Daniel Chalef, Founder/CEO of Zep shares his career journey and the story behind building Zep, an open-source project that solves the problem of managing state in long-lived memory (LLM) applications. He discusses the challenges of monetization and the need for flexible pricing and entitlement infrastructure. Daniel also highlights the importance of building a strong go-to-market strategy and the power of small language models in creating fast and powerful applications. He shares his experience with building his monetization stack and the criticality of flexible pricing & packaging to support usage-based billing, plan management, entitlement management, and metering. Finally, Daniel reflects on the lessons learned from the failure of his first startup and the transformative impact it had on his career. Keywords Daniel, ZEP, career journey, open-source, state management, LLM applications, monetization, pricing, entitlement infrastructure, go-to-market strategy, small language models, Schematic, plans, entitlements, usage limits, failure, transformative Takeaways - Building a successful startup requires being curious and easily bored, which drives innovation and entrepreneurship. - The power of small language models lies in their ability to perform specific tasks quickly and accurately, enabling the creation of magical applications. - Flexible pricing and entitlement infrastructure are essential for scaling a SaaS business and accommodating different go-to-market motions. - The failure of a startup can be a transformative experience, providing valuable lessons in leadership, resilience, and self-identity. - Partnering with specialized platforms like Schematic can save time and resources by leveraging their expertise in pricing and entitlement management. Sound Bites "High curiosity, easy to bore." "Small language models have the ability to both be highly powerful when we're thinking about doing specific tasks coupled with being very fast." "Not every tool is a product and not every product can be a company." Chapters 00:00 Introduction and Setting the Stage 05:29 Daniel's Career Journey and Building ZEP 12:05 The Power of Small Language Models 23:24 Lessons Learned from the Failure of Daniel's First Startup 27:35 Monetizing SaaS, Efficient Pricing and Entitlement Management