Oxide is crossing the chasm

Welcome to changelog and friends a weekly talk show about booking a 50 rack Thank you to our partners at fly.io the public cloud built for developers who ship Learn more at fly.io Okay, let's talk Okay, friends. I'm here with a friend of mine hardrock gill ceo of code rabbit ai code reviews. So awesome So the Explosion of ai for developers is very real as you know some call it hype some call it the future hard job Either way code review remains the bottleneck for teams. What do you think? How does code rabbit fit into this new world?

My message to developers is like ai is here to stay we have seen like great success with code generation tools especially the agentic architectures that are getting really good in terms of exploring your code and

Solving small issues and it's only going to get better from here This is like a time when you embrace ai Otherwise, like it's like about getting left behind and ai is not going to replace the developers is what we have been seeing I mean, it's like just elevating the role of Then and it's like going from a tank battle to an air battle like earlier Developers were struggling with the same tax and all the mundane and the toil unit test cases like all the boring stuff But now we're seeing all of that is increasingly being automated with ai Fight the air battle as they say and the same thing is happening on the code reviews Now you're generating a lot more code and what's hitting you next is code review bottleneck That's where we come in as code rabbit generated ai based code review platform Which reasons about your changes and elevates your role as a reviewer like you're not going and finding Issues which are surface level at the code. I mean it goes beyond static analyzers to understand and those changes But it does elevate your role as a reviewer to look at the high level picture

Whether these code changes are aligned with where this product has to be Whether it's like code changes are aligned with the overall architecture direction of your company That's where we come and help So how does code rabbit work code rabbit like the great thing about this solution it works where you work Like it's not like you have to now adopt a completely new habit or remember to use ai in this case

So it works it deeply integrates into your git platforms inside your github get lab and other get platforms And in addition like two weeks back. We also announced a vs code extension, which we have made pretty much free for all individual users So there's no reason not to try it out Like if you're already using cursor and some of these like ai code editors It's a nice compliment like as you are done changing making your code changes

Just trigger the code rabbit after each commit and you'll be surprised at the quality of findings It will find and the issues it will find on top of your ai generated code. Very cool

Well, i'm a huge fan of code rabbit as you know We're using it here at changelog and you can see it in action in our pull requests You can get started today for free and it's also free for open source learn more at code rabbit dot ai again code rabbit dot ai Well, let's start this show where we should start it. Where should we start? Sure. Yeah, where should we start it? Which season are you in? Oh god

What a great question. I thought it was over. No, no, no, no He's asking for in the analog of silicon valley that oxide is living

Where do you show what season are we currently portraying? Oh oxide and friends this season are you guys? Okay better question. I thought you meant like what are you currently watching?

I thought you were saying what are you watching? I'm like that is that is a great question. I you know Always merits a re-watch You cannot re-watch that many times. I mean it is so prophetic too. It's it's amazing They just like I feel in particular that the ai episodes are almost chilling I mean, they they seemed a they seemed a little outlandish now They're just like oh my god, the ai did over six is coming to fruition. It's coming to fruition a hundred percent

Yeah, if entropic just disappears we know why yeah, exactly, right? Um, you know

I I feel that we are because I also feel a view it obviously is a cautionary tale, right? And I think that there's so many and there's so many times when I was watching it With my my now 18 year old where I would kind of pause it and explain it like okay This is a real concept like they they're presenting this in a very humorous way But um, you know, I I still think that that season two episode one sandhill shuffle Um is one of the most important single episodes for an entrepreneur to watch Yeah, not just the nagging is obviously wildly entertaining but the when the guy the pursuit of fun He raised too much money, right and he didn't realize that he could have raised richard asks. Could you have raised less money? And he's like, oh right I could and you and he and they they do such a masterful job of the guy kind of replays the history of his own startup in his head of like Okay, like we would have like yeah, we would have raised less and then we would have been at this other milestone Like yeah, it would have been difficult. We could have pulled it off and like and then he's like you know, they Realizes that his company was lost because he raised too much money and uh, we're very mindful of that that's a very real phenomenon and you know, we are uh, you know, we obviously just raised 100 million bucks and we were very mindful about that and making sure that we uh, I mean because the the flip side at least for oxide is that It is uh, we have always believed that if this company can cross the chasm It is a generational company. It's a huge company waiting to be built And the the number one risk for the company actually is running out of money is actually capital. I mean vcs hate to hear this Right. They're like, oh, that's the number one risk. It's like yeah, that's why we're here. I mean, it's like we've got That's why I want money. That's why we need money. It's like, oh, all right Well, is there any other way we can be helpful? It's like no you can be helpful by like, you know by Running a check. It's like I it's like wow god. Okay, that's kind of boring We'd love to introduce you to like can we introduce you to potential customers like no no that never works No, you don't even we're good to go. Yeah, we're good to go We actually need so that is you know, I think that I I would skirt the question by saying, you know we're mindful of all at all seasons of silicon valley and all Stages of a company that represents and how do we How do we be the company we want to be without reliving some of the seasons of silicon valley? without instituting piper pulse um without you know, which I still think is one of the uh, And actually the system at facebook was actually called pulse. I did not realize this I've got some x metaphor because you're like you realize that that is like actually real and That's real and also the chairs ad Do you know they're the tables that's based on a chairs ad tables tables Which is a spoof ad and you're like, this is such good satire and so biting and it's like oh That's because actually facebook paved the way they have a chairs ad That has to be seen to be believed. It's just amazing. So it's like how do we How do we be the company we want to be and obviously venture-backed? I mean, we we're very grateful for venture capital It's very important for what we this is this can only be a bc-based company I mean, I think it's like it's easy to be very cynical about venture capital but it does allow you to do something extraordinary you get this like Mag you get this huge amount of cash to go build the thing before you have customers before you have I mean that that before you have a business and You know, that's that's a magical thing And then you've got to hit, you know, the clutch and the gas just right. So Um, we're very mindful of it all and I hope we are not I you know I hope we're reliving the good bits and not the bad bits. I

But but mindful of it all for sure. So why is 100 million for a series b? Yeah, big spirit too much

Like why is that the right? Is that the right number? Yeah, and I I think that you know when we uh, and We were not necessarily raising right so when we had raised our series a and you know You know When you are a venture-backed company you always have to be willing to take the right meetings with venture capitalists because you always need that next round and Especially a series b I think is the most difficult series to raise. Um, because you're kind of a teenager as a company um, you are you know teenagers can be tough because They've got adult needs but they don't have adult strengths. You know, they're not like They're not actually like contributing yet. They're they're on the cusp of it. They're they're close But you are you know, I got two kids in college. So i'm definitely, you know, i'm feeling this right now You're just like, okay Why don't I give you my bank account and you just give me whatever is left over? Let's do it that way. Um But you know You're kind of a teenager to series b and you need to have so you're constantly Like trying to find the right partner for that and the right and we you know We had a bunch of firms that there are a bunch of firms that are just like not very good, you know so you you're kind of You're not taking every meeting by a long shot Um, but we the the this firm that really wanted to get to know us and you know The first meeting was fine But um, then they came by for a second meeting and that second meeting was really good and they've done a lot of homework And this is usit And you know, the third meeting was real, you know, and you kind of have it's courtship that happens over a long period of time and you know, they got to know us really well and they Felt like, you know when you're thinking about your next kind of financing, we think you guys need to go big and we And it was it was bigger than we were like, wow, okay But really the way they structured it was great From our perspective and kind of de-risked some of the risks that we saw of taking that much capital and it gave us it was really important because again like the way Still to me the the greatest risk to Oxide is that we just don't make it. We run out of capital before we Were able to build it's really hard to build a business It's especially hard to build a business where it's like we're selling big machines, you know This is not a lot. This is not a home labber, right? Even though the home labbers would love us to do something for them. It's like i'm so sorry, but they are not your customer no, they're not and it's like the sales cycles are long and yeah, you know you but the the flip side of that has been like if we get there if we and when we were talking to Customers and you know god bless our early adopters and early customers love them all they've been terrific and a couple of them Have gone on the record even better is so grateful for them Or tweeting it out. That's also great. It's like we had customers like are we gonna be able to talk about the fact that they're a customer? They're gonna be like, oh my god, toby at Shopify just tweeted it out. It's like, oh my god Okay Thank you. I guess that cat's out of the bag. I guess the ceo just tweeted it, which is great. Um, but you know But you know, um Those are we are so so so grateful for those early customers But we thought we talked to so many who are just like, oh man, I love Everything about this. I love everything about this. This is absolutely the right thing. We should go to I just like we would know totally I was just we were talking like God, I just need another I need a fortune 200 retailer to have adopted this And we're like you're a fortune 200 retailer like you're the one to adopt it And then you know, I know I know I know I know I am and I would love to but I just need someone Else to adopt it. You're like, okay. All right. It's like I but I love this if I do if you do that Like i'm all in and you're like, okay, so too much risk It is in the risk is and you get it right? The risk is like you guys go away The risk is you're acquired. I do love the people like i'm really worried. You're going to be acquired by dell and i'm like Now I don't want to neg myself. Do they know about your password?

Yeah, exactly exactly like I don't think we're the part of the podcast you're like no never again Yeah, that's why I built this

I think dell would not want us. We are we we we would we're a bit of a Kind of a skunk there from from dell's perspective. I don't think dell's interested in us and you know The the hotel hp we we are so disruptive It's like that we are that is not that has never been the the strategy but people are understandably worried about it because People can rattle off companies that have disappeared the favorite startups that have disappeared into dell or hpe and i've been acquired and we you know, I get it and we Uh, we obviously that's not what we aspire for for ourselves But you also there's only so much arguing you could do something because like they got a really good point, right? So the only way it's just like earning how do you earn someone's trust? It's like one day at a time, you know You can't you you can't like gas it on on earning someone's trust and that's where it really boils down to people trusting and not just trusting us people trust us personally it's More that like I need to trust that you're going to exist I need to trust that you're going to be there. I need to trust that this is going to make it and You know, I think that this is a big part of and we've already seen that where people are like, oh, wait a minute 100 million dollars People are like, I think you guys are going to make it like, oh, thanks We think we're gonna make it too But it's great to hear it out of someone else's mouth like oh my god like you guys are actually gonna make that like actually okay, and I wow, that's this is great, you know, and I so I think that the The capitalization is not just the capital that that we need to go expand manufacturing and to go uh, because the other I mean The other really significant aspect of this is that we and we knew this was gonna happen But it's been fun to see it happen where a customer buys one rack or maybe two And they're like, hey, um What would 10 look like? What would 15 look like? What would 100 look like and You know for a long time that was just kind of like just kind of pillow talk, you know We were kind of dismissing it, you know, it's like it's great We obviously always took it seriously But as time has gone on like those questions and conversations be like no no i'm like i'm serious Like i've got like i've got budget i've actually used this thing I know what this thing actually is and isn't and like i've got this new project coming up But this would be perfect for it and these are the kind of numbers I need and you're like those numbers get significant really quickly and you do actually need a head of capital to be able to Secure the financing that you need to be able. I mean you see you there there is a flywheel that you need for which you need to like this is not on the one hand hardware is not as capital intensive as people think because It's not like we're building our own plant Right, we're not benchmark electronics our contract manufacturer and like they like they've got their own itar facility We're not building a manufacturing line. We're not doing there's a lot of things we're not doing that people kind of associate with hardware But on the other hand, it is also capital intensive because like yeah You got to go procure a bunch of dram and a bunch of CPUs and a bunch of boards and like You can't invoice someone on that until it's actually been like shipped. And so there is like Especially as the numbers get large Um, the financing angle becomes really important. So yeah

Is there a point where you do go build that stuff or is it just so far away that you're not even thinking about?

That's a great question. I Man, I would kind of think never I mean, you know on all that stuff We always try to keep an open mind and I think that you know We've got a really great partner in benchmark because benchmark allowed us to do some things that are I mean like look We're an idiosyncratic company right as you guys know and we are idiosyncratic Tip to tail and you know, one of the things that was really important to us Is that we actually own all of our own manufacturing software. So we wrote all the software that runs on the line And this is really unusual. Most companies don't do this Most companies don't really consider this aspect of it. Um most and I mean what's funny is like the companies that that do consider it Are the ones that are like it's the kind of the space x's and the apples and the I mean the companies that take manufacturing Really seriously do consider it but companies that are scale generally don't In part because maybe they don't have the luxury of doing it But it was very important us to own all the software involved in manufacturing line but because we do that like we have like We've got it is a truly great partnership where they're doing the things that they're good at that I don't necessarily know that we want to be good at and we are able to do the things that are very important to us Like software manufacturing companies are not great at software. This is you know, I don't feel that this is a news flash And we are in our dna we are a software company obviously do software and hardware together But our and we've got software and shares with a strong hardware sympathy hardware and shares with a strong software sympathy but we have got great software expertise at this company and Uh, because we can we control all that. Um, I don't think so I think that this is something we would really look to partner for continuously. Gotcha. It's a wild ride 100 million dollars It is

I don't even know what you what kind of class do you go to to manage that kind of purse? Like who says brian Here's 100 mil spend it wisely

Right. Well, this is I mean, I think this is it does apparently well I know this is so this is something that people don't realize about because it's it's kind of easy to complain about aspects of vc But the and the process can be you know, any entrepreneur will tell you it's an arduous process It's like I mean it is like coupling. It's like dating. It's like actually although, you know, my uh, my my son is plays college baseball and uh, it is I'd be I I will say that you're playing uh playing NCAA varsity sports does look a lot like raising around if you've got an ncaa varsity athlete. They are definitely But they because it's like the options a lot of options and you're kind of like everyone is trying to like find the right pairing, you know, and You are You're trying to really find the right partnership but you know with vc like they're going to give you a bunch of cash And they actually don't have a whole lot of control over what happens, you know, I mean, it's like yes you've got kind of like the you've got you know, some aspects of what you've got a board seat or what have you but like You're really trusting the company to build itself in a way that is wise and proper and Uh, that's part of the reason why they take a long time to do their diligence part of the reason why? you take meetings with a vc firm when you're not raising because They want to get to know you and they want to get to know you so They trust what you're going to go do with it. So they know that it's and um, you know, I think that uh, you know, I think if anything for us, I I think you know, we We're very much children of the dot-com bust. So we are uh, if anything like the comfort zone We have to get out of is uh is getting a little more aggressive on things that we would do. Um, and because my you know my overwhelming bias is towards a bit of caution because I I think that you know, we Um as one of the advisors of our advisors of the company who i've known for a long time One of the first people I pitched on oxide laughed hysterically when I pitched him on oxide like belly laugh Like really hard laugh in 2019 Um, and then I kind of came back and saw you know came came by 2022 2033 about and about what we built And he's like, wow, this is this is amazing Yeah, it'd be a real shame to this up now And I and i'm like it would and I just remember steve and I both a lot of pressure yeah, because it's like we both like this is Like i'm not a serial entrepreneur. This is not like i'm not going to take you know, five more trips to the well like this is it and and like This is it and we got to make this one work. And so it's it is it's a lot of you know That pressure is a privilege, of course but so I know and in some ways that i'm like the the almost like comfort zone we need to get out of is is being willing to knowing when to push harder in and fortunately i'm, you know blessed with a terrific co-founder and steven, um, you know, and he and I both have The same disposition you have the same need and desire to go push ourselves as well

So so i'm kind of fascinated about the mechanics of this kind of thing Do you actually take custody of a hundred million dollars or do you have access to a hundred million dollars?

Like how do they like it like it will like Wires into your account like you raise a rare account. Yep, you raise around your account. Oh, yeah Oh, well, actually also i'll tell I I will I mean kind of a funny story in this regard in our series a so, uh, not only does it it Wires into your account But is actually Not yours until the round is closed, but it's like literally sitting in your account Okay, it doesn't go to an escrow account. It's not like buying an escrow You don't own it but people will be like it's in escrow but like you're like it's okay, you keep saying it's an escrow but it's like It's kind of like That's the real thing that you can do That's a real thing you can do it but like no no one's gonna do that So the but there is this is where and things get super like when you're raised So you're raising a round and you're you're raising a price round and you know, people are going to invest at and you know People are investing conditional on other investors So you need to wait until you kind of like hit the number that you've got on the paper Before like the round is closed like you're not so you can be like waiting on a wire and you're not closed or you can and you know one of the things that we did in our series a when we're extremely grateful to our Investors for accommodating an early close So we were going to raise, you know, we ultimately ended up raising what 44 million dollars in our series a And our investors did an early close at 30, which was great because we this was 2022. It was really brutal to I mean the environment had turned very very brutal and uh, we Were you know, so then you know, like okay once I cross this like this 30 million dollar threshold then like I every and Not surprisingly one of the larger investors, uh institutional investor is like look We wire last like that's the way we operate. So we are going to operate we are going to wire last And i'm like i'm kind of sympathetic to that like they want to make sure that everyone else has already wired before they wire well they They why they go to wire and you're like, hey you guys are 23 short And we're like, oh my god, we're 23 short and like how do you end up 23 and of course everybody is like I'll pony up 23 like are we short? Yeah, it's like a bunch of like grad students out for dinner or something. It always comes up short. You're like, okay There are only like four of us here who didn't throw in and everyone kind of swears that they paid it up And i'm like, of course, you know, it was it speaks highly to alex. Everyone's like i'm in for 23. It's like no No, unfortunately, it doesn't work that way. We can't just like put you know And I put a couple of of of bills on the table the reason we're short is because of share math and shares get shares will get rounded down and you end up and You have probably presumably you have many rounds that ended up being short by A share or some very small number of multiples of shares so it is kind of like and most people don't care but in this case like that investor's like no i'm not wiring until you have like the 23 and we're like Okay, so we'll now we need to go back to another investor and basically get them to buy additional an additional share of oxide so we can get to the threshold, uh that that we need and uh, You know to be fair like that that investor is kind of frustrated with their own treasury department on that That kind of process they're like i'm really and you know what I get it Like I I think it's it's understandable to be pedantic because when that wires Like I mean talk about like wiring information you want to have correct it wires gone yeah, you double triple check that we yeah, we had a uh, uh, We were talking to an institutional investor that uh corporate venture capitalist, uh cvc Uh, it was late to a call. I hate it when venture capitalists are late. Hate it. Hate it. Hate it Hate it. Do not be late because i'm going to be here on time Like i'm going to be here on time as an entrepreneur You need to be here on like you as a vc kind of have one job It's called show up on time. I hate it when vcs are late So vc is like six minutes late but comes in very apologetic. I'm like, i'm so sorry. I'm late It's very out of character for me Uh, we just had an eight figure Wire that went to the wrong account Oh my gosh, and we're like, do you need more time like we can reschedule? I'm, so sorry

We need to deal with that right now. Yeah, you go with you with that

But it's like I mean this kind of something like when you get to the actual like Mechanics of the money moving you're like, oh wow This is just like and it's a super manual process and it is like, you know people making phone calls And it's like on the one hand you're like, oh god, this is so manual I'm gonna hand like maybe this should be manual But maybe this is not a bad idea for this to be pretty manual because you don't do it very frequently And it is super super super high consequence. So we when you're in when you're on like that kind of it is really tough and the part of the reason by the way when You know, this is the reason that like people You know opening up to a large number of investors, for example It makes these issues become more complicated. You know, you've got to have now you've got yeah more people that need to wire More people that need to get chased down for paperwork So, um, we there is a big mechanical aspect to it and it just doesn't feel like you're not done until you're done

Um, but fortunately what you need is like a cap table salami attack, you know Like someone just sitting there go ahead and shave those off onto my out of my account. Totally right. I know On my account. I'll take it. I'll take the 23 bucks worth exactly, right? Um, yeah when it was a lot simpler if you could just have that on there like yeah

And so by the way, so the there actually there have been things have been invented to make this simpler So this is why like the safe is a great construct. So safe is a suit a simple agreement for future equity Um, it pains me to agree with paul graham. I think although paul graham I'm like super complicated about paul graham right now because he says things that I Really strongly agree with and the things that I really strongly disagree with like often at the same moment I kind of my brain just kind of buzzes. Yeah The um, but one of the things that y combinator got really right is this idea of a safe And a simple agreement for future equity what that says is like look We have to deal with all this We have no idea how much you're worth. We got no idea how much you're worth And let's also like not wait until everyone's ready to wire and it's kind of like waiting for the like tell you what? We're i'm just going to invest this amount of money. I'm going to invest 500k And then we at some point you're going to have a price round or you're going to have an event that happens in acquisition What have you we will price it then and when we price it because i'm doing this in advance I get a discount on that or I get you know There are different ways that that people kind of structure those things to incentivize them But a safe is is a or there's a cap. I mean, that's another thing that people do. We'll say all right the uh, One of the things so you get this so like i'm gonna invest But i'm really worried that i'm gonna invest 500k and then you're not gonna raise for like Years, and then you're gonna raise at this multi-billion dollar valuation And i'm only gonna own a little sliver of this so to prevent that from happening. I'm gonna put a cap in place So if you raise that above this valuation cap I get it as if it's at that valuation cap. Um and it's the the the And it's also a way for them to kind of be able to model it So but the safes are great for that because you can just like go right now They can also be too great. They're kind of like candy and entrepreneurs can raise too many safes They don't understand that how their safes are stacking and they go to raise their price round. It's like whoops You got washed out because you didn't keep track of the safes. Um, so this is actually something so This is what we need like these silicon valley outtakes for because the hbo silicon valley I don't think it really hit on the on this is one of the rare things that they need as a new season

I mean, there's so much new they definitely need this

Aren't we living the new season right now are we convinced that we didn't just like pass into fiction and we are just like Yeah, we're just living we're living the new season right now. We're there for sure

I was thinking about some of the money that's thrown around right now because I was reading this been all about You know and and to individuals, you know, like hundreds of millions to steal a ai Researcher from this from you know from apple to meta or whatever and you know with that and they turn them down

We turn them down On that stuff that you got to know, like what did you turn down exactly? This is where you're just like, can you show me the paper actually that you got? I mean, this is not a hundred million dollars cash up front. This is like Like and I on those things i'm like, I always kind of wonder what they actually look like But there's no doubt there's a lot of money being still the numbers that we talk about now

You know, you just said 500k and that was like because you're trying to think it's not hard to say Yeah, like an individual might do or something. That's right. That's pretty much free money at this point

That's right. Um, yeah

It's just it kind of boggles the mind how quickly it can't all be inflation that we've ramped up our numbers

Yeah, I mean, I think that we've got well, and it's going to be interesting to watch what happens because I think the other problem is that the we've got these companies that aren't going public and you know, we might start to see some of that where but like ultimately like We have to I mean certainly the aspiration for oxide is to be a public company. That is what we Um, that's what we want to go do that. So that that is doing that when you said generational I assumed Well, that's going all the way right there. That's going all the way. Yeah. Yeah, we want to be a public

How how close are you? So you're

We're actually going to cross the chasm. I'm in a board meeting. Are you just razor series b, you know?

No, I don't mean like in in raises or whatever. I just thinking like in your mind somewhere Yeah, it has to be like so i'm maybe not a road map But like you're talking about crossing the chasm to the generational company and like what is still in your way?

I think yeah, I do think we're gonna I think we're close. I mean, you always want to knock on wood and everything else

Yeah, I think we're gonna I think we're gonna do it are there hard problems unsolved are the things where you're like

We have to figure this out first. Um, the the problems we need to figure out are now are Um, there are for sure plenty of interesting technical problems that remain no question But it's the questions are not around can we build it at all which by the way was a huge question I mean, we don't want to that's why your friend laughed at you Yeah, absolutely. Absolutely way and you know the other line he had is like you realize that if you pull this off It's going to be illegal to buy dell and it and And that's it, you know, that's it. And so We but it's a big if and so there's so much we need to go pull in that why is it illegal? Because like you just you would never Architect what dell offers like that's not the way you would build it if you're trying to solve Rack scale compute at scale so they just say like I don't want to buy just one rack I want to buy 100 racks. I want to have a last to compute in my own data center I would not be like, okay Let me start with a one you or two you server and ac power supplies and each one of these things and like Running like let me go invent uefi like what you just wouldn't do any of that stuff You're like, let me what you would actually do is what the hyperscalers have done which is like how do I engineer this thing as a whole and how do I think of it holistically and the like nobody likes the pain that they're in in lhp super micro and it is just An enormous amount of pain, um because it's not fit for purpose It's just not what it's designed to do and people that are are trying to build because we did this We did this at joint people that are trying to build elastic infrastructure on On hps of microdel are trying to do their own oxide on the cheap effectively and it doesn't work out well, you know, and this is where you discovered that like the you know You discover drive for you not only discover drives that you've not qualified as I discovered a joint I didn't even know teshiba made hard drives until I went I was I had such a vexing IO latency problem i'm like, you know me and i'd finally over a course of like weeks and weeks Whittled it down to like coming from like the absolute lowest layer of the stack the io layer And i'm like, you know I wonder do I have a different version of hgst firmware on this drive? And I like pulled the drive info i'm like teshiba makes hard drives I mean, it was literally like this moment of like this is not even like a company I like what it's like having like a chevrolet hard drive. You're like a wilson driver Yeah, exactly. You're like what what there's like, uh, there's Like there's a raccoon in here like that doesn't even make it didn't and You just realize that like oh i'm just being Thrusted this thing because of some sweetheart deal as turns out all the cheeba hard drives are basically bought by dell And then just thrust it into that you don't control your bomb with dell And that stuff is so deeply frustrating and that is a deep frustration that people are all feeling this is not like theoretical and I think one of the things it's it has been like Uh, it is definitely vindicating. I think it's like a little bit surprising to even our proponents where they're like, you know I was talking to someone today And they said that like these firmware problems that you've solved are really significant important to them I'm, like, you know, you don't have to sound surprised like obviously we know it's important because we saw that But like these pain points are really deep and really important and the people running at scale are the ones who suffer from it And a lot of why people have moved to the public cloud is because they were sick of dealing with all that And it's like I didn't have to deal with any of it I never had to deal with a bias upgrade when i'm running on aws. Thank god and now but now i'm dealing with this bill that is just like Out of sight and growing all the time and it's like oh man It's like can't can't I own this infrastructure and still have all this delightful stuff that I get? From the public cloud and that's the market that vcs didn't believe existed Um, believe it or not. They just didn't think it's there

What's up friends i'm here with kyle galbraith co-founder and ceo of depot depot is the only build platform looking to make your builds As fast as possible but kyle this is an issue because github actions is the number one ci provider out there But not everyone's a fan explain that I think when you're thinking about github actions

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Functionality or tools that you need to actually be able to debug your builds or deployments and so Back in june, we essentially took a stab at that problem in particular with depo's github action runners What we've observed over time is effectively github actions when it comes to like actually debugging a build is pretty much useless The job logs in github actions ui is pretty much where your dreams go to die Like they're collapsed by default. They have no resource metrics when jobs fail You're essentially left playing detective like clicking each little drop down on each step in your job to figure out like, okay

Where did this actually go wrong? And so what we set out to do with our own github actions of observability is essentially we built a real observability Solution around github actions. Okay, so how does it work all of the logs by default for a job that runs on a depot? GitHub action runner they're uncollapsed you can search them you can detect if there's been out of memory errors

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They're starting to believe though. They're starting to believe they are starting to believe and it's it is funny when you know You'll have like a vc that you know pass on us or whatever And they will send us a report like oh, I just read this report about like, you know Cloud repatriation and like they send it to me i'm like Why are you sending it to me? Like you should be sending this to your past self like I know this like this is not news to me I mean are you I we also I had another another investor that passed on us. That was like, um, hey, I you know, um this rust thing Seems like I you know, do you guys use rust at all? I'm like, do you use it all? Like yeah, we yeah, we use rust a lot. I mean we And and he's like, oh wow, okay. Who is that? I'm like, yeah, the company's name is oxide. He's like He's like this kind of like, oh god Yeah, oh boy. Anyway, um, well

Like you said they're always late, you know a little bit late

Well, and I think that they are I mean to kind of be sympathetic about it Like they are the the the concern that vcs always have is product market fit Is that you like the failure mode that they I mean there are two failure modes They're worried about uh failure mode. Number one is this is going to be an outsize return and i'm not going to be a part of it um, that is actually a and That's a real fear. That's that's fomo. That's the fear of missing out for sure And that is a very real fear and they fear that more than a zero because it happens less frequently Like it is totally it is very frequent that vcs fund a company that is a zero that happens all the time What happens less frequently and really gets under their fingernails is when they pass on a company that they could have invested in That then has returns a fund for somebody else That's the stuff that really drives them crazy so that so they've got like that's kind of fear number one fear number two in terms of like they are I mean They they're not in the business to have zeros, right? So they actually don't want to have zeros The the way you have a zero is that you have a company that builds something that no one wants to buy Like that's the concern that they have And that you built and especially like if you've got someone and I get it like you get someone who's like no No, like people have built this all wrong and i'm gonna build this much better thing you're just like okay now i'm like I got you know antibodies are coming up and you can see why people pass on oxide but Because they didn't see the market was there. Um the and then also it actually strangely the There is no other startup doing what oxide is doing which makes them more nervous You would think that you're just like and this is what holds them in like quantum superposition between fear and greed and and we have had vcs who are literally like overwhelmed with fear and greed with oxide and they're just like God, there's no one else. Oh god, there's no one else. It's like, you know what I mean? Like there's like god the mode is so deep like oh my god, there's no one else because you guys are like wrong um And so it you know as that has been um, yeah It has been kind of amusing as people realize like oh my god, there actually is There is a market there it's like there's a market there There's a market there. Yeah, there's so much

I don't know if like i'm still just not sure who your you know part of it is specifically I think it's on prem because it's kind of clear own the cloud that makes sense, but there is so much On prem out there required. Yeah that they're just like thank you Jesus that oxide exists and they care about the things you cared about from The teshiba drive you never knew was there then the mismatch of firmware how a sound could change io And your care for that level of detail Yeah, not just the hardware level but the software that controls all that. I think that's the beauty of it I would I mean, I don't know how you phrase it, but I would probably phrase it as if You are the only people who could do it And maybe now that you are doing it Yeah, you have someone enter that is also highly capable and because you've done it They would compete and maybe because you've done a lot of stuff at open source they can maybe leg up because of open source who knows but

You know, that was always our assumption. So my assumption was so when we raised in 2019 my assumption was One of the myths the first myth that we are going to dispel Is that you cannot raise for this company and I had many people tell me you cannot raise you will not raise this company Be no venture firm will ever fund it And it turns out it's more complicated than that because it's so contrarian that it's actually that fomo it does like kind of light bc's up because like oh, this is like a Big potential and the problem we had actually was much more that this is the next bell y'all Totally that's right That they would be attracted to it But then also terrified by it and they would be kind of locked in that kind of again that kind of superposition And we actually tried to actually this is funny out of you appreciate this they like I did Try and I can tell you that like this is where you know season two episode one definitely has some truth to it You do actually want to disqualify from these used to be like no this is like you should not be doing this Like this is not something you should invest in Like you're a bunch of software investors and they're like, oh now we want to invest much more You're like no god damn it. Like i'm not actually trying to neg you I'm not i'm not trying to do whatever what airlock did to you i'm Actually literally trying to talk and actually there was a there was a vc firm in particular That was so adamant and I was like i'm like these guys are just like not kind of technically lightweights and they just did not Appreciate the technical risk and i'm like you're never gonna get over the line and i'm like you don't understand We are going wailing You should be fishing from the pier actually you should be shopping in like the fish section and safe way Like that's that is as close to it And they're like no we want to go wailing we want to go wailing i'm like no god damn it Like you don't actually no you don't actually want to go wailing like we are going like multi-year Mission to faraway ocean. So but we assume like we're going to dispel this we're going to show that you actually can raise And there'll be a company that raises behind us And so we were kind of geared for that from the beginning that there'll be another company That raises behind us and so we did one after we were completely done with our seed like Yeah, that was actually harder than I thought it was gonna be It's like actually and maybe and in particular one of the things we definitely did do with our series a it's like well I'm Or our seed rather i'm like i'm definitely gonna find the investors That want to invest in this because they believe in it outside of oxide and we're gonna get those folks on the cap table We're gonna conflict them out of investing so they so we will definitely have the best investors for this which we did

Um, I see so that's very good against competition or what a total hedge against competition a little yeah a little sneaky hedge

Yeah, it's an interesting play the other sneaky hedge that we did is like I want to make sure That we structure a company such that anybody who's attracted to this Who like I want to go do this looks at oxide is like i'll just go join oxide I just like I could go to like deal with the whole vcs thing Or actually like this company is going to give me the freedom and the agency and the autonomy to realize my own personal vision of how this and You know One of the things i'm really proud about is like we have attracted those folks and we've got a bunch of people At different, you know and at any kind of slice of the stack I can introduce you to the technologist who's got a chip on their shoulder about that slice It's like no this slice whether it's the security of the system whether it's the efficiency of the system networking in the system The I the system software is like no. No, I have got an opinion about this and I I want i'm coming to oxide to kind of exert that and you know at this point It's like we're you know, we're gonna be six years old here in september It's like yeah, you're welcome to raise behind us, but man, there's a lot of work to go do Yeah And we you know, we're still Continuing and we got a lot in front of us still technically but technically this has been now d risk I mean you're asking like what are the obstacles like what what it stands between us? Um, we've got a product it works, you know And we've got I I no longer Hold my breath on an install Or or an update right of course because i'm saying that there's going to be an install to go The next install is going to go wildly wrong and we're going to come back to this about you know the time that I um, but we um, and so we're able to kind of Level up and level up and level up and get to those those next customers the bigger customers more ambitious customers. So Uh, it's exciting. Um, and the problems in front of us are are of that kind of scale variety scaling scaling scaling

yeah back on the working for oxide thing you guys are famous for having the Egalitarian salaries right like everything's I don't know if that's what you call it, but everybody gets paid. I don't yeah, I call it

Yeah, uniform compensation, um, yeah, I um Because people like oh you think everyone's equal like I definitely don't think that

Well, that's what I was trying to get at with just thinking about raising money and like, you know People getting a slice of the pie. I'm sure there's equity involved in these people It's not all cash compensation. And so how does that play out?

Yeah, you do get people who are like, oh you're not talking about the total compensation because you're not talking about equity Oh the first of all everyone at oxide has got equity very important to me That's just like important principle for me that everybody has equity in the company. So that's just like bedrock principle the equity also compensates for risk and risk in the company goes down over time and There was way more risk in for employee number one than there is for employee number 100 and it's like those are not going to be and you know It is kind of funny that people are like, oh like, you know Everybody in the company should have if you say they should have equal compensation Which I'm like again, not the word we use they should also have equal ownership and you're like, how does that work? Can you just like walk me through how that works? Like I I don't know like You know you can do this. It's like you can have an employee-owned cooperative. I think you know go down to your local organic grocery store employee-owned cooperative and and You know, it's like the i'm reminded of that old onion headlock, uh local appy local applebee's hotbed of machiavellian maneuvering Uh, you know, I I think that just like There are a lot of challenges. It's like we're sorry. We are not an employee, but that's not our objective Um, and I also think by the way this idea that equity is part of your compensation is misplaced and this is a It's a problem and this is something that these large companies with product market fit that are public Use the fact that they can kind of print these confederate dollars in terms of their equity And they use that as part of your competition because if you view equity as part of your compensation It means that you are selling your equity all the time. Like you're a net seller on your company you know you are you're not buying hold on that and I just don't think I and I get where people kind of come from with it. But I the People don't understand startup equity is not liquid Your google equity and startup equity shouldn't use the same word because they're not the same thing At all like they are one you can't sell the other you can sell one with infinite liquidity and the other one has got zero liquidity I think people don't often understand what zero liquidity means and you know, one of the it's not real. It's not Or it's real but it's not real yet. Yeah, and actually, you know in many cases like from a liquidity perspective not realized The worst thing that happens is success right because you know company kind of like Stumbles and exits and there are plenty of companies that exit for greater than their preference stacks So they pay out to the common you get your money back and it was like, you know You may be disappointed with that. It's not it's not the venture return that eventual capital is running But an angel of us would be like, oh, this is great Like, you know, I gave you 75k and I got back like, you know, 91k right great, you know, and yeah Uh, but like not if a company is successful Like I gave you 75k like where's my 75k? It's like oh, it's like Sorry, we're six years in we're 10 years in we're 12 years in and you know that that liquidity event Doesn't necessarily happen for a long time So it's like these are not in the same ballpark and it's like for a startup The like your startup equity. It's very important that everyone has it very important Everyone has a share in in that kind of generational future It's also important that like that's not what actually pays for the kids summer camp What pays for the kids summer camp is cash compensation and so that cash compensation is very important to us

So how do you do it then? Do you just offer opportunity for them to buy it?

um, we make sure I mean everyone when they When they join the company gets it gets equity as part of their package and then you know We re-up people over time again to kind of um because it's yet it's important that employees have a share in that and then Um from a cash perspective, you know, we have it's been a little bit tough. We've been in an inflationary environment, obviously Um, we did just give one give ourselves a raise. So, uh, we are we're now i'll make it i'll make it 235 um, which is funny because like this is you know, the fourth or fifth raise we've had and you know When compensation is completely disconnected from you know performance review processes and all that kind of bull Like even I will like I know we've talked about it But I don't know like, you know kind of got final approval to be like, oh, yeah And the all-hands like by the way, everyone got a raise like I don't think oh, that's great And someone's like literally will have gotten up and go to the bathroom or we we did actually have this happen a couple of ways to go Where people like there's a discrepancy in my paycheck. I got paid too much So, I don't know we actually gave one we gave ourselves a raise like when did that happen? Like oh it happened like two all-hands ago. It's like oh crap. I was out and I didn't catch the recording It's like well, that's the one sorry You gotta gotta pay close attention to when you get a raise around here. Um, but the the um, and that you know It's been funny because like that's not a point of principle necessarily. Although the transparency is one principle the um that is something that we have just always done and then when we were uh, really struggling to hire struggling to hire bluntly double e's struggling to get outside of our kind of immediate, uh network and um, you know, one of our engineers is like I think we should talk about the compensation and We talked about it and this is in march of 2021 And that is in many ways the most important single thing we did in the history of the company because it brought in so many new folks to the company and not because they were drawn to the the the it's it wasn't The fact that it was uniform per se It was the fact that it represented a different way of conducting ourselves It's what it represents that's important that like and the reason that our engineer was advocating we talk about it It's like when I talk about oxide values to friends and family They think it's bull until I talk about the comp and when I talk about the comp it's like a record scratch people are like

You're serious. Oh, you're really serious. Well, no one else does that does anybody else doing that?

No, not to this my knowledge not at our Nope, and we've been told over and over again that like won't scale won't scale won't scale i'm like I don't know maybe I Whatever. I don't know i've been told I was told that when we were 10 20 30 40 50 we're now at 70 we'll be and and Or 80 on our way to 90 We and I would say that it is playing a more important role Not a less important role because the thing it's been it's had so many like interesting side effects One of the super interesting side effects is everybody is hiring up here and uh when you tell people that they're going to hire a subordinate Their standards for that person are going to be a lot lower And they're maybe going to overlook a bunch of things that maybe they shouldn't overlook You tell someone they're hiring a peer and they're like, okay. I want to make sure that this is like worthy of us Right, and so it's like yeah, it's it is not easy to get a job at oxide It is uh, we are very oversubscribed and we've got people that take hiring extremely seriously, um, and I think the other like the you know, The other thing that's been very important is that it tells us in a very concrete way the importance of every role at oxide And you know because when we first did this it's amazing This because we first did this obviously announced at march 2021. We don't have a product and people are like, yeah But are you gonna play support people that and it was always like support people like this is like a cast In in tech they're less than and you're like and you kind of take it apart You're like really? We're gonna like do you feel that I want you to think of the very best Support people you've ever worked with are they worth it? Oh, yeah, of course, they're worth it Okay. Well, what if we only hired the very best like, oh, yeah. Yeah, I guess it would make it work then like, all right Asshole, I guess that's what we're gonna do. We're gonna go higher and so it's like And why do you always like why is it always support like so i'm so sorry like support is so hard And so important you are front lines. It's the front lines with a customer Like what is more and like you have got a it's highly technical. It is by the way, like under fire You've got like always yeah, we're calling you because something is wrong by the way overwhelmed Overwhelmed and multitasked multitasked The ability to have the empathy the ability to have the ability to go technically deep and then To have someone for whom like no, that's my calling. That's what I want to do. I because I mean there is an upside to it It's like the gratification you get is is as a high high right when you feel like oh like that is really and what if you attract people that are drawn to that and it's like we have got The best support people you can find and I love our and and our support folks have been like it has been such a relief And we had you know One of our folks who joined us relatively early was like, you know what? I've been told my entire career that I needed to be I need to go into quote software engineering to advance my career My heart was always in support And I left support I went into software engineering, but god, I would love to be back in support because that's where my heart is and I can do it here and you look at what They've been able to do here because like there is when you do that like no one has to feel Like I am doing wrong by my career by supporting a customer No one but conversely No one also needs to feel like well I need to defend the throne room and I better not let this software this support engineer contribute back to the source base Because what would that mean that we'd have to like change their pay grade. So as a result, like we have our support engineers Very much contributing to the thing we're building and it's like and then you expand that to not just to support but you you expand that to these other roles the operations roles that the QA roles roles that like people Sadly, like look down upon in fact QA is really challenging we've got an open QA role right now that we're not calling QA because QA has been so like just Absolutely looked down upon that. We can't even call it QA even though it's so we call it product assurance maybe we should if you're listening to this and you Yeah, PA we do if you're listening to this and that and that is your calling like you should be looking to Oxide because we are that that's what we're um, and it's been a real it's Watching folks come in with that kind of versatility And be able to do the kind of extraordinary things. I mean the sense I mean, this is not surprising It's just also not unrelated to to the compensation bluntly. There's a very strong sense of teamwork and because we have disconnected compensation from because the reality is everyone loves the idea of like connecting compensation to individual performance because like it feels like Of course you would like you want like, you know but the problem is that just leads you down to a primrose path where Whenever anyone does anything they think to themselves. Does this advance my Focal package or not. Is this something that I use my promo package or not? And great folks will not think about that too much and they will do the right thing even when the company is not rewarding the right thing and we ask people when are they most unhappy and why and almost invariably it's when they are doing the right thing and management is discouraging it and To be in an environment where it's like no, we're gonna separate all that and now Allow people to do the right thing all of the time So much more of the right thing just happens now, of course You gotta hire carefully and that's what we do, but we we hire people that have that disposition But man you build a whole company that way And it's extraordinary it really you know, as I tell people it's like it's lightning in a bottle Don't you dare take this for granted?

It's almost like all politics go away really like a lot of the politics get removed that could be there

They're just pointless the politics are like, you know

You know, I I had one guy it doesn't get you anywhere you don't gain anything different because you can't politics Uh, it's the scenario because you just can't it's not a lever you can pull

It's not a lever you can pull and you know, I had one guy, uh coming from google who's like and I think and I I you know, I I think this is one of the real unfortunate things about companies like google amazon others that that take people who have an An intrinsic excitement for the technology And they break them a little bit and get them to like no no what you should actually care about is that that? marginal 10 15 20 percent Of your compensation and you should distort your life and make yourself unhappy for you You should just like be thinking about that for everything you go do and as as he said like I didn't realize how much Of my brain was dedicated to thinking about compensation until I didn't have to think about it anymore And I can just think about doing the right thing And that's really really really empowering Um, and it's been it's been extraordinary. So yeah, I wrote an update on it about about what you know, how it's going Uh and talking about the support engineering example, literally the top hacker news company. I could not believe this So i'm like in the blog entry I am effectively saying, you know, how could anyone why do we single out support people this way? And kind of like shaming people who do that top hacker news comment. It's like interesting blog entry, but i'm sorry No support person is worth over 200k a year and you're just like you kidding me uh the uh and and Fortunately one of the the respondents to that new one of our support engineers and it's like actually That's for an engineer. I've ever worked with that works at oxide And hey, uh, will you're worth every penny with a panda?

Don't listen to these guys well not listening to the hacker news commenters is an age-old tradition that i've been following for a long time I'm Believing everything you're saying and i'm buying it Super buying it. I'm believing in buying might become I might at that being said I might be the guy that says does it scale and I recognizing that it's continued to for up to 70. Yeah. Um You fair question again How many people work at dell how many people work at dell? Because I mean you're gonna get if you guys cross the chasm like you're gonna be how many people have to work at dell I don't know. This is a different question

No, it's a different question because they you know, and I had I I did I had an investor who turned me at one point is like You know Because they kind of forget that we've done this our investors like they do I mean, it's not something they really think about they know that our team is very good They know we don't have attrition problems they know and also if they looked at one point early on we're doing this one of our investors like, you know, we did the math and like You the what you're paying people is like dead on The median like salary per employee that we have in our portfolio company So it's like you you guys are not like off the mark one way or the other so it's fine Like just like doing it differently like fine knock yourselves out So the vcs like kind of don't care but what one of these investors turned to me is like, oh because we in particular One of our investors was like, uh was talking to steve and it's like, you know, steve you've really done a terrific job and like you You basically you deserve a raise and steve's like that's that's great news. That means we're going to give the whole company a raise It's like oh right this oh, right you people you people in this again You people and but we did right we did the whole company race and uh, and it was great But this other investor turned to me is like, okay, you realize like you won't be able to do this At 600 people I'm like, you know I don't know the whoever be 600 people. I don't know that I don't know that you like Really? You can't build a billion dollar billion dollar company with lessons I mean like nobody has ever done even what we have done. Nobody has even been at this at this relatively small scale so like i'm just like not I The the right answer is we don't know Yeah, and there are

Will things change maybe I don't know how many support people you have like per Rack or per customer or some sort of metric that you could take and then multiply to say like well at some point Because I looked it up del i'm Fully admitting that they're probably overly bloated etc. They got a hundred thousand people working there. So 600 Seems small at scale. Maybe it's not but just like that's not scaling up oxide very much from here. That's a 10x basically

Totally 70. Yeah. Yeah, totally and so I think that the like a fair question. I also think that like how many support people would del have if they Thoughtfully engineer their products made sure that every I mean the number of people that del dedicates to telling customers That you're the only ones problem. I've dealt with del support. Yeah, sure. Yeah, I have to and it's like the The You don't need very many people at at a company To support a prime. It's the old maytag the maytag repairman, right? I'm among friends on this one, right? You are you are you guys with me on this? I know maytag, but i'm not sure Okay, so maytag repairman was an ad from the 80s and the maytag repairman had nothing to do and you have nothing to do Because maytag maytags work. This is when washing machines used to work So, you know those who have a modern appliance know that this is not true

But it used to be to say they don't work anymore. They don't work anymore

Um, because it's a terrible economic model. I think that the uh, or that's what companies convince themselves of We want to build something that works and the way you build something that works is when it doesn't work You jump on it and you understand it in totality And you fix it So the next customer doesn't have that problem if if every problem is only seen once Because you've got such an aces support team and aces engineering team That they jump on it and they root cause every single thing from the very first failure and they don't need to see a thousand failures ten thousand failures How many support people they need a lot less than del has?

So that's the that's the experiment we're doing right? So how many do you have now?

four or something like that four or five something like that. Yeah. Yeah. Dang. That is a small amount Yeah, and it's and you know, we will continue to hire but like we're going to continue to hire

Extraordinary folks, you know sure and and that's the part that I say how far does that go? You know you you have to be incredibly vigilant in your hiring which right now you are and a certain point you might have the demand for hiring and you might actually be like We compromised a few times and we're getting out of the mediocre people, you know, nope

Nope, not gonna do it. All right, not gonna do it. Not gonna do it You're gonna that is when and this is where you and and again not to god It's like not to praise paul gramm a second time, but this is where the two times pr two times. I know 100 founder mode 100 and this is where founder mode Is actually extremely helpful Because if you look at those companies, why does that sa exist because brian chesky? Woke up and suddenly there were a bunch of people at his company. He didn't recognize the need and hire And the failure mode is always the same The failure mode is that they they lose control of their hiring because they don't have good processes to begin with The processes suck because they don't take it seriously They they know it's like oh, we want to have a great team But no one actually understands what that hiring process looks like. They don't actually Admittedly, I have I've had some advantages of making some grievous mistakes in my past that for that that forces have a very good hiring process the not an oxide but the uh, they they they lose control of hiring They hire I mean, I don't want to say middle management is the root of all evil, but you know it's you know, maybe a little too reductive, but The problem is That middle management grades their career on the number of reports in their organization It's like if you hire software engineers based on the number of code lines of code that they write if that's how they value themselves Like you're going to get a lot of bad code and you're going to get a lot of it If you hire management that grades their career based on the number of reports in that organization guess who needs more recs That manager you just hired really we can't do it with fewer people. No, we can't I need more people Okay, you're trying to advance your own career. I get it the and the and this metastasizes And you wake up and you have too many people and they all do it And so I turn to this investor. I'm like, you know what? I don't know if we're ever going to get 600 people And you know what we are also the only company in your portfolio that has not over hired he's like That is true. Actually I'm, like you don't have to say actually and you agree with me by the way Actually, but the um, and we've not over hired and we are not going to over hire yes, that's going to mean that it is painful and requires vigilance and but we've got a we the very writing intensive hiring process we believe it can scale and Uh, we are not gonna we are not gonna tell you ultimately like every hire is ultimately that decision is ultimately made by steve And yes, it's informed by everyone else. But like he bears responsibility for and and and that's not going to change And that's just called founder mode

That's what it's called, huh

That's what it's called. It's i'm always reminded of the scene from pulp fiction. I want a wallet that says founder mode on it

Oh, yeah, man That's a good one. That's a much better reference than silicon valley. So bite your tongue

Imagine you're ipo-ing. We we need okay, we need a we need a new season of silicon valley directed by quinn tarantino That's what we actually okay. I mean Now you're on board. How great would that be? Oh my goodness like kill bill As as a startup, you know what I mean? Like this you know what you mean umathermin entrepreneur. I just feel like

I where can I put my money to make absolutely absolutely i'll bankroll that thing. I don't have very much but I can borrow

Exactly. Yeah, I got tons of money. I got tons of money

Yeah, who needs money that actually makes me think about you know money management with 100 million in your bank account. Like it's really It's real like that's real money. You could just buy government bills and you know, oh, yeah, you know dollars a year Like how do you have money managers or how do you what is that?

LinkedIn now Reading my linkedin I mean the number of linkedin connections I have had has just gone non-linear because of course you I mean You advertise that you've done this raise and right many many people are offering manage that money But they would love to manage that money for me. Absolutely. Absolutely. So I just gave it to the first person

So how do you?

Oh, you know that there's I mean there's an issue like how do you manage it? Where do you bank? You know, we've got a silicon valley bank. Is that the one we were at svb? um, we were at svb when as and and I think you know, Steve will still say the most stressful moment of the company for him was when svb We were concerned that that weekend and we had payroll to make on tuesday um had a a 453 or whatever it was thousand dollar payroll that check that we needed to go out and um, you know, this is where you really really really know who your investors are because the The ones are just like i'll write a personal check Um and you you do you have investors like i'll write a personal check you're like great i'm gonna need that You're like don't you have anyone else? Sorry, that was like a rhetorical flourish and then you get that weather which is like i'll write it I'll write a personal check. I'll write it now don't cash it if you if if you don't need it And we did have investors who did that. Um, that's pretty cool um which and so I mean where you bank is a huge issue and like then that becomes a cash issue because You want a real banking relationship because you got all this, you know you want to have po-based financing and ar-based financing and like you that gives so Some of that you offer up as kind of a carrot to who is going to really own this banking relationship Like okay you we're going to bank with you. You're going to get this large amount of money but then in return we are going to get some services from you whether it's venture debt whether it's The arpo po-based financing what have you so there's there's a whole like science to all that

Yeah, even credit lines too. I mean you don't need the cash I mean, that's right, but you have to have some credit lines because you can't spend your cash You got to spend it differently. That's right. Tell about how you spend your cash. Well perceive cash, you know the bill That you're creating for yourself. It gets uh, you have a cfo or you just manage that yourself or what? How do you do it?

Uh, yeah, I mean we've got some we we hired someone that you know To to help on that and to doing a great job and did the same thing data process for someone in finance, right? same thing same Same compensation same process same materials process same Did it all and uh got someone terrific there it's got Coming. Yeah, exactly coming from lenovo having had done a lot of this stuff and has been You know, I think uh, definitely as we've we've given todd plenty to do at oxide

So speaking of big money, there's been lots of big money going into data centers proposed and otherwise I think apple just Said another 100 billion in the states. I'm not sure what that's going to actually be But they're going to build something somewhere kentucky. I think I think their glass is going to come from kentucky obviously, that's not a data center, but Manufacturing state side you have projects. Is it stargate? What's the open ai one star something? You have xai saying they're going to put out 50 million gpu's in the next five years That could just be talk, but they're certainly going to be deploying lots of things Does oxide have opportunity in this new gpu based You know, yes heavy model training and inference world that's like blowing up right now

Do you guys have a role in that at all? Yeah, so I mean I think um for sure Uh something to know about that world Is it's really easy to focus on gpu's And they're important. There are a bunch of gpu's we obviously don't we don't have We do not have an accelerator based sled. Uh, we will at some point for sure something We've definitely got our eye on um when we do that. It almost certainly will not be focused on those training workloads We focus on inference on and then we can kind of talk about that. So i'll talk about it in terms of inference um But I would say that one thing that uh, people should be aware of is that there is a lot of general purpose compute Involved in what people view as an ai workload So I mean i've been i'm sure as you've been mesmerized by watching these things show their steps And the number of times like if you give Chat gpt or claud an image to do some like I want to recognize some things in this image. It will write a python program You know, I mean you can watch it like write python programs run those python programs get the results of that It will obviously search the web. It will it will do all sorts of things Like yeah, that didn't happen on gpu's that's happening on cpus

Standard servers and apis, etc, etc

Yeah, so it's like and also that then like need to be containerized right need to be like you you especially if you're gonna have something where like i'm running general purpose compute At the behest of a user of this thing is that that's the internet and you know We had simon willison on our on on the podcast on our predictions podcast, which is great And he was talking about claud compute. The first thing he had claud compute do is download a uefi vulnerability rootkit And it's like, okay i'll go execute this thing and you're just like you know, so the That is uh, there's a lot of general purpose compute out there um, and I think that one of the and I think with the rise of test time compute and you know, You you add the way these kind of models are going there is more general purpose compute not less. Um, so yeah, there's the there's Uh, you know, we kind of assume that like oh if we don't have a gpu like there's not like a place for us That's interesting and you know, it's always nice when when customers tell you you're wrong Um, and you know, we had our our first customer god bless them idaho national labs Um idaho national labs had to kick our door down because we're like you're a super computing facility We're not making accelerated compute. We're not taking your call and they're like, can we please explain to you? Why we're interested in oxide and wait, but it finally seems like i'm just gonna take this call These guys won't leave us alone. I'm like, it's it's a waste of time, but fine And he gets up they're like, okay, can we talk for a second because yes, we have a super computer We also have a bunch of del vmware that does a bunch of stuff that we need. That's not the super computer And can we don't you guys replace the del and vmware? It seems like i'm so sorry. I'm so sorry We didn't take your call. Yes, that's what we do. That's what we do. I'm so sorry I'm, so sorry and so there is that analog is is we're we are I am learning that I I need to not judge companies by what I my perception of what they need is Because uh, I have been uh, disabused of that notion more than once

Well when you're running like you were at the time you needed to be focused and so every Customer interaction that was not your core audience or even close to it was a waste of your time Because you were worried about not being able to even be generational. That's right to be able to succeed So you had to have that that position and now that you Don't then you don't probably i'm curious how All this flavors into sales. Are you in sales mode? What mode are you in now?

Uh, yeah, we're we're down. Oh, yeah for sure. Yeah, we've got all on sales sales as much as possible. Yep Yeah, and we've got and again, you know, we're these earliest customers are all No one, you know, everyone has a rack or a small number of racks But with the idea of like this thing works i'm gonna go big with this So and they this has all been true for a couple of years now So it's like we've got no we're now kind of at that go big moment for a couple of these different customers Which is exciting so but we are we are in sales mode, but like we're really focused on customers that really need what we offer which is you know, not even like A customer that's gonna only gonna buy a rack or two like yes We'll get to you in a while when we truly are We truly have crossed the chasm but we it's it's the customers that are like no No, I want to talk to you about five ten twenty thirty forty fifty that those are the ones that are that um Our customers that are that when we're in we're blessed to have so exciting. How big is your sales team now? You've got something like four or five people. Yeah, exactly small Yeah small yeah, that's tiny and and you know, we've got this very writing intensive process and Is this the right hiring process for sales kind of a question I had Steve felt adamant like no, this is absolutely the right hiring process for sales and it It's been really interesting because you hire because there's again It's the way people people feel with support like you can't possibly do the support You're like you can't possibly expect sales people to write a sentence that is like they're they're animals and beasts I mean like honestly people like No, this is an animal like, you know rips apart customers it's like is it really an animal though? Really? I mean what and what we have actually found is that uh for sure it's different and it's not you know But the people that are attracted to that are really attracted to that. So we've got sales folks that were are terrific and are the ones that you know, the ones that that that can model themselves on Steve right in terms of like part of the Steve's Disposition has always been about how do we not just find new customers but make customers delighted? delight customers find that next use case for Look out for customers be that trusted advisor for customers and we want a sales team that that go-to-market team that represents that and and Uh, we're really blessed with that

How do you have sales people make a salary not so I assume the commission

Yeah, no, actually then there is an asterisk. So Okay, uh the on sales and we do talk about this publicly but on sales. There is a commission component and uh, and it was funny because we When we you know, it was a change to roll out because I mean sales is commission-based, right? And so people are like, oh, well, I want that too. I like why should the engineers get that like, okay Well, their base salary is less So yeah, you can like you also can make less like oh never mind. I don't want that like, okay Yeah, you don't want that in other words like you're taking a risk You are you're gonna make potentially less and potentially more I can tell you everyone at oxide Wants our sales folks to make a ton of money because they know that like if they make a bunch of money

It's because we're selling racks. So what happens if today? One of your sales team just goes out and books like a 50 rack order A can you fulfill that b how long would it take and see how would you go about it? Uh, 50 racks They want right now. They got the money

50 would be smaller than some of the original customers you're talking about. Okay. Well, give me a number that would scare you then well, no, I mean like that number does scare me but like The uh, we we've already had to do this exercise for larger numbers you have yeah All right, so cross that cast. I mean that's scale right? Well, well, I mean, let's ease up when i'm not across that castle

Okay, you're you're out of out over it you're over out over it out over it and

It's exciting um, and it requires I mean, this is where it is like it actually is hardware you're shipping right so it actually this is where You need to go into the supply chain, right? You need to go find those log lean time parts. You need to go and we Lean on uh or leverage partnerships that you've got um real and When you talk about like big numbers like that There's also a challenge of like the numbers get big right? So now you're like, okay well, we've got a lot of approvals that we need to go through internally and there's a bunch of you know, Understandably, like you're gonna actually like this is a big number and You know, like, okay. What well, when can we get it? It's like well, you know It's we need to get the po before we can you know, but we we how do we kind of kick stuff off? without having a po in hand because like you don't and this is you know, Very mindful of we were very mindful of history in everything we do but the history of the osborne computer company right, uh famously osborne went Belly up when it actually had product market fit now there's a bunch and there's a great book great Is it maybe in air quotes but a book called hyper growth out of print? um where adam osborne, uh gave his version of events but Operation they lost it on operations is kind of the the tldr is like they had a product that people wanted And they died because they screwed up the operations of it and they ended up with too much inventory of the wrong stuff at the wrong Time and they just went insolvent And so like that can definitely happen. So when you have a Customer is talking like hey, I want 50 racks and i'm serious I want 50 racks and this is not just like pillow talk. This is like what does this look like? Give me a quote I need to go like i'm going to go through my approval process Then you need to be like, okay, we got to go light up bus parts racks Rectifiers compute sleds. We need to go figure out exactly what this thing's going to look like We need to figure out where the long lead time parts are. We need to go on the inventory that's cheap You just procure that that's easy um, and then you've got some decisions to make on on you know, People buying at that scale need some skew control, you know What are the I i'm maybe I want different dims or I want you know You've got it and you've got to afford them that there's that that's a back and forth what are the so, you know, it's it there's A whole galactic amount of detail. There's an entire galaxy of detail That is not the building of the thing which already has enough detail, but it is the actual the operations piece of this Is extraordinary complicated and it's why you know when you've it's why our operations team is you know, we've got Our operations team is terrific and talk about like, you know being just as important as anyone else in the company and boy When you go do one of these exercises where it's like it's serious and we're going this is like this is not a drill and you Really appreciate it. Like wow, this is just extraordinary resourcefulness and agility and being able to you know, The probably unsurprisingly we've got a couple of our operations folks have got uh operations experience from the service I got some, you know ex air force folks that you know are used to just like how do we go deal with like very large scale operational issues, um and uh and having to make up a bunch of stuff on the fly in terms of like, okay we can't like your facility your you know, we Your facility in toronto can't do this Um, but there's another facility you've got in malaysia. What does that look like? Oh, then you oh by the way, then you have like the joker in the white house spinning the tariff wheel Can we like this is hard enough by the way without being like there is like, okay, there's a tariff There's not a tariff. No. No, there is a tariff. No. No now we're gonna have a tariff later We're gonna do this for any of that. It's like, okay. This is actually hard enough when everything's staying still Um, but uh, and it's all challenging and so it's a lot of detail, you know You just have to get and you've got to embrace that detail and you've got to go headlong into it And then I think the other thing is that's been important for us Is then be transparent with folks about where we are and where we're not like if we You know if and when we hit a snag we're going to be transparent about what it is And we're not going to present this to you as like hey, this is a problem. We don't know what to do It's like here's the problem. You know, we've had we've hit an issue here This is what we're doing to resolve it Just we're letting you know and you know, that is the way we've operated as a company with that deal of transparency but if you are a Dell hp super micro customer you get these same delays, but it's just like you don't have any transparency about what's going on It's like where's this thing I paid for it's like, oh, you know, I don't know no one will tell me it's like no No, we want to be sure That we are giving people that kind of transparency, but it's difficult and it's detail oriented is the answer

It's gotta be hard to plan that that far ahead. I mean Do you just spend a lot of cash like holding stuff? How do you reserve?

You know, no, you can't do that, right? You you just you just need to order Just in time. Yeah You kind of want to be like at night Making pizza over there. Yeah, exactly making pizza. How many you want? How many you want? I gotta yeah, uh, no and it's like you you want to like hit that balance like you don't want to be made to order and you don't want to hold inventory and so The answer is like the kind of like the answer kind of depends on the part, right? So you've got parts that are With thin supply chains that aren't that expensive like yes stock inventory doesn't matter Um, fortunately the parts that like you would not want to stock as much Are parts that are more commodity, right? So it's like Dims and cpus you don't have to stock those. That's just a lot of money to stock a bunch of those so you need to kind of need and then this is where you also need partners that are gonna really Uh, and it's been you know, it's been fun because we've had a lot of people that have believed in us from the beginning But we've always been like we're weird. We're idiosyncratic And all of a sudden we have these demands show up they're like, oh my god, this is actually like you you you you nut jobs actually might pull this thing off and you actually do need like big numbers of Uh, you know of dims or of discs or or you know of boards or of chassis or what have you so it's actually fun To go Reward folks who have really believed in us for a long time. It's like, okay now we got a big order. Let's go

How many are building right now like what's the can you reveal versions of numbers not the exact number

Um, you know, i'm not gonna review our exact run rate. Um, but uh, Let's just say that we're on this knife edge the entire time of like trying to figure out how to expand our capacity As quickly as we possibly can Uh have people not uh, we want to make sure that we're hitting the expectations for when these things are going to arrive We don't want to have long lead times Um, we want to and you know, especially in the splashing country. So some very long lead times um, so yeah, I would say it's something we are Uh spending a lot of energy on if you go to the the jobs we're hiring for you will notice that there are several in the operations area so this is an area where we are very uh aggressively expanding because it's um, We've got a terrific operations team

What is the lead time like how how do you quantify that to us if I said hey, I want to buy i'm i'm super interested Yeah owned by 50 The yeah, I mean fortunately response to that

Yeah So i'm super interested in one of my 50 is like not exactly the conversation because like that number is so big that like that's not a Like there's the casual How about any four? Yeah, i'll buy four right and then you like, okay so we Start to get like all right We need to get to a po and then we would be you'd be working with our operations team be like Estimating a time if you were to buy those right now. I mean we our goal is to be at like eight to 12 weekly times so We would be and In general, not bad We have been yeah exactly in general. We have been able to move faster than our customers Mostly that is no longer becoming the case as the numbers get bigger and the urgency gets higher that is not going to be the case, but um It has been the case that like no like we're ready to ship it We need an address from you like oh, we still don't know which dc it's going to and you know, or what have you? So it's like we've been able to block on. Uh, but yeah, we we want to be at that kind of eight to 12 week Kind of lead time we we don't want to be longer than that

I know you kind of educated us on like general compute in data centers. Jerry mentioned like starlink not starlink is star something Jerry, what was it called? The one in avoline texas. It's just a star gate. Yeah huge data centers mostly gpu base

But yeah, I mean is it though? Is it that is I mean, do we know what that is? They're telling us

I don't know. I'm just reading the headlines. I'm just reading the headlines

It's like did that that chat gpt make that up is that a hallucination, you know, just have like constant, you know, deliveries to

Abilene texas

Yeah, I mean and so when you get to a certain size That's what it looks like right when it gets to you you start talking about you know

10 rock size just right there. Just look at those beautiful 10 oxides just sitting there Exactly. Uh, there's 50. Oh my gosh 50 right there waiting to get installed

Yeah, and I think that's it begins to look more like okay These things are just like streaming in effectively because you you are buying them as fast as we can make them um, and you know, we got A couple of folks who are on the cusp of doing exactly that we've been super deep in

I suppose money and fulfillment and operations and support Very little on the tech though And i'm really curious like what are the major? Technical feats that you've just accomplished that's enabled this world for you. I know the Integrated stamp like what are some major like things are truly truly like I can die tomorrow because we did this and i'm happy Yes We accomplished the goal. What is that? Yeah, just for the record. I don't want to die tomorrow. So

I want to get that out of there The the things you understand my euphemism, yeah, a hundred percent, um And there are a bunch of things I mean I What we've been able to do It's just sad that sad state of the industry That the bias a a construct that dates back to when I was a child and i'm you know, 51 years old uh being able to boot next 86 without a bias is like man on the moon um, and That was extraordinarily difficult Um, and that was one of those things like you don't pull it off you've got nothing you don't have a product at all Um being able to it's the approach we took to holistic boot is something that the hyperscalers haven't even done Uh the approach that we took to the switch the the programmable switch. Um We and being able to integrate that in with the rack is extraordinary And I can't believe we got it to work and then intel killed the part right intel that we were using intel tafino Intel killed the part. Um, and so we Have had to go to and we had to go find another part Um, and we were really excited about the part we found at the excite labs called the x2 Um, which we're really excited to go build on and then the stuff we've been able to build on that x2 is very exciting That's not what we were shipping today Um is really extraordinary the things we've been able to do With the control plane with this distributed system that was you know We had done several control planes in the past and really wanted to improve on them and Actually seeing that come to fruition being able to do An update and being able to dynamically update this thing because we take a distributed system that we update across an air gap and you know the fact that you that We are and and when we shipped our first product It was important that we could update this thing at all. We had something that we called the the update the the minimum update That that minimum update required the rack to be parked you would stop vms update the software and start the vms again Which is like great that you could update it at all. Obviously not like that's not the cloud experience, right? Um and the the ability to build the true distributed system To allow that thing To be updated truly dynamically And to watch that unfold over. I mean that that is a that was a long long long software project and Required, uh, just extraordinary work from a bunch of people and and and and Great, uh, and so watching that come to fruition is amazing what we've been able to go do On the service processor and getting rid of the traditional bmc We've been able to go do with the root of trust having a true root of trust being able to attest All the way up the stack having the root of trust truly attest the sp having the sp attest What runs on the host cpu? Pulling that together into a trust quorum where you have I mean well what we're pulling off is really extraordinary where you get this group of sleds together and they Themselves decide there are enough of us to share a secret so in other words if you just walk off with a sled you don't have anything, you know, the the ability to do this with the with the distributed storage the The it's the ability to stitch all this together and then get the power observability that we had always There's so many things that I had always wanted And I didn't understand Why I didn't have them. Um And now I understand why I didn't have them because we it's really hard It turns out a lot of the stuff is really hard but to be able, you know The vision for oxide dates back so long it dates back, you know For aspects of it over 20 years and the and it's not just you know, it's a vision for a lot of people have had and Watching that come to fruition in so many different dimensions Is extraordinarily satisfying in terms of like the thing that like truly fills me with pride This is going to sound corny, but it's it's hand on heart true It's not the technical artifacts. I'm proud of the technical artifacts for sure The thing that I am like Tears in the eyes proud of is the team that built it And you know when you walk into oxide there is a panel from one of the first oxide machines Signed by everybody at oxide and that's the first thing that you see when you walk in and That to me is the most important thing that we've built together is this extraordinary group of fearless fearless technologists And who are wanting to actually go kick the dent that we want to kick in the universe together That is what is I think that and as I told people it's like This is lightning in a bottle we If oxide were to stop tomorrow We would all look back on this period of our careers as the apex as this unique time period in our careers and That is the thing that is like unequivocal that we've achieved that can't be taken away now We've got a lot further we want to go we want to go um But that is the thing that I am most proud of is that because when you are when you convince someone and this is why I mean hiring is such a it's amazing to me how frequently this gets outsourced to people because When when you're coming to oxide You are giving to all of us The most precious thing you are giving your finite time on this earth and You're going to give that to us and we are going to give ours to you and that is that is sacred In the words of you know, James Carville has got this Uh in the war room the the documentary that follows James Carville and George Stephanopoulos He's got this phenomenal speech At the end of the election where he talks about how sacred this is And it is so important and you know, the most important kind of sale that I make we make Is convincing someone? To to to cast their lot with us And god that is so amazing and that is the thing that and I am proud of course of all the things that come from that And of all of these technical artifacts and these breakthroughs that we've had And the breakthroughs that we will have we got a bunch of exciting stuff in our future But it is the it is the crew that did it that I am hand on heart most proud of

That's awesome. It's good to be a part of that kind of crew too because I mean Just being able to be that kind of fearless person with A small cadre of people you didn't have to hire thousands thus far to get there. You had to be in the sub 100s even now

To get to that point, which is which is just wild. I would say that also the fearlessness is very complimentary Um, there's so many things that i'm terrified about but then someone else at the hook side will be fearless about it I'm, like, oh, thank god. Hold me. Hold me right now Let me weep on your shoulder. Tell me it's gonna be okay Stronger stronger together. I think I wet my pants

Well, if you're looking for a secretary I can answer phones for 235, yeah, there you go exactly i'd love to be part of the the crew and I probably can just say hello, uh, brian's unavailable right now, but uh Leave me your name and i'll let i'll make sure he calls you back. There you go

Yeah

Well, should we uh close let's close down the friends and let's do the you want to do a plus plus bonus I got some current events. I'd love to get your guys's takes. Oh god. Yeah, let's do it

I got two things on my mind. All right. Oh, I got I I hope you I hope it's one of one of my things

My friends. All right. Bye friends Stay tuned plus plus people for another 20 plus minutes of brian the current events that we discuss Thomas domke stepping down as a github ceo and the downfall of intel. Can it be saved? Brian has lots of opinions on that one subscribe to listen at changelog.com Plus plus that's our membership program where you directly support our work make the ads disappear and get awesome bonuses such as Extended episodes like this one. Oh, and we're also going to publish this bonus as a couple of clips on youtube So if you don't want to throw us any cash But you do want to know what we think about the github and intel news head to youtube.com changelog Thanks again to our partners at fly.io and to our sponsors of this episode code rabbit depot head to code rabbit.ai And depot.dev to check out their wares and tell them changelog sent you we'd appreciate that have yourself a great weekend Share our work with a friend or three whom I dig it and let's talk again real soon