Lenny's Podcast: Product | Career | Growth
00:43:38 · Lenny Rachitsky, Caitlin Kalinowski
[00:43:38] S1: I am so excited to tell you about this season's supporting sponsor, Vanta. Vanta helps over 15,000 companies like Cursor, Ramp, Duolingo, Snowflake, and Atlassian earn and prove trust with their customers. Teams are building and shipping products faster than ever thanks to AI. But as a result, the amount of risk being introduced into your product and your business is higher than it's ever been. Every security leader that I talk to is feeling the increasing weight of protecting their organization, their business, and not to mention, their customer data. Because things are moving so fast, they are constantly reacting, having to guess at priorities, and having to make do with outdated solutions. Vanta automates compliance and risk management, with over 35 security and privacy frameworks, including SOC 2, ISO 27001, and HIPAA. This helps companies get compliant, fast, and stay compliant. More than ever before, trust has the power to make or break your business. Learn more at vanta.com/lenny. And as a listener of this podcast, you get $1,000 off Vanta. That's vanta.com/lenny. I'm going to go in a completely different direction. Coming back to components of hardware, I asked a bunch of people what to I talk to you about. One of the people is the founder of Matic, the CEO of Matic, Mehul Nariyawala. I've never said his last name out loud, so I hope I didn't butcher it. By the way, I love my Matic. I don't know if you have a Matic, but it's like- [00:45:06] S0: I have two, and I've purchased two more for friends.
00:45:06 · Caitlin Kalinowski, Lenny Rachitsky
[00:45:06] S0: I have two, and I've purchased two more for friends. [00:45:10] S1: Oh, yeah. What an endorsement. Yeah. Basically, it's like this amazing robot vacuum that just works. So his question, so he wanted to ask you, and so he suggested to ask you this, is about memory prices. The way he described it is there's a meteor called memory prices that are coming for consumer hardware, and robotics, and physical AI. What's going on there?
00:45:30 · Caitlin Kalinowski, Lenny Rachitsky
[00:45:30] S0: Yeah, we are in trouble as an industry. And I'm not an expert on this, but I think that AI has to do with why. And I also think that the supply chain is constrained. I have been advising startups and companies to pre-buy memory, and to have enough memory in stock, if they can afford it, to ride out price spikes. Like anything in this category, let's see, this happened in COVID too. So we had so many supply chain disruptions, and getting enough memory was one of the challenges. So we had to pre-buy as well. I won't say who, but the company I was working with had to pre-buy memory as well. And so this is part of what I wanted to talk to you about today, is these supply chain disruptions. And if a key component that goes into a lot of tech, like memory or silicon, is constrained, there's not much you can do. You either pay, or you have already pre-bought enough that you can ride things out. And so those are the only real options. Obviously there's a risk to pre-buying, and the price might go down. And so the challenge is, I think, there's a latency with supply chain in something like memory, where it can't adapt fast enough, often, to demand, or there's a new category of product, or, in this case, maybe data centers, that are just eating up so much and are actually not as cost-sensitive as somebody in consumer electronics like Matic might be. And so they'll just pay for these higher costs. This is tricky and something we have to deal with all the time. [00:47:09] S1: How much have prices gone up? How bad is this problem, and where do you think it'll go?
00:47:09 · Lenny Rachitsky, Caitlin Kalinowski
[00:47:09] S1: How much have prices gone up? How bad is this problem, and where do you think it'll go? [00:47:14] S0: Actually, this is a great question, Lenny. I don't know what's going to happen. I think prices are going to double, probably. I don't know on what timeline. If I knew what timeline the prices were going to double on, I'd be trading, which I'm not very good at. I'd really be, I'd be doing a different job if I could predict these things, but certainly we're going to have a supply chain shock. [00:47:34] S1: And it's already gone up a lot. If you're saying it'll double, but it's already gone up. I don't know. I saw numbers like 6x and some like that. [00:47:39] S0: Oh, really? I didn't realize it was that bad. [00:47:41] S1: That's a number I saw, let's not quote that. And you're saying, yeah, from what I hear, it's AI-driven, just like you need ... And when you talk about memory, it's like DRAM and things. What is memory, when we talk about memory? What's going on there?
00:47:41 · Lenny Rachitsky, Caitlin Kalinowski
[00:47:41] S1: That's a number I saw, let's not quote that. And you're saying, yeah, from what I hear, it's AI-driven, just like you need ... And when you talk about memory, it's like DRAM and things. What is memory, when we talk about memory? What's going on there? [00:47:55] S0: Processing. So the way to think about it is processing memory. You think about memory on your hard drive or your solid state drive, where you're keeping files that you're not using, essentially, in many cases or that you're dealing with maybe documents or pictures that you have. Maybe that's in cold storage on a server, maybe that's using a hard drive somewhere. This is usually things that you don't need really, really fast access on. But if you're running a program, some of that program is actually going to be run in RAM. And so there's different kinds, obviously, for servers. There's different kinds of server racks. Some server racks are actually focused on this type of memory, and some server racks are focused more on what we consider like a cold storage or a slower ... Now, this isn't my area of expertise, but certainly most of the products that I built, maybe all of them have had RAM, and we've had to figure out how to ... For me, mostly it's a packaging issue. Where do you put it? Does it need to be accessible? Which RAM do you pick? How fast does it need to be, and what is the cost? Is usually our trade-offs. [00:49:10] S1: And what is the bottleneck with more RAM? Is it just the companies that make memory are just not able to produce at this rate, because there's so much demand?
00:49:10 · Lenny Rachitsky, Caitlin Kalinowski
[00:49:10] S1: And what is the bottleneck with more RAM? Is it just the companies that make memory are just not able to produce at this rate, because there's so much demand? [00:49:17] S0: That's right. That's exactly what's happened. [00:49:19] S1: So this is a really good specific example of just how hard it is to build hardware. All it takes is one piece to be not available, and your whole thing's screwed. [00:49:29] S0: Yeah, you can't build anything if you have one component missing. [00:49:32] S1: So let's say Matic is an example. How many components are there that they all have to assemble and not have one not available?