I got rejected from YC (4x)…. now my side hustle is worth $1.16B

This is the first AI agent thing that has like been a mind-blowing moment for me where I am not a programmer, I am not a coder, but I can now create software.

That's insane.

What's impressive that kind of broke the frame of what, how long things would take?

Oh my God. That's wild.

Can I ask a blunt, crude question? How can I use your software to become a billionaire?

I would say building— I feel like I could rule the world. I know I could be what I want to. I put my all in it like no days off.

On the road, let's travel, never looking Okay, so, uh, how do we want to start this? So Amjad, you, um, you're awesome. So you have— you're today in a position that I think a lot of people want to be in. You have— you're doing the Silicon Valley dream. You had this idea, you go through YC, you've now raised hundreds of millions of dollars, you're valued at a billion-dollar valuation. So that's today. But then the cool thing about your story is that didn't seem likely. You know, 10 years ago. It is a very unlikely success story. And yeah, you went through YC, but you rejected a bunch of times. Like, yeah, you're in Silicon Valley now, but you started off coding in an internet cafe in Jordan. That's what's interesting to me. And we asked you beforehand, we're like, hey, what killer stories could you come on the podcast and tell? And you go, you wrote this, so I'm going to read it word for word, and then I want you to tell us the story. You go, rejected 4 times and Rickrolling into YC, raising tons of money and meeting amazing billionaires. Let's do the first part. Rejected 4 times and Rickrolling into YC. Can you tell the story?

How much money was that?

It's like $70K or something like that.

What was the original product of Replit?

So it was basically an editor and a console. You could type code there and you can run it, you can switch a language and that's it.

By the way, Sam, have you ever used Replit?

I was using it today before this. It's magical. And also your tweets describing what it is like, for example, your doctor saying, you know, he wants me to track my sleep. So I just uploaded the PDF that he wanted me to fill up. Fill out into Replit and it made an application so I can upload it much easier. Yeah, it's like pretty magical. Sean, are you able to use it? It's definitely out of my league still.

Both me and Sam have joked around because we both, uh, have maybe 5 or 6 times false started of like, I'm going to learn to code this summer. It's like a New Year's resolution thing where you just keep saying you're going to do it and you, you do 20% of it, 30% of it, and you give up. Uh, you know, we buy the Udemy course, learn Python the hard way, then you start doing it. And nothing really ever stuck. And one of the biggest problems was that nobody really talks about this. Do you think learning to code is like learning Spanish? It's like learning a language. You're like, okay, so how do I need to say the thing? But before you can even do that, it's like, oh, I'm supposed to download this program. So I need to download an editor and then I need to download all these packages to be able to—

that's where I stop.

And then you need to, and it's like just setting up the environment is so goddamn confusing to a beginner that you don't even get to do the part where you actually write the code and be able to run. And then it's like, oh, how do I run the code? I got to host it somewhere. Now I got to learn how to do hosting. And cert, like, what is that? And so there's all these things around it that were confusing. Replit solved all of that, which was amazing. And I actually did your, like, 100 Days of Learning to Code. Like, it's actually made it really easy. You know, if I didn't have kids, I would just be doing a lot more because it's— you solved that problem for me. And I know I'm asking you about the YC rejection. I want to come back to that. But to give Sam maybe a little more of the context, I think— correct me if I'm wrong, maybe I'm making this up— I think the reason you wanted to have this kind of like online editor, online environment where it's all hosted there was because when you were younger, you were living in Jordan and I guess you used to go try to learn to code out of an internet or go try to code out of an internet cafe. But that means every time you go, you have to set everything up for the first time because it's not your, it's not your home base, not your home computer where you set it up once and it's there. Is that true? Is that why you have, you felt the problem like 10x what a normal person would feel?

Yeah, basically like every time I wanted to do a little homework, I have to like spend an hour setting up the environment. At the time, the web was moving so fast until we had Google Docs and we had Gmail, we had this, you know, client-side JavaScript application sort of revolution. And I'm like, okay, you know, why can't I type code into the browser and run it? And I started looking around and turns out like nobody solved this problem. There were some experiments and it was kind of crazy to me because it was almost like, you know, finding a $100 bill in New York Grand Central Station, right? Like, it's like, oh, I found an idea that nobody's paying attention to. And is that true? Because, because it's kind of crazy, you know, the world's big, a lot, there's a lot of programmers.

That seems like an obvious thing. I mean, I'm a total outsider. So my question is like, was there some technical challenge to that? Because that seems like, I guess it's easy to say things that are successful are obvious ideas looking back, but like, yeah, well, yeah, that seems like a very two things, right?

There's the technical challenge of being able to make this all work in a browser, right? That, that was, that was not obvious. But then there seems like the second thing was, I keep going back to the internet cafe thing because it's sort of like the hardship made the problem like unavoidable to you. Whereas anybody else who learns to code, if you're just doing it at home in America and you're in your computer, you might do that setting up once, maybe you have a little bit of the problem, but you're not running into it face first every day. As if you were working out of internet cafe.

Can you put that in context for a non, non-engineer? Is the thing you guys did, is it on a scale of like 1 to Satoshi Nakamoto solving the like double spend problem? Like how hard of an invention was that?

That was like the nerdiest analogy you ever could have came up with.

That's what I'm here for. So like, was it, was it genius or was it just that nobody had taken as much time as it would take to do that? Like, where was that breakthrough? How do you, how would you describe that breakthrough?

Uh, it's definitely not on the order of like the double, double spend problem where it's like a fundamental invention. It was like, you know, pushing like a huge rock bolt, like up a, up a mountain. It took so much grit and and just obsession to be able to hack the browser in order to run things that the browser wasn't supposed to run, wasn't designed to run. And so I would say it is solving hundreds of problems as opposed to solving like, you know, one, one invention.

Perfect.

Perfect.

Yeah. So you, you're working on it as a side project for a number of years.

That's a long time, by the way, Sean. Can you imagine like having a side project that's a hobby that takes 3 hours a night with little— I mean, doing that for 2 years is kind of a long time, no?

Dude, the only 2 things I've ever done that with is this podcast and my kids. And there's really no way out of the kids thing. So, you know, it's like—

And the podcast was a hit right away.

The podcast, yeah, gave me results right away. So it actually doesn't count. You were doing this without the kind of like financial rewards or fame rewards or any other major rewards during that time. How many years did you do the side project thing and what kept it going?

You know, 2009 was the original idea. 2011 was the breakthrough and, you know, went viral on Hacker News and the internet. And I think that was the first time I felt like a little bit of fame, a little bit of return on investment. Like I remember Brendan Eich, the inventor of JavaScript and was the CTO at Mozilla, like tweeting about it. I was like, wow, this is amazing. Like, you know, we are a kid in Jordan, like made this like fundamental breakthrough in like, you know, browser tech and like I'm getting this recognition. That's pretty cool. And also some articles wrote about it. It was people talked about it in conferences. And so all that was evidence for my O-1 visa to come to the States. Basically my entire adult life I'm working in this, which is crazy, right?

Like, how old are you now?

I am 36. Wow. I think.

And, you know, well, you've been working on this since you're 20, 21, I think.

Yeah, 21.

Yeah, that's, that's a while. That's your whole life, your whole adult life.

And, you know, it continued to like, you know, incrementally improve my life. So it wasn't, it wasn't this, you know, working in a room for 11 years and nothing happened. So I get this visa to the United States. And they go work at Codecademy and they use the open source work that we did, right? And a bunch of companies in the US, there was like this boom in like MOOCs, if you remember that, Udacity, Coursera, whatever. And a lot of them used the open source version of Replit to create interactive courses. And suddenly like the world opened up to me. I'm getting job offers all over the place. And I, and have choices where to go. And, and so we decided to go to New York.

Um, uh, VCs kind of wouldn't, uh, wouldn't talk to us. Or, you know, we'd get meetings with VCs. Some of them are like yawning and I think one of them slept and it was just like not interesting to them.

Dude, I had that happen one time as well. Like a guy literally fell. It was like he was literally 80 and it was Friday at 4 and it was warm in the office and he like fell asleep mid pitch.

Like it was warm.

Yeah, it was like a cold day. It was warm inside. So I was like, Yeah, I mean, like, I was like, you deserve this. But dude, what, what have they not seen in you? Because like, it's so easy to be, to look back in the past, but like, you seem like you got the it factor. This seems like such an obvious idea. You worked on it for 2 years. Smart people are talking about it.

Like, what were you, what were you missing? What was the case against it?

Well, I think, you know, Silicon Valley is like probably the most meritocratic place in the world. But it is also status-driven. At least then it was very status-driven. Like if you look at the white people who got into YC, like with Stanford dropouts and things like that. And I think since then YC has improved and gets international people and all of that. But my background wasn't really interesting to them. I didn't have any fancy colleges or any of that. Also being married couple was somehow like something that they thought it was a disadvantage.

You didn't match the patterns. You didn't match the Stanford pattern. You didn't match the co-founder relationship pattern. You didn't match the trend of what categories have big exits. You weren't on trend at that time, right?

Yeah. And so continue to apply to YC every season of YC. We'll send in the application and, you know, our thesis evolved more and we felt like we had started making some money. Some people started paying for our service. We had an API at the time that people paid for. A lot of educators and people learning to code started to pay for Replit.

What was the revenue when you got in?

Like maybe $10,000 a month. It was enough to sustain us at that point. It was like the ramen profitability. But before YC, the person who actually, the first one to bet on us was Roy Bahat from Bloomberg Beta. So I knew him from my Codecademy days and it was such a, the meeting with him was so refreshing. Like he was like just a straight shooter. He would tell me like, here's where I think, you know, the idea or the category is hard. You know, here is where I think the valuation should be. And it was like the first meeting, he just gave me everything he was thinking about. He didn't obscure anything. And I was, I was feeling really good about it. And so, yeah, he gave us $500,000 on a $6 million valuation. So that was the first check we got. Nice.

And then how did the— how did you eventually get into YC?

So basically, you know, we're grinding and the product was getting better every, every week. And I started writing articles about what we're solving. So we're solving pretty hard problems. And so this article kept going on Hacker News, and Hacker News was really excited about what we're doing. And Paul Graham reads Hacker News a lot, probably still to this day. And one day, like December 2017, I wake up, there's a DM on my phone, and it is Sam Altman. And he's like, hey, I run YC, and we're interested in what you're doing. I'm like, dude, I know who you are. You don't have to tell me you run YC. And he's like, okay, let's meet, you know, come to this address. And it wasn't the YC address. I was like a little confused. And so I go there and it was the OpenAI office in the Mission. And so I meet him there and, you know, we talk a little bit and then he's like, he turns his computer around. He's like, this is Paul's email. He emailed Sam and told him this company is very important. You should reach out to them. And he's like, okay, talk to PG. I'm going to give you his email, talk to him, and then maybe we can work on something to get you into YC. So I started this email relationship with Paul, which was really fascinating. I mean, he's a great writer, right? And so we talked about, we talked about Repflod, we talked about the problems of setting up an environment, the problems of hosting an application. It turns out after he sold Viya Web, he started working on something like Replit. He started working on like an editor. You write some Lisp, of course, because he likes this very obscure programming languages. And but by the way, Paul Graham is the founder of YC. At the time he was starting to retire and Sam was running YC. And so, you know, we had this email relationship where he wrote me essays essentially on the problem we're solving.

By the way, were you intimidated? You know, Paul Graham writing essays to you privately? Are you like, Is that high-stakes replies there for you?

Yes. Like I would spend hours kind of crafting the emails and trying to like be as good of a writer as I can. But you know, one thing about me is like I was never like nervous about meeting like famous and established people. And I think that helped me over time because like, you know, I can be myself and I can talk to them at the same level as opposed to like being a fanboy or, or, you know, why, why was that?

What were you just oblivious to it or you just had a different mindset about it? What was the reason?

Dude, have you guys seen that? Uh, do you guys know the director Guy Ritchie? He's, uh, that like British director. He's got this great story. He was on some podcast, maybe Joe Rogan, and he was like, you know, I just want to be the director of, of my own life and I want to live my life like a movie. And what you're describing is sort of like that where you're like, I just, I am destined for greatness. And like, we are taking on this, uh, amazing, uh, problem and like, we are going to do wonderful things and it will be hard, but we will triumph. And I think that's actually great. That's a great story to tell yourself. And I think it's very motivating and it makes life more exciting. I think that's really cool.

And we're not talking like metaphorically, like a life hack. No, no. Actually hacked into the servers and changed your grade? Is that what happened?

Yeah, I went into the basement. I spent like 2 weeks. I did the— what's his name, the famous inventor, Michelangelo or something like that? I did his sleep, polyphasic sleep, where you work for hours and then you sleep 15 minutes. And it was sort of like I was writing on the wall. It was like a full-on insanity.

Were you angry? Why did you decide to hack?

I know so many smart people who work so much harder to cheat or get around the thing than just doing the thing. And, and there's like a 50% of the time they end up being like losers and then 50% of the time they are in fact like the greatest.

They're on this podcast.

Yeah.

Well, I think it is like some ADHD, right? Like you can't sit, you can't sit in class, but if you're interested in something, you're going to like hack and like work on it a ton, right? And I almost got away with it, but the servers at the, uh, at the university crashed, uh, and it crashed on my record. So the, one of the administrators there gave me a call and he, he said, um, look, there's like this, there's some anomaly in your, in the, in the record, uh, of your exam in school and it's crashing our databases. Do you know anything about it?, and I was like, what's the anomaly? And he's like, you know, there's a field in the database that says you're barred from the exam and your grade should be 35. That's the default grade of failing the exam. And instead my grades were like, you know, 75, 90, whatever. That's what I entered into there. And I didn't understand that there was another field. By the way, you know, that's not good good design for a database. And so since then, I, you know, I had, there was a fork in the road. I could lie and I think I could get away with it and, you know, and just say like, that's a bug on your side. But I was like, what's the most interesting story? Is they catch me and it becomes a story that people talk about. And I was like, okay, I'm just gonna like come clean and just tell them what I did.

Uh, so you feel like better, better than getting the grade would be getting the reputation? Yes, exactly. So you tell them, and then what happened? They kick you out?

No. So, um, you know, I, I'm kind of a convincing person, so I, um, I go the next day and it's like all the deans there and they're discussing my case and they're like trying to find out what, what I did. And, and they're all computer science deans. So I went in there and I changed the subject to technical aspects of the hack. And I drew on the whiteboard and showed them what I did and all of that. And they were very impressed.

It's like a Good Will Hunting moment.

What a great story, dude. That is an amazing story. Sam, by the way, would you ever want to compete with Amjad at anything?

No, this is like, this mentality, this is, uh, it's scary. Like, yeah, I would not want to. You're like, excuse me, Dean, have you heard of the word prodigy?

Uh, you're like, You're like, I, my talents haven't been used well at this university. I accept your apology, dude.

It's like, why are you failing me? Yes.

Yes. That's so good. Okay. So I love the principle, do what makes the best story. I love the hack story. That's, that's amazing. Where we, how did we get here? We were talking about, um, YC.

YC. Okay.

Sorry.

Let's get to the story of YC because that's where we started. Okay. So Sam's like, yeah, you should do YC. Actually, the batch starts tomorrow. Why don't you fill an application? It's just a process you have to do, and we can do a late interview tomorrow. And I'm like, fuck, I want to fill the application again. Like, you made me do it like 4 times. Like, I don't want to do it again. And so, you know, I kind of do a bare bones application about Replit. And then there's the video. I'm like, yeah, man. I don't want to, I don't want to do the video. So, so I pasted a YouTube link and we go the next day, uh, Haya and I.

By the way, for people who don't know, the YC application is like one page. It's like 6 or 7 questions, but then they say upload a video, 2 or 3 minutes, you talking about your startup. So that's the video part. And then the interview is 10 minutes where they just rapid fire. So you have like 10 minutes and it's like this make or break thing. It's less than a lunch, you know, like it's less than a job interview. More intense. So you're waiting around for that.

Yeah.

I mean, my view was they recruited us to YC. Like, why are you making us do this stuff? Right.

And so, yeah, I was going to ask that. Like, they're asking, they're acting like, you know, Paul Graham's like, you know, maybe I could pull some strings.

It's like, I know a guy.

Yeah. Like, you're the guy. So I don't understand what they're, uh, what they're bullshitting. Well, I don't get it.

Well, I think they wanted to just like go through the process.

It's like the process applies to everyone.

And I I respect that. So, you know, they call us to the interview and I walk in and there was Jared and Adora and all these amazing YC partners. And there was Michael. He was the CEO at the time. And I shake their hands and I shake Michael's hand and I felt like his grip was a little too hard. I was like, okay, that's fine. And then I go sit down on the chair and the moment I sit down, Michael looks at me, why did you recall us?

Oh my God.

In that moment, did you— it's like, and that's when I realized I fucked up. Like, did you realize, like, yes, how I'm coming across? Like, what was your mindset there?

Like, I was thinking, I was nervous. I was very nervous, and I was regretful. Immediately.

Yeah. Because you probably— it's like, oh, here's this entitled— just another, just another tech entitled guy, when they don't know you're like immigrant from Jordan who's like scraped his way here, right? They don't— reality and how you were coming across weren't connected in that moment.

No, they weren't at all. And, uh, and so, uh, and so I, you know, we go outside and, and I tell Hayya, okay, this is done. Let's, let's call an Uber and get back to work. Like we don't need to get into YC. So I call an Uber and just before I arrive, I receive a call and I take the call and it's like, hey, it's Adora. You got in, come back. The kickoff is about to start. And I was like, what? Are you sure? She's like, yeah, come back, sign the paperwork and get started. So I was stunned the whole day. Like it was, you know, we start, we go to the dinner and I'm like,, you know, you know, phased out and all, but like it was really exciting. And, you know, people who's never been to the YC office and Mountain View, it's all orange, like bright orange and the lights and everything. It feels like a cult-like environment.

And like, is it like, I think I've seen the inside. Doesn't it like a, like a, don't they, they have like a steeple or isn't like one of the rooms that like is a triangle, like a church almost? Yeah. Yeah.

Exactly. And Sam gets up and tells us what the experience is going to be. It's like, this is the hardest time you're going to work. You know, you better tell your friends and family that you're going to go away for 3 months. You can't help them move or all of that. You just got to be focused on work. So Haiyan and I like took it very seriously. Okay. I was like, okay, these 3 months are very important for the success of the company. And we transformed the product in these 3 months. It went from a simple sort of editor output to a place where you can host applications and build real things. And all in 3 months. And we're working, you know, 12-hour, 13-hour days. And, and it was, it was only 3 of us at the time. Our first employee actually was, was sort of a runaway kid. He grew up in California, a little down south, and, and he didn't want to go to school.. And so he leaves his home, he goes to Hack Reactor, and he becomes a programmer. And he was 18, he was looking for a job. I knew the guys at Hack Reactor, they used Replit. And I'm like, send me your best programmer. And he's like, look, this kid is a little awkward, but he's the best. And so he comes in, he nails our interview.

Music to my ears.

Yeah. And basically I like him because, you know, it mirrors kind of my life story a little bit.

Where is this guy now?

But we got him some liquidity after 6 years of working. I felt that's the right thing to do. And because he was kind of burnt out and didn't want to continue. So I called my brother in Jordan. I'm like, look, you got to come out here. We're in YC. You need to— and he's a programmer. I taught him programming when he was a kid. And I was like, you got to come help us. And he's still with us today. And I called my friend from Codecademy, Moody. He's still with us today as well. I'm like, you gotta help us. Like, you know, you could do it remotely. And so we assembled like a team of 5 people essentially. And so we go really hard and we were like one of the hottest companies in YC at the time.

And can you give some sense of the scale of it now? Like, you know, I invested in it a year ago or so, 2 years ago, something like that. I don't know when, but the numbers were off you had user growth. First, your graph looked like a hockey stick because you zoom out and you, you, you, you, it ignores all of the little like years where nothing was really going on, but you have this crazy growth. But the crazy thing about it is that your growth was developers. So it's like, you know, one developer user is worth, I don't know, 10, 20 times just like a normal internet user, but you had this crazy hockey stick growth of developers. Can you talk about, can you just say a couple of like permission to brag. Can you say a couple of brag-worthy stats that would impress us?

Yeah. So, so Replit was very easy to get started with. And so people would start, uh, start using it in college or high school and continue using it for many years. And so it was sticky for especially junior developers when they're starting out. Um, and, uh, and it was, it was spreading on its own, like word of mouth. Uh, you know, there was a viral component to it. People can share URL and then suddenly you're in the same environment as them, right? And then we have this like multiplayer coding experience. And so people were collaborating and also COVID was really great for us because we were, I think, the only collaborative editor experience on the web at the time. And so a lot of people were remote and needed something to work with each other. And so Replit was adopted at the time. And so the growth was off the chart. And the servers were going down. And the marginal user on any web app is sort of like zero, zero cost. But for us, it was, you know, we try to optimize it a lot, but it was still on the order of like $1 to $5, like a month. And the growth was off the charts. But I have to admit it was hard to monetize at the time because developers are actually not used to paying for things. Now they kind of are paying for things because of AI. But at the time, they weren't paying. And then, you know, as we added limits and things like that, they felt like they can like move on and set up their own developer environment. And so it took a lot of, you know, creative thinking to figure out how to charge for people. And ultimately, AI was the thing that people are paying for. And the reason is like the productivity benefit of AI is like, it's like obvious. And people was like, okay, this saves me time and makes me a better developer. And so people are paying for it right now.

Well, can you give any indication on how many users or how many, how much revenue the business does?

Sam, check this out. This agent thing, I gotta show you this. So you, you haven't used this, right, Sam?

No.

All right. So, so watch this. So yesterday I was like, I'm, I'm gonna mess around. I was doing research for this, but I was like, I, I just got like sucked into Replit and I started doing that, stopped doing research. So I go and I, I go to Replit and it's changed. 'Cause now when you, before when you would go, it would be like, here's a coding screen with a blinking cursor and it's like, write some code. And I'd be like, oh cool. I don't really write code. So. I don't know how to use this product exactly. Maybe I could learn to code. Maybe I could, uh, you know, pay somebody to build something on here, but whatever. I was stuck. So now you open up Replit and it just, it's like ChatGPT. It just goes, so what would you like me to create? And so I go on there, watch this. So I go, I'll give you the exact prompt. I said, build me an app that will text me every morning asking how I ate yesterday. Let me answer via text message and then track the results on a monthly calendar grid. If texting doesn't work, you could also use WhatsApp or something else. Okay, so basically like on the right here is just like the chat and it just goes, absolutely, let me propose what we'll build. And then it just kind of like explains to me like a project manager. It goes, I'm going to help you create a food tracking app through SMS messaging with a calendar visualizations. We'll start with the SMS. Later we can add WhatsApp as an alternative. It's like, okay, okay, prioritizing things. That's interesting. And then it goes, the app will send daily messages, blah, blah, blah. And then it goes, how would you like me to proceed? And it's like, there was like, you know, add more features, change the instructions, or like go ahead and build the prototype. So I clicked build the initial prototype. And then literally, I don't know if you can see this, but like, it starts like auto-scrolling as it's writing code. Like this is all just code it's generating. So like, you know, like I'm not doing anything. I'm literally sitting back with popcorn while this is happening. So it's like, here's your calendar grid. And it's like, uh, hey, I need, I'm going to use Twilio for the SMS. It decides I'll use Twilio for the SMS. Can you go to Twilio and give me your account and your phone number so that it'll, we like, we use Twilio for sending SMS. So I go to Twilio, I give it my SMS and then it's like, it's made, it literally made the thing exactly how I want it to be.

So this works now?

Yeah, I actually got stuck on the Twilio step because Twilio has to verify my phone number. So it like, it hasn't verified it yet, but I can go into, in Twilio I see it tries to send me the message and it just says awaiting Twilio verification to like be able to use this. Um, so I'm like a little bit stuck there, which is like a common thing with agents. I feel it's like almost absolutely incredible and then kind of frustrating at some point where you have to like, you know, fight through some walls.

Well, I think I'm just tweeting. I think he said, uh, I want people to be able to build an app faster than they can just Google the answer to a question.

And that's exactly what happened here.

Well, that's insane.

So this screenshot, uh, is the agent looking at the result. It's trying to verify. This is not the running app. If you click run, you can take a running app.

It says at the top, took a screenshot and then it shows it to me. It's like, hey, is this how you want it? And I was like, oh, because before it had it where it was like not the right month on top. I go, oh, put the month on top. Like, don't say monthly food tracking, right? December. And then it also said like, hey, would you like any other style improvements? I can make it broader. I can change the color scheme. And I'm like, dude, this is literally better than an employee, right? Like, first it's instantaneous. Uh, second. I could, you know, I don't have to pay, pay somebody to sit in the desk to sit around waiting for me to do something. I had an idea on a whim, go to REPA and did the thing with the agent. This was a, like, there's been a few like mind-blowing moments for me in my like tech career, you know, like I graduated 2010. So I'll start at that point where it's like the first time I took an Uber, I was like, holy shit, that was amazing. I pushed a button, a car showed up. The guy got in, I didn't even have to pay for it. Like, it just paid through my phone. That was magic. And I could see it all. I could see him on an app getting closer and closer to the restaurant. That was like one of them. You know, ChatGPT for sure was another where I could just, you know, tell it to make something and write something and it would write it for me. This is another one of them. This is the first AI agent thing that has like been a mind-blowing moment for me where, um, I am not a programmer. I am not a coder. But I can now create software.

This is like amazing. Can I ask a blunt, crude question? How can I use your software to become a billionaire? Because like, I see this and I'm like, you know, like the, the ridiculous analogy that I use is I'm like, I feel like an artist sometimes where I like, I feel like I have the ability to conceptualize certain things, but I can't paint. It's like I can't fucking paint what I want to paint that's in my head, like, because I literally don't have that skill set sometimes. And so like, I'll be working on stuff and I'm like, dude, I want this to do this, but I gotta go talk to this developer and I don't wanna have this conversation. And that's just like a pain in the ass. And so like, you basically are making it so I can finally express myself easily.

I like how you're on the first date. You're like, how can I get you to take the clothes off? What? You're like, how do I use your thing to get really rich?

Yeah. I mean, that's basically like, like, and you had on the document, you're like, uh, here's just here's the opportunities, just use Replit to do X, Y, and Z. And I want to go through that because this is like amazing. This is actually, you know, there's like, there's like a viral clip on YouTube or Twitter, like a bunch of places where it's like the headline, which we probably have used, which is like billion-dollar one-person companies or something like this. You're the closest person to this probably, uh, to that question, to answer that question.

Yeah. So there are apps, uh, built on Replit Agent that otherwise would take probably $100,000 of developer time. And you can build it like in $25 paid to Replit. I will say that there's limitations, right? It is not perfect. This is like the worst it's going to be. It sometimes gets stuck with problems. You need to have some skill in prompting to coax it to like figure it out. And it sort of like teaches you over time because it tells you what it's doing as it's editing the code. And so over time, you're learning how to use it. You're actually learning how code works. You're learning how— maybe you're not learning how to exactly type code, but you're learning the different components and where things could go wrong. You're learning about database. We have like a database. You can go in and look at the tables and look at what's happening. And so, you know, the vision for this is that that's all you need. That's all you need to build an entire startup. And, you know, every day we're inching towards that. I talked about pushing the boulder up the hill. And I think that's one of my talents is like, okay, what are the problems that you can make progress on every day and every week such that in a year time you have this exponential progress and the product is so much better? The other thing is we're riding this wave of the foundation models getting better. So every time they get better, we plug in a new foundation model. And the product is suddenly better. So you're riding this, you know, two exponential curves, which is like the engineering we're doing, but also the underlying models and infrastructure is getting better. So I think in a year's time, it's going to be really mind-blowing. In a couple years' time, I think we're going to see stories like someone getting super rich making an app in Replit that sort of goes viral. And so we're adding Stripe integration right now. You can, you can already use kind of Stripe on, on Replit, but we're adding integration that makes it super easy to start monetizing your app.

So Sam said, how do I get rich? And you're like, disclaimer, it's not fully there yet, but now you still have to answer the question.

I mean, the question is like, what kind of applications is like, what are the ideas? What kind of applications you can build? I would say AI applications are growing really fast. Like the revenue ramp in some of those AI applications is kind of crazy.

Can you tell the story of Magic School? I thought this was really interesting.

Yeah. So Magic School is like an AI application for educators. It's basically like helping them use foundation models and LLMs to do their work, to do assignments for kids to have an interactive, like, AI experience. And so it's like a full suite of AI for educators.

The guy who created it is a— was a teacher, right?

Yeah, it was like a known thing. It was like hardest thing you could do, sell into schools, into teachers. They're overworked, they're underpaid, they don't have the time to like figure out your new tool. But this thing is great. So if you, if you go to it, it's basically like, because teachers spend a lot of their time not in the classroom. It's after, after school is done, they have to grade papers. They have to create the lesson plan for the next day. They have to create the quizzes or the multiple choice tests and they have to like, so you have to constantly do these. And there was these platforms like Teacher Pay Teachers where I could just, if I don't want to make it myself, cause I'm tired after the school day, I might be able to go buy one for $9. From another teacher who teaches 5th grade science in some other state. And I would take that and I would, I would buy it that way. What Magic School did was it was like, cool, generate a quiz. You just say like, I want to, I teach, you know, 5th grade biology. I want to do a pop quiz about, you know, how this, how mitosis works. And then it'll basically create either a lesson plan or a quiz or, you know, um, uh, a student, like interactive, like, you know, workbook that they need to create or whatever. And so it lets a teacher not have to spend, you know, 4 hours a night creating the materials that they need just to teach class because AI can do it for them. And this thing looks— I don't know these guys, I don't know anything about them, but it says, you know, over 4 million educators are using this, which are 4 million educators and their students, which I don't know if they're counting.

Well, if you go on SimilarWeb, they have millions of monthly uniques. So that's like a really big—

I think they raised like $20 million too off this idea.

Yeah, so I mean, that's like a pretty huge signal.

So they launched in, uh, like, I want to say July 2023. So they're like a little over, over a year. And do you know that these like SaaS metrics are like how long to get to whatever, like $100 million or whatever? The AI apps, and I would say Magic School is on that trajectory, is like just like that, you know, the curve is like, you know, all the way straight up.

This is kind of weird, but maybe this is like a feature of yours that You helped this company become potentially one of the faster growing companies of all time, and you only earned $20 a month from that.

Yeah, so Replit had, you know, always a problem of value capture. Possibly that's why like VCs struggled with it for a long time. So that there's some logic for why it is hard to monetize these things and like capture some of the value. I will say, you know, I invested in Magic School, so there's some of that. And with AI, I think we're going to be able to capture at least a little bit more of that value. If people are monetizing these apps on Replit via the agent, there's a way I think where we can potentially take a cut out of that, especially if we make it like super simple to start monetizing an app. And also like if once we reach scale, you know, it is like ChatGPT, like you don't need a lot of skill to do that and it's going to get easier and easier. Once we reach scale and you have, you know, millions of people paying for this, and it's not just like $20, you're going to pay incremental, uh, after you finish your credits. So we give you credit, monthly credits, and then afterwards, if you want to continue, you can like buy more credits.

Are there other companies like Magic School, like cool companies like that you've seen that maybe we haven't heard of that are using AI?

Yes. So, um, you know, I'm very excited about agents right now.. And, you know, I think I predicted earlier this year on a podcast that, you know, this is going to be the year where like agents are born and next year is like where agents are going to scale. So there's this company called 11ax and 11ax creates AI SDRs. And so basically you don't need to hire SDRs. Like there are some companies that feel like they can bootstrap their sales without SDR. You can have like one AE and that AE, account executive, is like running these like tens of AI SDRs. And the revenue ramp on 11x was also crazy. It's pretty wild how fast these companies are scaling. I don't think in the history of Silicon Valley we've seen anything like that, even in the like Web 2.0 era.

So what is like a fast ramp for AI? Maybe not 11x specifically, but just for an AI company, what's like What's, what's impressive that kind of broke the frame of what, how long things would take, but you've seen it now.

Yeah. So I would say reaching 10 million in 3 or 4 months.

What are some other companies that have gotten to that like 10-ish or 10-ish million or similar trajectory in 3-month type of businesses?

Yeah. So this is— I wanted to kind of give it this, you know, sort of a disclaimer about this, which is the big question in the investor community right now is like the moats question. And that started around the time that ChatGPT kind of came out. And there was these GPT wrappers, sort of this condescending way of looking at a lot of these companies. It's like, ah, if you can create GPT wrapper in a month, then a lot of other people will create GPT wrappers in a month and you're going to be competing on price and the margins go down. And yes, the ARR is great, but Anthropic is capturing, or OpenAI is capturing most of the ARR, not you. You're kind of like a middleman and you're going to have like a hard time having margins. And I think it's totally a valid question. Now, I think, you know, moats develop over time through strategy and technical excellence. So, I mean, some of these companies can go down pretty fast and there are examples of that right now. But I think if you, you know, you can start building technical, like with Replit, Again, this idea of pushing a boulder up a hill. We have this runtime environment, we have this infrastructure, we have the deployment, we have databases, we have all these integrations. I mean, it's the only one in the world that is like an end-to-end environment to make software. And to catch up with that, it's going to take years, right? But technical advantage is also not a long-term moat. And so, so again, it's a big question. I don't think it's answered yet. You know, there's strategic things you could do if you reach scale, if the switching costs are high, you know, that, that may be like a way to, to have sustainable moats. But, but it is definitely a big question.

You know what's crazy, Sean? Like, for the long— I hate using the D word, democratize. I think that's like such an overused, like, Silicon Valley—

don't do it.

Yeah.

So, you know, the playbook I would use is like I would go into some inefficient market or industry. So a deal from, from Magic School. Went into this hugely inefficient industry, which is schools and education. And by the way, another product is Synthesis Tutor, which is also going viral right now. And they have also this revenue ramp that's kind of crazy.

Both Sean and I invested in that company.

I think all three of us did. Yeah.

Yeah. And for a while, they had like this thing where like, you know, they had educators on the payroll and whatever. They replaced all of that with AI. Now, like, you know, the kids sit in front of the iPad and they're talking to the AI and like learning really fast and it's much better than the previous product.

Right.

Yeah, it's the era of the idea guy now. It's our turn. It's our turn to shine, right? Because now the limits and the kind of the value creation is, do you understand a problem well enough to know how to take this really powerful magic wand and point it at that problem and be able to make that more efficient? And then of course, do all of the other hard things, go get customers, make it sustainable, build a good team, you know, like do all the normal entrepreneurship stuff. But it seems like more than ever, having a great idea is the kind of like key unlock to doing these things because building has become easier. And I'll give you kind of my my personal epiphany that I had while I was doing this. So I invested in Replit mostly when I just thought you seemed really smart and I saw a growth curve of developers using it and I thought, oh cool, like I've experienced this problem before, like a one-stop place where I can come in, write the code, host it, all the stuff you talked about, like don't have to download Java, don't have to do any of that shit. That appealed to me at the time. I think actually in the same way that Synthesis, like took AI and actually almost like really like 10x'd the value prop of the business. Um, I think you guys are doing the same. So here's my quick pitch, which is now that I think of Replit as, um, like basically what Shopify was for creating, you know, like online stores. I think Replit is that for creating software. So to me, you guys are—

Dude, his eyes just brightened when you said that.

You're Shopify for software.

Yeah. So, so, you know, even at the start of Replit, uh, uh, you know, there's our initial seed deck, and the deck, it kind of has this Elon Musk style, like, you know, master plan. And it was like, we, we build a, you know, we build a platform, we grow it, and then AI is going to make the thing a lot more accessible because our mission was make programming accessible. Then we updated our mission, it was create a billion programmers. And then so the moment that, you know, even GPT-3 came out, I was like, this is the thing. And I wrote this thread on Twitter about how AI agents will just change how programmers work.

This is the deck. So 2015, this is, I don't even know if OpenAI was a research lab at that time, maybe. Definitely, you know, there was no ChatGPT, but this was your master plan. Deck. So we're going to grow by building tools for teachers and students. We're going to build a simple network and AI-assisted interface that blurs the distinction between learning and building, evolve into a platform where people can learn, build, explore, and host applications. Like talking about AI back in 2015 in your, in your actual pitch deck.

Dude, it's also clear how, uh, Codecademy was highly influential to you because I remember years ago, Sean said everyone tries to learn how to code. I used Codecademy and it was a pretty cool interface and it's very similar to what you're describing.

You know, at some point I kind of lost hope in courses. Because like, you know, we have 100 Days of Code, we're telling users that to use our application, you need to invest 100 days. That's kind of crazy. Like there isn't any like successful company in the world where you need 100 days to learn it. And so that's when I kind of changed my mindset and I said, okay, it needs to be ChatGPT-like. It needs to be just a prompt. And we started building that earlier this year. And now that's all we're focused on. We want to create new programmers. You know, existing developers, great. They have a lot of tools. But we want to go after the citizen developer, right? Everyone is a developer. And I think that's, you know, that's what you're talking about. You go from like 100 million developers in the world. Well, I think it overstates the numbers, probably more 30 million, and then you 10x that. And so what does the world look like when anyone with an idea could, could make something? And one of my favorite books is The Sovereign Individual. The thing I really was excited about is this idea of ideas become wealth. And so you no longer have the bottleneck of making something. That's where we're headed. And this is what you're talking about, Sean, is like the, uh, the— it's, it's the time for idea guy. And like, maybe that's, you know, tongue-in-cheek. And like, maybe the way to, to talk about it in more precise terms is that people who can find these gaps in, in markets, people who have expertise in certain areas that they can tell there's inefficiency and they can like create an AI application that can immediately plug that.

Like I saw this video on Twitter the other day. It was of a snake that got its head chopped off and it like floated around and bit the, bit like the tail of its own body. And then like the body like reacted. Your employees, are they thinking that they're sort of doing that to themselves where they're like, like when you make jokes, Dark. Or like when you're like talking like, you know, like you don't need to hire all these programmers to do all this stuff. Are they like sitting there with their hands in their pocket? Like, does that mean us?

You know, I always wanted the company to be super lean. And so for a long time, we're like 10 people, but like now we're like 70 people.

That's still nothing.

Have you met anybody in kind of the tech industry that blew you away, either personally or maybe you read about them, maybe met a friend of a friend told you a story? Because I saw a picture of you with Jensen. You know, you've met Paul Graham. I know that you're like connected in the AI circles. You met Sam Altman. In addition to building the tech, I love the characters and I love the stories. This is why every, you know, Elon snippet of how he runs his companies goes viral and shit like that. What are your favorite kind of inspiring stories or crazy stories that you've either experienced directly or read?

Yeah, you know, one of the craziest stories when we're raising from A16Z, Mark invites me to breakfast at like 10 a.m. at his house. And so, so I go there and I expect like I'm going to talk about the business. And so we spend like 2 or 3 hours talking about politics and the world and like all sorts of things that are interesting to him. And I felt like this guy is like more than just a technologist. He's like a philosopher. And so right now he's going out and he's talking about this stuff. Like his Joe Rogan interview went super viral. And he's been always have like these interesting ideas about the world. And the interesting thing about A16z is his partner Ben is sort of like the executor, sort of the executive, right? He wrote The Hard Thing About Hard Things, where like he teaches you like about what it means to run a company. It's painful, it's hard, and what it means to hire executives, what it means to scale a company. And so you have this duo of like the doer and the philosopher. And I think that's really amazing. And I think they're they have really big plans, uh, and, and I would just hate the philosopher.

I'd be like, are you gonna do anything? What are you talking about politics for right now? It's got to be the worst to be the doer in the doer-philosopher relationship, right?

You know, I, I think, uh, I think Sam is, is, uh, it was interesting to kind of meet him, talk to him, because very— he's very effective. Like, he— like, the first time I met, I met him or like maybe not the first time, but like he was on his computer as I'm talking. And so I'm talking, I was like, yeah, we're fundraising. I want to talk to, you know, A16Z. I'm like really big fan of Mark. And he was typing on his computer. Okay, I introduce you to Mark. And then, you know, when you send Sam emails, it's like pretty quickly replies with like a couple of words or like a couple sentences. So I saw how effective and fast you can be. And that really, I'm not like that. You know, I'm trying to be more like that, but I'm someone who really values the quietness, like to think about ideas and to think about strategy and things like that. So I'm not always on top of communication. It actually makes me like a little, you know, it's overwhelming. But But I think, I think seeing these people, at least, you know, inspired me to be a little more like that.

You, uh, you tweeted out the story that I loved about, um, you said the most gangster story in Silicon Valley is Steve Jobs buying Pixar for $5 million, investing $50 million, and operating at a loss for a decade, so much so that he had to cut personal checks to make payroll, and somehow turning it around to a $7 billion exit. Why, why did you like that story?

I didn't know that. I thought NeXT was just a failure. I didn't, I didn't even realize it actually contributed. I thought they just bought Steve back, acquihire, but it wasn't an acquihire. It wasn't just acquihire.

No, I mean Objective-C, for example, you know, NeXT Computing was really obsessed with this idea of object-oriented programming and they innovated a lot on what that means. And, you know, it is based on Unix, but it has a lot of interesting features on top of that. So Apple, they, it saved Apple because Apple was otherwise not going to be competitive without these, new chips.

Right. Well, dude, I know we kept you half an hour over. I apologize for that. Uh, but this was amazing. This was one of my favorite episodes in a long time. And I'm not just saying that. You can go check out all the other episodes. I don't say that at the end. So, uh, this was awesome. Thanks so much for coming on. Uh, where should people— Twitter is the best place to follow you?

Yeah, Twitter. Uh, uh, @AmosHod on Twitter. Um, and, and the Replit handle on Twitter as well. Just, just @replit.

Dude, thank you very much. You're the best.

Of course. Of course. My pleasure. I feel like I could rule the world. I know I could be what I want to. I put my all in it like no days off. On the road, let's travel, never looking back.