I think this is a perfect time to be building with or building for these tools cuz the components out there are just so mature like now for payments you don't want to the coding agent to you know build Stripe from from scratch because I know there's a lot of people building strip clones Airbnb clones but in reality you would just ask the coding agent to actually add uh stripe as a component or add clerk as a component for authenticate Justine Yoko welcome to the show um what is Vibe coding and why has it at least seemingly taken the Internet by storm so my understanding of vibe coding is that you give uh a coding agent a set of instructions and you just let it go and the only thing you need to do is to provide natural language instructions like I like this I don't like this you know this vipes well with me this doesn't so that's how uh VI coding is I think yeah and I think we've seen it used by both Technical and non-technical people interestingly like some really technical people have been tweeting about how instead of like coding something from scratch they're just like going to an llm and saying this is what I want to make and then iterating on it and then maybe they're kind of exporting the code to wherever they like to edit it and um and making their own edits and then deploying it and then there's also a lot of completely non-technical people who are like purely just going on Vibes who have never been able to make anything before who are like entirely riant on an llm to write code for them um which is very cool yeah and to your point it's not just the non-technical who are doing this and then the technical are kind of using this paternalistic term the term actually comes from Andre karpathy right who is like extremely technical like is behind the llms that are actually helping people Vibe code their entire Reddit Community is behind this and on the back of that there are these companies that are being built that help people Vibe code so who's actually participating in this trend what are the companies that are um being used and how would you also kind of like frame them in terms of like are there different categories within this strend yeah so we've um we've seen different companies serve different types of users so I think there are some um more sort of like IDE based companies like cursor that um are targeting developers and just making it uh a lot easier for them to code by giving an agent a prompt and then it writes writes code or edits code for you uh and then we've also seen a new emergence um both for non-technical and also being used by technical users of these like text to web app or text to website companies um that are in the browser and like you literally go it's it's a web app you type it in you say hey I want an app to track if my dog has been fed or I want a website for my small local business where people can find information and contact me and then you sort of get this interface where usually they all look quite pretty similar on the left side you prompt it and then on the right side it kind of shows you um what it's generating what the interface looks like and then you can say no I want this button to do this or no I want the design to to do that um so we've seen a ton of companies emerge in this category um I think the biggest ones we've seen thus far are probably like the repet agent um lovable uh bolt and vzer from versel um but we're seeing more products emerge here every day yeah definitely seeing um a Divergence of different Persona using different tools and reaching for different tools so for example like as an engineer maybe my first instinct is like ID is where I live so I want to do everything in my ID or them back in the days now it's cursor uh but for someone who may just want to you know build a marketing landing page they may reach for you know B lovable and vzer because they generate just very visually appealing assets uh just for different use cases and what you know people are used to from the very GetGo yeah and give me a sense of scale here right because I think maybe cursor is becoming more of a household name a lot of people refer to it as one of the fastest growing companies over the last 2 years but what about some of these others like are people really using these tools at scale or are we really in the early Innings yeah it's a great question um not every company has released their metrics I think bolt and lovable both have either tweeted about it or or talked about it on podcasts and are are saying things like getting to 20 million in ARR in two months or 10 million in ARR in two months which is an insanely fast ramp um and so I think to us that indicates like there's a ton of lat and demand for people who want to use these um tools or want to code or make something for the first time and are are finding a ton of value and being able to do it like in a more accessible way obviously um there's also a ton of demand from developers to to code more easily because cursor is growing incredibly fast as well I think it's actually just very qualitatively like myricks aside I think it's solving a very real problem like um like my cousin who wants to say build a uh his personal app for tracking like his uh how often his flowers are watered like before consumers like this they couldn't have made an app for themselves they have to you know find an app that works for them but now like I think the beauty is that they can create some of this themselves and you know they can run it on their local machine forever and never deploy it for anyone else it's like there's so much personalization need this is soling yeah software for one I feel like I'm hearing that more and more where it's like yeah I have a friend who wrote a book and he's like I've always wanted my own personal page to show my book sales and like I've tried it I've tried to learn to code just never happened um so tell me more about that because it does seem like okay it's seems like it you could maybe create a static web page maybe something like a Tracker some of these more early stage like websites maybe not full-blown apps am I getting that sense or am I wrong about like where these tools are and where they end perhaps in in what you can build yeah I think the difference with like the the vibe coding products versus um products we'd seen before to help non-technical people generate websites like a Squarespace or a Wix um is that they're actually writing code so they can actually like do more kind of interactive and and dynamic things like um one example is like even me with lovable made a web app where um you input a book that you liked growing up it does a call to the open AI API gets a response about like three books you might like now based on the book you liked growing up um then you can save the book in a database that I like prompted within lovable um and then you can even log in with your Gmail account which like a a a Google authentication API um if you want to like save books and then rate them and so that sort of thing I think is beyond like far beyond just like a basic static website it's like truly a dynamic web app um that was a little bit hard than just like pure text prompts it required me going and I mean the llm would explain it to me I would say like hey I want to add authentication and it would be like okay here's the five steps but you do have to click out to this external link and you do have to be able to like copy in these codes and keys into one places or another but someone like me who's non-technical was was able to do it and so I think our belief is it's just going to keep getting easier yeah uh the components I think this is a perfect time to be building with or building for these tools cuz the components out there are just so mature like now for payments you don't want to the coding agent to you know build payment built Stripe from the strap uh from from scratch because I know there's a lot of people building strip clones Airbnb clones but in reality you would just ask the building uh the coding agent to actually add uh stripe as a component or add clerk as a component for authenticate yeah I mean to that point these tools are pretty magical right you can build way more than what uh is especially non-technical person could have built in the past can we just quickly revisit that idea of the why now like why are these tools so good are we a little surprised even that these llms are so good with code because that to me would have not been intuitive coming in and maybe just tell tell us a little bit more about like the building blocks that led us to having these tools in the first place yeah so I guess on on the very lowest level of layer which is a foundational models all of these tools are powered by very good coding models out there so why are the models good one obviously it's like Transformer architecture and everything but two I think it's the plethora of a data the data distribution is there on the internet most of the apps nowadays are JavaScript apps uh like if you go on stack Overflow before AI AG most of the qu people questions people ask are like why can't this nodejs app work and then you get answers for that uh and now there's a lot more like Frameworks that's very well defined like nextjs react right so you really travel up the abstraction in coding so as a result when you know like you train a coding model with the data there's just way more examples of web Frameworks web data so as a result it's very good at you know building those apps another reason I actually think is web com uh webbased uh develop environment now is very mature so before you may need like a front end which is like HTML JavaScript and back in like um rust or maybe back in this sheet CP down or something uh but nowaday like the full stack apps are all JavaScript like the most of the apps we see that are being generated are all JavaScript and typescript based so it's in itself a very contained runtime the agents can automatically verify like did I do a good job generating this or uh you know is this like actually correct can they run the browser so all of that I think the confidence of that may generating code much easier totally yeah and I think we're seeing on the foundation model layer just to add um the companies are really focusing on code as a benchmark like we see when open AI or anthropic or anyone puts out a new model they're generally measuring performance on code related tasks or benchmarks um and the great thing for people like me then who can't code myself is like amazing like the llms are now learning to code much faster than I could um and I can provide some direction or guidance as it's trying to debug debug itself um but it's able to do things that would take me like years to learn for sure and maybe we can answer the question as well in terms of how these work right is it am I some people might think that this is just like an API call to a foundational model is it that or is there more built on top and then adding on to that how do these different companies add value right past the integration with the foundational model and how do they differentiate you know across the competition um these are actually very sophisticated systems when we you know lift the covers and look into how they could be implemented so um the consumer interface is always like like Justin mentioned there's a generation of the code there's a preview there's a prompt window but then when you kind of lift the cover what it had to do is that it has to have a uh execution environment for the agent to actually work in so it needs to Ping the foundational model like hey my user have this prompt like give me the examp possible code and then you have to um you know the agent will have to tell the foundational model like generate the code only to this you know these set of Standards um and then once that happens it runs this code you know in the execution environment which is mostly a browser uh nowadays uh it's either something called Web container which is like a very cool technology that leverages your own you know uh laptop as a computer and then you know spin it up uh like locally or it's you know running on a server somewhere so it uh produces that preview uh for the user and then uh kind of like what we discuss on the component side like a lot of apps can't be built without a database uh so you just have to Pur the data somewhere that's either in memory in a browser or it's you know more persistent in the actual database like super base of the world great um the real question is how how well do these work right where would you say again like the tools perform well maybe perform perfectly all the way to the end of like things are really breaking down maybe we're not quite there yet yeah it's so funny um because to someone like me it often feels totally magic that you can prompt and like get a working web app and then sometimes it's like the most frustrating thing ever because it gets stuck in some bug or Loop that it is not seemingly not able to fix or I'm having to tell it like think step by step and and figure it out um I think Yoko can speak more specifically to like where they where they go wrong but I think one of the problems is just like as these apps get bigger and bigger and more complex um they lose some of the context of like what they've already generated and the environment in which they're operating and like you might ask for one design change this has happened to me many times with these tools you ask for one design change and then it generates that new element but then some something in the new element it generated breaks like 10 previous things it did before and so suddenly like the authentication doesn't work because you like added an image to the top of the page and then you have to tell it like hey now this other thing is not working can you go go back and fix it um and yeah and the other thing that like sometimes doesn't work about them that is really interesting is the llms are always convinced that they can fix something they're very optimistic they're exem optimistic which is sometimes great but it's sometimes so frustrating when you're on the 40th try of like yeah you to like we need to have a different approach like this button is still not doing what you said it was going to do and it's like still just as cheery as it was time to and it's like we're going to do this and you're like I need to turn it over to a professional at this point um so I think I think like it depends on sort of the complexity of what you want to build they can do some things especially simple things where code base isn't getting too big really well and really reliably um but they're definitely not perfect yeah this is like a very timely podcast just because uh Cloud just uh released their latest coding model and then all over Twitter people are like oh here's a one shot prompt on creating this you know app obviously there's a lot of advancement in the coding capabilities um but at the same time I think the infra on the infr layer softwares are always very stateful so the question is uh you know where do you keep the state and how do you reconciliate this state where is your off where's your database you know where's your caching where's the core logic um I think for that part it's still a very complex problem that it hasn't done a good job in you know reducing the problem space just yet but I'm actually very hopeful in that it's a verification problem uh at the very bottom in that uh before we always like as Engineers we come make code and you're like this is a sha linked to this list of changes now I find myself just keep prompting and then when it rewrites the whole app for the next prompt I don't even care about what's the previous version as long as it works so I actually think the next step for a lot of these tools is adding you know how to verify it still works is it adding tests is it adding something else there's a lot to be you know desired today but I have high hopes that it's going to get there pretty soon yeah it seems like a a solvable problem for sure let's talk about what people are building I mean you've mentioned a few examples here but I'd love to have you both since you've seen so many projects kind of talk about like the depth and breadth of all the projects that people are creating yeah I think it it varies um there's an extremely long tale of things that people are building which is fascinating because you can truly build like an app for one person yourself which you could never do before I love that app for one yes it's such a good catchphrase one of these companies should use that yeah um and so on the consumer side that's everything from like yoko's cousins app to track if a plant was fed to like um I need that by the way so to I need for my dog um so slightly different um to like we've seen like a dad generating like a bedtime uh story for his kids that like always you know has his kid's name and interest and things like that and then it'll Weedle out a different story every night um so consumer use case is just like anything you can imagine wanting to build you can create we're also starting to see more usage on like the kind of moving up into the Enterprise part of the spectrum so like small business agencies there's all of these people who um were Consultants or could be hired to make a website or a web app for like your local business or or any sort of kind of professional service provider and those folks used to use like a Squarespace or Wix or something like that um and many of them are now experimenting with like repet or bolt or lovable because they can build um they can make projects so much quicker than they could before which is very cool which allows them to take on more work take on smaller projects that might not have made economic sense before and then I'll let Yoko talk about what like true Engineers more in the Enterprise are are experiment running with yeah so I think true Engineers actually reach for a slightly different tool like true Engineers they would probably start from cursor but then for a simple like landing page stuff um I think lovable and B and like vzero of the world they're all just very visually appealing and then the UI is very different because they can render it whereas in cursor like you canot render it as a developer you're you're responsible for that uh but to Justin point I think it's there's something we heard that's so interesting in that a lot of the marketing agenc or just agencies in general before you know B lovable and you know be zero of the world they wouldn't want to take on like a thousand $2,000 uh projects nowadays they can because they can turn out these projects so fast uh that like it is still of very good quality so what we're seeing is definitely the the sum of the long tails is bigger than the head so that's why people are actually migrating from Squarespace Wix of the world to this you know like software 4 One business yeah I think that's great how do you see these products evolving right because today they do seem quite similar I think you even called out maybe one differentiator which is okay maybe certain products will be more focused on design um you also talked about how maybe certain features aren't quite there yet where does this go in terms of like how you see maybe the market segmenting or what kinds of new features you see these companies adding yeah I think today what we've seen is most of these products are trying to be like everything to everyone so it's just like a text prompt box and anyone from an everyday consumer to an engineer they're like come one come all you can all build something here um and they have very similar interfaces I think we'd expect to see sort of more segmentation in the features they build and the customer base they focus on um based on a variety of things like um you could imagine segmenting by like technical sophistication of the end user so like if for an everyday consumer like me I probably if I'm just making a simple website or something cool to show my friends I might even want to make it like on my app like with the new repet app with the AI agent that does it super easily and the experience of prompting and the level of code it shows me and the level of sophistication will be very different or probably should be very different than a product that's like Built For Engineers who are like prototyping something to like show to their team during standup um and then I think sort of beyond the technical and non-technical user segmentation there's also probably segmentation in terms of like the level of control you expose on various parts of like the website or the web app um like we've talked a lot about design how basically uh most of these tools today you like prompt that you you say like hey I want a website or web app with this Vibe and then you can say like slightly different color or move this button and for a real designer it's like so frustrating have to promt via text yeah so we're expecting to see more people add figma esque features where you can have like true fine grain control over design yeah I think uh it's so interesting because a lot of people like to talk about like we should Empower everyone to learn to code like uh you know like now uh maybe my mom can use the tool to learn to build her own website with code but I actually don't agree with the view in that I don't think I mean as an engineer myself have you know worked in the industry for a long time I don't think most of people should learn to code with how good AI is now nowadays I don't think codee is right abstraction for majority of the world and there's just a lot of latent demand there on what's a right knobs for the actual audience out there to build you know software from is it natural language is it drag and drop is it like something like you know figma like so the question becomes like what do we should we ship for a majority of the world to be able to build sofware you know for one um so it's also interesting CU like when we talk to a lot of uh you know more consumer consumers who you know didn't kind of come from a coding background they actually have no desire to learn to code their goal is to ship what they want to ship coding or not right and then before you know it's more static no code tools like Squarespace you know of the world nowadays you have more like fine grain control on what you want the software to do so I actually think the next step uh in a lot of where this is going is uh like finding what are the things that someone can you know do without code but not as rigid as the previous generation code I think that's such a good point in terms of the like level of of abstraction because even if you take natural language like English there are different levels that people interface with that right you can some people can speak in English but not read or write in English right some people may not recognize specific uh letters that people write but again they understand a specific message that's being delivered or created within that language let's talk about pricing because I actually um I think these different products are so underpriced given the products that people are able to to create in terms of you know they literally could not create something in the past and now they can create something of immense value in their life so tell me about how companies are currently pricing and then how you think about the comparisons right like should we be comparing it to the wix's and the squares spaces is this a completely new market and we're a new pricing model needs to emerge tell me about how you think about that yeah the pricing is a really interesting one um I think most of the companies in the space are doing some variation of usage based pricing so they'll probably you'll get some amount of tokens for free and then they'll press you to convert to a monthly subscription where you get a certain amount of tokens they have different kind of tiers based on the number of tokens you need you could sometimes buy more if you need them um but the the interesting thing about that model is like most people even like technical people are not thinking about um the cost of generating a website or web app in terms of how many tokens they need like most of us have no idea we're like I'm like I don't know is it going to cost 100 5,000 50,000 like I don't know and and some of it depends on like the performance of the llm like if I have to go back and forth with the app a ton that's going to spend a ton of tokens whereas if it gets it right the first time it's not going to spend a ton of tokens um and so I think like we would love to see more clarity around the pricing models like making it easier for people to understand UPF front like how much is it going to cost both to build this original website or web app but then also to maintain it on an ongoing basis um I think the dream for like many products in the space is some sort of value based pricing which better aligns like kind of your incentives with the user of like hey if this if someone is creating like an e-commerce store they're doing like tens of millions in annual revenue and they've created it through your product like they're probably willing to pay you several $100,000 a year to like keep it up keep it looking good like maintain it that sort of thing um whereas someone who's just making their personal web page is definitely not going to be paying you hundreds of thousands of dollars a year to do that yeah yeah I think there are two ways with traditionally look at pricing like this is not a hard and fast role but just general Trend we have seen there's is a product being used by a machine uh or is or a script or is the product being used by a human there's only so many requests a human can make even though we keep prompting the app and there's a lot of tokens yeah and then usually if it's you know used by a machine it's a uh consumption based pricing right so we see this a lot in the infrastructure player players like you know like either uh databases or like API uh products and then for things that humans use uh say uh maybe canva of the world maybe that's like a perc per month kind of pricing I totally agree with Justin I don't think tokens is the just the right you know measurement in the long run um and then I actually do think that the value these tools kind of bring to individual users and Enterprises are dramatically different and then for the individual users maybe it's more like a productivity game you know like is it how much money do I am I willing to pay per month to get to you know where I couldn't have before and then for Enterprises I actually think it's more packaging question instead of uh Outsider PR Outsider pricing like what other team collaboration features I can factor in so that I can pay you know more per per seat interesting speaking of incumbents do these products survive right if you take some some of the newer companies that you mentioned that are doing extremely well getting to millions in ARR very quickly um are is it just a matter of time before large companies let's say like a Google or you know maybe a better example would be something like a figma right which is already has the connective tissue to designers for example um is it just a matter of time before they start integrating these features and basically blow these new startups out of the water or how do you think about you know if there's really defensibility there we're in the business of you know uh investing in a lot of you know upper incoming companies and that we also think I mean figma is a portfolio company and they're doing amazing things in the AI front so I will actually you know know definitely count figma as you know one of the uh Trend Setters in the space especially for design and Engineering um there are many ways to tackle the problem uh but I think compared to you know Google of the world which if you have used Google Docs or you know Excel uh before there's always an argument on why didn't they build a AI native Excel like a year ago uh or why didn't they you know have a good way to incorporate AI into the writing experience just yet you ship your or chart and then as the fact I actually know that you know at Google you have you know different Orcs shipping for AI and not AI I don't think that's a way to ship AI needed products so I obviously like we're very optimistic about like uh upcoming startups kind of taking on the incumbent for this very reason yeah and I I think those are great points and also the good thing about this space is you're creating new markets and it's truly becoming Mass it's kind of similar honestly to what we've seen um AI do for Content generation across all of modalities like in some way you can think of like I don't know if it's code or website or web app it's like another modality like um AI image generation didn't replace like photography and it didn't replace like artists it just allowed people like me who were never creating like images or art before to create it and so um I think we'll see something similar in this space where um there will be products like figma that have immense user based really great products who will be able to approach this problem from like hey we know what our users need and like we can get gain an advantage from the existing platform we've built by adding features that allow people to go like from design to web app or something like that super easily um but then there'll be a ton of a a huge Market of users who like me who are not in figma every day and don't start in figma and who are going to start in another sort of product um and so I think that's what's super exciting is like it's not like we have this really small constrained pie that everyone is fighting over it's like the pie is getting bigger and bigger every day especially as these models get like better and better because more people can do things and more use cases are being discovered um which is part of what's like so exciting about this space totally I mean I think that is really the most important point right which is just the number of people that can participate here is so unprecedented like before Vibe coding or really just AI code in general what was it like less than 1% of the world knew how to code and therefore could create things with code and so now even to your point Yoko maybe those people don't need to learn to code but now they have this resource that they can they can build with so maybe ending there is there any like highle takeaways or things that you want to share in terms of what you're excited about in these next steps um looking ahead whether it's the specific tools we have now or new tools that you see on the The Horizon that should be built what do you think in terms of what's coming even on the developer side I'm excited to uh see a new set of tools here like instead of like the traditional tools like GID uh you should have you know something else out there that's more AI nav native there's a new way of creating software even for people who can code and then you know it's hard to put my fingers on where exactly it will evolve but I know it would be very dramatically different maybe two years ago it was hard to see like oh like what would it look like for something uh like cursor to come out right now we just use it every day and we're so used to it I actually think it will happen to uh you know most of the developer productivity TOS out there yeah I think from a consumer perspective two things I'm super excited about one is um the problem of like how do you integrate other services that you need to make like a truly working web app like I would love to not have to go somewhere else to create a database and then go back to a bolt or lovable or a repet um or a vzer I would love to like not have to go to stripe separately or an authentication separately like as much as all of that stuff can be packaged in just like one click it does it for you um I think that will massively explode the the consumer usage and and small business usage as well like honestly not even consumer just like non-technical people um and then the second thing I'm really excited about is like what what are the different ways that we can enable prompting here like thus far prompting and creation has been very text driven which is great because like if you can speak English you can make something which is incredible but I think especially um for more like aesthetically oriented um people or just everyday consumers thinking about it it's like wouldn't it be cool if I could like upload a screenshot of my Instagram page or if I could upload my like Spotify listening history or like my five favorite movies and be like this is my vibe like truly like VI coding ex trly or like you know here's screenshots of like six websites that I love can you make something similar um I think that sort of thing will be uh super interesting and exciting and especially young people I think are going to love like the whole gen C and even gen Alpha younger populations love that sort of thing wait till they realize code can animate web page crazy things that they'll start creating with that I think we're going to have a return to the like '90s vintage aesthetic for a bit where you have like the giant mouse that like leaves like a trail across the screen or like those sort of like fun things that people don't really do anymore um I don't know that's that's one of my personal predictions I love that that's almost like mood board to you know apps instead of prompt to apps I think also bir directional like I was telling you both my husband started Vibe coding and he was telling me the things he was doing while he was prompting and I was like oh I would have never thought to ask the AI for design examples he was like show me five examples of the way that I could visualize this and I was like I did not think that that was possible but of course it is right and so there's also an element of like knowing how to prompt but also I think a bir directional nature where maybe the AI becomes more vocal about like hey have you considered this instead of it just being like hey build this and then the AI goes and does it yeah I guess more to the point of software for why I just really love like this you know like this tline you kind of came up with recently this may be worth a to whole different topic a whole different podcast uh episode is that we are seeing a lot more um more of the developers building mcps like model context protocol server so the way just quickly share what that is for yeah so the way uh mCP works is that you could build something that extend the cap capability of a coding agent so on cursor I can build say a mCP server to teach agent how to send email now I can h highlight something and then send emails there I think it will be the next Generation API I don't know if it's mCP or a different protocol so but these platforms are very quickly becoming very extensible whether that's from components like clerk super base or from MC mCP actions that you know agents can call as tools uh very exciting for excited for the next phas of that as more and more build people build the plugins here love that great well I am so excited to jump from this recording and go Vibe code oh amazing