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We are SO excited to share our conversation with Dharmesh Shah, co-founder of HubSpot and creator of Agent.ai.

A particularly compelling concept we discussed is the idea of "hybrid teams" - the next evolution in workplace organization where human workers collaborate with AI agents as team members. Just as we previously saw hybrid teams emerge in terms of full-time vs. contract workers, or in-office vs. remote workers, Dharmesh predicts that the next frontier will be teams composed of both human and AI members. This raises interesting questions about team dynamics, trust, and how to effectively delegate tasks between human and AI team members.

The discussion of business models in AI reveals an important distinction between Work as a Service (WaaS) and Results as a Service (RaaS), something Dharmesh has written extensively about. While RaaS has gained popularity, particularly in customer support applications where outcomes are easily measurable, Dharmesh argues that this model may be over-indexed. Not all AI applications have clearly definable outcomes or consistent economic value per transaction, making WaaS more appropriate in many cases. This insight is particularly relevant for businesses considering how to monetize AI capabilities.

The technical challenges of implementing effective agent systems are also explored, particularly around memory and authentication. Shah emphasizes the importance of cross-agent memory sharing and the need for more granular control over data access. He envisions a future where users can selectively share parts of their data with different agents, similar to how OAuth works but with much finer control. This points to significant opportunities in developing infrastructure for secure and efficient agent-to-agent communication and data sharing.

Other highlights from our conversation

* The Evolution of AI-Powered Agents – Exploring how AI agents have evolved from simple chatbots to sophisticated multi-agent systems, and the role of MCPs in enabling that.

* Hybrid Digital Teams and the Future of Work – How AI agents are becoming teammates rather than just tools, and what this means for business operations and knowledge work.

* Memory in AI Agents – The importance of persistent memory in AI systems and how shared memory across agents could enhance collaboration and efficiency.

* Business Models for AI Agents – Exploring the shift from software as a service (SaaS) to work as a service (WaaS) and results as a service (RaaS), and what this means for monetization.

* The Role of Standards Like MCP – Why MCP has been widely adopted and how it enables agent collaboration, tool use, and discovery.

* The Future of AI Code Generation and Software Engineering – How AI-assisted coding is changing the role of software engineers and what skills will matter most in the future.

* Domain Investing and Efficient Markets – Dharmesh’s approach to domain investing and how inefficiencies in digital asset markets create business opportunities.

* The Philosophy of Saying No – Lessons from "Sorry, You Must Pass" and how prioritization leads to greater productivity and focus.

Timestamps

* 00:00 Introduction and Guest Welcome

* 02:29 Dharmesh Shah's Journey into AI

* 05:22 Defining AI Agents

* 06:45 The Evolution and Future of AI Agents

* 13:53 Graph Theory and Knowledge Representation

* 20:02 Engineering Practices and Overengineering

* 25:57 The Role of Junior Engineers in the AI Era

* 28:20 Multi-Agent Systems and MCP Standards

* 35:55 LinkedIn's Legal Battles and Data Scraping

* 37:32 The Future of AI and Hybrid Teams

* 39:19 Building Agent AI: A Professional Network for Agents

* 40:43 Challenges and Innovations in Agent AI

* 45:02 The Evolution of UI in AI Systems

* 01:00:25 Business Models: Work as a Service vs. Results as a Service

* 01:09:17 The Future Value of Engineers

* 01:09:51 Exploring the Role of Agents

* 01:10:28 The Importance of Memory in AI

* 01:11:02 Challenges and Opportunities in AI Memory

* 01:12:41 Selective Memory and Privacy Concerns

* 01:13:27 The Evolution of AI Tools and Platforms

* 01:18:23 Domain Names and AI Projects

* 01:32:08 Balancing Work and Personal Life

* 01:35:52 Final Thoughts and Reflections

Transcript

Alessio [00:00:04]: Hey everyone, welcome back to the Latent Space podcast. This is Alessio, partner and CTO at Decibel Partners, and I'm joined by my co-host Swyx, founder of Small AI.

swyx [00:00:12]: Hello, and today we're super excited to have Dharmesh Shah to join us. I guess your relevant title here is founder of Agent AI.

Dharmesh [00:00:20]: Yeah, that's true for this. Yeah, creator of Agent.ai and co-founder of HubSpot.

swyx [00:00:25]: Co-founder of HubSpot, which I followed for many years, I think 18 years now, gonna be 19 soon. And you caught, you know, people can catch up on your HubSpot story elsewhere. I should also thank Sean Puri, who I've chatted with back and forth, who's been, I guess, getting me in touch with your people. But also, I think like, just giving us a lot of context, because obviously, My First Million joined you guys, and they've been chatting with you guys a lot. So for the business side, we can talk about that, but I kind of wanted to engage your CTO, agent, engineer side of things. So how did you get agent religion?

Dharmesh [00:01:00]: Let's see. So I've been working, I'll take like a half step back, a decade or so ago, even though actually more than that. So even before HubSpot, the company I was contemplating that I had named for was called Ingenisoft. And the idea behind Ingenisoft was a natural language interface to business software. Now realize this is 20 years ago, so that was a hard thing to do. But the actual use case that I had in mind was, you know, we had data sitting in business systems like a CRM or something like that. And my kind of what I thought clever at the time. Oh, what if we used email as the kind of interface to get to business software? And the motivation for using email is that it automatically works when you're offline. So imagine I'm getting on a plane or I'm on a plane. There was no internet on planes back then. It's like, oh, I'm going through business cards from an event I went to. I can just type things into an email just to have them all in the backlog. When it reconnects, it sends those emails to a processor that basically kind of parses effectively the commands and updates the software, sends you the file, whatever it is. And there was a handful of commands. I was a little bit ahead of the times in terms of what was actually possible. And I reattempted this natural language thing with a product called ChatSpot that I did back 20...

swyx [00:02:12]: Yeah, this is your first post-ChatGPT project.

Dharmesh [00:02:14]: I saw it come out. Yeah. And so I've always been kind of fascinated by this natural language interface to software. Because, you know, as software developers, myself included, we've always said, oh, we build intuitive, easy-to-use applications. And it's not intuitive at all, right? Because what we're doing is... We're taking the mental model that's in our head of what we're trying to accomplish with said piece of software and translating that into a series of touches and swipes and clicks and things like that. And there's nothing natural or intuitive about it. And so natural language interfaces, for the first time, you know, whatever the thought is you have in your head and expressed in whatever language that you normally use to talk to yourself in your head, you can just sort of emit that and have software do something. And I thought that was kind of a breakthrough, which it has been. And it's gone. So that's where I first started getting into the journey. I started because now it actually works, right? So once we got ChatGPT and you can take, even with a few-shot example, convert something into structured, even back in the ChatGP 3.5 days, it did a decent job in a few-shot example, convert something to structured text if you knew what kinds of intents you were going to have. And so that happened. And that ultimately became a HubSpot project. But then agents intrigued me because I'm like, okay, well, that's the next step here. So chat's great. Love Chat UX. But if we want to do something even more meaningful, it felt like the next kind of advancement is not this kind of, I'm chatting with some software in a kind of a synchronous back and forth model, is that software is going to do things for me in kind of a multi-step way to try and accomplish some goals. So, yeah, that's when I first got started. It's like, okay, what would that look like? Yeah. And I've been obsessed ever since, by the way.

Alessio [00:03:55]: Which goes back to your first experience with it, which...

The Agent Network — Dharmesh Shah

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