00:17:41 · Danny Fortson, Katie Prescott, S0, S1, S2, S3, S4, S5, S6, S8
[00:17:41] S9: Today's episode of the Times Tech podcast is sponsored by ServiceNow. [00:17:45] S10: ServiceNow describes itself as an AI control tower for business reinvention, connecting people, systems, data, and AI so work flows more smoothly across an organization. [00:17:56] S9: The platform integrates with different clouds, models, and data sources, bringing them together in one place to help your team. [00:18:03] S10: To learn more about how ServiceNow puts AI to work for people, visit servicenow.com. [00:18:11] S0: People are disappearing again just like before. [00:18:16] S1: Nocturne. Streaming on Apple TV on the October 30. Liev Schreiber. [00:18:23] S2: Walter has a way of getting to people. When he does, [00:18:25] S1: they don't come back. Steven Graham. The world [00:18:27] S3: is sort of dark places. Zarcee Beats. [00:18:30] S4: How's he getting messages at? [00:18:31] S5: He's locked under six feet of concrete. [00:18:33] S6: She's still alive. I'm a fighter. [00:18:36] S1: Nocturne, streaming on Apple TV on the October 30. Subscription required. [00:18:41] S8: This episode is brought to you by Capital One. Capital One's tech team isn't just talking about multi agentic AI. They already deployed one. It's called Chat Concierge, and it's simplifying car shopping. Using self reflection and layered reasoning with live API checks, it doesn't just help buyers find a car they love. It helps schedule a test drive, get preapproved for financing, and estimate trade in value. Advanced, intuitive, and deployed. That's how they stack. That's technology at Capital One.
00:18:41 · S8, Katie Prescott
[00:18:41] S8: This episode is brought to you by Capital One. Capital One's tech team isn't just talking about multi agentic AI. They already deployed one. It's called Chat Concierge, and it's simplifying car shopping. Using self reflection and layered reasoning with live API checks, it doesn't just help buyers find a car they love. It helps schedule a test drive, get preapproved for financing, and estimate trade in value. Advanced, intuitive, and deployed. That's how they stack. That's technology at Capital One. [00:19:18] S10: Can you give us an example of one of the companies you've taken over and how you've changed it and what it looks like now?
00:19:24 · Luca Ferrari
[00:19:24] S11: One that's Lots to choose from. Yeah. One that's quite suitable, I think, because we've owned it at this point for almost four years and it's big enough and people know about it is Evernote. It's a productivity tool, basically, mostly note taking, but it does a lot more than that these days. So when we bought it, it had a team of roughly three fifty people. We rebuilt that team pretty much completely to achieve very high levels of talent density. We got rid of a lot of management layers, built roles that are way more kind of t shaped, so people have now much broader mandates. After a year, roughly 60 people work on Evernote. Today, it's 20, 25 people. At the same time, we rebuilt the technological foundation pretty much completely. So we rearchitected the cloud infrastructure, achieving much better scalability, performance, fewer bugs, better maintainability, just a more modern, more secure infrastructure. We rebuilt the modules that make sure that once you take a note, say on your laptop, it's properly synchronized on your phone and vice versa or with other people who are using the same note or or workspace with you. We rewrote most of the code base to make the app faster. We have launched a gigantic number of new features, got rid of features nobody was using but were getting in the way of making the product intuitive, redesigned the UI, rebranded the product. I mean, it's still called Evernote and it's still an elephant in the logo, it's now a little bit, we think, more modern and nicer. We have completely rebuilt the monetization, changing prices, what's available for free, what's premium, completely changed marketing. And now the product is generates a lot more revenue, way more profits. And every other important metric, the trajectory of all the other important metrics is either the same or improved relative to before. So it's been a massive undertaking, but also very rewarding from every perspective in our view.
00:21:11 · Katie Prescott, Luca Ferrari
[00:21:11] S10: So you're changing the team, changing the tech, kind of wholesale looking at the business model. Exactly. And your teams around the world then work on all of your businesses. [00:21:21] S11: Yeah. At any point in time, there is a team who wake up in the morning, and all they think about is Evernote. But next month, we could take half of those people and move them to Airtable Yakuza or and or... And we could deploy new people to Evernote. So there's great fluidity and everybody's allegiance is ultimately at at the Bending Spoons level. This is very important for us. We believe it breeds massive efficiency and ability to go again, go after big opportunities. If someone comes up with an exciting idea for, for air table or for AOL, we could put a 100 great people. We don't have to hire coach, have them understand the culture because the entire technological foundation for each of our businesses is the same. It's the same operating system so they don't have to relearn the tools. They go there and they work pretty much in the same way as they were on whatever previous business they were working on. [00:22:12] S10: And I think you've described that as the perfect operating machine.
00:22:12 · Katie Prescott, Luca Ferrari
[00:22:12] S10: And I think you've described that as the perfect operating machine. [00:22:15] S11: That's the aspiration. We're far from perfect. But, yes, we're we're trying to build... Basically, could say the most important product we work on is none of the customer facing products, but these under the hood engine or machine that helps us operate all these these businesses, these products really well. Our creativity and efforts go first and foremost in... Into that underlying layer that's a little bit hidden, but so important. And and then after we feel we've done the best we could there, then, you know, any leftovers go to the... To everything else. And the and the reason is if that machine is amazing, then we're almost guaranteed to make sure that that each of the businesses is as good as it can be. If the machine is lack lackluster, then we lose our edge, our ability to to buy things and and make sure they're more successful with us than than with everybody else. And then the entire thing doesn't work any longer. Know? [00:23:04] S10: Do you ever get under the hood of one of these businesses you buy and go, oh, no. This was a big mistake or there are some nasty surprises there? Or you think this can't be part of the perfect operating machine? [00:23:15] S11: I mean, there are always surprises, some good, some bad. More bad than good because a lot of most sellers we find are honest. It's not black or white. People tend to lean toward painting it the rosier picture, you know, like [00:23:27] S10: Selling an house.
00:23:27 · Katie Prescott, Luca Ferrari
[00:23:27] S10: Selling an house. [00:23:28] S11: Exactly. Yeah. Big, big lies rarely. But things that are a little bit worse than that being presented to you. It happens somewhat often, but we've never found something that we're like, holy shit. Like this is a problem. It's mostly somewhat disappointing, but not too big. Now, when it comes to business being highly imperfect, that's mostly good news for us as long as we know when we set the price, because our very value proposition is that we as a company are generally able to to make businesses a lot better. So when there are imperfections or even serious flaws, if they're fixable, so if if if the problem is there are no customers, well, you know, we need customers, but... Or the product is not solving a real problem, we're not interested. But if the product solves a real problem, there are plenty of customers, users, retention is robust, but maybe the technology is dated, the product is buggy, customers need a set of features that's not there yet, maybe the team could be improved, Monetization is suboptimal. All of these things are good news for us because it means we are, we should be able to offer a great price to current owners while still having enough headroom that we can deliver high returns for ourselves. So we are actually quite attracted to businesses that fundamentally they're good, but there are elements of them that could be greatly improved. [00:24:46] S10: And when it comes to that returns point, when do you get to the point of selling some of these companies?