Why You Should Join Warp
Revolutionizing the most foundational developer tool is a multi-billion dollar opportunity.
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Why You Should Join Warp
The year is 2022, and software has eaten the world. Every company is now a software company. To the delight of venture capitalists everywhere, businesses in every industry leverage both third party software and in-house developers to automate and optimize their workflows. Somewhere in Washington, Jeff Bezos and Bill Gates share a laugh while trading contracts between AWS and Azure.
Software has eaten the world, and as a result, some of the most valuable businesses in the world have been built on the single value proposition of making it easier to write and deploy software. Companies offering hosting services (Amazon Web Services, Google Cloud Platform, Microsoft Azure), APIs (Stripe, Twilio, Plaid), and process tools (Atlassian, Datadog, Github) are each primary contributors to and benefactors from the Fourth Industrial Revolution.
Despite this, the most important piece of software in a developer’s toolkit hasn’t changed in over 40 years.
The terminal.
The terminal is how developers talk to their computers. The terminal is what empowers developers to write, test, and deploy software. The terminal hasn’t changed since 1978, when the VT100 was introduced.
Modern software teams are far more collaborative and agile than teams 40 years ago. Every other tool they use reflects that. Modern project management (Jira, Asana), development (Github, VSCode), deployment (AWS, CircleCI), and monitoring (Datadog, Sentry) tools were all designed with collaboration and speed in mind.
Yet the terminal hasn’t caught up, despite its critical position at the bottom of every developer’s stack. It remains siloed. It has a learning curve that resembles the Berlin Wall and an interface that also resembles the Berlin Wall. Love it or hate it, frontend, backend, mobile, firmware, systems, machine learning, data, and security engineers rely on the command line to set up environments, write code, debug code, make commits, execute tests, run deployments, monitor statuses, and train models, among countless other one-off experiments and tasks.
The terminal occupies a unique position at the bottom of every developer’s stack, serving as the starting point of every software product and company ever built. There’s a multi-billion dollar opportunity in making the most important of developer tools as agile and collaborative as modern software development processes demand it to be.
Warp is doing just that by building the terminal for the 21st century. And it will create a monster business while doing so.
Background
Warp is a Rust-based terminal emulator currently available on MacOS. It’s not the first terminal emulator, or even the tenth. But it’s the first terminal emulator giving everyone (not just veteran users) terminal superpowers. It’s the first terminal emulator designed to leverage the power of the cloud. It’s the first terminal emulator designed for teams.
Concretely, Warp seeks to drive developer productivity by improving the base terminal emulator in two ways:
Providing a modern user experience out-of-the-box. Warp includes automatic command completions and suggestions, an improved input editor that functions like a modern word processor, and a block-based abstraction used to group individual commands and their outputs, among other quality-of-life improvements.
We found their AI command search feature particularly helpful. Tapping into cloud-enabled features. Warp can leverage the cloud to power features including synchronous and asynchronous collaboration, infinite history and session replay, org-wide analytics measuring developer activity and output, and an ecosystem of terminal plugins and apps, among other things.
While the base terminal will always be free, Warp plans on charging enterprise clients for access to these features. The product is currently in public beta. It’s exceptionally well polished; we’ve been using it for a few months ourselves and have absolutely loved it.
It’s already begun developing somewhat of a cult following:
Since launching publicly in early April, their Discord has accrued 6800 members, their Twitter 7100 followers, their Github 6000 stars, and the product itself “tens of thousands” of users. Even Mike Krieger, the Co-Founder of Instagram, is a fan: he’s working on a new startup in stealth, and uses Warp as his daily driver.
“I have been using Warp every day at work,” he said. “My favorite thing is the speed, both in terms of how fast it works and also how fast you feel while using it, especially the excellent typeahead and search. Warp brings terminals into the modern day.”
What’s worth emphasizing is how engaged Warp’s userbase is. We’ve confirmed with their team that the vast majority of users are active daily, giving Warp top-class retention metrics as a result. While their early userbase includes all sorts of different developers, we’re told that site reliability and devops engineers in particular have been quick to fall in love given their terminal-heavy daily workloads.
Warp was founded in June of 2020 by CEO Zach Lloyd, who was previously a Principal Engineer at Google working on Google Docs, the Co-Founder and CTO of venture-backed startup SelfMade, and the Interim CTO at Time Magazine. The company is currently under twenty full-time employees and is almost entirely composed of engineers.
Warp raised a $17 million dollar Series A in 2022 led by Dylan Field, Co-Founder and CEO of Figma. Other investors in the round included Mark Benioff (Co-Founder and Co-CEO of Salesforce), Jeff Weiner (Ex-CEO of LinkedIn), and Elad Gill (Co-Founder of Color Genomics, Ex-VP at Twitter). They also previously raised a $6 million dollar Seed round led by GV.
Warp has developed a product that users love. It’s got an all-star team of engineers and investors, and is led by an experienced founder. It’s got a lot of ✨ hype ✨.
But that alone doesn’t make a category-defining company you should drop everything to join.
In this piece, we’ll dig deeper to show why Warp is such a company. We’ll look at how they’re targeting a massive, globally important market. We’ll look at how their product positions them to become a leader in that market. We’ll look at how they’ll deal with competition, and how their team is perfect to execute on this opportunity. And we’ll do it all with as much thoroughness as we can muster.
Ready? Let’s begin!
Opportunity
We’ll begin our analysis of Warp like we do for all of our companies, from a first principle:
In order for a company to become massive, it must become a leader in a massive, growing market.
Many companies with clear product-market fit never become truly massive because they fail to meet this condition. Thus, we must establish two things:
Warp operates in a massive, growing market.
Warp’s product strategy allows them to become a leader in that market.
A Massive, Growing Market
Warp operates in the developer productivity space. Concretely, their market consists of companies who buy tools to improve the productivity of the developers they employ. We believe this to be a massive market for the following reasons:
Every company hires software engineers. As of 2021, there were roughly 1.8 million software developers in North America working in industries ranging from technology to healthcare to financial services.
A quick search on LinkedIn shows almost half a million open jobs for software engineers right now.
Every company is interested in maximizing the productivity of their software engineers. Software engineers are expensive, both to recruit and retain. Companies will pay top dollar to maximize the productivity of their developers, either through SaaS tools (Jira, CircleCI, IntelliJ) or other means (pallets of RedBull, 8pm dinner service, free bananas at Amazon).
Further, we believe this to be a growing market for the following reasons:
Global spend on software R&D is increasing. “Digital Engineering spend” will constitute over 50% of overall global engineering R&D spend by 2024, growing at a CAGR of 19% to reach over 1 Trillion USD.
There are more software engineers entering the workforce every year. The Bureau of Labor Statistics expects the number of total software engineers to increase by 22% between 2020 and 2030, growing three times as fast as the average occupation.
This isn’t even considering users like data scientists or hardware engineers, who also frequently utilize the terminal but are categorized separately by the Bureau of Labor Statistics. Suffice to say, Warp is playing in a massive, growing market.
A Leader in the Market
Next, let’s focus on Warp’s ability to become a leader in the developer productivity market.
Starting again from first principles, the surest way for a startup to become a leader in their market is to develop some groundbreaking improvement in a foundational aspect of their target market.
Foundational improvements are necessary since they address the whole market and can be expanded upon later. Improving a foundational tool or service means that everyone is a potential customer and that you have a sticky starting point for expansion into adjacent product lines.
Groundbreaking (10x) improvements are necessary to overcome the friction customers will encounter when switching to your service. While Apple can get away with pushing incremental iPhone improvements on consumers every year due to their brand and partner network, startups rely on unique value propositions strong enough to cut through the noise and pull customers towards them.
The largest technology companies were built by bringing groundbreaking improvements to foundational tools and services before expanding laterally. For example, Salesforce came to dominate the CRM market by introducing the first cloud-based offering with a revolutionary SaaS-style pricing model. They then expanded into marketing tools, data visualization, enterprise communications, and building the nicest offices in San Francisco.
Groundbreaking improvements to anything are rare, but groundbreaking improvements to foundational tools and services are generational phenomena. Companies that successfully capture these improvements inevitably dominate their markets. Let’s see how this framework applies to Warp.
Does Warp target something foundational?
Yes. Like we talked about before, the terminal occupies a unique position at the bottom of every software engineer’s stack. Literally every developer uses the terminal. Every software company ever started with a single command run from the terminal.
Are the improvements Warp introduces groundbreaking?
Here’s where we start to dig deeper.
To start, we don’t consider any of the “offline” features Warp includes to be necessarily groundbreaking. The autocomplete, improved input editor, and blocks are excellent utilities, but they all have open-source counterparts and are together too incremental to serve as wedges for scalable adoption. While they make for a clear improvement on the default terminal, we don’t believe they’re the key to getting teams to pay and switch.
That said, we believe that the capabilities of the cloud enable some truly unique value propositions that may serve as suitable wedges for enterprise adoption. Here are a few ways that Warp can leverage the cloud and their unique position in the developer stack to drive productivity.
Improving ramp time for new engineers
In the status quo, new hires or engineers switching teams spend a significant amount of time setting up environments and getting used to build/test/deployment workflows, among other things. Warp can reduce ramp time for these engineers by allowing team members to share environments and workflows, reducing time spent setting up and time spent asking teammates for help.
Recite the dark magic yourself with Warp™ Long-term, Warp can become a shared knowledge base in its own right by integrating example blocks, wikis, and setup guides in different parts of the codebase to make it even easier for new employees to ramp.
Improving incident resolution time
In the status quo, engineering teams debriefing after uptime or security incidents lack detailed information regarding how the team responded and resolved the issue beyond what individual engineers can remember, making it difficult to design systems around improving future response times. Warp plugs that hole, leveraging its cloud-enabled “infinite history” functionality to provide engineering leaders and stakeholders with information regarding team actions during critical moments. Stakeholders might be able to view who ran which commands when to scope and resolve the issue, as well as analytics regarding redundant and ineffective actions to optimize future incident responses.
Improving team efficiency
Warp can improve team efficiency by developing features around analytics and collaboration.
Analytics
In the status quo, engineering managers use tools like LinearB and Jellyfish to track high-level, task-related analytics to identify bottlenecks (i.e. unreviewed PRs) and optimize workflows. There is clear demand for analytics regarding the performance of engineering teams. Since Warp operates at a more foundational level, it has access to far more granular data around the development process like when certain commands are being run, when certain blocks are shared, and what specific outputs look like. Warp can leverage this data to generate analytics around common bugs and issues found in terminal output, the most commonly shared outputs, and the most frequently used CLI-tools. This would provide leaders with unique insight on the traditionally “offline” activities of their developers, helping to identify bottlenecks and improve processes. Stakeholders might receive a dashboard with these metrics alongside a tool allowing them to search through and export the raw data themselves.
Collaboration
Nothing will ever replace this but Warp is the next best thing In the status quo, collaborating on terminal-related work (getting feedback on output, working out kinks during setup, or running experiments and tests with command line tools) requires screen sharing over Zoom or copy-pasting output to Slack. Warp can build features around asynchronous and synchronous collaboration to make terminal-based collaboration faster. For asynchronous collaboration, they might have
Block sharing (already implemented). Allow users to easily share and view a block of terminal input and output via link. This makes it easier to share, compare, and save terminal-based work.
Block search. Allow users to search through the commands and outputs of their teammates. This makes it easier for users to find examples of commands and workflows they need to use themselves, or access important script outputs they need for informational purposes.
Block notebooks. Allow users to save, share, and edit persistent, runnable sequences or groups of blocks with additional comments. This makes it easier for users to package and share longer sequences of terminal-based work like setup sequences or comparison-based experiments.
For synchronous collaboration, they might add
Multiplayer. Allow users to synchronously edit input and view outputs from the same terminal session. This makes it easier for users to collaborate while debugging or running experiments.
Improving individual efficiency
The terminal isn’t forgiving to newcomers In the status quo, an engineer’s productivity on terminal-related work is heavily dependent on their individual proficiency with the command line. It’s difficult for an individual to be effective without knowing a significant number of commands and flags by heart. In addition to single-player features like autocomplete and AI-powered command search, Warp can help all individuals use the terminal more effectively in three ways:
Developers can leverage the knowledge of their teams more effectively via shared commands/workflows/notebooks as discussed above.
Developers can leverage the creativity of the Warp community via task-specific terminal apps and plugins delivered by an “app store” for the terminal; some developers would write GUI-based extensions for Warp focused on individual tasks like git, debugging, port scanning, cluster management, or certificate/key management, similar to Chrome extensions. These “terminal applications” might also target the workflows of certain types of engineers, like blockchain, security, or machine learning developers.
Developers can leverage deeper integrations developed by the Warp team with common tools they already use like Slack (receive notifications when a long-running task finishes), Stack Overflow (automatically search for error messages found in blocks), or Postman (import cURL requests).
We don’t expect all (or even most) of these potential value propositions to resonate with developers. The important thing is just the incredible quantity and uniqueness of the value propositions Warp can access due to their unique position in the developer stack. We believe the factors above collectively precipitate a groundbreaking improvement within terminals, the most foundational of developer tools.
Competitive Landscape
While there aren’t any other private companies developing a cloud-centric terminal emulator, there are a large number of open-source, freely available terminal emulators for developers to download and use. The more popular ones include
Alacritty - a cross-platform, OpenGL terminal emulator (39.5k stars on Github)
Hyper - a cross-platform terminal emulator based on web technologies (38.6k stars on Github)
Kitty - a cross-platform, GPU based terminal emulator (14.8k stars on Github)
iTerm2 - a feature-rich MacOS terminal emulator (12.4k stars on Github)
Wezterm - a cross-platform, GPU-accelerated terminal emulator and multiplexer (4.4k stars on Github)
Besides the input/output blocks, all of these terminals (including Warp) ship with a similar set of “offline” improvements to a developer’s workflow: autocomplete, improved search, split panes, hotkey windows, etc. A performance benchmark comparison of these terminals done by the Warp team can be found here.
We don’t consider any of these terminals to be serious competitors to Warp long-term for two reasons.
None will offer the cloud-based features Warp is capable of. These open source tools won’t have companies behind them paying for the development of such features or the server bills required to support them and won’t be able to access the unique cloud-based value propositions described above as a result. They don’t pose a competitive risk to Warp, like how Pencil Project never posed a threat to Figma.
sudo stop crying son All of these terminals exhibit similarly steep learning curves, one of big problems Warp is solving. Warp fills a large gap in the market by providing a terminal that is just as accessible as it is powerful. It will build a long-term advantage by capturing the hearts and minds of the next generation of programmers just as they’re starting.
That said, the open source terminal with the strongest potential of becoming a competitor would be Hyper. Hyper was developed by and is actively maintained by Vercel, the unicorn startup behind Next.js, a popular front-end framework. Hyper is already very popular and Vercel already has a strong relationship with and understanding of engineering teams. When Warp crosses the chasm and begins scaling enterprise adoption (proving the product and business model), it would make sense and be possible for Hyper to release a competing product with the same set of cloud-based features. Vercel could then leverage its existing network of clients to jumpstart distribution among enterprise and SMBs. Even here, however, Warp would have an upper hand due to performance: since Hyper is built using web technologies (HTML/JS/CSS, WebGL), it is orders of magnitude slower than the Rust-based Warp. This will not only hinder group adoption of their main terminal, but it will also make writing performant UI and compute-heavy extensions/overlays to it difficult.
Even then, Warp’s product gives them strong moats against any potential long-term competitors. Their business exhibits best-in-class defensibility on three different levels:
On an individual level, the terminals are foundational, habit-forming tools. Once Warp convinces a user to switch based on one of their game-changing features (as they’ve done to tens of thousands of developers so far), it’ll be really difficult for competitors to get them to leave, short of them introducing some revolutionary functionality themselves that Warp can’t replicate.
On a team level, Warp builds strong network effects via shared workflows, environment management, integrated documentation, infinite history, and org-wide analytics. Once teams have switched to Warp, it will be difficult for competitors to get individual developers to leave since that would mean missing out on the collective knowledge of their teammates, and it will be difficult for them to get teams to leave because that would mean setting up all of their knowledge and processes again from scratch.
On a community level, Warp builds strong network effects via a shared ecosystem of terminal plugins and apps. A developer community will build extensions for an “app store” similar to the one on VSCode, which will provide additional value to every Warp user. It’ll be difficult for competitors to get individuals to leave because a new terminal ecosystem would have far fewer apps and extensions.
The market is wide-open for a product like Warp’s, and they can build some of the strongest moats possible by getting there first.
Execution
Warp has an excellent page describing their team, but we’ve also gone ahead and stalked all of their LinkedIn profiles so you don’t have to yourself :)
After doing so, we can confidently say that not only have they cut no corners in building one of the strongest teams we’ve seen, but that more importantly, they’ve built the perfect team for the product and market they are tackling. Warp is under 20 full-time employees and is overwhelming composed of engineers along with one designer and a handful of developer advocates to handle their rapidly growing community. Every member of their team has a background working at top companies and studying at top schools - they’re all highly capable operators who have walked away from a lot to join this startup. Let’s go over a few of their key players.
Zach Lloyd - Founder, CEO
Zach was previously a Principal Engineer at Google, where he was the overall tech lead on Google Docs and the head of Google Sheets, receiving about 10 patents in the process. He was also previously the Co-Founder/CTO of SelfMade (which raised 16 million) and the interim CTO of Time Magazine. He holds a B.S. in Symbolic Systems from Stanford and dropped out of Yale Law School.
Shikhiu Ing - Design Lead
Shikhiu previously led a team of 30 at Google as the design lead for Google Docs. Previously, he worked at R/GA on the award-winning Nike+ Fuelband and at Adobe on Photoshop Mobile.
Michelle Lim - Growth Lead
Michelle was one of the first engineers to join Warp. She previously interned at Robinhood, Facebook, and Slack as a KPCB Fellow. She holds a B.S. in Computer Science from Yale, where she co-founded their first health tech incubator, a startup helping with doctor-patient communications, and was a venture partner with Contrary.
Roshan Fernando - Chief of Staff, Growth
Roshan previously interned at Doordash, Goldman Sachs, and Microsoft in engineering and product roles. He was also previously employee number one at Sympto Health and holds a B.S. in Computer Science from UC San Diego, where he won Caltech Hacks and was a venture partner with Contrary.
David Stern - Software Engineer
David was previously a Staff Software Engineer/Tech Lead at Youtube, where he led Youtube Live. He holds a B.S. in Computer Science from Brown.
Aloke Desai - Software Engineer
Aloke was previously a Senior Software Engineer/Tech Lead at Google for Google Docs. He holds a B.A. in Computer Science from Pomona.
Chuck Pierce - Software Engineer
Chuck was previously a Staff Software Engineer at LinkedIn and Sony. He holds a M.S. in Physics from UC Davis and a B.S. in Physics from SJSU.
Ian Hodge - Software Engineer
Ian was previously a Software Engineer at Facebook. He holds a B.S. in Computer Science from Stanford.
Zheng Tao - Software Engineer
Zheng was previously a Software Engineer at Dropbox, Amazon, and Gem. She holds a B.A. in Computer Science from Waterloo.
Jess Wang - Developer Advocate
Jess was previously a Software Engineer at DoorDash, Microsoft, and PayPal. She holds a B.S. in Computer Science from Harvey Mudd.
For the sake of brevity, we weren’t able to cover the entire Warp team, but you get the point. It’s a stellar team full of people who have worked on some of the most impactful cloud-based products of the past decade. They’ve each individually walked away from a lot to join this journey, but most importantly, they’ve got the critical combination of skills that are necessary pull off a product like Warp:
Highly skilled, rigorously-minded engineers who will build the secure and performant foundations that can power a product like Warp. Zach told us about a time David spent three weeks refining the text-rendering pipeline in their custom rendering framework to fix a (barely noticeable) bug where the spacing between letters was sometimes fractionally off and how Zheng once independently tracked down and fixed an issue where corners in their UI elements weren’t rounding properly by a few pixels. They have a level of craftsmanship and obsession rarely found on engineering teams, partially due to how everyone on the team uses the product every day.
Entrepreneurial, fast-moving engineers who will define and build killer features on top of those foundations, allowing Warp to differentiate itself. Zach told us how the team recently did a hackathon where they ideated and implemented four sizeable, yet-to-be-announced features in just one weekend.
We anticipate that the Warp team will end up looking a lot like the team at Ramp, whom Packy already did a wonderful job of describing in this piece.
Culturally, one tenet Warp prizes amongst its engineers is what their CEO Zach calls a “product-first” mindset. That is, engineers who care about the end product and user experience above everything else, more so than any intrinsic beauty in the code itself. We agree with Zach; it’s an absolutely critical trait given the mission of his company.
Attempting to revolutionize something as foundational and antiquated as the terminal means that there’s an enormous amount of product latitude to contend with, far more than at most startups building less-ambitious tools with singular value propositions. Because of how there are so many compelling directions to go in and features to build, the production of a useful, polished, and cohesive product will require all team members to generate, scope, and prioritize ideas with a deep understanding of the user experience.
For the wrong engineering team, it’s a nightmare. For the right one, it’s something worth salivating over. There are a few other traits valued in their culture, but we thought that this was most worth pointing out.
Warp has an exceptional team already, but the next hundred people they hire will make just as much, if not more of an impact long-term. It’s good to see that they’ve got the cultural tenets in place to ensure those next 100 people are well-equipped to build this company.
Comparables
To help make things concrete for you, we think it might be helpful to consider some other companies that have become leaders in the developer productivity space. Each of the following companies became leaders in specific niches of the software development workflow, achieving multi-billion dollar valuations in the process. If Warp can become the Terminal Company™ like we expect, then they stand to do at least as well given their dominance of the most foundational developer tool.
JetBrains
JetBrains is a Czech software company that is one of the leaders in the IDE (integrated development environment) market. Despite the popularity of VSCode (which is free), they generated revenues of around 380 million USD in 2020 and are valued at upwards of 7 billion.
GitLab
GitLab is an American software company that is one of the leaders in the source repository market. Despite fierce competition from GitHub (acquired by Microsoft for 7.5 billion in 2018), they IPOed in 2021 with a valuation of around 15 billion.
Datadog
Datadog is an American software company that is one of the leaders in the cloud monitoring market. Engineers use Datadog to monitor events around their cloud services and infrastructure. Founded in 2010, they IPOed in 2019 with a valuation of around 11 billion.
Atlassian
Atlassian is an Australian software company that is one of the leaders in the software project management market, knowledge base, and source repository markets. They produce popular products like Jira, Confluence, and Bitbucket. They are currently valued at around 42 billion.
Conclusion
Software has eaten the world, and every company is now a software company. As a result, some of the most valuable companies in the world have been built on the single value proposition of making it easier to write and deploy software. Warp is doing that also at the most foundational level by reinventing the one tool every developer uses daily to write software.
They’re hiring: Join Us | Warp
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