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.
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Instead of treating consulting and product as separate, CNX uses feedback from services projects to inform new features. A requested customization is often built directly into the core Valence product, benefiting all customers and creating a tight feedback loop.
A platform's immediate user is the developer. However, to demonstrate true value, you must also understand and solve for the developer's end customer. This "two-hop" thinking is essential for connecting platform work to tangible business outcomes, not just internal technical improvements.
AI product quality is highly dependent on infrastructure reliability, which is less stable than traditional cloud services. Jared Palmer's team at Vercel monitored key metrics like 'error-free sessions' in near real-time. This intense, data-driven approach is crucial for building a reliable agentic product, as inference providers frequently drop requests.
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.
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.
Vercel's CTO Malte Ubl outlines a third way for open source monetization beyond support (Red Hat) or open-core models. Vercel creates truly open libraries to grow the entire ecosystem. They find that as the overall "pie" grows, their relative slice remains constant, leading to absolute revenue growth.
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.
Instead of tracking hours or rewarding a "996" work culture, the V0 team's performance compass is business impact, measured in dollars. New hires are explicitly expected to deliver millions in impact within their first year by fixing issues that cause customer churn or frustration.
The V0 team dogfoods their own AI prototyping tool to define and communicate new features internally. Instead of writing specification documents, PMs build and share working prototypes. This provides immediate clarity and sparks more effective, tangible feedback from the entire team.
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.