Leaving $1.5B Startup Behind for AI's Next Wave

In this interview, Nikita Shamgunov discusses work associated with Neon and the lessons that emerged while building it. The conversation covers 1 Left 1 5B Start Again, with concrete examples of how the team found a problem, tested a product, responded to setbacks, and chose what to do next. Readers will learn a practical framework for turning insight into execution while staying close to customers, changing evidence, and the tradeoffs involved.

my name is Nikita I'm CEO and founder of neon this is my second company so my previous company uh single store at Peak it was valued at 1.5 billion neon is a database company and a developer platform where do people get databases today they either download them and install them themselves but neon says we're several as postgress we're saying don't worry about servers here's just the URL and the URL is all you need to know to build your application neon is expanding its Mission from being a database as a service to platform as a service so back as a

service I'm building databases all my life so at Microsoft I joined the team called SQL Server so when I joined Microsoft soft person all it's an incredible cheap but it's also a very very old and stable product I joined in 2005 and by the end of 2005 Microsoft released the product SQL Server 2005 the previous release of that product was 2001 during that time there were people that would come to Microsoft work on the product leave Microsoft and never ship software at all at the time I had a you know phenomenal offer from Facebook and then took a Facebook off offer and moved down to the Silicon Valley at Facebook look culture was very different from Microsoft and the speed at which things were happening was absolutely insane a lot of people just committed to the Facebook mission that engagement was a lot higher and once I experienced it I realized that this engagement exists in startups and it does not exist in larger companies naturally I was very susceptible for entrepreneurship and then when my co-founder Eric is like well shouldn't apply to why combinator and we got accepted so my previous company uh single store at Peak it was valued at 1.5 billion you know I spent there 10 years when I took overover single store we probably at a 7 million run rate I took it to North of 20 and then for the first time in my life the amount of operational work reduced temporarily I'm not the most important layer right so you can just remove me from the organization and the organization will probably do just as good and then added this to the craving of learning breath and make the plunge started another database company uh which is neon that's why I left single store and it kind of panned

out you know it doesn't matter how good your technology is if there's no Market fit do people want your stuff the best feedback of course is people are willing to buy this product right but even before that you kind of want to to throw it out there and see that this product is needed by the world and then you put all this energy to makeing that product and making it a high quality product you want to validate this hypothesis how can you do that and how can you do it as earlier in the startup cycle as possible we started to do those things open sources one then we put together a website we were building in the open all the code was available on GitHub and moreover all the code was available on GitHub with a very permissive license and then about about 11 months in our the number of GitHub stars on that product started to go vertical meaning if you like plot them on the line the oldest people staring our repo which means they kind of interest in what we're doing and and that was our first product Market fit signal and then we put the website out we didn't put a password on it and we thought we were going to launch in about two months but between that time and the launch somebody leaked our website ne. on haacker news and there was a lively discussion you can go and find that people going and saying well this is a good idea or this is a bad idea and whatnot you know think about a product and a company like you creating your movie and then your website is a trailer right and that's how you kind of know if a movie is going to be well accepted by the audience or not because the trailer is out and you're starting to collect very early signal about the interest of an audience to that particular product or service I think that Tech is one of the many not that many good choices andte I think is fairly new and that's why a lot of them were available and neon was available as well so we bought that one as an advice for future entrepreneurs don't worry about it until your product hits product Market fit notion waso for for a long time and then now now everybody uses

notion here's Silicon Valley it's littered with technology that nobody wants or needs and that's totally fine because when you start you just don't know and it's good to be honest with yourself when you're changing the plan communicate this to your investors board employees and then to yourself when you look at yourself in the mirror that the plan is now a new plan and that's okay the world is is what the world is and the world changed then in technology the world changes quite often ignoring that change and saying you know we set out to do this and therefore we're going to do that just makes no sense but being formal about the steps that you're taking and the wise behind those plan that I think is a very useful and important thing to do and I kind of strongly recommend everybody who's doing that to be formal or semi-formal and it doesn't mean that you need to like write six-page documents it could be as simple as like 1 2 three kind of like Tesla right I'm going to build a rooster and I'm going to build a Tesla S and then I'm going to build a a mass Market Tesla 3 it could be as simple as this but then the world changes and then introduces for Tesla the opportunity to create full self-driving and that becomes kind of like a huge emphasis for the whole company so not only you need to be formal not only you need to be executing very very fast you need to look around the corners and then understand how the world changes around you to take advantage of those opportunities now how do you take advantage of those opportunities when you have your one 123 plan you architect your team against your one 123 plan and then the world changes and something in this world becomes more important or becomes an opportunity and then because the team you build is the company you build is another thing that V Coosa says you might even not have the capacity to understand how to change the plan and even if you do you might don't have the capacity to evolve the company into that direction and therefore I think you must bring people from that world that you're locking and if the world changing in a particular direction try to get the people who are experts in the direction that the world is heading because if you don't have the right people around you you won't come up with a good

plan the hardest things are about people the other hard things are when things are just not working and when the things are not working you spend an extraordinary amount of energy to make them work and then they work for a period of time and then they stop and they stop because even either you know have a product Market fit or technology is not good or competition is kicking your ass and so you're burning a lot more money to make it work and it takes the highquality team to work through those moments ideally you work through them without losing your cool that's when then the stuff is tested and people lose patience people quit blame each other we had it all you know living through this once uh hopefully had made it a better founder and compared to single story me seems like L smoo sailing there's the length and then there's the growth it only feels long if the growth slows down or stops and then you start looking in the mirror and asking yourself is that what you signed up to do is like is this grind is ever going to stop or it's growing and in this year we grew over six times in revenue and when you look at this it's like w like the scenery really is changing and the stuff that we're doing now is like not the stuff that we were doing in the beginning of the year as long as we're in that state it's forever the fog of War usually clears as the company goes along and right now it's pretty thick with NE you know the company is clearly working there product Market fit our customers love it more and more of them coming every day onto the neon platform we reach into things that we almost didn't think we would even consider in the AI space and in the broader platform space and if back in do a service it's when the growth slows or the world moves on in a different direction or a competitor kicks your ass that's when the music stops playing as long as the music keeps playing I think it's it's just a lot of fun to keep dancing to this music