No Priors: Artificial Intelligence | Technology | Startups
00:21:32 · Sarah Guo
[00:21:32] S2: Our enterprise customers as it relates to just general spend on code generation for software teams have gone through a journey this year. Right? They're like, we're gonna let people try it, then we're gonna token max, and we're gonna, like, restrict that and figure out who's actually doing this productively. How do you think that reflects for your your business, and how do you think about the sort of actual intelligence cost?
00:21:53 · Jake Stauch
[00:21:53] S0: Yeah. I think we're still watching this. I do see our CIO customers trying to pull back from that initial token maxing era, but I also think we're so early in the adoption curve that it's not going to be a a clampdown in the aggregate. It's actually gonna continue to be a pretty dramatic rise because most companies are still figuring this out for the first time. And they're... They are all going to go through this cycle of rapid early adoption and then kind of a pullback of spend and trying to measure and calculate ROI. But what I hear from our our customers all the time is not really a concern about the long term budget impacts. They they realize that there's gonna be a short term pullback, but they're still planning on increasing spend. What they need though is more proof of ROI, and that I think is what's gonna transform in the industry is is people looking for how can I prove that this spend is giving me something, and that is hard? I don't know that anyone's really figured out how to measure what you're getting from the tokens that you're buying, but that I think is gonna be a huge opportunity for us to show the work that's being done and try to equate it to work that would have been done in other platforms or with other cost models or by labor. And so that's what our customer asked for, is help me prove that this was worth it. And and that's what the assignment is. That's what we have to do. We we try to price on workflows run because I think it's a better reflection of actual work being done versus just tokens, which is more like verbosity and inefficiency. But but I think we're all gonna figure out different models of proving that what we're doing makes sense.
00:23:22 · Elad Gil, Jake Stauch
[00:23:22] S1: One of the things people have been talking about is this sort of sesspocalypse where the idea is, know, people will just build their internal SaaS software, and all these categories will go away. And a lot of people, to your point on calculating the ROI and tokens, are trying to sort, is it worth rebuilding these systems? And can you actually do that effectively? What is your view on the SaaSpocalypse, or this shift in SaaS versus I [00:23:44] S0: think all the companies I've talked to that tried to vibe code these tools internally, especially the the main system record tools, not the the kind of point solutions. But the main system record tools have discovered that it's quite expensive to build and maintain enterprise software. Even if you can do it, it doesn't make economic sense in many cases to do it unless your needs are very bespoke and unique in some way. And so buying off the shelf for things that are not your core competency, I think, has always been the build versus buy argument. I think that that is is true now as it is, as it... As it's ever been, because it still is hard to build enterprise software. A lot a lot of companies are discovering this or relearning this, that actually enterprise software is complex, and you need people to maintain [00:24:21] S1: Use cases and edge cases.
00:24:21 · Elad Gil, Jake Stauch
[00:24:21] S1: Use cases and edge cases. [00:24:23] S0: Edge cases. Yeah. Thing... Things that break down, and people need update, so then you have to staff the team, and then you're paying for that labor, and and then no one really wants to work on the internal tools team in many cases. So you have all these problems with doing that. Where I do see it is in kind of the point solutions, where a lot of companies have hundreds and hundreds of SaaS applications. They probably need a couple dozen [00:24:43] S1: Mhmm. [00:24:43] S0: Full. And so I do think you're gonna have a shrinking of the the sprawl of different point solutions, and they're gonna be eaten by the core systems of record and the core platforms. [00:24:51] S1: All the middleware too, think, is just gonna go Exactly. Exactly. [00:24:54] S0: So I think there is gonna be consolidation. And so this will be a SaaS apocalypse, but in that kind of point solution, smaller market cap type companies, I don't think that you're gonna truly get away from the courses of records, the ERP, the HRIS, the ITSM, the CRM. I think those are going to stick around. They might transform, and what we're seeing with Serval is is we are displacing the... Those tools. So I think there will be a new generation of incumbents, but I don't see those categories just disappearing.
00:24:54 · Jake Stauch, Sarah Guo
[00:24:54] S0: So I think there is gonna be consolidation. And so this will be a SaaS apocalypse, but in that kind of point solution, smaller market cap type companies, I don't think that you're gonna truly get away from the courses of records, the ERP, the HRIS, the ITSM, the CRM. I think those are going to stick around. They might transform, and what we're seeing with Serval is is we are displacing the... Those tools. So I think there will be a new generation of incumbents, but I don't see those categories just disappearing. [00:25:22] S2: I'm curious as to what mental model, or what theory of mind do you have for the IT user given... You know, they're not software engineers, but they understand their business. They understand what they're trying to go automate. Is it... You know, when you talk about Vibe coding, I'm like, okay. But do you understand, like, security architecture? Like, do you understand how this is gonna integrate with governance? Like, how do you square, you know, code generation and how we think about vibe coding and what the challenges are with that with... You know, we wanna build robust IT systems. [00:25:55] S0: Yeah. Absolutely. Think IT is really interesting because they're they're closer to a software engineer that I think a lot of people give them credit for. [00:26:01] S2: Mhmm.
00:26:02 · Jake Stauch
[00:26:02] S0: Especially in in large enterprises, the IT department is the engineering team. In a lot of cases, they don't have the the software engineering team, so IT runs all these systems, and and IT often does write code and manage the systems. And so I think we treat them as adults. We give them the tools that we would give software engineers. Now we abstract away some of that complexity. We make it easier to use in some regards, and and we don't just kinda hand them cloud code and tell them good luck. We actually... We build a platform that's dedicated to their use case, and we don't expect them to be able to necessarily write code or or understand what's being written, but we still give them access to it under hood. You can always see the code. Mhmm. And you can always treat this through a full software development life cycle, but you also don't have to. And so a lot of the the product principles is thinking with a few different personas in mind. You know, an IT engineer who actually can and does write code all the way through someone maybe in the marketing department and the the people team that doesn't wanna see code ever, but still wants to have that flexibility of of code gen under the hood because they've got a complex workflow that they wanna build that they don't wanna drag and drop their way to. So I think a lot of it just comes to having multiple personas in your head, and also treating IT like an adult. I think a lot of the products that have been out there have actually kind of been pedantic to IT of like, oh, you don't actually understand this stuff, so you need this very stripped down, more opinionated, simpler version. Actually, IT appreciates the complexity and appreciates the power of these platforms. We wanna deliver that to them.