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How Perplexity Works — with Denis Yarats 🎙️

Refactoring Podcast — Season 2 • Episode 5

Today's guest is Denis Yarats.

Denis is co-founder & CTO at Perplexity, one of my favorite products and one of the most successful AI startups today. Perplexity was founded less than two years ago and has just raised $250M in venture capital, at a $2B+ evaluation.

With Denis, we talked about the state of AI products and his vision of where they're going. Then we talked about Perplexity as a company, how the team is organized, how engineers work, and how they use AI themselves.

I apologize for the extremely low quality of my audio on this one 🙏 I didn’t realize the recording picked up my headphones’ mic, instead of the proper high quality one. We’ll fix it for next time. Sorry again 🙏

🎙️ Episode

You can watch the full episode on Youtube:

Or listen to it on Spotify, Apple, Overcast, or your podcast app of choice.

🥇 Interview Summary

If you are a 🔒 paid subscriber 🔒 you will find my own summary of the interview below.

It’s the 10-minute, handcrafted takeaways of what we talked about, with timestamps to the relevant video moments, for those who don’t have time to sit through the 1-hour chat.

Let’s dive in 👇

1) From SQL to the Web 🔀 (video)

A little known story about Perplexity as a product is that it didn’t start with generic, web search.

Founders focused on structured search first, creating an engine that would translate natural language queries into SQL. However, they quickly realized that unstructured search provided broader utility, and pitoved to it.

The pivot was enabled by the founders’ technical background in search and language models, and the timing was fortuitous as well, as the rise of ChatGPT increased the public interest in AI, and provided the perfect moment to launch such a product.

However, Denis recounts how the team initially met challenges in raising capital. Investors were skeptical about the viability of a new search company, given Google's dominance. The team had to develop robust tech and a fairly polished product before they could confidently introduce it to the market. Their persistence paid off, as users’ adoption immediately went through the roof.

2) Saving time ⏱️ (video)

Today, Denis believes Perplexity’s strength is in complex queries that would require a lot of navigation and summarization. Perplexity focuses on speed and accuracy, with the goal of making people save time vs using Google.

Perplexity is (in part) a paid product, while Google is free, but Denis believes the time saving makes Perplexity’s cost worth it for a large number of users.

As we moved to talk about how Denis’ team works, we first discussed hiring:

3) Trial periods ⏳ (video)

Perplexity employs a unique hiring process that involves trial periods instead of traditional interviews.

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Refactoring Podcast
Interviews with world-class engineering leaders about writing great software and working well with humans.