Decagon Hit $100 Million Betting Against Forward Deployed Engineers

Embedding software engineers long term just means your software doesn’t work, Jesse Zhang argues

Jesse Zhang says the case for AI customer service is obvious. That’s what makes it an easy sell. It’s also what makes it a crowded one.

Decagon has crossed $100 million in annualized revenue, the company told me — in AI customer service that’s far from first place. Zhang’s plan to vault ahead of competitors like Sierra and Salesforce is speed. The Decagon CEO wants his customers to move fast: the product should be intuitive, quick to customize, and require minimal handholding.

“We are in a use case where speed matters a lot,” Zhang told me. “The way we’re going to prove it to you is that you’re able to go live way faster and you’re able to make changes and hill climb the quality of the agent a lot faster.”

(That theory of business resonates with a guy who graduated from Harvard in three years and got married at 24.)

As part of that pitch, he and his three-year-old company have taken a strong stance against being wedded to forward deployed engineers (FDEs), whom vendors embed inside customers to customize and manage software for them. Despite the rising popularity of the role across tech, Zhang sees reliance on it as a sign of a weak product — and as a place where Decagon stands out from its bigger and better-funded peers.

Sierra is an 800-pound gorilla that has three times the funding, a Valley-famous CEO in Bret Taylor, and has well-surpassed $200 million in annualized revenue, according to a source close to the company. Salesforce is frantically pivoting into AI and boasting success: it recently disclosed that Agentforce surpassed $1 billion in ARR. In June it doubled down, agreeing to buy Fin, the customer agent company formerly known as Intercom, for $3.6 billion.

Decagon and its investors — which include Bain Capital Ventures, Accel, and a16z — argue that the product, not a large services organization, is what landed major airlines and credit card companies as customers.