4 ms·

Relatedly, I think many people overestimate how hard it is to compete with the big players. People think that because they earn billions, they are unbeatable. B

Relatedly, I think many people overestimate how hard it is to compete with the big players. People think that because they earn billions, they are unbeatable. But this is untrue! Scrappy, creative people who just go for it can often beat the big players. As a recent example, look at Cursor AI. Microsoft was in the PERFECT place to come up with Cursor. Microsoft had the most AI knowledge via their own teams and via OpenAI. They have enormous data centers for AI compute. They had the most used code editor (Visual Studio Code). And still Cursor came in and made a better product! Jeff Bezos said "your margin is my opportunity". I think we can say the same for bureaucracies. Whenever there is a bureaucracy, think "your bureaucracy is my opportunity."

deleted 2y ago
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svara 2y ago
Theory of the firm states that the corporation will get as large as coordination costs allow, but the other way to view that is that large corporations need to compensate for their increased coordination costs in some way. Empirically, they can often do that successfully, as evidenced by the fact that large cloud providers are, indeed, large. But you correctly point out that over time this almost guarantees opportunities for firms with lower coordination costs.
OccamsMirror 2y ago
> And still Cursor came in and made a better product! On a long enough timeline Microsoft wins this battle. I don't think you appreciate the inertia of market dominance and a massive existing user base. They can simply copy features and push them to millions of developers overnight. More likely, Cursor either gets acquired or becomes a niche alternative while VSCode maintains its dominance. Competing with established players when you have zero moat is always tough and I don't think Cursor are even close to winning their category yet. Bureaucracies exist in large companies precisely because they've grown successful enough to need them. While they do create inefficiencies, they also enable consistent execution at massive scale - something startups often underestimate until they try to grow beyond their initial niche. It may be slow, but they win by outlasting, outspending or buying you. However if you simply mean that Cursor can carve a niche quick enough to become an attractive acquisition target then I might concede that fact.
- huijzer 2y ago
  > On a long enough timeline Microsoft wins this battle. I don't think you appreciate the inertia of market dominance and a massive existing user base. So Cursor shouldn't even have tried? It is pointless what they have achieved? That's what you're saying? I disagree. Having people who know about your product and have a positive experience with your product can be very sticky. Coca Cola is a famous example. Also look at AWS. Microsoft has many of the benefits you said. Microsoft has scale, many existing relationships with customers, own much of the related software, and many more benefits. Still, AWS has a 31% market share while Azure has only a 20% market share. The gap becomes more narrow each year, but it's still not closed. There is definitely a huge benefit to grabbing market share by having a superior product. Even while you only temporarily have that. You also talk about the economies of scale, but that was my point. Even while Microsoft had all the economies of scale, still Cursor came in and took a large part of the market!
  - HumanOstrich 2y ago
    Did you just speak for the parent commenter and then disagree with yourself?
- hammock 2y ago
  On a long enough timeline, Microsoft buys your company. It's a win-win
  - selcuka 2y ago
    It's a win-win for Microsoft and the developer, but not for the consumers. It's better if someone else buys the company.
    - deleted 2y ago
      [deleted]
- MattSayar 2y ago
  This basically describes Slack vs Teams as a case study. Teams launches, Slack says "good luck with that," MS basically gives Teams away for free and gains market share, then SAP acquires Slack.
skybrian 2y ago
Is Cursor really better? I tried it briefly but bounced off. I’m convinced that AI-assisted search and replace would be quite nice sometimes, but not enough to switch. Then again, I don’t use most features in Cody, either. Basic AI code completion seems good enough for me and the fancier shortcuts don’t stick.
- jkmcf 2y ago
  As an original bouncer, and recent convert, I would emphatically state that Cursor’s AI for coding is much better.
  - jasonjmcghee 2y ago
    I must be holding it wrong. It consistently gives me low quality code / changes. I try it about once a month for a handful of hours. The code somtimes runs, which is a large improvement over recent years, but generally doesn't do what it's supposed to do. And this is using claude 3.5, which works dramatically better for me in a chat session where i give it exactly what i want it to look at. I just haven't found a way to be productive with it yet. I've even tried the usual tricks of forcing it to write comments about what it's attempting to do throughout the code, but even then, fails.
    - gardenhedge 2y ago
      Same, completely overhyped in my experience
    - WesleyJohnson 2y ago
      I have mixed experiences with the "chat" portion of Cursor AI. The "composer" has been much, much better, albeit on greenfield projects. I haven't explored it too much with existing monoliths, but I suspect it might not fair as well. I'm currently using it to build an iOS mobile game, using Swift. I've never coded in Swift, or used SpriteKit, but it's going surprising well. When it does produce invalid code, I just copy the error directly out of xCode into Cursor Composer and 9 times out of 10, it fixes the issue first try.
Flomolok 2y ago
I don't think so. The amount of features something like Google cloud has + experience is not cheap to just build. Plenty of companies try in Germany the schwarz group aka Lidl and the German Telekom too. Also normal companies are not fast. It takes time for them to learn about something new, understanding it and then implementing it before they finally can us it. If Ms tells you they will do it in 1-2 years everyone is fine with that. And GitHub announced GitHub spark. Google has this already.
jimbokun 2y ago
YCombinator was premised on the hypothesis that competing with the big players is easier than you think.
- intelVISA 2y ago
  wisely so, the bar is alarmingly low in most spaces.

deleted 2y ago

[deleted]

svara 2y ago

Theory of the firm states that the corporation will get as large as coordination costs allow, but the other way to view that is that large corporations need to compensate for their increased coordination costs in some way. Empirically, they can often do that successfully, as evidenced by the fact that large cloud providers are, indeed, large. But you correctly point out that over time this almost guarantees opportunities for firms with lower coordination costs.

OccamsMirror 2y ago

> And still Cursor came in and made a better product! On a long enough timeline Microsoft wins this battle. I don't think you appreciate the inertia of market dominance and a massive existing user base. They can simply copy features and push them to millions of developers overnight. More likely, Cursor either gets acquired or becomes a niche alternative while VSCode maintains its dominance. Competing with established players when you have zero moat is always tough and I don't think Cursor are even close to winning their category yet. Bureaucracies exist in large companies precisely because they've grown successful enough to need them. While they do create inefficiencies, they also enable consistent execution at massive scale - something startups often underestimate until they try to grow beyond their initial niche. It may be slow, but they win by outlasting, outspending or buying you. However if you simply mean that Cursor can carve a niche quick enough to become an attractive acquisition target then I might concede that fact.

huijzer 2y ago
> On a long enough timeline Microsoft wins this battle. I don't think you appreciate the inertia of market dominance and a massive existing user base. So Cursor shouldn't even have tried? It is pointless what they have achieved? That's what you're saying? I disagree. Having people who know about your product and have a positive experience with your product can be very sticky. Coca Cola is a famous example. Also look at AWS. Microsoft has many of the benefits you said. Microsoft has scale, many existing relationships with customers, own much of the related software, and many more benefits. Still, AWS has a 31% market share while Azure has only a 20% market share. The gap becomes more narrow each year, but it's still not closed. There is definitely a huge benefit to grabbing market share by having a superior product. Even while you only temporarily have that. You also talk about the economies of scale, but that was my point. Even while Microsoft had all the economies of scale, still Cursor came in and took a large part of the market!
- HumanOstrich 2y ago
  Did you just speak for the parent commenter and then disagree with yourself?
hammock 2y ago
On a long enough timeline, Microsoft buys your company. It's a win-win
- selcuka 2y ago
  It's a win-win for Microsoft and the developer, but not for the consumers. It's better if someone else buys the company.
  - deleted 2y ago
    [deleted]
MattSayar 2y ago
This basically describes Slack vs Teams as a case study. Teams launches, Slack says "good luck with that," MS basically gives Teams away for free and gains market share, then SAP acquires Slack.

skybrian 2y ago

Is Cursor really better? I tried it briefly but bounced off. I’m convinced that AI-assisted search and replace would be quite nice sometimes, but not enough to switch. Then again, I don’t use most features in Cody, either. Basic AI code completion seems good enough for me and the fancier shortcuts don’t stick.

jkmcf 2y ago
As an original bouncer, and recent convert, I would emphatically state that Cursor’s AI for coding is much better.
- jasonjmcghee 2y ago
  I must be holding it wrong. It consistently gives me low quality code / changes. I try it about once a month for a handful of hours. The code somtimes runs, which is a large improvement over recent years, but generally doesn't do what it's supposed to do. And this is using claude 3.5, which works dramatically better for me in a chat session where i give it exactly what i want it to look at. I just haven't found a way to be productive with it yet. I've even tried the usual tricks of forcing it to write comments about what it's attempting to do throughout the code, but even then, fails.
  - gardenhedge 2y ago
    Same, completely overhyped in my experience
  - WesleyJohnson 2y ago
    I have mixed experiences with the "chat" portion of Cursor AI. The "composer" has been much, much better, albeit on greenfield projects. I haven't explored it too much with existing monoliths, but I suspect it might not fair as well. I'm currently using it to build an iOS mobile game, using Swift. I've never coded in Swift, or used SpriteKit, but it's going surprising well. When it does produce invalid code, I just copy the error directly out of xCode into Cursor Composer and 9 times out of 10, it fixes the issue first try.

Flomolok 2y ago

I don't think so. The amount of features something like Google cloud has + experience is not cheap to just build. Plenty of companies try in Germany the schwarz group aka Lidl and the German Telekom too. Also normal companies are not fast. It takes time for them to learn about something new, understanding it and then implementing it before they finally can us it. If Ms tells you they will do it in 1-2 years everyone is fine with that. And GitHub announced GitHub spark. Google has this already.

jimbokun 2y ago

YCombinator was premised on the hypothesis that competing with the big players is easier than you think.

intelVISA 2y ago
wisely so, the bar is alarmingly low in most spaces.