Inside Cursor: AI Coding Tool Hits $300M ARR

"It felt like the people that were working on the space maybe had a disconnect with us and it felt like they weren't being sufficiently ambitious about where everything was going to go."

• Michael saw opportunity in a competitive space by being more ambitious.
• Assess your competitors' limitations to find your unique value proposition.
• Don't shy away from saturated markets if you can offer a better solution.

"We found a ton of success in training models specifically for that task... it's been super helpful for pushing on quality in places where you need a specialty task."

• Michael leveraged custom models to improve speed and cost-efficiency.
• Specialized models can outperform general-purpose models in key areas.
• Identify where custom solutions add value over existing models.

"We spent time on tons of other things, for instance, building the team was incredibly important... but some of the normal things that people would maybe reach for in building the company early on, we really let those fires burn for a long time..."

• Michael focused on product development and team building over early sales and marketing.
• Letting the product speak for itself can be an effective growth strategy.
• Prioritizing resources on product quality can lead to organic growth.

"It's something that we should probably talk even more about as a company, but I think that hiring people with the right disposition... can get you through a lot here."

• Michael emphasizes hiring level-headed team members to maintain focus.
• Leading by example helps the team navigate through distractions.
• Understanding which advancements truly impact your business is crucial.

"We thought, oh, coding's great, you know, coding is totally unchanged... There was a period where we were actually working on a very different idea."

• Michael's team initially worked on automating mechanical engineering before pivoting.
• Realized they weren't excited about the initial idea and shifted focus.
• Being willing to pivot can lead to greater opportunities and product-market fit.

"We actually waited a long time to grow the team because of that, and I think that most... many people you hear hire too fast, I think we actually hired too slow to begin with."

• Michael prioritized hiring exceptional talent over scaling quickly.
• Focusing on product and team can be more beneficial than early scaling in other areas.
• Take time to find the right people who fit your company's values.

"I think it's been kind of, a lot of it hasn't been over rotated on kind of that initial push, but instead it's like the continued evolution of the tool and just making the tool consistently better."

• Michael emphasizes the importance of continuous improvement.
• Sustained effort on product development leads to exponential growth.
• Don't rely solely on initial momentum; keep enhancing your product.

"We definitely didn't expect to be doing any of our own model development... At this point, every magic moment in Cursor involves a custom model in some way."

• Michael found that custom models were essential for product quality.
• Even if existing solutions seem sufficient, developing your own can differentiate your product.
• Be open to changing your technical approach as you learn more.

"We thought we would be building for a couple 100 people for a long time. And, from the get go, there was kind of an immediate crush of interest."

• Michael and his team shifted focus from mechanical engineering to coding tools.
• Pursuing a competitive space can be fruitful if you bring ambition and innovation.
• Don't be afraid to enter hot markets if you can offer something unique.

"Many people you hear hire too fast. I think we actually hired too slow to begin with."

• Michael realized they underestimated the importance of timely hiring.
• Waiting too long can slow down progress; balance speed with quality in hiring.