Well, thanks so much for being here today for Build Day. Build Day's really all about turning great ideas into great products, and so when we stepped back and asked what that might mean, we thought, well, no better company to talk to than Vercel, who's very much at the forefront of making that possible, and Guillermo, in particular, who, of course, is the genius behind Next.js and Vercel in parallel. So, lots of good conversation to be had around open source and business.
Good to be here, thank you.
I think earlier this year you guys announced 200 million ARR and a doubling of users year over year. For those of you who are reasoning about sort of scale and what might be possible, I heard 4.3 million downloads a week of your AI SDK alone.
Yeah, it's hard to keep count of downloads 'cause they're growing so fast. Good problem to have. But, yeah, the business has been growing really fast, and, as many others I think here, it was born in the cloud and it was born on Stripe.
Amazing, and, you know, I think with many of today's startups, rather than reasoning about year-over-year growth, we're increasingly reasoning about month-over-month growth or even week-over-week growth.
You could ship something today that makes a huge difference. Always elevating ambitions, amazing. Well, thank you for being here. I thought we could start maybe a bit with your background. Born in Buenos Aires, taught yourself how to code? True story?
Curious about kind of your early journey and what brought you to the US.
You know, there are a lot of parallels between what I set out to do with Vercel in my early days because teaching myself to code and speak English was quite the challenge, but...
You taught yourself English? English was not spoken at home?
The funny story, no. In fact, my parents were really interested in it 'cause, in Argentina, the country was always divided between capitalism and socialism. And my parents were very much like engineers themselves, industrial and chemical engineers, and they had a lot of admiration for great engineering. And they knew that the cutting edge would be in Silicon Valley in the United States, but you needed to know English in order to get there. And so I was interested in software engineering, and I noticed that a lot of the programming manuals, documentation, readmes, were in English. So I basically had a bootstrapping process to do. And I tell people these days that AI is sort of a before and after because, if I go back in time and I'm trying to teach myself how to code, I can do it in my native language, and I can do it at every step. I can just ask the LLM to teach me. Like, literally, one of the things with LLMs is like, 'Explain quantum mechanics like I'm five.' I could have done that.
You could have done that when you were five, yeah.
So I didn't have that. The next best thing was the internet, and the next, next best thing was open source. So, for me, one of the discontinuities in my learning journey was when I started getting to know the open-source communities, contributing to open source, spending a lot of time connected with strangers on the internet, as one does, and learning together. And so I started contributing to a lot of web frameworks. One of the earliest was called MooTools. It was a JavaScript library, and that was actually very formative. You know, if I think of my resume, my resume was a bunch of the open-source projects that I contributed to. And the web itself was for me sort of the vehicle that allowed me to basically leave Argentina and become a worldwide figure in programming because the instant that I was able to use the web to very quickly ship things, fork something and put it out into URL, now you have a worldwide audience, right? These hyperlinks can travel at the speed of thought pretty much. So fast-forward to Vercel and had the same inspiration. If you wanna start a company, if you wanna start a digital business, if you wanna ship your next big idea, I need to make it extremely easy. I need to remove all of the friction. And, funny enough when I was here in Silicon Valley, I had already sold my first business to WordPress, I noticed that the cloud was all the rage. I always encourage people to think about platform shifts very closely. Clearly now we have a platform shift towards AI. Like 10 years ago when I started Vercel, the platform shift was towards the cloud. I looked at the cloud, and it was so hard, even though I had like 10 years of engineering experience under my belt. And so Vercel set out to remove all friction, from idea to global cloud application.
And so you're kind of developing Next.js and Vercel, one open source, one is a business, in parallel. I'm curious like hard trade-offs along the way when you had to make a call, one versus the other.
Yeah, where there was no trade-offs was in my vision. I wanna make the web easy, and so when I was thinking about it from first principles, something that you guys love to do here at Stripe, okay, I sat down, and I needed two halves of this equation. I needed the tooling, compilers, programming language, runtime framework, and then I needed the cloud infrastructure. And so interestingly enough, I noticed an asymmetry in the market. I noticed an unmet need because most of the platform providers were leaving the framework side for you to figure out. So AWS and Google Cloud and whatever, like, here's a bunch of virtual machines and clusters and networking solutions. Right, you do the rest. It's like the meme of draw the rest of the owl. They were like, 'Here's some primitives. You figure it out how to build an application.' And so I looked at it from first principles. I was like, 'Wow, that's strange,' 'cause as I'm in the act of drawing this proverbial owl, I'm realizing I need tooling. And so that's where the idea of Next.js came from. It's like, hey, I wanna create an application that is of the sophistication, performance, and flexibility of the giants of the internet 'cause I always caveat my little storytelling with, look, there were ways to publish to the internet really easily. You could have, you know, go to Squarespace or Wix or Tumblr. Like, there were ways to get something online, but my aspiration was that you would be born- much like Stripe-like, your business is born on Vercel. It never graduates because we give you infinite scale and infinite power. And so I solved the Next.js side, made it open source, and then I also needed to solve the other equation with half of the equation, which is, all right, how do you host and scale this? And I also set a really high bar for myself. I wanted to make it universally performant. I wanted to make it such that without even being an expert in optimization or infrastructure, you could deploy something that scales and performs excellently. And so those were the two things. One is more on the business side, and the other one is sort of our presentation to the world. Our cover letter to the world is start with Next.js or any other open-source frameworks that we contribute to.
I mean, awesome that they were so hyper-complementary, right, additive. Were there hard trade-offs you made? I mean, even in your own time...
Like where you spent your own time and energy?
Yeah, it's funny because I had to overcome a few bad, I guess, intuitions in order to get there. One intuition that I had at the beginning is: in order to create the world's best and most successful startup, I have to make everybody happy, like every single person. I feel like that's just a life lesson. In order to be the best, yeah, you don't have to make everyone happy. You have to be somewhat disagreeable.
So who did you agree to disagree with?
So, interesting, and this is why the story seems so simple now that I tell it, it's like, 'Oh, wow, like, genius. Of course, you created the framework and the infrastructure.' In the beginning, the infrastructure was so generic that I was trying to appeal to everybody. You liked Java. It's like, 'Oh, I can't let Emily down. I'll do some Java over here. Oh, and you like Next? Oh, okay, I'll do some Next. Oh, and you...' And so I really was just beginning to straddle myself really thin. And so the principle that I've now extracted from this that I'm very happy to share with the world, because it can save you some pain, is your ambition for a venture-backed business that'll reach global scale should be pretty much unbounded. Like, we're here today. We're gonna colonize Mars someday, sometime in the future. So that's the long-term aspiration and ambition. But you also have to meet it with realism because, if you're just pure unmitigated ambition, you're gonna be so up in the clouds- not the actual cloud, but the metaphorical cloud- that you're not gonna get anything done. You might get into a situation being jack of all trades, master of none- extremely dangerous situation to be in. You might get into the situation of what some call it like, you know, having a million mediocre customers versus 1,000 customers that really love you. And so what was obvious in retrospect, and we did end up doing is, 'Hey, we'll start by dominating a niche.' So the niche was- which is funny because I think a lot of things that we believe are niches turn out not to be- 'cause we've had $250 million of revenue from a niche, which is front end. First chapter of Vercel was front end, hosting the front-end side of websites and web applications, and then CDN and security services. Our next step, which has come way later than I would've expected, is back-end: agents and the AI cloud, and all those things. In many ways, you have to earn the privilege to expand that product lineup or that customer base in order to get to the ultimate ambition of your business.
Actually, we're seeing that in a lot of the companies that are being built now. What feels like a niche with a global user base- and especially sort of ability to reach markets that are well beyond our own- are not niches at all. They're very, very large markets. Okay, but you had to make hard trade-offs at the start.
100%. Had to shoot for the stars and then decide which planet you were gonna land on first. 100%.
You talked about like, you know, the new frontier is AI, and we've talked a bunch about open source versus closed source. I'm curious in the context of AI how you think about open-source models versus proprietary models, both in terms of what the industry is building, but also in terms of how developers should adopt the two.
One of the things that I believe is that once your business reaches product market fit, you can't get too satisfied, right? Because the world will expect you to do more. Your customers will want you to do more. You'll have the people and funding to do more. So you can expand into other adjacencies. And one of the rules for when do I expand into my next chapter- there's a bunch of rules that I have or principles. One is what I call brand permission, meaning if Vercel tomorrow launched a washer and dryer product, even if it's slick and black and beautiful, you'd be like, 'That's a little strange. I was expecting them to launch maybe like an AI coding tool.' Like your brand doesn't yet give you permission to launch a washer-dryer. And also you want to expand into adjacencies to your core competence. So, if you do payments, you can handle billing next. Or, if you do payments, you can handle fraud next and things like that. And so, for us, with our new chapter of becoming the AI cloud, what we realized is that there is a lot of demand for the same things that we did in the past. People want simple frameworks, tools, and solutions for creating agents. There's a new protagonist in this story. I call it, first chapter of the internet was about pages or pixels. In fact, if you've used Next.js, you know that the very first thing we asked you to do was create a pages directory and toss your files in there. It's very much PHP-inspired. The next chapter...
Pages and pixels replaced by?
Agents. And so agents might not even have a face, so to speak, intelligence that is sort of permeating everything you do, meeting you in every conversation, in every platform integrated into Slack, integrated into Zoom, integrated into, you know, parsing your documents while you're doing other work. And so this is a completely different paradigm of the type of software that we've all been building. And this is why it's exciting to start a business today because that feels to me like a platform shift, and what's interesting about platform shifts is that the old thing doesn't disappear. So it's not that tomorrow there'll be no pixels or we'll get to a point where there is no pixels. Much like today, we still have AM and FM radio, so the older technology is still there, and it'll have- I think in the case of the web, pages and URLs and links are gonna continue to have a ton of relevance. But clearly there's a new type of software people wanna build, and there's a new opportunity then to provide the infrastructure and framework. So just like there was Next.js, we created the AI SDK. You called out it has 4.2 million downloads a week. I think it's actually gonna surpass Next.js. Next.js now feels old compared to this new hotness. It's like my new love interest. No, but they're complementary. There's a foundations cloud, and there's an AI cloud that you can build on top. And so whenever you have an idea for an agent or an assistant, you will naturally gravitate towards a platform that speaks your language, and that's what we're building now.
Yeah, so you guys are really at the forefront of helping developers build with AI. We partnered with you to make Stripe sandboxes native inside Vercel. And I'm curious sort of how you thought about integrating payments within your stack and why it felt sort of worthwhile to you.
