. That thing you just described is so real. And I just want to give you props because I don't think most people ever really talk about what that feels like. And now it's obviously it's great to talk about it now because, like, you know, it didn't just end sadly. That's the best thing about success is reminiscing in a more positive way about the failures

15:32and everything that goes wrong. But the other one is you mentioned investors is just a broader industry. Um, and, uh, you know, I remember my calendar, you know, emptying and I'm no longer invited to the hot parties. Uh, in, in many ways when, when I go to one, it's like, oh yeah, Replit. Oh, I remember that thing, you know? And what are you up to now? You're like, yeah, yeah. You still at it. And our partners will, we're not including our logo anymore.

16:03And, uh, our vendors removed our logo. That's dirty because it's like, you didn't even have to, you proactively changed your website. Why'd you do that? Why'd you scrub us? Uh, and, and it, it felt like, you know, a big, a big part of my identity has been about Silicon Valley. And it's about, I've read everything I could get my hands on every biography and read about all the different figures from the biggest to the most obscure.

16:36And I, I just felt like the, the weight of Silicon Valley on my shoulders because I was backed by the best as well. Like Mark Andreessen, Paul Graham, uh, you know, David Sachs, you know, all these people are on our cap table and I was like letting all of them down. So, so, so if this was a movie, there's a turning point, right? The montage begins at some point you wake up and you look at the dashboard, something starts to change. You start getting emails. The, the, the music picks up and suddenly things start to move.

17:08What was the first move of that, like of that, that second act before we hit the training montage? We, we launched, uh, Replit internally at Replit for employees outside of the core engineering group working on it. And the first time everyone tried it, I was especially paying attention to non-engineers. Are they going to be able, because that was the mission, are we going to enable them to, to be actually successful using this? And, you know, Jeff, Jeff is our head of, uh, partner, partnerships, Jeff Burke, uh, Haia and I always think Jeff as like the prototypical potential customer because like he's a consulting

17:42background, he's super sharp, but he can't configure Python to save him his life. Right. And so he tried it and I remember him posting the feedback as like, oh, this is miserable. I failed. They couldn't like make the simple app. So the first day, the next day, third day, I think one day when he posted, it was like, oh, I was able to make this thing. We're like, okay, we got it. I think, I think that the product is, is ready right now. And it was around August in 2024. Uh, and the team felt they weren't ready.

18:12I was like, we got to launch this. I don't care if it is semi-broking. If you get 50% of the time, get amazing results, it's going to wow the world because for the first time, an agent could not only can write the code, debug it, create a database for you and deploy it to the cloud. It's never been done, even if it is in just like demo shape. And I was, one of the habits that I picked up during this darkest hour is playing video games. I hadn't played, when I came to the US, I was like a pro gamer back in Jordan.

18:44When I came to the US, I was like, okay, I'm going to focus. I'm going to be the Silicon Valley entrepreneur. I'm going to work really hard. I'm going to, you know, I want to be, uh, I want to make a lot of money and I want to be successful. So I'm, I just dropped all the hobbies that I had, but I bought a steam deck because I just wanted something to take my mind off all the depressing stuff. They do this thing, uh, in games, it was called early preview, sort of like a beta, but, but the intention is that you're getting SMI broken thing, but you're expected to kind of give

19:16us feedback. I was like, okay, we're just going to release, uh, an early preview of the product. And we're just going to call it that where I say, Hey, don't, don't subscribe to this thing. Cause it might be buggy, but if you're already subscribed or you have your, you're okay with getting buggy software, uh, join it. So we, in September, 2024, I posted, uh, a video of me in the office shot on an iPhone saying, Hey, like AI coding is, is amazing. Generates a lot of code, but so far you had to do all this other stuff today.

19:48For the first time, we're showing you that an AI agent can do the end to end thing. And there were a few moments when this tweet started going viral. One of them was Andre Karpathy, who is, um, you know, head of AI at Tesla, early open AI, uh, AI researcher co-tweeted it and said, this is the, a feel the AGI moment. And so that demo showed the industry luminaries, what AI could do, people, people inside research firms like open AI Anthropic reached out to us and told us we did not know our models are

20:22capable of doing that. And so that moment was like, okay, we, we have something here. And then the revenue first day made like a million dollars of ARR second day, two million dollars. Were you just like hitting, hitting refresh constantly? Yeah. I'm trying to must be on a call. He's been in his office all day. What's he doing? Just hitting refresh. Yeah. The whole time. Uh, but at the same time, we're just hustling to make the product better. So basically in like two days, you made more revenue. Yes. You like beat, you beat your, your, your, uh, yeah.

20:55Growth in two days. That's gotta be a crazy feeling. You know, I, I've always heard from other entrepreneurs is that the feeling of product market fed is like stepping on a, I don't know who said this. It's like stepping on a landmine. And I, I knew that we didn't have it for a long time. That's what we pivot, pivot, pivot, pivot. And then that felt like stepping on a, on a landmine. I was like, okay, we got it. Now we go from there. All right, let's take a quick break. And I got a question for you. When a buyer asks AI for a solution like yours, does your business come up?

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21:48Sam, I don't know if you ever met him when you came to my office. There was this young guy who used to work out of our office. Furkan had basically like adopted these kids. They were, they were on the East coast. He, they wanted to come to Silicon Valley. They didn't have money. He's like, here's some money. Yeah. They're like, is this an investment? He's like, no, this is money. You just have this in your account and you come sleep on my couch and you work out of my office and like, get, get going. And so these two young guys, they were probably 20 years old, 21 years old. They were working out of our office and they had like, they were trying to do an early version of like rent GPUs in the cloud.

22:19So they realized these, this was before the AI boom though. So like it was for machine learning or like, you want to do like a, just like some research maybe, but this was before everything kicked off. But they had seen that like all the crypto miners had all these GPUs. That were unused. And so they had posted on a crypto mining subreddit and like thousands of people showed up right away and were ready. There were calls, all this stuff. And then they were trying to get the demand side, but the demand wasn't there. And I was like, Hey, this is a great idea. Like in theory, it's a great idea. Like, why are you guys like pivoting?

22:49Like, why are you guys worried about these other ideas? And he goes, when we did that first thing, it was like, we stepped on a landmine. And so now I kind of know that's what's possible. So like, yeah, all these little signals, I know they're not real signals. And in this case, 20, 21 years old, and I'm supposed to like be mentoring him. And I walked back to my desk being like, I've never felt that. And I realized like I'd been doing startups for six, seven years. I had never felt what they were lucky enough to stumble into on the first day. And, and, you know, you don't even know what you're looking for. Had you never felt it's like love. It's like, am I in love?

23:20Maybe I'm in love. Maybe this is it. And then you feel it and you're like, Oh, all that, that other stuff wasn't that. This is the thing. And I feel like for entrepreneurs, it's one of the hardest things. But I sort of, it's almost bad to talk about that, not talk about it, but I don't think you should expect that because I think that most great companies have never had that. If you look at the subset of companies, most don't work. Some work. Okay. A handful work a little bit better. And then a very small percentage are amazing. And even amongst the amazing ones, what they're describing, what you guys are describing, they

23:51don't feel that. Like, for example, we were talking about like Mars candy the other day. Like that's been around for 150 years and more likely than not, it was like a grind, a grind. This year was not a grind. It kind of did pretty good, but this year it was kind of a grind. You know what I mean? Like there was never like this moment where it's like, we just grew to a billion in revenue from 2 million in 24 months. I think you're right. A, it doesn't happen right away, even for you, even though it happened super fast. It's like 10 years in, but there is a difference between push and pull. And I think the companies I've seen, which is a very small handful that actually have

24:21product market fit, it starts to feel like pull. In fact, Emmett, the CEO of Twitch, I remember asking him, you did just in TV, then you guys pivoted to Twitch, was it obvious right away? And he basically said, product market fits, the main thing that matters. He goes, basically, you feel like you're pushing a boulder up a hill every day. And then at some point you kind of wake up and you realize it's like you didn't, you reached your hands out, but the boulder had already moved. And now you have to start running to catch up to it. And suddenly the whole game feels like a sprint catching up to the boulder going down the hill. It takes time, but there is a difference between like you are manually pushing the crank versus

24:54it starts to get pulled by the market. Let's just offer like a distinction between the different types of businesses. There are, you know, Clay Christensen's RIP passed away recently. Harvard Business School professor came up with this concept of disruption, right? Disruption became sort of a meme, but it's actually an economics theory almost about technology. And he talks about sustaining technology versus disruptive technology. You can be innovative on a sustained curve. You can make things incrementally better.

25:24But there are things that are disruptive. And those are like moment of time businesses or technologies that create this explosion of demand because for the first time it became possible, right? So if you're Mars Candy, there was a lot of other candy. Maybe you're really good in your recipe, you're really good in your execution. Most businesses are trying to compete in a more or less zero-sum market. So they're trying to capture market from existing demand on existing competitors, right?

25:59Now there are market creation moments. And I think for Replit, this was a market creation moment. And most internet companies, whether it's PayPal, Facebook, you know, Google, the reason you have this explosive growth is like you just invented something new and then everyone's rushing because this capability didn't exist before. And there's no other alternative, by the way. That's a really good point. Then do you think that the right move for someone building a company is good?

26:31Okay. So on one hand, you could say, well, just have patience and like, just keep going, keep going, keep going with, you know, maybe the same thing. Whereas the other hand, would it be like pivot, just like the 20-year-old kids until you find that rock rolling down the mountain? I mean, it depends what you're trying to build. Are you innovating something new? Are you creating something that wasn't really possible? Or are you entering a business where you're like, okay, I know you've done the business plan, right? Like, here's what the market size is.

27:03Here's how much we're going to capture from it. Here's how we're going to be better than competition. If that's the case, you're going to slog. And maybe every now and then you have some kind of innovation or some kind of breakthrough that gets you a bit of a jump over competitors. But prepare yourself to be very good at execution. Build an amazing team. Build amazing processes. Just be very good at the day-to-day execution to outcompete your competitors. If you're a young guy trying to make something that didn't exist before, or, you know, like

27:37Sean and some of the guys in social media, they're trying to create a new, you know, clubhouse or, you know, some kind of thing that I didn't know I would enjoy talking to people, you know, taking a walk on my earbuds. This is just like, didn't occur to me. So if you're inventing something like that, you will, you know, the point is pivot, pivot, pivot until it hits. Because if it's not hitting, you're not hitting on some human nature or element that you're finding, or you're like finding a secret in the universe almost.

28:11You're a fun case study. Yeah. Yeah. One of the reasons it's fun to talk to you is not only your business is interesting and you're interesting as a founder, but you're also a bit of a polymath. Like we were talking at the beginning of this about like the Paul LaRue, like Bitcoin. I feel like, you know, you have like a bunch of these like little rabbit holes that you've gone down. I'm curious, like, what are those rabbit holes today? Because I've seen the original Replite deck and this was what, 2014, 2015, something like that? Yeah. It's like, bro, you called your shot Babe Ruth style.

28:42So read this thing out. What was the master plan? So growth by building tools. How about the fact that in your deck, you have a slide called master plan.

28:52So growing the product by building tools for education, essentially people learning how to code and then build a simple network and AI assisted interface that blurs the distinction between learning and building. That's essentially what Replite is today. Like you're learning how to make software, but you need to, you don't need to sit down and learn how to code. You're just like vibe coding and it's just happening as you go and you're kind of picking up these skills. And then evolve the platform into a place where people come to learn, build, explore and host applications.

29:22So not only is it the development environment, but the hosting of the applications. And the hosting of the application, I think I should have had another point because that unlocks the next step, which we're getting into now, which is monetization of those applications, scaling of those applications. Right now, if you go to Replite, you build something, you can just say monetize it and it will like integrate Stripe for you and all of that. And pretty soon you should be able to say market it. And I'll like. How big are the biggest apps that are built on Replite?

29:52Like are we talking, guys are making hundreds of thousands of dollars, set low seven figures. Like has anybody really broken out that are just, they were made on Replite and they still run on Replite? This one is a little controversial, but Medvi, the billion dollar one person business covered by the New York Times. Basically, they were a company that sold what? GLP One. And the reason it's controversial is because people don't like their marketing practices. The entrepreneur, I think, already fixed a lot of these issues that people are reacting to. But he runs a big part of the Replite, a big part of his stack on Replite.

30:29And it's been, he says it's been a crucial part of their growth because it's not only just the core application, but the automations he's pin up day to day. So for example, he's working with a vendor and every day he does something manual, like a marketing vendor. It's like, okay, I'm going to build this website to you. You go and you speak to an agent, the agent will give you all the information you need. Or the agent will give you the assets. So he'll, he'll build interfaces for all the different parts of the business, all the back office stuff of the business. And he's the fastest person to go from idea to prompt.

31:00Even when he was on Twitter going viral, he was like building a game at Replite. And he built an experiment where he said, he sent me that experiment where you can scroll a site with your, with your, with your head. So you can read something without looking at your screen. So I've never seen someone after like spending some time chatting with him, be so quick to create things. So boom, create that, create that, like automate this, automate that. That's one example. There's been, there's been a lot that, you know, I've spoken about over the years in the past that used to have to migrate off of Replite because the platform was not complete.

31:33But now the platform app is actually complete and you can run a full business on it. We have a lot of venture backed companies such as Spellbook, I think it's a multi hundred million dollar company started on Replite. Magic School, I think a 500 million dollar business started in Replite and many others. More recently, since Replite Asian, there hasn't been enough time for them to really hit massive scale, but there's a lot of multi million dollar businesses. For example, recently, I think they just did a, did a round, but there's a company that's

32:04building influencer marketing for local restaurants and local shops. So they'll, you know, you're a local restaurant, you want someone to cover your restaurant, you go to the platform, you hire an influencer, they actually physically walk to your restaurant, eat there, take a TikTok, whatever. Because now most people, especially Gen Z, they actually don't go to Google Maps anymore. If you ask the Gen Z, let's find a restaurant, they're like, go to TikTok. And so that, that's already over a hundred thousand ARR, like few, few weeks. What's that one called? Do you know the name? Try nearby.

32:34Dude, I still go to Yelp and my young employees were like, call me Greybush. They're like, you're so old, man. Like, what are you doing? You look, you open the yellow pages and call them when you want to order food. I was like, why not Yelp?

32:48Can someone move the sundial for me? It's surprising to me that the Google search queries keep going up. They just broke records. The revenue and search keeps going up. But, but, but yes, people in my, you know, people around me that they're not using Google as much. Are there like any cool trends that you're seeing? Like, you know, we have, are we have like a subset of like young, young, like 18, 19 year old kids who listen to MFM and they like want to hear business ideas. Are there any interesting trends that you're seeing in AI and on the repli platform where

33:23you're like, man, there's all these like cool, like one or five or $10 million businesses that could be created. Yes. Silicon Valley have always approached problems with like hyperscale in mind. And I think for the first time, because the making software is cheaper, you can actually create a multimillion dollar business and not have to erase venture, not have to grow the team a whole lot. So, uh, local style businesses is, is, is very interesting. Um, there is a guy in England that I think he's well on his way.

33:53He's a hundred thousand already in run rate. He's well on his way to a million. He, uh, is building software for ice rink management. So skating rinks and all of that. I think that you go around your, in your life and there's a lot of things that are just not computerized that not, there's no software running it. So that, that, that would be my first approach. Actually, that's what I did when I, uh, my first business was building software for internet cafes and, and land gaming. And so that's always been a great place to start.

34:25You remind me of, uh, in Paul Graham's, one of his essays about how to get startup ideas. He says, uh, the easiest way to get startup ideas is to sit like, if you want to find the startup idea of the future, simply live in the future and then build what doesn't exist. Yes. It's like, okay, what the hell does that mean? He describes when Zuckerberg built Facebook, it's not because he was a normal guy thinking, Hmm, what, what would the next, what would the future look like? It's like, no, he was on computers all day. His social life was online. Right. The problem was he only had certain tools available.

34:55So for him, the idea of social, like social networking online was not just like possible. It was completely normal. It was his preferred medium to actually exist in. And you could just like lean into that rather than thinking you're the oddball. And I think, you know, that, that's sort of interesting because, you know, you built Replit partly because you grew up going to these internet cafes in Jordan. And every time you'd come, you'd be on a different computer. So you kind of needed something that lived in the cloud. And so, you know, for you, what was completely normal was odd to other people. So I think that's the, the trick with startup ideas, right?

35:28Is to sort of lean into maybe the things you do that are a little bit more than normal or a little bit odd. And then just say like, what would make my experience doing this odd thing a little bit better? You know, another, another one I would say is being lazy. In programming, there's this old saying that laziness is a, is a, is a virtue. And the idea is to automate a lot of things, but now everyone is a programmer essentially. So, you know, part of the reason why I made Replit is because I don't want to keep setting up the freaking IDE every time. And so, you know, go about your life with this laziness attitude.

36:02What are the kinds of things that are so annoying that you have to keep doing over and over again? There's probably a million, maybe a billion people that feel the same way. And perhaps you can make a piece of software to automate that. And more important than ever, this like lazy mindset of viewing things through the lens of automation is very important during, with AI, because AI is truly like, you know, we have a magic automation machine. So not only you'll optimize your life, you'll become, you know, you'll become a lot more

36:35productive, but you might stumble on something that a lot of other people would want. This is for the folks out there who have a business that does at least $3 million a year in revenue. Because around this point, that's when you're able to look up after being heads down for years building your company. And you realize two things. One, you've done something great, but you're still a long way from your final destination. And two, you look around and you realize, I am all alone. I've outrun my peers. Which means you're now making $10 million decisions alone by yourself.

37:05And that is when mediocrity can creep in. My company, Hampton, we solve this problem by giving a room of vetted peers of other entrepreneurs who are going to hold you accountable, call you out on your nonsense and help show you the way. Because the fact is, is that there's only a tiny number of people in your town who know what you're going through and who have been there. And they're hard to find. And if you can find them, it's hard to have this explicit time, this explicit place where you sit down, where the rules are clear that we are here to help each other and to be one another's board of directors.

37:36The biggest risk is not failing. You have a company and it's working. You're going to be fine. But the biggest risk is waking up 10 years from now and saying, Shit, I barely grew in business and in life. And for people like you who are ambitious, wasted potential and regret is what we want to help you to avoid. We have made so many of these groups and we have a thousand plus members. And I know this stuff actually works, whether you work with Hampton or you get your own group on your own. But having a group like this, a group of people who you meet with in real life once a month, it can change your life.

38:06It changed mine. And I know it will change yours. So check it out. Joinhampton.com. Hey, can you give me your opinion on this? We were kind of joking, kind of not joking a while back with the guests. And we were like, it's sort of like we were asking ourselves, we're like, are we like in December of 2019, where we're just like three months away from like COVID happening and like America shutting down? And we're just like, yeah, I heard there's this virus in China, but whatever, no big deal. You know, are we sort of like that with AI where it's like, well, you know, like Square

38:40maybe laid off a lot of people, but like, yeah, it's probably not going to happen anymore. Like, do you think that we are like months or 12 months or something like that away from like the world changing dramatically? I think we are in the singularity, like the, you know, the original idea of a singularity. I think Werner Winge, one of the early computer pioneers and sci-fi authors, talked about the singularity, borrowed this concept from physics. In physics, it's like the, is the black hole.

39:12And, you know, anything that happens after the black hole is undefined. So we actually don't know what happens. It's like not knowable. So anything that is beyond that point, you can't even have formulas for because it's literally undefined. You know, a lot of the early AI thinkers talked about this moment of singularity, whereas it is incredibly hard to predict what happens after because the pace of innovation is not only fast, it is accelerating as fast as it already is, meaning it is, the second derivative

39:47is exponential. And so I think this is the moment we're in where, you know, in 22, you know, we got GPT four at the time and, you know, GPT two had come out in 2019, GPT three in 2020. So every two years we were getting a model and now it feels like every few weeks we're getting a model, sometimes every day. And there are these fundamental capability shifts that happen either in autonomy or cybersecurity

40:19or computer use or what have you. And every one of those capability shifts have a lot of downstream applications that yet need to be discovered. We haven't actually productized it yet. So it's almost like you get a bundle of energy. That's how I think of models. They're potential energy that entrepreneurs need to go figure out how to create, make them into products, right? And this is why it's an explosive time for entrepreneurs and entrepreneurship is because we have this potential energy that needs to be harnessed.

40:51Now, the reason why there's like a delay is because we have this capability overhang. The world will change, but it's really hard to know whether, I can't tell you in 12 months, like all entry-level jobs will be gone. Well, what if you had to make a bet? My bet would be that I don't think unemployment numbers will move a whole lot. Perhaps they'll marginally increase. I think Dario, the CEO of Anthropix said, we're going to get to 20% unemployment or something like that. I don't know if I'm misquoting him, but he said all...

41:21He's a doomer, basically, though. He's on the far end. Yeah, like I don't think we're... Because what I'm seeing from our customers, we have some customers that automate a lot of things and end up laying off some people. We have other customers that automate a lot of things, make more revenue, and want to hire more people to automate more things and create more products. And so net-net, I think there's going to be a lot of new AI companies, a lot of companies that make use of AI and want to hire more people. So net-net, I think the unemployment question, I think, will probably be neutral.

41:54How do you think this sort of Game of Thrones AI war plays out, right? You've got, you know, the King of the North. You got Elon up there. He's trying to come down. You got the open AI kingdom over here. Google, you know, they were in denial, but now they're here. You know, they're making it happen. What do you think? How do you think this plays out? I like business theory. It's not always useful, but it often is useful.

42:24Hamilton Hamler wrote this book called The Seven Powers. And everyone in Silicon Valley talks about moats. Seven powers is the theory of moats. The moat of these LLMs, is the technology fundamentally commoditizable, right? Like, it seems to be very easy to replace these models. Like, you know, a lot of developers every day, professional developers are switching between these models. In some cases, if you're in cursor, it's like one, literally one click away to switch to the next model.

42:57And I think a lot of the fighting has to do with this fact that it is hard to find a way to zoom heads too far ahead of the competition. You're always sort of neck and neck competing with others. So you might want to try to block them in different ways, whether it's in the court or with the government or regulations or things like that. Whereas I think in the past, you could, if you're Microsoft and you achieve this dominance on the PC, it's really hard to unseat you, right?

43:36And so there's this natural monopolies that used to emerge. And they're protected by certain moats, such as network facts, economies of scale. We haven't seen any of those moats sort of emerge from these foundation model companies. And so my hypothesis is that maybe the one natural moat is capital. You need not just one-time capital to enter the market, you need continuous capital to train the current model, the next generation model, and the next generation model.

44:09And then you need enough install-based revenue to cover your costs. But that is not enough moat to keep the other big players away. So you can imagine all the big companies have a fighting chance and all the big governments can also participate in this. And maybe China as a place where you can't really distinguish between country and company. And maybe the country is going to be doing to the foundation model market what they did to the EV market. Well, they'll subsidize the hell out of it in order to have a competing chance and maybe even destroy the market globally by subsidizing it.

44:46And all of this to say is I think it is good for entrepreneurs because if we ended up with a monopoly or just a logopoly and you're building on top of it, it is actually very hard to build a successful business. Because like you said, they'll come for you. But if it ends up being a technology that's kind of easier to replace, I mean, there is a place for a lot of entrepreneurs to participate. Sean, remember you were telling that story about the Anthropics CEO and he was like, yeah, things are booming.

45:16But like in a weird way, I feel like I'm always like a few months or a few quarters away from running out of money because we're growing so fast. We have to buy inventory, GPUs. Are you in a similar position where even though you're making all this money, you're having to spend more and more and more and is profitability in sight? No, to the first question, we're not burning nearly as much cash as foundation companies, model companies. And like, you know, sometime last year, profitability was in sight.

45:46We had something like, you know, 30 years of runway or something like that. Since then, we decided to spend a lot more on specialty sales and marketing. And my theory on this is, or like my thesis is that there are a lot of businesses that will need help adopting this technology and adopting Grappler broadly. And so we, and also there's this imbalance between supply and demand that I talked about. So I thought, okay, we just need to scale the sales team.

46:18And so the sales team was like four reps or something like that by the end of last year. I think it's going to be more than half the company by the end of this year, which is very surprising for me to say because I was always like a sort of a tech. Yeah. How's that feel to be around a bunch of regional sales managers? I f***ing love it. I didn't know. Because I think I'm a sales bro. I am a sales bro. I am a sales bro. I think I'm weird as far as tech nerds. Well, why do you love it? This is actually really, we laugh because it's funny, but this is actually quite interesting.

46:51He was deadlifting before it's cool. He likes sales before it's cool. You're, he's got range. My guy's got range. Well, why do you like it? Because I used to hate salespeople. Well, then I realized that salespeople, like all these whining and dining, it actually works and they do create demand. Yeah. And I'm like, oh, okay. You serve a purpose. It's more of a contact support than consumer. Like a consumer, you do something and then you do an A-B test and maybe two weeks later you'll find out whether it worked or not.

47:23And there's this huge delay and there's so many things outside of your control. There's like hype in the market that affects you. Or someone writes about you, you go viral and then you die down. Or it's, it's like, there's a, there's almost like the weather. You can't really control a lot of it. Sales is, is much more, like I said, contact support. Like I can apply effort and, and, and whether we get the win or not is somewhat much more within our control. And so if I hear like some kind of deal is at risk, it activates me so much because the idea of like losing some kind of comeback competitor, this is like the worst living in the world.

48:02And like, I'll call whoever I need to call. I'll show up to their office. We'll do whatever we need. And we rarely lose deals. In the few times there was like a potential of losing a deal, we just pulled out all the punches. And the company just, because Haya and I, you know, Haya, my co-founder and my wife is also hybrid competitor. She also lifts and does boxing and all of that. Haya and I like built a culture that's incredibly competitive. And so we, we get activated by this. And then when we win, it just feels good. It's very real. It's like very different than seeing a number go up later.

48:34You know? Wait, so I had heard about this. Your wife is your partner or business partner. That's pretty, that's pretty cool. I think, I mean, it's cool when it's cool. What do you get? Cool, it's cool, yes. Yeah. In bed is like last things. When it's tragic, it's disastrous. Yeah. How, how's that? I think that having Replit being so hard, as hard as it is, and it was, if we weren't in it together, I think it would have definitely driven a wedge between us because you're both

49:09entrepreneurs. You know how much of your life energy startups take. Like they literally take your vitality, your age. Did you know? I had hair when we started the company. And so in life, you have limited amount of energy and you direct it towards your spouse, your kids, your work, you know, things like that. But then if something is like this sucking energy, the sucking everything, time and energy, eventually it'll just strain your relationships. And I, I, I, you know, I, for a long time, like a lot of my friends just didn't hear from

49:45me. Like I kind of disappeared in many ways and still in many ways, you know, I would love to spend more time kind of checking in with friends and keeping connections alive. But the fact that we're in it together, I think made our relationship stronger because those darts. And having all the, the, the shares in the family, I mean, that is pretty cool. That's cool too. No, I mean, I'm not being funny. That's cool. I think, um, Sean used to work with this guy, Michael Birch and him and his wife started a company and they sold it for like, I don't know, six or $800 million. And it was, so it was like their family, like, you know, got two times, uh, rewarded.

50:18But you have to be careful. A few things. Uh, you have to be careful not to like make these mission decisions on the weekend and show up and I was like, Hey, decision done. Uh, have to be careful not to bring, you know, the tone you bring at home to, to, to the office. Don't make it awkward around other people. It's very easy to make it awkward around other people. You have to work harder to ensure that this is meritocracy because, you know, I come, uh,

50:48from a world that is less meritocratic, that is more based on who you know, what you know. And family business are very common in that world. The problem with them is that people join the business and they expect if they're not part of the family, they're not really gonna, their work is not going to matter as much. Right. And so you have to, uh, be very clear about performance and set high expectations for yourselves and be communicative about, uh, and, and, and also always open to the potential

51:19that, you know, there are other people that are better at, at, at running the company than you are. You said you read a ton of biographies and, uh, especially with this kind of shift into sales mode and being like, Oh, I get to play full contact startup. This is amazing. Who are the founders that either most resonate with you in their style or you, you, you respect something about them or a story that you find yourself retelling a bunch or telling yourself, telling your team that's been kind of inspirational for you. I think Ben Horowitz and like the hard things about hard things is a very good book and inspiration

51:55for, especially like a more sales driven, uh, business. That's a good book. I read it a while back and it has a lot of really interesting stories about doing deals and losing deals and hiring salespeople. And then, you know, after I watched Pirates of Silicon Valley, started learning about Bill Gates. This is another really good old school, very unknown, uh, biography, hard drive. It's like a nineties about Bill Gates. After reading about Bill Gates and Steve Jobs and these guys, I just knew that I wanted to

52:28be part of that part of Silicon Valley. It just seems the most exciting thing possible. You can have the most, uh, impact. And that is a blessing because I look at a lot of my friends and they're now almost 40 and they really haven't found the thing that they want to get after. And I think that it creates this crisis of meaning and, and a lot of people. I'm also a big fan of, um, visualization. There was a period of time where there was a lot of like pseudoscientific stuff, documentaries

53:01coming out. There was one called, What the Bleep Do We Know? It's like about quantum physics and visualizations. Like if you put the vibration out, the universe will reward you. I kind of believe that, uh, in a weird way. And I, I can't really disprove it, but tell you a few stories. Um, you know, I wanted to be on Rogan's show. I was like, you know, I've, I've done, I've done all of these shows, uh, I've done Tucker's show, my first million, all these shows.

53:32I was like, I want to be a Rogan. And I was like, how do you, how do you, how do you, how do you even get on Rogan? And I started like sort of visualizing it. I was like, what would I talk about? What would I tell him? How would the interaction be? And things like that. And a few weeks later, uh, I get a message from two people, Mark Andreessen and, and Lex Friedman. And they both asked me the same question.

54:02Hey, I have a friend whose daughter is entering a entrepreneurship competition and wants her app, wants to make an app. And do you know anyone who can help her? Like, can you help her? It's like, that's odd. And, and I remember replying to Lex Friedman and then he, he goes to me and then I replied to Mark and it's really odd. I got the same message from Lex, who's this person? It's like, yeah, I, you know, it's, it's Joe Rogan. It's his daughter. And I said, you know, uh, I'd like to help her.

54:34Like I'll freaking build the app for her. Like he introduced me. So he introduced me to Rogan. Rogan introduced me to his daughter. And I, I said, let's, let's get on a Zoom. I get on a Zoom call and it's like four high school girls. And they're like, they're very bright. They have a business idea to connect Gen Z local, uh, Gen Z to local businesses, uh, for jobs. And they're like, you know, I'm going to teach you how to make applications and you're going to make it. And so I opened a replet and like, here's replet. Here's what you do. You just, you know, type in your prompt and let's check in next week.

55:08Next week we, we check in and they already made like half the app. And by the way, replet Asian was early on. It was still running into some problems. So every now and then I'll jump in and like help them with one thing, but for the like 95% of it, they built it themselves. And I'm always off the belief of like, just prove, you provide value and like, just don't ask for anything in return. It wasn't like, okay, I'm doing this to get on the show. I think that would be the bad mindset to, to, to have. I kept mentoring her and I, I gave her advice on how to win the competition.

55:39It's like, look, no one, none of your peers will have an app. You're the only one that's going to have an app. Everyone will have slideshows before you do the pitch, go send the app to all the judges. And that way they'll know you're the only one that, that, that actually went above and beyond. And they actually, they presented and they win the competition. And by the way, Joe, I think might've thought I am some kind of contractor. Like he didn't know I didn't introduce myself. And so I sent Joe a nice letter and I told him a nice message. I told him, look, I'm, you know, very, very bright daughter.

56:10I'm so glad I could be part of this. I would love just five minutes every time to kind of introduce myself and my story. And so, uh, he's like, okay, um, I'll, uh, uh, you know, I'll call you tomorrow or whatever tomorrow comes. He didn't call me and then, uh, text him. I didn't hear back. So I, I gently told his daughter, I was like, I would just like a phone call with your dad. And so he's just like, okay. And then phone rings and it's zero again. And I was like, about 90 seconds in, we're talking about MMA.

56:44I'm like, you're kind of a, you're, you're, you're, you're not, it's like the same guy. I'm not a big MMA guy, but, uh, on the, on the call, I, I just, it was like, um, I just told him about myself. It's a lot of pressure to do that quick, right? Yes. Yes. You have to be calm. I, I'm actually the calmest moments. And I think I could learn this from gaming. Like I slow, I slow down a lot under pressure.

57:16Like when pressure comes, you have to, uh, gaming, uh, racing, uh, anytime there's like incredible pressure and any mistake might kill you in this case, not literally kill you, but like kill your chances. Actually, I experienced time slow down and I think you can train this in yourself. And I think a lot of race drivers talk about this as well. Weightlifting is a great place to practice this because it's low stakes, but like at the end of the set is when you're shaking, it's you're, you're at the most fatigue, maybe

57:47you're shaking, maybe you don't know if you could do it. What most people do is they rush to finish and they've sacrificed form. And basically if you can practice poise in the last few reps, you're doing that now every day in the gym. It's like you can get a lot of reps and practice in the gym as a metaphor for life that you can't