Luca Ferrari on Building Bending Spoons: Extreme Ownership, Talent Science & Relentless Simplification

Bending Spoons runs acquired software companies with tiny, hand-picked teams

Bending Spoons buys software businesses and runs them with very small, carefully selected teams. Ferrari holds that talent varies enormously, so the company screens for it with data and gives every business the same internal tools. The stated aim is to build the best company there ever was, though he admits the odds are slim.

Takeaways

• Talent matters more than experience. Ferrari's failed first startup Evertale, an AI diary writer, ran 2010 to 2013 with up to 12 people. The best member was about ten times as productive as the medium one, and experience can make people worse when exposed to low standards.
• Hiring runs as a data science. Most tech work is not rocket science, and practices change fast enough that experience decays. Bending Spoons scores candidates on over 100 signals, including academic records, projects and tasks, like a quant hedge fund. Last year 800,000 applied and it hired 300.
• Hiring managers get no bonuses. Ferrari argues hiring managers have bad incentives, and specific objectives tied to pay lead to bad outcomes. Hiring and firing is centralized in a talent team of about 50, and everyone shares one job, which is helping the company succeed.
• It buys businesses to operate forever. Bending Spoons has bought a little over 50 businesses and, unlike private equity funds, holds them. Ferrari says previous managers were often judged on metrics like subscriber counts rather than cash generation, so under new ownership they can make unpopular pricing and talent decisions.
• Evernote shows the lean operating model. Evernote cost about $200m and was roughly breakeven. The team fell from about 350 people to 50 to 60, and it is now run by about 20, with revenue between $100m and $200m. Bmail, with about $400m in revenue, took a similar number of people.
• Shared tools and AI agents drive efficiency. Acquired businesses run on an internal operating system of over 50 proprietary tools shared across the portfolio. AI agents such as the design tool Diagram and one called old Spooner add to it. The company has about $3bn in run-rate revenue.
• Ownership and simplification define the culture. Extreme ownership is the main quality the company seeks, which Ferrari admits relates to Jocko Willink's book. Relentless simplification means no job titles at all and puts the burden of proof on anyone proposing added complexity.

Is Bending Spoons a conglomerate

• Senra compares the company to a conglomerate and discusses Henry Singleton, whom he argues found many ideas before Buffett and Munger. Ferrari praises Singleton's capital allocation.