Leaving $1.5B Startup Behind for AI's Next Wave | Neon, Nikita Shamgunov

Summary

The video features Nikita Shamgunov, CEO and founder of Neon, who discusses the evolving world influenced by AI. Shamgunov, previously associated with a $1.5 billion valued startup, reflects on the importance of adapting to changes and seizing new opportunities, even if it means altering the initial plan. Emphasizing transparency with stakeholders and strategic planning, he details Neon's growth from a database service to a platform service, highlighting the significance of fitting into the market with high-quality products, having the right team, and the exciting journey of entrepreneurship.

Highlights

• Shamgunov highlights the rapid changes AI brings and the need to adapt 🌐
• Discusses his transition from a successful startup to founding Neon 🚀
• Neon's journey from a database service to a platform service is explored 💼
• The importance of having the right team to embrace new market directions 🤝
• The need to validate market fit early and adjust plans accordingly 🛠

Key Takeaways

• Embrace change and be adaptable in the tech world 🌍
• Communicate changes to your team and stakeholders transparently 📢
• Validate your product's market fit early on through feedback ✨
• Leverage open source to gauge public interest in your product 📈
• Build a team that aligns with changing market opportunities 👥

Overview

Nikita Shamgunov, the mastermind behind Neon, is here to tell us why embracing change in the world of AI is crucial. Having transitioned from leading a $1.5 billion startup to embarking on a new adventure with Neon, he underscores the transformative impact of AI and the importance of agility in the tech landscape.

Neon isn't just about offering databases; it's about evolving into a full-fledged platform service. Shamgunov shares his experience in building successful products, the significance of early market validation, and how open source played a pivotal role in Neon's growth trajectory. Through transparency and strategic realignment, making informed adjustments has paved the way for success.

Finding the right people is key to success, says Shamgunov. As the tech world rapidly changes, having a team that's ready to pivot and seize opportunities is essential. With Neon's growth and entrance into exciting new areas like AI, it's clear that Shamgunov's approach of staying true to the core while being ready to evolve is paying off big time.

Chapters

• 00:00 - 01:00: Introduction and Embracing Change In the "Introduction and Embracing Change" chapter, the discussion centers around the inevitable changes brought about by AI. It emphasizes the importance of recognizing and adapting to these changes rather than rigidly sticking to original plans. The narrative advises honest communication about changing strategies with stakeholders like investors, board members, and employees, along with personal acknowledgment. The key message is to understand global changes to leverage opportunities effectively.
• 01:00 - 02:00: Personal Background and Neon Introduction In this chapter, Nikita, the CEO and founder of Neon, introduces himself and shares his personal background. He recounts his experience with his previous company, SingleStore, which reached a valuation of $1.5 billion. Nikita then describes Neon, his current venture, as a database company and developer platform. He explains that traditionally, people have to download and install databases themselves but Neon's approach simplifies this by offering serverless Postgress services where only a URL is necessary for application development. The chapter also hints at Neon's expanding mission beyond its initial scope.
• 02:00 - 03:00: Transition from Microsoft to Facebook The chapter discusses the transition from working at Microsoft to joining Facebook, highlighting the experience in building and managing databases. The speaker shares their journey of working with SQL Server at Microsoft, evolving from "database as a service" to "platform as a service" to "back as a service." The narrative is a reflection on their professional growth and the skills they acquired during their time at Microsoft before transitioning to a new role at Facebook.
• 03:00 - 04:00: Building SingleStore and Shift to Neon The chapter discusses building SingleStore and transitioning to Neon, highlighting the journey and experiences of joining Microsoft in 2005, focusing on the release of SQL Server 2005. It covers the gaps between major software releases and transient work periods at Microsoft before a culture shift at Facebook, where the narrator moved thanks to an enticing offer.
• 04:00 - 05:00: Validating the Product and Market Fit The chapter discusses the high-speed dynamics within companies like Microsoft and Facebook, particularly emphasizing the heightened engagement and commitment in startups compared to larger corporations. The speaker shares their personal inclination towards entrepreneurship and the impact of this environment on their career decisions. They recall their journey when their co-founder, Eric, suggested applying to Y Combinator, leading to the acceptance and inception of their previous company, Single Store at its peak.
• 05:00 - 06:00: Lessons in Entrepreneurship The author reflects on their journey in entrepreneurship, highlighting their experience of leading a single store from a 7 million run rate to over 20 million, which subsequently led to a company valuation of 1.5 billion. They underline the diminishment of their operational responsibilities, expressing that the organization could function independently of their direct involvement. This autonomy allowed them to indulge their passion for learning, leading them to start another venture, a database company called Neon, marking a new chapter in their entrepreneurial career.
• 06:00 - 07:00: Adapting to Changing Technology Landscapes The chapter emphasizes the importance of market fit in technology development. It suggests that no matter how advanced a technology is, it won't succeed without demand. The chapter advises testing product hypotheses by gauging world needs before investing heavily in development, ensuring both necessity and quality in technology offerings.
• 07:00 - 08:00: Importance of Having the Right Team The chapter discusses the significance of having an appropriate and effective team during the early stages of a startup. It emphasizes the strategy of open sourcing code and building projects transparently, which involves making all code accessible on platforms like GitHub under a permissive license. This approach not only fosters community engagement but also helps in attracting interest, as evidenced by a spike in GitHub stars indicating rising attention and validation for the project.
• 08:00 - 09:00: Challenges and Growth Experiences The chapter "Challenges and Growth Experiences" covers the unexpected leak of a product's website, which was supposed to be launched in two months. The leak happened on Hacker News, sparking a lively discussion on the product's viability. This scenario is compared to creating a movie, where the website serves as a trailer, providing early insights into potential acceptance and feedback.
• 09:00 - 10:00: Reflections on Company Growth and Future Opportunities The chapter titled 'Reflections on Company Growth and Future Opportunities' discusses the early signs of audience interest in a product or service, which can be indicated by the trailer's release and the subsequent feedback. Technology is mentioned as a relatively new domain with choices that might not always be good, but offers opportunities for entrepreneurs, as illustrated by the availability and acquisition of resources like neon. Additionally, advice for future entrepreneurs highlights the importance of not overly worrying until a product achieves product-market fit, citing Notion's long development period as an example.

Leaving $1.5B Startup Behind for AI's Next Wave | Neon, Nikita Shamgunov Transcription

• 00:00 - 00:30 the world changed and the reason is AI ignoring that change and saying we set out to do this and therefore we going to do this just makes no sense and it's good to be honest with yourself when you're changing the plan communicate this to your investors board employees and then to yourself when you look at yourself in the mirror that the plan is now a new plan and that's okay understand how the world changes around you to take advantage of those opportunities now how do you take advantage of those opportunities the thing is that
• 00:30 - 01:00 my name is Nikita I'm CEO and founder of neon this is my second company so my previous company uh single store at Peak it was valued at 1.5 billion neon is a database company and a developer platform where do people get databases today they either download them and install them themselves but neon says we're several as postgress we're saying don't worry about servers here's just the URL and the URL is all you need to know to build your application neon is expanding its Mission from being a
• 01:00 - 01:30 database as a service to platform as a service so back as a service I'm building databases all my life so at Microsoft I joined the team called SQL Server so when I joined Microsoft soft person all it's an
• 01:30 - 02:00 incredible cheap but it's also a very very old and stable product I joined in 2005 and by the end of 2005 Microsoft released the product SQL Server 2005 the previous release of that product was 2001 during that time there were people that would come to Microsoft work on the product leave Microsoft and never ship software at all at the time I had a you know phenomenal offer from Facebook and then took a Facebook off offer and moved down to the Silicon Valley at Facebook look culture was very different from
• 02:00 - 02:30 Microsoft and the speed at which things were happening was absolutely insane a lot of people just committed to the Facebook mission that engagement was a lot higher and once I experienced it I realized that this engagement exists in startups and it does not exist in larger companies naturally I was very susceptible for entrepreneurship and then when my co-founder Eric is like well shouldn't apply to why combinator and we got accepted so my previous company uh single store at Peak it was
• 02:30 - 03:00 valued at 1.5 billion you know I spent there 10 years when I took overover single store we probably at a 7 million run rate I took it to North of 20 and then for the first time in my life the amount of operational work reduced temporarily I'm not the most important layer right so you can just remove me from the organization and the organization will probably do just as good and then added this to the craving of learning breath and make the plunge started another database company uh which is neon that's why I left single store and it kind of panned
• 03:00 - 03:30 out you know it doesn't matter how good your technology is if there's no Market fit do people want your stuff the best feedback of course is people are willing to buy this product right but even before that you kind of want to to throw it out there and see that this product is needed by the world and then you put all this energy to makeing that product and making it a high quality product you want to validate this hypothesis how can you do that and how can you do it as
• 03:30 - 04:00 earlier in the startup cycle as possible we started to do those things open sources one then we put together a website we were building in the open all the code was available on GitHub and moreover all the code was available on GitHub with a very permissive license and then about about 11 months in our the number of GitHub stars on that product started to go vertical meaning if you like plot them on the line the oldest people staring our repo which means they kind of interest in what we're doing and and that was our first
• 04:00 - 04:30 product Market fit signal and then we put the website out we didn't put a password on it and we thought we were going to launch in about two months but between that time and the launch somebody leaked our website ne. on haacker news and there was a lively discussion you can go and find that people going and saying well this is a good idea or this is a bad idea and whatnot you know think about a product and a company like you creating your movie and then your website is a trailer right and that's how you kind of know if a movie is going to be well accepted by
• 04:30 - 05:00 the audience or not because the trailer is out and you're starting to collect very early signal about the interest of an audience to that particular product or service I think that Tech is one of the many not that many good choices andte I think is fairly new and that's why a lot of them were available and neon was available as well so we bought that one as an advice for future entrepreneurs don't worry about it until your product hits product Market fit notion waso for for a long time and then
• 05:00 - 05:30 now now everybody uses notion here's Silicon Valley it's littered with technology that nobody wants or needs and that's totally fine because when you start you just don't know and it's good to be honest with yourself when you're changing the plan communicate this to your investors board employees and then to yourself when you look at yourself in the mirror that the plan is now a new plan and that's okay the world is is what the world is and the world changed then in technology the
• 05:30 - 06:00 world changes quite often ignoring that change and saying you know we set out to do this and therefore we're going to do that just makes no sense but being formal about the steps that you're taking and the wise behind those plan that I think is a very useful and important thing to do and I kind of strongly recommend everybody who's doing that to be formal or semi-formal and it doesn't mean that you need to like write six-page documents it could be as simple as like 1 2 three kind of like Tesla right I'm going to build a rooster and
• 06:00 - 06:30 I'm going to build a Tesla S and then I'm going to build a a mass Market Tesla 3 it could be as simple as this but then the world changes and then introduces for Tesla the opportunity to create full self-driving and that becomes kind of like a huge emphasis for the whole company so not only you need to be formal not only you need to be executing very very fast you need to look around the corners and then understand how the world changes around you to take advantage of those opportunities now how do you take advantage of those opportunities when you have your one 123
• 06:30 - 07:00 plan you architect your team against your one 123 plan and then the world changes and something in this world becomes more important or becomes an opportunity and then because the team you build is the company you build is another thing that V Coosa says you might even not have the capacity to understand how to change the plan and even if you do you might don't have the capacity to evolve the company into that direction and therefore I think you must bring people from that world that you're locking and if the world changing in a
• 07:00 - 07:30 particular direction try to get the people who are experts in the direction that the world is heading because if you don't have the right people around you you won't come up with a good plan the hardest things are about people the other hard things are when things are just not working and when the things are not working you spend an extraordinary amount of energy to make them work and then they work for a period of time and then they stop and they stop because even either you know
• 07:30 - 08:00 have a product Market fit or technology is not good or competition is kicking your ass and so you're burning a lot more money to make it work and it takes the highquality team to work through those moments ideally you work through them without losing your cool that's when then the stuff is tested and people lose patience people quit blame each other we had it all you know living through this once uh hopefully had made it a better founder and compared to single story me seems like L smoo sailing there's the length and then
• 08:00 - 08:30 there's the growth it only feels long if the growth slows down or stops and then you start looking in the mirror and asking yourself is that what you signed up to do is like is this grind is ever going to stop or it's growing and in this year we grew over six times in revenue and when you look at this it's like w like the scenery really is changing and the stuff that we're doing now is like not the stuff that we were doing in the beginning of the year as long as we're in that state it's forever
• 08:30 - 09:00 the fog of War usually clears as the company goes along and right now it's pretty thick with NE you know the company is clearly working there product Market fit our customers love it more and more of them coming every day onto the neon platform we reach into things that we almost didn't think we would even consider in the AI space and in the broader platform space and if back in do a service it's when the growth slows or the world moves on in a different direction or a competitor kicks your ass that's when the music stops playing as
• 09:00 - 09:30 long as the music keeps playing I think it's it's just a lot of fun to keep dancing to this music