Vercel created a separate business unit for its AI tool, V0, because it targets a different audience (PMs, designers) and needed to operate with extreme speed, unburdened by the decision-making processes of the larger 700-person parent company.
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Vercel's Pranati Perry explains that tools like V0 occupy a new space between static design (Figma) and development. They enable designers and PMs to create interactive prototypes that better communicate intent, supplement PRDs, and explore dynamic states without requiring full engineering resources.
Block's CTO reveals a counterintuitive lesson: reorganizing from a GM-based structure to a functional one (where all engineers report to one org) was the key to their AI transformation. This structural change had a greater productivity impact than any specific AI tool they implemented.
In the fast-evolving AI space, Vercel's AISDK deliberately remained low-level. CTO Malte Ubl explains that because "we know absolutely nothing" about future AI app patterns, providing a flexible, minimal toolkit was superior to competitors' rigid, high-level frameworks that made incorrect assumptions about user needs.
The V0 team operates with minimal product management oversight, empowering product-minded engineers (often ex-founders) to make 95% of product decisions directly. This sacrifices potentially "perfect" choices for a dramatic increase in development velocity.
The V0 business unit acts as the first and most demanding customer for Vercel's core platform. This "customer-vendor" relationship, rather than simple internal collaboration, provides high-quality, real-world feedback on infrastructure like billing and compute APIs.
V0's success stemmed from its deliberate constraint to building Next.js apps with a specific UI library. This laser focus was 'liberating' for the team, allowing them to perfect the user experience and ship faster. It serves as a model for AI products competing against broad, general-purpose solutions.
Vercel's Pranati Perry shows how she used V0 to build a personal tool for generating SVG components for her portfolio. This highlights a trend where designers build small, single-purpose tools to automate and enhance their own creative processes, not just for team deliverables.
To maximize speed, V0 operates with a "no handoffs" philosophy. Everyone, including designers and product managers, is expected to contribute code and submit their own pull requests. This "full-stack PM" model minimizes the coordination costs and wasted cycles of explaining changes.
According to CTO Malte Ubl, Vercel's core principle is rigorous dogfooding. Unlike "ivory tower" framework builders, Vercel ensures its abstractions are practical and robust by first building its own products (like V0) with them, creating a constant, reality-grounded feedback loop.
Previously, building 'just a feature' was a flawed strategy. Now, an AI feature that replaces a human role (e.g., a receptionist) can command a high enough price to be a viable company wedge, even before it becomes a full product.
