He quit Google & his 1st startup failed—but his 2nd grows at $1M ARR every 10 days. | Zach Llyod, Founder of Warp.dev

Zach Lloyd (00:00:00):
If you go out and start something on your own. It's really like, does the world care about what you're building? It's kind of like a truer test. Yeah, I've seen people get promoted to Google for doing things that failed. It got to a point where I no longer believe in the mission or the viability of the business and my co-founders still did. And I ended up feeling to much cognitive dissonance for me to sell a thing to employees, and future investors, and so forth that I fully didn't believe in. So we raised like $15 to $17 at the A, and then the B was big. It was like a $50 million Series B. 

Pablo Srugo (00:00:33):
Pre revenue?

Zach Lloyd (00:00:34):
Pre revenue. Crazy, right?

Previous Guests (00:00:38):
That's product market fit. Product market fit. Product market fit. I called it the product market fit question. Product market fit. Product market fit. Product market fit. Product market fit. I mean, the name of the show is Product Market Fit.

Pablo Srugo (00:00:50):
Do you think the product market fit show, has product market fit? Because if you do, then there's something you just have to do. You have to pick up your phone. You have to leave the show five stars. It lets us reach more founders and it lets us get better guests, thank you. Zach, welcome to the show, man.

Zach Lloyd (00:01:06):
Thanks for having me. I'm psyched to be here.

Pablo Srugo (00:01:07):
Dude, I'm excited to have you here. I mean, you told me earlier you, with this latest company. I mean, you raised about $70 million or so.

Zach Lloyd (00:01:14):
Yep.

Pablo Srugo (00:01:15):
You said it took a bit to get to a million ARR, but now you're adding a million ARR every ten days. Which is pretty insane, great place to be in.

Zach Lloyd (00:01:23):
It's exciting. I mean, it's been a slog but recently I think we really got it. Which is cool.

Pablo Srugo (00:01:28):
Perfect, well, listen. Let's start maybe at the beginning. I mean, you told me you were at Google for a while and then you left to start your first startup. Which wasn't Warp, it was a different one before this.

Zach Lloyd (00:01:37):
Correct, yeah. So my career, I made a few things out of college. I actually went to law school for a year. Ended up at Google, was at Google for a long time.

Pablo Srugo (00:01:46):
How'd you go from law school to Google?

Zach Lloyd (00:01:48):
Yeah, if you want to really back up. So, my undergrad was in this thing that was like a combination of math, computer science, and philosophy. Unlike, I think a lot of people coming out of college these days. It wasn't super clear to me if I wanted to be in the tech industry, if I want to do something more academic, I wanted to do something just totally different and so actually when I graduated college. I worked for a year in tech and I was like, I don't know if this is for me. And so I got a master's degree in philosophy. And then I was like, what now? So I went to law school for a year. Law school, I was like, okay, I clearly, I don't want to do this. I really didn't want to be a lawyer. I figured that out and so I was like, okay, what am I going to do? So I ended up withdrawing from law school and working in a recording studio. Because I've always loved music and I was like, you know, I got to make some money, and what skills do I have to make money. So I actually answered an ad on Craigslist to start working again as a programmer part time. This was pre-Google and then this was another startup. I worked there, I was like, you know, I really actually like engineering and programming more than I realized. And so I'd had some friends from college who were at Google. Who referred me and I went through the application process, and got in there. And then, yeah, Google was awesome. I was at Google for about eight years. The entire time there I was on Google Docs. I built a lot of Google's spreadsheet product, which was cool and then by the time I left Google. I was a principal engineer and I was leading engineering for the whole Google Docs team, which was pretty cool.

Pablo Srugo (00:03:10):
What'd you think of the philosophy masters, by the way? I majored in philosophy from undergrad and then switched to a minor. Curious how it was for you.

Zach Lloyd (00:03:17):
I loved it. Yeah, so my master's was in philosophy of science. So a very specific type of philosophy. It was kind of like, what's the nature of knowledge? How can you be sure that, we actually know something? How does science work? I also did a lot of more formal logic. So I really liked that aspect of it, studying how reasoning works.

Pablo Srugo (00:03:36):
It's like the harder, the more rigorous part of the philosophy doctrine.

Zach Lloyd (00:03:41):
It was really close to math, what I was doing and actually, I almost went and did a Ph.D. in Logic. Which, again, it would have been really cool and interesting. But it gets very obscure and so I was kind of like, I don't know where this goes career-wise. But from a, learn how to think clearly, learn how to write well, learn how to analyze arguments. I think philosophy is an awesome thing to study and would recommend it to anyone. I mean, did you liked it?

Pablo Srugo (00:04:05):
I was in, I guess it was like the more. The logic stuff was definitely cool. Epistemology was pretty cool, but it was, you know, the softer part of philosophy and I actually preferred reading. I got into it, because I like to read a lot of the philosophy books.

Zach Lloyd (00:04:18):
Yep.

Pablo Srugo (00:04:19):
I preferred that than actually being in a lecture or a class setting and a lot of people would just take the class in an annoying tangent. To often and so.

Zach Lloyd (00:04:28):
I hear that.

Pablo Srugo (00:04:30):
That was a bit frustrating, but yeah. I love philosophy itself, so there's that. So walk me through. I mean, ten years at Google, obviously you've kind of grown to the company. You're leading a massive team and doing very well. What makes you decide to venture on your own?

Zach Lloyd (00:04:44):
Yeah, great question. So, I'd always wanted to start a company. Even before I started Google, I built various things that I tried to turn into businesses. That weren't real businesses. I built this website for musicians to meet each other and form bands, and jam together.

Pablo Srugo (00:05:01):
Is this during Google? Like on the side, or before?

Zach Lloyd (00:05:04):
This was a side project I did while I was at Google. I don't know, I always wanted to start something. So that was part of it. The other part of it was just from a challenge growth standpoint. I thought that it would be a good learning experience, and so.

Pablo Srugo (00:05:18):
Were you getting bored?

Zach Lloyd (00:05:19):
I don't know if I was bored but I feel like, throughout my career and also school. I was a really good student and I was also really pretty comfortable working at a place. Where there was a very clear criteria for what you had to do to get promoted, and so I was very good at climbing a ladder or getting good grades. That type of thing and I thought it would be a good experience for me. Honestly, to see if I could succeed in an environment that's less about checking these things to get you promoted or get you good grades. But if you go out and start something on your own. It's really like, does the world care about what you're building? Do they like what you're building? And it's kind of like a truer test. And I just thought I would learn more from doing it. You know, I've seen people get promoted to Google for doing things that failed. It's just a different skill set and I was like, you know, if I really want to develop as a leader, and really want to challenge myself. I should try and do something on my own. I'm also super competitive. So from the standpoint of trying to win at something, I really wanted to do it. I actually didn't have a super clear idea of what I wanted to work on. When I left Google, which I think a lot of people will start companies. Because they have some burning problem they want to fix, and that's awesome. I was like, I had an idea, it was not a good idea. It was a photo sharing app idea, but I was like, you know, I really want to build this thing.

Pablo Srugo (00:06:37):
What year was this?

Zach Lloyd (00:06:38):
This was 2015, so ten years ago. So I was like, I really want to build this photo sharing app, you know, it'd be an iPhone app. It was, concept was it was going to be the fastest way to share photos with your friends. The world didn't really need this.

Pablo Srugo (00:06:50):
You didn't have a good idea, let's say but you did have an idea. It's not like you left with completely carte blanche.

Zach Lloyd (00:06:54):
I did have an idea. I was like, I know what I want to build and so I left. And I was like, okay, let me just basically sit in my apartment, and try and build this thing.

Pablo Srugo (00:07:01):
Would you agree, that the risk is actually a lot lower than it seems? Because worst case, you just come back to Google. Was that part of your thinking?

Zach Lloyd (00:07:06):
Totally, at this point. I was pretty employable. So if I couldn't get to work, I could go back. But again, I didn't do the things that I think people who are more savvy starting companies would do now. I didn't have any real inkling of what the business ought to be, I didn't have a co-founder, I didn't really even cross my mind to raise money and I guess that's actually more common now. But I didn't think of going to YC or an accelerator, or anything like that. I was just like, okay, I'm going to build this thing. It'll be a cool product and then obviously people will use it. And that's just not how the world works, and so.

Pablo Srugo (00:07:40):
Was that part of the Google culture?

Zach Lloyd (00:07:43):
Yeah, I think Google is an amazing company that sets you up in a uniquely bad way to be a startup founder. Cause when I was at Google, anything you launch at Google is going to get millions of people trying it, right? And that is not the case obviously, for a startup. The challenge in a lot of ways in a startup is not can you build a cool product. It's can you get people to care, can you get in front of people, can get them to try it and so I literally was never thinking about that, in my time at Google. Because I just took it for granted like, okay well, we'll add a new thing and you know millions of people will try, and that's cool. The other thing I didn't think about at Google, it was just so product and engineering focused. That I was never thinking about anything related to the marketing aspect, sales aspect, the business aspect. If you wanted to get an engineer on your team. You had a million engineers applying to work at Google. I didn't have to go recruit an engineer at Google. Engineers would just come in and they would be the best engineers in the world. And so, there are all these things that I didn't think about at Google. And, you know, when I did my first. I won't even call it a company, but like project outside of Google. I made all the mistakes that someone who would take all this stuff for granted.

Pablo Srugo (00:08:53):
I'm sure you knew it was going to be much harder, but you probably didn't realize maybe how much harder. You'd be like, well, I'm not going to get a million people to use it but I'll get 10,000 and it was like, wait a second.

Zach Lloyd (00:09:01):
Yeah, I'm not dumb. I think I knew this was going to be really hard. That was part of the idea of it. It was like, okay, I want to try something hard. You just don't realize all of the dimensions in which it's going to be hard, until you actually try it. Again, I think that's another, I don't know if it's a career principle. But for me, the best way that I can learn something is to try it. Learn by doing it and I certainly have had many experiences since Google. Where I have failed at doing things and that's, you know, every time you try something and fail. It's kind of cliche at this point, but you really do learn. I really do and so kind of diving in, and trying to start something is the fastest way to figure out all the things that are going to be hard about it. So that definitely was, what I experienced immediately when I built this.

Pablo Srugo (00:09:44):
What happens then with the photo sharing app?

Zach Lloyd (00:09:46):
So I managed to turn it into something that was not a total loss for me, which was interesting. So I spent like six or nine months not a tremendous amount of time building this thing. I got maybe a few thousand people using it. So I didn't get any real significant user traction but it was like, it worked really well. Which makes sense, because I knew how to build stuff. When I moved on to do my next company, which I was a co-founder and CTO of. We were actually able to use the photo sharing app that I had built and repurpose it to be our foundational app for that company. So I think technically we structure that, like, the company acquired the photo sharing app. We're not talking for any real amount of money here, it's just for a little bit of equity. But it ended up being something that was useful for the next five years, which was kind of surprising and cool.

Pablo Srugo (00:10:34):
What was that next startup and how did that happen?

Zach Lloyd (00:10:36):
So the career arc here. So I did this photo sharing app, which was called Camera Club, and I did it for like six to nine months. And I was like, okay, this is not really going to turn into a thing. I was like, this has been fun to build, it's cool. I learned like, okay, there's a lot of stuff that I'm probably not doing right here. So then my question was, how do I accelerate my learning even more? I ended up, at that point basically pausing to try a couple different avenues. So, one was I tried to find some co-founders, even before having an idea. Just sort of jam on ideas with. So, I pursued that route of meet some other smart people who were, wanted to start a company that weren't totally confident in the idea.

Pablo Srugo (00:11:15):
How'd you do that?

Zach Lloyd (00:11:16):
I did that largely through my network. So there were a bunch of ex-Googlers who were starting companies. There were people from college that I knew, who were in the technology scene in New York. This is all in New York, by the way. Where I was doing this, and so I ended up networking. I got introduced to a few people who I thought were very cool. Who I spent, let's say, a period of three months just idea exploring with. There were very few constraints on it. So I was looking at ideas in the healthcare space and it's like, I don't know anything about healthcare. And again, I wouldn't recommend people do this. You have to put some constraints, on what you're going to do if you're going to found a company and just cold diving into a very complex industry like healthcare. Where I didn't know anything about it. It was like we were going and interviewing doctors and it was like, I don't think that was a great use of my time. But people do start companies this way. I just feel like that's playing on extra hard mode. It's hard enough to start a company. So you're probably better off starting one where, at least you have some inkling of the space, the product you want to build, the problems that you want to solve. So I did that.

Pablo Srugo (00:12:18):
Yeah, I think you have to have something that pulls you. Whether it's your experience and what you know, or at the very least, what you really care about. Hopefully a mix of those two things, but at least one of the two.

Zach Lloyd (00:12:28):
Exactly, you got it. You have to care or you have to know. I think it's a great way of putting it. I was like, oh, I hate going to doctor's offices and filling out the forms. It's like, okay, that's not going to cut it for a business idea.

Pablo Srugo (00:12:40):
And you're doing this, by the way. You're not formally a co-founder of anything? You're just exploring things with different people.

Zach Lloyd (00:12:45):
Just exploring, just met other people who were. Who are now, really good friends of mine, by the way. It was a cool thing to do just to, wake up every morning, go to coffee shops with Joe and Matt. And be like, let's look at this industry today. And let's see if there's an opportunity here. It was a fun experience to do that, but I didn't feel like we were making a lot of progress and ultimately, you know, I think if you're going to start a company. You really want to have strong conviction that there's a real problem you want to work on for a long time. I didn't know all this, I didn't have a great mentor. It would have been really useful for me, to have had someone who had been a founder. Who was really guiding me and was like, this would be a good way to do it. I didn't have that, unfortunately. But the other thing that I did at the same time was, I started talking to people who were very early, but had already had an idea and wanted a technical co-founder. Investors are always pushing this, by the way. They'll have a lot of situations where they have a business person, who comes in with an idea and it might be a cool business idea. But to actually execute on it, they need a technical co-founder. Someone who can help build it and so I ended up getting hooked up with the co-founder of the company that I would eventually join. Which is SelfMade, through an investor and the concept behind that company. It was basically a photo editing market place. It was meant to be a consumer app. Where people would basically submit photos that they had through a mobile app and on the other end of the mobile app would be professional photo editors, retouchers, people who could make the photos look good. The consumer would pay a few bucks per photo and on the other side, you know, we pay the retoucher something. And so, I said no to this idea. Actually a few times but the co-founder, he's really persistent. He's now a VC, he's a really good salesperson, he's now a good friend of mine too. He really convinced me that this was a smart thing to do. They had already raised a small seed round. He was really fair with the sort of equity he was offering me and it was like, I ended up thinking it would be a great sort of opportunity for me to learn, in the context of a business that had funding. I knew we could hire people, I knew we could bring a product to market, I believe that there was some demand for the thing and so I eventually agreed to do it.

Pablo Srugo (00:14:52):
Was he a first-time founder, by the way?

Zach Lloyd (00:14:54):
No, he was a second-time founder. So that was another thing that was actually. 

Pablo Srugo (00:14:56):
Okay.

Zach Lloyd (00:14:57):
Appealing to me. His first company was a dating app that was acquired by IAC, like thematch.com folks. I would learn a bunch from him, and the truth is I really did learn a bunch from him. The business had a whole bunch of other problems and issues. Which made it really hard and ultimately, wasn't a great fit for my skills and passions, and all of that. But it was a good learning experience. But, I don't know, it wasn't ultimately not like a super successful endeavor, but I learned a bunch from it.

Pablo Srugo (00:15:25):
How long were you there for?

Zach Lloyd (00:15:26):
I was there for three years. So a while, and we took it from Seed through Series A. We got into, you know, mid single digits, millions of revenue. So it's like we got some real revenue traction on it, it pivoted multiple times. So again, we started off as this consumer app and the unit economics didn't really work on that. And I think we discovered that relatively quickly. So we ended up having to change it into something that was kind of a marketing solution for small businesses, is where it landed and so the business that we we ended up growing was. If you were like a Shopify store or a small solo entrepreneur like yoga teacher or something and you wanted a professional looking social presence. You would hire SelfMade and through a combo of like. It was a tech enabled service essentially, we would take all of your content. We would put together a social media posting schedule, we'd write your captions, we'd edit your photos and then we would post that for you. And that's actually, you know, that's worth something to a small business. Where it's like, they want a professional looking social and so it was actually relatively easy to sell that product. The problem was, so first it was a problem with the internet economics. It was expensive to provide this as a service. It was operationally a huge headache, because it was so human powered. You just had to hire people and you had all sorts of quality control problems. It was very expensive to get this labor in the U.S. So we ended up having some labor overseas in Jakarta. It turns out it's really hard to demonstrate or to get someone ROI by just making them a nice looking social feed. That actually doesn't, on its own drive business. I think there's some sort of power law distribution with what social media does for businesses. Where for most people having a social media feed that looks nice, just like doesn't do anything. But if you actually have a viral social feed, I think it could really be transformative. So it ended up for all those reasons, I think, not being an awesome business and it really wasn't a great fit for me. Because I don't give a shit about social media. I just really don't, it was the weirdest fit for me. Because it was me with my background building productivity apps. Our company was largely millennial, Gen Z, social media manager type people, and I was like, this is a very weird situation.

Pablo Srugo (00:17:38):
Back to what you know or what you care.

Zach Lloyd (00:17:40):
Yeah and so, again, I learned a ton. I built, I think, a really good engineering team there. Many of whom I'm still in touch with, again it was like, playing on hard mode. Because It was like I'm selling them on a thing. I don't know, if it's going to work, but I felt like I really owed it to the employees, my partner, the investors, everyone to do my best to make the thing successful. There's a lot of rejection and failure.

Pablo Srugo (00:18:03):
What happened ultimately?

Zach Lloyd (00:18:04):
It got to a point where, I was a full-on. I no longer believe it, in the mission or the viability of the business and my co-founder still did.  Which cool, good for him and it ended up feeling like too much cognitive dissonance for me to sell a thing. To employees and future investors, and so forth that I like fully didn't believe in. And so I think that's the point, where I would have been basically detrimental for me to stick around and, try and do that. And it was something I didn't feel comfortable doing. And so it was a bit of an acrimonious situation. It's kind of like a divorce, you know, and it sucked. It sucked for him, because it definitely made it harder for them to raise more money. You know, I was part of the draw, I was the team of, you know, Zach and Brian. And if Zach's not in, what does that say about the company? And so it sucked a million ways around, but it was what I felt like I had to do at the time. I was like, I cannot be here convincing people to join a company that I don't believe in anymore, and so I ended up leaving.

Pablo Srugo (00:19:03):
And what's going through your mind? Are you thinking like, okay, I'll go and rejoin some bigger company? Or I'll start my own thing? What are you thinking about?

Zach Lloyd (00:19:10):
I was just like, I need to do nothing for a minute. I was like, I don't know if I want to start another company or not. To be honest, it was super hard.

Pablo Srugo (00:19:17):
At this point, it's what? Like 2019?

Zach Lloyd (00:19:19):
Exactly, yeah. So I left in 2019, right at the beginning of 2019. It would have been, sort of a waste. To go through that whole experience and then not try to use, what I had learned to start something new. So actually the first thing that I did was, I spent a couple months just writing up. I called it a post-mortem, of the whole startup experience. Everything that was good about it, everything that was bad about it, everything that I would, if I were to ever start a company again, I would want to adjust or do differently. 

Pablo Srugo (00:19:50):
Do you publish this.

Zach Lloyd (00:19:52):
No, and I don't think I could. Because it's to personal it's quite critical and it documents my interactions with the VCs from the company, and the co-founder. And all sorts of crazy stuff from it. But I did it for myself, I do think it would be super entertaining for people to see but it's too personal. But it was a really good exercise, because I came out of it with a bunch of principles. For if I were to do something again, what would matter to me? And just to share some of that with you, it was like,

Pablo Srugo (00:20:21):
Yeah, please. I was going to ask.

Zach Lloyd (00:20:23):
So I was like, look, if I do something again. I have to really care about the problem that I'm solving. Startups are so hard, they go wrong in so many ways, pick a problem that you really care about. That was one of the principles.

Pablo Srugo (00:20:33):
By the way, on that one. I used to think it's an interesting one, right? Because, I was the guy that when I started my first startup. Couldn't care less about the problem. In other words, I was like, dude, whatever. If the thing's going to work, if it's a good problem solution set and there's money to be made, like I just want to run a business. The reason that, now speaks to me so much, is because there is almost no way. No matter what you do, it's going to be like you said, so hard. Yes, you hear stories of somebody puts out a product and it just goes, right? But it's such the exception, you can't plan for that and even in that case, it's still hard. So, you have to plan for things not going your way so many times that the only thing that keeps you going is the fact that you care.

Zach Lloyd (00:21:12):
I had exactly the same experience. When I first started, I was like, I'm going to be very analytical. I'm going to pick a problem, I'm going to try and solve it, I'm going to pick the one that's the best business opportunity. It's like you said, it's so freaking hard and the default is failure. And people saying no, and the thing not working. I would just pick something that you care about. So that it's like you're more motivated to keep going with it. So that was one of my principles. Another principle, again this is more specific to me, was I really wanted to build a software business and the prior business was software enabled. It just created a bunch of things that didn't fit my skill set. I would much rather build something, where I'm telling a computer what to do and the computer is doing it consistently, and that's the product. Than I would, trying to organize a large number of people doing something. There's all other reasons to build software businesses, software businesses scale much better, they can grow much faster and so there's no reason for me to be building a business that's operationally heavy. I really wanted to focus on team. There were moments at SelfMade, where I felt we generally had a really good team but we also kind of hire people. You end up with just, I don't know. I was like, I really want to have a smaller, very talent dense culture.

Pablo Srugo (00:22:21):
You'd hire, because you just wanted to fill the role that needed to be filled? Or what was the?

Zach Lloyd (00:22:25):
It was like, we need a person for this. Get them in, it might make sense in the short term but it causes in the long term this deterioration of the quality of the team and the culture. Another thing I decided to do was to kind of write down and publicize all of my operating principles. This was pretty smart. So for Warp we have this thing called How We Work. which is a public notion document. Which I can share the link with you. You can publish it if you want. Where it's like, it's all the principles of the company written down and it's things like, What's our hiring process? It's, what are the values that we have? It's how do we do coding changes? What's our product process? We spent so much time debating this stuff and wasting time on it at SelfMade and also at Google. I was like, much better to just have it written down and let everyone look at it.

Pablo Srugo (00:23:16):
What would you say out of that, are some of the more unconventional, non-obvious things that you guys do. That you have written down as this is the way we do it. We have tens of thousands of people who have followed the show. Are you one of those people? You want to be part of the group. You want to be a part of those tens of thousands of followers. So hit the follow button.

Zach Lloyd (00:23:33):
That's interesting, it's not unconventional, it's like an operating system and so, all the way down to, how do you use Slack, for instance? And it's like, if you're going to come to Warp and use Slack, you're going to use threads. We're going to be on a model, where you don't have to worry about, what time you're sending something. Because it's up to the person who's receiving the message, to decide what they read. If you don't just document this. We'll have people complaining like, oh, why am I getting Slacks on the weekend? It's like no, the rule is at Warp, you don't have to respond to that Slack on the weekend. That's fine, but I'm not going to put the onus on anyone who's sending a Slack to know everyone else's calendar, and so there's a whole bunch of, you know, just shit like this.

Pablo Srugo (00:24:14):
It makes it less of a personal attack.

Zach Lloyd (00:24:17):
Yeah, it's like, no, we decided on this. There's the tactical stuff and then there's the value stuff. And it's like, look, if you come to Warp. I don't know if it's the most unconventional thing, but I only want to hire people who are a product focus or product oriented and that could be in any role. It's true in engineering, it's true in marketing, it's true in sales. We put everyone who comes to work through a, it's like a PM interview is the final interview stage. We asked them to suggest ideas on how to improve the product. We asked them to explain, what problem it's fixing for a user. This is not something every company does. Probably there's a lot of companies where it's like, we're probably missing out on some really good technical engineers. Who might not be great product thinkers and I'm just like, I've wasted so much time in my life with really strong engineers. Who have no idea what problem they're solving and are just in it for building the coolest piece of code. That they can build at the company value level. It lets people who want to apply for a job at Warp. Some of them will think that that's a horrible idea and they'll opt out. And some of them will be like, oh, that's awesome. I want to work with people who care about the product as well. It's stuff like that, that I think gets us a ton of value from having this resource.

Pablo Srugo (00:25:25):
So you build all this. You're kind of like high level. Yeah, going back to the storyline 2019, and then what is leading to?

Zach Lloyd (00:25:30):
Yeah, so I took all this time and I was like, I'm going to write down all the things I learned at SelfMade. I'm going to start to systematize them and extract stuff, for if I were to do another company and then I was like, I don't know what I want to do yet. And so I was like, I'm going to do some consulting. Which is kind of a fun gig, if you can get it. So, I was consulting, where I would go in and give advice to startups that were maybe trying to hire engineers or build out their engineering practices. So I did that a few places and I did that for equity. Which was cool and then I ended up getting one bigger consulting job. Which is what I have on my LinkedIn. Which is that I was sort of the interim CTO at the Time and I don't know anything about publishing. Just to be clear, a funny thing for me to get, but my cousin is the owner of Time. He's a Salesforce founder, Mark Benioff and he'd asked, hey, would you be willing to go in and help the tech team at Time get to a. Just like operate better, make sure the stack is good. Is our CMS infrastructure in the right spot? Is our paid ads infrastructure in the right spot? And, I didn't know anything about this, but I could at least ask some questions from someone who'd worked in the technology industry for a long time. Which at this point I had done and so that was a great gig. I did that three days a week, basically. While I was also, at this point I had decided, okay, I want to start another company and I want to take everything I'd learned. So I was doing this consulting thing part-time and I was doing this, let me think through ideas and stuff that I would actually want to work on. For the other part of the time. I did that for about, I guess, a year, year and a half. It took me to get conviction on wanting to start Warp. But that was kind of a cool period of in between intense startup, relax a little, and then start another company, which is intense.

Pablo Srugo (00:27:13):
What is the original idea for Warp? Where does that come from?

Zach Lloyd (00:27:15):
Yeah, so for Warp. I narrowed it down much more quickly. I was like, what are the kinds of things that I want to work on? So I wanted to work on stuff that I knew, stuff that I cared about. To me, that immediately had me focusing on either stuff that was more like Google Docs. Because I knew that space, really well. So that would be productivity app for knowledge workers or stuff for developers. And so I've been a developer for a really long time and so I just started trying to pay attention to the tools I was using, the problems that I was having, what I thought might honestly, fundamentally just be a useful thing, if I had a product that worked differently. I ended up just thinking the tools for developers from a usability and product standpoint. They just weren't at consumer quality, was kind of how I thought about it. I was like, why do developers have such shitty tools? From a polish level, compared to things like Google Docs. There was this trend where, it used to be that consumers had the best quality experiences in their apps, and then at this point. Sort of Slack and Zoom had come along and replaced WebX. Whatever the Slack predecessor was.

Pablo Srugo (00:28:23):
And this is Zoom heydays, right? This is right after 2020 COVID pandemic sort of thing.

Zach Lloyd (00:28:27):
Yeah, exactly and I was like, there's this trend. Where there's this consumerization of enterprise software. Where you can kind of win. I think Notion was another good example too. Where it's you kind of win by offering a much higher level of product polish and just displace an incumbent app. Which has a really horrible user experience. So I think, WebX is a great one. I don't know if you ever use that tool. You'd go in and you'd have to install something every time. And it was like you couldn't get into the call and the video quality was horrible. And I don't know, Zoom is just, they're like let's just make something that's really easy to use and has great video quality. So I was looking for the same type of thing for developer tools and the problem with developer tools is. For the most part they've been built by developers for themselves and built by the most hardcore developers. Who wanted the most advanced crazy configurations. It was almost like a video gamer, mentality and that's great for Linus Torvalds or something. It should work that way, but I didn't want it to work that way. I'm not an incompetent developer. I'm a very good developer who, I care much more about the product that I'm building for an end user. Than I do about spending a ton of time tweaking and customizing. Learning every keyboard shortcut on my tool. I want a thing that's easy to work and not frustrating. I started thinking there was an opportunity in the developer tool space, to rethink some of the core tooling that developers use. If you want to be very horizontal. Which I also was like, I want to work on something that has the most impact for the most people. I really didn't want to work on a niche developer tool, like a better Kubernetes thingamajig or whatever. I wanted to build something that every developer could potentially use and so there's two developer tools that matter. There's the code editor, the IDE, and there's the terminal. And of the two, I was like, the IDE is more tolerable to use. In my opinion, than the terminal. The more I thought about the terminal is super duper powerful, if you can figure out how to use it well. 

Pablo Srugo(00:30:21):
For maybe the non-technical, how would you separate? Where does is the IDE come in? Where does the terminal come in?

Zach Lloyd (00:30:25): 
Yeah, so the IDE is a thing where you open it up. It kind of looks like Microsoft Word. It has all your code files in it. And what you do in it is you type code. It will show you if the code basically looks right by giving you features like auto-correction and auto-complete. But it's basically Microsoft Word for code editing. And the terminal is the black screen with the green text on it that you see in all the hacker movies, where it's the place where you run the programs that you're writing. And the interface is like you type text, you're telling the computer to do something in a terminal command language, and then it does it and it spits out a response. It turns out you can do a gajillion things. There's a reason it's the hacker tool of choice, because you can do anything on your system, you can do anything in the cloud, you can do all kinds of data analysis and logs analysis, but you have to know the magic spell in order to use it, and that magic spell is what's the terminal command. And so I was like, hey, that's a very limiting thing for this interface, where if you were to make the interface more accessible, you could keep the power, but you could make everyone who uses the tool feel way more powerful. And so I was like, there's definitely a better product to build here. What was super unclear was, is there a good business around it? And so the business that we sort of settled on, and I say we, I was the only founder of Warp, but I did kick this idea off, honestly, a bunch of investor friends at this point, a couple of whom ended up backing the seed round, which was cool. And the business that we decided on was, there's probably an analogous business to Figma or Notion or Google Docs, where you build a collaboration platform around these workflows and so that business ended up not being actually the business that we're in. Now we're in like the really we're in the AI business and the agent business. That was the initial business idea. And it gave me enough conviction that I thought it was worth starting a company, raising money and trying to build a team to execute on it.

Pablo Srugo (00:32:15):
Did you raise right out of the gate?

Zach Lloyd (00:32:17):
I raised right out of the gate. So this was another like self-made kind of lesson. Like we were, it's self-made. I felt like we were always our backs against the wall with capital. There's something good about that from like, hey, it puts pressure on the team to deliver on like a fixed timeframe, but it also can force you to like be very, very short term and how you think. And so I was like, if I actually want to build a better product, it's going to take a bunch of engineers a bunch of time to build something that is actually meaningfully better. And so we raised, at the time it was like a big seed round, we raised like a $6 million seed round. And in 2020 that was quite big.

Pablo Srugo (00:32:51):
Who led the seed round?

Zach Lloyd (00:32:51):
The seed was led by GV, which is Google Ventures. We raised the seed round. First person who I brought into the team was a designer who I'd worked with at Google. We spent a bunch of time making the concepts that I'd had when I did the raise. And I did the raise just off of a deck, essentially. And like, you know, at this point I was like the second time founder and I think I had like some track record with SelfMade. You know, SelfMade, we actually got real revenue and got it through Series A. So it's like I was a little bit known in the VC community and people wanted to invest.

Pablo Srugo (00:33:19):
Well, and actually, I would say from a VC perspective, too, you could easily argue you kind of de-risked the most riskiest bet you're taking on an ex-Googler is, frankly, the zero to one. Like, can they actually get something off the ground? You know, because they can obviously scale a product and all that. And I think with SelfMade, you certainly would argue you at least you proved that part that Google proves the other part. Yeah. Right. So it's like, OK.  

Zach Lloyd (00:33:36):
We did that. And like, I think that probably a second time founder is kind of the sweet spot. Like if I were a VC, I would often be looking for, like, second time founder where the first thing they got in some traction, it wasn't like a total dud, but it wasn't like a runaway success either. So the person is still super hungry. I think VCs, they like my profile and I knew these people personally for a really long time. From a like who you work with standpoint for founders, I actually think probably the most important thing when you pick the VC is like, just like having a strong level of trust and the ability to be transparent and feeling like you don't have to manage them. And there's someone who you're going to want to talk to when things are not going well as opposed to someone who you're like dreading talk to or feel like you have to like present a story when things aren't going well. So these people were people I'd known for a really long time at that point. And so that worked out very well.

Pablo Srugo (00:34:25):
And so how many people do you hire with the six million and how long do you just kind of like go heads down building mode?

Zach Lloyd (00:34:30):
My goal at the outset was to hire designers. The concept of the company was building a better product, and to me the best way to make that a reality is to work with an awesome product designer. So I hired this person who I'd worked with at Google who was a great designer. And then we wanted to hire maybe 4-5 engineers, not more than that to sort of build out the initial product. The milestones for the product were, can we build something that we use internally? That was the first one. The second one was, can we get anyone external to use it? The third was, once people try using it, do they stick with it? Do they engage? Do they retain? Can we get it to become the daily driver for some group of people? And then after that I was figuring out how to grow it. But yeah, we spent maybe, it really took like, I want to say like six to nine months to build something that we could use internally. We then put it in front of a bunch of friends. None of them cared or wanted to use it, so that didn't work. And so what we ended up doing instead of that was basically posting on Hacker News that we were building this new terminal. It was built in Rust, it had all these features. We posted it with a waitlist, just like sign up, give us your email if you're interested in trying it out. and we got 10,000 developers to sign up for it the first day. And so that was great because it was like, okay, there are people who want something like this.

Pablo Srugo (00:35:50):
Why did none of your friends want it if so many other people wanted it? Just bad luck?

Zach Lloyd (00:35:53):
It's because your friends might not be your target first user. There's real danger in getting such a biased signal. It could have been biased the other way too. It could have been like they want to support us and so they use it. And so that's another way you can get false signal. That's no good. And so I think better if you can do something that's a little bit more realistic. And so putting it out into the world where developers hang out and seeing if developers actually cared was a much smarter way of getting initial signal. It really increased our conviction that people want a better version of this thing, or at least they're willing to try it. And so that was awesome. And so we did that, and then we sort of released cohorts of people off the waitlist to just try to see if they would engage and stick with it. And then it was, like I said, it was like, can you get the retention to be really good? We got the retention to be what I think of as where you want it to be for this type of product. And most importantly, does it flatten out? Do people use it forever? And then after that, can we grow the free userbase. And I don't know how much time we have to go into sort of the full like how we got from there to where we're at now, but like that was the sort of start of it.

Pablo Srugo (00:36:56):
The transition, obviously this is happening like end of 21, early 22. Maybe we fast forward like when ChatGPT comes out or if that's like what is that kind of inflection point they decide to go all in on AI.

Zach Lloyd (00:37:07):
Yeah, so like in broad strokes, so what we built out of the gate was something that had a really, really nice user experience, but for a free product. It kind of had to be a free product because, you know, there's like no marginal costs. To us, it was like pure client-side software. Like, I guess we could have like charged. It was going to be hard to monetize that.

Pablo Srugo (00:37:25):
The other terminals were free, like whatever people, like status quo is free, right?

Zach Lloyd (00:37:28):
The other were competing against free. There's a free terminal that ships with your computer. There's a bunch of free existing competitors. And I do think we had a much nicer interface since we were able to grow that into the hundreds of thousands of developers using it. But we weren't able to really create a business model around it.

Pablo Srugo (00:37:44):
Was that free, by the way, or were you marketing aggressively to get the users?

Zach Lloyd (00:37:47):
It was basically free, all of that growth. We didn't start really investing in any kind of paid marketing until we had revenue. We would do small things, maybe like host hackathons, but we certainly weren't doing performance marketing at scale, or filming ads.

Pablo Srugo (00:38:03):
Got it. So I mean it was really word of mouth, like 100,000 developers using it through word of mouth. Obviously you had a good product.

Zach Lloyd (00:38:08):
Yeah, word of mouth, we had a little referral program where we'd send people swag. My mindset at that point was it doesn't make a ton of sense to spend a lot of money on free user growth. We started then building out some of the things that we thought would be more of the paid product, which were like the collaboration platform which we did get some people to pay for, but it was kind of slow growth. I wouldn't say it was going to turn us into a really big business. We started putting AI into Warp really early, actually before ChatGPT. So we were using Codex, which was the same thing that was powering the initial version of Copilot. And so the first AI feature we had was you can basically type in English and get commands back.

Pablo Srugo (00:38:49):
And this was when? Is this mid 22'?

Zach Lloyd (00:38:51):
This was, yeah, this was like the end of 2022, I think.

Pablo Srugo (00:38:55):
And by the way, you raised more money in that time frame, right? You raised an A?

Zach Lloyd (00:38:58):
We did. So we raised an A and the A was led by Dylan Field, who's the founder and CEO of Figma, who was an angel investor. He just really believed in the product and the team and was like, you know, again, like our investors for Warp were very much of the mindset of like long term If you build something that's really useful for hundreds of thousands or millions of developers, that's going to be a big business opportunity one way or the other. And so that's why Dylan invested. That's also why Sequoia invested in Series B. Again, we didn't have like revenue traction at that point, but we just had a product that people really liked. They were very, again, of the mindset like that's hard to get for developers and developers are very, very important sort of market if you can get people using it.

Pablo Srugo (00:39:35):
How much was the A and then the B?

Zach Lloyd (00:39:37):
So we raised like 15 to 17 at the A, and then the B was big. It was like a $50 million Series B. 

Pablo Srugo (00:39:44):
Pre-revenue?

Zach Lloyd (00:39:45):
Pre-revenue. Crazy, right?

Pablo Srugo (00:39:47):
Wild.

Zach Lloyd (00:39:48):
Again, this is, I think, different times.

Pablo Srugo (00:39:50):
This is what, beginning of 23?

Zach Lloyd (00:39:51):
Yeah, basically.

Pablo Srugo (00:39:53):
Okay. I mean, the markets had already started coming down second half of 22, but I think VC was like late to that game, yeah.

Zach Lloyd (00:39:58):
I don't know how we pulled this off. Again, I think it's going to end up being a smart investment for these people. And so again, we were growing the free user base well, but we didn't have a business model really that was working. We didn't have revenue growth. Towards the end of 2022, we'd start to put AI in. When ChatGPT came out, we were like, this really makes a lot of sense in our product because the chief thing that makes the user experience of the terminal hard is you have to do everything in this arcadian command language the LLMs are very, very good at taking English and turning it into commands. We were conceiving of it in like a kind of limited way. We put in like a chat panel, which I think is what a lot of people did at the time. And then we realized relatively quickly like, hey, this is useful. People were using the chat panel, but we're like, there's actually a much better integration that belongs in Warp where instead of having like a chat panel on the side of the app, the whole app should just be you interact with it in English, or if you want to interact with it in terminal command, you can do that. And so we moved to this model and we called it Agent Mode, which everyone has copied that name, by the way. If you look it up on ChatGPT, we were the first people to call anything Agent Mode. And the idea was you would just, instead of typing commands, you could just type or even just speak English to your terminal asking it to do stuff. And the use case for that was like, fix this Git problem for me or like do this deploy. So it was very terminal oriented stuff. That was useful and that had a real cost associated to it.

Pablo Srugo (00:41:28):
This is instead of getting it in terminal language on a chat and then kind of plugging it in, just like talk to it like you normally would.

Zach Lloyd (00:41:34):
Exactly. Instead of like copy-paste, you just like directly interact with it in English. And that's like the way that it should work. That's the way that Claude Code works. And again, we were before Claude Code in doing this.

Pablo Srugo (00:41:46):
This is mid-23 that you did this?

Zach Lloyd (00:41:47):
This was 24.

Pablo Srugo (00:41:48):
24. Okay.

Zach Lloyd (00:41:50):
This was early 24 where we launched this feature, agent mode, I think spring 24. And then at that point we were like, okay, everything needs to be oriented around AI, everything needs to be oriented around agents. We didn't really have a coding product, so that's what we've been working More and more towards is making Warp a universal interface for doing agentic development work. We don't even call Warp a terminal anymore. We call it an agentic development environment because it's really like the primary modality in a terminal is running commands. The primary modality in Warp is instructing you what to do in English.

Pablo Srugo (00:42:23):
Does it come into the IDE world or it's still different than that?

Zach Lloyd (00:42:26):
It's now in the IDE world. The stuff we've been doing recently is like, especially with tools like Gemini, CLI, and Claude Code making the terminal the center of the agentic workflow, we're just like, we can do a way better job of this. And so it's like, what do you actually need to do agentic development? And what I mean by agentic development is like the way that you're building features is like you're telling the computer in English that you want a feature built. You're telling the computer in English to fix a bug. You're telling it to figure out why your servers are crashing. You're telling it to deploy your thing to Vercel, like literally in English. The thing that you want is something that looks like a terminal. but it has a bunch of the features of the IDE. So it's like we've been adding the ability so that you can edit code, you can see all of your files, you can see all of the code diffs that the agent is creating, you can review the diffs that the agent is creating. And so our thesis here now is like neither a regular terminal nor a regular IDE is like the right approach for agentic development. It's like you really want a tool that's built for this workflow. And so we've gone all in on that in Warp, and that's what's driving our super fast growth now, which is cool.

Pablo Srugo (00:43:29):
You launched it in like 24 and you started monetizing it around then too?

Zach Lloyd (00:43:32):
Yeah so we what we launched in 24 we started monetizing and that got us you know we got like to a million revenue on that and like it took a while like 300 days or something where it was part collaboration features and it was part like telling Warp to fix like terminal stuff meaning like again I don't know how technical the people listening are but it's like fix this like Git thing for me or fix this Docker thing. So these are like fixing small annoyances in the terminal which is valuable but it was when we launched in June, the agentic development environment and fully turned Warp into something that could do coding and actually prove that. So we're number one on one of the coding benchmarks, which is Terminal Bench. We're number three now on Suite Bench, so the two public coding benchmarks. So we kind of totally repositioned as being this all-in-one tool if you're doing agentic development.

Pablo Srugo (00:44:25):
Does this become a cursor competitor, like the way you're positioned now, you use one or the other realistically?

Zach Lloyd (00:44:30):
Yeah, our competitors now are Cursor and Claude code. But that's fine. It's better to be in a market like those are two super fast growing tools. And like you kind of want to go to where the competition is in some sense. Like again, it's like counter to the typical startup advice. There's competition there because the demand for it is insane. It's very, very early in this market. Like even though there's tools that are growing very quickly, like I guess it depends how you look at it. It's not the developer tools market anymore. It's the market for automating the production of software, which is something closer to the market for paying software developers to develop software. It's in between the developer tools market and that, which is more like a trillion dollar market. There's just a very, very low penetration of these agentic tools into that market. And so it's a gigantic opportunity with a ton of demand where we have a really differentiated product approach. We're competing with Claude Code and Cursor, but Warp actually does way more. It does do all of your DevOps and production workflows. It does do all of your Git and Docker and all that stuff, but it also is awesome at writing code and building features. You get one bespoke interface for developing in this new way. And when we launched that the kind of curve went like that to like that. And that's like maintained or even like it's accelerating still, which is cool.

Pablo Srugo (00:45:47):
That was like three months or so, four months ago that you launched?

Zach Lloyd (00:45:50):
That was like three months ago. Yeah.

Pablo Srugo (00:45:52):
Okay. And now it's like this 3 million more or 4 million more a month you're adding?

Zach Lloyd (00:45:55):
Yeah. So it took us like 300 days to add the first million and then I think by the time we had launched the ADE, we had like a million and a half or close to two million. So we already started to accelerate, but then when we did this, like repositioning, it really started to grow quickly. And it's been growing. We're not quite at a million a week, but we're like, we're getting closer and closer to that. So that's pretty cool.

Pablo Srugo (00:46:17):
That's cool, man. Well, listen, let's, we'll stop it there. I know we went like, we went way over. Let me just ask real quick, the last kind of three questions that we always end on the first one, I think is pretty obvious, but like, when did you feel like you had true product market fit?

Zach Lloyd (00:46:27):
I think it was after this ADE launch. It was verifying that that launch wasn't like a spike, because sometimes you get launch spikes and it just sort of diminishes and goes back to baseline. But the fact that it's now persisted for months, there's other ways of looking at it. There's revenue. There's just like the things that people write us on the feedback around like, this let me build this thing that I never would have been able to build. Or like, I've been a developer for 20 years and this like saved me. You know, weeks of time setting this thing up. So it's like you start to get a different type of qualitative feedback. Whereas before it would be like people were like, yeah, this is an awesome terminal. I really love using it so much nicer than like iTerm. Now it's like I could do my job without this or this is like really transforming the way that I do my work. That made it very clear that we were on to something.

Pablo Srugo (00:47:11):
Was there ever a time with Warp where you felt like you did at the last startup where you kind of thought maybe things weren't going to work out?

Zach Lloyd (00:47:17):
Yeah, I mean, I kind of thought that in the worst case for Warp, what our business strategy would be is like build something that gets a very, very large free user base and have to sell the company to someone who just wants like developers in their ecosystem. And I always thought that that would be a fallback plan. And we still do have that hedge if we really need it. I haven't felt for a long time like Warp was going to be a zero. But I did feel like, are we going to get something where the revenue grows really quickly, where we're solving a problem that's way, way, way more important to developers? I definitely had lots of moments of questions around that. We took stabs at monetizing in various ways early on. It didn't quite catch fire. Yeah, but I never felt the way that I did at the last startup where I was like, is this thing that I'm building not valuable at all?

Pablo Srugo (00:48:02):
And last question, if you had one piece of advice for an early-stage founder, what might that be?

Zach Lloyd (00:48:06):
Let me think about that. Yeah, there's a lot of things I could choose here. I'm going to pick just think shit through for yourself. From first principles. It's good to go out and get advice from people who've done stuff before, whether it's other founders or investors or your accelerator or whatever. But ultimately, you should be able to convince yourself that what you're doing makes sense and explain to yourself why. You'll find its logically impossible to follow the advice of everyone you get because the advice will be conflicting. And so the more that you can be like, here's what I'm doing and here's why, and I've thought that through from a few first principles, and I believe it, then the better.

Pablo Srugo (00:48:45):
Well, Zach, thanks so much for jumping on the show, dude. It's been great.

Zach Lloyd (00:48:47):
Yeah, thank you so much for having me. This was awesome.

Pablo Srugo (00:48:50):
Wow, what an episode. You're probably in awe. You're in absolute shock. You're like, that helped me so much. So guess what? Now it's your turn to help someone else. Share the episode in the WhatsApp group you have with founders. Share it on that Slack channel. Send it to your founder friends and help them out. Trust me, they will love you for it.