Windsurf’s Emotional Rollercoaster: From Near-Collapse to Cognition Acquisition
In a surprising turn of events, AI coding startup Windsurf has been acquired by Cognition, following a tumultuous period that nearly saw the company’s demise. Jeff Wang, Windsurf’s interim CEO, recently shared the dramatic story behind the acquisition on social media platform X.
The saga began when a potential deal with OpenAI fell through, leading to the departure of Windsurf’s CEO Varun Mohan, co-founder Douglas Chen, and several top researchers to Google DeepMind. This move left the remaining Windsurf team in a state of uncertainty and despair.
Wang described the mood as “very bleak” during an all-hands meeting where he had to break the news of the departures to the staff. “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,” Wang recounted.
Despite the setback, Wang believed that Windsurf still had valuable assets, including its intellectual property, product, and strong talent. The company was considering various options, including raising more funds or continuing operations independently.
However, fate intervened when Cognition executives Scott Wu and Russell Kaplan reached out to Wang. Recognizing the potential synergy between the two companies, Windsurf’s leadership quickly entered into negotiations.
The weekend that followed was intense, with Wang and his team juggling discussions with Cognition, fielding interest from other potential buyers, and working to retain their remaining engineers. All this occurred against a backdrop of social media frenzy surrounding the company’s situation.
Wang emphasized the complementary nature of the two companies, noting that while Cognition had a strong engineering team, they lacked in marketing and go-to-market strategies – areas where Windsurf excelled.
A key aspect of the deal was ensuring fair treatment for all Windsurf employees. The agreement included provisions for payouts to every employee, waiving of all cliffs, and accelerated vesting of Windsurf equity.
The acquisition was finalized and announced to the Windsurf team on the following Monday morning, marking a dramatic shift in the company’s fortunes. Wang later described the experience to Bloomberg as going from “probably the worst day of 250 people’s lives” to “probably the best day” in just a matter of days.
This acquisition highlights the volatile nature of the tech industry, where fortunes can change rapidly, and the importance of resilience and adaptability in the face of adversity.
