Replit’s Path to Product-Market Fit — The $1 Billion Side Project

Sometimes the signals of product-market fit are so strong, they can no longer be ignored. In the latest installment of our Paths to Product-Market Fit series, Amjad Masad takes us on Replit's unconventional journey from college side project to billion-dollar AI startup.

Outline

In the startup world, we often hear stories of founders who’ve dreamt of starting a company—any company—since childhood, with big business ambitions stemming from their days of running a lemonade stand. This is not one of those stories.

Amjad Masad’s founder journey began instead with a singularly focused vision: bringing the power of software creation to everyone. Leading a business was more of a means to that end. “I always was attracted to the entrepreneurship track, but I’ve always ultimately been guided by my worldview when it came to creating technology,” Masad says.

He started with the premise that coding should be as simple as opening up a new tab in a browser. That might not seem all that groundbreaking in 2024, in an era when LLMs can now write code for you. But while collaborative, web-native tools like Google Docs emerged in the late 2000s, real-time collaborative coding in a web browser was still not widely available for a surprisingly long time.

This pain point was the genesis for the open-source project that would become Replit. He and a few of his university friends built the project, then known as Repl.it, as a preliminary way to get a REPL (a computer programming term for Read-Evaluate-Print-Loop) for your go-to coding language whenever you need one.

CREATING THE EARLY PROTOTYPE

As a college student at Princess Sumaya University in Jordan, Masad showed up to campus brimming with ideas. But reality quickly nixed these lofty plans.

“As computer science students, the first thing we were faced with when taking a programming class was the initial slog of setting up the development environment. It wasn’t just a one-time thing, it was constant,” Masad says. Even after clearing that initial hurdle, the path ahead was still fraught. Once an environment was set up, it was nearly impossible to collaborate with anyone async.

“If you talked to any engineer, they’d know the struggle,” he says. “I’d write some code, and it would work on my machine, but not my project partner’s or my professor’s. It made it incredibly difficult to code together.”

This was back in 2008, when single-page applications like Google Docs were just emerging and more and more technology companies started shifting products to the cloud. Masad assumed that meant that a collaborative web-based code editor was just around the corner. "But when I looked around, there was nothing. There was no platform that allowed you to run code, share programs, and collaborate with others."

So he decided to take matters into his own hands. With the naivety and ambition of a young developer, he set out to build the tool he envisioned. "I thought to myself, 'How hard could it be?" Masad laughs. "It turns out, the prototype was easy. I created a text box where you could input JavaScript, click a button, and it would evaluate the code. There was also a way to save and share it, and my friends loved it.”

I immediately got feedback that what I was building was useful, which is what every developer wants to hear.

Buoyed by the positive response, Masad dove headfirst into this new approach, compiling various languages to JavaScript — eventually expanding his project to include more languages. (He even attempted to write a Python interpreter in JavaScript, a challenge that consumed him for 12 months before he eventually admitted defeat.) But a serendipitous discovery changed everything. "One day, I stumbled upon a project by a research group at Mozilla,” Masad says. “They were exploring the idea of compiling different languages to JavaScript, treating JavaScript as a bytecode interpreter. That captured my imagination."

To his delight, it worked. He developed a prototype that was the first to support Python, Ruby, and several other languages in the browser, and open-sourced it. This early project, which he called Repl.it, laid the foundation for what would eventually become the company Replit, Masad's integrated development environment platform. But let’s be clear here — in Masad’s eyes, at this point in time Repl.it was still very much a side project.

BRANCHING OFF

While working on Repl.it on the side, Masad was also laying the groundwork for a career in tech (one that he hoped would land him in the U.S. someday). Upon graduating, he nabbed a job as a software engineer at Yahoo’s office in Jordan. But he continued to work on Repl.it on nights and weekends to keep up with the growing demand for the project, alongside his co-founders (one of whom, Haya Odeh, he ended up marrying.)

Even though no co-founder was working on the project full-time, by 2011, it continued to grow in popularity among developers, particularly student developers — a strong sign that it was already on its way to finding product-market fit, with or without Masad’s prodding. “It eventually exploded on Hacker News and GitHub that year,” he says. “While Replit, which was the demo app, did well, the thing that really took off was the underlying engine, called JS REPL.

This surge in growth happened to coincide with a burgeoning movement toward Massive Open Online Courses (or MOOCs) in Silicon Valley. “The idea of being able to learn online was capturing people’s imaginations,” Masad says. It wasn’t long until several U.S.-based tech companies, like the edtech company Udacity, started reaching out to Masad and his co-founders. But there were two that Masad crossed paths with that accelerated his career in particular:

Codecademy

Codecademy, a prominent player in the space that had just graduated from Y Combinator, began using many of the packages Masad had written for Replit. In 2011, shortly after JS REPL became a fan favorite of developers upvoting it on HackerNews, the Codecademy founders reached out to him for help, initially offering him a contracting gig for $15 an hour. This quickly evolved into an opportunity for Masad to join the company as its founding engineer.

Faced with a choice between launching his own startup in Jordan, where resources were limited, or joining Codecademy and moving to the U.S., Masad chose the latter. "The second option was more exciting to me," he explains. "It allowed me to come to the U.S., which had been a dream of mine for a long time."

Facebook

After two years at Codecademy, Masad joined Facebook in 2013. He was drawn to the company by Mark Zuckerberg's vision for Internet.org, an initiative aimed at providing universal Internet access. Timing is key to remember here. In 2013, the boom for building mobile products was well underway, and the prospect of shaping this future captivated Masad.

“The world was in the middle of a massive shift, where soon everyone would have access to computers via phones and tablets,” he says. “It was exciting to see progress in democratizing access to the internet.”

At Facebook, Masad initially worked on the Android app but soon gravitated back towards infrastructure projects. He became one of the early members of the React Native team, which sought to bring web technologies to mobile. Masad was responsible for writing a lot of the JavaScript infrastructure for React Native and was eventually tasked with building the company’s first JavaScript infrastructure team.

“We wanted to modernize the JavaScript infrastructure on Facebook. So I built a team, which also ended up being responsible for building Jest, Babel, and Yarn. We essentially built the modern JavaScript dev toolchain at Facebook,” he says.

RETURNING TO REPLIT

Somewhere along the way, Replit faded into the background while Masad devoted himself to his roles at Codecademy and Facebook. But in 2016, while still at Facebook, Masad contemplated what he wanted to do next. His career decisions up until that point were centered around three core beliefs:

Universal connectivity, computer literacy, and computer access were the future.
There are going to be a lot more developers, in a lot of different flavors, around the world.
Software development could be much better.

“Those ideas dictated how my career progressed, and I was attracted to projects that fit within that rubric,” Masad said. Guided by these same principles, it dawned on him to turn the page back to the very beginning.

As it happens, he wasn’t the only one still thinking about the project. “ Even though Replit by this point had been abandoned and parts of it were broken, developers still kept coming back to use the product because there was nothing else out there,” Masad says. “There were a few ambitious projects like Cloud Nine which was acquired by AWS, but nothing that was web-native.”

This was a signal that Masad was on the cusp of nascent product-market fit for a commercial product. When he took a step back, he realized going all in on this project could enable all three of his core beliefs and this was the push he needed to return to his original project after a multi-year hiatus. It was an exciting time; with only the existing demo page from his college days, Masad was essentially working with a blank canvas.

But if Replit was going to become a billion-dollar company one day, Masad would have to swing for the fences. Here were two risky moves Masad made early on after picking Replit back up:

Moving to the cloud

Steering Replit away from browser-based execution and pivoting to a cloud-based project was a hard left turn for Masad. After all, that was the initial wedge that made the original open-source project so successful. But when looking at the project with fresh eyes, and more importantly, with commercialization in mind, Masad started to view the browser more and more as a “dead end.”

“The idea of downloading tens of megabytes of JavaScript on a Chromebook in Africa was just a non-starter,” he says. “My thinking was that cloud, with universal connectivity and internet bandwidth improving, would be the way to go. That was controversial at the time because there were a bunch of competitors springing up that were doing browser-based execution.”

By pivoting away from the browser, Masad got to work rewriting the project for the cloud. “Docker had just come out and made it easier to do cloud-based sandboxing. I started adding more and more languages, and the project started taking off again.”

Going all in on web-native

Another change Masad wanted to make, based on what he saw competitors shying away from, was making Replit web-native software. All of the other popular IDEs at the time were desktop apps, but Masad had a vision of seamlessly deploying code in the browser, with outstanding web-native UI to match. This meant building Replit again from the ground up.

“One concrete truth about building web-native software is that URLs are very important,” he says. “Figma is an example. You can share your URL with someone and they can hop into the same environment as you, and the product becomes multiplayer by default. None of the online IDEs did that at the time, so that’s what we tried to replicate.”

But pursuing this path wasn’t so simple. “Building as a web-native software meant we were taking on a much bigger challenge. Monetization was going to be harder, professional developers were not going to be able to use it at work for a long time, and that we weren’t going to be very fundable,” he says.

Finding funding and monetizing the core product

Masad’s concerns about funding were valid. Replit first applied to Y Combinator in 2016 and was rejected. They struggled to raise a pre-seed round, despite the traction in users that they were seeing.

Eventually, Christina Cacioppo, founder of Vanta, wrote them their first check, followed by Roy Bahat, a connection from Masad’s Codecademy days, who invested $600K in their endeavor.

Given this strong foothold already, going after students and educators as the initial customer profile just made sense, but Masad had his reservations. “I always thought of the education market as a stepping stone for us. I didn’t like monetizing it, because I wanted Replit to be universally accessible.”

By focusing on this narrower ICP, Replit started to see revenue roll in for the first time, and a “significant amount,” at that, according to Masad. But even with cash flowing in, it was still difficult to scale the team. “It was a rough period for us,” Masad says. “We were seeing this massive growth which was great, but to support this meant that I was on call all of the time.”

Masad applied to YC two more times, another time in 2016 and once again the following year.

He kept getting rejected — in fact, they never even made it to the interview round. “ We just weren’t able to break into the core of Silicon Valley’s circle,” he says. Time and again, Masad and Odeh were told Replit was not a sustainable business.

So you can imagine Masad’s surprise when in winter 2017, Sam Altman, who was serving as YC’s President at the time, reached out to Masad on Twitter. “He told me that Paul Graham had found us on Hacker News, and as it turns out, had actually wanted to build something similar to Replit before YC took off,” Masad says. Over the next few months, Graham and Masad stayed in touch over email, exchanging ideas and communications. Graham encouraged Masad to apply again, and he begrudgingly obliged.

CULTIVATING GROWTH

Replit’s seed check could only carry them so far. By 2018, Masad and his co-founders were looking to raise again. Fresh out of Y Combinator, Masad had articulated his long-term vision for Replit in his pitch deck (loosely inspired by Elon Musk’s “ master plan”). It was broken into a three-step process, and even foreshadowed the prospects of AI’s influence on coding, well before LLMs became mainstream:

Create a collaborative cloud development environment
Train machine learning models to make coding easier and more accessible (based on this network and the data that they would collect).
Become a platform that democratizes access to “the incredible wealth creation engine of making software on the internet.”

Step one was squared away with the original prototype of Replit and the nascent product-market fit the product had found with students and educators. To make it to the next step in his plan, Masad knew he needed to change gears and focus on a bigger market. That meant getting in front of professional developers.

“The biggest question for our business to this day is: ‘ Will Replit ever be a daily driver for developers?’ I define developers in this case as professionals making money and doing economically productive activity,” Masad says. This persona became the North Star for the company.