# Agent startups can win through better problem understanding

Markdown copy of https://realalpha.app/s/agent-startups-can-win-through-better-problem-understanding/ on Real Alpha, the best minutes from long interviews with the people building AI. Cite and link the page, not this copy.

- Speaker: [Kevin Scott](https://realalpha.app/builders/kevin-scott/) · Kevin Scott is CTO of Microsoft. · Chief technology officer at Microsoft, previously SVP of engineering and operations at LinkedIn and VP at AdMob.
- Host: [Dan Shipper](https://realalpha.app/people/dan-shipper/) · Co-founder & CEO, Every · Sold his first startup, Firefly, to Pegasystems; writes Every's Chain of Thought.
- Show: AI & I
- Episode: [Microsoft’s Vision for an Internet Made for Agents With CTO Kevin Scott (Best of the Pod)](https://realalpha.app/v/jBGo33Jkids/), Aug 12, 2026
- Moment: 20:57 to 23:51 of the episode (3 min), playing on https://realalpha.app/s/agent-startups-can-win-through-better-problem-understanding/; the episode from there: https://realalpha.app/v/jBGo33Jkids/?t=1257

## Quote

> “They're innovating because they think they have an **understanding of a problem** that someone has that is better than anyone else.”
> — [Kevin Scott](https://realalpha.app/builders/kevin-scott/) at [22:24](https://realalpha.app/v/jBGo33Jkids/?t=1344) · AI & I

## Takeaways

1. Developers will keep choosing among different tools.
2. Product insight matters more than bespoke infrastructure.
3. A nuanced view of user needs can support specialized agents.

## About this segment

Kevin Scott expects many agents rather than one universal tool. He says startups can stand out by understanding a user's problem better, then applying existing infrastructure to solve it.

From “Microsoft’s Vision for an Internet Made for Agents With CTO Kevin Scott (Best of the Pod)”, Aug 12, 2026. [Watch the full episode](https://realalpha.app/v/jBGo33Jkids/)

## Transcript

From the transcript AI & I publishes with the episode.

[21:01](https://realalpha.app/v/jBGo33Jkids/?t=1261) Yeah, I look, I think it's going to be a lot of different agents. I mean, like, and it's good to have a lot of agents. And like we certainly would get up Copilot and, you know, GitHub agent stuff that we're working on. Like, I think we will compete very hard to like be a tool that lots of people will choose because it's very useful to them. But I think it's unrealistic in the universe of developers to, like, think that, like, every developer on the planet is going to snap to using, like, one tool for, like, an important part of their job.

[21:32](https://realalpha.app/v/jBGo33Jkids/?t=1292) Like, part of the joy of being a developer is you actually have that choice and you can sort of choose and play around with a bunch of different things and, like, do irrational things and, like, do rational things. And, like, it's just... You know, it is one of the very consistent things that I've seen over the past four decades of my programming life is like people choose to change their tools all the time.

[21:56](https://realalpha.app/v/jBGo33Jkids/?t=1316) What are the dimensions? Do you have an opinion on the dimensions along which the different agents might differ? Well, I think the most important thing about... Agents is like probably the product making part of them. And so the most interesting startups that I'm seeing right now are not trying to. innovate by building some kind of differentiated infrastructure. They're innovating because they think they have an understanding of a problem that someone has that is better than anyone else.

[22:37](https://realalpha.app/v/jBGo33Jkids/?t=1357) And they think that they can pick up infrastructure or modify infrastructure or tune infrastructure to go solve their understanding of that problem in a world-class way. So I think that's what we need a lot of right now. And like, that's what's gonna dictate the diversity of agents and like how, like which things get used for what. And I think honestly, because it's so much easier now to like have that nuanced understanding of what someone's problem is and to pick up these tools to go take a swing at solving it, that you're just going to have a lot of companies like building a lot of things, trying to, you can even see it with the software development tools.

[23:21](https://realalpha.app/v/jBGo33Jkids/?t=1401) It's like crazy how many things have come out over the past year. And like they're interesting, like all of them. Yeah, it's a lot to respond to when you're a company building software development tools yourself. But like, it's super, super interesting. And it's like what we've seen is if you've got some kind of nuanced understanding of what someone needs, like people have like high tolerance and like high interest in like giving things a try.