Stephen Gacheru

A product designer, AI enthusiast.

[Hewa App @HewaApp]

Heading to the Coast?

Strong winds, rough seas, high waves, heavy rainfall, and reduced visibility are expected along parts of Kenya’s Coast.

Be careful if you’re planning any offshore activities.

Source: KMA / Kenya Met

[Jeff Wang @jeffwang]

To put it mildly, the past week at Windsurf has been crazy. There have been a lot of different rumors and reports, so I want to share a transparent account of how it actually went down.

Before I start, I just want to say that Varun and Douglas were great founders and this company meant a lot to them, and it should be acknowledged that this whole situation must have been difficult for them as well.

One week ago, last Friday, I walked into the office for our all-hands, where our ~250 people were expecting to hear that we were getting acquired by OpenAI. By that time, I had already learned what was really about to happen and had broken the news to Graham, the new President, and Kevin, the new CTO. You can imagine the shock when the team found out.

It was my job to explain to the company our path forward as a company. In my view, there were a few options: try to raise more money (VCs were offering), try to sell the company (we had interest from multiple parties), try to distribute (although there were liabilities to wind down), or try to keep running the company. Although we had lost some great people and taken a serious blow to morale, we still had all of our IP, product, and strong talent including an excellent GTM machine - the core components of the company were still there.

The mood was very bleak. Some people were upset about financial outcomes or colleagues leaving, while others were worried about the future. A few were in tears, and the Q&A had been understandably hostile. In distress, people asked if we could distribute the cash immediately, but we also needed it to pay bills and keep the product working for customers.

After trying to steady the team as much as we could, Graham and I spent the rest of the evening on calls, trying to identify every available option.

Out of the blue, we got a text and email, from Scott and Russell, with the message, “Chat?” It was around 5:30pm, exactly this time last week.

I immediately called Graham and told him I thought this combination made sense. Cognition had been the one team our people had respected the most. While they had overinvested in engineering, they had frankly underinvested in GTM and Marketing, and our teams in those functions are nothing short of world class. On the other hand, we now were missing a Core Engineering team, and there’s no better group of AI engineers than the lineup Cognition has assembled.

Then, there was the product logic. Devin would benefit from a foreground synchronous agent, while we needed a remote asynchronous agent. The teams and products together would be able to create an unrivaled end to end platform.

We took the Cognition approach very seriously from the start and launched right into negotiations. Scott and his team moved fast, and while the timeline was exploding with memes and commentary between Friday and Monday, Scott and Russell spent that time in our office, working tirelessly to get a deal done in record time. Saturday rolled in, and I brought Kevin to the office. At this point, we were still having 1:1s with our enterprise engineers to retain them, and at the same time, we were trying to get more information to diligence Cognition while reviewing other potential partners.

Saturday, I was still getting inbound interest from potential acquirers, including one we had all looked up to for a long time. But by then, Scott was already in our conference room with physical papers to sign and was handing me a pen. We had already made up our minds that there was no better partner than Cognition, even with other excellent and impressive companies interested. We quickly brought in lawyers to review the LOI and signed that day, a little over 24 hours after Scott’s cold outreach.

Saturday had been spent understanding each other’s businesses, and when the sun came up Sunday morning while we were in the office, we prepared to move on to getting the deal finalized. The Windsurf team had been through too many twists and turns, so both Scott and I felt that the next transition for them had to truly be final.

The other priority during this process, which Scott and I aligned on and was one of the things that helped me realize he was the right partner, was that we needed to take care of all Windsurf employees. Their work and talent had gotten us to this point; they deserved to be paid for that, and we wanted to give them a better price than any of the previous scenarios. That resulted in a key part of the deal: structuring it to give a payout to every employee, to waive all cliffs, and to accelerate all vesting for Windsurf equity.

On Sunday, an army of lawyers from both sides descended on the office, having been challenged by Scott and Russell to get this deal finalized within 24 hours. We ate and slept (or at least tried to grab quick naps between discussions) in the office through the weekend to get it done. Our teams and lawyers stayed up all night Sunday working out the final details. On Monday morning, we went over every detail again, got board approvals, and the documents were ready to sign. One of our lawyers said it was one of the fastest deals they’d seen.

Monday 9:30am, we signed our definitive agreement for Cognition to acquire Windsurf. Scott had given a heads up to Cognition employees, and we had another all-hands scheduled for Windsurf employees at 10am that morning. After the traumatic announcement on Friday, Scott and Russell wanted us to be able to open Monday with good news and we wanted to handle this new announcement in a much better way for employees. In fact Russell took a red eye the night before and somehow made it to the Austin office just in time.

We held Monday’s all-hands in the same room as Friday’s, and this time Scott was by my side at the front of the room. It was a blur, but the highlights I’ll always remember were getting to tell employees what we had negotiated for them (“We’ve decided to give you 1 year of vest, OH, and years 2, 3, and 4 as well!”) and Scott saying, “A founder goes down with the ship.” The applause from our people seemed to last forever, and I was on the verge of tears myself.

Now comes the real work. We are officially one company, operating as two entities, but with much to do both internally and externally. We have work to do on both our team and on our product, to realize our shared ambitions. It was a wild ride this week, and now the story has been told. We are excited to move on to the next chapter. We’re putting our heads back down to focus on building the future of AI together.

[Stephen Gacheru @StephenGacheru]

Final thoughts:
Perplexity is the go-to tool for fast, smart, and efficient research. With links to trusted sources, it’s often more trustworthy than other AI tools and a great companion for anyone working with information.

[Stephen Gacheru @StephenGacheru]

The world of AI moves fast! Every day there’s a new large language model (LLM) or an update, making it hard to know which one to use.

To help, I'm starting a short series diving into top AI tools and their best use cases. Let’s start with Perplexity AI.👇

[Stephen Gacheru @StephenGacheru]

When should you use Perplexity?

* When you want quick, reliable answers without searching through pages
* For research, summaries, or brainstorming
* When you need to fact-check or explore ideas quickly
* When you prefer conversational results over link-heavy pages

[Stephen Gacheru @StephenGacheru]

This is quite troubling https://t.co/Mb0H7PU5Uh

[Anton Osika @antonosika]

Lovable is the fastest growing startup in Europe ever, $4m ARR in 4 weeks, this is how we did it:

//1

[Stephen Gacheru @StephenGacheru]

https://t.co/2ufSeGVnEy

[Stephen Gacheru @StephenGacheru]

@KRACare what’s happening today your system? I’ve trying to pay with mpesa and I keep getting this error Transaction failed, M-PESA cannot complete payment … to Kenya Revenue Authority. Organization receiving the payment is unavailable, try again later.

[Stephen Gacheru @StephenGacheru]

@ncbacare @NCBABankKenya @ncbacare @NCBABankKenya Same exact words that I have heard from your customer care representatives over the last 3 days. Meanwhile I can't drive my car now because of someone has refused to do their job and renew the insurance

[Stephen Gacheru @StephenGacheru]

@NCBABankKenya @ncbacare Has probably one of the least responsive insurance departments out there. Multiple phone calls to do a renewal has yielded no results. If you are planning on using them be warned.

[Stephen Gacheru @StephenGacheru]

@ncbacare @NCBABankKenya I have sent the DM

[Stephen Gacheru @StephenGacheru]

When life gives you lemons, write better error messages https://t.co/kLp1FKUjG8

[Stephen Gacheru @StephenGacheru]

https://t.co/tAVhvOfud6

[The Future Millionaire @futuremilli_Ke]

When you invest in high risks assets like crypto, always invest money you can afford to lose. This is what's happening with #LUNA right now. It has dropped over 90% from a high of $119 just last month.

[Stephen Gacheru @StephenGacheru]

https://t.co/EU0XjIeLxd

[The Future Millionaire @futuremilli_Ke]

­Treasury Bills and Bonds are some of the least understood investment options and yet they are one of the safest investments with good returns.

This week in part one of our series we explain what they are and risks involved in investing in them https://t.co/7LD8jA7oNs

[The Future Millionaire @futuremilli_Ke]

Many people look at Saccos as a place to easily get loans at a lower rate than banks but they can also be a great tool to help you build your wealth over time. https://t.co/9UP9ibhoVl

[Stephen Gacheru @StephenGacheru]

It's finally time for me to introduce something that was born during this covid-19 pandemic and that I've been quietly working on in the past few months
https://t.co/55ayTAPDtV