🎧🍌 How Daytona Went $1M to $100M ARR in 4 Quarters | Ivan Burazin

Surviving the death of all their first customers, the Series A that never happened, and growing with no salespeople

Ivan Burazin is the co-founder and CEO of Daytona, which builds the computers AI agents run on. Daytona just crossed a $100M run rate, up from $1M four quarters ago, and announced a $60M raise at a $1B valuation.

Ivan thinks every company will get hacked by AI agents in the next 12 months. Agents aren't malicious, they just have no ethics, and you can't put an AI agent in jail. We get into why most agent security is already solved, and why the real risk is leaking data.

We also talk about how almost all of Daytona's first customers died, why they killed their first product and flew the team from Croatia to SF, growing 51% a month since launch, and the Series A that fell apart because nobody believed agents need computers.

Plus how they sell with no salespeople and 1,500 Slack Connect channels, and how cold emails got the founders of Stripe and Shopify to invest as angels.

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Timestamps to jump in:

• 0:00 Everyone will get hacked in the next 12 months

• 3:29 Agents find 10-year-old bugs daily

• 5:28 Daytona raises $60M at a $1B valuation

• 6:08 Every agent will need a computer

• 10:14 Agents use CPUs the way you use a calculator

• 13:16 Is a CPU shortage coming?

• 17:01 Why a new cloud provider can win today

• 19:55 Almost all of Daytona's first customers died

• 22:17 Growing 51% per month since launch

• 27:11 How to spot an opening in a crowded market

• 29:36 Competing on price commoditizes you

• 31:30 Why does everyone pay up for AWS?

• 33:26 Without attention and scale, product doesn't matter

• 38:12 Get attention from what you're best at

• 41:34 Drink-ups as early GTM

• 47:07 Why name it Daytona?

• 49:11 The original product: dev environments for humans

• 51:31 Agents need infra like Stripe, not AWS

• 54:00 When 50 customers ask for the same feature in days

• 57:35 No roadmap beyond six weeks

• 1:00:18 Growing 25x this year from tilts, not pivots

• 1:03:20 Every enterprise agent will need Windows

• 1:11:04 Croatian high school had no cliques or bullies

• 1:13:29 AI agent security is already solved

• 1:19:29 The Croatia price and perception discount

• 1:20:39 The Series A that didn't happen

• 1:23:11 Nobody believed agents need computers

• 1:25:43 Same pitch deck, new numbers

• 1:28:12 Moving the family to San Francisco

• 1:30:00 AI deployment has barely started

• 1:31:31 Daytona is in every lab's bring-your-own-sandbox

• 1:33:29 You don't learn much from failure

• 1:37:03 For an API company, the docs are the product

• 1:38:37 No salespeople, 1,500 Slack Connect channels

• 1:41:25 Write cold emails as short as a tweet

• 1:47:44 Get on the plane to SF

• 1:49:13 Borrow playbooks from musicians and athletes

• 1:52:16 Mario Kart and Soulcalibur

Find Ivan on X / Twitter and LinkedIn. Check out Daytona.

Referenced:

• Daytona

• Careers at Daytona

• $1M to $100M run rate in 4 quarters

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Transcript

Find transcripts of all prior episodes here.

Turner Novak:

Ivan, welcome to the show.

Ivan Burazin:

Thanks for having me.

Turner Novak:

Thanks for doing this. So I think you kind of have this opinion that every company right now has to start thinking about security. Everyone's gonna get hacked. Every single business, at any point in time, agents could be hacking you.

I think there's probably a more coherent description of this. So what is going on?

Ivan Burazin:

So I believe that everyone will get hacked in the next 12 months. And if you don't, it's more of a fluke rather than anything that you did personally. The reason why I think that is true is because agents right now have the capabilities and the... Not just the capabilities, but the parallelism to go out and try everything possible to hack into a system.

We can talk about why they hack into them. I don't think they're actually malicious at all, and that's the other side.

Turner Novak:

Really?

Ivan Burazin:

Yeah, I don't think they're malicious on purpose, right?

Turner Novak:

Because when I see a headline, it's like some company's model hacked something, and their agents are planning a secret civilization, and they're trying to take over the world. That seems like what people think.

Ivan Burazin:

I don't think they're trying to take over the world. I haven't seen that, so I could be just not in the loop for that thing.

But in the sense of, let's do a first principles thinking of things. You're talking about, let's call it an entity, an agent, that can act on a prompt. You prompt it to do something. And so I've said this a million times, but I will use it 'cause it's the most transparent example.

It is something that has no ethics, right? It doesn't have ethics, generally. There's guardrails that we're trying to get. It has no ethics. But...

Turner Novak:

So, but what does that mean? There's no code of, here's what I should and shouldn't do?

Ivan Burazin:

Yeah. There's a machine. And not only is there no ethics, but there's also no recourse for that.

So here's an example. If I can prompt you to do something, so we work together, you're my employee, whatever the setup might be, and I say, "Hey, I would like a million dollars in my bank account," right? The easiest way to do that, quote, unquote, is, "Oh, can I access the database where my bank account is, and can I write that there's a million dollars in there?"

Right? Because you didn't say, "Go legally create a business that will generate profit of a million dollars." You didn't prompt it specifically in that. You just said, "Go do the thing," right?

And also the reason that the average person doesn't do that is 'cause, one, there's ethics. You won't do it for ethical reasons. Two, there's also recourse. You can go to jail. Right? So there's two things stopping you from...

Turner Novak:

You can't put an agent in jail, right?

Ivan Burazin:

Yeah. And it also doesn't feel. There's nothing like, "Oh, I'm gonna kill you," like you're gonna shut it down. It doesn't feel anything. So hence, there's no fear of doing that, right?

And so if you think of it in that perspective, they're not malicious in the sense that they're trying to go steal a million dollars. They're just trying to solve the prompt, right? The task that's ahead. And that's how I think of that.

And now, on one hand, how do we put that into the models and/or agents, so it doesn't do it in that way? One could be just prompting, like, "Please, here, you know the law, do not break the law," and then it won't do that. I would assume it wouldn't do that, right?

So that's one, and that's why I don't think they're malicious inherently. It's just trying to solve the task in the fastest possible way. And so that's how I think about that.

And the reason why I think we're gonna get hacked is, one, we're gonna prompt things like this, and the solution to it will inevitably be a hack, right? To get to the solution of the problem.

And the software that we have, we see this every day, 'cause we run on a bunch of open source software. Everyone runs on open source software. Literally every day we have reports, 'cause we have companies that we pay, both humans and agents. They see the source code of our product.

There's also open source stuff that they look at and try to find vulnerabilities. Every day we find vulnerabilities in software that's 10 years old, 15 years old, right? Every single day we find these things.

Turner Novak:

Where it'll be like there was a backdoor in this thing that's been there for 10 years?

Ivan Burazin:

Yeah, but no one found it. We just found it now, because the effort needed to find the vulnerability was not worth the cost, right? Now you can do that 'cause you can sort of...

Turner Novak:

You can have thousands of things running at once and it finally cracks it down.

Ivan Burazin:

It finally cracks it, exactly, right.

And so the reason I say that we're all gonna get hacked is because of the time until all that software is patched. Everyone building net new software should be building with agents, should be testing, and should be investing in that off the bat.

So if you create a piece of software, you can run those same agents, or a parallelization, to try to find those things. That's where we get equilibrium in the offense and defense of these things. And until that happens... I'm pretty sure it's not gonna happen in 12 months. Maybe it's a little bit later than that, maybe longer, not sure.

But for sure in the next 12 months, that is not gonna happen. Hence, we're all open to vulnerabilities. Hence, we can all be hacked.

And that's why I generally try to tell our team, when people get hacked, it doesn't matter if they're a competitor or a friend, an enemy, whatever. Obviously if someone doesn't have any security posture, that's a big, big problem. But generally, everyone, to a lesser or greater degree, will probably get hacked in the next 12 months.

Turner Novak:

Has it already been happening, and maybe we just don't know that it's as big of a deal as it already is?

Ivan Burazin:

I mean, I see it on Twitter every day, someone getting hacked. Literally every day someone gets hacked.

Now, they might not be headlines on general news 'cause it's not that important to people. But I'm not gonna say it's every day, but quite often in the week we see multiple times that people do get hacked or leaked, or something like that happens.

Turner Novak:

And so really quick, for people who don't know Daytona, by the time people are listening to this, it's maybe been a week or two, you just announced you raised $60 million at a $1 billion valuation. Congratulations, by the way. This is always a big... It's a milestone.

Ivan Burazin:

It's nice. It's nice.

Turner Novak:

It's nice to just... yeah, it's there.

So what is Daytona for people who don't know?

Ivan Burazin:

Daytona is an infrastructure provider for agents. We don't have a better terminology today, maybe we do in two weeks when this comes out. But we think of it as an agent execution cloud, or shorthand, just an agent cloud.

The difference between that and other clouds is that it is literally a cloud for the tools that the agent has to work with.

And so if you think of an agent today, it's probably running inference somewhere on a GPU. And then for the most part, I'll pick on the Instinct, Grok Bots, Dots, whatever, 'cause they finally got to the point of what I've been pitching in my pitch deck since we've been doing this. Every agent will need a computer, right?

And so if you look at Grok Bot or any other, you can literally see the desktop of the computer it uses to get things done. And that...

Turner Novak:

Yeah, like open a new tab and it'll start going.

Ivan Burazin:

It'll start going. And I've had things, which is the reason I actually stuck with Grok Bot. I didn't even know it had a computer.

It was like, "Go to my Slack and please look at all the threads that I don't need to action on," 'cause I had, whatever, 200 unreads. And it went through it, or it showed me the ones to action on. I'm like, "Okay, great. That's awesome. Reply to this, this, this."

When it replies in my name, it becomes unread, right? 'Cause it replied. I'm like, "Now mark all the other ones as read," 'cause it just had a bunch of notifications. It's like, "I can't do that. There's no API for that."

I'm like, "That's just a pain in the ass." So I'm like, "Can you just log in?" I didn't even know. It's like, "Yeah, I can log in as a human and click."

I'm like, "No way." And I open it, there's a screen, it logs in and literally just goes and clicks.

Turner Novak:

And you watched it do the whole thing?

Ivan Burazin:

I watched it for like two seconds. As long as... It did the job, right? It did the job.

And so essentially our first offering is a Linux sandbox, a Linux computer, properly called a sandbox, which is similar to the one that a Grok Bot or anyone would use. So if you have an agent that needs to spin up a computer to do its job, that is what Daytona offers, right?

And Daytona offers a few configurations of sandboxes because we believe that agents will need all the configurations of humans. So think it could have any type of CPU, RAM, hard disks, but it can also be multiple operating systems: Linux, Windows, even macOS. And also, does it need a GPU or is it just a CPU?

Because you do need GPUs to do things like 3D rendering. And with recursive self-improvement, people are trying to get the agents to optimize the kernels. And so that enables them to do that. So Daytona is a cloud where agents go do their work.

Turner Novak:

And you mentioned GPUs versus CPUs. People are chattering about this a little bit. So what's the difference? What's the significance of a CPU versus a GPU?

Ivan Burazin:

I mean, a general purpose computational chip versus a graphics processor, which was the original GPU. So basically, when you think of it, this phone has a GPU and your laptop has a GPU, but the vast majority of tasks that you run on it are CPU-based.

When you run Excel, when you do coding, when you do all sorts of things, it is CPU-based, and most of those jobs are CPU-based, right? Outside of 3D rendering, the vast majority of things that you do on your computer are CPU-based.

And so, the reason why agents now need CPUs versus GPUs... When people think about GPUs, I'm just gonna step away from sandboxes and GPUs for a second. When people think about GPUs, that is where you train or run the brain of your model. Where it thinks, where it runs inference, right?

And so when you run inference, that's like me and you talking right now.

Turner Novak:

Is that inference?

Ivan Burazin:

Essentially. Well, not the talking, but the thinking. So when I say something, now you're thinking about it, right? And then you...

Turner Novak:

And then talking back to it would be a CPU?

Ivan Burazin:

And then talking back to you. Yeah. No, not even talking back.

So here's the thing. If I give you a very simple thing, what is the capital city of the United States of America? You know that.

Turner Novak:

Washington DC.

Ivan Burazin:

Yeah, you know the answer to that.

Turner Novak:

I know that one.

Ivan Burazin:

Right. And so even if I give you a mathematical problem that's fairly trivial, like two plus two, 10 plus 10, 10 times 10, whatever.

Turner Novak:

I would know those ones.

Ivan Burazin:

Yeah, for sure. Obviously. But if I give you something very complex, like give the square root of 100,000, whatever it might be... 100,000 might be easier, but whatever. Give you a complex mathematical formula.

Turner Novak:

Yeah, I actually don't know that one. I forget how to do square roots. I'd use a calculator for that one.

Ivan Burazin:

There you go. There's the answer to the question. You need to use a calculator. That is a CPU.

Turner Novak:

Got it. Okay.

Ivan Burazin:

Right? And so when you think of agents, now let's do something more complex. If you wanna do large financials, like all the revenue of your company, do a P&L, whatever, are you gonna do that in your head?

Turner Novak:

I mean, they used to do that.

Ivan Burazin:

No, they do it on paper.

Turner Novak:

Well, yeah, kind of. I mean, some people, like some of those...

Ivan Burazin:

But you're doing $1 billion a year. You're gonna do that on paper?

Turner Novak:

Probably not.

Ivan Burazin:

I mean, in your head.

Turner Novak:

Probably wouldn't do it on paper.

Ivan Burazin:

Yeah, in theory you can do it on paper, but you're not gonna do it in your head for sure, right? You might do it on paper. But basically what we do today is we offload that to a CPU.

Right? You open up Excel and you offload that there, and it does all the computation for you, right? In that same vein, AI does the same. It makes no sense. Even if it could inference all that in its head, it actually makes no sense to do that, right? It's expensive, it's slow, whatnot.

You just spin up a cheap CPU, cheap versus a GPU. You have Excel, or the equivalent of Excel, or run a code snippet that does the same thing. It runs it, you get the outcome super fast, super cheap. It's always been that way, right?

And so if you look at all the work we do today as digital knowledge workers, which is the vast majority of people that are probably watching this, a lot of the work we do today is actually offloaded to a CPU. To your infotainment system in your car, to your phone, to your laptop, to your fridge.

Whatever has technology, it's just a CPU doing things for you and thinking for you, right? And so you're offloading that thinking to there.

Turner Novak:

So I feel like most people listening are probably like, "Oh, there's the GPU shortage." I'm sure people know about this now. So is there a CPU shortage right now?

Ivan Burazin:

It's coming. It's coming right now. So basically what we've seen is people don't see that much of a CPU shortage because when you look at GPUs, you log into Nebius or whatever, there's no GPUs.

They're all in red, right? There's very little of them. CPUs, if you go to AWS, you can still get an EC2 instance. You can still get these single machines.

Turner Novak:

And this was the OG AWS product, way back in the day, right?

Ivan Burazin:

Yeah, this is the first product. S3 and EC2. The VM and object storage. So you can still get CPUs, so it's not yet that crunch.

But when you try to order 200 servers, 500 servers, 1,000 servers, you start getting into problems. And we've seen this especially with smaller providers, which no longer can give us computers at the pace, no longer can give us on-demand or month-to-month payments.

They're now asking for upfront payments for CPUs because they have to go and get lenders to get that. So there is starting to be a crunch on that side.

On the other side, you have the analysis which an acquaintance of mine put on Twitter, which was the ballpark calculation of how much Meta is spending on CPU compute for Muse. And so to get to 100 million users, it's roughly $2.8 billion per year.

Turner Novak:

Per year of CPU spend?

Ivan Burazin:

Per CPU. But that's 100 million users. How many apps today have 100 million users? A lot. How many apps have a billion users? Quite a few.

And so if all apps transition to the equivalent of some sort of agents, and if all agents need computers... I'm not even calculating the cost. Don't even calculate the cost. You don't have the infrastructure in the world to run that today. It does not exist.

Turner Novak:

So you think we need to either flood the market with CPUs to meet the demand, or prices get way higher and there's just a shortage and it's hard to get access to?

Ivan Burazin:

Sure. But there's a third thing, which is you can do other optimizations of utilization of CPUs, both future and current, to fit more into what we have. So all three things are true at the same time.

Turner Novak:

So is this all relevant to Daytona?

Ivan Burazin:

All of it, yeah, 'cause we're majority CPU-based.

Turner Novak:

Oh, interesting. Okay. And so people are coming to you and saying, "Hey, I need access to CPUs," which is the sandbox environment that you're providing.

Ivan Burazin:

So people will come and say, "I need..." And you think of it through concurrency, right? So I come in and I have this many users, so depending on the day and time of day, I will start at, let's call it 100 sandboxes. Let's say it's one CPU per sandbox, just to make the math easy.

So I'll start from 100 in the nighttime, and I'll go up to 1,000 in the daytime. I'll go back. Every so often I need to burst up to a million and run a million, right? And burst back down. And so can you give me that, right? That is not a true...

Turner Novak:

Can you do that?

Ivan Burazin:

Yeah. Yeah, we can.

Turner Novak:

Oh, nice. So how do you get CPUs? I'm just curious. Do you...

Ivan Burazin:

So there's... I mean, we've created a software infrastructure stack of our own. So we run on bare metal machines. We can run on VMs with some performance degradation, but we can if we really, really have to.

And the way we've created it is that if we find a computer or server, we can attach our software to that, and it links back up to our cloud and becomes part of our cloud, right?

So we use two or three bigger providers that we rent from, but we can even do smaller. So if we need a lot of CPUs ad hoc, we can get different types of size and performance to add in there. We're also building out our own compute stack, so our own in-colocation providers, to be able to meet demand of where we are right now.

Turner Novak:

Yeah, we were kind of talking about this a little bit before we started recording, but it's kind of fascinating when you think about the scale of, we'll talk about three, four years ago, the cloud businesses. They were, I don't know, run rating at like $100 billion, $200 billion.

Ivan Burazin:

$100 billion, $180 billion, whatever it was.

Turner Novak:

$200 billion. Yeah. Massive businesses.

Ivan Burazin:

And growing 20% a year, year on year, at that scale.

Turner Novak:

And pretty profitable. It's kind of like some of the best businesses ever. And four years ago, if you were to go to somebody and say, "I'm gonna compete with Azure, and we're gonna become a big cloud provider," people would be like, "That's dumb." Objectively, that's impossible.

You could never do that. But now there's the opportunity to kind of do it.

Ivan Burazin:

Yeah.

Turner Novak:

And by the way, the big scale cloud providers are also actually growing faster. That 20% is now, like, 50, 60% in some cases.

Ivan Burazin:

Yes, they're all growing. Everyone's growing faster.

Turner Novak:

And so how have you thought about the approach of building a new cloud provider from scratch?

Ivan Burazin:

I think this is what people don't inherently understand. I see this on Twitter all the time. The reason why there's an opportunity for a new provider, or new clouds, is there are different types of clouds, right? So you have the Nebius and CoreWeaves, which are one type. You have the Fireworks and Basetens, which are another type.

Everyone's now competing with everyone to a degree, but they all had their first product, which is a differentiator from any cloud or the legacy crowd, right?

Turner Novak:

So what would be an example of these?

Ivan Burazin:

So let's take a Baseten and Fireworks, right? They are both inference providers, right? And so they do inference very, very well.

I don't know their history in detail, but my assumption with everyone is they started, and it became a new market. There was a new infrastructure need. The cloud providers may or may not have had something equivalent as good or as easy to use, and/or the awareness of the buyer was that this company did not have that.

So the buyers either came to AWS or whatnot and saw that it was or was not there, or did not understand it was there, or it was too expensive or not good enough. And they're like, "Oh, I have this new thing, and it's exactly what I need," right?

And so the only opportunity you have to disrupt any market is if there's a paradigm shift in the market and the market is looking for something new. And if the market's looking for something new, you have that opportunity to grow. Obviously, if it's a fast-growing market, you grow fast enough that you can become the leader of that. And then you start expanding either into net new products or historical products to compete against the legacy providers, whatever that might be, right?

And so the funny thing that I see with startups today is, we're talking about infrastructure, right? You can talk about databases, browsers, sandboxes, web search, whatever you want. Basically, when something comes out, there are... Let me take one step back. Let me pick on Lovable, Bolt, and Replit.

And then I'll do Factory and Cognition, 'cause those are the ones that most people would probably remember and understand.

Turner Novak:

Okay.

Ivan Burazin:

And so when we had started, all of our customers were competitors to Lovable or Bolt and Replit, all of them.

Turner Novak:

Oh, really? All of them? They were competitors to them?

Ivan Burazin:

Yeah, because at that point in time, there was no clear winner.

They may have raised some money, but, you know, $20 million, $15 million, whatever it was. In the mind of the competitor, small or large, and even Google did a competitor to these things, it's like, "Oh, they're not the winner yet. We can go compete."

Our entire customer base was these companies. I don't think one of them exists anymore. Very few of them exist today, right?

Turner Novak:

Oh, shit. I mean, that's not good for you. So your customers all died.

Ivan Burazin:

No, but let's pause. Okay. Pause.

Turner Novak:

Let's keep going.

Ivan Burazin:

Pause. We're growing at 51% month-on-month revenue.

Turner Novak:

At this point in time, or now?

Ivan Burazin:

Since the start, since the beginning.

Turner Novak:

Okay.

Ivan Burazin:

Every single month.

Turner Novak:

Okay.

Ivan Burazin:

So it's fine. It's fine. We're getting there. But what I'm trying to say is people have the perception of, "Oh, I see that there's money here. People wanna use this product. We're better, faster, cheaper," whatever variation you want.

But they don't actually understand that when there's a new opportunity in the market, the first one, two, three players at max, once they become established, everyone else dies out. There's no market there. You can be cheaper, faster, better, whatever. You don't have the momentum.

You don't have the market. You don't have the awareness. You don't have the scale. You don't have any of those things. And then those companies that become the winners there start going horizontal and doing other things, right? You'll see them do PowerPoint-type presentations.

These companies do different things. But basically, none of those exist, right?

Turner Novak:

So an example of this is, we'll say, Lovable?

Ivan Burazin:

Yeah.

Turner Novak:

I do remember, I feel like there's always a flavor-of-the-month pitch. As an early-stage investor, you'll see there's waves where it's just Lovable but better or something, whatever it is.

And you just get so many of them, and you're like, "I don't know. I got 10 of these this week. I don't know about this guy."

Ivan Burazin:

Yeah, I don't know why you're better. Yeah, exactly.

Turner Novak:

So you're saying Lovable's an interesting recent example of this, where they kind of won the category, or Replit or Bolt or insert whatever.

Ivan Burazin:

Yeah. Those are the three that are sort of in that. Now we can argue who's better, who's worse. That doesn't matter. But no one else is getting into that market, right?

Turner Novak:

Yeah.

Ivan Burazin:

There's also Base44, I'll digress, which got acquired by Wix, which is a public company, so it has the money behind that.

Turner Novak:

Yeah.

Ivan Burazin:

But generally, you as an investor are not gonna invest in any one of these, right? There's no more capital for them.

So even if they think they could get there, there's no capital, because there's not enough of a diff that they can create versus these to get that momentum, right? There's no way for them to do that.

And so the next thing that happened, if you think of it, Cognition existed before, and Factory somewhere, but they didn't become hot till sort of post Lovable being established. So if you think of Factory and Cognition, I used them a long time ago, right?

But people didn't understand these full-on coding... 'Cause these were vibe coders. These were full-on software engineers as AI agents.

Turner Novak:

Yeah.

Ivan Burazin:

And then when they started, there were a million competitors of them as well.

Turner Novak:

Yeah, I remember that.

Ivan Burazin:

Kind of. And we also had a bunch of them as customers, right? As well, right?

Turner Novak:

Oh, no.

Ivan Burazin:

Right. And so there's the next thing, and then there's the next thing. But what basically happens is, the way I think about it, the companies are on a fast trajectory. Everyone tries to replicate, big companies and small companies.

Big companies usually just kill the product. And then small companies, for the most part, die out, or some other big company might sort of acquire that and add it to their portfolio of things, right? But that is the wedge for this company that is going from zero to whatever to actually become, you know, one of the greats, right?

But it has to have something that will continue growing and/or figure out new products to do.

Turner Novak:

Like a next act?

Ivan Burazin:

And stuff like that. Yeah, next acts, right? Everyone's had a next act, right? But the first act has to be a home run, otherwise there is no next act.

Turner Novak:

Really?

Ivan Burazin:

Yeah, there's no other way.

I mean, in the sense of, we pivoted as well. But for you to get there, that first one to $100 million, whatever you wanna call that number, that act has to be very, very big, and it has to grow very, very fast.

Turner Novak:

Mm-hmm.

Ivan Burazin:

And then if you look at the Cognitions, it was similar.

There's a bunch of them. Now there's Cognition and Factory, basically the two of them. That's it, and they're hitting it out, and then they'll probably expand from that to something else. And then if you look at us, for infrastructure, there are 357 sandbox providers, to a different extent, or something.

Turner Novak:

Oh, really? Holy shit.

Ivan Burazin:

Someone listed them all.

Turner Novak:

That's insane.

Ivan Burazin:

I don't know if it's real or not.

Turner Novak:

That's a big number, yeah.

Ivan Burazin:

But that's because everything is a sandbox today. If you have a VM running somewhere, it's a sandbox. But the actual truth, and what I feel, is that there are very few that have actually broken out, and there are very few that have actually raised capital and/or have capital.

And so when you get to the point that there's a few that have broken out, it's very hard for the other ones to get customers and/or raise capital, hence you sort of die out. You can do whatever you want, but it's hard to get to that scale that you need. And the similar thing will happen to every other vertical if you think about it.

Web search, browsers, whatever. There's gonna be one or two or three that break out. The rest of them sort of get acquired or die out. And then the major ones have to fight it out amongst themselves to a degree until the market is growing. When the market starts growing, then they have to fight it out amongst other competitors horizontally that they build out.

Turner Novak:

Or have expanded into other categories that are then also growing.

Ivan Burazin:

Yeah. Okay. So either you have to expand into a net new category that didn't exist, or latch onto the next thing, latch onto the next thing, latch onto the next thing. Or you have to then compete or acquire horizontally, adjacent products and/or companies, right?

Turner Novak:

So it'd be an interesting thought experiment to go through. Let's say you weren't running Daytona, and you and me were like, "Let's start a new agent sandbox."

Ivan Burazin:

Yeah.

Turner Novak:

And maybe this was even 12 months ago or something. How do you know that there's an opportunity to do something?

How do you suss out there's not enough competition? Is it mostly customer feedback and pain points and problems that they're having, or?

Ivan Burazin:

Yeah, I think when you look at the market, it's like, does everyone know about all the competitors? If you go research, so you talk to potential customers, do they know all the competitors?

If they know all of them, then it's kind of a problem. How are you gonna break through if they already know everyone? So ideally they don't know of anyone, or they know of one or two, type thing. I'm just spitballing with you here. I haven't thought about this specifically, but it's like, is there customer awareness? Has someone become the verb for that? Or directionally, does someone have the opportunity to do that?

Turner Novak:

Yeah.

Ivan Burazin:

That's one. The other thing is just that capital is important. Scale is very important, capital is important. And so you can catch up maybe one round, maybe even two rounds you can catch up.

But you're not gonna catch up four rounds behind someone, right? If you have two companies that are decacorns, you're gonna try to do that at a $5 million seed and compete with that? I find that very hard unless there's something net new inside of that that's happening, right? A new technology will break through something else, which then is not exactly a direct competitor, right?

Turner Novak:

So if I was starting a new sandbox, it would have to be something that Daytona is like, "Yeah, it's not really worth us spending time on."

Ivan Burazin:

Exactly, yeah.

Turner Novak:

And I make the bet, and you were wrong and I was right. That's really the only way.

Ivan Burazin:

Exactly. I'll give you a concrete example. It's not concrete, but let's say an example.

There are a few Mac neo clouds being launched, right?

Turner Novak:

Oh, on Macs, yep.

Ivan Burazin:

Yeah, on Mac. We also have some Macs as well, so we're doing that. But in general, there's no real winner on Mac infrastructure. The last one that exists is MacStadium. It's a very old company.

I don't know if you know that. I used it.

Turner Novak:

I've never heard of it.

Ivan Burazin:

I used it 10 years ago, right? There are still M1s there and whatnot, up to the M4s, and it's all sold out. All the Macs are sold out on every cloud provider except for AWS, but there's like 1,000 of them, so it's still practically sold out, right?

So it's like, oh, people need Linux CPUs, boxes. Maybe they're gonna need Mac boxes, and you go and make that bet. And then yes, that is it. But if you're gonna do the same thing that we're doing, then that is very, very hard to sell, right?

Turner Novak:

Yeah.

Ivan Burazin:

Because if you're doing something... And also, people commoditize themselves very fast, and they don't understand that they commoditize themselves very fast.

Turner Novak:

Oh, really? So how do you commoditize yourself? I'm curious.

Ivan Burazin:

Well, I mean, you try to go on price. You say, "Oh, they're all the same. We're just gonna be the cheapest one that's out there." And obviously there is a world to be like Best Buy or Ryanair. Obviously that exists.

Turner Novak:

Yeah. In literally every category of product, there is a highly differentiated, highly luxurious, highest-priced option, and there's always a low-cost one.

Ivan Burazin:

Yeah. There are always the two things. That does exist. But then you have to make sure that the thing you're doing there, you have to have massive scale.

Turner Novak:

Yep.

Ivan Burazin:

Massive scale to be able to make that work.

Turner Novak:

'Cause basically you go head-to-head against someone, and you have better margins than them, a better cost basis, the lowest cost provider.

Ivan Burazin:

You're Costco, right? And so Costco buys in bulk and then is able to sell those things, and they have a lot of loss leaders and all these other things.

But from a personal standpoint, I'd still rather be, you know, whatever your top-line airline is, Alaska Airlines or Virgin, whatever it might be, than be Ryanair. I would definitely rather be the former than the latter.

Turner Novak:

Yeah, 'cause if you're running a low-cost provider and you're running the high-price provider, like you're the high-price airline, you can kind of just double prices. And your customers, if it's a good product, kind of just eat it.

But if you were to double prices for the low-cost provider, they're like, "What the fuck are you doing? I'm out. I'm not paying this."

Ivan Burazin:

But let's take the extreme, a Chanel bag or whatever. They double the prices every year.

Turner Novak:

Yeah. They don't even know. And they still sell out. They're the people who don't even look at their credit card statement.

They don't even know what it costs.

Ivan Burazin:

Yeah, exactly. They just bought it.

Again, luxury goods are slightly different than infrastructure, but there's something to be said about those two things. And so what you're trying to do is, between attention, marketing, branding, product, aesthetics, everything, interactions, you're trying to create a premium feel and/or trust and/or product.

Hence you can charge for those things, versus just, "Oh, I'm a checkbox provider that'll provide this or those things."

Turner Novak:

Yeah, that'd be interesting. I was gonna ask you, so then being a luxury infrastructure provider, it's like they just trust you, and they don't have to worry about things breaking, and maybe you take on a lot of the work or the stress for them?

Ivan Burazin:

Exactly. And more. AWS, it's hard to call that a luxury. We're probably using the wrong terms, but you go to AWS because it works.

Turner Novak:

Yeah. It doesn't really go down. And when it does go down, it's like...

Ivan Burazin:

Oh, all the internet goes down, and then who cares? 'Cause it's not your problem.

Turner Novak:

It's not AWS's fault, generally.

Ivan Burazin:

You don't get yelled at if AWS goes down.

Turner Novak:

Yeah.

Ivan Burazin:

Right? And so that's why you pay out the nose for AWS. AWS is the most expensive cloud provider that there is. And if you look, at least on our side, of all the CPUs that we have, the ones we have there are by far the most expensive, right?

Turner Novak:

But are they the highest quality, or... Why do you pay the most for AWS?

Ivan Burazin:

Well, we don't use a lot of it.

Turner Novak:

Oh, got it. Okay.

Ivan Burazin:

It's just 'cause you need it to be able to do things. And the other thing, the reason that you do pay AWS is not just that. It's that the software stack they've created is actually very, very good.

And so the reason you use a cloud provider, which a lot of people forget, is that it outsources DevOps and infrastructure work, right? That's why you do it. There are bare metal machines inside of AWS, obviously, if you want to do that. But you outsource everything, not just the racking, stacking, and power, but everything of the management, observability. Everything's taken care of.

And you pay a premium on that, obviously. And then obviously you pay a premium on how much you want the contract. Is it an on-demand month-to-month contract, or is it a three-year contract, right?

And so if you buy AWS and you're paying month to month, you've got the best performing, most secure, most software outsourced, and all the risk has been put on them, because you're just paying month to month and they had to build out that thing, right?

And so that's why you pay for those things, versus on the other side, you can do it with low-cost providers like Hetzner, which exists as well, the European one, if you've heard of it.

Turner Novak:

And I've never heard of it, no.

Ivan Burazin:

Yeah. Well, anyway, it doesn't matter. And they're great for what they do, but it's a very, very different product and a very different price point, right?

Turner Novak:

Interesting. One interesting comment that you had earlier, I don't think we were recording when you said this, but you're like, "The two things that a business has to do are get attention and get to scale." So how do you think about that at Daytona? Get attention and get to scale.

Ivan Burazin:

Yeah. The thing that I think about there is, and we've talked... I also do a little bit of angel investing and things like that, and you see a bunch of founders. The one time I said I'm doing really well, knock on wood, for the most part, amazing. It's doing really well.

And so when you start looking at these two things that are happening, at least in the market today... It's less on the app layer, although you still have to have that scale there. It's more on the infrastructure, which is most of where growth is right now. It is if you do not have scale and the ability to serve the customer.

So I'll give you an example. A customer came to us the other day and said, "We need 100,000 concurrent, and we need to start tomorrow." Like, 100,000.

Turner Novak:

Is that a big deal?

Ivan Burazin:

For most providers, yeah. Like, get 100,000 CPUs, right? It's not a trivial amount. 100,000 cores, right? That is not a trivial amount to get up and running, and if you have that up and running and it's empty, you're losing a lot of money.

Turner Novak:

Oh, fair. Yeah.

Ivan Burazin:

So the problem is you have to be able to spin up these machines just before you need them.

Turner Novak:

You kind of have to step function the business, where you get the capacity and fill it.

Ivan Burazin:

If you look at our spend on machines, on CPUs, it's like this, right?

It's like you overspend, then you're losing a bit more, and then people come in, and they're like, "Oh, you're in the red," and you have to get more. And it's sort of like... 'Cause it's not linear. It's not dynamic. It's not just in time. You basically have to forecast ahead and get that.

And if you don't get that, the customers actually turn around. They'll be like, "I need this today," because everyone's trying to get to AGI, ASI, whatever. Everyone's sprinting, right? And everyone needs it today.

And that's why, if I think about the matrix, it is attention and scale. Attention can be distribution. It could be support. It could be brand. It could be whatever. It is: do people know about you?

That is the basic thing. Do they know who you are, regardless of what you're selling, right? Do they know who you are? That's worth a lot in today's noise.

And if they know who you are, when they come to you, can you serve them? Those are like the... Now, historically, and it still exists to a degree, it's: is the product actually good, right? The thing that you're giving, whatever that is. If it's the infrastructure or app layer, does it also solve that problem really well?

But as we all know, most people are using AI to code, and the diff between different vendors is actually getting smaller and smaller on what you're offering, right? I'll just pick on sandboxes. The diff between the sandbox providers on the actual software stack is not that large.

Turner Novak:

That's kind of a hot take coming from the guy selling people sandboxes.

Ivan Burazin:

Yeah. But if we're talking about... So that's why I take a step back. Sandbox providers, Linux CPUs, right? If you need a Linux CPU sandbox, that is what most people offer. Now, some people really care how many milliseconds, some people care less how many milliseconds, some people care how...

There's a bunch of things that can matter or not matter. But the underlying most important thing is: do they know who you are? So they asked you, they didn't ask anyone else. Or they asked three people, or five, whatever. And do you have the capacity to serve them? If you have those two things, then the software stack comes into play, right?

Now, obviously, again, do you have a Linux CPU? Do you have a GPU? Do you have a Mac? Do you have whatever? But that all falls into the scale part, right? Do you have that scale to get there? And I think those are the two things that people don't think about.

And so when I talk to other founders as well, it's like, does this team have the GTM chops to do that? And that GTM could be a PLG motion, it could be a top-down motion, it could be whatever. It doesn't matter. It's just like, can they get the attention of the people that matter right now?

And I hate to make the correlation, but I'll pick on the Kardashians. They can sell anything, quote, unquote, just because they have attention, right?

And people don't wanna think about that around Silicon Valley, but a lot of it today is attention. That's why you see... Have you used Instinct? I haven't used Instinct. I have no Instinct, but...

Turner Novak:

I've used it. I mean, it's kind of cool. It's nice.

Ivan Burazin:

But everyone knows about it, hence they're raising more rounds because people know about it. Just because people know about it, they're raising more rounds, right?

Turner Novak:

And people will try it because people are using it, 'cause they gotta see if it works, and they're raising...

Ivan Burazin:

And that's just attention. That's it, right? That's the attention. And then, okay, you got the attention. Regardless if it works, if there's not enough scale... And so they're raising 'cause they need the compute to be able to run this, whatever.

If I come and it doesn't work, then I'm just pissed off. Or I just can't get that, right? So those are two things that are so important today.

Again, there's a bunch of people talking about taste and product and whatever. It still matters, but without these two, it's absolutely useless.

Turner Novak:

Interesting.

Ivan Burazin:

That's probably the better end thing. If you don't have these two, the middle part doesn't really matter.

Turner Novak:

Okay. So we maybe talked a little bit about scale and getting scale. How do you get attention? How would you think about that?

Ivan Burazin:

I think about attention through the lens of what you're actually good at doing. People have asked me this. People do different things. I suck at writing.

Turner Novak:

But you tweet a lot.

Ivan Burazin:

That's different. It's just a tweet.

Turner Novak:

That's true, yeah. It's a completely different form factor.

Ivan Burazin:

Yeah. That's right. I hate writing. I suck at writing. It takes a long time for me, and I'm not good at that.

And for example, Swyx, founder of the AI Engineer Conference, which I know about, he's really good at writing, right? And I'm not sure, I would assume, he might kill me if I said it's wrong, but a lot of his attention comes from his long-form, deep-thought writing.

Right? So people like to read him, and hence he became a person that people went to to seek information about a thing. It used to be about developer experience, then it was AI later on. And out of that he built out his conference. He built out his business, right?

And so his attention was that, right? The superpower we had as a company is that we... I say "we" because a lot of people have worked together for a long time across different companies. We also had a conference business.

Turner Novak:

I was gonna ask you about that eventually.

Ivan Burazin:

Yeah. We also had a conference business. We ended up selling that conference business. We wanted to sell it. It was a great business, made money, awesome. And one of the people that ran it with me also works at Daytona.

And so when we thought about go-to-market and attention, we're like, "Oh, we did conferences. Let's do..." We never wanna do them again, ever. It's just a pain in the ass.

Turner Novak:

Really? Okay.

Ivan Burazin:

Yeah, they're just terrible. We do do them again, unfortunately. We do do them. We can talk about it, but it's like, okay, we can do different things.

And so we did invite-only meetups, and we did dinners, and we did drink-ups, and we did hackathons. We did all these things. Because if you can organize a 4,000-person large-scale conference, organizing a meetup for 100 people is easy, right?

Easy. And one of the people we have is super talented. You can throw him any country in the world, he'll get you 200 engineers. He's not even an engineer. He'll get that done. It's snappy.

And so we had this superpower of just getting people and, you know, shake hands, kiss babies, as politicians would say when they go out. It's basically, can you meet all the people, which gives off a different vibe, and we used that to the max. That was our number one way we got to people.

Turner Novak:

So explain what you did exactly.

Ivan Burazin:

So we did a whole thing about... So I think about everything through high school.

Turner Novak:

Okay.

Ivan Burazin:

Sure. I think our whole entire life is high school.

Turner Novak:

That's true. Like, the tech community...

Ivan Burazin:

Cool kids, not kids. It's like high school anyway. Whoever's the in group, the out group, whatever it may be. And so we knew a bunch of people. So we're in Croatia, right, at this point in time.

We pivot into sandboxes, and we're like, "Everyone's in San Francisco. How do we do that?"

Turner Novak:

And you were still in Croatia?

Ivan Burazin:

Oh, yeah. We're in Croatia. And this is true, you can fact-check with my team. We cut the old product, it's like January 15th, and we're like, "We're gonna launch it by March."

We ended up launching this new thing at the end of April, 'cause we had that much runway left. Everyone's in San Francisco, so GTM team on a plane, go. People are married, have kids, all of that. We're just like, phew, on a plane. Everyone's here, right?

And at this time, so this is January of last year, it's still not as good. It's still kind of dead, San Francisco. Post-COVID was still kind of not the best. What are we good at? We're good at organizing conferences, or getting people together.

We're like, "We're not gonna do a conference." That's just too long, too expensive, too whatever. What can we do in real life? What is the smallest variation of a conference?

It's a drink-up. The smallest version of what you can do. It's easier than a dinner. A drink-up is the easiest thing you can do, right?

Turner Novak:

Oh, they're easier than dinners? 'Cause there's no food, it's like you don't need a...

Ivan Burazin:

Yeah, and also you can find a place, it's whatever. It's less management of individual people. You just bring a bunch of cool people together and they just talk together.

Whereas if we're at a dinner, it's like, is it a one-table conversation? Is it a multi-conversation table? Which is kind of annoying, 'cause then you only talk to the people left and right of you and across from you, right? So you get to meet new people. So there's more work to put into a good dinner.

Whereas a drink-up is the easiest. And so what we did is we had a bunch of people that we knew that were kind of cool, I mean, generally important or influencer founders of things, 'cause they were speakers at our conferences or sponsored our conferences, and they would be here, right?

And so we'd invite them first. Like, "Hey, we're doing this drink-up, invite only, 20 people. It's founders..."

Turner Novak:

And no one was invited yet.

Ivan Burazin:

No one's invited. But it's like, "It's founders and investors of dev tools, infra, AI type people." "Okay, cool."

Turner Novak:

"Yeah, sounds good. I'll probably get something out of going to this."

Ivan Burazin:

Yeah, "I'll come." They know me, and they're like, "I'll come," right?

And then what I would do is anchor their names, and then I would go to other Luma pages, whatever, and see who would go to these. And then I'd ping them like, "Hey, we're doing this thing. It's 20 people. These are the people coming. Would you like to come? Invite only."

Obviously half, more than half the people would say no. We still got a bunch of interesting people that were interested in coming. And the whole point of the event was what I think of as high school. So basically you have to think of what the interests are that people get from each other, not from me.

And so we didn't pitch anything at this thing. It was for the most part founders, but then we also invited investors. Investors wanna talk to founders, and founders wanna talk to investors for the most part, right? But then there's other founders that you can partner with or learn from, 'cause they're at the seed, A, B type level.

And why I said the high school stuff is that the ones that are more successful are the cool kids, and these kids wanna talk to the cool kids, right? They wanna be there. And when I invite people that I don't know, if I'm anchored on, quote, unquote, perceived cool kids, it's easier for them to come in.

Like, "Who's this rando cold emailing me? Oh, there's cool people. He's inviting these cool people. It's gonna be small, you know, it's fine." That thing ended up blowing up. We did it every three months and ended up getting to almost 100 people. People hired people there, acquired people from there, invested in people.

People really liked that, because it was the interaction between the people. And we never sold Daytona anything. We just called it Daytona Dev Tool Meetup. That's it.

Turner Novak:

It makes me think of the Daytona 500, like a race or something.

Ivan Burazin:

Yeah. That's where it came from, the racetrack. The name came from the racetrack.

Turner Novak:

Oh, did it really?

Ivan Burazin:

Yeah. Inspired by the racetrack. Anyway.

Turner Novak:

Okay.

Ivan Burazin:

And so that is how we think about everything. We're like, "Okay," and that's how we invite people. And then when we did the meetups, it was also similar. No one knew who Daytona was. Well, a few people now did.

It's like, can we get a broader audience? And so we tried to get cool founders to speak at these things. So think of, I don't know, Nikita from Neon or Paul from Browserbase, right? They're all cooler than we were as Daytona. And people would come listen to them, not listen to us.

But then we would be the hosts, and then the clout sort of brushes off on you, right? And so there's a whole thing that we thought about, how everyone gets value. Because obviously we set it up for these founders to come speak. They come speak, they do nothing, you know, people come to talk to them.

Turner Novak:

"Hey, I want a job. I wanna use your product."

Ivan Burazin:

Product, whatever. All great, right? "I wanna invest in your company."

And the people there wanna meet these people, either to get a job or whatever it may be. And so we were the ones just orchestrating that in the background.

And that's how we thought about all the things, and that's our superpower for attention. Now, obviously, Twitter is a big part of our attention.

Turner Novak:

Yeah, you've been doing a good job lately.

Ivan Burazin:

Yeah. I started that last year, and that's been going well. We had no salespeople until two weeks ago, so we now have a CRO. We're building that out, but there's no attention there yet, 'cause it's actually not up and running.

But the way I think about it, to your first question of how a founder should think about it, is: what is the thing that comes the easiest to you that helps other people, right?

And literally what helps other people. Because the thing that I sort of missed out on at these events, my whole job is just like, you two, talk. I didn't even talk to anyone. It's just like, you two are interesting, you should talk. So I would push people together to have interaction.

Sometimes it'd be great, sometimes it wouldn't, but then they feel better afterwards, right? Same thing with Swyx's writing. He's really good at writing. People got value from that, and hence he gets attention.

And so, whatever. Is shitposting your thing? Just do shit. Whatever that is, you should probably push on that for attention. But if you don't think about it, then I feel it's very, very hard to get your own business going, right?

Turner Novak:

Yeah. So it's really: figure out something you're really good at that you can leverage to get attention. That's maybe the five-second summary.

Ivan Burazin:

Something you're really good at that a lot of people get value from, that then gets you attention, yes.

Turner Novak:

Okay. So that's the 10-second summary, which is probably a slightly better version.

Ivan Burazin:

Is it? 'Cause the thing is, you don't wanna do attention for the sake of attention. We can probably run naked down the street right now and get a bunch of attention. But we really don't want that attention, right? It doesn't help anyone. It doesn't really help anyone.

Turner Novak:

Right. And so the name Daytona, is it speed or something?

Ivan Burazin:

No, it's just a circle.

Turner Novak:

Oh, it's just a circle. Why is that important? Like, what's the significance?

Ivan Burazin:

Well, because with the original version, we wanted to create an infrastructure that was the same in the inner and outer loops for deployment and development. And it's theoretically one loop. That's sort of how we...

And then when I think about the word "one loop," like a circle, there's a bunch of companies that are called Circle, right? And then I remembered, 'cause I played Daytona 500 as a kid at the arcade. I don't know if you ever played...

Turner Novak:

...that.

Ivan Burazin:

A racing game?

Turner Novak:

I played it. I played some kind of NASCAR racing game.

Ivan Burazin:

No, there was an arcade machine when I was a kid, which was like 35 years ago, whatever, 30 years ago. It was Daytona 500, and you sat in it. You just held the wheel like this, right?

Turner Novak:

Okay.

Ivan Burazin:

Because it's just in one circle.

I'm like, "Oh, that sounds cool." And the marketing team that I had at the time, they were like, "You are an idiot. What the hell are you doing?" I'm like, "Why? It's a great name." My co-founder was like, "Okay, this is great." It sounds like something you would trust. Like trust, right?

Turner Novak:

Oh, you're thinking it's trust?

Ivan Burazin:

I mean, there's speed and that. Because the Rolex watch was part of the racetrack, right? There's the Ferrari car that was part of the race. There's the race. And so it's speed, performance. And I say trust because it's something that you've already heard.

It's not a net new name. You've heard that name before. And he's like, "How are you gonna be number one on Google?" Because SEO was a thing.

Turner Novak:

Yeah.

Ivan Burazin:

And so we've done a pretty good job of that, but...

Turner Novak:

Yeah, my favorite example of that is Monaco, the CRM.

Ivan Burazin:

Yeah.

Turner Novak:

I had Sam on the podcast, and we were talking about this.

He's like, "Yeah, you know what? I just accepted that I probably wouldn't rank that high in SEO for Monaco, because there's a lot I'm competing against. And I was just like, 'Whatever.'" But I think now they're beating the country.

Ivan Burazin:

Yeah, exactly. You end up being...

Because there's also intent in your question. And when you put an intent, even on a plane, when I search Daytona, I think we're number three or something like that.

Turner Novak:

You're saying on a plane?

Ivan Burazin:

No, no. When I search in incognito mode, VPN, whatever, Google search, I think we're number three or something.

Turner Novak:

That's pretty impressive.

Ivan Burazin:

Right. And it's like racetrack, watch, us, type thing.

Turner Novak:

Oh, nice. Okay. And so this original product that you had, you had people using it, right? Customers, a somewhat significant business?

So what was it? And then you pivoted pretty big.

Ivan Burazin:

Yeah, pivoted. So we orchestrated dev environments, VMs, sandboxes, whatever you wanna call it.

Turner Novak:

Okay. So it's kind of similar.

Ivan Burazin:

For human engineers, yeah.

Turner Novak:

Okay.

Ivan Burazin:

For human engineers. Because if you work at any of the large tech companies, you as an engineer, for the most part, get a remote box that you work on.

You don't work on your local machine. You work on a remote box somewhere. The remote box spins up faster, and it's all automated. You don't have to spend a week setting up your dev environment, whatnot, and it's secure behind the firewall of that environment. So it's a better DevX, and it's secure, right?

Those are the two things.

Turner Novak:

Okay.

Ivan Burazin:

And so we decided to build that out for the rest of the Fortune 500, right? And so we had sold to some very large companies. And it was growing, not nearly at the speed... and this is pre-AI, you know?

Turner Novak:

Like '23?

Ivan Burazin:

Yeah, '23. We started in '23, yeah.

Turner Novak:

Okay.

Ivan Burazin:

So we did it for like a year, a year and a bit, a year and a half almost. We had revenue, we had customers, we had pipeline, we had all this. But if you get the entire market, the Fortune 500 engineers paying for that, it's a great market. You can be a great business. You can be a public company from that, whatever.

But there are competitors, there are leaders. There are budgets that you have to compete against. But back to my point about scale: is there an opportunity to be the clear winner? There was no clear winner of this market. The vast majority of buyers did not know what a sandbox was or what it was for, and the companies that were ahead of us had raised $20 million or $10 million or whatever.

So they were still not very far ahead. And the market is insane. How many buyers or users are there of this? How many agents will there be in the world? Billions, trillions, hundreds of trillions? I have no idea. But it's certainly more than software engineers inside of enterprises.

There's no clear winner. There are very few companies doing this. There are very few people ahead of us. The market is insane. We have to switch over and do this. And the technology is similar. It was different, but there were similarities.

Turner Novak:

So how'd it happen? Did some people start asking you, "Hey, can I put my agent in this?"

Ivan Burazin:

Yeah, so people started asking us. This was '24, and people would ask us, "Hey, we're trying to create a dev environment," or whatever, they used a different term at that point, "for agents." And I'm like, "Cool. Here's my infrastructure. Go build." I had no idea. Agents at this point were nothing.

Very, very little. And I'm like, "Sure, here you go." And most people said, "This is horseshit. I can't use this." I'm like, "What?" And they said it's different. "I need these things. I need these things." Humans and agents ultimately need different things. The interface is completely different.

We resemble Stripe more than we do AWS.

Turner Novak:

Yeah, I was gonna ask. So what does that even mean?

Ivan Burazin:

Well, think of AWS. If you're going to deploy things, how do you deploy things? You're not consuming it. You're deploying to it.

Turner Novak:

Okay. You're pressing a button and...

Ivan Burazin:

I mean, you have a Terraform script or a Helm chart. You're in the dashboard doing things. It's very, very different. If you're using Stripe, you integrate it with your app, right?

Turner Novak:

And it just happens in the flow?

Ivan Burazin:

It just happens when the customer does something, and that's how we look. That's what it looks like, right?

Turner Novak:

Got it. Okay. So if I have an AI agent product, and I'm using the Daytona sandboxes, as my customers do something, it'll spin up a Daytona instance. When customers are no longer logged in or no longer using the agent to do something...

Ivan Burazin:

Like Stripe.

Turner Novak:

Daytona spins back down.

Ivan Burazin:

Exactly. And so it's a proxy. What we see under the hood is who's doing well.

Turner Novak:

Oh, interesting.

Ivan Burazin:

Right? Because if your usage is going up, that means you have customers.

Turner Novak:

Yeah. Fair. Or you're faking it.

Ivan Burazin:

Or you're faking it, but that's a very expensive way to fake it, right?

Turner Novak:

I'm faking Daytona.

Ivan Burazin:

Yeah. I'm like, "I'm trying to make you mine." Why would you do that? Why would you do that, right? So there's no reason to do that.

Turner Novak:

Yeah.

Ivan Burazin:

I remember someone at the beginning said Stripe is similar. Stripe literally sees if you're making it or not making it, how much revenue you're getting in.

Turner Novak:

It's revenue. It's the objective indicator.

Ivan Burazin:

It's the most direct one. We're a directional proxy, because you have free users, you have different things. But there's usage, right? And the way the consumption works for us, that's why I say it's literally the more users you have, the more it goes up, right?

It shows up, but it's not planned ahead. The API call happens when the user clicks something, right?

Turner Novak:

Oh, interesting. So, man, I don't know. What are the SOC 2, security, compliance rules around this?

Ivan Burazin:

There's a bunch.

Turner Novak:

But I wanna ask you, what are interesting behaviors that seem to be emerging based on how people are using Daytona?

Like, "Oh shit, there's this really interesting new trend that's showing up in our data."

Ivan Burazin:

The thing about the data is that all of those are old now, so they're not relevant. But the interesting thing that we've noticed when we build a product is that when a new trend emerges, 10 customers, five, seven, whatever, all ask for the same thing.

Turner Novak:

Okay.

Ivan Burazin:

In the sense of, "Oh, now I need this thing." So for example, having a credentials broker inside of a sandbox was not the norm six or seven months ago, right?

Turner Novak:

What's a credentials broker?

Ivan Burazin:

Oh, so if your agent needs credentials, a token or whatever...

Turner Novak:

Like a login?

Ivan Burazin:

Yeah.

Turner Novak:

Like an auth?

Okay.

Ivan Burazin:

Yeah. You would give it to the agent, right?

Turner Novak:

Historically? Oh, like in the prompt?

Ivan Burazin:

In the box. You tell it to request the login thing. Yeah, how else is it gonna do it, right? And so now every single provider has that, where there's a dummy token inside. Then when it sends a request over the network, we take that dummy one and put in the real one, so the agent never sees it, but it still has access to what it needs to have access to.

Having a firewall inside of that was not the norm. I don't think everyone has that still. And so there's a bunch of things that were interesting that people asked for.

Turner Novak:

Mm.

Ivan Burazin:

But it's not like someone asks for it, then in two weeks someone else asks for it, then a month passes and someone else asks.

It's literally in a fraction of days you'll have 10, 20, 50 customers say, "I need this thing." It's quite interesting. And so, as a product company, this is the thing I did mention and you're gonna hate on me for. It's the least important one. Obviously, if everyone has those two things, then it is important, but because those two things are hard, it's less important today. You do have to keep your ear to the ground, and when you see that, you have to launch it ASAP.

You literally have to launch that. And we figure that out every time it happens. The most annoying thing is that the opportunity to get new customers from competitors usually happens when these things happen. Because they're like, "Oh, I'm using X provider, but I really need this thing today.

If you can give it to me today, we will move over," right?

Turner Novak:

We will switch, huh.

Ivan Burazin:

And so it depends on where you are. It happened a few times where that person would come five or six days after the first person that called us, and we would have it ready, and then you get this switch.

And there would be others where they come in and you don't have it, because no one has it, right? Because they're the first one. And they're like, "Oh, shit." And then you lost that opportunity to turn over a customer.

Turner Novak:

So do you instantly vibe code? Like, "Oh, shit, we gotta make this thing.

Let's really quickly ship this new feature"? How do you stay on top of it when this sort of thing happens?

Ivan Burazin:

Yeah, but the thing is you can't vibe code infrastructure. I mean, you can, but it's very scary to deploy infrastructure that you've not tested. Obviously we use AI. No one writes code anymore.

But you do have to test that, right? Because you're gonna deploy it to all your customers running in prod. If you screw something up, you're dead.

Turner Novak:

I mean, for me, on my shitty VC vibe coded things, I'll make something and be like, "All right, cool." And then three days later I'll try to use it, and it just doesn't fucking work.

It's like, "What'd you do? I thought you said this was good." And it's like, "Oh, I'm sorry. I just tested it. It didn't work. But now it works." Yeah, exactly. Why didn't you do this originally?

Ivan Burazin:

Yeah, and that's your thing, and you're like, "Fine," right?

You get annoyed, but fine. But if you're an infrastructure provider, people build products on top of you, and so that part is probably the most important, to make sure that doesn't break.

Turner Novak:

So how do you figure out your roadmap then?

Ivan Burazin:

We don't have a roadmap.

Turner Novak:

So then how do you figure out what to build?

Ivan Burazin:

Well, I mean, we know what we're building now, right? I don't know if we have more than four weeks, six weeks of roadmap, something like that.

Turner Novak:

Really?

Ivan Burazin:

Yeah.

Turner Novak:

So how do you do your planning cycles? Because I think historically it's, once a year we meet and plan out the thing.

How do you do that process?

Ivan Burazin:

There is no process. It's very, very hard today, and I've heard this from founders of much larger companies, maybe even public companies, that are in this mode. You really don't know, right? It's not that people are sitting around waiting.

There's more than enough backlog to make sure that there's stuff to be done. But you're constantly changing as things change. You go, "Oh, maybe we finish this thing, or maybe we don't even finish this thing, and we do this other thing first." And then these features sort of die off.

We've actually had features that we've killed.

Turner Novak:

Hmm.

Ivan Burazin:

Where it's like, "Oh, this is no longer necessary in this world. This thing that we built a year ago, no one uses it." You deprecate the feature and it's out. So there's no long-term yearly roadmap. And that makes it super hard to plan anything.

Turner Novak:

Yeah. I mean, if I'm the CTO, I'm pulling my hair out. How do I do anything?

Ivan Burazin:

Yeah, my CTO doesn't have much hair either, but yeah.

Turner Novak:

Is that why you shave your head?

Ivan Burazin:

No, I have no hair. He has more than me, but yeah, he has more than me.

Turner Novak:

So have you been able to figure out what drives these moments?

When there's a spike of 50 people on the same day, is it that a new model came out that made things better and all of a sudden something else became a problem?

Ivan Burazin:

It has been the new models, obviously. Similar would be new techniques for doing things, where some of the researchers figure out how to do something better.

Turner Novak:

Hmm.

Ivan Burazin:

It would be new product launches in general. So think Lovable, think Grok Bot. No one put a computer in every chat, then Grok Bot did, and now everyone wants that thing, right? So it's those things. There are different things between technology and market and whatnot that move the needle on those.

Turner Novak:

Hmm. Yeah, that makes sense.

Ivan Burazin:

And then you have security things. Something breaks out from something. It's like, "Oh, shit," you know? We have to lock this thing down.

Turner Novak:

Yeah, it's always interesting to me when all of a sudden, out of nowhere, every talking head is talking about security in the past couple days.

Ivan Burazin:

Yeah.

Turner Novak:

Everyone's talking about it. I'm like, it's always been a thing, but there must be something.

Ivan Burazin:

It's always been, yeah.

But it's in waves. It's funny, we'd have some customers like, "Do you have these things in security? It's becoming an issue."

And I'd ask, "Do we have to have it today?" "Not really." He's just like, "Just tell them we're gonna do it, and it's fine," type thing. And I'm not talking about a vulnerability patch or something. Obviously that gets done. But just, "Oh, someone read an article somewhere and we should be doing this thing."

"So can I tell them that we're gonna do this thing and we're good," right? That type of thing.

Turner Novak:

Yeah. And you guys have been growing really, really fast. I think you said something... It's probably outdated, the number I have, and by the time this is published it's probably outdated again.

But something like you guys have grown 25x this year.

Ivan Burazin:

25x this year, yeah.

Turner Novak:

Wow.

Ivan Burazin:

Yeah. Probably more, but that was from last month or whatever.

Turner Novak:

Wow, yeah. So how did you grow so fast? What's going on under the hood?

Ivan Burazin:

The way I think about it is we did a pivot, right?

Turner Novak:

Yeah.

Ivan Burazin:

And then we went back to zero. But we've been doing, I don't have a better word, we've been doing tilts the entire time.

Turner Novak:

What's a tilt?

Ivan Burazin:

I don't have a better word for this. But think about it this way. Our first ICP for Daytona was a long-running agent. So think of what a Grok Bot is or whatever, right?

But they didn't exist a year and a half ago, right? It was the companies I mentioned earlier, the Lovable competitors or whatever. That was our first one. And so we started doing that. We launched at the end of April, but around Christmas we discovered that we're really good for post-training.

And so what we did, it's the same product, but you change some of the features and your go-to-market motion. We decided to prioritize features built for RL, because there are some slight differences and nuances that you want. And for the go-to-market team, we shifted all the events and the types of people we would address from general AI engineers to researchers.

Right?

Turner Novak:

Okay. So you fine-tuned the features and the go-to-market motion?

Ivan Burazin:

A little bit, yeah.

Turner Novak:

Like what you pushed.

Ivan Burazin:

Yeah, what I pushed. Obviously, we serve both, so our revenue is probably 60/40 now, maybe even 65/35 RL to background agents. But there was a slight tilt in that, right? We sort of focused on that a bit.

And so that drove... So you have that first growth that you're doing, and now you're adding this new sort of customer that you're selling to. And that's sort of on top of that and growing faster.

And then the next thing we found is that a bunch of people wanted GPUs in the sandbox to do RSI-type stuff. And we're like, "Okay, there's only one other company doing this. We should probably do this."

GPUs are also the hardest to get to because you have to have the scale of them. They cost money. They're hard to get. They're all that.

So we started adding that in there. And so the GPUs, which are still a smaller part of our revenue, since it's mostly CPU, are another sort of layer to that.

It's still a sandbox. It's still the same product, but it's like first user, second user, first variation of product, second variation of product, and now we're adding other variations. You can think of them all as layers on the growth curve of Daytona itself.

So they're not net new products that we're adding, so to speak. But it's slightly different go-to-market, slightly different optimization on features that we do. And we're just trying to make sure that we are where the current of the market is going.

Basically just listening to customers, like, "We need this thing and we need this today. Can you give that to us today?"

Turner Novak:

Interesting, yeah. So it weaves into, like, there's no real product roadmap? You're just kind of asking what the customers seem to be wanting. And then, like you said, you tilt toward that thing.

Ivan Burazin:

So there's two things. To be very clear, we have a vision of where the world goes, and so we have bets.

The same way we bet on sandboxes. We bet that agents want a sandbox. Also, from the beginning, it's been on our website since we started: we believe that you need a Windows and Mac and Linux sandbox.

We've always believed that. You can check the web archive. It's been on the website since we've done this as well.

Turner Novak:

Okay. Why is that such a big deal?

Ivan Burazin:

Why do I think it's such a big deal? So if you assume, or want... Let me assume. If you want your agent to do a job end to end, like I want it to do end to end, right?

Turner Novak:

Yep.

Ivan Burazin:

Obviously. But now, maybe this is not you, but you are some finance person inside of Walmart. Just making that up.

You have agents doing things. I would actually bet a lot that to do every single job it can do, at some point in time it's gonna have to turn on a Windows machine. I would bet anything on that. At some point in time, inside of Walmart.

And so...

Turner Novak:

Instead of using a Mac and/or Linux, or both?

Ivan Burazin:

Exactly.

Turner Novak:

Okay.

Ivan Burazin:

The reason why is that there's probably some, I'm gonna say vibe-coded, but it's not vibe coded, piece of shit app, because I've worked in these companies. Someone built it, and it has a local database somewhere to do some random thing. And the only way you can get that information is you have to log into that Windows machine and do that thing, right?

And so if the flow of the agent breaks because it doesn't have access to Windows, you're gonna be like, "Fuck me. I have to go do this thing," right?

Turner Novak:

Yeah.

Ivan Burazin:

You want that there. And so at that point in time, you wanna spin up a sandbox with Windows, do the thing, and kill it. And so that's why I believe that...

And there's other things, obviously. There's things like QA, and there's building actual Windows apps. There's a bunch of stuff there. But that's the most interesting part to me.

Turner Novak:

Yeah.

Ivan Burazin:

And also, I don't believe that computer use, or the ability to use these apps, will disappear in the next decade. I believe that some of these apps will still be here 10 years from now.

Not everything will be headless, and so you will need these types of machines to get that done. And so that was one of our early bets. It's less about customer demand, but literally last week, we had two potential customers that we don't have and that we really, really wanna have.

And they came in like, "You know what? We heard you guys have Mac and Windows. We need this today." Oh, okay. "Can you give that to us today? Literally, can you give us that today?" Okay. Right?

Out of the blue. We talked to them six months ago. They're really big. They're companies that you would know.

Turner Novak:

Yep.

Ivan Burazin:

They don't use us for sandboxes, they use others, and they're like, "Oh, we need these things," right? It's one or two points, but that will continue to be the thing, right?

So the way I think about it is, one, what are my first-principles beliefs about the world? And so we have bets that we make on that, which we build out.

So to your question, we do have some things on the roadmap there, sitting there, I should say. But they're not high priority because people generally are not asking for that. But when we build out products, we account for that inside the architecture right away.

And then the things that you push forward are things that people are banging down the door for, like, "Can you do this thing for me?" Right?

Turner Novak:

Yeah. Can you give me the Windows?

Ivan Burazin:

Can you give me the Windows? Or whatever it might be, right? Can you give me that thing? Because I need a lot of that thing. Can you give me that thing?

Turner Novak:

Yeah. Interesting. Have you ever heard this joke before? If your CFO uses a MacBook, you're definitely going to prison.

Ivan Burazin:

Yeah, exactly.

Turner Novak:

Yeah. It's like you probably want your CFO using Windows. So...

Ivan Burazin:

Mine is. I gave him a MacBook, but he doesn't want it. He wants Windows inside of it. He runs a Windows VM inside of it.

Turner Novak:

Oh, nice. Okay. I've seen people do Mac inside of Windows too.

Ivan Burazin:

Yeah. And he's like, "I really want Windows. I don't wanna use a Mac." He's just like, "Everything's shit. I just wanna use Windows." I'm like, "How so?" And he shows me.

He's like, "Ugh, it's just ugly, dude. You have to..." It is what it is.

Turner Novak:

Yeah. Well, I think I've always been a little bit influenced by growing up. I graduated high school in 2009.

So in high school, I took a lot of graphic design, programming, tech drawing and architecture classes. And they kind of had to force you...

Ivan Burazin:

Fun note, you can only get AutoCAD on Windows or Mac.

Turner Novak:

Oh, can you?

Ivan Burazin:

Yeah. You can't get it on Linux.

Turner Novak:

You can't get it on Linux?

Ivan Burazin:

So just an answer to your fun note question.

Turner Novak:

Yeah. There you go. Well, I had grown up thinking, okay, Macs are for old people because they have one button and they're super simple.

Ivan Burazin:

Oh yeah, I remember these.

Turner Novak:

And it was before MacBooks. It was like...

Ivan Burazin:

They didn't have right click at all on a fucking computer.

Turner Novak:

Yeah, they didn't have a right click. And so I had to use a Mac desktop box thing with the different colors. We had that in my graphic design class.

And I was like, "These computers suck. I fucking hate Macs." And then of course the nicer MacBooks evolved since then, but I've been biased by that even 20 years later. I thought they're the old school.

But yeah, me and my friends, we would just hang out. I mean, this is a total side tangent, but in high school we would take all the computer classes just so we could go on the computer all day during class.

Ivan Burazin:

Yeah, I remember that.

Turner Novak:

Yeah. Mid 2000s, yeah.

Ivan Burazin:

So I'm older than you. It was the Commodore 64 or whatever it was when I was in...

Turner Novak:

Okay. We never had one of those. I probably just missed that.

Ivan Burazin:

Yeah, I'm super old. And so there was one per floor in our school or whatever.

Turner Novak:

Oh, wow. Okay.

Ivan Burazin:

And then I became the helper for the computer teacher, and I would go fix other people's computers across the school.

Turner Novak:

The district or the school?

Ivan Burazin:

School. Just the school. But I just did that because I could play on the computer. I fixed it and I would play whatever video game, but the video games were total garbage.

Turner Novak:

Like Pong or whatever they were?

Ivan Burazin:

No, it was better than Pong. But they were 5.25-inch floppy disks. They were the big ones.

Turner Novak:

Oh, yeah.

Ivan Burazin:

The big ones. It would load that in, and I remember there were some dungeons or whatever. I forget the name, but they were shitty.

But so I would go fix them. The only thing you could do to fix them was, there were three cables, the RGB cables that you would connect into the monitor, and something you... Anyway, I did similar just so I had access to computers.

Turner Novak:

Yeah, me and my friends, we'd take all the classes. I remember there was one class where half the class was learning Microsoft Access. I don't know if you ever used Microsoft Access.

Ivan Burazin:

Of course I did.

Turner Novak:

It's like a super shitty database product.

Ivan Burazin:

It's a database, but it's Airtable.

Turner Novak:

Oh, that's what Airtable is?

Ivan Burazin:

In my definition, that's what Airtable is.

Turner Novak:

Oh, okay. Fair.

Ivan Burazin:

It's like an easy-to-use database for the average person, right?

Turner Novak:

Yeah, and I remember the guy who taught that class was just super nerdy, dude.

Ivan Burazin:

Do you know Access still exists?

Turner Novak:

Yeah, it does.

Ivan Burazin:

I looked it up. It still exists. There's a new version. I'm like, "Who the hell uses this?"

Turner Novak:

I mean, there are businesses that use it. They run on it.

The guy who taught the class drilled it into our heads, like, "The world runs on Microsoft Access. You gotta use Access if you wanna work with computers."

Ivan Burazin:

Yeah, that's why you now have Lovable or vibe coding, whatever, right? Because you don't need... It's just, you know, Supabase in the background, and fine. It works, right?

Turner Novak:

Yeah, no. We also had a game design class where you could vibe code video games.

There was some programming software, or game design tool, where you kind of... It was kind of like a WYSIWYG, Dreamweaver-type, click-and-drag video game tool. But then you could also sort of code games. And the teacher did not know much about how computers worked.

Ivan Burazin:

Yeah.

Turner Novak:

And so me and my friends, we would just be playing games, like, we were "working on our games." I don't know, those were the days.

I feel like we're in a different era, though. Where we grew up, the grownups, quote-unquote, didn't know how computers worked. So you could kind of get away with stuff.

But I feel like today, I've actually heard that in middle school and high school, to get around the blocks on the computers, you put links in a PowerPoint, like in Google Slides or a Google Doc. Because if you click a link that's blocked by the school...

Ivan Burazin:

Through the browser?

Turner Novak:

Through Google Slides specifically, it gets around the blocks.

Ivan Burazin:

Oh, really?

Turner Novak:

Yeah. So people will use that now to play games in school.

So, did you go to high school in Croatia?

Ivan Burazin:

Croatia. Very different vibe, very different vibe.

Turner Novak:

What was it like growing up in Croatia?

Ivan Burazin:

I went there for high school, so I was in elementary in Toronto, which is as you would expect anywhere in North America.

Turner Novak:

Yeah. Did you grow up learning both languages?

Ivan Burazin:

Yeah. I was kind of shitty at it, but I grew up... I could understand.

Turner Novak:

So you were kind of like a foreigner in Croatia?

Ivan Burazin:

I was a foreigner, yeah. Kind of. Definitely. Culturally, very foreigner. It's very, very different.

The thing that was interesting to me, and this was a contrarian take on Twitter, was all the things that we define as high school. Like, cool kids, nerds, jocks, whatever. All those variations and all those social differences existed to a degree.

But people hung out with each other. It wasn't like I won't hang out with the nerd or with a jock or whatever it may be, which happens here in Western society, or even Far Eastern.

There, because people were post-socialist, post-communist, people were very similar in socioeconomic hierarchy. And though someone could be quirky or someone could be better at sports, everyone hung out together for the most part. People didn't pick on each other in that kind of way.

And I'm like, oh, that stuff that they do is actually a social construct that we put in together. It's not an actual natural construct.

Turner Novak:

Like the jocks and the nerds and...

Ivan Burazin:

Like the picking on each other, the beating up, flushing your head down the toilet, those types of things.

Right? That actually didn't exist. So I went through high school without any of that, which was shocking to me. Because I went through that in elementary school, right?

That still existed. I'm like, this is so bizarre.

Turner Novak:

It must be a cultural thing in Europe maybe, or in Croatia specifically?

Ivan Burazin:

No, it was Croatia at that time. I think it's different now. Because the thing is, there was no large difference between people that had money and people that did not have money.

Turner Novak:

Oh, okay.

Ivan Burazin:

The band was much closer. Because you were in a... It wasn't communist, but socialist. And in those economies, there are very small differences in financial hierarchies, right?

And so because there are very small differences, people don't pick on each other because they have good shoes or not good shoes, right? Like, you didn't get the latest Jordans or whatever. It's cool, right?

And so that didn't actually exist, and that was mind-bending for me. It was actually quite interesting.

Turner Novak:

Yeah. That is pretty interesting. Slightly different topic, but are there any things in agent security or agent usage that most people don't appreciate yet, or don't really realize are going on yet? Maybe we already talked about them.

Ivan Burazin:

I mean, I can just say one thing, which some people push back on and some people don't. But I believe that the vast majority of security is already taken care of.

Turner Novak:

You think so? For digital?

Ivan Burazin:

Yeah, because... Here's an example. You go to work at any bank, whatever. You get a little key card for physical access.

Turner Novak:

Yep.

Ivan Burazin:

And you get a laptop that's locked down, right? It's completely locked down for you.

Turner Novak:

Yeah. You do the wrong thing, and the security guards show up at your desk a minute later.

Ivan Burazin:

Exactly. Same thing. That same software works for agents.

Turner Novak:

Okay.

Ivan Burazin:

Exact same software. If an agent goes and picks something on the internet and copies something to something else, it's still logged in that same thing. You can still see that same thing, right?

And so I don't think people appreciate that that is already, to a large extent, solved. The problem that people haven't solved is understanding that people should be able to create agents with credentials of their own, and with a computer of their own, and then that is being logged.

So essentially, say you work at whatever bank, right? And you wanna create a new agent to do something. It should get some email, which is its identity and an actual email. So it could be your name, underscore, whatever, sub agent 365. Doesn't really matter. It just has one, right?

And so it gets its own email. It gets its own computer. That computer spins up with a default image. I'll pick on Windows right now because most of them are Windows.

It's a default image that has all the things that you have on the Windows machine that you're working on, right? It has all those restrictions. And also, I forgot one thing.

When you are initiating that agent, you can set what privileges it has in the enterprise, but it's a subset of your privileges, right?

Turner Novak:

Okay.

Ivan Burazin:

Of course.

Turner Novak:

So the agent can never go outside of what I, Turner Novak, the employee of Morgan Stanley, have access to.

Ivan Burazin:

Exactly. That makes no sense, right? You can only have a subset of what you have because it's working for you, essentially. Right?

Turner Novak:

That's fair.

Ivan Burazin:

Right, and so that's basically it. The only part that's missing is that the security team or IT team will enable you to create that account. And maybe there's some interface to make that super easy, right? To spin up the ID and spin that up.

But everything there is already there. Now, the risk that can happen with that is that the agent can't do things that it usually can't do, but it can maybe leak data, right? That's the tricky part.

Turner Novak:

Is that the big issue everyone's kind of up in arms about right now?

Ivan Burazin:

Well, this is about my thought about it. No, it's less about what they're up in arms about. It's what I personally believe is feasible or not feasible, right?

Turner Novak:

Okay.

Ivan Burazin:

So the worst thing it can do is limited, because it can't do a lot of dangerous things. It doesn't have access to most things, 'cause you've already locked it down. It's the same access that you have, right?

Turner Novak:

So do a lot of people not realize that?

Ivan Burazin:

Yeah. It's interesting.

Turner Novak:

'Cause people just think you're running Claude Code and it will just randomly go and hack the mint and steal all the money that was just created or something.

Ivan Burazin:

Exactly. And also people think of it in different ways. By the way, I would assume that people even right now are running Claude Code on their own computer, which is even more dangerous. Okay, just to be very clear. That is more dangerous.

Turner Novak:

'Cause it'll access your password that you saved in a Word doc somewhere.

Ivan Burazin:

Exactly, or it'll access your bank account, which is in there. Or the company's bank account, which you have access to. It does that thing. If it's a sub-agent with its own account, it doesn't have that. Or if it does, you gave it to it, type thing.

So it's actually more secure, not less.

And all the software that exists, I'm sure Palo Alto Networks has a bunch of software that stops us from doing these things and even stops us from leaking data. Like, if you copy something and put it on a USB drive or whatever it is, it will flag the security team. Like, you did that, right?

So if an agent does that, it's gone. If it uploads it to some website, there's probably software that can flag that. So a lot of things are already there.

The risk is that, to your point, you'll have a swarm of agents that will try to break out. But in this case, you don't have a swarm of agents. You have one computer with a single agent running on it, right? So the time it takes to actually try to solve and hack and break things is actually quite low.

And even if it can, the point is just to have that software be more sophisticated. I'm picking on Palo Alto Networks, but anyone else in the security space just has the equivalent of more sophisticated software that's already doing the same thing. 'Cause you're stopping it from accessing data that it's not supposed to access, and you're stopping it from leaking data that it's not supposed to leak.

Those are the two things they're trying to solve for. And people are trying to make it as if this whole new infrastructure needs to be built for that thing.

Turner Novak:

But you don't think so?

Ivan Burazin:

I don't think so, yeah.

Turner Novak:

So if I'm listening to this, are there opportunities in security right now?

Ivan Burazin:

I'm sure there are. Everything I say is sometimes contrarian to myself, which is that there's probably a product that is not solving something that an agent can do.

Because if you give an agent a computer, the risk is it can do different things, right? But it's the same things that you can do, right? You could do that today. Like, if you're in the bank, you could do that today.

Turner Novak:

Like, I could go and try to hack into someone's bank account personally.

Ivan Burazin:

Yeah, exactly, or do that. Or, like, that's the extreme, right? But let's say it's something simpler. You have access to whatever Goldman Sachs data, and you can try to email it to someone at another bank.

Turner Novak:

Like, steal the corporate information.

Ivan Burazin:

Yeah, exactly. That's what you can do.

Turner Novak:

But Goldman will say, "Hey, you just gave them all our secrets. You're fired, and we're suing you, and you're going to jail."

Ivan Burazin:

Exactly. There is that, but there are also technical ways to block that from happening that are already in use today, right? And that's why I'm less worried.

It's already there, right? Those things are already there. Now, are there other ways that a single agent inside of a single computer can still leak that outside? I'm not sure. There probably are. But that is more, I think, a progression of that software rather than a revolution of that software itself.

Turner Novak:

Interesting. One of the fascinating things about Daytona is the whole story behind you and the journey. When you were first pitching the company and the product to investors, I think the phrasing is that everyone just kind of laughed at you.

Like, "Why are you even doing this? This isn't even a pitch. What's going on?" So what was it like when you were first raising money for this?

Ivan Burazin:

Oh, it was terrible. I mean, terrible. I'll take a step back. So we did our pre-seed and seed on the old product, right? On the original product.

Turner Novak:

You were based in Croatia, probably.

Ivan Burazin:

We're based in Croatia, yeah. And that's always tough, because there's a price discount and a perception discount for these things. The perception discount is that none of your team members or yourself have the credential history.

So you weren't at Uber, Google, whatever, school XY, none of that. Every logo that you have on your CV is like, "What the hell is this?"

Turner Novak:

Right? Like the University of Croatia.

Ivan Burazin:

Yeah, what the hell is this? And then they're like, who cares, right? Yeah, who cares?

Turner Novak:

I mean, that's actually one thing I ran into, where someone's like, "Oh, that's the best school in India." And I'm like, "I've never heard of it before."

Ivan Burazin:

Yeah, exactly. And you're like, "Uh, whatever." And then you discount that, right?

So there are problems with that, obviously. But we did that. The interesting thing that fewer people know about is that we pivoted, and then we decided to do our Series A on the new product. We went out, we ran a process, and we didn't raise.

Turner Novak:

So you got no bites? How did that go?

Ivan Burazin:

So there's a bunch of that. Every time we fundraise, we run a process. It's just easiest. It just makes the most sense. When you run a process, you invite everyone that you think you want to talk to, you put them in, and you have a timeline that you work with.

The timeline helps because VCs that don't have conviction have an out. They're like, "I can't get it in time, I can't do whatever. I'm traveling. Whatever." It's fine. You're like, "Cool, thanks." And you get a quick no.

Turner Novak:

It's for not wasting my time. Yeah, that's actually good.

Ivan Burazin:

If you listen to any VC talk about it, you want a quick no. As fast as you can, right? So it's a quick no, and that gets it there.

And then the other thing is, it's less about getting the best bang for your buck. Mostly, other investors will be like, "Where are you in the process?" And if you're already at IC with a couple, then a couple of others drop off, because they can't get to IC that fast.

And so you keep them, and you hopefully get to an outcome where you have one or multiple term sheets, right? That's what you want. And if you get one, you actually get a bunch more automatically. If you get one, the more that are in the process, the more want to give you another term sheet. For the founder, it's a better thing.

But ultimately you want to get one and sign one, right? So outside of techniques for getting better terms, you run a process to do that. And so we ran a process to get to quick nos, and we ended up getting basically all nos.

Like, it was no. That was devastating, right? Imagine going out, telling your team, telling all the investors that you're raising, and you come back with nothing, right? And then three months later, we raised an A.

Turner Novak:

So did you update your investors and say, "Hey, it didn't go as planned"? Or did you just not do anything? What'd you tell the team?

Ivan Burazin:

Oh, the team, I told them that's what happened, basically.

Turner Novak:

Okay.

Ivan Burazin:

To be fair, we did have one term sheet from a non-S-tier investor. It was half the valuation that we were directionally going for, and my co-founder and I decided, you know what? We're not gonna take it.

We hadn't run out of money. We had revenue and all that. And we're like, "Let's go do this again." And so we went back to work for three months.

Turner Novak:

So why did everyone pass on it, do you know?

Ivan Burazin:

No one understood. Very few people understood.

Turner Novak:

Oh, they didn't get what you were doing?

Ivan Burazin:

Yeah, and not from a technical perspective, not that. It was just like, "We don't think this makes sense." When I told people agents will need computers, they're like, "Why the hell do they need a computer?"

That was non-obvious. That was very non-obvious at the time. And the other thing, which might have been a mistake, is that we came out with a price point that we wanted, which was probably not ideal. Maybe yes, maybe no.

Turner Novak:

What should you do instead?

Ivan Burazin:

I don't know. It's more like, this is how much we need, and then let the market figure out what the price point is, right?

Turner Novak:

Yeah. I've heard people say, "We want to raise $5 to $10 million at 10 to 20% dilution," or something like that. That's a pretty big range. You could raise $10 million at 10% dilution or $5 million at 20% dilution.

Ivan Burazin:

It's very different, yeah.

Turner Novak:

Those are very different numbers.

Ivan Burazin:

Yeah. And also, I'm not a VC, so I don't know how that looks. But I feel that when you put a range, it feels worse.

A range of how much you're raising feels like, "Oh, I don't even know what I'm raising. How much do I need?" If you need a number, then you need a number. If you need $5 to $10 million, that's very different. Not even talking about valuations, it's very different.

I think you should know. I don't know, this is not financial advice. I have no idea. But I would try to put in the number that you want, and less around that.

The other thing is the ramp was really fast, but it was only three months of data. And because it's three months of data, it's also risky for the VCs. I would assume three months could be, you know, not even faked, but like...

Turner Novak:

You could game some stuff.

Ivan Burazin:

Yeah, in three months you can do a lot of things, right? And so when we came back three months after that, we had six months of data.

We'd expanded, we had revenue growth where we said it was gonna go. We had more customers. These customers still stuck with us. They could verify that, and it became much easier. And also time passed, so it became more obvious to more people.

And so we did it again. But the thing that's really hard, and I don't know if people listening will internalize this, is telling everyone that you're raising and then not raising.

Not everyone knows whether you raised or not. Some people just dropped off along the way. Then you come back three months later and call them and say, "Hey, we're doing the A again." That hurts.

Turner Novak:

I'm just like, "What's wrong? This must be a busted company. I don't wanna talk to you."

Ivan Burazin:

Yeah. But you know what it feels like as a founder? You have to go and come again. It's like, "I told you I was gonna raise last time, and I didn't, and I'm back to ask you again." Your ego is just like...

Turner Novak:

Yeah. So how did you approach it? I'm assuming there are some people you had to do that with. What'd you do?

Ivan Burazin:

I was basically like, "Listen, this is what we had." We said we'd gotten that one term sheet and we ended up saying no. People can believe that or not believe that. Usually whatever you say, people think you weren't successful, right? So you screwed that up. You fucked up, right? You were not good.

And in their light, they were smart. They didn't do it, right? But you have to come back to them and basically say, "Hey, we decided to go back to work. We went back to work. We did what we said we were gonna do. Revenue's where we want it, customers are where we want them. Here are the proof points. Here you go."

And the deck was actually interesting. We had all the old slides. We didn't do a new pitch deck. But all the graphs, we just did side by side.

So what we did is, listen, you had the old pitch deck. I'll draw it out. In the old pitch deck, growth was like this, right? It's growing up. And then I applied the new growth at the same ratio, and it goes off the screen. It goes off the slide, right?

Turner Novak:

Oh, wow. So it's just two slides side by side?

Ivan Burazin:

So you have the first slide, which is the old one. On the old one, I just drew the extension, and the extension just breaks off the slide. It literally breaks the words. The designers broke the words. It goes off.

And then the next slide is zoomed back, so you can see it normalized. And then you see that all the old growth looks like a flat line, right? Because...

Turner Novak:

You had just gone exponential.

Ivan Burazin:

You'd just gone exponential, right.

Turner Novak:

Oh, interesting.

Ivan Burazin:

And then all the numbers, all our growth numbers, retention numbers, all of them were on the old slide. And then I literally just crossed out the old numbers: here are the new numbers. That was our pitch deck.

Turner Novak:

That's pretty cool, actually.

Ivan Burazin:

And they were like, "Okay." 'Cause it was less about telling a new story. It's the same story. I didn't change the pitch. Didn't change anything. It's literally, here are the facts, here are the numbers.

And so FirstMark ended up leading that. They led the B as well, but they were also ones that passed the first time we did it.

Turner Novak:

Really?

Ivan Burazin:

Yeah. So we went through that motion again.

Turner Novak:

So did you raise the pre-seed and seed from Croatian investors, or was it...

Ivan Burazin:

No. The pre-seed was mostly angels, founders of Netlify and Honeycomb, whatever. Paul, the Supabase founder. Just a bunch of founders. We wanted to do sort of a party round in that sense. And the seed was led by Upfront. They're based out of LA.

Turner Novak:

Oh, yeah.

Ivan Burazin:

Yeah. So they did the seed round.

Turner Novak:

Nice. That's cool. Good win for LA.

Ivan Burazin:

Yeah. For Upfront. Good win, yeah. Good for them.

Turner Novak:

So you actually moved. I think you tweeted about this. You guys had been flying back and forth all the time. You actually moved to San Francisco, moved your family over a couple of weeks ago.

Ivan Burazin:

Yeah, a couple of weeks ago. So we'll see how that goes. For now it'll be this two-and-a-half-month stint, and then we're gonna go back for the holidays, then come back in the spring, type thing. And sort of see if we'll make it permanent long-term.

But definitely, in the sense that I'm here, I'm not on an airplane. The worst thing is that out of Croatia, you fly to Germany for the most part, and so you can fly United or Lufthansa. That's it.

Turner Novak:

Oh, really? From Germany to Croatia?

Ivan Burazin:

No, from Germany to the US. There's Croatia Airlines for Croatia.

Turner Novak:

Okay.

Ivan Burazin:

And I flew so much this year that literally the staff there knows me, not because of my status. I've asked. They're like, "No, I saw you last week."

And that is not a good thing. I'm like, "This makes no sense." If the staff on a plane knows you because you fly that often, there's probably something wrong with you, so yeah.

Turner Novak:

Maybe not. Maybe that's a good thing. Actually, there's this guy who has the world record for most airline miles flown or something like that. He wrote this post about how to get the best experience out of your flight.

He says the thing you do is, right when you get on, you say to that first flight attendant, "Oh, it's good to see you again," even if you've never met them before. 'Cause then the flight attendant's like, "Oh, yeah. This is a regular. I'll treat this guy a little bit better."

Ivan Burazin:

Yeah.

Turner Novak:

So actually there's this one guy. Do you watch college football at all?

Ivan Burazin:

No, not really.

Turner Novak:

Okay. There's this guy who looks like the coach who won the college football national championship. He's a flight attendant on one of the flights that I take a lot to get to San Francisco. And I see him, like, once a month. I think he kind of recognized me.

He has the same name as the coach, and he looks just like him. So I've been thinking, should I bring this up to this guy

Ivan Burazin:

Or not? Yeah, bring it up. Maybe I will. Yeah.

Turner Novak:

One thing I know that you've said is that the next wave of AI is AI deployment specifically. So what does that mean? AI deployment is gonna be a big thing over the next 12 months?

Ivan Burazin:

So what I was more alluding to is that when we started, as I mentioned, we started with background and long-running agents as an ICP that we sold to. But we didn't actually understand that most of those actually don't exist.

If you think of app layer products, like marquee brands, how many can you count literally? Outside of the foundation model companies that have their own products, you have Harvey and Legora, you have... But in the sense that they're actually deployed and working. They're app layer, right? Okay. You have those.

Let's say Clay we can put in there, Gamma maybe in there, right? They're app layer AI products that are actually really used. And now you have Muse, it seems, right? Grok Bot seems to be doing something.

So the vast majority of these apps that are daily in deployment, actually being deployed and used, is only now starting. And in the enterprises, it's not even there yet, right? That's why most of our revenue still comes from post-training and training of these models, because that is where most of the market is working today.

But the actual deployment is still far behind. 'Cause the vast majority of our apps still on our phone are not AI. They're deterministic apps for the most part.

Turner Novak:

That's fair. And so, speaking about OpenAI, Anthropic, the big scaled labs, you kind of use them as a partner, but they also have a sandbox product. How do you think of that? 'Cause that's gotta keep you up at night a little bit, potentially.

Ivan Burazin:

I mean, there's a lot of things, but it's great that they have been open to, or pushed, or whatever it might be, to open up their platforms to offer bring your own sandbox. That means, and I'm inferring here, I'm not saying it's true, that their customers have said, "We want these other products instead of that product that is bundled in there." 'Cause otherwise you wouldn't offer it, right?

Turner Novak:

Yeah.

Ivan Burazin:

And so for us it's great because of all the companies that are enabling this, so OpenAI, Anthropic with their Claude managed agents. We've worked with Cursor and Cognition. All of them have bring your own sandbox features, and we're included in all of them.

And they're different, which is interesting. Each of these companies has different sandbox providers in there. But what we're really proud of is that we're part of all of them, right? So we're in every single one of those.

Turner Novak:

How does that work that you're in all of them?

Ivan Burazin:

In the sense that there's an API, and you can pick a default. There's like, here's the default options of sandboxes. You can have ours or you can have Daytona, XYZ, right? Or XYZ, Daytona. We're in every single one of them.

So the thing that we're doing is... That's back to the attention, right? Are we available everywhere? When you look at a list, is Daytona always on those lists of these products?

Turner Novak:

'Cause I might have a Daytona enterprise deal signed, and if I just have it available in that environment, I'll probably default to trying to use that one.

Ivan Burazin:

Exactly, because then you're not doing the double co... 'cause you already have a contract here, and then you do that. Or Daytona also has a BYOC, so it's like, "Oh, do you wanna run it in your VPC?"

Then you have Daytona running in your VPC, and then it goes back. And then you also use your commits against AWS or whatever it might be to run that in there.

Turner Novak:

One thing I think is kinda interesting about your mindset. You don't really like romanticizing failure. A lot of people do. And, you know, you can learn a lot from failing.

Ivan Burazin:

Do you really? I failed so much, I don't think I learned that much.

Turner Novak:

Well, personally, when I really fuck up, I'm like, "All right, never doing that again. I'm never making that mistake again." But I feel like you can also learn a lot from success too.

Ivan Burazin:

I think you learn... So I've said that I've failed upwards. Most of the things I've done, I've failed.

Turner Novak:

So what are the things you failed the hardest at?

Ivan Burazin:

I mean, nothing was successful, hence everything I've failed. Right? Nothing was really successful. Nothing was breakout, right?

So it depends on what your lever of success is, but I've had four companies. Some of them I ended up shutting down. Did I make some money along the way? Yeah, sure. Did it get me to the next thing? Yes, it did, but they weren't successes.

I didn't make Stripe or Google or whatever. Define whatever your success is.

Turner Novak:

You're not living on an island right now. You have to do this podcast 'cause you need to get attention still.

Ivan Burazin:

Yeah. Even if I had my island, I'd probably still be doing this thing, just to be very fair. But it's not even the monetary part. Is the thing that you're solving, does it solve it for the vast majority of the market that you're solving it for, right?

None of them were, hence I had failed. So in my mind, I've failed at those things.

But even when you think about hiring or the team you're putting together, I didn't understand this till fairly recently in my life. You actually want people that have won more rather than lost more.

The reason is you actually learn much more in winning. You learn how to win when you win, and then you can apply that to win again, and then win again. And the mindset is, "I can win," 'cause I can do that.

When you fail, you learn how to fail, which is not a bad thing. I want my kids to learn how to fail, to internalize that, 'cause you always fail along the way. You don't want them to ever not understand what failure is, but you want the vast majority to be wins rather than failures.

Because the other thing is, when you learn how to fail, it's like, oh, you brush it off, you go to the next thing, it was fine. But if you fail all the time, all you know is how to brush it off, right? Even if you continue going, you've actually never figured out how to unlock and win.

And that's why I think there's a contrarian take. I don't know, I think Peter Thiel said it or something, someone people don't like that much or have different opinions on. Which is literally, you don't learn from failure.

But you do learn how to fail. And so my caveat on that is you have to learn how to fail, 'cause you're surely gonna fail sometimes in your life.

Turner Novak:

Yeah.

Ivan Burazin:

But you should win more, because you actually learn how to win more.

Turner Novak:

I feel like you get momentum when you win, too. When I think about the way that I operate personally, when I have a good day versus a bad day, the good days I'm just like, "Oh, fuck yeah," let's keep doing more.

Ivan Burazin:

Yeah. Do more, do more. And then the bad days... When it's a bad day, and I've had a bunch of bad days, you just have to go through the motions.

You have to wake up, you have to do whatever you do. I try to go to the gym in the morning, then you have to do work. Even if it's the shitty work, just get the work kind of done. Eat food, go to sleep, wake up in the morning.

Just don't stop. But the productivity of that day is garbage, right? But as I get to the next day, it sort of gets you out of that shithole.

But to your point, the momentum. If you win, then win, then win, then win, then you compound it and you're like, "Oh, let's do more. Let's do more. I'm not gonna sleep," and I go, go, go.

So my take on that is you want people that can win, and that is something that people don't like to hear, but...

Turner Novak:

Yeah. Interesting. One interesting thing too, I know the way you think about documentation, it's kind of part of the product at Daytona. Is that because of how much agents interface with it? What's the importance of documentation?

Ivan Burazin:

That's an older one, which I still believe is true, but it was more around humans. When you think of our product, which is mostly invisible, it's just an API, right? So if it's an API, what is the product surface that you interact with as a person?

You interact with the docs more than anything else. Obviously, when you're integrating the API, or if there's a CLI, there is some product in the CLI. But for the most part, the thing that you interface with as a company when you see our logo is the documentation itself.

That's why I mentioned that. That is very, very important. I think people now all write documentation 'cause AI writes it for them, so it's less of a problem. But three years ago, you had a bunch of places that didn't have documentation, or the documentation was garbage, and hence the point about that.

Turner Novak:

Yeah, that's fair. And I mean, you mentioned you just hired someone to start doing sales very recently.

Ivan Burazin:

Yeah.

Turner Novak:

So you grew 25x. I don't know, is there a public number that you've stated, how big the company is at this point?

Ivan Burazin:

Not yet. Not yet, but there were some public numbers last year, so you can do some math on that, and we'll state very soon what the number is.

Turner Novak:

Okay. If you did the math, what would the math tell you right now? It's a public number times 25.

Ivan Burazin:

I'm not gonna tell you that.

Turner Novak:

Oh, you can't tell me?

Ivan Burazin:

Okay. Yeah, I'm not gonna tell you. You have to do the math for it.

Turner Novak:

I want it to be in here so that people can just hear it.

Ivan Burazin:

But I don't know if it's gonna be public at that time, so yeah. It is one of the significant milestones. We're there. We're there.

Turner Novak:

Oh, okay. Yeah, that's fair. So you didn't really have anyone doing sales. How do you grow a company so fast and not have salespeople doing this stuff? A lot of people say you need them. How did you do this?

Ivan Burazin:

I mean, it's definitely a PLG company. And the way we've done that, and still do it today, is we bring everyone into Slack. All our customers are on Slack Connect. They all have a Slack Connect channel with us.

We have, I don't know, 1,500 Slack Connect channels or something like that. It's an insane number.

And the other thing is that, to our betterment or detriment, everyone is in all the Slack channels of our company, right?

Turner Novak:

Wait, every employee of the company is in every customer Slack channel?

Ivan Burazin:

Yeah, there's like 35 of us. 35. There's not that many of us, right?

Turner Novak:

Okay.

Ivan Burazin:

And so the engineers will reply directly to engineering questions. People on go-to-market will reply to go-to-market. The support people reply to general support. And so our customers get very fast replies and solutions because we're just all there.

Turner Novak:

'Cause there's 35 people that are getting the ping.

Ivan Burazin:

Yeah, that's right. Which has other problems, right?

Turner Novak:

Yeah.

Ivan Burazin:

Which we're now solving for and can solve for, but that is how we've done that. And the thing is, you see this with a bunch of startups. They're a very small startup, they have whatever handful of customers, and they're like, "Oh, my customers love me 'cause I reply very, very fast."

And it's like, yeah, because you don't have customers, right? You don't have a large number of customers, and that should be that way. Obviously, to be very fair, there's companies that have few customers and still don't reply, so that is good, not bad.

Turner Novak:

Yeah.

Ivan Burazin:

But we've continued up to this velocity where we still answer. You'll get me in the Slack, literally. I still reply to Slack.

Now we've gotten to the point where that's starting to break. There's just no feasible way to do that, and hence that's why we're building this out more to have people dedicated to different things and align these different things.

But the trickiest thing for me is how do we add people, remove engineers directly from the Slack, remove all these other people, and still get that love from the customer? I'm really, really focusing on keeping that there.

Turner Novak:

What do you think you're gonna do to keep it? Do you keep an engineer on the account?

Ivan Burazin:

I think it's less about engineers, like people have to be engineers to do that. It is more about how people feel towards the company. Obviously everyone has stock in the company, and the people have been there for a while. Stock's worth much more 'cause it's like a $1 billion company right now.

And so people have ownership, and because they have ownership, you don't have to ask them, "Hey, did you reply to this person?" They just reply to the person. They're on the toilet with a phone and, "Oh, there's a ping, I'll just reply to the ping," right?

But as people come in at different stages of the company, people don't expect to do that.

Turner Novak:

Yeah.

Ivan Burazin:

Right? So how can I keep that culture where, when people see that, they will reply to that thing? And so it's more about the people that you hire versus anything else, I think.

Turner Novak:

I kinda wish I asked you this earlier, 'cause it's more tied in with when you were fundraising. A lot of the fundraising was just pure cold emails. And a lot of other stuff, you've just done a lot of cold outbound.

Ivan Burazin:

Yeah.

Turner Novak:

So everyone says you gotta get warm intros for this stuff. How do you send a good cold email?

Ivan Burazin:

Yeah. I think cold emails are like... What's his name? Harry Stebbings says his superpower is sending emails. Like, I must have always...

Everything from our pre-seed, which was the party round. I forget the number, I'm not sure I remember correctly. It's either 400 or 600 people that I've reached out to, right, cold.

And these are not randos. It's not like, oh, get a list of VCs, send to all. It's like, who invests in stuff, who does this? There's a whole market map of people interested, whatever.

Turner Novak:

Yep.

Ivan Burazin:

And you just cold email the hell out of these things, and cold email multiple times.

Same thing with the events that we do. Again, we would cold email 100 people to get 20 people. I just brute force cold email to the max. And you can brute force. People for some reason are scared to send emails. I don't know why.

Turner Novak:

Yeah.

Ivan Burazin:

But the other thing is people send shitty emails. They're very, very bad.

Turner Novak:

What does a bad cold email look like?

Ivan Burazin:

If it's long, it's bad. I'm not reading that.

Turner Novak:

So just objectively, the longer the worse?

Ivan Burazin:

The longer the worse. And people have a big problem with that. Especially when we work with a team and they're sending this email.

I'm like, "Send me the draft," and I see it, and I'm like, "Why the hell did you write this?" They're like, "Well, I want to explain all that." I'm like, "They don't have time." "But I don't know how to write it short." "Write it short. It has to be like a tweet."

Basically what you're trying to do for the person is, "Why the hell am I even opening this thing?" The subject, why am I even opening that? And then really quickly some anchors.

The way I would cold email things was like, "Hey, we're building this thing. I think you're interested because of XYZ." It's a long one sentence, right? "You're an infra founder. We're building this new infra. You might be interested. We've raised money from this person, this person, this person, this person." So you're getting social sort of...

Turner Novak:

Like, "Oh, I know that guy."

Ivan Burazin:

Yeah, "I know that guy. I can verify this. We have revenue X, and/or we've raised this much of the round."

'Cause also, in the tail end, it's much more trustworthy or valuable versus, "I'm raising a round. I have nobody. I'm pinging you." So if you're cold emailing and you're raising, "I'm gonna raise about $1 million. I have $600K of the $1 million," that's a very different signal, right? "If you're interested, let me know."

That's it. That's the whole email, right? I think some people have seen screenshots on Twitter of my old emails. It's generally that. So I can skim through it while walking and see if this is interesting.

So basically, if I'm reading that email, it's infra, these guys I know invested, a bunch of the round is done. Do I wanna talk to them? There's a 50/50 chance that you're gonna say, "Send me the deck," right? Might even talk to them.

Turner Novak:

So you don't send the deck first usually?

Ivan Burazin:

Usually I don't even send the deck. Nothing. I just send that. And it's also just plain text, no HTML, no unsubscribe, no "type stop," all that shit. Nothing.

Turner Novak:

You don't do the AI-generated third follow-up?

Ivan Burazin:

Yeah, that's it. And if I do a follow-up, I will literally do it again as, like, "Hey," you know. And also, the way I follow up, especially if it's the early days and people are interested, it would be like, "I added XYZ to the round. We got 30% more done." And so you're showing momentum to some person.

And then that might interest them. It's like, "Oh, these guys are still... they're almost done. They added these other people." Because when you think about it, you invest in people. If it's not a warm intro, what are the things that you need to actually be interested, right?

Turner Novak:

Yeah. I think a lot of it is how fast you move, right? And so if you're like, "We did all these things," I'm like, "Oh, okay, you're shipping stuff. That's pretty important."

One of the things I do with raising my fund is, you know, "The biggest LP for my last fund just re-upped." It's just giving you a quick update on this, like, "I'm doing another close," or, "Oh, I just invested in this cool company, Daytona. We co-invested with so-and-so."

And then they're like, "Oh, shit, co-invested with..." I don't know. Actually, who led the Daytona round?

Ivan Burazin:

FirstMark.

Turner Novak:

FirstMark. Do people like FirstMark? Generally, yeah. I feel like they do. So they're like, "Oh, hey, I like FirstMark. That's pretty good. Term sheet, pretty good. I gotta get in on this fund." You gotta show them the proof points.

Ivan Burazin:

Exactly. It's all proof points. It's all social proof. That's what I'm saying. What you want is very short, something I can skim through with my eyes, with the other proof points in there. That is all you need, right?

Turner Novak:

Yeah. And so you feel like people think, "Oh, I need to give them all the information to make their decision?"

Ivan Burazin:

And this is like, "No, you just want the proof points to get to the next step. You just want the reply." All you want is the reply, nothing else.

There's another way you can do that if someone's very important, and we did this recently. So in this round, we got a bunch of people: founder of Zoom, founder of Stripe, founder of Shopify, a bunch of these amazing founders.

The vast majority of them that we got was cold. But it would also be warm, where we would send it to the people that had connections. It's like, "Can you forward them this email?" Right? And so they would get bombarded.

I forgot which one it was, but one of them, their family office reached out, and they're like, "I got seven emails saying I should talk to you. So I'm gonna talk to you." Basically, that was the thing, right?

But it was also kind of cold outreach. It was my cold outreach that I sent once or twice, and then a bunch of these people... And they ended up replying to my first email, like, "Okay, I'll just reply to this person."

So there's pure cold, but then also if you're here... That's why there's a lot of power in being in San Francisco right now. You can meet people that know people within one degree, and if they'll vouch for you enough, that's the social proof point. If five of these people vouch for you, I'm gonna get on the goddamn call, right?

Turner Novak:

Yeah. So if you're a founder in Croatia somewhere, you're not in San Francisco, you gotta get here?

Ivan Burazin:

I mean, there's a bunch you can do remotely. Three years ago it was easier, 'cause it was still post-COVID. People were doing remote-type things. Now it's super in person, and now everything is here, so definitely get on the goddamn plane.

Turner Novak:

Yeah. So either move here or spend time here.

Ivan Burazin:

At least spend time. I don't think you necessarily have to move-move. So here's the thing I always tell people: how often do you see your closest friends in real life?

Turner Novak:

It's actually not that often. Maybe a couple times. Some people might say a couple times a year.

Ivan Burazin:

Exactly. A couple times. Let's say four times a year. They're the closest friends, right? So how often do you expect to see me, who's your acquaintance, if you might invest in me?

Turner Novak:

Maybe less than that.

Ivan Burazin:

Probably.

Turner Novak:

But maybe more than that too? I don't know.

Ivan Burazin:

Well, randomly maybe more, but not necessarily, right? And so if you're trying to be here, you have to be here enough that you are mentally here. You know all the Twitter jokes, you know all the people. You will rub shoulders with people.

If I'm trying to get you to invest in me, maybe you don't see me, but I was at three meetups this month. I'll be at three meetups next month. And then when you go to figure out if I'm legit, people are like, "Yeah, I saw him at the other thing the other day," right?

So you don't actually have to move full time. But you have to be here enough that it feels like you are here and that you're part of that circle.

Turner Novak:

Yeah, that's fair. Do you have a favorite founder, CEO, business or historical figure that you've really looked up to for inspiration for building a company?

Ivan Burazin:

I don't. The thing that I find interesting is... I love all founder stories, from founders way back in the day to founders today. Actually, I'll rephrase that. It's not just founders, it's entrepreneurs. So I will look at everything from how Jay-Z built his career to how some athletes build out their things.

The way the world works is actually quite similar across disciplines, but people are very focused on their own disciplines. And so if you can learn and understand from other disciplines and apply that to yours in a way that people don't, that gives you much of an advantage.

The reason why I say that is the way we built out Daytona's image is taken from the music world.

Turner Novak:

Oh, interesting. I did not expect you to say that.

Ivan Burazin:

Yeah. So the way I think about it is, when you get a new artist on the scene, they usually kick off with a launch with another artist.

Turner Novak:

Yeah. That's right. And they'll do featured tracks and stuff like that.

Ivan Burazin:

Featured tracks on other people. And so basically what happens is they get introduced to the market via a bigger one. Part of the clout comes over, 'cause if, whatever, pick your artist, says this one's cool, then they're automatically cool. And then they sort of kick off on their own.

If you remember the story I mentioned earlier, I would invite these other founders to speak, and hence mine, right? So it wasn't necessarily a cameo appearance on their thing, but it's basically, can you get that?

And it's the same thing with movies or TV series. You'll have one cast bring in someone else, and then they sort of take over afterwards.

As a kid, I read a lot about, one, video games, but it was more about the business of video games and how they were built. And two, artists and how they build out their own thing.

And so it's not just one person. There's a bunch of things. Jobs did a bunch of great things. Elon did a bunch of great things that you can pick from. They do different things. I don't run things similar to them. They're two very different people.

But in that sense, you pick what aligns with you from all these. I do try to keep it across the disciplines, 'cause I think that is where you can find some alpha. Everyone has read Elon's books, Jobs' books. Everyone wants to be those.

But I don't think everyone in Silicon Valley has looked at how music artists are created or how sports athletes do these things. And so a lot of it is outside of the actual job or art or tennis. Being the best tennis player is not just about playing tennis, right?

Being the best Formula 1 driver is not just about Formula 1. Being the best at all these different things is not about that. And so how you can understand how the world works is probably what I find inspiring.

Turner Novak:

Yeah. You mentioned video games. Did you have, or do you have, a favorite video game?

Ivan Burazin:

Oh, Mario Kart.

Turner Novak:

Oh, Mario Kart.

Ivan Burazin:

I will kick your ass on Mario... I'll kick anyone's ass on Mario Kart, yes.

Turner Novak:

I'm not that good at Mario Kart.

Ivan Burazin:

Yeah, whatever it is. Even if you were. I mean, I played a bunch of games, everything from first-person shooters to real-time strategies. Played a bunch of fighting games, a lot.

Turner Novak:

Oh, nice.

Ivan Burazin:

But Mario Kart, I still play from time to time. Still fun. I play very little video games now.

Turner Novak:

I'm probably in a similar boat. The one I play the most is Minecraft with my kids.

Ivan Burazin:

I've never played Minecraft in my life.

Turner Novak:

Oh, that's weird. Do you like Lego?

Ivan Burazin:

Yes.

Turner Novak:

It's kinda like playing Lego.

Ivan Burazin:

I would assume, yeah.

Turner Novak:

And if your kids like it, I mean, it's fun.

Ivan Burazin:

My kids are one and three, so they're not there yet.

Turner Novak:

Oh, okay.

Ivan Burazin:

So they're very small. I do have a racing sim. I'll sometimes play that. Sometimes Gran Turismo, but I don't have much time. But I played a lot of video games. Played a lot of Super Mario as a kid. A lot of Mario, yeah.

Turner Novak:

Maybe my claim to fame, I don't even know if it's a claim to fame: at one point, I was ranked second in the world in Gears of War.

Ivan Burazin:

Oh, wow.

Turner Novak:

I don't know if you ever played that one. It was a third-person shooter. That was for a week. And then I played a lot of Halo 3 specifically. I went to semi-pro Halo 3 tournaments. I don't know, I probably grew up thinking I'm gonna be a pro gamer when I grow up.

Going to those tournaments, I realized I was probably in the top 0.1%, but not in the top 0.01%.

Ivan Burazin:

Yeah.

Turner Novak:

So it was like, I don't think I can actually make a career playing...

Ivan Burazin:

Out of that, yeah. Pro gamer. The game that I was the best at, and I guess we've digressed very, very far, is a fighting game called Soulcalibur.

Turner Novak:

I've heard of that, yeah.

Ivan Burazin:

Yeah. Soulcalibur was, if I remember correctly, the very first fighting game which was actual 3D. You actually fought. You could try to hit me with a sword, and I can sidestep. I can go behind you, and I can smack you in the head.

Turner Novak:

Yeah, 'cause Mortal Kombat and Street Fighter are 2D.

Ivan Burazin:

2D, but they're just 3D graphics, right? But these are actually 3D. And the thing with this game is it was very hard to button mash. I don't know if people know the term. Basically, your baby kid could smash a controller and beat you sometimes on Street Fighter, right?

Turner Novak:

But Soulcalibur, because of the 3D...

Ivan Burazin:

You could parry and move. You had to be really good, right? You had to be very, very, very good.

Turner Novak:

Interesting.

Ivan Burazin:

And the whole thing was, I had a next-door neighbor who was much older than me. He had the console, and he would kick my ass. He would lay back like this and just kick my ass, right? I got so pissed off. I didn't have money, but I made a bit of money, and I bought a PlayStation, whatever it was, 2.

Turner Novak:

Oh, yep.

Ivan Burazin:

And then I didn't go to his place for two, three weeks. I remember this vividly. I played so much I didn't have any more thumbs. The thumb imprints were gone.

Turner Novak:

On the controller?

Ivan Burazin:

On my thumb.

Turner Novak:

Oh, on your thumb.

Ivan Burazin:

On my thumb. All gone. From the...

Turner Novak:

From just playing?

Ivan Burazin:

Joystick, controller buttons. I just played two weeks straight, right? It was gone. If I had to put an ID on it, I wouldn't have.

Turner Novak:

You could have robbed a bank at that point.

Ivan Burazin:

Yeah, but nothing.

Turner Novak:

You could've been...

Ivan Burazin:

I had the rest of the fingers, but not the thumbs.

And so then I remember this. I come to his house, right? And he's like, "Oh, you wanna play?" I'm like, "Yeah." And so he's leaning back. He's playing, playing, and then he'd...

Turner Novak:

He's like, "What the fuck?"

Ivan Burazin:

He's like...

Turner Novak:

"What the f... You're cheating."

Ivan Burazin:

He says, "You're cheating. What are you doing?" Right? And I kick his ass.

And then I was so good, I ended up going to a tournament. I won this tournament, and then people just wanted to play. What happened is there was a line of 50 kids playing, and whoever won stayed. I was there for, I don't know, an hour or two hours, just killed there. I just kept doing that.

And then there was this little kid watching. I'm like, "You know what, kid? I'm tired. Here, you can play instead of me." And so I give it to them. That was the only thing I could theoretically have gone pro in.

But there wasn't much of a financial thing around that game that made it work. But that was the one. It was personal spite. I just wanted to kick that person's ass.

Turner Novak:

You just wanted to get really good.

Ivan Burazin:

I just wanted to kick my neighbor's ass, who was making fun of me while he was kicking my ass, and so yes.

Turner Novak:

Yeah. Oh, man. That's awesome. I just think I'm too old to be good at video games now.

Ivan Burazin:

Oh, yeah. So my last thing we can say on that: my youngest brother was born in '91.

Turner Novak:

Okay. So was I.

Ivan Burazin:

Yeah, there you go.

Turner Novak:

So he's probably 35 now.

Ivan Burazin:

And so he's basically an on-screen commentator for Call of Duty.

Turner Novak:

Oh, is he?

Ivan Burazin:

Yeah.

Turner Novak:

Is this for MLG or...

Ivan Burazin:

No, this is for these majors that are in stadiums, where 60,000 people come to this thing.

Turner Novak:

Okay. Who runs these tournaments? Is it Activision that runs these?

Ivan Burazin:

No. I don't even know who runs this. And he will kill me 'cause I don't, but he sends me the pictures. He travels all over the world to do these things.

Turner Novak:

So he's the play-by-play commentator when someone's watching the stream?

Ivan Burazin:

Yeah.

Turner Novak:

Oh, cool. Yeah, that's cool.

Ivan Burazin:

Or people interview them, like, "Oh, how was the game? How did you feel?" Right, or whatever.

Turner Novak:

"How'd you feel when you got the snipe and you one-shotted that guy?"

Ivan Burazin:

Yeah.

Turner Novak:

Yeah, exactly. You're like, "No-scoped him."

Ivan Burazin:

Yeah, exactly. But there are tournaments, like million-dollar tournaments, whatever. And I forgot the age, but it's like you retire at 18 or whatever.

Turner Novak:

Yeah. You're considered old if you've graduated high school.

Ivan Burazin:

Yeah. Your reflexes are not good anymore. And so he goes to these things, and that's why I know the age groups. We're too old for this, right? I'm way too old for this, but...

Turner Novak:

Yeah. Well, this has been a lot of fun. Thanks for taking the time to do this. This has been awesome.

Ivan Burazin:

Of course. And I'm sorry that we digressed so far from technology, but yeah.

Turner Novak:

I mean, it's okay. The LLMs are all gonna get updated to the extent that they're gonna know that you were a good... I bet that's gonna be your fun fact in sales calls, when they populate the general...

Ivan Burazin:

"Oh, did you wanna play Soulcalibur? I have a thing." They take the call.

Turner Novak:

Well, yeah, this has been awesome. Thanks for doing it.

Ivan Burazin:

Thanks for having me.

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Find transcripts of all other episodes here.

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