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    745 points rcchen | 29 comments | | HN request time: 1.091s | source | bottom
    1. dalemhurley ◴[] No.44537376[source]
    Cursor (and Garry Tan’s X post) has shown us that the VC money is propping up these companies astounding growth, the only way for them to become profitable is to increase the cost per a request, which means they need to innovate like crazy.

    The moat is paper thin.

    GitHub has open sourced copilot.

    The open source community is working hard on their own projects.

    No doubt Cursor is moving fast to create amazing innovations, but if the competition only focuses on thin wrappers they are not worth the billion dollar valuations.

    I love watching this space as it is moving extremely fast.

    replies(6): >>44537680 #>>44537693 #>>44537910 #>>44537998 #>>44538331 #>>44540883 #
    2. tootie ◴[] No.44537680[source]
    I think the recent Grok release and considering xAI was relatively late to the game shows that the only moat to training giant models is how many GPUs you can buy. ChatGPT was earth-shattering and it took less than two years for multiple credible competitors to match or exceed them. Making these models profitable is proving extremely difficult in the face of so much competition and such unsustainable expectations being set. Google seems to be most likely to sustain themselves through this melee. Them and the Chinese companies.
    3. bmau5 ◴[] No.44537693[source]
    What was Garry's post?
    replies(2): >>44538632 #>>44538734 #
    4. woeirua ◴[] No.44537910[source]
    There is no moat. If you’re a true believer that strong agents are around the corner, then all of these add on companies will be obsolete in a few years. The first company to strong agents can trivially rebuild Cursor or Windsurf.
    replies(1): >>44538414 #
    5. TechDebtDevin ◴[] No.44537998[source]
    Cursor just committed mass consumer fraud at worst, and at best pissed off all their best customers. I feel really sorry for those who invested at a 9bb valuation.
    replies(2): >>44538067 #>>44538127 #
    6. jen729w ◴[] No.44538067[source]
    > I feel really sorry for those who invested at a 9bb valuation.

    Because they didn't do their jobs properly?

    7. aeve890 ◴[] No.44538127[source]
    >Cursor just committed mass consumer fraud at worst, and at best pissed off all their best customers.

    What happened?

    replies(1): >>44538243 #
    8. wadefletch ◴[] No.44538243{3}[source]
    flip-flopping on pricing has led users to feel nickel-and-dimed

    i like cursor fine, but check out the forum/subreddit to see people talking like addicts, pissed their fix is getting more expensive

    i think this aggressive reaction is more pronounced for non-programmers who are making things for the first time. they tasted a new power and they don't want it taken away.

    replies(4): >>44538759 #>>44538874 #>>44539842 #>>44540420 #
    9. parthdesai ◴[] No.44538331[source]
    Gary gives off a grifter vibe to me. Such a shame seeing how YC has fallen
    replies(1): >>44538852 #
    10. herval ◴[] No.44538414[source]
    If you believe AGI is around the corner, doesn’t it mean it’ll replace ALL products?
    replies(5): >>44538510 #>>44539451 #>>44539920 #>>44540096 #>>44541572 #
    11. yieldcrv ◴[] No.44538510{3}[source]
    So grifting for investor cash and revenue right now is the obvious play either way
    12. forrestthewoods ◴[] No.44538632[source]
    I have same question
    13. ec109685 ◴[] No.44538734[source]
    https://x.com/garrytan/status/1941553682736439307

    The thesis is that once you’re paying $200 a month, you’re beholden and won’t pay and compare it with anything else.

    replies(1): >>44539821 #
    14. bn-l ◴[] No.44538759{4}[source]
    No I’m a programmer and I’m better about the rug pull also.
    15. sebmellen ◴[] No.44538852[source]
    He blocked me (a relative nobody) on X for remarking on the number of people I know who’ve made it to YC on completely fraudulent credentials.
    replies(1): >>44540055 #
    16. TechDebtDevin ◴[] No.44538874{4}[source]
    I agree with your take, but I still don't excuse anti consumer practices like that. It annoys me because this is a repeat problem in this space, where these companies don't take into account the market dynamics, or costs of their service. From the start I've been looking at these $20.00 subscriptions, and then my own personal api per token costs and been wondering how they aren't all bankrupt.

    Look no further than founders in the sports betting space, like the fanduel founders. Borrow a bunch of money at huge valuations because of hype and ignore the fact, that despite it being exciting and popular, the margins are like <5%. Fanduel founders sold for 400 something million, walked away with nothing. Its now a multibillion dollar company when the new owners realized the product was marketing, not the vig. These AI companies are shifting towards their "marketing" eras.

    17. kevindamm ◴[] No.44539451{3}[source]
    That would be true if the product was the goal. In my experience,

      marketing > market > product
    
    Even with AGI in hand, there will still be competition between offerings based on externalities, inertia, or battle-testedness, or authority. Maybe super-intelligence would change the calculus of that, but you'd still probably find opportunities beyond just letting your pool of agents vibe code it.
    replies(1): >>44539615 #
    18. herval ◴[] No.44539615{4}[source]
    Sounds like the kind of thing Windsurf & Cursor had as their most valuable asset - mindshare and authority?
    19. romanovcode ◴[] No.44539821{3}[source]
    Until something else comes around for similar price and is much better.

    Good thing for consumers who use AI coding tools is that there is no lock-in like in Photoshop or similar software where you hone your skills for years to use particular tool. Switching from Cursor to any other platform would literally take 10 minutes.

    20. hobofan ◴[] No.44539842{4}[source]
    What surprises me is just how much they've missed the mark.

    I'm not an extreme user of Cursor. It has become an essential part of my workflow, but I also probably on the lower/medium section of users. I know that a lot of my friends were spending $XXX amounts/month on extra usage with them, while I've never gone beyond 50% included premium credits usage.

    After their changes I'm getting hit with throttling multiple times a day, which likely means that the same thing happens to almost every Cursor user. So that means one or more of:

    - They are jacking up the prices, to squeeze out more profit, so it looks good in the VC game

    - They had to jack up the prices, so that they aren't running at a loss anymore (that would be a bad indicator regarding profitability for the whole field)

    - They are really incompetent about simulating/estimating the impact of their pricing decisions, which also isn't a good future indicator for their customers

    replies(1): >>44539893 #
    21. raesene9 ◴[] No.44539893{5}[source]
    My guess is that it's your second scenario there (avoid running at a loss). In the start-up game scale/growth is the most important thing and profits really aren't that important. you want to show to later stage VCs that your idea has traction and there's a large addressable market.

    Whilst profits aren't important you also can't burn all your current capital, so if the burn rate gets too high you have to put up prices, which seems likely to be what Cursor is doing.

    22. pjc50 ◴[] No.44539920{3}[source]
    If you believe AGI is round the corner (I don't), then you face the dilemma of investing in a company that will be the one profitable survivor in a disintegrating world.
    23. atakan_gurkan ◴[] No.44540055{3}[source]
    His reaction seems entirely appropriate. He could ignore you, but then you might keep replying to his posts and potentially spread incorrect but damaging information. He is losing close to zero by blocking you, but preventing a potential big loss. Why did you make that remark, if not to damage YC's reputation? This does not seem like the correct approach, if you wanted to improve their selection process.
    replies(2): >>44540152 #>>44541095 #
    24. charcircuit ◴[] No.44540096{3}[source]
    This would only be true if it was cheap to run and would return results quickly. If AGI only has compute to serve 1 customer per hour then their is an upper bound of market share it can take from other products.
    25. samrus ◴[] No.44540152{4}[source]
    > Why did you make that remark, if not to damage YC's reputation?

    Seems harsh and cultish to assume malice. He didnt say you parents have false credentials

    I would say calling out people and institutions like that is important so as to keep them honest, and if they arent honest and are trying to grift/defraud people then they deserve the reputation loss

    > He is losing close to zero by blocking you, but preventing a potential big loss.

    Thats great for gary, but the rest of the world isnt there waiting to be optimized for his benefit. If people trust YC to incubate good talent, but feel its becoming a hub for grifters, then some accountability is in order. Institutions are beholden to their public stakeholders, even private institutions, because they still have people who are using and supporting them

    26. LunaSea ◴[] No.44540420{4}[source]
    That's where the real test lies for Cursor and programming LLMs.

    Will users feel that a $200 subscription is worth it or not?

    27. BrtByte ◴[] No.44540883[source]
    It feels like we're watching a hype cycle in real time
    28. raincole ◴[] No.44541095{4}[source]
    Well, incorrect or not, now that person has a very strong motivation to talk bad about YC. Smart "reaction."
    29. TrackerFF ◴[] No.44541572{3}[source]
    If AGI is around the corner, I don't believe one single company will "own" that tech. It will be like it is today, where you have multiple models competing.

    And after that, AGI will be open source.

    In the end, ownership of data and compute will be the things that define the victors.