02:19:55 · John Coogan, Luca Ferrari, Jordi Hays
[02:19:55] S0: Yeah. It it is it it feels like, at least to me, like, it's kind of an odd name for any business. I it's cool. I I like the reference. But why did you pick that name particular in in particular? [02:20:08] S5: So we we knew we weren't gonna work on just one product. Okay. So we couldn't call it, say, Facebook Yeah. If you do, you know [02:20:15] S0: Yeah. You need, like, a name for a holding company on day one, sort of. [02:20:19] S5: Yeah. Something like that. So we we chose to to find a name that would somehow convey a couple of principles or values that we thought were important to us. And bending spoons reminds us of two things. One is the power of the mind. For obvious reasons, if you are gonna ban spoons with your with your mind, it means you believe it's powerful and you can do great things with it. And the other one is call it perseverance, hard work, dedication. In my imagination to to get to the point where you can bend stones with your mind, you probably have to work pretty hard at it. So Impossible was kinda memorable, so we we liked it. [02:20:56] S0: Yeah. [02:20:57] S1: I like it. I I reached out or or one of us reached out when when the where the AOL acquisition got announced. Like, give it give us a backstory on on that deal, how it came to be, when you started thinking about the business, what what value you saw in the business, and and maybe why it was a target that that was overlooked by by, maybe American private equity players, and and what you saw in it.
02:21:28 · Luca Ferrari
[02:21:28] S5: There were multiple private equities that we're looking at it too. So we weren't the only ones. You know, it was owned by a private equity or it it's still owned because the the acquisition was only signed. It hasn't closed yet. Mhmm. And so you could imagine how they would run a proper competitive process. The typically, we we follow our business for a long time before an opportunity to acquire presents itself. I I don't have precise statistics, but my my off the top of my head, I'd say it's quite rare that we end up acquiring a business we haven't followed for at least a year, sometimes more. So we have been following AOL for a while and, you know, when when it became available, we we made an offer that we thought was quite competitive and here we are. What do we see in it? So I think it's a it's actually a great business. People are a bit stuck in the with the idea of AOL from the nineties or maybe early two thousands of Internet connectivity. It doesn't do that. Haven't done that for a long time. Today, it's two different products. There's a web portal for people to consume news and entertainment and and an email client, like Gmail, pretty much, you know, like that sort of thing. They have well well in excess of 30,000,000 monthly active users, 8,000,000 daily active users. So it's huge. Give or take one in 10 Americans uses it. And and it's just not necessarily, you know, the the the new hot thing that you would read about online, but it's still massively used and, you know, very good retention because people are self selected if if they still use it for really liking the brand and the offering. Yeah. And we we you know, nevertheless, we think we could help make the product more modern, more effective. We think that through AI, we could create better recommendations for the web experience, essentially better content to consume. We'll see, but it's exciting. We look forward to working with the team on it. Plenty to to refine and expand. We it's it's and it's exciting to work on a storied brand. You know, it's I find it kinda cool actually to be able to get our hands dirty with with with a brand of the caliber of AOL.
02:23:42 · Jordi Hays
[02:23:42] S1: Yeah. It truly is one of the great America Online, one of the great one of the great names in in business history. How do you think about like, I feel like Silicon Valley, like, has a sense that businesses are either in hyper growth or they're dying. Right? And there's nothing in between. And that's just because, like, the industry venture capital dollars are deployed into companies that are growing really quickly. And as soon as you stop growing, like, that that sort of source of capital is is turned off, and you kind of fall out of the headlines. But how much, like, I assume a lot like, the kind of, part of the thesis for Bending Spoons is that a lot of these businesses are just, like, way more durable than, like, the tech industry maybe gives them credit for. Because even after they're not getting like headlines in tech crunch, they can still generate a lot of cash flow for a very long time. But how how do you think about like durability of of digital businesses and and when they be can can become sort of like Lindy and and survive across decades versus when they evaporate?
02:24:51 · Luca Ferrari, Jordi Hays
[02:24:51] S5: Yeah. I would say I kinda agree and I and I will say that if anything, a business that has a lot of history, it's a lot easier to project its, you know, its future and and and make accurate forecasts. Maybe, you know, it's not 10 x, but you also have a ton of data historical records for all the cohorts at scale to know roughly where it's going. So, yes, maybe the upside is not transformative as it would be in a seed or VC investment. Investment. But if every all the stars align, you know, maybe 10 extra even a 100 extra money, but but you also know you're very unlikely to to seed melt in your hands. [02:25:30] S1: Yeah. [02:25:31] S5: Many of these businesses have excellent metrics. They're just not cool and hot, so to say. And so the the entire capital markets, particularly on the private side, not so much the the public side, but the on the private side is geared towards growth, very aggressive growth. And there's merits in that, but it also means there's perhaps an opportunity to be less opinionated about growth at all costs. We we know on our part, we we try to we're basically quite mathematical about it. We make our projections, have our own return thresholds, and then we are happy to buy fast growing businesses. We have many times stagnant businesses, decline businesses as long as the math checks out. And this has been quite good for us, not not being too, you know, thesis, you know, limited by a very narrow thesis, but actually staying opportunistic.
02:25:31 · Luca Ferrari, John Coogan
[02:25:31] S5: Many of these businesses have excellent metrics. They're just not cool and hot, so to say. And so the the entire capital markets, particularly on the private side, not so much the the public side, but the on the private side is geared towards growth, very aggressive growth. And there's merits in that, but it also means there's perhaps an opportunity to be less opinionated about growth at all costs. We we know on our part, we we try to we're basically quite mathematical about it. We make our projections, have our own return thresholds, and then we are happy to buy fast growing businesses. We have many times stagnant businesses, decline businesses as long as the math checks out. And this has been quite good for us, not not being too, you know, thesis, you know, limited by a very narrow thesis, but actually staying opportunistic. [02:26:20] S0: How are you structuring Bending Spoons? Do you have a deal team and an operational team that goes in and actually runs the companies? Or is it more of a, you know, a hybrid model where a partner who finds someone who finds the deal might be immersed in that company throughout the life cycle of owning the deal?
02:26:20 · John Coogan, Luca Ferrari
[02:26:20] S0: How are you structuring Bending Spoons? Do you have a deal team and an operational team that goes in and actually runs the companies? Or is it more of a, you know, a hybrid model where a partner who finds someone who finds the deal might be immersed in that company throughout the life cycle of owning the deal? [02:26:42] S5: Yeah. So it's actually say that we're kind of 25% private equity, 75% tech company. Yeah. So we do have an m and a team. It's actually pretty small, probably eight, nine people. Mhmm. And and they they do what you would imagine a private equity firm would do. They they create a pipeline, scout the deals, negotiate the deals. And then really probably 95% of the of the team here are software engineers, product designers, growth managers, AI researchers. And once we close a a transaction, we add a call a task force of experts to get, you know, get in the trenches with the acquired team and study things in fine detail and help with those kind of radical transformations I was describing earlier. So that's the tech tech technology company part. We almost all we do is writing software, developing and refining technologies, user experiences. And we we buy to hold and operate forever. We're not a fund, to be clear. Mhmm. More like a Berkshire Hathaway. We buy off the balance sheet if you've sold a business nor doing ten two.