The Twenty Minute VCReplit CEO: Why the SaaS Apocalypse is Justified & Why Coding Models are Plateauing | Amjad Masad
EVERY SPOKEN WORD
45 min read · 8,842 words- 0:00 – 1:00
Intro
- AMAmjad Masad
We're approaching a certain plateau in how good coding models could get. And so
- HSHarry Stebbings
We could not have a more relevant guest than Amjad Masad, co-founder and CEO at Replit, joining us in the hot seat.
- AMAmjad Masad
Cost question is secondary to the performance question. When you focus on cost is when you reach a certain asymptotic plateau in the S curve.
- HSHarry Stebbings
The man is reshaping what it means to be a great product manager, product leader, and Replit is one of the leading vibe-coding tools alongside the likes of Lovable
- AMAmjad Masad
The name of the game is just staying one, two, three, four, ten steps ahead.
- HSHarry Stebbings
This was an incredible discussion with Amjad, and I'm really excited for you to hear it.
- AMAmjad Masad
For all intents and purposes, IDEs are dead.
- HSHarry Stebbings
Ready to go? [upbeat music] Amjad, dude, I'm so excited for this. I've wanted to make this one happen for a while, so thank you so much for joining me once again today.
- AMAmjad Masad
My pleasure.
- 1:00 – 3:08
How Replit's Vision Finally Caught Up With Technology
- AMAmjad Masad
Great to be here.
- HSHarry Stebbings
Uh, we were just chatting about kind of the depths that the Replit's been through and, like, the amazing position today. Did it take a long time for the world to see what Replit was, or did technology take a long time to catch up to your vision of what it could be?
- AMAmjad Masad
It's, it's more the latter, right? So the core insight that I had, even before we started the company, maybe at this point 20 years ago, was that software is much more transformative than, than we actually think it is. You know, Marc Andreessen wrote, you know, "Software is eating the world" and all of that, but I thought it's transformative for, for people's lives and for the prospect of wealth creation, wealth distribution, entrepreneurship, all of that. Well, it's, it's sort of my story, you know, the impact it had on my life, you know, as a kid growing up in Jordan, coming to the US, and now running a multibillion-dollar company. And I've seen that even earlier than that. When I was 15, I bu- I built a little, a little business. I was making hundreds of dollars, and that was amazing amount of money for me. I took my entire class to McDonald's when it, when it, when it opened up in Amman. And, um, a-and, and so that was the kind of the core insight. And initially when I came to the US, I was -- I worked at Code Academy, and the goal was, like, let's teach everyone how to code. Let's make it as simple as possible. And I started seeing the stories back then even. Like, if a fitness guy learns a little bit of coding, launches an app on the App Store, makes a million bucks. It's like, wow, this is, this is amazing. And so when we started the company, Replit, in 2016, the goal was how do you make programming more accessible? How do you get to a point where there's a billion developers, not just, you know, 20 million developers at the time? But the ... A-a-and so we started solving one problem at a time, right? Solving the development environment. Replit was the first in-browser IDE. Solving the hosting environment, solving the package management, the maintenance, the iteration, the version management, the multiplayer. We solved all these problems, but there's one bottleneck, and that is
- 3:08 – 3:48
Why Amjad Said "Stop Learning to Code"
- AMAmjad Masad
people don't wanna learn how to code.
- HSHarry Stebbings
Mm.
- AMAmjad Masad
And it took me a long time to really accept that because I, I became the learn to code guy. And in, in, I think March 2025, when I was in TBPN, and I said, "I no longer think you should learn how to code," it went super viral. People were pissed. "How could you say that?" And, and, and it's just the realization that there are people that are now successful. You know, we were talking about, uh, Jason Lemkin earlier from SaaStr. People that are building multimillion-dollar businesses solo with no developers, they don't need to learn how to code. They need to learn how to create. They need to learn how to build.
- 3:48 – 5:34
Building on Top of Foundation Models: How Much Is Replit vs the Model?
- AMAmjad Masad
And, and the real unlock wasn't just AI, it was AI that could do actions over long horizon, right? So we, we've had AI since '21, '22 with GPT-3, but the unlock in 2024 was agentic AI, and that was the first glimpse of it. And, and we bu- we had to build a lot of infrastructure around it to make it work.
- HSHarry Stebbings
Dick Coleman, how much of the magic is what you build versus the performance of models beneath you?
- AMAmjad Masad
It is a dance, I would say. Think about, you know, Elon Musk, uh, when he, when he did self-driving 1.0, you know, before version 13 or whatever, where it's end-to-end. They had to write a lot of software, right? They had to write a lot of, uh, classical, you know, uh, computer vision type software in order to make it work. But then they went to end-to-end learning. So there's this, this thing that happens in AI, and as a founder it's really important to understand this. Y-y-- at any given point, you have to plug in a lot of holes in order to build the most advanced thing that you can build. So September 2024, we had to, we had to build a lot of, a lot of infrastructure, a lot of, uh, guardrails in order to make agents work. March 2025, when we released, uh, Agent V2, we had to delete a lot of that code because the models got a lot better at, at, at staying consistent. But then you u- you, you upgrade your vision, right? And so September 2025, we released Agent 3, and that was the most autonomous agent on the market. It was the first to run for hours on end. And again, we had to write a lot of software in order to, you know, ma-make it stay on track. And now since Opus 4.6, autonomy is built into the model. And so
- 5:34 – 7:27
How Replit Routes Different Tasks Across Anthropic, Google & Custom Models
- AMAmjad Masad
you, you have to understand what is the model capability and how much infrastructure you have to build in order to make it perform, and you have to stay ahead of that in order for your product to stay the most innovative on the, on the market.
- HSHarry Stebbings
When you look at your model usage today, I've heard you say before, when I was obviously listening to your prior shows, that you have a preference for Anthropic. What does the model usage look like across different providers today?
- AMAmjad Masad
Yeah. So Anthropic, the, it, you know, has been the sort of workhorse for, for over, over a year right, right now. It's, it's like the, the, the core agent loop because it can run for a long time coherently. But the few things have changedGoogle's Gemini's m-models have, um, are, are the best at price performance, for example. You know, given their price, where do they sit on the Pareto frontier, right? And so for tasks, for example, like tasks like code search, we might create a sub-agent, uh, that is, that is cheaper and has good enough performance, uh, and we offload that from the main core loop, right? So we now we use-- And I wrote this thesis back in '22, I called it the society of models. Now we use models from every provider. Actually, at some point we were sending more tokens to Google than we were sending Anthropic, despite Anthropic being the, kind of the core w-workhorse. And so th-there's this concept of agent labs, right? We t- we talk about AI labs, but there's agent labs, you know, us, Cursor, some of these other companies. Our goal is to start with the user problem. What are we trying to fix? What are we trying to build? And walk back to the technology, and use whatever model we need to use. In some cases, we build our own models.
- HSHarry Stebbings
That was gonna be my question, so Amjad, the reason why this show has become more and more successful is 'cause I, I bluntly ask more and more direct questions.
- AMAmjad Masad
Yeah.
- HSHarry Stebbings
Um,
- 7:27 – 11:45
Did Cursor Make a Mistake Building Their Own Model?
- HSHarry Stebbings
Cursor decided to build their own model. When we look at other players across different verticals, it's always been a mistake to build own model. Was Cursor's decision to build own model, and your decision to in, in some cases, a mistake because the equivalent model performance has just always come alongside you?
- AMAmjad Masad
It ebbs and flows. Again, like, AI is such a change, changing landscape, the answer will change every three to six months. So in 2023, when we trained-
- HSHarry Stebbings
But when, but when you, when you're investing your team and your resources then in that, you have to weigh off is it worth that three-month advantage, no?
- AMAmjad Masad
Right. You, you do, and that's why it makes it so, so freaking hard and why you have to change your mind all the time, right? Because there's a lead-up time. But the most important thing is optionality. So in 2023, when we were training models, uh, we achieved better coding performance than the, than the state-of-the-art models at the time, GPT-3.5, right? Um, but then since Sonnet came out and later Opus, uh, the, the gap has closed by a lot and they were doing-- they were spending tens of billions of dollars, if not hundreds of billion dollars, making agents work, and that would, that would've been a dumb strategy for us to go and, and try to compete, uh, on that. But now I would say the opportunity opened up again for other reasons. Uh, the, the open source models are getting really good, and we're, you know, we, we're approaching a certain plateau in how good coding models could get. And so, uh, you can use your data to fine-tune a model specifically for your use case. We-- I don't know if you saw, but, um, Intercom yesterday talked about their new model that is better at customer support than the frontier models. And so maybe their model is gonna be state-of-the-art for three to six months, and maybe six months from now the, the, the models will, like, zoom back ahead and-
- HSHarry Stebbings
How do you analyze that? Is, is it better to be three months ahead and spend the money? Like, how important is it to be ahead for three months?
- AMAmjad Masad
It's very important. It's, um, you know, it's, it's a, it's a, it, it's a matter of closing a large enterprise deal. Uh, like, you know, w-we're constantly getting baked off against everything under the sun, right? And, or we're winning most of our enterprise deals because our product is, is ahead of the market consistently.
- HSHarry Stebbings
Can... The, the thing that I always hear is that we're using frontier models to basically set benchmarks. We're seeing where those benchmarks lie, and then we're switching to open source to get as close to them as possible with much more efficiency in terms of cost. Is that the future?
- AMAmjad Masad
It depends, right? Like, so cost question I think is secondary to the performance question, right? Especially in a, in a, in a time when, when it's flush with capital. Uh, I think when you focus on cost is when you reach a certain, uh, sort of, uh, asymptotic, you know, plateau in the S-curve and you don't foresee, um, a massive improvement, uh, specifically in your domain. Like, Intercom might say, you know, we pr- we, we don't predict that models are gonna get that much better on customer support for the foreseeable future, therefore, you know, w-we, we can focus on, on building our own or there's, like, a data flywheel that we ca- we can get, or there's a cost advantage that we get. But if you focus on cost at the expense of performance, you're gonna lose. Uh, and so, you know, it's similar to any era in tech, right? Like, w- it's cloud, it's mobile, it's, uh, SaaS. W-whatever it is, there, there are moments of time where, where the goal is growth and performance and being at the edge, and then when things kind of rationalize, or Uber, Lyft, when things rationalize, you, you kind of foc-focus on your gross margins.
- HSHarry Stebbings
I think there's this idea, in all transparency, that your Replit's, your Base44's, your Lovable's, and you might kill me for putting you in that bucket, but, um, [chuckles] is, uh, is it bluntly of $100 that you make, 80 bucks goes to the model providers?
- 11:45 – 16:38
What Are Replit's Gross Margins
- AMAmjad Masad
Uh, for us it's not 80. It's, it's, it's way less than that, but, but it is a significant portion, like anyone-- Like, even, like, Anthropic, every $100 they make, 60 goes to NVIDIA. Like, you know, their, their margins are public. It's 40%, right? [chuckles] I mean, so... And they're also massively subsidizing their, their service. So really-
- HSHarry Stebbings
Can I, can I be blunt? What, what are your margins and how have they changed over time?
- AMAmjad Masad
They change quite a bit, and there, there are moments of time, like, uh, I said last year, like, we were close to profitabilityUh, and then, and then we're like Agent 4 is gonna be this, like, massively parallel agent. Agent 4 is the most parallel agent in, uh, in the world right now. You can, like, create 20 agents and have them all coordinate and, and run and build your product 10X faster. Um, but, but, but then, you know, that's when we work on... So, uh, in, in programming, there's, like, this old saying, "Premature optimization is the root of all evil." Because as a programmer, if you think about performance and optimization early on, you're gonna make the wrong decisions. So the reason margins, like, keep moving around is, like, we're trying to build the best product, and then after we build the best product possible, then we look around and we're like, "Okay, there's so many ways we can optimize." Then we go into an optimization period.
- HSHarry Stebbings
When we think about price sensitivity, how do you think about essentially routing different behaviors, where some models are actually okay for certain things and some need the frontier? How do you think about intelligent model selection for different functions?
- AMAmjad Masad
I would say that is the core competency IP of an agent lab, right? Uh, if you think of yourself as an agent lab, you have this tacit knowledge first of evaluating models. Like, I think about our AI engineers as kind of psychologists in many ways. When a model comes out, the first thing they do, they, like, s- sit down with it for a day or two, right? They play around with it. They plug it in. They're like, "Okay, what, what are the limits? What can it do?" And then we plug it... And, and, and that's more, like, the tacit aspect of it, right? Which is very easy to u- underestimate. But the reason Replit, when a new model comes out, we're able to build state-of-the-art performance, um, even better than the lab itself, like, w- we're big partners with Google, and Gemini is one of the best models at design. I would say our products are better at design using Gemini than Google's products. It's because we know how to, how to evaluate these models, how to get the best performance out of them, and then we have a bunch of proprietary benchmarks that we use. And finally, we do a lot of A/B testing as well. So that's really what you're doing as a company that is building on top of foundation models.
- HSHarry Stebbings
How concerned should we be about the proliferation of Chinese models in Silicon Valley companies?
- AMAmjad Masad
I, I'm not sure about this question. Like, you know, um, yeah, I- I- I guess, uh, you know, it's a l- little bit above my pay grade to, to tell you how... what are the intentions of the Chinese Communist Party with regards to AI. Is their intention to actually innovate and, and play in the market fairly? Is their intention to destabilize? Is their intention to destroy the value of, of US AI, AI labs? Uh, I don't know. Um, I think there's r- there are reasons to be careful, and there are reasons to be optimistic about the, the progress. Like, what I see from border-
- HSHarry Stebbings
Would you, would you have a moral issue with using a Chinese model?
- AMAmjad Masad
I don't think there's a m- moral issue per se. Like, I don't think they're using slave labor or anything like that to, to, to do that. Uh, I would have a security issue, especially since we have enterprise customers that, that depend on us for sensitive, uh, data and things like that. So we haven't taken the step yet. Um, I wouldn't preclude it from taking it in the future. I would love to see a US corporation investing in open source. It looks like NVIDIA is making moves in that, in that regard. But open source is gonna be very important for us to actually have a free market around AI. Because if we're gonna end up in an oligopoly of AI companies, th- then the... You know, there's actually an economic theory of how they'll naturally collude on price, and prices will not go down as fast as possible. They'll also control how we use these AIs. They'll also, uh, not provide everything through the API and keep some of the models for them- for themselves. And so I think that it would be bad if we're in a situation where AGI or AI is only controlled by a few corporations. So open source is gonna be very, very important. I would venture to say, like, maybe the US government should s- start a consortium of companies that are, like, creating the best open source, national open source model, uh, so that the market stays
- 16:38 – 19:50
Inference Is the New Sales & Marketing
- AMAmjad Masad
competitive.
- HSHarry Stebbings
We mentioned Jason Lemkin earlier. He, he said something brilliant to me, which is he said, "Inference is the new sales and marketing." Obviously, free is a large part of your business and many others in the space. Do you agree with Jason on inference is the new sales and marketing, and how do we think about that?
- AMAmjad Masad
Yeah. If you, if you think about the hype period that we got with, like, Claude Code and Codex towards the end of 2025, early '26, a lot of it was driven by how much, uh, free tokens they were giving out, how much... You know, ev- every other day they're like, "Oh, it's 50% more to- more tokens or less rate limits," and things like that. So it's clear that companies are using inference as a way to loop people in, and I think agentic development is addictive. It's, it's, I- I think the better kind of addiction than, like, social media or passive consumption. It's like creative addiction, which is kind of good. But I think companies are realizing that a way to kind of rope people in is, is through a lot of free tokens. Now, there's a question about retention, but I don't disagree fundamentally with the statement that, uh, that, uh, you can use, um, free tokens to, to, to acquire users.
- HSHarry Stebbings
Enterprises will kind of try things in, in certain respects. You know, I was chatting to Jason Lemkin before, and he said, "Your number one ICP is product teams." As product teams kind of code or vibe more, what do they do okay in two to three years? How do they think about those functions?
- AMAmjad Masad
There, there's a, there's a big question about how product teams will look in the future. If I were to make a prediction, I would say that-We'll still have engineers inside the organizations. Those engineers are responsible for more infrastructure, AI, ML, um, embedded systems, you know, more, more, you know, low-level engineering. And then you have product organizations, and product organizations will have people that are, like, tilt a little more technical and have people tilt a little more design, have people tilt a little more product, but you're not really calling them anything different. They're like a ... They're product builders, and their responsibility is to figure out what to build next. I agree with Jason that a lot of the ICP right now is product, but one thing I'm really excited about is operations teams, and they're, they're kind of underserved. Like, eh, operations teams are, are sitting at the nexus of a lot of data flow, and typically they'll buy a lot of SaaS software. They're typically not happy with it because there's all these SaaS softwares, like, siloing the data. They try a lot of automation software that doesn't work very well. They have a lot of Excel sheets, a lot of manual work. And so, you know, w- we see a lot of our customers are building, you know, quote, uh, you know, quote configurators for their sales team, automating their deal desk, um, you know, automating support, uh, operations. And when they use Replit, the, the, the return on investment is as good if not greater than product teams. With product teams, you're, you're cutting down product development lifecycle, which is hugely valuable. With operations teams, you're, you're actually being more efficient. You're selling more, you're ... You reduce head count or you need less, less
- 19:50 – 28:00
Is the SaaS Apocalypse Real?
- AMAmjad Masad
people.
- HSHarry Stebbings
You said ops have a lot of tools that they're not happy with. That has led to the SaaS apocalypse and a lot of people believing in kind of, uh, the, the deterioration of value in a lot of these public companies. Is that over-exaggerated, or is it a just cause for concern that they have lost the market caps they have?
- AMAmjad Masad
I'll tell you what we're seeing in enterprise. We're not seeing people rip out Salesforce, Workday, or, like, really fundamental, I think the, the hype term is, uh, system of record type SaaS tools, and instead they're building on their APIs, and we're creating MCPs and hooks into the HubSpots of the world and Salesforce and all of that. But there's also another side where we have this great partnership with Databricks, and people are skipping the SaaS tools entirely and, like, building on top of their data warehouse. So, so, you know, there's another view on this where the system of record is actually your data warehouse, and this is, like, a way to be bullish on, on Databricks and companies, uh, in that, in that space. Um, where we're seeing-
- HSHarry Stebbings
Well, that goes to a sta- that goes to a statement though that Jason has said though, which is like then it is justified because what you're seeing is, like, the maiming of SaaS company growth. If you have 20, 30% of customers or users who are using Databricks as their warehouse and that maims that audience for the core c- for the core, like, SaaS public companies, that's enough to cause the growth to decline significantly.
- AMAmjad Masad
I, I would agree with that. I would agree with that. Now, uh, a lot of vertical SaaS, uh, is, is in, in trouble as well where, you know, maybe it's ... You don't think of it as, like, a system of record where, like ... L- like, a, there's a lot of survey SaaS software, and we see that getting replaced wholesale with, with Replit. And then the other side of this, there's a lot of micro entrepreneurs and, a- a- it's starting on Replit today, and they're undercutting the price of a lot of, uh, SaaS, uh, companies out there, especially, you know, kind of vertical point solutions. Uh, and then there, there's another pricing pressure there as well.
- HSHarry Stebbings
What about on the traditional incumbents in, in our space who is thinking of Squarespace, Wix? What happens to them?
- AMAmjad Masad
I mean, if you look at the behavior of Wix, they look like they ... They're, like, they're pouring everything into Base44. Um, so it seems like-
- HSHarry Stebbings
Is Wix now Base44 basically?
- AMAmjad Masad
I, I, I don't know much about their company, but it looks like they're spending a lot of ads definitely behind, behind Base44. Um-
- HSHarry Stebbings
What did you think of the Super Bowl?
- AMAmjad Masad
You know, I haven't heard that many people talk about it, but I think it's, it's good that people are, you know, getting vibe coding out there and, and more people are talking about it, but I don't think it's still in the public consciousness.
- HSHarry Stebbings
How do you think about maintenance in this case? You have ops teams building tools. You have entrepreneurs building tools. You gotta maintain these fuckers. [laughs]
- AMAmjad Masad
This is, this is-
- HSHarry Stebbings
It's hard enough running a business.
- AMAmjad Masad
This is where Replit shines.
- HSHarry Stebbings
I gotta maintain this now?
- AMAmjad Masad
This is where Replit shines and, and, you know, if you ta- talk to Jason or some of our other customers, um, Replit goes way further than any other vibe coding product on creating more maintainable software. For example, and part of the reason Replit has, has been slightly more expensive than, than others is that we do a code review for every, for, for every, you know, code change that we make. So we spend a lot of tokens on maintenance as much as we spend on creating the software. Replit is, uh, also has a built-in tester. So if you enable all the power features, whenever you, whenever the agent writes code, goes into a testing phase, spins up a browser, tests everything in the, in the app, g- goes into a code review session, reviews that, kicks it back to the coding agent, gives it feedback, you know, "The test failed here. The code review is not good." And people enjoy looking at the code review agent 'cause it's kind of a dick. It's like, "This looks like AI-generated slop." It'll actually say that. [laughs] And then, and then it, it goes back. We're also building, um, agents that are sitting in production software. So we already have security agents right now that are sitting in enterprise deployments and are monitoring activity and, uh, and they're monitoring packages, monitoring for supply chain attacks. And so the thing about AI, any problem AI creates, there's more AI that you can build to solve that problem. So I think the-
- HSHarry Stebbings
Have you been surprised by how price sensitive people are around security and code reviews?
- AMAmjad Masad
Not in our segmentI would say in the engineering segment, um, and we, we have some engineers use Replit, but 75% are non-engineers. A- engineers are more price, uh, sensitive because they have a lot of options. They can use a lot of different products on the, on the market. Now when, when you're an operations manager using Replit and you just saved $10,000 on a, on a SaaS software, you've gain- you've saved another, you know, $200,000 on, on headcount, and you're spending an additional $1,000 to just make sure that the software is more secure, that's like a no-brainer. The ROI has been a hundredfold for, for, for companies we work with. On the consumer side, there's more price sensitivity, especially if I'm an entrepreneur just dipping my toes, which is why we reduced the price on our Core plan. So I think there's gonna be... And you're, you, you, you hinted at that earlier. There's gonna be this different models for different use cases or different parts of your journey. If you're just starting out, you don't want to be hit with $1,000 bill. You want to be able to play around with 20, $30 before you commit.
- HSHarry Stebbings
Totally get that. Is Core a loss leader? Are you like, "Hey, I'm willing to lose money on Core for the conversion to pay, to Pro"?
- AMAmjad Masad
Yeah, it's, it's sort of like become a kind of a bit of a f- the new freemium because you can't totally run off, like, an amazing free tier be- because tokens are, are still very, very expensive. So you want people to pay something to recoup, recoup some of the losses. But as the percentage of, of a revenue becomes more enterprise, more pro, then we're willing to, you know, uh, subsidize the cost of Core a little more.
- HSHarry Stebbings
Token costs today, how do they change over the next three years? Like, is it like they get 50% cheaper or, like, 10 times cheaper?
- AMAmjad Masad
It, it's an interesting question because there's different ways to slice it. Um, you can look at the price of intelligence. The price of intelligence have gone down tremendously. It's really hard to quantify it, right? But, like, everyone's spending way more on Opus than they were spending on GPT-4, but they're getting way more intelligence, way more productivity, uh, out of that. Pure, pure unit price is not going down as much as people expected it to go. Um, and I think part of it is I think we're liv-
- HSHarry Stebbings
Why, why is that?
- AMAmjad Masad
I think part of it is we're living in a world where the true frontier models is actually just between GPT-5 and, and, and Claude. Um, and, and so there's no- not a lot of pricing pressure. Now we're seeing Gemini catch up. We're seeing the open source models catch up. And so maybe as, as there become-- gets more pricing pressure, we'll, we'll see, we'll see token, unit token prices go down. Also, the other thing is I don't think these, these companies are all that profitable, partly because, you know, the underlying, um, chips are not all that cheap, uh, and there isn't a lot of competition. We have sort of at bottom everyone's running an Nvidia, and there's not much competition there. And Nvidia has amazing margins, especially for a hardware company. What is it, 80%?
- HSHarry Stebbings
Yeah. It's pretty phenomenal. Uh, [chuckles] it's why it's the world's most valuable company. Um, I, I, I'm confused with something. I'm confused with Cursor. Can you help me out? And this is Jason's question, so you can blame him. All the shit hard questions, just blame
- 28:00 – 30:24
Is Cursor Dead?
- HSHarry Stebbings
Jason.
- AMAmjad Masad
[laughs]
- HSHarry Stebbings
Um, uh, Twitter says Cursor's completely dead. I don't have a single portfolio company that uses Twitter. I don't know anyone that uses, uh, that uses Cursor, sorry. Um, but they just hit 2 billion in revenue. Is Cursor dead, or is this narrative completely bullshit?
- AMAmjad Masad
I'll tell you a few, few principles. One is the market is so large. The market for software is, is no-- it's not just the market for SaaS, although it's part of that. It is a market for... It, it is an expanding market. There's no existing TAM. You can say this is the TAM we're going after. Some people will say, like I think Sequoia at some point said it's like the labor TAM, right? The, the, like, knowledge worker labor TAM. That could be that, but it's not like we're displacing labor. We're actually supercharging labor, so companies are becoming more productive. Uh, and so it's like an ever-expanding TAM, and it's gonna be perhaps as big as the internet, uh, if, if not, if not more, and that's like I'm talking about just software generation broadly. It's vibe-coding. It's AI powered coding. It's fully agentic coding. Coding generation in general, I think it's a, it's a hugely valuable market. So I think a lot of... A- and the world is large, and a lot of different companies will prefer different products. There are people at Replit today that still prefer to look, review every piece of code, and some thought that Cursor's good, good for that because it's, it's still sitting in an, in the IDE, right? So there's a portion of the market that still really, uh, really likes that. And the other thing is, I think, um, uh, Cursor has done well at enterprise sales, and enterprise is a very sticky customer, uh, and once they adopt something, it has to really fall tremendously behind, perhaps like GitHub Copilot, in order for people to replace it, and I don't think Cursor fell that, that far behind, right? They still use the, the, the latest, uh, agents. They have, like, a good agent harness. Um, and so I think, I think the-- I think Twitter is a distortion machine, and Twitter is, like, the inside of inside of inside baseball. It is the people at the edge of, like, the adoption of, of AI. So I think if you're constantly on Twitter, which why I think VCs, uh, don't have the best, I think, i-i-information landscape because a lot of them just live on, on Twitter. But, but the world is much
- 30:24 – 32:26
Are IDEs Dead?
- AMAmjad Masad
larger than that.
- HSHarry Stebbings
Are IDEs dead? Will we have IDEs in two years?
- AMAmjad Masad
I think, I think for all intents and purposes, IDEs are dead. Uh, I think the, the, you know, they'll limp along because again, some engineers just love that, that control, but there's no future in them in that there's no one's gonna be asking for like the latest feature of like IntelliSense or like what were IDEs? Like i- IDEs, like, uh, one part were like the code intelligence. We call it intelligence. It wasn't very intelligent. And so all of that is, is, is irrelevant. Like a- the auto-complete, the click to symbol, all of that stuff is irrelevant. So in that sense, IDEs are dead because AI has like eaten all of that. But in terms of like, you know, people who wanna see the code, I think there's still a population of users that want that. I think there's still, you know, engineers that are working with software that they wanna actually verify that it works. For example, life or death software. If I'm writing like mission-critical software for self-driving cars or, or a NASA or SpaceX mission, I think there's always gonna be a need for some kind of IDE.
- HSHarry Stebbings
Be pretty pissed if my autopilot on my plane had problems because of a vibe-coded [laughs] with no, with no IDE. [laughs]
- AMAmjad Masad
Yeah, that would be pretty sad. I mean, uh, uh, look at the... These, so I mean, even in planes and, you know, those kind of software that we're talking about, they never adopted JavaScript, and the reason they never adopted JavaScript is because JavaScript is, is the original sort of vibe language because JavaScript didn't have types. You could like run into errors. But the reason why we adopted JavaScript is because web software was not gonna kill anyone. Your Gmail, if someone pushes a bug to Gmail, not gonna die. Maybe it'll be down for an hour, and that's fine. So there's different risk appetites, and I think vibe-coding follows the same, the same thing where it's, it's, it's on the sort of less risky type
- 32:26 – 34:58
Should Students Study Computer Science Anymore?
- AMAmjad Masad
of software.
- HSHarry Stebbings
So if you're a student listening to this, should you not study engineering at university? Should you not study CS? How does this inform how you think about advising young people?
- AMAmjad Masad
Before 2005, right, let's say, which is when I went to school, uh, people who went to computer science were very intrinsically motivated in understanding computer science and understanding exactly how computers work, and they were like hackers and really interested in programming, right? And then after that, computer science became a hyped-up field because you can... It's the easiest place to make money, right? And we had the boot camps, and we had this whole thing, and computer science, uh, departments exploded because of that. Now, if you're not into computer science, if you don't feel like you're drawn to it like a fly draw- drawn to, to a light, then don't go into it because someone tell- told you you're gonna make a boatload of money working for Google. That's gone. So that... It's pretty dumb to like tell people to go into computer science if they're not really intrinsically interested in it. Now, if you're interested in it, uh, I think there's still ways to contribute. I think we... You know, there's, uh... You can, you could get into ML and AI and go work at, at, at like the big labs or, or a company like ours. You can get in-
- HSHarry Stebbings
But if you're, if you're thinking about university, the curriculums are not able to move at the pace of model progression. What would you advise me as a student?
- AMAmjad Masad
Well, well I, I will say if, if computer science is, i- i- like, the s- the field of computer science where you're like learning about, um, you know, data structures and algorithms, uh, that's not gonna change. So if you... A- and there's always gonna be need for people to understand the underpinnings of computer science because we still need kind of those people. Uh, but not-
- HSHarry Stebbings
But do you think university is the best place to learn that?
- AMAmjad Masad
Depends on the person. I think there are pers- there are people who are autodidacts. I w- I would consider myself someone who is very good at teaching myself, and so it depends on, on you. Like, if you're really good and you can learn on the job and you can open the textbooks and you have the, the discipline to do that, you don't have to go to university. But if you, if you, if you're someone who likes the structure, who likes to meet other students and work with them and, and li- likes the discipline of i- the university forces on you, then I think there's still a place for a university.
- 34:58 – 38:48
Will AI Make Companies Smaller or More Ambitious?
- HSHarry Stebbings
Are companies gonna be so much smaller in the future when you look at the capabilities of individual people? Do you buy the ideological Silicon Valley, "Oh, you know, we're just gonna do more, and we're gonna be so much more capable," or are you actually like, "No, we, we will have dramatically smaller engineering teams"?
- AMAmjad Masad
I see, I see both. So, so Jason is someone who's... Who, who wants to work with a very lean team. He's doing better... More than when we had... When he had p- people on staff. Yesterday I met an entrepreneur at a conference in DC that's using Replit, who's a... I think he sells board games online, and he says, "It's been so transformative on my business. We've saved so much money on, on SaaS. We're selling more, uh, that I decided to use the increased revenue and efficiency to hire more people." He hired eight more people. Uh, there's a customer case study we actually published on our site, Firecrown Media, um, like a $60 million media company that owns magazines, different properties, and they've been so successful using Replit for marketing automations and all sort of things like that, they decided to hire more people that know how to do vibe-coding in order to, uh, to, to, to, to, to sell more and do more and build more. So it depends really on the kind of company, but we see companies that were like, "We wanna get leaner, and we want less people." And it, it... I think it c- it'll come down to the entrepreneur, the level of ambition, w- how they wanna run their company. For, for, for us at ReplitI think what we want to try to eliminate is, uh, or, or, or reduce is a lot of supporting roles. We want builders, right? We want, uh, we want builders and we want salespeople, 'cause I think salespeople, uh... It's like people just, like, really want to talk to someone to sell them software and to teach them how to use it. And also the sales role is changing in that, uh, uh, salespeople are becoming more like educators and, uh, transformation sort of consultants. They go into companies, tell them how to use the product and, and, and what's the best way to leverage this technology. Um, but-
- HSHarry Stebbings
With the, with the removal of other parts or with, with less engineers or with removal of other parts of the org reducing headcount cost in those areas, are you able to justify sales reps moving down ACV categories or ranges because you don't have the cost elsewhere in the business?
- AMAmjad Masad
It depends. There's a lot of companies that now have self-serve enterprise, right? Uh, b- especially in AI because th- there's so much, there's so much demand that you can sort of justify that. But let's say, you know, traditional SMBs still want, need some, some handholding. And, uh, you know, typically the, the, the cost of sale is higher because you have so much supporting staff, but if you can have a commercial, uh, AE that, that is... You know, you're willing to s- spend, like, an hour or two talking to a customer and onboarding them, and perhaps a few, few hours, um, you know, for the rest of the year supporting them, and the contract size is, like, 10,000, $15,000, I think, I think you're right, it's, it's possible that becomes more of a thing.
- HSHarry Stebbings
What worries you today? Uh, are you, are you positive... I, I, I'm genuine. Are you positive about the future? Are you n- negative? And just-
- AMAmjad Masad
So there, there are a few-
- HSHarry Stebbings
Not just about software development, about life. I know it sounds weird and macro.
- AMAmjad Masad
Well, actually, let me tell you about Replit first and, like, what worries me there.
- HSHarry Stebbings
Yeah.
- AMAmjad Masad
W- we've gone through this, you know, first they laugh at you, and then they... W- I forgot the quote exactly, but we're at a point where, like, then they attack you, right? Where, you know,
- 38:48 – 47:35
Why Apple Is Blocking Replit From the App Store
- AMAmjad Masad
it's now been publicly reported that, you know, Apple is, is, is sort of blocking the, the Replit app. Um, Replit has been on the App Store since 2022 doing exactly the same thing, allowing people to generate or write code and running it in a, in a browser window. Suddenly they're saying that we are, um, you know, uh, we're, we're not complying with their guidelines, and we've been stuck in app review for now three months. We haven't been able to push an update. And again, we've been on there for four years. We've passed 100 Apple App Store reviews, and suddenly Apple has decided that they don't want this... Uh, other, other apps in the category are also getting, getting affected.
- HSHarry Stebbings
I'm sorry. What the reasoning behind that is they, they... Sorry, I'm being disrespectful to you here. They think that your apps are not as high quality in their AI slop and that they're making discovery harder in the Apple?
- AMAmjad Masad
They, they're just telling us we're not in compliance with their guidelines, and we've shown them repeatedly that-
- HSHarry Stebbings
But wait. But peeling that back one layer more, it's like they're, they're fearful that it's gonna-
- AMAmjad Masad
I don't know. I, I don't know because they're accepting apps made on Replit. They're accepting them into the App Store. You could... I tweeted about one yesterday. There's... The, the acceptance rate is very high. If they think that what we're generating is slop, uh, they could have said that, and, and second, they wouldn't have accepted the apps that are being made with Replit. So it doesn't seem like-
- HSHarry Stebbings
So then, so then what is the reason, Amjad? Like, you're a smart dude. I'm a hopefully relatively smart dude. Like, there is a reason behind that.
- AMAmjad Masad
I, I, I want to give them the benefit of the doubt, and I want to say that perhaps they're trying to figure out what is their posture here, and perhaps the delays is just because they're trying to figure out, figure that out. Um-
- HSHarry Stebbings
Posture with regards to what? How they-
- AMAmjad Masad
With regards to vibe-coding, with regards to vibe-coding and, and how people are gonna be using that on the App Store. Look, may- maybe they're concerned that people are gonna be circumventing the App Store rules. That's not what we do. Maybe there are other apps in the categories that do that, and they looked at the category as a whole and was like, "Okay, let's put a pause on this." But we're not doing that. We're not building an app store. We are just making it possible for people to make apps. And so if their concern, and maybe that's their concern, that, that people are gonna be making apps and getting around the App Store, that is not what we do.
- HSHarry Stebbings
How detrimental is that to your business when you think about Apple putting that additional barrier challenge? Is that like, "Fuck" [laughs] or is that like, "Eh, we'll, we'll get over it. Faced many before"?
- AMAmjad Masad
Yeah. Yeah, you know, look, I, I've, I've been on this mission, again, for, for over a decade now and, uh, at building this company for, for a decade and, you know, the fact that we're such a important force in the, in the world, in the culture, in, in how the world is, like, reacting to this technology is a good thing, and it means that we are achieving our mission. We're important. Now, I, I never thought it was gonna be easy, and I'm ready for the challenges to come, and I actually like, like challenges. You know, life is more, much more interesting when there's a little bit of fight into it. [laughs]
- HSHarry Stebbings
[laughs] I think it's important to have a common enemy in a team. Amjad, you can shoot one, Claude Code, Lovable, or Base44. Which one do you shoot?
- AMAmjad Masad
I don't really think that way. Like-
- HSHarry Stebbings
If it's not a name, I'm gonna go, I'm gonna tell Jason.
- AMAmjad Masad
[laughs]
- HSHarry Stebbings
J- the, the next word is a name, Amjad.
- AMAmjad Masad
I'll tell you that they're all gonna copy what Replit does. Replit is setting the roadmap for everyone, uh, and that's fine. That's fine by me, but, uh, what I really like is innovation, is, like, building-Building the next thing that can really change how people think about software. And, and I feel very proud that this agentic revolution was really kickstarted by Replit Agent in 2024. So it just, the, the name of the game is just staying one, two, three, four, ten steps, uh, ahead.
- HSHarry Stebbings
Right, dude.
- AMAmjad Masad
Yeah.
- HSHarry Stebbings
We're gonna do a quick fire round. I say a short statement, you give me your immediate thoughts. Does that sound okay?
- AMAmjad Masad
Yep.
- HSHarry Stebbings
What have you changed your mind on most in the last 12 months?
- AMAmjad Masad
Um, how fast, uh, to scale our sales organization. I always wanted to build, like, a hyper-efficient company, and Replit is extremely efficient for our size and valuation, but, um, I think that given how much interest we have in the market, uh, I think we should hire as many salespeople as we can to go sell these to these people.
- HSHarry Stebbings
Who would you most like to have on the board who you don't have on it yet?
- AMAmjad Masad
I, I would like to have an, an, an operator that's, that's like, you know, two decades ahead of me or something like that. Um, like a CEO that's been, um, b- been into, in the, in the weeds in building a company from scratch, but reached, went public and reached, you know, uh, pa- w- way past where, where what I've done because we have a lot of VCs, and they're amazing, but no one who, who's actually an, an operator.
- HSHarry Stebbings
Carl Eschenbach. He's a beast.
- AMAmjad Masad
Who's that?
- HSHarry Stebbings
He was the CEO of Workday.
- AMAmjad Masad
Oh, okay, cool.
- HSHarry Stebbings
Uh, and, and now he's at Sequoia as a, as a partner, but he was CEO for a long time, so...
- 47:35 – 48:38
What Amjad Wishes He'd Known Earlier
- HSHarry Stebbings
Final one for you. What do you know now that you wish you'd known when you started Replit?
- AMAmjad Masad
I mean, the feeling of product market fit is... Y- you can deceive yourself into thinking you had product market fit at different points. You'll get a few customers. Oh, this product market fit. Real product market fit, and, like, people will say it, but you can't really internalize it, is, is the idea that, like, the product is getting pulled out of your hand. You can't even provide it fast enough. You know, I th- I think if I understood that earlier on, uh, perhaps I would've searched for it faster, harder, or, or thing- things like that. So as an entrepreneur wanting to build not a lifestyle business or small business, wanting to build a venture scale business, you have to find that moment. You have to keep pivoting and changing. Perhaps you don't change your vision, but keep changing the different... Keep, keep, keep k- kind of searching until you find that explosive demand.
- HSHarry Stebbings
Dude, I've so enjoyed this. I so appreciate you letting me go wayward. Uh, but you've been fantastic.
- AMAmjad Masad
Thank you.
- HSHarry Stebbings
So thank you so much for joining me.
- AMAmjad Masad
Appreciate it, man. Thank you.
Episode duration: 48:49
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