The rise of Cursor: The $300M ARR AI tool that engineers can’t stop using | Michael Truell

The rise of Cursor: The This blog post summarizes a podcast interview with Michael Tru, co-founder and CEO of AnySphere, the company behind Cursor, an AI-powered code editor. The conversation explores Cursor's rapid growth, the future of software development, and the role of AI in shaping the industry. Cursor's Vision: A World Beyond Code - Goal: To invent a new way of programming, moving beyond traditional coding. Approach: Cursor aims to build software by specifying * intent* rather than writing code. This involves a shift towards a higher-level, more human-readable representation of software logic. Growth: Cursor achieved ">(300M ARR AI tool that engineers can’t stop using | Michael Truell Cursor: Reimagining Software Development in a Post-Code World - This blog post summarizes a podcast interview with Michael Tru, co-founder and CEO of AnySphere, the company behind Cursor, an AI-powered code editor. The conversation explores Cursor's rapid growth, the future of software development, and the role of AI in shaping the industry. Cursor's Vision: A World Beyond Code - Goal: To invent a new way of programming, moving beyond traditional coding. Approach: Cursor aims to build software by specifying * intent* rather than writing code. This involves a shift towards a higher-level, more human-readable representation of software logic. Growth: Cursor achieved )100 million ARR in just 18 months, showcasing its rapid adoption. This exponential growth was attributed to consistent improvement and addressing user needs. EPO: Revolutionizing Experimentation - EPO (Experimentation Platform): A platform enabling rapid A/B testing and feature management. It's used by companies like Airbnb, Snowflake, and Twitch to accelerate growth and improve product performance. Key Features: Advanced statistical methods, accessible UI, deep analysis capabilities, and streamlined reporting. EPO significantly reduces the time required for experimentation. Benefits: Increased experimentation velocity, improved data analysis, and faster iteration cycles. The Future of Software Engineering: A Designer's World - Shift from Code to Logic: The future of software development involves moving away from writing code towards specifying the logic of the software in a more human-readable format, closer to natural language. The Role of "Taste": Taste becomes increasingly crucial, encompassing not only visual design (UI/UX) but also the overall design and logic of the software. It's about effortlessly translating the desired functionality into a working product. Engineers as Logic Designers: Software engineers will transition from writing code to specifying intent , acting more as designers who define the software's functionality. Cursor's Origin Story and the Role of AI - Early Days: Cursor's development began with a desire to create a more useful AI product than existing vaporware. The team was inspired by the success of GitHub Copilot. AI's Role: Cursor leverages AI to assist in various aspects of software development, including code completion, suggestion, and debugging. The Human in the Loop: While AI plays a significant role, Cursor emphasizes the importance of maintaining human control over the development process. The goal is to empower engineers, not replace them. Cursor's Architecture and Model Development - Custom Models: Cursor uses a combination of large language models (LLMs) and smaller, specialized models. The smaller models are trained for specific tasks, such as code completion, improving speed and cost-effectiveness . Model Selection: The team strategically chooses which tasks are best suited for foundation models versus custom models, focusing on areas where custom models can offer significant advantages. Defensibility: The use of custom models provides a key competitive advantage, creating a moat against competitors. The market is characterized by a high ceiling and potential for significant disruption. User Success with Cursor and Future Directions - Key Tips for Success: Users should focus on breaking down large tasks into smaller, more manageable chunks. This allows for better control and iterative refinement using AI assistance. Benefits for All Skill Levels: Cursor benefits both junior and senior engineers, although the ways they leverage the tool differ. The Future of Engineering Roles: The demand for software engineers will continue, but the nature of their work will evolve. AI will automate many tasks, allowing engineers to focus on higher-level design and problem-solving. Key Takeaways Cursor represents a significant step towards a new paradigm of software development, where specifying intent is more important than writing code. AI plays a crucial role in this transformation, but human expertise remains essential . The market for AI-powered code editors is large and dynamic, with potential for significant disruption. Cursor's success is based on a combination of innovative technology, rapid iteration, and a focus on user needs. This summary provides a structured overview of the podcast. The original transcript contains more detailed information and nuanced discussions. The rise of Cursor: The Final Summary: This podcast episode features Michael Tru, co-founder and CEO of AnySphere, the company behind Cursor, an AI-powered code editor. The conversation explores Cursor's rapid growth, its unique approach to AI integration in software development, the evolving role of software engineers in a "post-code" world, and the future of the industry. Key themes include the increasing importance of "taste" in software design, the strategic use of custom AI models alongside large language models, and the long-term defensibility of AI-driven software development tools. The episode also delves into Cursor's hiring practices and the company's vision for the future of software engineering, emphasizing the continued need for human expertise and control. Chapter 1: Cursor – The AI-Powered Code Editor and its Meteoric Rise - This chapter introduces Cursor, highlighting its rapid growth from zero to ">(300M ARR AI tool that engineers can’t stop using | Michael Truell Cursor: Reimagining Software Development in a Post-Code World - Final Summary: This podcast episode features Michael Tru, co-founder and CEO of AnySphere, the company behind Cursor, an AI-powered code editor. The conversation explores Cursor's rapid growth, its unique approach to AI integration in software development, the evolving role of software engineers in a "post-code" world, and the future of the industry. Key themes include the increasing importance of "taste" in software design, the strategic use of custom AI models alongside large language models, and the long-term defensibility of AI-driven software development tools. The episode also delves into Cursor's hiring practices and the company's vision for the future of software engineering, emphasizing the continued need for human expertise and control. Chapter 1: Cursor – The AI-Powered Code Editor and its Meteoric Rise - This chapter introduces Cursor, highlighting its rapid growth from zero to )100 million ARR in just 18 months. It introduces Michael Tru, the CEO, and his background in AI and computer science. The chapter also briefly touches upon EPO, an A/B testing and feature management platform, and Vanta, a security platform, both of which are sponsors. Key Terms: Cursor , AnySphere , AI code editor , ARR (Annual Recurring Revenue) , EPO , Vanta . Chapter 2: The World After Code: A New Paradigm in Software Development - This chapter lays out the vision behind Cursor: to move beyond traditional coding by creating a higher-level, more intuitive way to build software. It discusses the shift from writing code in languages like JavaScript and Python to a more pseudo-code or natural language approach. The concept of "taste" in software design is introduced as a crucial element alongside logic. Key Terms: Post-code world , Pseudo-code , Logic designer , Taste in software design, UI/UX . Chapter 3: The Origin Story of Cursor and the Evolution of AI - This section details the genesis of Cursor, focusing on two defining moments: the first useful AI product (GitHub Copilot) and the realization that AI's potential lies in leveraging existing models and scaling them effectively. It explores the path to Cursor's development, emphasizing the focus on human control and the limitations of fully AI-driven development. Key Terms: GitHub Copilot , AI model scaling , Human-in-the-loop , IDE (Integrated Development Environment) . Chapter 4: Cursor's Architecture: Custom Models and Large Language Models - This chapter dives into the technical aspects of Cursor, explaining its use of both custom AI models and large language models (LLMs). It highlights the strategic use of custom models to address specific weaknesses of LLMs, improving speed, cost-effectiveness, and the overall user experience. The discussion also touches upon the topic of defensibility in the AI market. Key Terms: Custom AI models , Large Language Models (LLMs) , Autocomplete , Model defensibility , Moat . Chapter 5: The Future of Software Development and the Role of Engineers - This chapter explores the future of software engineering in light of AI-powered tools like Cursor. It discusses the changing roles of engineers and the importance of adapting to new workflows. The conversation includes advice for users on effectively utilizing Cursor, emphasizing the importance of breaking down tasks and managing expectations. The chapter also covers Cursor's hiring practices and future growth plans. Key Terms: Software engineering evolution , AI adoption , Task decomposition , Hiring strategies . of that is code right now. you can kind of gesture at it with figma and you can gesture at it with writing down notes., um, but it's, you know, when you have an actual working prototype. And so I think that more and more being being an engineer will start to feel like being a logic designer.. And really, it will be about specifying your intent for how exactly you want everything to work. and it will less be about it. be more more about the, the, what and a little bit less about the, how, um, exactly you're going to do things under the hood., uh, and so yeah,, I think I think taste will be increasingly important. I think one aspect of software engineering and we're very far from this right now and there are lots of, you know, uh, funny, funny memes, going around the internet about, you know, the kind of some of the trials and tribulations people can run into if they trust AI for too many things When it comes to engineering um, around, you know, uh, building building apps that uh, you know, have have glaring glaring deficiencies and and problems and functionality issues but um, I think we will get to a place where, um, you will be able to, uh, be less careful as a software engineer which right now is an incredibly incredibly important, uh, skill., um,, and yeah,, we'll move a little bit from carefulness and a little bit more towards taste. And this, uh, makes me think of vibe coding. is that kind of what you're describing when you talk about not having to think about the details as much and just kind of going with the flow? I think it's I think it's related. I think that v-coding right now describes um, exactly kind of this this state of creation that uh, is pretty controversial where you're generating a lot of code and you aren't really understanding the details. that is that is like a a state of creation that then has has lots of problems like you don't really by by not understanding the details under the hood right now. you then very quickly get to a place where you're kind of limited at a certain point where you create something that's big enough that that you can't change. And so i think some of the Some of the you know ideas that we're interested around, you know, how do you give people uh continued control over all the details Um, you know when they don't really understand the code Like I think that um, solutions there um, are very relevant to to the people who are buy coding right now. I you know, I think that uh, right now we we kind of we lack the ability to, you know, let the themakers actually have complete control over the software And so, um, one of the one of the issues also with you with vibe coding and and letting letting taste really shine through from people is you can create stuff, but a lot of it is the AI making decisions that you are unwieldy and you don't have control over. one more question along these lines. you you throw out this word taste. when you say taste, what are you thinking?? I'm thinking having the right idea for for what should be built. And then just it it will become more and more about kind of the effortless translation of here's exactly what you want built. here's how you want everything to work. here's how you want it to look. and then you'll be able to make that um on a computer and it will less be about this kind of translation layer of like you and your team have a picture of what you'd want to build and then you have to really painstakingly labor intensive like lay out that into a format that a computer can then execute and interpret. and so yeah, i think you know less is less on the ui side of things. maybe taste is a little bit of a misnomer uh but just about having the right idea for for what should be built. awesome. okay, i'm going to come back to these topics, but i want to actually zoom us back out to the beginnings of cursor. uh, i've never heard the origin story. i don't think many people know how this whole thing started. basically, you guys are building one of the fastest growing products in the history of the world. it's changing the way people build products. it's changing careers, professions. it's it's changing so much. how did it all begin? any memorable moments along the journey of the early days? carer kind of started as a solution search of a problem. um and uh a little a little bit where it very much came from reflecting on um how ai was going to get better um over the course of the next 10 years. and um there were there were kind of two defining moments. one was uh being really excited by using the the the first beta version of the git co--ilot. actually this was the first time we had used an ai product that was really really really useful and um was you know actually just useful at all. uh, and wasn't just a vaporware kind of demo thing. And in addition to being an, you know, the first AI product that we used, that was useful, G-copilo was also one of the most useful, if not the most useful dev tool we' ever adopted. Um, and that got us really excited. You know, another moment that got us really excited was the series of scaling on papers coming out of OpenAI and other places that showed that even if we had no new ideas,, AI was going to get better and better just by pulling on simple levers, like scaling up the models and also scaling up the, the data that was going into the models.. and so at the end of 2021, beginning of 2022, this got us excited about how, you know, The rise of Cursor: The Cursor's Rapid Growth and Success: Cursor, an AI-powered code editor, achieved remarkable growth, reaching ">(300M ARR AI tool that engineers can’t stop using | Michael Truell Cursor's Goal and Vision: Cursor aims to revolutionize software development by inventing a new way of building software, moving beyond traditional coding. The vision is a world "after code," where engineers act more as logic designers, specifying intent rather than writing code. This involves a shift towards a higher-level, more human-readable representation of software logic, closer to pseudocode or even natural language. The ultimate goal is to make software development more accessible and intuitive, even for those without extensive coding experience. Cursor's Rapid Growth and Success: Cursor, an AI-powered code editor, achieved remarkable growth, reaching )100 million ARR in just 18 months and $300 million ARR within two years of launch. This rapid growth is attributed to several factors, including a focus on building a consistently better product, driven by sustained paranoia about improvement and user feedback. The initial version was built quickly (in about three months), with a focus on iterative development and public feedback. The team's willingness to rebuild and iterate based on user feedback was crucial. The Role of AI in Cursor: Cursor leverages AI extensively. While initially relying on existing large language models, Cursor now incorporates custom models for specific tasks, particularly in code completion and suggestion. This counterintuitively involved less focus on training models from scratch and more on leveraging pre-trained models and fine-tuning them for specific use cases. The custom models are designed to complement the strengths of larger foundation models, addressing specific weaknesses and improving speed and cost-effectiveness. These models excel at tasks like auto-completing code diffs (changes in the codebase), providing fast and accurate suggestions within milliseconds. The use of smaller, specialized models for specific tasks allows for faster inference and lower costs compared to using large models for everything. The Future of Software Engineering and Cursor's Role: Michael predicts a future where software engineering will be less about writing code and more about specifying intent . "Taste" – the ability to envision and design the desired software experience – will become increasingly valuable. This involves less translation between a high-level vision and the code implementation, and more direct specification of the desired outcome. Cursor's approach focuses on giving human engineers control over the process, even as AI handles many of the implementation details. The IDE itself will evolve, potentially integrating with other tools like Slack and issue trackers. ** Cursor's Development Process and User Tips:** Cursor's development involved a rapid, iterative process, initially using a hand-rolled editor before switching to a VS Code base. The team prioritized building in public and incorporating user feedback. For users, the most successful approach is to break down complex tasks into smaller, more manageable chunks and iteratively refine the AI's suggestions. This helps manage the complexity and allows for better control over the AI's output. Users should also develop a "taste" for the AI's capabilities and limitations, understanding what it excels at and where it might need more guidance. The Impact of Cursor on Different Engineer Levels: Cursor benefits both junior and senior engineers. Junior engineers can leverage the AI to learn and improve their skills, while senior engineers can use it to increase efficiency and tackle more complex tasks. However, both groups can fall into anti-patterns: junior engineers might over-rely on the AI, while senior engineers might underutilize it. Cursor's Hiring Process and Company Culture: Cursor employs a unique two-day work test for potential hires, involving a real-world project to assess their skills and cultural fit. This approach helps scale the hiring process while ensuring a strong cultural match. The company is growing rapidly, with a significant focus on engineering, research, and design. Long-Term Defensibility in the AI Market: Michael discusses the challenges of long-term defensibility in the rapidly evolving AI market. He believes that building the best product and consistently delivering value are key to success, rather than relying solely on proprietary technology. The market is large enough for multiple players, but sustained innovation and a strong focus on user needs are crucial for long-term survival. ** The Future of Software Engineering and the Role of Engineers:** Michael envisions a future where software development is significantly accelerated and simplified by AI, but where human engineers remain essential. The demand for software far outstrips the current capacity to build it, and AI tools like Cursor have the potential to dramatically increase productivity. However, the role of engineers will evolve, requiring new skills and a different approach to problem-solving.