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Sequoia backs Zed

zed.dev

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Re: Sequoia backs Zed

#191

Post by tiffanyh »

With so many new AI editors popping up, it feels like the Zed team is in a tough “lose/lose” spot.

If they stick to their current path—focusing on craftsmanship and letting their world-class talent build the best editor—they risk falling behind giants like Cursor. Cursor seemingly came out of nowhere and is already doing $300–400M annually, rivaling JetBrains (who took 20 years to get there) in just two years. With that kind of momentum, Cursor can now buy their way into a superior product.

On the other hand, if Zed takes more VC money, it likely means doubling down on AI in ways they clearly don’t seem eager to—but at least it would give them a fighting chance.

I really feel for this team. It couldn’t have been an easy decision, and from the few interactions I’ve had, they strike me as incredibly talented, kind, and genuine folks. I truly wish them the best.

Re: Sequoia backs Zed

#192

Post by nicce »

MeetingsBrowser wrote: post #151
airesQ wrote: post #106

Is IntelliJ "bad"? Aren't the reactions here overly negative? This means the company is funded, development will continue, zed will continue to improve. An IntelliJ style license (for example) is an acceptable trade-off from my point-of-view

Not many people are willing to pay ~$300/year for an IDE. And Intellij didn't take any VC funding. So at some point Zed will likely need to pursue monetization more aggressively than IntelliJ does now.

The thing with taking VC funding is that your intention usually is not to steadily grow a sustainable product.

You take the funding so that you can outgrow the competitors and get the market faster. All you need is the small promise of innovation in an area which is somewhat new. At the beginning, the product is good enough and you have money to keep marketing and developing slightly faster than others. This will get you the users.

In the end, is your product at that point truly the best among competitors? It matters less, since you already have the users.

I think Zed didn’t need this one since they had a great product. Many would have been ready to pay at least a little. They could have grown slowly and see what works. With VC money take can go to completely wrong direction with giant steps and they are not noticing that unless it is too late. And then investors want returns.

Re: Sequoia backs Zed

#193

Post by dymk »

MeetingsBrowser wrote: post #151
airesQ wrote: post #106

Is IntelliJ "bad"? Aren't the reactions here overly negative? This means the company is funded, development will continue, zed will continue to improve. An IntelliJ style license (for example) is an acceptable trade-off from my point-of-view

Not many people are willing to pay ~$300/year for an IDE. And Intellij didn't take any VC funding. So at some point Zed will likely need to pursue monetization more aggressively than IntelliJ does now.

Cursor costs $240 per year and loads of people are paying for it

Re: Sequoia backs Zed

#194

Post by csense »

I'm willing to accept this claim:

- You can make money when your product is a text editor.

I am very skeptical of these claims:

- When your product is a text editor, $42 million in capital can be effectively deployed to make meaningful improvements to your product.

- When your product is a text editor, your lifetime inflation-adjusted profit will eventually exceed $42 million.

Sequoia is apparently not so skeptical, and willing to put the money on the table. That must have been a truly extraordinary pitch deck...

Re: Sequoia backs Zed

#195

Post by MeetingsBrowser »

dymk wrote: post #193
MeetingsBrowser wrote: post #151

Earlier quoted context omitted.

Not many people are willing to pay ~$300/year for an IDE. And Intellij didn't take any VC funding. So at some point Zed will likely need to pursue monetization more aggressively than IntelliJ does now.

Cursor costs $240 per year and loads of people are paying for it

I doubt there is much overlap between people happily paying for cursor and people upset Zed took VC funding.

Re: Sequoia backs Zed

#197

Post by dustingetz »

csense wrote: post #194

I'm willing to accept this claim: - You can make money when your product is a text editor. I am very skeptical of these claims: - When your product is a text editor, $42 million in capital can be effectively deployed to make meaningful improvements to your product. - When your product is a text editor, your lifetime inflation-adjusted profit will eventually exceed $42 million. Sequoia is apparently not so skeptical,…

AI text editor

Re: Sequoia backs Zed

#198

Post by [deleted] »

MeetingsBrowser wrote: post #151
airesQ wrote: post #106

Is IntelliJ "bad"? Aren't the reactions here overly negative? This means the company is funded, development will continue, zed will continue to improve. An IntelliJ style license (for example) is an acceptable trade-off from my point-of-view

Not many people are willing to pay ~$300/year for an IDE. And Intellij didn't take any VC funding. So at some point Zed will likely need to pursue monetization more aggressively than IntelliJ does now.

[deleted]

Re: Sequoia backs Zed

#199

Post by ben-schaaf »

toastercat wrote: post #141
dpkirchner wrote: post #113

Earlier quoted context omitted.

It does, or did, use dark patterns when showing upgrade notices -- prompting you to upgrade to a version that you don't own yet, without telling you you don't own it, leaving you with an unlicensed version. I was happy to use 3 but that felt really off.

Yeah, I wasn't happy about that. Nor was I happy about the new 3-year-of-updates license model that ST4 adopted. Although at least to me, Sublime Text 4 feels like a "finished" product.

ST developer here. We aren't happy that happened either, it was a big oversight in the ST4 release that made people like yourself lose trust in us. I'm sorry and will do my best to not have something like that happen again.

> Nor was I happy about the new 3-year-of-updates license model that ST4 adopted.

I'm curious what you don't like about this model? The most common complaint with regards to updates was the long waiting period between major versions, which we've now eliminated, and without changing the perpetual nature of our licenses.

Re: Sequoia backs Zed

#200

Post by 542458 »

csense wrote: post #194

I'm willing to accept this claim: - You can make money when your product is a text editor. I am very skeptical of these claims: - When your product is a text editor, $42 million in capital can be effectively deployed to make meaningful improvements to your product. - When your product is a text editor, your lifetime inflation-adjusted profit will eventually exceed $42 million. Sequoia is apparently not so skeptical,…

Counterpoint, apparently cursor's revenue is in the 300-400 million range. So it's not wildly inconceivable that you'd do 40m profit (although I too am doubtful).
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