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a16z GP Matt Bornstein on the signal that made the Cursor team stand out and the pitch meeting with Michael Truell: "The Cursor team kind of stood out because not only did they align with the things that we thought about the world, more importantly, smarter people than us." "Engineers working at the time, at the leading AI companies like OpenAI, Midjourney, Replicate, and a bunch of others all kind of use this and subscribe to this model." "The team frankly just seemed kind of special. They…
a16z@a16zAug 27
a16z's Martin Casado, Matt Bornstein, and Sarah Wang on the Cursor story: In 2023, four MIT dropouts released a fork of Microsoft's code editor. Microsoft owned VS Code, GitHub, the OpenAI weights, and had the best enterprise distribution in software history. And despite this, Cursor won. A rotating cast of competitors were supposed to crush Cursor. The company blew past every forecast it gave its investors. In this episode, Martin, Matt, and Sarah break down how it happened: why Cursor initially refused to train its own model, how they kept evolving their own product three times in two years, and how they built the fastest-growing sales team any of them has ever seen. 00:00 Intro 01:19 AI coding before agents 03:30 "Code in the future will look like pseudocode" 04:55 The pitch meeting that was 90% "no" 06:14 Why Cursor didn't build its own model 08:15 What Michael Truell does for fun 11:24 The growth assumptions Cursor broke 12:13 Competing with Microsoft 14:45 At dinner with John Schulman 15:40 The competitors that couldn't kill Cursor 17:33 Michael Truell on Claude Code 19:14 Cannibalizing yourself 3x in two years 20:09 Why the gross margin critics were wrong 22:08 The sales team they never wanted 25:40 Hiring AEs like engineers 31:00 How their office suits their product 33:19 Why Cursor and Elon fit 35:15 How Cursor got good at M&A YouTube: https://www.youtube.com/watch?v=GHrnbvkVPZA @martin_casado @BornsteinMatt @sarahdingwang
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