[music]
Well, uh, Vadim, thanks for joining me
today. Uh, you are the founder and CEO
of a company that's been around since,
uh 2008
um, around there. Defco. Uh, tell us
about Defco. And, uh, I'm actually
excited to have you on because you're, I
guess I would say like a very
experienced engineer, software engineer,
and um [snorts]
um, looking forward to this
conversation.
>> Yeah, I mean, thanks for inviting. Yeah,
I know a few things about computers.
Maybe that's can't confirm it. But um my
company is uh uh diff we developing uh
different software for different uh
gross stage startups and enterprises and
yeah we started 18 years ago. So in some
countries we can all start drinking
finally. uh but it been a journey uh and
right now our main focus in gent
development and building uh custom
systems with enhanced development
techniques and as well as uh building
agents for many enterprises that we work
with. So basically replenishing human
workflows uh and automating human
workflows with actually agents that
works.
Yeah. And you know, in our pre-all, I
talked to you quite a bit and and it
just seemed like you were good engineers
before and now with AI tools, it just
seems like, you know, everybody uses
that term 10x engineer or 100x engineer,
but I think in your case, in my opinion,
it actually applies seeing some of the
output that you guys have uh have done.
What do you think about that?
I think realistically when we talk about
10x engineer 100x or like again you hear
all over the the numbers realistically
this is the question of um basically
what type of project you have and what
kind of and how you actually measuring
this because first of all this is
unrealistic metric the same as like you
remember the on the old days was like oh
this engineer delivered so many
thousands lines of code.
>> Yeah.
>> And does it mean that this engineer is
good
>> and like how we can actually measure
that we 10 times faster?
>> It is an actually interesting type of
illusion because in fact uh
>> in many cases humans do not touch the
tickets
>> or like not touching the codes etc. So
why and how we can actually measure
this? Mhm.
>> So it is an output per number of ticket.
But this is also questionable. Can we
measure this by speed of development of
the project? Can yes but in reality
architectural things in a project and
product type of decisions is actually
most uh limiting factor in many cases.
So again, um I think when we're talking
about those numbers, it's really great
tagline for Techrunch article. Um but
to actual folks on a field, it is more
like a bluff and you like, yeah, great.
Um we have the number, but what does
actually mean?
>> Well, what about let's let's go to
something really pragmatic like costs
for the same project. Would you say the
cost is is less or more or the same with
AI tools?
>> I think realistically we cut down the
cost
uh for our clients by at least 4x.
>> Wow.
>> In most cases
>> I would say in most cases it's
>> still discussion.
>> Um it's also really important to
determine if it's a new project or if
it's permale project. So it's existing
project those completely different um an
illusion that you have a like a
20-year-old u legacy code base and you
can really do wonderful things with AI
about this. That's a really interesting
uh myth. It's not in reality
unfortunately. You still have a many
many legacy issues as you would with
humans as well and for many of those
projects they not actually uh documented
well. So you have a lot of uh surprises
in along the way.
>> So a lot of refactoring going on
possibly.
>> Yeah. And this is really interesting
conversation when what type of project
you actually encounter and how to
approach uh because if we have a new
completely new project. Yeah. But like
again in the same way I don't see people
building um competitors of uh hotspot
and salesforce in one day. That's not
happening and I don't think it will
happen next year or two. uh I don't
think we're near uh those kind of
things. So actual large piece of
software it's not replaceable by uh AI
at least at this moment. Can you develop
really large system um with AI help and
develop it faster than previously?
Absolutely. Uh but again those things
are completely different.
So, I mean, one of the last questions I
was going to ask you was like, what
would you build today
as a
as a founder? Like, what would you
build? Like, let's say you were starting
your own project. What would you build
today? Now, you know, I was going to
leave that for last, but it sounds like
it just fits right into this part of
things. You know, if you're not going to
build SAP or you're not going to build
Salesforce, what are you going to build?
I mean it's all comes down to the old
matics of um system of decision, system
of engagement and system of record.
Yeah.
>> Um and now we have also another thing
that we call a system of intelligence
which is basically uh system of agents
or agentic systems which is a quite a
new concept in a way and um it's really
dependent on what uh could be done.
reality it's a lot of different
opportunities I would say um what to
build I think realistically
I would try to go against the most
hardest um and most compliance-based
industry
because no one would look there and
those things looks really tough in
reality they in many many cases not
really tough um and uh they all wants to
automate um again banking, healthcare,
insurance type um of uh businesses
any like complex uh manufacturing u drug
discoveries etc. So again when you go
against those complex type of system you
really finding an interesting
opportunities I think and you really can
defend your position much more than
building let's say a simpler u tool
market automation or something like this
>> because [snorts] come on like how many
marketmations tools are there and we all
use 10 maybe maybe life. [clears throat]
So again, I think this is uh my playbook
because uh you do not look into the most
brightest thing. You look into the most
unsexy
uh type of industry and you're like,
"Okay, now I will get and own this."
>> Yeah. It's funny that you say that
because I I watched a a video with
uh a fellow who is a billionaire, but
you don't know he was because he just
chose the most unsexy type of industries
like uh piping and and logistics and and
and different things like that. And it
sounds like the software industry is
going through the same sort of thing.
It's like choose the most boring
pro like part of software. the regulated
areas, the compliance areas, the the
piping, the the things that are
I I guess used on on a mass scale and
just build there. So that that's that's
very interesting to see. Um, and there's
a lot of people building out stuff in
Silicon Valley that are, you know, the
AI for HVAC companies, the a the AI for
whatever. And I think you have a strong
opinion on these things. Uh, just
looking at your website. Um, and I know
you're a you're a service provider, so
you will build anything, right? But, uh,
what do you enjoy building the most?
Oh, okay. So, you really prepared the
challenging questions. I like this. Um,
[clears throat] thank you
man. Like, um,
again realistically
um, I would kind of divide this into
three type of categories um that would
be uh, in a way interesting. I think
still in enterprises it's a lot of use
cases that um you can really solve and I
really like to see the the case when you
like take a large um system and you
really um let's say we had 150 sales for
working on the flow
and the output was let's say 100 mil
just as example uh and now we can take
and free up
basically more than half of the day of
those people so they can sell more.
>> Mhm.
>> In reality, it's not 200 mil, it's u60,
but it is good. And when you see those
examples, you're like, okay, this is
really the right flow of things.
And you know that you can accumate more
and you can get rid of uh even more
things that people do not need there.
And again I'm not talking about like
replacing humans because I think in
sales um you need human touch and I
think it will be valued for a long time.
I think the second thing is um really
challenging R&D projects.
>> Mhm. when you [clears throat]
when you look into the specifics of the
project and you like I have no freaking
idea how to build this stuff.
>> Mhm.
>> And again, you know the direction
but you have no idea how to build this
properly. You you doubting
um which approach you would choose. And
this is more complex type of things uh
where you do not trying to recreate the
same um systems that exist.
I think those are kind of like the most
fun and challenging to work with. Um in
a way um not necessarily the most
profitable in the cases. However, I
think it's a it's a lot of fun uh to
work with those.
Um beside this I think uh the last piece
is uh is uh the projects that you kind
of like you see the immediate result. Um
so you build the system and you work
with the founder. It's not about the
product, it's about the founder in this
case. Um because we work with a lot of
growth stage startups and we work also
with a lot of second time founders and
I'm a big fan of working with those guys
because they know what to do. Mhm. And
they sometime you sometimes see on like
some decision that they will make and
you like why and it end up being a great
deal. Um and again you learn from those
experiences
and I think this is the biggest kind of
advantage of working in this industry
that you can learn from so many folks in
the same time
and you have uh a lot of relationship
that really kind of leading you to
understanding that those type of
projects really is something different.
And when you see the napkin idea
um coming back to an actual 100 million
plus business in next couple of years.
This is really amazing.
It sounds like you're you're almost um
taking an advisor consulting position as
well. Uh are you also and I believe you
said you were you're also an investor in
some of these projects too if you like
the idea.
I um kind of like combining the advisor
and investor role in some of those
cases.
In some cases we work as a service
provider for them. In some cases we so
completely separate.
>> Okay.
And I [snorts] also met mentor in
Alchemist and few other places but yeah.
>> Okay. Talk about your um experience as a
investor. What do you like? What do you
what do you what would you invest in
>> on early stages? You mean?
>> Yeah. Yeah.
I think it's a kind of uh really
straightforward playbook. So it's a
always combination of timing uh market
and founder.
>> Yeah.
>> Realistically for me the founder is more
important than many other things. Um
because I see that um
sometimes the great founder will uh
create the market or sometimes the great
founder will adopt the product. And I
think the the fact that again the
founder is really of I mean founding
team in reality. Um
you want to see the folks that not just
knows what they do because this is the
boring part. Like if you have insurance
folks trying to build insurance startup.
Yeah. I mean they would build something
but they typically would not build a
disruptive thing.
>> When you have real outsiders come into
this market and they really create
something new and they don't know that
no one done this before like creating
the accounting systems in a way that no
one done before. you like
um why you have not done this before
like oh no one actually suggested this
but this is I think a good thing why you
skipped this oh uh no one actually
suggested this so again uh I think
challenging the start school is
important there and uh founders that
really kind of bold and really
persistent
um and really seen the future. I think
this is really really important and not
being afraid again on losing because
it's always the conversation I you
uh
have fear of losing or you have a um uh
basically passion to win.
>> And in both cases it's okay. And it's
just two type of of founders and you in
my cases I think you can find a right
playbook
but you need to see those eyes really
really
>> you need to see the fire there because
if you don't see the fire
>> it's it's all long done. That that that
that makes a lot of sense. You need to
look into a founders's eyes and see like
that man is really or that woman is
really crazy and they're going to take a
big risk or they're going to do what it
takes to to make this company succeed.
So it's like a passion.
>> Yeah. Because the founders journey is
really lonely.
>> The entrepreneurship in general really
really lonely and really really painful.
>> Mhm. People think about like smoothies
and all the funny things and uh looking
into the wonderful things of uh uh TV
shows etc. In reality it's freaking
broil guys.
>> Mhm.
>> And they like oh yeah we will raise so
much money. We'll do such wonderful
things. Come on. Like first of all only
one out of 10 will raise anything. um
second one of the trainer will raise
something else uh on the second round
and uh we can continue
>> and uh if you relying on the on
investments you already lost. So it's
it's many other things that exist in
this playbook that important to change.
[snorts]
Yep. And um
I think you said it right there. It's a
it's a it's a journey and it's something
like a lot of people don't take into
account. It's funny. Uh, did you see the
post by, uh, Gary Tan out of, uh, Y
Cominator talking about,
you know, uh,
founders who are in their 40s and 50s
being a little bit more resilient than
founders uh, well well, he didn't make a
comparison. He just made the statement.
And you know, I just thought that was
cool because there's people like myself
included um that have a lot of life
experience and uh that sort of goes into
your skill set and you know why
Cominator is known for just having 18y
olds, right? and and 23 year olds. But
to have the the founder and the the
manager managing partner of Y Cominator
say something like that was was kind of
like it made me smile a little bit. What
what are your thoughts about that?
I don't think it's specifically about
age or like specific type of
experiences. I think it's all about the
energy that you have.
>> Yeah.
Because again I see absolutely dumb 20
year olds and absolutely dumb 40 year
olds and 50 etc. And I have absolutely
brilliant folks in the same categories
and I see that they like really like
I see so many founders being so careful.
>> Mhm.
>> You not winning by being careful.
>> Yeah. You win it by betting and betting
again and again. The business is all
about experiments.
It's like, hey, I have a theory that
this stuff will work. I have no idea it
will. I have only limited control, but I
will do whatever it takes to really
prove the theory,
and it will not work by itself, and I
will push it as hard as I freaking can.
And the only way I succeeded if I really
analyze if this is actually a good
outcome or not. And I will be wrong in
many many cases. And this would be a fun
journey because I will fail so many many
times. And my successes actually comes
from those failures that I will learn
and I will adapt and will send up again
and we'll do whatever it takes. So I
think this is the kind of like the
journey and I think I have a lot of uh
folks in the 40s and 50s and even 60s
that I think is a great founders. Um
and in the same time I have the same
category that really kind of careful and
like oh I don't know if I should oh let
me take a vacation and think about this
stuff.
No, no. You you you know that this will
not work. Like you need to battle this
today. Mhm. Like it's
need to be uh done immediately. Uh not
like because like the point is
if you keep um uh combining those issues
um you will have a lot of issues
>> if you try to battle them and you
pertize them and you play right um sure
and it's not about the rules either like
again your own rules
again you need to remember that history
written by winners There's no losers.
I love your perspective. Like I I I
thank you for correcting me on that
generalization I made, which was clearly
a generalization. And it's it's hard to
to uh say anything across the board like
that. But uh you're right. You're right.
It is about attitude really. It's about
attitude, sense of urgency,
um, instinct, many different things that
that happen. Um, anyways, let's move on.
U, you've been previbe code, initial
foundations of vibe coding, and now
we're getting to the point where we're
having cloud agents just not just doing
work for you, and you're just coming
back and hitting the PR button or uh,
merge button. [snorts]
um where
what's wrong how has software changed
and and how is what is the career
progression for a software engineer
these days like h how what is what's the
best way to get started on all these
things
I want to be honest I have no idea
[laughter]
it's changing right yeah I
been asked this same question around
nine months ago
um oh 7 months ago. So basically the
OPUS was just released and um
we seen completely different flows of
agentic workflows again um it's all just
like started basically and um one person
that I think is 18 or 17 asked me about
like hey I study computer science what
do you think what is the next steps uh
will look like and I'm like man I have
no idea
>> because again I've been running this
business for 16 years or for 18 years
and we're the reality is I have no idea
where it will lead us in next um year. I
don't know where we will be in next
months. [laughter]
Um again the um horizontal
um
planning in many companies now like
weeks. Yeah. And it it is long because
[laughter] you literally don't know what
will happen tomorrow. So I think like
the reality of um many of those use
cases that I think the fundamentals is
important and right now how we see this
is um we don't need coders anymore.
Like we don't need people who write the
code because we're not writing code
anymore
>> specifically.
we need to understand uh the system. So
we need people who can design the
system. So we need architects, we need
product people [snorts] and uh we need
to create a right
harnessing uh for them to build those
systems
not other way around. So
in many cases it's all about the context
and all about putting the right
structure of AI to build us. So in the
software industry I think architects
still will be important.
I think really understanding and playing
really really fast and learning really
fast is also really important because
like it's not longer enough and not
longer actually making sense to just go
ahead and check your uh whatever
uh books uh and like learn something for
a year. No, those skills doesn't really
apply.
You need to learn really really fast and
you need to adapt.
>> The fun fact like again I don't care
which language you're learning. It
doesn't really apply anymore
because like again we took many projects
in the last 6 months for tech stack that
we had um limited capabilities for.
The fun fact, we actually never wrote
any code. Oh wow. It was all by a
[clears throat]
we found many issues in a legacy system.
We fixed those. We applied those things.
We're not writing this manually because
it doesn't really make sense because it
is expensive. Um first of all, it's
slow. And second, we will make mistakes.
Yeah. Will AI make mistakes? Sure. But
if we compare a number of mistakes of AI
to human, we actually will see that we
actually do pretty good on AI.
>> So I think like
like yeah you have so many issues with
yeah but like you developing 10 times
faster or 100 times faster.
>> Of course you will have issues. Yeah it
is expected you should have issues.
Basically you will have security
problems. You have bugs. you will have
some things that doesn't really make
sense. Sure, fix the prompting, fix the
harnessing and memory and yeah, go ahead
and uh fix those things uh in the
system, but do not touch the code. If
you touch the code, you kind of like
broke the idea of agentic development
basically.
Oh my goodness. So it went from
I I guess what you're saying is like it
maybe a year and a half ago it went from
yeah I'm using an AI coding assistant
it's helping me write 20% of my code 30%
it's checking things it's validating
things to maybe
8 months ago when Opus came out to oh
it's writing code it's writing 60 70%
and now you're seeing it's 100%.
Um, or close to 100%. I mean, it can it
can be argued it's it's it's always
going to be in between 85 and 100%. But
you're saying as an experienced vendor,
an experienced shop, you're nearing the
100 mark or you're closer to the 100
mark depending on the project just to be
clear. Wow. It is some projects that you
cannot do this. It's some limitations
that applies etc. But in many many cases
especially for new projects we we have
many uh smaller projects uh below let's
say 100k uh uh budgeting wise that is
basically one month one month's built
uh all agentic development.
Yeah, we spend a lot of time on creating
the right documentation and the right
harnessing and right uh logic to
actually create the flows there um and
ensure that AI knows everything and yeah
we mention EI to develop this basically
in a matter of days.
>> Wow. So the most time spent actually on
discussing functionality, making product
decisions, um all of those things,
writing with a genic systems, it's it's
really quick. Mhm.
>> [gasps]
>> So I remember working for a company
uh maybe about 7 8 years ago [snorts]
and there they used to charge I don't
know 20,000 30,000 for a website you
know maybe it's got a store on it maybe
it gets up to 40,000
um
it seems to me like that if somebody got
that quote today they would just go no
that's you want a simple website with a
an e-commerce store and a CMS and and uh
for for 40,000 are you kidding me you
you can do that now for probably in days
and and like 4x less the cost like you
said right so so where is the what is
the unique selling proposition like you
you it's different for you like you you
have a you have a business that has 18
years worth of clients your your your
reputation is amazing in the industry
but where does the business of software
development go from here and and you
know maybe you don't know like like you
said before but what is the edge that
people can have
>> I don't think anyone knows
>> this is the fun fact [snorts]
>> I mean
listen um if we're talking about uh the
websites we still have websites that
do for 100k.
>> Okay. Um it's not a simple promo website
obviously and it is many cases when AI
is not doing the best. Um it still
exists again it's not the silver bullet
for everything. Um pixel perfect is not
the best thing for AI. Um and uh again
we build system to leverage as much as
possible. However, we limited into
ability of doing this just because again
AI is not perfect there and if we have a
projects where uh client will tell us
hey this uh shade is 30% it's supposed
to be 45
you kind of like you cannot use the for
this will we will think it's okay
>> because it's really it's okay no one
cares
But someone [gasps]
>> someone in some enterprises will. So
realistically
um we have limitations there obviously
but uh for many projects those things
not really applies and not really
important because the time of the
feature that will leave is really low.
Uh and yeah you can adapt and you can
fix those things later etc. So it's a
iterative process
where the software development will go
it is the question that I have no idea
uh because I think the how I see the
industry right now um everyone using it
the
number of people that using this in
advanced level
so let's say we have uh the first level
of uh uh quitting assistance kind of
like a copilot etc. Um, [clears throat]
this is probably 80% of the market
or even more. And you still have, by the
way, a lot of folks that believe that
they can do things better than AI. And
thank you. I really appreciate that
those folks exist. They really helping
us to grow our business. Um, I I'm
really happy for this.
[cough and clears throat]
And last year we had those folks that we
had inside of the company that no longer
was a company because we don't need the
folks to really write better than AI. We
need folks to create systems for AI to
create systems that better. So it's
simple
where it will go. It's a good question
that I think I have really a lot of open
um uh open-ended uh discussions because
realistically
we don't really know if we will have a
system that will allow us to create
everything from scratch in the matter of
seconds.
I think a few kind of like ideas where I
think we kind of like are going. I think
in
um real life um what I see is the model
advancements that happening at least
like right now doesn't really affect the
quality of output so dramatically
because again the difference between
feeble meas
etc
is basically really minimal if you have
the right heart if you have the right
system and you're not stupid enough to
not create the documentation in a stupid
way. Um, in this case, you will have
pretty much a good output and you can
use
open source models as well and have cost
like that 10 times less. [clears throat]
I think this is where we kind of like
leading this into. So the better models
doesn't equal the better performance
because the problem is actually people
that prompting this.
>> Mhm.
>> And I'm not saying that the prompting is
a problem. I'm saying that many people
just do not give AI enough information
what they need to do. They give AI two
lines. Hey, build me
wherever
um this system um and I build me a
website for my company. I'm doing
wherever balloon uh sales for holiday
parties. Great.
It's not enough to describe the task.
You probably should really think through
the content first before you ask about
uh the website as example. in this case
is a simple uh um example and you need
to go through the understanding what the
actual flows um uh of users should be.
So I think this is not going away and AI
with better models will not solve this
and in large systems it's still the
question of really deep understanding of
the users and really deep understanding
of um what people will buy and what they
actually need.
>> Mhm.
>> And in many cases um it is the question
of harnessing and engineering uh those
systems.
Will we have uh more faster development?
Absolutely. Yes. Um I think um the cost
um like we kind of like have a kind of
like pricing crisis uh that coming
probably to the market
>> as well because um the cost is kind of
like going down in a way. Um
again right now I think many uh folks
set in more advanced levels um um uh of
uh agentic development systems have a
age of uh creating u faster and better
uh and I think the smaller dev shops and
uh folks that don't really s deep into I
think those guys
will get to this point. Uh but at this
point it uh we'll have more and more um
on um uh uh the folks that already on
the uh bigger level but we definitely
will have on like midmarket and lower
tier market we'll have a lot of folks
that kind of hey we'll do everything for
5,000 or whatever. Yeah, we'll have
those cases and again you kind of like
looking into this and with the same kind
of mindset as like can you let's say we
like 5 years ago. Yeah. Can we go to
cheaper developer in different countries
and build systems
>> for cheaper?
>> Absolutely. Uh will this be a good
quality product? No.
Like I mean some exceptions, sure, but
generally speaking, if you're hiring
someone for 15 bucks an hour,
do not expect them to build you a next
unicorn.
>> Yeah.
>> Like don't don't be like ridiculous
because people thinking that developers
for 200 bucks an hour and 20 bucks an
hour are the same thing. No, they're
like completely different.
>> Yeah.
>> Can both of them be stupid? Yes. But
generally this is this is a difference.
Yeah, that that that that makes absolute
sense and I see how your your your
advisory consulting investing sort of
like fit hand inand with that because uh
you definitely
uh they say taste and judgment is a big
thing these days and I think with your
experience it comes a lot of that. So,
um I just wanted to to to end out with
um I know that
you I've said this a couple times
already that you don't know where the
industry is going, but if there was one
bold prediction that you can make for
the next 12 to 18 months that you can
say, you know, I I I I I'll put my name
on this prediction. What would it be?
>> Oh boy. Uh, and after people will quote
me and I would be like, um, I I'll I'll
clip this one.
>> Oh no. Um, okay. I I think I I will give
you two just in case.
>> Okay. [laughter]
Uh, to to choose which one will work.
Um, probably no. Uh, none of them. I
think uh the first logic that we would
see is
that we'll have more and more um open
source usage.
>> Okay.
>> Uh so basically we'll have um
multiidentic systems on um many open
source uh models that um you're not
giving away your data. Again, if if
you're a small person like company
building some not like life science type
of stuff and you building another S for
X Y and Z things, it doesn't really
matter. But when we're talking about
like really companies with a lot of uh
private data, hey, open source is a way
to go and with the right harnessing,
it's actually not much worse than um the
best models on the market. Um so it is
and much cheaper like it it is really
important in terms of the inference. I
think this is the one prediction that I
see. The second is I think we'll have
more and more systems that um have a
different
um user flow experiences where we
actually have less uh people um
interacting with the system and doing
whatever system need like inputting
information inside of the CRM etc. So
you basically will have a system that
will give you uh tasks that already
completed
or suggest tasks to do. So it will be
something like okay so you had a
conversation with John uh so I logged
this conversation based on this uh
here's the proposal that I generated
please review and approve and here's the
contract please review and approve as
well as uh here's a few tasks to tell
the product team to potentially add and
I already send those so this is the way
how we would see the interactions with u
mini interfaces in the future I'm not
saying that all will be text. I think it
will be still interfaces and UI etc. I
think we need the uh visual
representation of those things. However,
I don't think we need um actually
manually click through those uh system
and interfaces.
And I would pay for this CRM uh more
than I would pay for the regular one
because it's actually reducing my uh
flows. And you can do this inside of
Hotspot. You can do this inside of
Salesforce right now if you set up this
right, but it's not a default.
>> Interesting.
Yeah, decision data is important. Yep.
Um, thank you VM for your your time
today. Uh, it was a very enlightening
conversation for me and a very fun one
because it's about software development
which uh
it's been a long-term passion of mine.
So, uh, have yourself a great day, sir.
And, uh, maybe stay on for a second.