There are a lot of recent entrants to the AI startup scene, but one founder who’s been around for a while is Builder.ai’s Sachin Dev Duggal.
The UK-headquartered company helps businesses small to giant build web or mobile apps without the need for technical knowledge. The Port Authority of Singapore is using it to build software to manage container loads, while a nursery school is using it to build a parent-teacher app. On average, these projects take about three to four months, versus 12 to 18 with traditional software development companies, according to Duggal.
Builder.ai has roughly 1,000 employees and this year even managed to raise a massive $250m round from the Qatar Investment Authority and others during the worst tech downturn in recent years.
But Duggal is not a stranger to criticism. Former and current employees told the Wall Street Journal back in 2019 that Builder.ai’s precursor (the company has since changed its name) overstated its AI capabilities and understated the role humans played in the software development process. The founder responded that the company was always clear with customers and investors about using what they refer to as “human-assisted AI”. Duggal told Sifted he’s “glad” the article came out because it helped the company “focus”.
Eleanor sat down with Duggal on the Sifted podcast (listen here) to chat about how the business has changed since then and the role that humans and AI play now. They also chatted about the mistakes in hiring that he thinks he’s made, AI salaries — and even Buddhism. Here are the highlights.
How exactly Builder.ai uses AI
Builder.ai wants to cut the number of people needed to make software. How? By thinking of apps as building blocks of code that can be reused and reshuffled again and again, and only using human input for final customisation.
“[We‘re in] a world where it [takes] between 1.2 and 1.8 people to build a piece of software. The issue we have is demand still far outstrips supply, so if we can get to a world of 0.6 or 0.5 or 0.8, I feel like you’re going to start to see a demand and supply match,” Duggal says.
To achieve this, Builder.ai uses a combination of third-party open-source models — like Google’s Bard — that it customises. “What’s key is in many cases, it’s not a single model problem, so we cascade or daisy-chain the models.”
He says that some older AI models — especially computer vision models — work better. “They don’t have the fat that the new ones do and they’re laser fast.” Builder.ai is using large language models with caution, he added, because they’re known for making things up.
“In many cases, we are putting really tight boxes around how we use outsourced models, which are different — at least the way we look at it — to in-sourced open-source models where we’ve made adjustments.”
The company is now looking into using AI to understand customer intent — or, in other words, analysing what a customer really means and wants when they ask for a software feature change — and has two PhDs out of their AI team whose job is just looking at content.
Working with developers — and the mistake there
The apps created on Builder.ai’s platform get their finishing touches applied by what the company calls “experts” — developers who work at dev shops (web development agencies) that might be in any of 11 time zones. Duggal says one mistake the company has made was treating its experts as “capacity”.
“We are this year trying to make the shift to calling them our partners,” he says.
Builder.ai scores developers on their work to decide whether or not to work with them again, and Duggal says he wants that score to be something developers put on their CV, similar to being a Microsoft Certified Professional.
The advantage of being a British AI company
Duggal is British-Indian and lived in the US from 2011 to 2017, but he says that he has headquartered Builder.ai in the UK because of the strong talent pool and lower cost of talent.
“We’re very sensitive towards spending wisely because you never know when there’s a winter coming. A really good well-paid engineer in the UK or a PhD or data scientist is probably about 50% the cost of the West Coast,” he says, adding that in the US, “no one gets out of bed for less than half a million dollars.”
Staying lean and company goals
With more scarcity of capital, higher interest rates and economic uncertainty, both investors and founders have shifted their sights towards profitability instead of growth. Duggal says his north star is somewhere in the middle between the two.
“My message to the board has been: this is no longer a sprint. Now we’re running a marathon,” he says, adding the company is aiming for “growth, but not at any cost. We really want to drive towards free cash flow.”
One growing pain that the company has had is in hiring — something echoed frequently by scaleup CEOs who have to hire dozens — or even hundreds — of people in a short space of time.
“I don’t think we hired well all the time. We made a lot of mistakes. But is that because you were growing too quickly or you didn’t have a framework around who you wanted to hire? I think it’s all of them if I’m honest,” he said. “We’re now being really mindful.”
He said that means trying to use past hiring data to predict who might be a good hire, and he has been successful in getting more referrals to the business.
“This is a work in progress. I think it’s a challenge for every fast-growing startup. It’s tough, and the market doesn’t help. We’ve seen massive wage inflation in every market. From India to the US, we haven’t yet seen [wage] cooling despite layoffs at tech companies.
Finally, Duggal shared why he has eschewed the CEO title in favour of being known as chief wizard.
“Life can be very serious a lot of the time,” he says, but using the chief wizard title “removes a little bit of the formality, the gravity of having a conversation.”
It also means, “still not qualified to be a CEO. I am very cognizant that I am the person who will screw this up, so I don’t want the title until I know I won’t.”
Builder.ai’s Sachin Dev Duggal is also speaking at our upcoming Sifted Summit on October 4-5. Get your ticket here.