a16z General Partners Martin Casado, Sarah Wang, and Matt Bornstein unpack the story of Cursor: how a small, product-obsessed team entered one of the most competitive markets in technology, took on incumbents with seemingly unbeatable advantages, and repeatedly made decisions that ran against conventional startup wisdom. They revisit the early bet that the interface between humans and AI would matter more than building a coding-specific foundation model, why Cursor built its own product rather than a VS Code plugin, and how the founders' ability to say "no" became one of the company's defining strengths. They also discuss Cursor's rapid evolution from IDE to agent and model platform, and why the team was willing to cannibalize its own products as AI capabilities improved. The conversation gets into what founders can learn from Cursor's approach to competition, hiring, enterprise sales, M&A, and company culture, including why the team remained unfazed by competitors from Microsoft to Anthropic and how its obsessive focus on product ultimately extended into every part of building the company. Timestamps: 00:00 - Intro 00:53 - Back to Early 2024: How a16z First Met Cursor 05:23 - The VS Code Fork vs Plug-In Decision & the Enterprise Bet 09:57 - Vertical Liftoff: Why the B Round Was a No-Brainer 17:03 - The Hardest Round: Claude Code, Competition & the D 23:38 - How You Do Anything Is How You Do Everything: The Hiring Engine 27:24 - Cursor Culture: Craftsmanship, Taste & Twinkle Lights 34:02 - The SpaceX Parallel: Elon-ish Ambition & Impossible Competitors Resources: Explore Cursor Compile: https://cursor.com/compile Follow Martin Casado on X: https://x.com/martin_casado Follow Matt Bornstein on X: https://x.com/BornsteinMatt Follow Sarah Wang on X: https://x.com/sarahdingwang Stay Updated: If you enjoyed this episode, be sure to like, subscribe, and share with your friends! Find a16z on X: https://twitter.com/a16z Find a16z on LinkedIn: https://www.linkedin.com/company/a16z Listen to the a16z Show on Spotify: https://open.spotify.com/show/5bC65RDvs3oxnLyqqvkUYX Listen to the a16z Show on Apple Podcasts: https://podcasts.apple.com/us/podcast/a16z-podcast/id842818711 Follow our host: https://x.com/eriktorenberg Please note that the content here is for informational purposes only; should NOT be taken as legal, business, tax, or investment advice or be used to evaluate any investment or security; and is not directed at any investors or potential investors in any a16z fund. a16z and its affiliates may maintain investments in the companies discussed. For more details please see http://a16z.com/disclosures.