The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:31:01 · Erik Bernhardsson, Harry Stebbings
[00:31:01] S0: I think there is an opportunity to create a $100,000,000,000 company with a lot of specialized models and inference. [00:31:07] S1: You would have done it though at 8,500,000,000. [00:31:09] S0: I would have done it at 8,500,000,000. I I think there's a pretty big outcome here. Could be an exit. Could be, you know, like a public company. Who knows? But but I do think there's a lot of upside here. [00:31:19] S1: Dude, I'd love to see him ringing the bell on the New York Stock Exchange. [00:31:22] S0: Do you [00:31:23] S1: know what I mean? [00:31:23] S0: Yeah. Fantastic guy. Love that guy. Is he great? I mean, you know, his charisma, his like... You have to create, like, a personality, like, around your brand. You have to create this, like, visual identity. It's obviously not the visual identity I would have picked. [00:31:36] S1: I hear you, but I think then you should be more loud, if I'm just honest, Erik. Modal? No. Well, yeah, but you. [00:31:41] S0: Yeah. I mean, that's possible. [00:31:42] S1: Right? Like, I I don't think there's, a personality lad cult from Modal from your perspective. I think that's a fair point of criticism. I think I could be [00:31:49] S0: out there even more. I tried to tweet. I tried blogging. I've been, like, kinda bad at that recently. [00:31:53] S1: No one gives a shit about blogging.
00:31:53 · Harry Stebbings, Erik Bernhardsson
[00:31:53] S1: No one gives a shit about blogging. [00:31:55] S0: Yeah. Maybe. Right? Maybe I just need to, like, go more unhinged on Twitter. It's like fund related marketing, basically. Like, in the early days of of Modal, like, that was a big part of our growth. Right? Like me just like tweeting all the time about what we're building. And I think that's really important. I mean, every company has to find its own sort of, you know, go to market strategy. But in the early days, like we spent a lot of time just talking to people on Twitter, just like hitting people up, try the product, what do you think? Of them ended up angel investing. You know, they're now supporters of Modal. And, you know, you have to lean into what you're good at. And in the early days, I did a lot of shit posting. [00:32:23] S1: Do you know for every follower that followed me before 50,000, I would send them a personal, like, thank you message. [00:32:29] S0: That's amazing. You typed it out yourself? [00:32:31] S1: Every night from one till 02:30AM, would [00:32:33] S0: send them [00:32:34] S1: a personal, and I'd say like, I see that you're from Sweden, I love the Grand Hotel, let me know when you're in London. And I would send like 50 to 100 a night. [00:32:41] S0: That's dedication, that's amazing. [00:32:43] S1: No, but it was the customer acquisition flywheel. Yeah. They would go into the office the next day and be like, wow, you know this guy? He'd sent me a message, and like, you should listen to a show.
00:32:43 · Harry Stebbings, Erik Bernhardsson
[00:32:43] S1: No, but it was the customer acquisition flywheel. Yeah. They would go into the office the next day and be like, wow, you know this guy? He'd sent me a message, and like, you should listen to a show. [00:32:50] S0: It's It's pretty smart. I love what you've been doing in terms of building up this media brand. It's fantastic. [00:32:56] S1: Neil Mehta has a great thing, which is like, how can I 10x the customer experience? And actually, let's let's do it. Fuck it. Let's play a game. How do I 10x the current Modal customer experience? [00:33:06] S0: I think the biggest thing we need is we need way more products in in Modal. Like, we wanna create a busy comprehensive experience of everything you need to do in order to build an AI application should be a product inside Modal. The other thing we can do is hire way more FTEs and way more sales reps. I will say we've been behind on that, but we should hire like way more people that reach out to you personally and say, Hey, I saw you get started in Modal. I saw you're working in the bio space. How can we help you? Here's some bio examples, you know, protein folding, whatever. Like, we work with a bunch of other similar companies. You seem skeptical. [00:33:38] S1: No, don't at all. I'm actually just thinking about, like, I like the product ambition, but I go, as a European, who goes, wow. [00:33:46] S0: We're in the B2B space, so I think it's like, you know
00:33:46 · Erik Bernhardsson, Harry Stebbings
[00:33:46] S0: We're in the B2B space, so I think it's like, you know [00:33:49] S1: But do you worry about being stretched too thin? Yeah. To your point on, like, you know, why can't Nebius do what you do so efficiently? Because you're so good and you spend so much time. As you expand into specialties, there are players in each of them who've been doing that for years where I'm like, oh, Erik. [00:34:04] S0: I think that's true. I I don't think they're very good, a lot of them. But but I mean, I I sort of agree with your higher level premise. Like, if there's anything that's, like, super critical and never goes away, it's prioritization and resource allocation. Right? Like you can't boil the water and try to do everything at the same time. You need to be extremely ruthless. And having a multiproduct strategy, think is a very hard balance. Like when do you branch out into a second product or a third product? Right? Like it took us four years to see success with a second product, which was Sandboxes. [00:34:28] S1: Four years to see success with your second product, but you're five years to 1,000,000,000 in revenue.
00:34:28 · Harry Stebbings, Erik Bernhardsson
[00:34:28] S1: Four years to see success with your second product, but you're five years to 1,000,000,000 in revenue. [00:34:33] S0: Yeah. So we launched Sandboxes in 2023. Didn't see a lot of success in the early days. I mean, there was, like, some success. You know, it wasn't horrible, but, you know, it was a relatively insignificant part of our revenue up until summer of twenty twenty five when models, I think, like, Sonnet 4.5, one of those, like, they they just got really good at generating code and building whole apps. And then it just exploded. I mean, Sandbox is today is a 300,000,000 run rate business, about a third of our revenue. And so that's been a kind of a crazy journey. And now we're thinking about, you know, what's the third and the fourth. We just launched a training product. I'm super excited about that. Working on batch products, working on reinforcement learning. We're working on all kinds of other stuff. And so that evolution into becoming a platform, it's actually there. Like if you go back to the very early decks of Modal, you know, I put together some just for my own thinking. It was all there. It's like we had this like market map and all these... You know, it ended up being very different products than we thought, but it's so important for me to create, like, you know, to focus on a category and focus on a set of solutions, not just, be a single single widget vendor. [00:35:30] S1: What do you know about the sandboxes market today that you wish you had known when you started and released the first product?
00:35:30 · Harry Stebbings, Erik Bernhardsson
[00:35:30] S1: What do you know about the sandboxes market today that you wish you had known when you started and released the first product? [00:35:36] S0: It actually is like one of those products. I I think one of the benefits of being in infrastructure, but also one of the drawbacks in a weird way is, like, you kind of just have to trust your gut on, like, what are, like, important primitives and just build, like, amazing building blocks. I think we're in the space of, like, providing building blocks. We try to look at, like, what do engineers need and not, like, listen too carefully because, like, they'll ask for, like, all kinds of random stuff. Distill it down into like, what are some of the building blocks? And we put out a serverless function product in 2021. It saw success in 2023 with GenAI inference. We put out a sandbox product in 2023 because we saw a lot of people using LMS to generate code. And then it saw success in 2025, like I said. So a lot of like how we think about building products has always been kind of like, let's just put out like good building blocks. And then it exploded. But like to answer your question, it was reinforcement learning, it was vibe coding, background agents, and maybe some other stuff too in the future. Those were things we actually didn't anticipate. So I think infrastructure is often like that. Like we didn't anticipate stable fusion when we started building our serverless function product. It just happened to