让 AI 编程成为必然的公司

We don't need to compete with Anthropic and OpenAI on models right now. The interface between the human and the model is the key thing.

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

I asked Michael, “What do you think about Claude Code?” And he said something to the effect of, “Look, we are going after the biggest market in the world. You're always going to have formidable competitors. That does not scare us.”

As founders, we all want to be ambitious, and we want to push to the maximum point on the Pareto frontier, but you have to kind of know what the curve is.

For us, the decision to invest in Cursor was actually pretty obvious. You remember, Andrej Karpathy was using it. It was clearly a phenomenon and clearly a known brand.

They went and got all the users in record time. Now they have the asset, the data, and the know-how to build their own models. You really couldn't do the flip of that unless you started as a frontier lab. There were definitely a couple of “oh” moments.

1. Back to Early 2024: How a16z First Met Cursor

To kick off, I actually wanted to take us back to early 2024. Obviously, you guys led the deal in May 2024. Can you walk us through what was going on in Q1 and Q2 of that year, and maybe how you guys started working with Cursor well before we ever partnered officially with them?

You have to sort of transport yourself back to late 2023 and early 2024. I went back and looked it up. The leading models at the time were GPT-4o, Claude 3, and Llama 3.

Feels like forever ago.

Llama 3.

That was actually pretty good.

That was great. Yeah, it was a great model. The leading coding harness was Copilot by, like, a mile, right? This was the consensus thing. Microsoft was doing their Microsoft thing: they had Copilot, Office, and VS Code. All of these things combined, they were going to somehow win AI.

It was clear that AI coding was sort of working, but it was a different universe compared to today. You had the early signs that you could do meaningful work with AI, but agents didn't really exist. Loops didn't really exist. Reasoning didn't really exist at the time. So it was a crazy time.

There was a continuum of companies going after coding, right? On one hand, you had those that thought the only way to win coding was to build a base model, and it had to be a coding-specific one. On the other hand, you had, very presciently, companies just focusing on agents.

Right?

Cursor was somewhere in between. And it wasn't only models; there were a million companies doing plugins, too. Both of these were very reasonable things to do, done by very smart people. That's what's so interesting about these new spaces: smart entrepreneurs show up and do really interesting things.

In this case, model training was a very reasonable thing to do because the models weren't that good at coding yet. There was a theory that if we focused on this and did a coding-specific model, that would be the breakthrough. People doing plugins on the other side were saying, “Hey, let's not toss out the whole IDE. That would be a crazy thing to do. The interface between the human and the model is really important, so a plugin is a great place to go.”

It just turned out that what Cursor was doing was the right thing to do. Like us, they were very Bitter Lesson-pilled. At the time, they would have said, “There's no need for us to train our own model. Of course, that changed later for different reasons, which we're going to get into later in this podcast.”

They were saying, “We don't need to compete with Anthropic and OpenAI on models right now. The interface between the human and the model is the key thing.” I remember Michael and Aman saying that a lot and saying it very clearly from the earliest days of Cursor: code in the future will look like pseudocode.

I remember Michael making this point a lot. When you look at old computer science papers, there's a section that says, “Here's the algorithm,” not in code but in pseudocode, which I'm sure many people are used to. We don't exactly write in pseudocode now, but you could probably just take the pseudocode block from an old paper, and the models now would implement that. This is really what the Cursor guys thought from the very beginning, and they've proven to be exactly right about this.

Pairing the programmer's intent down to the minimum possible spec—that's what really matters now. Anyway, we were in this world. As Martin said, we were talking to a ton of very smart, very interesting people working on coding in various ways.

The Cursor team kind of stood out because not only did they align with the things that we thought about the world, but more importantly, smarter people than us—engineers working at the time's leading AI companies, like OpenAI, Midjourney, Replicate, and a bunch of others—all kind of used and subscribed to this model.

2. The VS Code Fork vs Plug-In Decision & the Enterprise Bet

The team frankly just seemed special. They had an unusual degree of focus. I remember we got Michael to come pitch our GP group, and 90% of the meeting was him saying no to things. For founders out there working on products that you love, VCs will always ask you kind of dumb questions about other things you might do, or things you're related to, or whatever. Michael literally just sat there, very politely listened to all the questions, and said, “Hmm, interesting. No, we're not going to do that.”

Wait, actually, on that point, can I ask you guys a question? I remember that meeting so vividly, when you brought Michael in for the A. One of the things that he said no to was—you know, to your point, there were a lot of plugins. There was this perhaps more consensus thought that a VS Code fork versus a plugin into VS Code—one would be better for enterprise, and it wasn't the former; it would be the latter.

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?” He looked all of us in the eye with high conviction. I'll turn it back to you: what did you think of his answer, and what gave you the conviction to take a pretty contrarian bet at the time?

They actually had a very reasoned articulation for why where they were in the design space made the most sense. For example, why wouldn't you build a coding-specific foundation model? What they said at the time was: it turns out that you don't speak to these models in code; you speak to them as humans, in natural language. Therefore, the model has to understand the breadth of human experience and language.

In order to build a coding model, you're actually building a frontier language model, and that's just a very hard thing to do. And then, of course, there are other companies doing it, and there are much more focused problems, like autocomplete, to solve.

I think every one of their decisions was very reasoned, in our opinion. They were also very product-focused, which you actually don't see a lot in AI. They really believed that you can build a product—the product, if it's really good, will be adopted—which, by the way, is very similar to how Elon thinks.

That dictated a lot of their decisions. If you really believe in the product, you would never do a plugin because then you're part of somebody else's product. If you really believed in the product, you wouldn't do enterprise early; you'd do it later, because the product itself is the go-to-market motion.

There was tremendous clarity on exactly what type of company they were, and the decisions that they made all fell from that consistently. Many of the companies we saw were these pastiches of, “We'll try all of these different things. We're not quite sure what's going to work.” They had 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.

Yeah, no, I think that's exactly right. I think they had the ambition and the courage to do the maximal form of what the product would look like. As founders, we all want to be ambitious, and we want to push to the maximum point on the Pareto frontier, but you have to kind of know what the curve is.

They just knew what the curve was and didn't get distracted by the non-product things. I remember, when we were trying to convince the Cursor team to let us invest in their company, I asked Michael once what he did for fun outside of work. He didn't understand the question. He said, “What do you mean?”

I said, “When you're not in the office.” He said, “What do you mean?” I also remember, by the way, when we had the lunch after we did the investment, I was talking about something from the internet days that was similar.

He was like, “I was 5.” And we’re like, “But—” What’s amazing about not just Michael, but all the founders, is that even though they were pretty young when a lot of these things happened, they were actually students of all this history. That’s a trait we see across all of our top founders. Alex Rampell talks about this a lot: They’re able to study and really learn from what’s happened before.

I’m going to turn the question back to you. I think Matt would agree that, for us, the decision to invest in Cursor at the time was pretty obvious. The team was phenomenal and incredibly focused. All of us were users; half the team actually used Cursor. You remember Andrej Karpathy was using it. It was clearly a phenomenon and a known brand, and the growth was asymptotic. So, from an early-stage investor’s perspective, it was a pretty straightforward decision. It was a much less obvious decision for a growth investor, and I think what you heard in that first meeting was probably a little bit dissonant with how you’d growth invest. But you very quickly led the next round. Maybe talk through how you got past the typical growth evaluation and got conviction.

3. Vertical Liftoff: Why the B Round Was a No-Brainer

Yeah, I mean, the timelines are so compressed here. It’s crazy to think back on because I remember you guys led the Series A in May or June, right? Early summer. By October, we had done the Series B, so it was clearly just vertical liftoff.

There were a couple of things that summer. You guys talked about Andrej Karpathy tweeting about them, but they went on Lex for an incredibly thoughtful discussion of how they thought about their vision for coding going forward. I think it comes back to something you said, Martin: They were just reimagining everything, right? And you just talked about this as well, Matt.

But you can’t write growth memos that way.

Never mind that. You got the bug because you were calling us. So how did you convince David George? Don’t you have to show—

Yeah. You know, it’s so funny because I think you had to think out of the box for this one. Of course, the momentum was vertical, but there were so many things where they defied conventional thinking.

I remember the first time, Martin, you introduced me to Michael. We got coffee that day, and Michael—they move quickly—so I pulled some stuff together for them. We were trying to show them, “Hey, this is the next stage of what growth looks like.” There were so many pieces of conventional wisdom that they just completely broke.

We would say, “Hey, we’ll help you find a sales leader,” because previously it made sense to start layering a sales leader at 25 million to 50 million of ARR, when self-serve starts to peter out. Michael looks me dead in the eye and is like, “Self-serve is not petering out.” Then you start to pull these drivers and think, “These are the assumptions that would go into any growth model historically. You can’t have that asymptoting at 25% growth in 5 years.”

A lot of the growth investment decision at the time was throwing out some of the assumptions we would typically make about how a company would eventually start to slow growth. I’m very glad that we did that.

The second piece is that we should talk about the competitive landscape, because you mentioned Copilot. I was actually going to say that I think Matt deserves a ton of credit here. We talk about how, in retrospect, it was a pretty easy decision on the Series A, but Matt led the early deal and saw something a lot of people didn’t.

If you looked at the competitive landscape, it was almost silly. You had a large incumbent, Microsoft, that had a company at scale with the OpenAI weights, and they owned VS Code. Everything would say that there was just no way you could survive relative to this single competitor. We’ll talk about the other ones later.

One thing you said about Michael was exactly what I witnessed. It would be great to hear Matt’s perspective, but I remember when Matt said this early on: They have a good answer for everything. When you have founders who are students of what they do, they’re very consistent in their answers.

When we did the deal, it was pretty obvious, but it wasn’t so obvious 6 months before. Matt and the team had that deep conviction way back then. I think for every one of these races, there are mirrors of that. Anyway, is this—

Yeah, totally. People think venture capital is like an individual sport. It’s not at all. Our whole team was working on this at the time. I think it was over a year. We literally had a Cursor team within our team.

It was great. Ro was great. You led the team. I mean, it was—

So, but yeah, no, you’re exactly right. These guys are crazy smart. They’re off the charts in terms of raw intelligence. They’re able to do this thing we talk about a lot—context-switching between technology and markets really seamlessly—and they ingest data, whether it’s historical data or things happening in the market, and act very quickly, which you said before, Sarah.

But specifically, I agree with that. It was just kind of crazy to think you were going to fork something from Microsoft, which owns the thing, and then compete with them with smaller models. They even own the OpenAI weights, and they have the greatest enterprise distribution ever. They have 100 million developers. They own everything. They literally own every piece of that.

You know, it’s so interesting, right? That’s definitely the conventional wisdom, and it’s usually correct—the conventional wisdom in many of these cases. One data point at the time was that Marco on our team set up a dinner where Aman Sanger sat right next to John Schulman, and they talked a lot about Cursor.

I think John’s thing was, “Oh, yeah, I tried Cursor, but our codebase”—I think he was at Anthropic at the time—“our monorepo just immediately killed it. I couldn’t even load the codebase.” The next day, Aman came back and said, “We made some changes. Here, you can...” Not only was it the speed of iteration, but we just looked for these little data points where it was like, actually, doing a plugin or just writing on top of VS Code clearly wasn’t going to work, because the smartest people in the world had tried it and it didn’t work.

Historically, as a team, we’ve always bet on the independent in a large market. 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 experience—with all of our experience with Cursor—was that there was always a looming existential threat, and we almost forget about it.

Of course, Copilot was the big one. Then remember the whole Windsurf thing. Windsurf did this very smart thing where they went to YC, and there were a lot of YC users using it, so you had this whole movement on Windsurf. Cognition was a phenomenal company, actually making real waves with agents, and they’ve done a great job with that. Then you had the first version of Claude Code that came out, and that was kind of a competitive thing.

There was always some competition. One thing I would say—and I’d love again to hear your perspective on this—is that it is such a pleasure to work with founders who are entirely unfazed.

Yeah. Paranoid but unfazed. I’ll never forget that. We’ve been lucky to do, I think, all of their rounds starting from the Series A. But the one—

We invest in every Cursor round.

We did. Yeah, with increasing amounts of dollars. But—

Sarah co-led the Series B and the Series C. That’s real conviction. That was a harder conversation to convince the team for the C.

4. The Hardest Round: Claude Code, Competition & the D

I was going to say the C. At the B, you could argue, “God, just bet on vertical momentum.” That was actually obvious—the company that grows from 4 to 50 in 4 months or whatever. But this—actually, no, it was the D.

Claude Code came out in May 2025 with a splash. The pickup wasn’t right away, but it was obviously formidable. I remember there was a round a few months after that—3 months after that—and I asked Michael, “What do you think about Claude Code?” He said something to the extent of exactly what you’re saying here: “Look, we are going after the biggest market in the world. There are going to be competitors. In fact, there’s been a rotating cast of characters from the very beginning. Copilot—Microsoft Copilot—was the first one, and Claude Code is one of a rotating set of characters. In big markets, you’re always going to have formidable competitors. That does not scare us.”

I just remember being—

Yeah, somewhat blown away by the clarity of that comment and the lack of fear. There’s humility as well. It’s humility mixed with bravado, and I just think that’s the winning combination when you’re going after juggernauts like that.

I know it sounds vague, but things like this are almost a Bezos-ish thing. If you’re smart and right, it actually gives you the confidence and the focus to have that kind of attitude when you have a megacompetitor coming after you.

Yeah.

Then I’ll say there were definitely a couple of “oh shit” moments, but they were always around models. Remember when Opus 4.5 came out? We were all on vacation, and I think everybody in the world was like, “Oh shit.”

That’s true. These things are moving much, much faster than any of us thought. And then I think the same thing happened when the pre-release of Mythos [?] came out and people had access to it. These models were getting so good so fast. Another thing that the Cursor team probably doesn’t get enough credit for is the extent to which they cannibalized themselves so dramatically, in a Reed Hastings-type way, in a matter of 2 years, right? They were first an IDE, then they moved to an agent platform, and then they moved to a model platform. It’s very, very tough for founding teams to actually have that discipline.

Yeah. Tab was the big thing. Karpathy had that famous post—I guess he has a lot of famous posts—where he’s like, “Tab, tab, tab.” Yeah, exactly. That kind of doesn’t matter that much anymore.

Yeah. I actually think that’s a good segue to some of the other strategic decisions they made along the way around business model. To your point on “oh shit” moments, I don’t know if they would consider this that, because I don’t think the vagaries of Twitter impact them as much—

As their investor—

Yeah, as the rest of us, just scrolling all day. But it was probably summer of 2025 where there was a lot of shit written about their gross margins, et cetera. And then, of course, post-Opus 4.5, maybe the January period—I mean, we should all talk about that, because those were both different but interesting times.

Yeah. I mean, one other thing is, I just feel like X is driven by tail-chasing, adrenaline-seeking, and schadenfreude, and there tends to be a massive disconnect between what people say on X and how the business is actually doing. So even though there was a lot of this—

The business tended to do very well.

And it’s so interesting: so much of this often comes from investors, especially people talking about business quality. But tech transformations always precede figuring out the business. If you guys remember the internet, we didn’t even figure out how to monetize it for a long time—forget margins, we weren’t making any money at all, right? And here you’ve got unlimited demand, unlimited growth, and margins. So I think this tends to be, A, its own kind of echo chamber, as people say, but also, B, every single wave has investors trying to say something that sounds smart, which is picking apart the business model of a nascent tech transformation. I just think historically they’ve always been proven wrong.

Yeah. For sure. I think I’m going to borrow this quote from something you said, Martin: first comes the technical transformation, then comes the business model. In this case, I think the strategy where they went and got all the users in record time means now they have the assets, the data, the know-how, et cetera, to build their own models. You really couldn’t do the flip of that unless you started as a frontier lab, and it’s clearly paying off in this combo that we’ll talk about later. But I think seeing that kind of backdoor strategy was really inspiring, and they took a lot of heat for it.

So, Martin, how do you think Cursor really became a sales-driven company, or a company that’s good at sales? Early on, I think I told Michael a few times too, “Oh, you better invest in sales.” He’s like, “Nope, not going to do that.” They literally set up enterprise@cursor.com. It’s like, if you’re an enterprise, send your inquiries to this. But obviously now they’re very good at sales, right? And go-to-market in general—how do you think they made that jump?

Yeah, it’s a great question. So here’s my best guess. They are very much students of whatever they do. They’re very thoughtful about every raise and every product decision. I think as they learned more about the market, they realized that the margins were in the enterprise.

Very classically, if you view your competitive set—say, the large labs—the large labs will basically subsidize or give away the self-serve tier. But then they actually command great margins in third-party, and they command greater margins in the enterprise. That’s really at scale. And as the company has grown, they decided, “Okay, 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.

They’d created a great top-of-funnel engine, and so this was existential and important. When they decided to do it, they really went in, and that may be the fastest growth of a sales team in the history of the planet. I mean, Sarah, you were very involved in recruiting, so maybe talk about that actual expansion, because it was—

5. How You Do Anything Is How You Do Everything: The Hiring Engine

Yeah, I mean, it’s so neat to see that expression, “How you do anything is how you do everything.” You really see it. So much of what you’re talking about—how they thought about product, et cetera—was reflected in how they did hiring and go-to-market hiring in particular. We have to shout out Jordan and Roman and their team there, who in the early days built that engine from scratch. They’re some of the most incredible people we’ve ever worked with.

Well, they also spend 40% of the time recruiting.

Yeah, exactly, which is amazing for technical product founders to spend 40% of their time recruiting. I’ve never actually seen it before. It is so effective, and a company really is the team that you build, and they took this to heart. Everybody talks about it. Everybody talks about doing it the classic route. It’s entirely different, where it’s like, how often was Oscar, you know, “Hey, I’m on a red-eye to Europe to close something”? Literally, it was constant.

Totally. And there was that great piece Bri wrote about their hiring practices that everyone should read. A lot of that focuses on their engineering hiring, like the work trial, all this stuff, right? But even on the go-to-market hiring, when you think about the thought that they would put into hiring a single AE, right? Of course, this is nothing new, but just the back-channel, back-channel, back-channel ethos—they had that to a tee. They knew exactly what they were looking for in founding AEs. I remember we would go there and sit in their office for 8 hours helping them source. They weren’t like, “Oh, we want to do it the old way.” They were like, “That’s not going to work. We’re building a company in a new way, right?” So we want very specific AEs that fit this profile, and 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 engineering 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.

Can you talk specifically about how they applied the lessons in hiring to AE hiring? This is something I think our founders deal with a lot. I dealt with this a lot personally. How do you actually make that jump, and what lessons really do carry over? Yeah, or that you observe in person.

No, yeah. And hopefully this has been written about, so hopefully it’s not sharing alpha. The way that they think about epochs of a person’s career or of a company, and who was the key driver in making that happen—I love this intense research period that goes on, where it’s like, “Hey, these are the top 10 companies who have seen great success in this type of selling. Now let’s go a level deeper. Here are the top 10 teams within those companies, and then here are the number 1 and number 2 individual AEs who drove that change and accounted for it.” Again, back-channel, back-channel, back-channel: who their boss, their boss’s boss, and their boss’s boss’s boss would say is a superstar AE.

Of course, in the early days it was like, can they deal with some uncertainty? 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 the founding AE set was super strong. I think figuring out what does the best look like at what period of time, and then which individuals drove that, is so applicable for engineering, obviously, and product building, but on the go-to-market side as well.

Nailing the right star who did it at the right time is really hard. It narrows the base that you can hire from completely, but because Jordan, Roman, and the early team got that right, they were able to scale it quickly without losing the Cursor culture.

6. Cursor Culture: Craftsmanship, Taste & Twinkle Lights

Yeah, which, you know, a lot has been written about the Cursor culture. I’m curious if you guys can share your own impression of it. You know, I mentioned earlier that coding was all that they did. My impression at the time—and the founders could correct us on this—is that they weren’t doing that because they were obsessed with work, and I think they’re still not doing it because they’re obsessed with work.

They literally just love writing code and love systems, and I think the three of us can feel that way at times too, right? That’s a very, very understandable thing, and that seemed to be the driving cultural impetus at the time. It was a very small team; everybody had that attitude, and we were orienting toward the future of what this was actually going to be. From an engineering standpoint and a product standpoint, they were very narrowly focused on what they were trying to accomplish and how to run the team.

But there’s this huge paradox, because I totally agree. I 100% agree. However, if you actually detailed their actions later on, that’s not the conclusion you’d get to. What did they spend their time on? It was recruiting, go-to-market, understanding business models, and biz dev. And so, in a way—

Again, I totally agree. And again, on one hand, you have—

A very product-focused team that comes from tech, that literally wanted to build products that they wanted to use. Listen, 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. I think it allowed them to navigate the most competitive market we probably ever see. Has there been a more competitive market than coding? I mean, it’s hard to imagine. There are so many companies—

Database wars.

Yeah. I mean, you have very intense competition in relatively narrow markets. I mean, databases are huge, but compared to coding, I actually think it’s much smaller, right? Coding is kind of the meta-category, right? It’s all expression of human thought in economic form. It’s kind of like coding.

I mean, imagine starting by competing with Microsoft and ending up competing with, say, Anthropic—both of these megacompanies with tremendous amounts of capital, power, and distribution. In the meantime, you fundamentally evolve your product approach, change your go-to-market, and then engage in the most complicated M&A of all time, all in a matter of 2 years. I think this is so crazy, right? It’s the magnum opus of a startup.

There’s definitely something to what you’re saying, right? In the beginning, these guys were incredibly focused on the product and literally enriching their own lives. They would be coding for fun. When I finally got them to admit they did something for fun, it was, “Oh, that’s also coding.”

Which, by the way, is the only—

Guilty, guilty.

Yeah, it’s the only fun left to any of us, by the way, now that the models have brought the post-scarcity future to us. Coding is the last passion.

Yeah. Listen, if your goal is changing software, it’s critical to get the business right.

Yeah. I was going to add an anecdote that’s not related to them coding, but the other thing that we’ve seen across a number of founders—and Michael, Sualeh, and Aman sort of embodied this—is, again, how you do anything is how you do everything, right? Of course, this detailed attention to the product—very artisan, there’s craftsmanship, right? Overused taste, they have taste in spades—but it extended to how—

Not only how they did hiring on the engineering and go-to-market side, but even the space they created and the events they threw. 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 have no shoes, right? You’d go in, put on your slippers, and it would feel—you’d feel at home. Hence why everyone was there working all the time: “This feels great, like home.”

It was very hygge, the Scandinavian style. I remember going to their second office when they finally expanded and complimenting them on a couch or something, because I think I was redoing my own house at the time. They were like, “Oh, yeah, we got that from a secondhand, very hygge furniture dealer.” They were going after a specific look and feel. I was struck by that because I thought, “Wow, that is not how I remember guys in their early 20s thinking about the space that they create and are in, how that leads to the product and the mind-space you’re in.”

Yeah, there’s actually a nice adjacency here to a lot of the decisions they made. Marketing was a very obvious one. They were very particular: “We use X; that’s not our voice. We’re not spammy.” We made so many suggestions. I remember we were like, “Oh, let’s do this event.” “No, that’s not our style.” Mm-hmm.

So they’re very good at saying no for sure. I will say they were also very good about this when it came to personnel. If there wasn’t a fit, they made the hard decision pretty quickly.

You very, very rarely see this with early founding teams, and they’re very consistent about that. I would say it’s almost this kind of un-talked-about, probably greatest strength of the company: once they made a decision, it didn’t matter how hard that was—whether it was deciding not to enter a market, deciding to be very limited in what they were doing, or deciding who would stay in the company and who wouldn’t stay in the company—they followed through. Kudos to them for having the courage and tenacity for these tough decisions.

Which is sort of an Elon-ish trait, too.

Yeah, I actually think these 2 companies—we just talked about the M&A a little bit—are very good fits.

On a technical level, right? Elon has the compute; they have the distribution and the data. On a vision level, they both think that code is the path to changing all of compute and maybe all of humanity. But also on a cultural level, right? They’re very product- and engineering-focused, very, very product-engineering-heavy, and very fast-iterating. They make hard decisions very quickly. I’ve been involved in a lot of M&A, and I would say this is probably the best fit I’ve ever seen as far as just the full package.

7. The SpaceX Parallel: Elon-ish Ambition & Impossible Competitors

Yeah, couldn’t agree more. There’s a funny analogy with our experience 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 nothing at the time—no Starlink satellites in the sky. And of course, they did it, right?

If you think about the Cursor team telling us—and they actually beat every forecast they ever gave us—

Oh, by a lot.

There are just so many Elon-ish characteristics: moving fast, going after large markets, winning them in the face of impossible competitors—Comcast, right?—in the Starlink case. There are so many parallels. Totally different venues, obviously, but fascinating to see that.

There’s another thing I would say, also, which I think between Elon and Cursor—SpaceX and Cursor—is that in both cases, the consensus was decrying the death of both companies so many times.

I think there’s also this kind of cultural perseverance in the face of naysayers, which I actually really respect on both sides.

Actually, I do have one other real question I wanted to ask you guys. Cursor is also really good at doing M&A—like, doing M&A.

Yeah. I would love to know a little bit more from your perspectives about why they did it, what the philosophy was, and all that. So I will say, listen, there’s such a war for talent right now that the companies that have figured out how to do talent via acquisition can really get ahead. There’s just a lot of advantage there.

The early motions that they did were of that nature: really good team, they’ll just go ahead and do the acquisition. What was really nice about Cursor was they were just never worried about operational complexity. They were 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. Again, that was just part of it.

It wasn’t until later, like the Graphite acquisition, where they started thinking about acquisitions in terms of strategic direction. Of course, that was a much larger acquisition. And listen, I think the company was so fast—who knows to what extent they would have figured out how to integrate all of these things and execute on them in the limit—just because 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.

You know, admittedly, 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 ex-founders in my company.”

And I think it should be a badge of honor, right? I don't know what that stat is for Cursor. Do you guys know? They have so many great founders there. I remember when they brought on Tito from Koala and then Adam Ward on the talent side.

Actually, just seeing firsthand the leverage that they got from bringing in someone who was effectively a founder-CEO, but slotted really well into the Cursor culture, and just taking that to great heights and adding to the acceleration—I think that playbook, 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, an executive at company A just went to take an IC role at Anthropic.” But Cursor kind of did this first, and they weren't just slotting people into IC roles. They're actually building the company this way, which I thought was very unconventional, but really—

It's actually operationally incredibly complex.

That's conventional wisdom.

Yeah. And I think it's actually true. I mean, I don't think they 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. Credit to them.