Base44’s Founder, Maor Shlomo on How Vibe Coding Will Kill SaaS

1. 0:00 – 1:13

   Intro

   1. MSMaor Shlomo0:00

      ... from all things in the industry, (beeping) I think the margins are the least thing that I'm worried about.

   2. HSHarry Stebbings0:04

      Base44 is the story of one entrepreneur who went from an idea to millions in revenue and selling to Wix for $80 million. Today, Mayhew joins me in the hot seat.

   3. MSMaor Shlomo0:16

      We're taking into consideration that the prices of model will go down towards zero. Me personally, I don't believe we'll hit a speed bump. I don't think also we'll hit the wall with, like, movements of LLMs. Even with existing models, we're only scratching the surface of economic value that you can create. If one person team can get sold for $80 million without people, it means that you'll be able to do a lot more stuff (beeping) with less people.

   4. HSHarry Stebbings0:43

      Ready to go? (upbeat music) Mayhew, it is great to have you on the show, dude. I've been so looking forward to this one. I am, I'm a fan of Base44. What a fricking journey. Thank you for joining me.

   5. MSMaor Shlomo1:04

      Thank you for having me. I'm a fan of 20VC.

   6. HSHarry Stebbings1:07

      Dude, that's very, very kind. Listen, ego flattery will get you everywhere, and I'm-

   7. MSMaor Shlomo1:10

      (laughs)

   8. HSHarry Stebbings1:11

      ... very, I'm very susceptible to it.

2. 1:13 – 11:56

   The Decision Behind Selling Base44

   1. HSHarry Stebbings1:13

      I was chatting to Michael Eisenberg before this show, and he said, "Dude, you've gotta start with, like, acquired for like 80 million bucks. Why did you decide to sell before we get to anything else?"

   2. MSMaor Shlomo1:24

      So I started Base44 as a bootstrap business after doing a very capital heavy one, which we'll probably get to in a bit. And it started honestly just for fun. Uh, just I wanted to get back to coding. Everything, I felt like everything in the software industry was changing. Um, loved the fact that, like, with LLMs now, we can do so much more. And so it started just for fun, and then the traction was insane. And I started getting to, like, you see like 10,000 users, 100,000 users. And then, then, like, the business was very profitable, and so I stood in this junction of either I'm continuing doing this alone bootstrap thing, uh, which I might get eaten by, uh, companies that are raising, like, shit ton of money.

   3. HSHarry Stebbings2:09

      Mm-hmm.

   4. MSMaor Shlomo2:10

      Or, um, I should raise a lot of funds and go very aggressive and try to build this on my own. And the third one is, like, get into a company that could be, like, a parent company, um, and try to find something that, uh, is, like, can, can harmonize with the business and actually push it forward. So I remember when I started having the conversations with Wix, I was very worried, and I was like, "I'm not gonna sell." And I remember telling Avishay, like, the CEO of Wix, uh, I was telling him, "If Cursor was, was sold to Microsoft, probably there won't be any Cursor today." The fact that they were, uh, independent and they could build a business, uh, by themselves how they wanted, uh, without kind of like the corporate stuff has gotten them through. And then we had many late night chats, um, where, one, I understood that Wix, for a lot of reasons that many who know, know Wix, uh, could understand and I'm happy to tell about, uh, is a perfect match 'cause we're targeting the same audience. It's the same spirit. Um, the marketing team is the absolute, in my opinion, very, in my very not objective eyes, is the best in the market. Uh, they're just aggressive. They're creative. They're absolutely awesome. Um, and if we can structure it in a way where the company itself, the product team stays lean, small, and startup-y like, but all the other stuff, uh, we can benefit from the monster that is Wix. For example, the, the support and customer care, the marketing stuff, the thing that you don't really want to build, like the legal and operation stuff, um, then this could be a lot of fun. And we structured a great deal, um, and I think to me, it was like, okay, we have a shot at actually building something that matters. And so I said, for an actual shot of taking this from this, uh, low few 100,000 users to something that might, if we work hard throughout the years, actually move the needle for a lot of people, that might actually be a thing that people speak about as, "Hey, this actually made an impact on the world," it was either I raise a lot of money and a lot of funding, or I go and join Wix, uh, that basically triples my, uh, chances at actually building something special.

   5. HSHarry Stebbings4:37

      Today, Base44 has, like, continued to thrive and is now over 100 million in revenue. It's done so well post-acquisition. Everyone's going, "God, does he regret selling now?" When you look at how fast it's grown and over 100 million in revenue, do you regret selling so soon?

   6. MSMaor Shlomo4:57

      Absolutely not for all kinds of reasons. First, I can comment on the revenue stuff and public company and, and so on. Um, but, one, we structured the deal in a way that even financially, um, I'm compensated for additional revenues and targets and milestones we're hitting. And second, this was the whole point. Like, I felt like in my eyes, this gonna be the largest category in s- in software industry, uh, 'cause a lot of, like, existing categories that we're familiar with, CRM and support systems and, and task management and project management, stuff like that are going to fold into the Vibe Coding category. And there would be a time, it might be in a few months, it might be in a few years, where it will be easier to build your own Salesforce type of, uh, CRM than to actually buy a license to something off the shelf.Um, and the whole point with partnering with Wix is let's take a shot at building something that would be huge. And I think without it, my chances would be really, really small. (laughs)

   7. HSHarry Stebbings6:01

      With the greatest of respects, that's wrong. (laughs) Dude, you're not gonna have people build their own Salesforce CRMs on the whole. Maybe a tiny, tiny portion or build your own Intercoms or Sierras or Decagons, th- and do maintenance and updates. Are you serious?

   8. MSMaor Shlomo6:21

      I honestly... I, I honestly think so. It might be not as, like, the current way that we s- with that we think about vibe coding where you prompt, like, "Hey, build a CRM for me," and then you get a fully fledged all features inside. It might be that software becomes more liquid, and so maybe you have a starting point. Maybe you have templates, maybe you have, like, open-source projects that people can take and then vibe code their own features and say, "Okay, this is great. Now I want this, uh, this version in, uh, Arabic from right to left, and I want, uh, on every lead to be able to add my own, uh, pictures of the lead or whatever," and then basically convert and transform the software to something that's more, uh, what they want. But I think the current model of one-size-fits-all doesn't make a lot of sense. It's not that everyone will move there. It's not that enterprises, it's gonna take a lot of time, but it makes so much sense for the buyer. Think about it as, like, the software's gonna be theirs, the code will be theirs. They will not need to share their data with the other, with other software vendors and be locked in in, like, uh, in, in whatever. They could adapt it and create a leaner version that's way more customized to their needs. Um, I think every... I'll, I will go even one step further. I think every software company, um, that needs implementers, right? There's, like, a Salesforce implementer or whatever, um, maybe in a decade from now is not gonna make it 'cause software... And again, like, a, a year, if you take a year back then, yeah, vibe coding wasn't even a thing and building software wasn't even a thing, and maybe it was, like, a nice toy thing. Maybe you could build, like, a task management small kinda, kinda software, or maybe you could build a nice website. In a year or two, you will get to a place where a lot of the current organizational tools that companies are using, you could build your own version or customize your own version, and it would make so much more sense to you as a buyer. The code will be yours. The data will be yours. You'll be able to adapt it, uh, to your needs. There's no one-size-fits-all. There's no, like, feature bloat. Uh, when you buy today, like, a task management, I don't know, software, it has so many features that you don't really need.

   9. HSHarry Stebbings8:43

      Do you think small businesses give a shit about that? Give a shit about actually owning their own data, owning their own code? If you're a small coffee shop or coffee chain or restaurant chain or legal and accounting firm, d- if that's the bread and butter of Wix's business-

   10. MSMaor Shlomo8:58

       Yeah.

   11. HSHarry Stebbings8:59

       ... do they need it?

   12. MSMaor Shlomo9:00

       Not necessarily the code and data, but they need something that's simpler and more customized to their needs. You know how I started Base44? My, uh, my back then girlfriend, now wife, um, has a small business. She needed a CRM, and she needed some systems for her small business. She's a tattoo artist, and she teaches, like, arts and, and stuff like that. And we tried building that with the former version of the... and, I'm, I'm not gonna name the, the software vendor or two software vendors that we tried doing that with, with, like, the drag and drop and the super customized, like, build your own tables or CRM or whatever, and it was hell on earth. And I'm, like, a software person, right? I should know how to do that. But, like, just configuring that and then making it so that it supports her process of how she processes leads and customers and whatever, and she's like, "Ugh, this is insane." I was like, "I know that, like, an LLM can code something leaner and way better for what she needs, exactly what she needs, and not gonna have, like, this entire features and enterprise features and team management stuff and whatever settings and stuff like that, which is gonna be super simple for what she needs and could adapt to her needs." And I was like, "I know LLMs can do that. I just need to provide LLMs with, like, the right setup, right? They can write the code, but she will need a s- a database to keep the leads, and she will need some, uh, uh, integrations with, like, sending emails and stuff like that." And, and that's why I started Base44 and exactly for that, and so I think small businesses specifically would want to build something leaner and more customized to what they need, something that they can understand, something that they can adapt. And, uh, bloated SaaS of the pre-2022 era, it's gonna be harder for people to use.

   13. HSHarry Stebbings10:51

       Dude, will Salesforce be bigger or smaller in 10 years' time?

   14. MSMaor Shlomo10:57

       It might, and Marc Benioff is a smart person. I'm sure that also, and the company's, like, is incredible, so they might adapt. But I think generally from this category, those companies will be smaller. If not, like, some of them would be eliminated.

   15. HSHarry Stebbings11:15

       Which would you say is most likely to be eliminated?

   16. MSMaor Shlomo11:18

       Smaller CRM companies. Every software that's basically a front end on top of a database with some team features and some integrations, um, and does not have a moat. And I think Salesforce is so big and so massive that this is, like, this is one of their moats. Like, they can make big bets and, like, move a lot of stuff and, like, go in many different directions, uh, when we all try to adapt in this AI era, but smaller players...... uh, I think would be eliminated.

3. 11:56 – 16:37

   How Base44 Thinks About Defensibility

   1. MSMaor Shlomo11:56

   2. HSHarry Stebbings11:56

      You said the word moat there. It's often a criticism of this category. You know, I've had the founders of Salesforce, Benioff, Atlassian, Mike Cannon-Brookes, Cloudflare, Matt Prince, uh, Dylan Field from Figma, uh, even Carl Pei, the founder of Nothing, the phone company, has created their own Base44 equivalent. And everyone says this is a business with no moats, and you see that in the ability for these people to spin up products in three months.

   3. MSMaor Shlomo12:24

      Yeah.

   4. HSHarry Stebbings12:25

      How do you respond to that statement?

   5. MSMaor Shlomo12:27

      I think it's relatively easy to create a Vibe coding tool. It's very, very, very hard to create a platform that could help people build products they'll actually use, that are functional, that are complex enough for real-world use cases. And for that, you need many layers of integrations, you need to adapt and tune the agent to handle very complex projects. I think some applications in Base44s are, are like millions of lines of code. And that's eventually the customers and users that you care about 'cause those are the one that will go beyond the hype of, "Hey, look, I've built this, uh, monday.com clone with a single prompt." No, you didn't. Like it's gonna take you like hundreds or thousands of prompts to get to something that you're gonna use day-to-day. And I think the moat in the category is being able to get there, and that's like layers of integrations and heavy lifting and building compute. You're almost building like a small cloud because you wanna give the LLM the ability to have access to databases, and have user management, and to have built-in integrations, and the ability to run scheduled tasks because that's what real software does. And you want to have the LLM can like access to many cloud services and integrations, and so you're building an entire ecosystem in this platform. But yeah, to build a Vibe coding tool that can build some websites or a front end that, uh, could connect to some APIs, I think it's super easy to do nowadays.

   6. HSHarry Stebbings14:01

      Does that not take away a lot of the low end of the market though? If you think about that, essentially, if it's able to build like good front end, good landing pages, good simple projects, then it basically leaves the higher end champion users for the more, uh, complex service providers like you. Does that not eat away and cannibalize a lot of the market?

   7. MSMaor Shlomo14:22

      I think it depends on like what you call the market. So like for Base44, uh, we almost don't focus on websites, which also goes, uh, very well with Wix, right? 'Cause Wix does a lot of like websites and, and marketing websites and e-commerce websites and stuff like that. For Base44, our laser focus from, our core focus from day one is the complex applications, the functionality. So if you're looking to build like a, a marketing platform where AI agents can generate content constantly and, and read your LinkedIn posts and see your, uh, um, the traction that you're getting and

   8. NANarrator14:58

      (instrumental music)

   9. MSMaor Shlomo14:58

      ... form they'll try to digest, and then filling your calendar, different like functional, complex stuff that you use day-to-day. And I think early on, the Vibe coding category was focused a lot, and still is to some degree, on, um, like front end and landing pages, uh, where many use cases were around like, uh, websites or e-commerce websites and stuff like that. I think this will get commoditized, um, for the category. There's still a lot to do when you're looking, like there's SEO and domain management and like if you're building an e-commerce that's like a complex business, you wanna integrate with like a full backend like what Wix has or Shopify or whatever. Uh, but for the functional stuff and the complex applications, the organizational applications, the, the personal applications, the full, fully-fledged SaaS platforms that buil- people are building, I think they won't get commoditized, and I think that's not a long market. Also, I think that's the more profitable use cases for tools like ours because at some point, okay, you're building a website, let's say a nice website for your VC firm or whatever. At some point it's like, "Okay, this, this looks pretty. That's it. I'm not gonna prompt anymore." And a lot of like the business model of this category is around like the credits for prompting, um, and so at some point you're like, "Okay, that's it. I'm done. I have this front end." It, it probably costs very, like not a lot to host it somewhere. Um, and I think the more profitable stuff with the higher margin and the more value would be in building the complex applications that you'll use day-to-day.

4. 16:37 – 23:18

   Mapping the Future of the Market in 3–5 Years

   1. MSMaor Shlomo16:37

   2. HSHarry Stebbings16:37

      When you map out this market in like three to five years time, can you help me understand what that looks like? 'Cause you've got, in my mind, like three different entry points. You've got the Base44s, the Loveables, and the Rapplets in one. You've got the Figmas, the Cloudflares, the Atlassians, the Salesforces in like the incumbent insertion point, and then you've got the Canvas on the other kind of more consumer end. I put, probably put Figma in there with Canva. What happens here? And then, sorry, you've also got the Cognitions and the Cursors and the pro tools there. Do the pro tools come down and eat your business? Do you go up and eat their business? What happens there?

   3. MSMaor Shlomo17:18

      (laughs) It's a very good question. I'll start with like the, what you categorize as incumbents, but I'll actually call it like the, the different software categories that exist, so like let's take a Salesforce or a monday.com, for example. I think a lot of those tools will build built-in Vibe coding tools inside their platform. You can see that like with, uh, monday Vibe, which is a tool they've built on top of like the monday.com infrastructure of like boards and like the, the database behind the scenes and the, the user managements, all those permissions and so on.And this is what I, wha- what I said when I meant software's gonna become more liquid, so I- I don't know if Salesforce, uh, is planning to do that all, but I'm assuming that at some point, like, you will be able to create your own user interface for Salesforce. And Salesforce will become like this system of record, where, like, you can create the UI that you want and how you wanna look at a lead or contact or account or whatever. And I think a lot of tools are gonna do that 'cause b- this is basically taking kind of, like, the... Instead of, like, configuring different things and building different features, it would allow a lot of extensibility to existing products. Um, and so you start seeing that and you see also, like, uh, um, Microsoft building, like, some vibe coding tools on top of, like, the, the Office and whatever inside. Like, I, I can see a future where a lot of the existing SaaS tools and SaaS product have a built-in vibe coding, customizes the software to your needs capability. Um, I think it's an interesting take on what's gonna happen with the pro players versus the very consumerish/uh, AI app builder or visual AI app builder where I think for, for Base44, for example, from day one, the objective was that you won't need to see a line of code. Um, and that for a lot of our users, like, line... Like, seeing code actually, like, I wouldn't say terrifies them, (laughs) but, like, it's not what they wanna do, right? You have... You're a lawyer and you wanna, like, create some system for your law firm, um, or software, like, there's no need for you to see code and you, you should be able to customize and do whatever you want just by prompting it. Um, I think that Cursor and the Windsurf or Cognition of the world are doing a fantastic job with focusing on the existing, um, dev community and kind of, like, target audience. And there's a lot to do there 'cause there's a lot of... It's gonna take a lot of time for tools like and platforms like Base44 and the Bolt and Lovables of the world to get to a place where you can build s- like, the existing, whatever, X percentage of software that we cannot build today. So give an example. Um, it's very hard to build a firewall today in Base44, right? Something that will sit on your computer, will be very, like, in terms of performance, will be very native on your computer, will, like, send logs to an, uh, centralized server that will analyze it for the organization. So, like, there's existing software products where the AI app builders, like Base44, it's gonna take a lot of time to get to, uh, if any. And I think that's also a lot of, like, how we measure internally. And one of our objectives is like, what's the percentage of software that we can build today and how we push it forward? So, like, uh, I'll give another example. We're working now on, uh, allowing applications inside Base44 to use scheduled tasks. So maybe you wanna build something and, like, every Monday morning, send an email to all your users with a summary of what they did inside your app or whatever. Uh, or you built a personal assistant and you've integrated WhatsApp and you wanna tell the personal assistant, "Hey, remind me in two days to pick up the kids," or whatever. And so this obviously doesn't exist today. And building this basically pushes slightly more the type of software that you can build with Base44. Um, and we've built, like, this built-in capability to build AI agents and we've integrated it with, uh, WhatsApp and Slack and whatever. So now you can actually build bots, not only applications. And so we constantly measure kind of, like, the type of software they- that we can build. And I think that Cursor and Cognition of, of the world are doing a terrific job with working on, like, this enormous software projects and especially, like, enterprise projects and, and, like, large, very complex software that needs a lot of backend services and it's, like, multi, uh, uh, in a way, very complex, uh, applications. Like, we wanna build a firewall or we internally obviously use Cursor to build our own backend. I don't know where the market will be headed. I'm sure that they will go a bit up market and bring in some of, like, the visual, uh, builder, the, uh... And kind of like them for the less complex users. And I'm sure that, uh, the earlier, like the- the Base44, the Bolt, the Lovables of the world will go a bit down, uh, with, like, the types of software that you'll be able to build and the software that you weren't able to build like, um, a year ago or a few months ago, you'll be able to build in a few month. It's gonna be interesting. But this is a huge market. It's, like, uh, it's... A lot of it is, like, depends on, like, what's that type? Like, you cannot build for any type of users. Either you serve the developer where they wanna see the code and they wanna edit it and they want to bring, like, uh, terminal stuff and you wanna run it on their computers or you serve the, the non-technical, uh, user, which is, like, ?????.

5. 23:18 – 30:47

   I’m Worried About Google

   1. HSHarry Stebbings23:18

      Mayal, you have Lovable, you have Replit, and you have Bolt. Who's the best and who's the worst?

   2. MSMaor Shlomo23:24

      (clears throat) Tough question. I think Replit is more technical and started as a dev tool. And I think for developers, they're doing a good job. For the semi developers, we'll call it this way, developers, probably the hardcore ones will go to Cursor. I wouldn't say who's the worst. (laughs)

   3. HSHarry Stebbings23:45

      Which one do you not worry about?

   4. MSMaor Shlomo23:47

      I'm not worrying about those three.

   5. HSHarry Stebbings23:50

      Wow. Who are you worried about?

   6. MSMaor Shlomo23:52

      I think more about market dynamics and how things will turn out to be with, um, the model providers.I think my theory and thes- thesis is that there's always gonna be huge advantage to the folks who are playing with multiple model providers, but if at one point one of the model providers will just win the market by a wide margin, then the next logical thing is to conquer the vibe coding market because this, again, in my non-objective eyes, will be the largest software category. Um, as long as there's, like, a fight and there's a race, um, then we're positioned to control a very large share of the market and bring in a better solution to the market.

   7. HSHarry Stebbings24:44

      Who do you think is more likely to do that, Codex or Claude code?

   8. MSMaor Shlomo24:49

      Google, by far. They have the compute. They're moving very fast. If Gemini at some point wins the race, like, literally wins the race, um, then they have the entire stack, including, like, Google Cloud and whatever, whatever they need, and they have the data and the whatever and integrations and, and Google S- Suite and so on, uh, to build an incredible empire. I'm hoping for a tough race, and it looks like that right now. Uh, and it's, by the way, an- an insane market dynamics 'cause, like, like obviously spending a lot on A- on AI, and, like, in a split second, like, you change one string in the code and you move, like, millions in spend to a different provider. And it's like in... and it bounces back, d- depends on, like, who provides, like, the best model and the best whatever cost and throughput and so on.

   9. HSHarry Stebbings25:44

      Can you give me an example of that?

   10. MSMaor Shlomo25:46

       Let's say on the coding space, there's, like, you see Claude comes out with, like, Claude 4 and Sonnet 4, and you're like, "Perfect, let's use that." Um, and before that we were, like, doing a split between, uh, Sonnet and, and Gemini. And then, um, OpenAI comes up with GPT-5, and so... And you try to figure out for all of those folks, by the way, it's like, it's not necessarily that there's, like, a better model that you move your entire workload, but you see it as, like, places where the model is doing better. So, for the first prompt, Sonnet is, like, the best, like, the best design there and knows how to structure it and is really good with, like, writing a c- uh, like, a project from scratch. But then what we found is that, like, GPT-5, and especially the, the thinking and the pro versions, like, really good at solving hard bugs. And so you move a lot of workload, especially on the complex applications and very large context, uh, uh, API calls to, um, OpenAI. And so when doing that, like, you're literally moving hundreds of thousands of spend, which is actually l- just, like, the simplest change. And if now, I don't know, but maybe Gemini 3 is gonna be better than anything else, which is what people, um, is nowadays saying, then we're gonna move a lot of spend and a lot of workload overnight to a different vendor. And that's like an insane market dynamics to me.

   11. HSHarry Stebbings27:10

       I- I get you. It's an insane market dynamic because everyone compares the LLM market to the cloud market in terms of it being a commodity, but actually a mega market that will be phenomenal for the providers with a couple of cool winners. But what you just said there is completely different, which is an ease of switching that you would never have in the cloud market. You do not switch your cloud provider with a line of code in seconds multiple times a month.

   12. MSMaor Shlomo27:34

       No.

   13. HSHarry Stebbings27:34

       How do you think about that analogy from LLM provider to cloud provider, given what you just said?

   14. MSMaor Shlomo27:39

       Yeah. You do not switch a cloud provider. That's very hard to do, right? My previous company, we tried doing that. It was so painful. Uh, if I've known how tough it's gonna be (laughs) when we started that for, like, a year-long process, probably wouldn't do it. For the LLMs, it's insane how easy it is. I think they'll still, like... So, I think what we see for the model providers is that they're building multiple tools for multiple levels in the value chain. So you see all of them having this, uh, CLI coding tool and all of them having this very, um, high end or, or end user focused shared product like Gemini and ChatGPT and so on. Um, and you start seeing them bringing in... So, Gemini is now everywhere in my Gmail, in, like, a lot of, like, workflows and, like, uh, building automation. And so you start seeing them go up the market of software and trying to... and, and bringing their tools and their model basically to drive consumption all across the stack or if you look, like, a year ago, it was mostly like you could consume it either in an API or we could consume it in, like, this, uh, um, end user type of, uh, chat. I don't know. It's gonna be super interesting. It's just that to me it's crazy the fact it's like one... l- let's say one of them kind of like, uh, uh, storms ahead for, like, six month, right? Something that haven't happened before. Uh, but it's, like, literally the best model for, like, six month ahead. How will they be able to handle the fact it's like... So let's say someone comes out now with a, with a better, stronger and cheaper model than Sonnet 4.5. Um, and it stays like that for Entropic for, like, the next six month. Like, what I'm assuming, I don't really know, but it's like, what h- what happens to Entropic's revenue? Right? It's like overnight, okay, you switch from all the cursors and the Claude codes, let's say you switch to Gemini or whatever or GPT 5.5 or whatever. Um, this is, like, such a fast decline, but also they had such a fast, fast ascend. I don't know how it's (laughs) gonna be crazy. Um, but I don't, I don't think I have the right answers to what's gonna... how this market is gonna play out. Obviously we're all hoping that, uh, this is gonna stay a very competitive market where prices will go down. I think also when will making, like, strategic bets on what we're going to optimize and what's not, and it's very...... strange to manage a business like Base44 because in some places, there's like, you see things that you need to either optimize or build, but you're taking the decision not to do that because they know that future versions of the models are gonna take care of that. So one of, like, the, the thing that, uh, Vishay and I are speaking of when we're speaking strategy is, like, we're taking into consideration that the prices of model will go down towards zero, um, at least for, for tools like Base44, uh, for platforms like B- Base44. And so this is like a strategic decision where you're saying, "Okay, I could optimize some..." And I'm, we're doing that, but like, uh, we're investing a lot of people, uh, right now to optimize the costs or we're taking into consideration just the pricing, uh, the prices of the models are just going down and down and down.

6. 30:47 – 37:15

   Margins Do Not Matter

   1. MSMaor Shlomo30:47

   2. HSHarry Stebbings30:47

      One of my core questions that I want to understand is the margin structure, and when you look at today, every dollar that comes in, what percent of that dollar goes back to an LLM provider?

   3. MSMaor Shlomo30:59

      Depends on the timing. The exact number, I cannot say 'cause we're a public company. Even though I miss that a lot to kind of like share that.

   4. HSHarry Stebbings31:07

      In the nicest way, dude, no one shares that.

   5. MSMaor Shlomo31:09

      (laughs)

   6. HSHarry Stebbings31:10

      Like why, there's no way, and like you, you, again, educate me. Does no one share it 'cause it's so bad?

   7. MSMaor Shlomo31:15

      No. It's also very decision dependent. So, like, you can change it from like a low margin to a very high margin in just one decision. It's just deciding on how great of a service you wanna give your users. I think what will happen eventually with, with all coding agents is that the cheaper open-source models are getting way better. You always wanna play with like the, the strongest models. But ch- what will happen and what we're kinda like looking at it internally is like building this switch or proxy where when you get a prompt from a user, maybe the prompt is so simple that it doesn't even matter like what model you're getting. It's like change the color of the button from blue to red, right? I don't really need to use like the heavy SONNET Maximum Thinking, whatever, pay a lot for that, right? I can, I can kinda like forward this request to a smaller, cheaper model. And this will also be like a way better experience to the user because it's gonna be so much faster than, than bringing kinda like the heavy guns of like their phone tier models. And I think doing that and the more models, the more the smaller or open-source models are able to take a larger percentage of the requests and prompts, obviously margin's gonna improve drastically. I don't think it's bad. That's, that's my, uh, I don't think m- yeah, I don't think current margins are bad, but I think they're gonna get way better.

   8. HSHarry Stebbings32:38

      Today, they suck. And everyone always says, "Oh, but we're gonna have, like, model selection as," exactly as you said there, which is, "We'll be able to do intelligent routing on models." And I'm like, "Okay?"

   9. MSMaor Shlomo32:51

      (laughs) Depends on like, uh...

   10. HSHarry Stebbings32:53

       I hope so, Mael.

   11. MSMaor Shlomo32:54

       Yeah.

   12. HSHarry Stebbings32:54

       I hope so. (laughs)

   13. MSMaor Shlomo32:56

       We all, we all do. Uh, I think it depends on kind of like the, the product and the flow that you're building. So one of the players that you mentioned, for example, is doing a really good job with autonomy. Uh, where kind of like you prompt something and then they go and they run for like 20 minutes or 30 minutes to, and they have like this coding agent and it's-

   14. HSHarry Stebbings33:16

       This is Rappler's agent, right?

   15. MSMaor Shlomo33:18

       Yeah.

   16. HSHarry Stebbings33:19

       Yeah.

   17. MSMaor Shlomo33:19

       But like w- first, what if my, my prompt like, what if I kind of like didn't really mean what I just prompted or like, okay, it went and built like this fully, um, just a free user and they just burnt like a lot of cash right now on like coding and testing and whatever. And if, so I think it depends on like the level of autonomy you wanna give and kind of like how fast iterations you're giving out to users. I don't know the margins but like, all I'm saying, you could burn a lot by not understanding what the user actually wants. But from all things in the industry, I think the margins are the least thing that I'm worried about.

   18. HSHarry Stebbings33:54

       The most thing you're worried about is Google coming in.

   19. MSMaor Shlomo33:56

       Not really, but like the competitive landscape. The pace is insane. Like for us, every feature that we put out, we know that it's gonna take either a few weeks or a few month for a competitor to copy, and we see that a lot.

   20. HSHarry Stebbings34:11

       How does that change w- how does that change what you build? It's really interesting. I had, you know, the founder of Fiverr, Misha, on the show, uh, from Israel too, and he said the time to copy is the single biggest difference in the last two years of software, where it used to be years, now it's weeks.

   21. MSMaor Shlomo34:26

       Yeah.

   22. HSHarry Stebbings34:27

       How does that change what you build or how you think?

   23. MSMaor Shlomo34:30

       You take big bets on things that are, if you can find those, that are substantial to your users and will be really hard to copy. So I'll give you one example. Uh, the whole reasons for Base44's existent, existence is the built-in backend. Uh, the fact that we built Base44 as a fully or vertically integrated platform where for every application, you already have a built-in database, user management, authentication, integrations, analytics and so on. And the thing is, is that we didn't use a third-party provider like Supabase, which is what the rest of the industry is using, Supabase and Neon. Uh, and we've built that like built-in and we've taken a very courageous kind of like, uh, step there, and there's still a lot more to build there. This is gonna be very hard to replicate, uh, and very hard to migrate your, uh, whatever, millions of users from one, from Supabase to a, uh, a homegrown solution if, if one of the competitors will try to do that. And I think this is a bet that we're deepening further and further and further. For other stuff, it's a game of velocity, of delight, of like taking the right UX decisions, um, and having the right taste, um, and just being, trying to be there when, before everyone else gets there. So it was like, uh, I think we started this, uh, so two weeks ago, we came out with something called app suggestions, very small feature, which is very nice. Like after you prompt, it gives you like the next steps, like, "Okay, now we add a dashboard." Like it gives you kind of like suggestions to what to do in your app.It took maybe a few days for other competitors to, to copy that. Uh, but it's fine. It's like, um, that's the game that we're playing now.

   24. HSHarry Stebbings36:20

       What percent of starting users finish the project?

   25. MSMaor Shlomo36:24

       It's a good question of what finishing means, and I don't think I have the, the answer for that. I don't think I have the right number for that.

   26. HSHarry Stebbings36:30

       Deployed application that works.

   27. MSMaor Shlomo36:34

       That's many, the- but the- that's not the right question. The right question is how many get the usage do you want? Kinda how many get to actual usage? So many publish their apps, and their apps are fully functioning. At some point you'll, like, battle test your agent so much to teach it how to query the database and how for every, like, you start categorizing the different flows and the different use cases that user prompted, and you make sure that you feed your agent with the right examples. So many, many, many get to, like, functioning applications, so this is like a saturated benchmark. The question is how many get to actual usage day-to-day? I don't have the right answer to that.

7. 37:15 – 41:52

   What’s the Metric for User Success?

   1. MSMaor Shlomo37:15

   2. HSHarry Stebbings37:15

      What metric is user success for you, then? If there is this nuance and complexity with regards to, like, success of a user, internally, what is your metric for user success?

   3. MSMaor Shlomo37:26

      There's a couple. Um, first, we measure the sentiment of the messages they send in the chat, um, which was also weird to me, but it turns out many people are, like, speaking with the chat as they would to a human. They either tell it, "Okay, fantastic job. This is exactly what I wanted when I was, like, asking for this feature," or they curse a lot, like, "This is not what I wanted. Oh, you deleted this button, and I wanted this and I wanted that." And so we have this metric that will literally measure on a minute-to-minute basis of, like, how many of the prompts... 'Cause nowadays, we get, like, 10s- 10s of 1000s of prompts, like, a minute or whatever in, in Tandem, and so we measure the sentiment, um, and that's how we know our coding agent does what it's being asked to. And you see kind of, like, how, uh, if we release an upgrade, you see kinda like this, this, the negativity metric kinda goes down, or if, uh, when we jump from Sonnet 4 to Sonnet 4.5, you see a major improvement there, so this is one thing that we measure. And again, this, even the metrics changed a lot with a business like Base44 because when we started, it was mostly around bugs, right? How many times, like, the model messes up something and the application, uh, doesn't work or there's, like, bugs and, like, hard things that, like, uh, break your app. Nowadays it's gonna, it's not easy to create bugs in your app. The LLMs are really smart. The, the infrastructure is battle-tested. So it's more about does the agent actually does what the user is asking of it? Um, does it, um, make the right change without making additional changes, uh, or messing up other features? Um, and you can see, for example, that again, so even if, uh, I gave the example of, like, scheduled tasks, so maybe the user asks, "Hey, I want you to send me a daily email with, like, reminders." And then the, the coding agent says, "I cannot do that. I don't have the right infrastructure to do scheduled tasks." And so when we add scheduled tasks, we should see few numbers, like a, a few percentages kinda like of this, uh, metric, uh, improves.

   4. HSHarry Stebbings39:44

      Going back to the elements on, on margin, I had Ev Randall, who's the new GP at Benchmark, and he said, "Hari, Hari, you're thinking about this wrong. We need less of a focus on margin, and we need more of a focus on gross dollars per customer." In other words, expanding the spend of the customer, not the actual margin on a lower spend. Do you agree with that? Or do you actually think, no, we'll revert back to a margin-optimized world where we have open-source models as we discussed?

   5. MSMaor Shlomo40:13

      I think 100% right now the, the game for our category is growth, um, and capturing as much of this insanely big market. There's almost no person that shouldn't be a user for a platform like Base44, and so obviously it's, like, growing not necessarily the spend of every customer or to as many customers as possible. The spend's gonna come down as models would be cheaper, so, like, I don't think it's, like, let's try and grab as many dollars from the customer as possible. So I'd say margin's always important. Keep your business kinda like... There's one thing I learned in Base44 is, like, when you lean and you are sane business and you are, uh, like, a good business, that does really good (laughs) to all other aspects of the business. And it's not something that I understood in my previous company, uh, which wasn't, like, it wasn't like I made vital mistakes, but it's like we were very capital-heavy and there's something by creating a, a business that makes sense and is healthy in margins and retention and, and, uh, the spend and whatever, uh, that allows you to grow later on in a sustainable way without at some point hitting the brakes and saying, "Oh, well, we've, like, nothing makes sense in our margins," or whatever. And so I'd say margins is something you should constantly look at while knowing or while planning ahead and taking into consideration that the model-related stuff, which is, like, 99% of the spend or 90% of the spend, um, is changing drastically and, and aggressively every few month.

8. 41:52 – 49:33

   Do Early Revenue Numbers Actually Matter in AI?

   1. MSMaor Shlomo41:52

   2. HSHarry Stebbings41:52

      When you have that change in spend, you have, like, a less certain revenue, as we said earlier. The transience of spend leads to an anthropic could skyrocket or could not, depending on where you shift spend. H- can you advise me... Honestly, dude, I'm an early-stage investor. I invest in AI apps today, and everyone is posting insane fucking numbers. Like, you know, you look at yours and it's like 100 million. You know, your, your Loveables and your Wrappits, like, 200 million. How much weight...Should I, as an early stage investor, place on revenue today?

   3. MSMaor Shlomo42:25

      That's a very good question, which also me as a, myself as an investor, like, I'm asking myself. So obviously, like, the metrics today is, like, uh, were, are, like, different, right? When I started my previous company, we got to, like, $2 million in ARR. I think it was, like, a year and a half and everybody were cheering or was saying, like, "This is insane." Like, whatever. (laughs) Nowadays, it's like if you, if you can show the, the hockey stick of how fast you got to, uh, $10 million or $20 million, everything changes. I think it depends on, like, the, the model of the company we're investing in, uh, for me, is like smaller checks into very healthy businesses. So the thing that I look at the most, okay, fast revenue growth, obviously that's what you want to see. This is like the most exciting, but there are two things. One, healthy business is like how likely is this business to get eaten by other players, the model providers or whatever? And the second, which is very much related, is a vertically integrated business. Um, so here's something really cool that, that, that we're looking at right now. So Cursor came out, I think it was two weeks ago or maybe a few weeks ago with their own model, right? Composer. Um, and this is like an, an, a nice way to, like, think about strategy of those types of businesses. So think about Cursor, right? I don't know how the margins were. Let's take the, the kind of like the, the, the not optimistic, uh, approach of saying, "Uh, margins were, were bad," right? They were paying so much to the other model providers or whatever. So this is like an insane strategy, is like grow as fast as you can, get to, like, insane, uh, distribution. Like, every developer that reads through Twitter, like, probably installs, uh, Cursor. And then at some point bring in your very efficient model that you trained that is now fast and start moving people from the very expensive low margin models into your own model, which is likely to be high margin. And then again, overnight (laughs) your margins get tremendously better, but you've, you've grown fast as hell and now you have the distribution, now you can optimize margins because again, what it, like, the margins for the models are, are like, that's something that's easy to, uh, if you decide, not easy, but it's like it's very doable to change drastically overnight. Um, and I think this is a really interesting strategy that we're also thinking internally, is like go as fast as you can with the frontier models. At some point open source becomes really a viable option to maybe fine tune on like the billions, almost trillions lines of code that we have inside Base44. Um, and then have this, like, very interesting margin take where for some of the prompts you forward, like, the, to the, to the fast high margin great model. Users really enjoy it because those models are going to be way faster than like the 044 heavy, heavy models. So this is like an interesting take when you think about vertically integrated applications. There are some applications today that I think are growing very, very fast that, that are going to have a harder time keeping it this way. I remember, I don't remember the name of the company, there was like this company that was like very, one of the earliest practical use cases for LLM. There was like in, in marketing, they were generating content and they grew super fast. You probably remember them.

   4. HSHarry Stebbings45:49

      J- Jasper.ai.

   5. MSMaor Shlomo45:51

      Oh, yeah. Grew super fast and the moat was just like, it was absolutely hard to create moat over there because it was like clearly that... It was like, okay, you ch- they're like, "You only using LLMs," right? For Base44 it was like an entire infrastructure. You build like a mini cloud that allows applications to, uh, send emails, generate images, use other LLMs to, like, uh, deploy, to manage users and whatever. So you have something around LLMs that makes sense to have like enough of a business. When I'm investing nowadays, I'm thinking, can this business, if not today, be at some point in the future vertically integrated, self-sustainable, like maybe what Cursor will turn out to be at some point?

   6. HSHarry Stebbings46:34

      Can we just go through in a helpful way, you said three elements there. Revenue growth. What revenue growth is exciting then? Is it just the highest? Is it, "I need to see one to 10 in the first year"?

   7. MSMaor Shlomo46:47

      Which type of-

   8. HSHarry Stebbings46:47

      "I need this." Yeah.

   9. MSMaor Shlomo46:49

      If you're building a SaaS, yeah, it's gonna be a zero to 10. That's gonna be exciting.

   10. HSHarry Stebbings46:53

       Zero to 10 in a year for you means a lot.

   11. MSMaor Shlomo46:55

       Yeah, I think this is insane. Zero to 10 is an insane growth, um, for any SaaS business.

   12. HSHarry Stebbings47:00

       Uh, well, I mean, honestly now that's, that's, it's, it's good, but there's quite a lot that do zero to 10. I mean, a lot.

   13. MSMaor Shlomo47:08

       That's, that's insane, yeah. That's what I'm saying. It's gonna be the, on the exciting piece. I'm not, like, when I'm looking to invest, I'm not necessarily gonna say, "Okay, the company has to do zero to 10."

   14. HSHarry Stebbings47:17

       How do you determine if they're gonna be eaten by models? Like, what is the question or criteria that will help you get comfortable with that?

   15. MSMaor Shlomo47:25

       If most of the value is on the way they prompt the application for a certain thing, like they've built, let's say, a photo editor. And so there's not a lot of features in a photo edi- like an AI based, like you feed a picture and you say, "Okay, um, make me, I don't know, make me, mm, prettier or whatever." Um, and if a lot of that's gonna be, like, the weeks in the prompt, I don't think that's, uh, that's, uh, that's gonna be a healthy business for the next decade. I don't think there's, like, a lot of moat. If you're building a lot of infrastructure or the company itself is vertically integrated, I think that's a very interesting take. So, like, you could nowadays build a competitor to Harvey and Spellbook that would kind of like teach some LLM better way on like how you, how to do law or whatever. Or you could build a law firm.And I think building a law firm is going to be very, very, very interesting because this is not something that a model provider would do, or any other kind of, like, uh, same software entrepreneur that wants to do just software. And I think there's, like, an opportunity today to build very healthy, new age, vertically integrated businesses. Um, and it could be, again, a law firm. It could be buying a hospital, basically optimizing everything on every layer and making it AI native, and maybe in a few years, being the first ones to introduce, uh, uh, uh, robots into, uh, as surgeons or whatever. And I think nowadays there's, like, opportunities all across the firm, like, in different categories, software, not software, whatever, to build vertically integrated, uh, companies. And I think if your company is just about, like, how you're prompting an LLM, and maybe you're doing a better job with, like, tuning it to whatever, legal needs or finance- finance need or whatever, and the infrastructure that you have below it is not very complex, it's going to be hard to- to have a moat.

9. 49:33 – 53:01

   Where Should Smart Money Go Today?

   1. MSMaor Shlomo49:33

   2. HSHarry Stebbings49:33

      Are you angel investing today?

   3. MSMaor Shlomo49:35

      Yeah. Or starting to. (laughs)

   4. HSHarry Stebbings49:38

      Do you enjoy it?

   5. MSMaor Shlomo49:40

      Very much. Was scary at first, but nowadays it's so much fun. Also, 'cause, kind of, like you- like, you have a chance to work with, like, incredible founders and be, kind of, like at this huge platform shift, probably the biggest ones that we're facing, and to think with them, "What the hell are we gonna do?" But also to think with them is like, "What are the new opportunities that they're going to open up?" They're just like building... So coming back to- to this crazy idea I said earlier, like, building a law firm (laughs) in, like, five years ago would seem like the most, like, bad idea that you can think of, right? Building a law firm, buying a hospital and optimizing it with AI or whatever, right? Building a new bank. I think today is like you have this huge platform shift. There's so much, so many exciting discussions when you look at different industries of like thinking in two years from now, four years from now. Like, what's the craziest thing that we can think of? Like, what should we aim for that's barely possible today or not possible today and should be possible in two to four years? And I think this is like an incredible, um, way to think about angel investing and so much fun doing so. Very risky, uh, but very, very fun.

   6. HSHarry Stebbings50:59

      Where do you think no one is investing today that everyone should be investing today? And where do you think everyone is investing today where they should not be investing?

   7. MSMaor Shlomo51:09

      Oh, wow. That's a good question. I think the not sexy industries, again, the finance, the- the restaurants, the whatever, the- the AGMOs, the like- actually having, like, entrepreneurs building that end-to-end is where people should be more, like, investing more into. I think a lot of people investing nowadays to very fast growing, kind of, like, uh, hockey stick, um, revenue plotting, uh, startups, which is not what I think... Unless you know a- a business or an industry very, very well, I think it's very hard to... for investors outside to understand if this is going to be with- with a moat or not. So a good example for that is I had the opportunity to invest in, like this, um, agent companies, right? Like the Manus, the- the- those folks.

   8. HSHarry Stebbings52:10

      Yeah.

   9. MSMaor Shlomo52:10

      I don't like... I felt like I don't know the industry good enough to understand if at some point this would get commoditized by the model companies. And so this is like an area that I wouldn't invest in because I was like, "Okay, this is obviously dangerous." Like, the... obviously the more that- that the capabilities that OpenAI builds into ChatGPT and then Google into Gemini whenever, they're like, they're gonna be well... Like, they're gonna have, like, serious and- and incredible agents. And I'm not sure this category, even if you get to, like, ex- insane growth, like you can see the Manus and th- the other players, like, they have this- this graphs that I think are even, like, go even more aggressive than the- than- than our industry. Uh, I'm not sure that there is a lot behind it rather than like prompting and giving it tools that are for sure gonna be part of like ChatGPT or the Gemini interface or whatever.

10. 53:01 – 57:47

    How does Base44 beat Cursor?

    1. MSMaor Shlomo53:01

    2. HSHarry Stebbings53:01

       Michael Eisenberg said I had to ask you, make the case for how you beat Cursor.

    3. MSMaor Shlomo53:07

       When I started Base44 and I said, "Okay, I'm gonna do this really for the non-technical people," because at- at that point, and still do, most of the industry, if you wanted to, like most of the players in the market, if you wanted to build something really functional, you should have prompted like, "Hey, connect the backend." And then it will tell you, "Okay, bring the API key from Supabase." And whatever else, things that, like, your mom and my mom wouldn't be able to do, right? And so I said, "Okay, let's build for the very non-technical folks." And then when doing so, obviously, like... and- and Base44 started getting a lot of traction. And obviously, like, we also got some developers and some technical people that said, "Give me the code." Um, and- and like, "You should invest in like a GitHub integration, allow me to edit files," and whatever. And- and at some point we also implemented that. But the more time passed and the more the models got better and the more, like, faster and whatever, there were less bugs, nobody wanted to see the code. Uh, and it was less important for- for people to actually be able to manually edit and change and whatever. And I think the direction, and again, that we're going to is like more and more and more percentages of, like, more and more types of software will- you'll be able to build inside Base44.... that nobody wants to see code. I don't think it's, like, if- if you get to, like, this flow state where you're prompting with AI and it's gonna be super fast and it's gonna be almost immediate, every prompt, like, you'll see that and it- it's gonna change, I don't think you wanna see the code and I don't think you wanna start saying, "Okay, you should look at these files and those models and, like, uh, well, like, run those tests and whatever." And I think nowadays, for some and a growing part of software, even the most technical users would prefer building inside Base44 than to do it in Cursor. Uh, and they would wanna, like, now set up servers and databases and see the code and write tests and kinda, like, navigate through the files and whatever. And my guess is that this portion of software that you can build inside Base44 is gonna grow. And I think obviously nowadays the experience, if you can build it inside Base44, you- you probably prefer do it inside Base44 than in Cursor.

    4. HSHarry Stebbings55:22

       You can invest in Cursor at 29.3 billion or you can invest in Cognition at 12. Which one would you do?

    5. MSMaor Shlomo55:29

       Probably Cognition. I think the notion of... So software building as a category is gonna grow insanely fast. I think our notion from the previous age of venture capital where the winner takes it all is wrong, and I think this category's gonna be so big that, uh, everybody will take a niche at some point. And so I think Cognition's gonna grow, have, like, more room to grow. I also know that, like, throughout time they'll be able to either replicate the most successful, uh, features inside. I think they have more room to grow, where betting on Cursor is like betting that it's a winner takes it all market.

    6. HSHarry Stebbings56:18

       Why don't you think it's a winner take all? And if it's a- not a winner take all, does that still work for a venture model? Our business is predicated on winner take all.

    7. MSMaor Shlomo56:28

       Not necessarily. Our business is predicated or the venture capital business is predicated on huge returns, right? If you look at, uh, all of my competitors and on Base44, we're all growing insanely fast and I think, at least I can say about Base44, but maybe the other players, like, healthy businesses. The- those are gonna generate huge returns. They're all, like, fast-growing businesses and it's not a winner takes it all market, which is also, by the way, why I got into this market in the first place (laughs) . Because, like, when I started, there was like... Bolt and Lovable were, like, very viable on- on- on social media and I was like, "This is gonna be such a big market. I feel like I have a very interesting take on this market with the backend built in, like, focusing on functional and complex apps," while most of the other players were focusing back then on, like, frontends and maybe could collect the frontend to Superbase but it was very hard. I think we're at a different ball game where AI is gonna generate so much value that markets are gonna grow very, very fast. Obviously some will get cannibalized, but markets are gonna go very, very fast and the VC model is not necessarily a winner takes it all, but it's a huge returns type of,

11. 57:47 – 1:01:13

    Will the AI Boom Hit a Revenue Speed Bump?

    1. MSMaor Shlomo57:47

       uh, market.

    2. HSHarry Stebbings57:47

       Do you think we will hit a speed bump? Everyone is very concerned about the AI bubble and not delivering on the revenue that we promise. Do you think that we will have a speed bump where there is a sign that we don't deliver the revenue that we promise?

    3. MSMaor Shlomo58:01

       I think the question is whether it's gonna turn out to be a platform play, which means when building better models, the entire ecosystem in the market benefits from, or whether what- what will happen is, like, model companies are gonna fight, their margins will get worse and worse because they will need to lower prices. Um, maybe at some point, um, we'll need to figure out or create something better in the LLMs because maybe we'll hit a wall. Um, so this will be the bigger- bigger question. Like, is there value that nowadays, uh, GPT-5 to GPT-5.1 adding is only to open AI off for the rest of the industry, uh, or the rest of, like, the market? If it's for the rest of the market, I don't think we'll hit a speed bump. Me personally, I don't believe we'll hit a speed bump. I think even with existing models, I don't think also we'll hit, like, a wall with, like, the- the importance of LLMs, but I think even with existing models, we're only scratching the surface of economic value that you can create. If, uh, if a one person team can, uh, can get sold for $80 million and building a viable business, and healthy business, and profitable business without people, it means that you'll be able to do a lot more stuff with very le- like, less people, and that companies will become more efficient and that... And- and as a result of that, every product that we buy is gonna be better, is gonna be cheaper. Um, I think there's so much more to do, and this was like with the previous version of LLMs, um... I've seen what it takes to- to build a company, uh, that- that needed to raise or- or was very capital heavy, $130 million and, like, over 100 people, and I've seen now in the age of LLM how- how much better it is or easier to build a very lean company as one person, um, and I think this value is gonna trickle down from enterprises becoming more efficient, many more startups because there's no technical barrier anymore, to eventually the consumer benefiting from- from all of those, from all this economic value that's gonna be created.

    4. HSHarry Stebbings1:00:23

       How many people are in Base44 today?

    5. MSMaor Shlomo1:00:25

       No, I cannot say. Uh, five minutes before the- the conversation they told me I cannot say numbers or number of people or whatever.

    6. HSHarry Stebbings1:00:33

       Really? W- I, I, I, I don't wanna pry, but w- why is that?

    7. MSMaor Shlomo1:00:36

       I don't know.

    8. HSHarry Stebbings1:00:36

       Is that just number of people?

    9. MSMaor Shlomo1:00:38

       I think they're waiting for, like, the investor's updates. Uh, we'll go and-

    10. HSHarry Stebbings1:00:42

        That's interesting.

    11. MSMaor Shlomo1:00:43

        Yeah.

    12. HSHarry Stebbings1:00:45

        I don't know if it's a good thing to have more or less. If I was a public company, I'd, I'd want to say more because it feels more secure to a less educated investor base that doesn't think about AI efficiency within dev teams.

    13. MSMaor Shlomo1:00:57

        I think the public markets nowadays are so fluctuating, and it's very hard to, um... Like, you have to see consistent results. I don't think that the stock kinda, like, behaves the same way that, like, you see inside the business.

12. 1:01:13 – 1:03:45

    Are AI Builders Overvalued or Is Wix Undervalued?

    1. MSMaor Shlomo1:01:13

    2. HSHarry Stebbings1:01:13

       I, I, I don't understand, Mayo. If you look at a Lovable, uh, at, at a reported $6 billion price on the latest round, or a Replit at, at three to four, and I'm sure they'll raise it six soon 'cause they kind of are maniac in that way, either they are grossly overvalued or Wix is grossly undervalued. You have to take one of those views. Which one of those views is right?

    3. MSMaor Shlomo1:01:38

       My very nonobjective opinion is that Wix, Wix is very much undervalued today. If we've already spoken about this, there's also... Put aside the fact of, like, product assets and moat. There's, like, a moat in being big, and there's a moat in having a marketing team and, and an organization with experience like ours. I'm not sure if, uh, Lovable or Replit is overvalued. I think to, to be able to say that, I need to look at the, like, the internals and the economics of those businesses. I don't really know those.

    4. HSHarry Stebbings1:02:07

       I'm sorry, do you not track them very-

    5. MSMaor Shlomo1:02:09

       I track the revenue and the things they publish, but, mm, we're focusing on just building a very, like, uh... And this, this is something that Wix taught me. Uh, Wix, for many years, was like the underdog of, like, other players. When I came into Wix and I was like, "Hey, and those guys are doing this, and th- those guys are doing that, and they're, and they're publishing here, they're viral here, and they're, like, they're copying our features," and whatever. And, like, Wix's mindset is just, like, build a great product, find the right way to market it. Doesn't matter what others do, it's just, like, you see that purely in the business in the metrics. Uh, you can see, like, we've released, like, the new agent, like the, the version of our agent. And, like, you can see the conversion goes up. And you can see that, like, the marketing team tests different things. Some of them didn't make any sense to me beforehand, and you can see kinda, like, the unit economics getting, getting better. So s- one thing that Wix taught me is, like, focus on your business, focus on a great product. It's like there's so much noise out there. I remember, like, my, my first time, my first company, 40% (laughs) of my mind was occupied with what competitors are doing and, "Oh, no, then ............................" And for me as well, it was, like, hard to grasp that the market is so big, right? (laughs) It's like nobody cares. It's like, as a category, we're currently capturing, like, 10%, 15%, 20%. Like, it takes years and ages until you actually go to, like, there's so many people that could use Base44. There's so many else, so many people that could use Replit and Lovable. It's like, focus on your business. Obviously grow as fast as you can, but I don't think it's like I'm trying to sniff around what's the unit economics and margins and whatever.

13. 1:03:45 – 1:05:07

    Does Not Being in Silicon Valley Help or Hurt You?

    1. MSMaor Shlomo1:03:45

    2. HSHarry Stebbings1:03:45

       Final one before we do a quick fire. Replit, Cursor, Cognition, all very Silicon Valley businesses. Are you h- helped or are you hurt by not being in Silicon Valley, honestly?

    3. MSMaor Shlomo1:03:57

       I think the world is changing. With my previous company, I used to fly out every two weeks to Silicon Valley because this is where things would happen. I w-

    4. HSHarry Stebbings1:04:08

       Big.

    5. MSMaor Shlomo1:04:08

       Yeah (laughs) and tough. I'm not gonna do that ever again.

    6. HSHarry Stebbings1:04:12

       (laughs)

    7. MSMaor Shlomo1:04:12

       Um, I don't think in any way our business is hurting, if anything. Um, I think the war on talent is really tough in Silicon Valley. If you're playing the game of get funded as much as you can so that you can build for a lot of cash and conquer a lot of, like... and that's your way of, like, conquering most of the market, awesome. Like, this is what, where you should be. I think for us also, Wix is m- is a, like, is a monster o- like, it'd be giving us their, their backs and, like, uh, they have, like, these deep pockets, and they know what they're doing with it. Like, that's my Silicon Valley, right? That's the backup that they need. And also you start to see, uh, and I think... and, and I have a lot of, like, uh, great things to say about Lovable, building it from Europe. Um, I think the world's changing.

14. 1:05:07 – 1:18:19

    Quick-Fire Round

    1. MSMaor Shlomo1:05:07

    2. HSHarry Stebbings1:05:07

       Listen, I wanna do a quick fire with you. So I say a short statement, you give me your immediate thoughts. I had Marc Benioff, I had Vlad Tenev from Robinhood on the show. They said 50% of their code is written with AI. What will that be in two years?

    3. MSMaor Shlomo1:05:24

       95% or 100%-

    4. HSHarry Stebbings1:05:28

       Wow.

    5. MSMaor Shlomo1:05:28

       ... for sure. It's like, uh, you'll be prompting agents. I think for us, uh, maybe 50% because they have, like, legacy code and systems. For us, Base44 was built in the age of, of, of LLMs, and so I structured the repository in a way that's gonna be very easy for LLMs to navigate through and to read the code. I think for us it's already closer to 90%. It's like mostly, like, prompting agents.

    6. HSHarry Stebbings1:05:53

       Single biggest advice for someone non-technical wanting to build with these tools. Like, I listen to you stay genuinely dude, and I'm like, "Wow, I really wanna build, uh, a tool that allows me to go through all my LinkedIn followers, find everyone who has a certain title that would suggest they're an LP, an investor in funds, categorize them and show them to me because they clearly have an interest in me already. I could outbound them and turn them into an LP in my funds." I don't know where to start. I'm, I'm intimidated actually.

    7. MSMaor Shlomo1:06:24

       So first I'll say step zero is like the biggest hack of like how you actually build something that later on you'll use or maybe be successful, which is exactly what you mentioned, is, like, build something for your own problems. This is the biggest hack that I learned. This is the, the, the easiest way to get some, like, to get a software that's actually usable. Uh, and this is not something I wanna, I wanna-... go back into doing something that's like for a, for a customer that I interview a lot and understand their pain points. It was so much fun building Base44, and so much easier when I had a use case in mind. I was like, "I'm gonna build for my partner. I'm gonna build her a CRM, and I'm, I'm gonna kind of like iterate on this software and whatever, until, until it, uh, it hits the mark." Um, for people starting out, uh, with tools like Base44, there's like a mindset that you have. So one tip that I constantly give out is like, there's a mindset that you have to get into which is, Base44 is not really a person that's like working for a week and getting back to you with like, "Hey, this is what I've built." And so you have to get into a mindset that's like very easy, it's very easy to revert or start from scratch. And so instead of like going into like building a PRD and then fitting it into Base44, well, like build a first version that you know you're gonna throw out. And for some people, it's like emotionally hard to understand. Like, they're gonna throw out like tens of, of thousands of lines of code. It's gonna be, okay, fine, but like all you need is like figure out the product stuff. Because once you have the product stuff, it's like, it's for, with a few prompts you get to where you, like, you got to with like hundreds of prompts or thousands of prompts. So iterations is everything. It's like it's not anymore about like planning ahead so that you save developer time. Um, and very easily hitting the revert button when one feature you wanted and you played with is like not something that... and then you get to a point where you say, "Okay, this isn't now, wasn't really a good idea." And like iterate very fast and understand that you're not working with a human, therefore it's fine to try out different directions or to just give it like a high-level idea and see what it comes up with. Um, and then from there, iterate. And so you can start with, uh, like a s- the highest level of prompt. Like build something that will help me, I don't know, engage my audience in LinkedIn, and see what the LLM does. Because it will have ideas that it will implement inside the application. And some of those ideas you say, "Oh, this is interesting. I didn't really thought about this," like the fact that you can maybe, um, generate, I don't know, uh, reach outs or that you can whatever, and see, and see the things that you didn't like, throw those away, take it again, and then prompt it back and say, "Okay, build something that will engage my LinkedIn feature. One of the features that I didn't like is this and that," and then, like, build around that. And so the, the idea that you can throw away things that you don't like and start from scratch or revert or go back is very hard for people, for people to grasp.

    8. HSHarry Stebbings1:09:17

       You made 80 million bucks with the sale. L- well done. Does money make you happy?

    9. MSMaor Shlomo1:09:22

       I don't think money makes you happy. I think there's two things, um, that money becomes really valuable. Three things. Uh, one is your time. I don't like, like fancy cars, so I didn't buy a car. But like nowadays I'm going with a taxi everywhere, and it saves tremendous amount of time. Or other stuff that I can pay, uh, instead of, of like doing or, or wasting my time on. Um, and this is a lot of help in like personal stuff, especially if you're like busy people, you're entrepreneurs and you wanna be with your wife or family or whatever. So this is a huge benefit. Second is helping people you care about and helping causes that you care about, which is big, 'cause at some points, like there's not a big difference between doing X million dollars and 10X million dollars. It's more about like, okay, you can maybe with your family and stuff like that, you can, uh, support. And the third, I mean, I'm assuming, is like, um, you can use the money later on to build the bigger stuff. (coughs) Or you have this, um, war chest that you can say, "Okay, next thing I'm gonna do," or when I'm thinking about kind of like, uh, the, the, the, what I'm gonna do in a decade from now, and it's like, "Okay, let's go to space, solve cancer, or build robots," or something like that, 'cause you can do that. (laughs) You can take a riskier, um, bet.

    10. HSHarry Stebbings1:10:49

        I just want a Gulf Stream, dude. Okay? Don't get all heavy on me. Fuck that. (laughs) Uh, there's some things that get edited out. I leave it to the team to see whatever they keep. But the joy is most interviewers, yeah, they make you look bad and they look, make, look, like, look really innocent themselves. I make myself look bad so you look innocent. It's a much better deal for you.

    11. MSMaor Shlomo1:11:14

        There's, um, uh, I think one of my friends told me. The other, there was like a saying with, uh, after I made the money, uh, like, uh, and we had this discussion among friends and I was like, "This doesn't really change your life." And, and, and my friends were like, "You're using it wrong." I was like, "What do you mean?" It's like, "Obviously money makes you happier." Like, "You should buy a jet ski. Have you ever seen someone sad on a jet ski?" It's like, "Nobody." (laughs) It was like...

    12. HSHarry Stebbings1:11:38

        (laughs) Oh, uh, I, I, I agree. Uh, OpenAI at 500 billion or Anthropic at 360 billion, which one would you rather be ?

    13. MSMaor Shlomo1:11:46

        Anthropic every day.

    14. HSHarry Stebbings1:11:48

        Why?

    15. MSMaor Shlomo1:11:49

        Moving faster. They collect something in the coding. They're very focused on delivering value to, um, B2B customers of... They don't have the first mover advantage, but I think they have better models and when they s- look at the trajectory, uh, they're better positioned, uh, for growth.

    16. HSHarry Stebbings1:12:09

        You can add one person to the Base44 board. Who would you add and what would you like to learn from them?

    17. MSMaor Shlomo1:12:16

        Wow, that's a good question. Uh, Jack Dorsey.

    18. HSHarry Stebbings1:12:20

        Why?

    19. MSMaor Shlomo1:12:21

        I think he's one of the most brilliant minds and founders, and you can see that consistently he builds things sometimes for just the sake of building. So you can see it's like some of like his latest pet projects, like this, uh, messaging protocol and like stuff like that. And I think this is a person that consistently, like building Twitter, building Square, building other projects, like that's just a mindset of a builder that I think can add tremendous...... futuristic strategic thinking, while also I think that the, our DNA and the thing that we're trying to build in Base 44 is like a builder mindset. And I think this is the, like the ultimate for me, the ultimate guide.

    20. HSHarry Stebbings1:13:08

        What thing or event did you sacrifice for work that, with the benefit of hindsight, you regret?

    21. MSMaor Shlomo1:13:15

        Not necessarily this time around, but, um, in my previous company, I think I missed a lot of my 20s, and I think for the first few years, we sacrificed a lot of time with the family and friends. I'm missing on many, like there's just like, uh, many, many different occasions and different, uh, memories. And I was so inexperienced that I was trying to compensate for my inexperience with overworking, which is fine, it like got me to a good place eventually, but I sacrificed many things, uh, and many friends.

    22. HSHarry Stebbings1:13:54

        What thing are Frontier Labs completely delusional about?

    23. MSMaor Shlomo1:13:58

        Maybe the moat that they have.

    24. HSHarry Stebbings1:14:00

        They don't have what they think they have.

    25. MSMaor Shlomo1:14:02

        I don't know if or how they're thinking about this, but it's like what's the e- what's the end game for the race? Right, it's like either... it's not gonna be one winner takes it all, and there's gonna be like more and more companies getting into this market, there's gonna be like the Chinese players that are now like changing the entire market dynamics. I think eventually it's like if, like it takes one better model or lower price to drastically reduce your revenue, then I think it... or, or at least they used to be delusional about this. I don't know if they used to be delusional about this. Maybe they always like, they were always planning to build kind of like up the stack. I think nowadays they're doing smart things, for example, on topic building, Cloud Code SDK, uh, or Cloud Code, but even if now Gemini 3 comes out and it's a better model than Cloud, uh, and Sonnet, then still there's gonna be an, uh, huge number of people staying with Cloud Code because they're used to it and they built some things up the stack.

    26. HSHarry Stebbings1:15:05

        Penultimate one. You got married very recently. What's your biggest advice on partner selection?

    27. MSMaor Shlomo1:15:12

        It shouldn't be, uh, like, "This person completes me." It should be someone that is, "I'm enjoying this at least so much that it's identical to you." My partner is in her own kind of like, uh, uh, field. Entrepreneur, she likes the same thing that I like. She's, uh, messy, she has ADHD like me, uh, she likes to paint like me. This is so much fun picking someone that's like you, because as entrepreneurs, like you have to have sympathy for the person that's like missing day and night, um, and is constantly working, and you have to understand deeply why they're doing that, and, and that's that, their... that, that's like a part of them as a person, same as it's a part of, of me as a person. So I think having the same mindset is crucial. It's very, very hard to date a founder (laughs) that's like, uh, deep into like, uh, building the company zero to one, and I think having a person and a partner that's like having the same mindset, that they're building something or they built something is making it so much easier to empathize with.

    28. HSHarry Stebbings1:16:26

        Final one for you, my friend. You can go back to the night before you started Base 44 and you can say, "Ah, Meir, you should know this. Future self has learnt this today." What do you go back and tell yourself that you wish you'd known when you started?

    29. MSMaor Shlomo1:16:42

        When I was, when I was by myself, it was scary as hell. I used to wake up every two hours in, in, at night just to check that the platform is up. And at some point, um, Base 44 started going really fast and I was still by myself, and people started building like businesses and applications on top, and there was like the... I remember this week when it started like really going up, and the infrastructure and the thing that I built didn't, didn't hold up, and so we had like many, there were like this week or two or three that they had like four incidents where the platform would go down. And people were like screaming and shouting at me just like, "Uh, I trusted you," and whatever, and I took it very, very hard. (laughs) And it was like, and it was like emotional very, very hard, and I wish I could have told myself like, "This is just gonna be a bump in the road. Community's gonna recover from that, and eventually it'll be like a sus- like this is gonna be sustainable, this is gonna be great. Don't take, (laughs) like don't take the bumps in the road." Also, consumer or the consumer market is so much different. It's like the, the emotional spectrum of the feedback that you get is so much wider than building a B2B SaaS, that you get like some, uh, very, uh, (laughs) not, not, not too positive, not too negative, uh, comments. Uh, I think handling it better emotionally is important. I didn't know that.

    30. HSHarry Stebbings1:18:03

        Dude, I've so enjoyed this. Um, it's a very free-flowing discussion. You've been amazingly receptive to put up with my romantic advice request as well as my LLM, uh, rooting requests. (laughs) Thank you so much for being so good, dude. I've loved this.

Episode duration: 1:18:29