Model progress does not automatically create a good product

Transcript

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

1. 14:11

   Not any degree that was significant. Because I read your quarterly report after that announcement. You guys grew 48% year over year. And the business basically accelerated its growth. So I'm looking at that. And this was when everyone had the SaaSpocalypse thesis in general. And I was a big subscriber to SaaSpocalypse. But I do think that there's a bunch of ways to distinguish SaaS companies, one of which I think is founder led. And I think that there's user experience that matters a lot, embedded user experience, and the ability to kind of build from there, especially if you know how to use AI to accelerate and reinvent your business as a founder, particularly, but your business accelerated.

2. 14:54

   Yep. No, it's been continuing to do well. And I think that, look, the hard part about model companies and product is like, what is the product? Is it the model? Is it the UI on top? Is it some hybrid of both? If it's a hybrid, how is it weighted? And in any case, You're talking about like an Anthropic, an OpenAI, a Gemini. Yeah, I mean, like whether it's a harness for coding or it's a product like Cloud Design, which you just mentioned, I think it's easy to mistake model progress for product progress.

3. 15:32

   Right. The reality is a tool like Figma, you know, has taken a very long time to build and a very long time to make sure that we get the workflows right for our users. And we still have work to do. Our users will tell you that. And we're always trying to make it better. So I think that it's sort of not surprising that it wasn't an instant hit or something when there's actually quite a lot of work on the...

4. 15:59

   Just a core user journey workflow side that you have to do to meet the needs of professionals. Now, they've made a cloud design into a product that is broad. So, it's trying to do a lot of things. You'll see posters and stuff as well, like graphic design scenarios, I believe, when you go to their homepage. And maybe they'll do well in some areas and on others. I'm not bullish or bearish on the product. I think it's just hard to make good design tools professionals.

5. 16:25

   yeah there's a lot of things to design and yeah and also categories of design the feel of it is like an instrument you have to get the feel right you have to get mechanics right yeah and we've stressed every detail of that and have had a lot of feedback over the years about what people like and don't like it depends on where they're coming from it depends on uh their task and sort of like what they're trying to overall do and there's so many scenarios but overall uh you know i think that there are more modes for software than are implied by the SaaSpocalypse. And it's not like software as a category is binary, good or bad. There are plenty of other ways that you can make sure that you're able to sustain yourself long term and you have a growing business long term as a software company or app layer company. And part of it is, yes, if you're as

6. 17:22

   specialized as possible on a target audience and you know your audience and you're building for them, that is something that matters. And I think a great example of this is Cursor. Cursor, by all means, should not have grown the way they did. You've got all these frontier labs that are chasing them with their own models before Cursor had a model of any kind. But yet, But Cursor, really obsessed over the user.

7. 17:50

   They saw our own corners. They strategized. They made sure they were doing the right thing for the customer. And they've had an incredible success. Yeah. And I think it's amazing. And I think it's an example that will be repeated across many different types of companies. SaaS is not dead. Well, I think that it's not true that all SaaS companies are fine. Yeah. And it's also not true that all SaaS companies are dead.

8. 18:13

   Fair enough. I'm going all in.