The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:43:27 · Harry Stebbings, Federico Simionato
[00:43:27] S1: Play On was one big project didn't hit in the way that you thought it would. What did you not expect to hit that suddenly did hit? And what did you learn from that? We were chatting earlier about never studying your successes, which is why we don't actually attribute lessons to them often. Yeah. Can you take me to what you didn't expect to hit that did in the lessons? [00:43:49] S2: Sometimes there are things that are... They look a bit boring, and instead they they just work. So for instance, I think audio transcription on Evernote is one such example. We were almost about not to launch it because people weren't recording audio on Evernote. And so, I mean, chicken and egg problem. Right? They're not recording audio maybe because they don't want record audio, maybe because there's nothing to do with the audio once once you record it. We still decided to launch it because it was just, like, qualitatively so good. It's basically state of the art. It's perfect. You just talk and it transcribes it. It... It's it's literally perfect. And so we decided, okay. Let's let's build it and launch it and see what people do with it. We just observed people tweeting images of the transcription just because it was so accurate, and they were like, I'm blown away by how good it is. So that... That's one example of something that I didn't expect. What did you [00:44:42] S1: learn from that?
00:44:42 · Harry Stebbings, Federico Simionato
[00:44:42] S1: learn from that? [00:44:43] S2: That you should be very careful with your opinions. You should always try to resort to some piece of evidence instead of saying, I think it won't work or I think it will work. Do you have evidence that it's working or not? And so if you don't, you should try and build evidence, and then you should follow that instead of saying, I think it won't work or it will work. [00:45:04] S1: We've covered quite a few different products from, you know, your WeTransfers to Evernotes HQ Trivia clones to your Play Ons. How is the team structured? I think people have this conceptional idea that basically Bending Spoons acquires companies, fires the team, and centralizes engineering of
00:45:04 · Harry Stebbings, Federico Simionato
[00:45:04] S1: We've covered quite a few different products from, you know, your WeTransfers to Evernotes HQ Trivia clones to your Play Ons. How is the team structured? I think people have this conceptional idea that basically Bending Spoons acquires companies, fires the team, and centralizes engineering of [00:45:24] S2: the product. You can think of Bending Spoons as a horizontal platform to which we plug individual products. The platform is basically everything that you don't need to have at the product level. For instance, let's let's make an example, talent and recruiting or accounting, finance, legal. But not only that, also deep technological teams that power, like, library data pipelines, monetization libraries, stuff that can be adopted by each product. This way, you don't need an Evernote recruiting team. You don't need a commoditization technology team. You just need to have these pieces at the platform level. And then to this platform that... Where we invest a lot, you can plug new products all the time. And so this means that the individual product team can be much, much leaner than it could be as a stand alone company. And often, we we see the difference that it makes. Like, we can acquire companies that are very large and run them with very few people in comparison. What's the biggest change? So you acquire a company with 500 people and it now runs with 50? Yeah. The orders of magnitude are around... It's very case specific. It's very hard to to... There's no like... What was Evernote [00:46:36] S1: and what is it now?
00:46:36 · Harry Stebbings, Federico Simionato
[00:46:36] S1: and what is it now? [00:46:38] S2: Evernote was a few 100 people, and now it's less than [00:46:42] S1: a 100. Got you. Where are those 100 people? That still feels like quite a lot if you actually think about the horizontal platform, this legal, accounting, recruiting, data pipeline. [00:46:50] S2: I I mean, at the at the product level. So just on the on the specific product. [00:46:55] S1: Does that not feel quite a lot in product in Evernote? [00:46:58] S2: I mean, it's not on product measure. I'm just talking about the business unit. It it contains technology, product, design, data science, monetization, growth, even management, you know, like, all all those people are, yeah, a few tens. [00:47:11] S1: Totally get you. Can I ask you, you mentioned monetization there, and you've mastered across different products, payables, and moving from freemium to premium? What have been your biggest lessons in scaling from freemium to premium in product?
00:47:26 · Federico Simionato
[00:47:26] S2: Mhmm. Again, that it's very case specific. You don't have a playbook that you then apply to each product. Let's take Evernote as an example. On Evernote, we inherited a monetization structure that was based on basically unlocking advanced features. As a user, you would pay to unlock business cards scanning, for instance, or PDF annotation. This creates a mismatch between the experience of a free user and advanced user. Right? Because you literally have access to a different feature set. The way we approached it instead was let's try to make it so that every user sees the power, the full power of Evernote. And so we literally made many features that were previously paid free. Offline is a big one. Like, offline availability of notes and notebooks used to be a premium feature, and now it's free. Instead, we monetize based on content, so based on how much you have on the product. And so if you want to create a lot, then you pay more. If you don't create much, then you can use it for free. So this this basically aligns the incentives of... I'm an advanced user. I use it hours a day. I create tons of notes. I pay more, and I'm perfectly fine with it. I'm a very casual user. I don't use it much. I have a few notes, so I'm just trying it out. You can try the full product without any constraint and you just like reflect the number of notes that you actually have.
00:48:50 · Harry Stebbings, Federico Simionato
[00:48:50] S1: How do you feel about the quite aggressive paywalls? I quite often download consumer apps. I'm using it very simply, but age your faces. Instead of the do three and then you pay more, it's like pay more straight away. It's a very aggressive paywall strategy. How do you feel about how aggressive a paywall strategy should be, and any lessons on that? [00:49:13] S2: The best way to monetize a product is always based on what works on that product. So you just try different setups, and you see what works. It has been the case often where we've made the payroll more visible than in the past just because acquiring products that have already grown and that already have a large user base, then you have more to unlock by monetizing people who are already there. Instead, if you're growing a product, then you might want to be a bit less aggressive and just, like, get people to try more of the product for free because maybe it will improve your k factor. It it would increase the amount of people that they refer, basically, if they have a good... A deeper experience with the product without interruption. It... It's very case specific. [00:49:58] S1: Another element that I also just find fascinating from a behavioral kind of psychology perspective is push notifications. Yep. Do you have any lessons on what works, what doesn't work, and how you'd advise product owners?