# Infrastructure products can take years to find their killer use

Markdown copy of https://realalpha.app/s/infrastructure-products-can-take-years-to-find-their-killer/ on Real Alpha, the best minutes from long interviews with the people building AI. Cite and link the page, not this copy.

- Speaker: [Erik Bernhardsson](https://realalpha.app/builders/erik-bernhardsson/) · Erik Bernhardsson is co-founder and CEO of Modal. · Co-founded Modal, the high-performance cloud for AI teams; previously led Spotify's music recommendation and data infrastructure teams.
- Host: [Harry Stebbings](https://realalpha.app/people/harry-stebbings/) · Founder, 20VC · Built a venture firm on his podcast; its third fund closed at $400M.
- Show: 20VC
- Episode: [Modal CEO: Has Open-Source LLM Inference Peaked? | What Happens to the Cost of Compute](https://realalpha.app/v/1dwyL6Iz_PU/), Nov 2, 2026
- Moment: 33:39 to 37:33 of the episode (4 min), playing on https://realalpha.app/s/infrastructure-products-can-take-years-to-find-their-killer/; the episode from there: https://realalpha.app/v/1dwyL6Iz_PU/?t=2019

## Takeaways

1. Sandboxes launched in 2023 and later reached a $300M run rate.
2. The product took off when models became much better at generating code.
3. Infrastructure teams may not predict the eventual killer use case.

## About this segment

Erik Bernhardsson explains how Modal's sandbox product took years to become a major business after its launch. The lesson: build useful infrastructure primitives and be ready when an unexpected use case arrives.

From “Modal CEO: Has Open-Source LLM Inference Peaked? | What Happens to the Cost of Compute”, Nov 2, 2026. [Watch the full episode](https://realalpha.app/v/1dwyL6Iz_PU/)

## Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

[33:52](https://realalpha.app/v/1dwyL6Iz_PU/?t=2032) To your point on like, you know, why can't nebius do what you do so efficiently because you're so good and you spent so much time as you expand into all the specialities there are players in each of them who've been doing that for years where i'm like i think that's true i don't think they're very good a lot of them but i mean i sort of agree with your higher level premise like if there's anything that's like super critical and never goes away it's prioritization or resource allocation right like you can't boil the water and try to do everything at the same time you need to be extremely ruthless and having a multi-product strategy, I think it's a very hard balance. Like when do you branch out into second product or third product, right? Like it took us four years to see success with a second

[34:27](https://realalpha.app/v/1dwyL6Iz_PU/?t=2067) product, which was sandboxes. Four years to see success with your second product, but you're five years to a billion in revenue. Yeah. So we launched sandboxes in 2023. Didn't see a lot of success in the early days. I mean, there was like some success, you know, it wasn't horrible, but you know, it was a relatively insignificant part of our revenue up until summer of 2025 when models, I think like Sonic 4.5, one of those, they just got really good at generating code and building whole apps. And then it just exploded. I mean, Sandbox today is a 300 million run rate business, about a third of our revenue. And so that's been a kind of a crazy journey. And now we're thinking about, what's the third and the fourth? We just launched a training product. I'm super excited about that. Working on batch products, working on reinforcement

[35:20](https://realalpha.app/v/1dwyL6Iz_PU/?t=2120) learning. We're working on all kinds of other stuff. And so that evolution into becoming a platform it's actually there like if you go back to the very early decks of modal you know i put together some just for my own thinking it was all there it's like we had this like market map and all these you know it ended up being very different products than we thought but it's so important for me to create like you know to focus on a category and focus on a set of solutions not just like be a single single widget vendor what do you know about the sandboxes market today that you wish you'd known when you started and released the first product it actually is like one of those products. I think one of the benefits of being in infrastructure, but also one of the drawbacks in a weird way is you kind of just have to trust your gut on what are important primitives and

[36:04](https://realalpha.app/v/1dwyL6Iz_PU/?t=2164) just build amazing building blocks. I think we're in the space of providing building blocks. We try to look at what do engineers need and not listen too carefully because they'll ask for all kinds of random stuff, but kind of distill it down into what are some of the... the building blocks. And we put out a serverless function product in 2021. It saw success in 2023 with Gen AI inference. We put out a sandbox product in 2023 because we saw a lot of people using LLAMs to generate code. And then it saw success in 2025, like I said. So a lot of how we think about building products has always been kind of like, let's just put out good building blocks. And then it exploded. But to answer your question, it was reinforcement learning, it was Vibe coding, background agents, and maybe some other stuff too in the future.

[36:45](https://realalpha.app/v/1dwyL6Iz_PU/?t=2205) those were things we actually didn't anticipate. So I think infrastructure is often like that. Like, we didn't anticipate Stable Diffusion when we started building our serverless function product. It just happened to be the killer app. What's your takeaway from that? The only thing that matters is you've got to stay in the game long enough for your timing to be right. Sometimes I think that's right.

[37:05](https://realalpha.app/v/1dwyL6Iz_PU/?t=2225) I mean, we've definitely been extremely lucky in certain ways with timing. We put out products right before we started the company in 2021, and then Stable Diffusion and ChatGPT came out in 2022. We had really good timing with that. It just created so much demand and we're very well positioned. But some of it is also like with infrastructure, like again, I think it's about building products that you anticipate will be useful in the future.

[37:25](https://realalpha.app/v/1dwyL6Iz_PU/?t=2245) And from your own experience are things that you always wanted to see. I think you have to kind of trust your gut in that. You said there about resource allocation and that being very, very important as you think about this breadth of products. Where did you allocate resources where with the benefit of hindsight you wish you hadn't