We've been going back and forth a little bit, but let's just say it's the fastest growing software company.
Well, Gemini clearly says it's the fastest growing software company ever.
For us, the idea always was that what is the most ambitious thing we can do? And to us, it felt like if we can automate software engineering, we can just automate the world.
Most people are limited not by what they can do, but limited by what they think they can do. And so, they don't set their goals ambitious enough. Impossible is only impossible because nobody tried it. We would want to be a meaningful driver of GDP of the world.
You did one thing that is very responsible for your success is you built the best team. Vinod, when do we see a hundred billion AI company from India?
I don't know the time, but it depends on your audience. One of those people will start that company.
Hi, I'm Pratush, co-founder at Activate, India's native AI VC firm. We build Signal because there isn't yet a clear consistent voice telling India's AI story across founders, capital, research and policy. We believe that story deserves to be told with depth and seriousness and hence Signal aims to be that defining voice. Through Signal Dialogues, we bring you conversations with the people shaping the AI era in India and globally. For our very first episode, we couldn't be more excited to host two people at the very center of this revolution. Vinod Khosla, the founder of Khosla Ventures, and Mukund, co-founder and CEO of Emergent, one of the world's fastest growing AI companies. Welcome to Signal Dialogues.
Welcome everybody. My name is Akrit V. I am the founder of Activate, a homegrown AI venture fund for India. And today we couldn't have imagined a better setting. We are here at IIT Delhi with two people who have been deeply inspiring. One for over 40 years and one for the last few months when it comes to India's AI story. Vinod, who of course doesn't need much of an introduction, and Mukund of Emergent, who also to hopefully most people watching doesn't need much of an introduction. We've been going back and forth a little bit, but let's just say it's the fastest growing software company.
Well, Gemini clearly says it's the fastest growing software company ever, especially from start of firm to 100 million in ARR.
Yeah. It's faster I think than Lovable because they started with other users. It's faster than Manna. Those are the other iconic fast growing companies.
Yeah. So it is the fastest growing software company ever and from India. We're on the sidelines of the India AI Summit and we managed to do this at IIT Delhi, an iconic institution where Vinod, of course, you went to college. So it's just so many things coming together. Let's a little bit start exactly with the Emergent story. Vinod, you recently invested out of Khosla Ventures and you've been very vocal all through the week about what they're building. Tell us a little bit about how you met Mukund and then the investment and what you think the company is doing.
So I, you know, more generally I would say what's valuable for entrepreneurs is to have role models. And in the past, people haven't assumed great companies can be built out of India. And there have been great role models, you know, when Flipkart and people like that started and Swiggy and others, people started to believe that startups can be successful in India, but mostly for India. And there have been valuable examples and so many more people got interested in entrepreneurship. I think the next level for entrepreneurs is to realize that billion dollar companies can be built out of India for global markets.
And when billion dollar, let's clarify for people because I know you always say this, billion dollar by revenue.
Right. And Emergent should be a great example by being the fastest growing company to 100 million. It's easy to imagine how it gets to a billion dollars.
It won't be easy. It will involve lots of zigs and zags and no business plan ever gets executed. That's why I tell founders, don't make a plan. Just plan to plan.
And make intelligent plans for the next three, six months.
And then be ready to zig and zag and pivot. That's how most successful startups grow. But I hope Emergent becomes the first example of a global company, something more dynamic than all the Infosys and IT services folks from the '90s, as software startups that can be absolutely world-class examples of great companies that happen to start in India.
Incredible. You know, you said something, you know, that I have been talking to young founders all week because we work with such early stage founders. Role models, right? For the last few years as I've been thinking about putting our firm together and just AI in India, I kept talking about the same idea that where are our role models? And Mukund, you know, you are turning out to be one. So, you know, with great power comes great responsibility as they say. But so let's back up a little.
And I just want to emphasize how important role models are. I was 16 in Delhi. Because my father was in the army and I'd on the weekends go to Old Delhi to rent old magazines. A year or two after they were published, they'd show up in Old Delhi to be able to be rented. So I'd go rent old magazines like Electronic Engineering Times because I was curious. And curiosity I think is one of the most important traits, especially in the world of AI. And I read about Andy Grove, a Hungarian immigrant into the US starting Intel, and he became my role model. And I've told him this story. He's no longer with us. But I told him this story like at 16. And this is a message to every 16 year old. I had a role model and hopefully Emergent can help a thousand other startups emerge as a role model of a global company. So I think you not only have a great opportunity, you also have a great responsibility to be that role model.
No, before we're putting you on the spot for more pressure, I'll tell you a story this morning which is, you know, one of our LPs in our fund actually called me up and said, look, you know, he was telling me you've done an incredible job at the AI Summit, you know, feels like there's so much going on for India. I'm sure you're going to have your immersion very soon. So, you know, people are starting to talk. So that is the right language. Yeah. So Mukund, back it up, you know, this has all happened too very quickly in the last two years. Was it magic, planning, serendipity, combination?
Yeah. I mean, for me, like, I mean, talking about role models, right? Like, I was also very young when I first saw a video of Steve Jobs and I was very inspired that, okay, you know, like, somebody can build something and reach those great heights. And that has been like my inspiration since beginning. And when I started, I actually came back to India from Google. I was working in Google before I came back to India and always thought why is there no Google, no Facebook from India, right? And that's been sort of my aspiration when I started. Of course, my first journey was Dunzo, which was building a hyperlocal quick commerce, turned out to be a massive wave in the country. And when I was starting the second time, I was just thinking what is the biggest thing that I can do, what is the most ambitious, bold idea that we can sort of chase. And of course, like, everybody was telling me that, hey, you know, like, when we started to raise the first time, like, we said, hey, we're going to automate software engineering, and people said, oh, that's not possible and, you know, it doesn't make sense and it was too early. It was like, you know, late '23.
You shouldn't have listened.
Yeah, we just kept going. We just said, hey, like, coding agent is going to happen. We started looking at this SWE-bench and the benchmark became world number one on that benchmark. And a lot of our focus has just been on, and I feel that when technology shifts happen, there's so much leverage in just building the right technology, focusing on the technology bits. And that's where our strength is, our research and engineering, and that's what we are focused on. And for us, the idea always was what is the most ambitious thing we can do? And to us, it felt like if we can automate software engineering, we can just automate the world. And that's what we were going after. And after, you know, a bit of zigzag as Vinod said, we finally landed in a product which, you know, was quite ahead of its time in some terms. Like, when people were trying to build, you know, front-end demos, we sort of thought about automating the entire production line of software. And, you know, launched in June last year. And since then, now we have just recently crossed 100 million in revenue run rate. And growth is accelerating for us, you know, and we are seeing that every time there's a model jump, there is just new unlock that happens. A lot more people get success, a lot more possibilities starting to open up. And internally, like, we have sort of rewritten our system three times. And we think that every time there's a new model jump that comes, for example now Claude is there, you have to just reimagine the problem completely. And that agility is helping us.
Yeah. Vinod, are you finding this... by the way, you know, one of the things you did really well, so there's a lot of vibe coding startups, right? And they'll all be successful, they're all ramping very rapidly. We invested in multiple ones of them.
But one thing you did that most founders don't do, and you used the wrong word right now, you said we had this great technology. You actually focus on the solution. You know, you said there's a constituency that's different than Lovable's, that's different than Replit, that's different than Cursor. You're going after the hair salon, you know, and solve his complete problem. You won't just write the code, they won't know what to do with code. That looks funny, this funny English. You're going to get their website up and running fully deployed. We'll solve the whole problem for a class of people who have no access to this, who don't know what SQL is, what a database is. You know, you talk to them about a database, they don't know what a database is. They get scared. So this idea that you envisioned a whole problem for a certain class of user was what was attractive to us, but also differentiates you from all the other vibe coding startups. People always ask me why did we invest in Emergent, and the answer...
When you already had invested in a few others in the space.
Yeah, we're investors in Replit, we are investors in Cognition. We invested recently in Lovable. But I think you, better than almost anybody other than Cognition, did the same thing for where only 500 of the largest enterprise customers. Here's their problem. We solve their problem. We're not bringing a technology, we're building a solution, right? That's what they did. And you did that for the small business owner. And so it was very well done. It was better product management and a better solution. Not just technology. And many entrepreneurs miss that message.
Yeah. So just staying on that one second then, that's exactly what I was coming to right now. You know, he also said something interesting right now which is a big debate everywhere, which is with every model launch his business is accelerating. Right now there is this sort of dual debate or question everywhere, which is with every model launch are more companies getting killed, are more startups getting killed, or...
Absolutely. I think as a startup you have to be very clear what is going to be unique to you in 2030 when the models do a lot more, 10 times, 100 times more than what they do today. So I spend a lot of time talking to companies about what's going to be your differentiation when the models do practically everything.
Yeah, I think for us, you know, we are solving as Vinod said, right? Like, we are solving the entire solution for our assembly, right? And I think like, they are today they're building software, tomorrow, you know, they'll need help with GTM, marketing and, you know, how do we sort of help them, let them care about like things that they're great at, like which is, you know, like solving the unique thing to their business, right? And let us help build everything else for them, right? So that's what we are focused on right now.
So Emergent has a clear answer to the question that most people can't answer. They always say what's the difference between all these vibe coding startups. The answer is, and what's the difference? Why won't Codex or Claude kill you? The answer is you're solving a solution and knowing that constituency, you're collecting a lot of data where once you post-train their models on your customer base's needs, you're going to have a more and you'll do more and more for that customer which they can't do. Like, they won't do everything in every possible domain. So the question is, is SMB an important area? It's a massive area.
Yeah. So that's the Emergent story. And frankly, yeah, I've been even, I've been surprised, I think you've been surprised at the level of need, right? Which is why you're growing so fast. That you're serving a need that was unserved by the other vibe coding startups or other things. And it's... yeah, for most of these SMBs, you know, it reminds me of in the early '90s we invested in Intuit. And they were serving a small business. It wasn't cool to sell into small business. Is that... nobody wanted to sell into small business? It wasn't cool. And this reminds me of the kind of laser focus, solve the problem for a particular constituency of users and then everything else, if you have the best solution, they will use it. You know, great segue to this next part or next question. And, you know, I would love to get your thought. You know, when we met the first time you sort of asked or we pondered over the same question. And now you have Emergent. So in a year things have moved on. Why have we not seen more of these from India and what do you think has made this company tick?
I would say, Mukund should answer that story. I would say, this would be a guess so maybe you can validate it. In the last 8 months you probably pivoted your plan three or four times. So it's the agility to... the customer base has remained the same, but the plan has changed. And I think agility is very, very critical. And this ability to sort of always keep, I always, this is what I mean by don't plan to plan. It's, you've done that multiple times even in eight months. Is that true or...
That's true. I think we are responding. I think the customer needs is also growing, right? So as we sort of learn more about our customers, you know, earlier they were building just website, now they want to build full CRM, now they want to build agents on the platform, right? And as AI is progressing, we have to keep up with that. The other thing, like, we actually get really excited about solving hard problems, right? So like when we think of a goal, for example even 100 million in 8 months, like for us it was like, okay, yeah, this is a hard goal that we can get behind and rally the entire team and, you know, chase something really, really big. And for example right now, like, we're really, really focused on successful customers getting to success, right? How do we sort of get more and more outcome for them? And, you know, so I think, I mean, that's sort of the DNA of the team right now, that we'll go after really hard goals, we'll go after really aggressive goals, and we'll, you know, also keep ourselves very close to the customer. So that's sort of been really important.
It also reminds me of something else I think is a very important lesson for all entrepreneurs. We had a good discussion in the last few days. And I can see there's entrepreneurs who actually are so rigid they won't change their plan. And, you know, it's exciting to evolve a plan. You know, my role is to brainstorm with entrepreneurs. That's the thing I do best in my view. Just brainstorm ideas. But then good entrepreneurs reject some ideas and take the best ideas and leverage it. And so this agility, this ability to expand what you're doing and your charter is what a good, I hate to call myself an investor. I say I'm a venture assistant to entrepreneurs. This is what it's about. Investors get hung up on the wrong thing, right? Or just revenue. 100 million is a great goal, but it's not really an end point. It's like how valuable is your business for your small business customer? How do you keep evolving that, expanding your vision, right? A good investor will think that way and not say when can you go public?
Yes. Which is the dumbest question I keep hearing. We probably will sit here for another four hours if we get into what you think about investors. So we will...
I think that discussion was like really powerful. I think like we got, I mean, there are a lot of contrary insights that we got of that. And like right after the meeting we sat down, we writing down, okay, these are the insights that we got. And like, so really, really helpful. That I think, especially now, I think things are very dynamic, right? And getting different perspective really helps us think through the business.
So just on that note, we know, like I was saying, you know, we were talking about this before as well. You've had this sort of, you know, real passion to see India grow, India emerge. Obviously you grew up here, Delhi, in this very hall. In this very hall, we were talking about this background, I've sat there, sat here. Why have we not seen more of these from India? AI Summit, do you think that catalyzes more of these?
I think AI Summit was really exciting only because you saw the level of interest from young people in India. Not... yes, there's at the government level there's real interest in AI, but...
I could tell by the way, I have to tell the story right now. The other day after your session got over when we were taking you out and sort of escorting you, I could see you were so excited and you wanted to stop and take, like, let the kids take pictures with everybody. And you were actually almost feeling bad. And it felt like that was the...
I felt bad because these are really excited kids and it's impolite to ignore them. But they were all excited about sharing in this vision of building their own startup. And that's very exciting to me. And frankly, that's where most of the progress in this AI field will come from. And that's why it's exciting to see so many more people say I can do my own startup enabled by things like Emergent, where I can do my own thing. It doesn't have to be a tech startup. It can be anything, business.
Yeah. Mukund, you know, we both started our first business around the same time. Ironically, we also sold it to the same parent, so we share a lot in that journey. And, you know, we come from this world where we were told it's very difficult to build a global company from India, right? Unfortunately, more so by people locally. We were told, you know, it's very difficult to build a fast growing AI company from India, right? And all of that. When you started, you were against all of those headwinds from what people... Hey, how did you navigate all of that?
I mean, we were just really laser focused on solving the problem. And like, we had a very strong belief that AI progress is going to be exponential. And as long as we are tracking on that and keep that belief and solve real problems, we were not worried like about anything else, right? We were just like solely focused on, also the problems were like really exciting, right? So, you know, early on, like as Vinod said, that curiosity, like a lot of our initial driver was different, being an Indian company building globally. I mean, I think we just focus on hiring like a really strong team, like really sharp people. Like most of our team is under 100 IIT rankers. Like we are very focused on, I think, the real right talent, people who come with a lot of ownership, people who come with like a lot of sharp problem solving skill because they need to learn on the job, right? Now everything is changing. And I think having that initial set of like five, six really, really strong people helped us chase, you know, and also just focus on, you know, customer, like we were always focused on like who we are solving for, what kind of demand we're getting.
Do you end up physically spending a lot of time in the US?
Yes, I do spend a lot of time in US now. And we are opening a small office there now. And, but I think we are building for global audience, right? So a lot of our customers are in US, are in Europe. So I think like being closer to customer always helps.
So my comment on that is most people are limited not by what they can do, but limited by what they think they can do. And so they don't set their goals ambitious enough. Right? And you'll only reach the goal that you set. You know that old Indian saying, you shoot for the moon, you might end up in the tree. You shoot for the tree, you'll end up in the ground if you miss. And that always reminds me about startups. I forget the exact saying. It's...
Shoot for the stars, you'll land on moon.
Yeah. Yeah. No, it was something like shoot for the moon and you'll end up in the kajur tree. And you end up, shoot for the kajur tree, you'll end up... So I've always had this vision of shooting higher. Impossible is only impossible because nobody tried it. Right? And we have another interesting company that is a very ambitious attempt at reading the brain. Like directly go from your brain into your computer. Now, everybody says it's impossible, but these people are trying it. Right. That's hard to imagine. So, impossible is not really impossible as long as you're thinking from first principles about how you might attempt, try. What are the things you would try? And you can't imagine anything, you can't imagine free energy for example with no source, no physics behind it. But as long as you're thinking from first principles, most people are not ambitious enough and they're limited by what they think they can do. And so role models again help. If Emergent is very successful, other people will think it's possible. Just like I saw a Hungarian immigrant start Intel and I said it's possible, right? So I wanted to get to Silicon Valley, which I did. And so this is a pretty important psychological thing in most cases, self-limiting.
So just, you know, exactly on this, is such a great point and such a good conversation. So, you know, this is likely going to be watched by the same hundreds of thousands of people who attended AI Summit, right? This is going to be the same young kids. You cannot meet all of them one-on-one. They're looking at a role model here. You know, hopefully there's a bunch of us who have capital now to provide. But I'm still thinking if I'm in third year or fourth year of IIT Delhi right now. I'm still thinking that, hey, look, you know, how do I replicate this from India, right? I think like there's this thing that's becoming where, okay, look, okay, sure I can go to Silicon Valley, I can go to the US and maybe I can do it there. You know, there's multiple things going on there. But like, what do I do now? How can I replicate it? And they're looking at you almost as it's simple, right? They do what Mukund did. Mukund called you, got started, then we got introduced. And it's that, it's much simpler.
And it's that, it's much simpler.
Right. I mean, I think there is enough capital available. I think people, if they're chasing big dreams, they can actually get there. I also think getting started is easy now with everything, good internet.
Getting started is very easy, but you did one thing that is very responsible for your success: you built the best damn team.
You didn't say, 'Oh, I need too much equity for this guy, I won't hire him.' You said top 100 IIT toppers, that's the minimum criteria to work here. Set a high bar for the employees. I think that will pay you dividends for the next five years. And you know, whether you're successful or not, I hope you're very successful. But life is always uncertain. That team will go on to do great things.
Great. Switching gears a little bit to what you do, capital and ventures.
