00:40:10 · Molly O'Shea
[00:40:10] S5: One of the things that you talk a lot about is startup mode. So what does that mean inside Bending Spoons?
00:40:16 · Matteo Danieli
[00:40:16] S4: Right. So the the expression startup mode, was born out of the necessity, to counter some of the most frequent criticism that we get when we acquire companies, which is that given that the acquisition and integration often entails a decrease in headcount, a profound restructuring of teams. You know, an external observer that's not privy to what happens in here will see that the number of people working on a product decreases as a consequence of us taking over and reasonably will determine, will argue that we don't care about making the product better. We don't care about evolving the product, and that necessary what will happen is that that product will deteriorate, the quality will go down and customers and users will not be, served in the same way as as they were before. And of course, this hinges on the fact that there must be a correlation between the size of a team and the quality of the work that's done on a specific product. Our argument is that that correlation is mild at best, and there are examples of the opposite. And startup mode is a very good shortcut for this idea. Like anyone... Like a lot of people might have experienced themselves that what happens in a company during the startup phase in the early years is very different to what happens when it grows into more of a corporate beast. Typically, people will associate to the startup phase as a period where, you know, there's there's a there's a smaller team often out of necessity. You don't have the resources to fund a larger operation. But then it's gonna be all hands on deck. There's gonna be a lot of fluidity in the roles and people feeling that basically everything could be their responsibility. A sense of ownership, that involves each and everyone, intensity in the work, you know, hard work, ambition. And, you know, what happens naturally is that, I mean, I'm not claiming that this is what happens with all companies. Matter of fact, there's a lot of companies that are able to scale and retain kind of the startup vibe, even when they grow up. And, you know, we try to be a prime example of that phenomenon.
00:42:47 · Matteo Danieli
But what typically happens is that, you know, as a product becomes more successful, both founders and investors will feel it's actually the best thing to do to actually add people, to increase the team because naturally you'll think more people, you'll be able to pursue more opportunities, more objectives, you'll be able to do more, customers and users, you want to have more, you'll be able to evolve the product, there's so many things to do, it makes a lot of sense. But if you don't navigate that growth, in the right way and that's a super complicated things to do, what naturally happens is that, if you have a product and you add people, in order to operate it, you'll need to create a lot of sub teams. You're gonna have to split up responsibility, different parts of the product will be managed by different teams. And so you lose that sort of holistic approach to operate in a product that that you that you breathe so often when you when you see what happens in startups. Responsibility will fragment a little bit. Even people that have bright ideas and, you know, are hungry for impact, they'll feel like they'll need to involve some other teams for something to happen so everything kind of slows down, what used to take days, takes weeks, takes months, you need to add layers, of management to handle the complexity and increase in the communication complexity, and then you start seeing some misaligned incentives as well because you know if, like during the startup days, especially if, employees are involved, in the ownership of the company, everybody knows that what's best for the company is best for themselves as well, but when the organization grows larger you start getting people that start optimizing, for their own career, at the detriment, of what's good for the company. And so you know one thing that starts happening is that if I'm the manager I understand and I feel that if I want my role to grow in importance I'll have to grow the number of people in my team and so on and so forth, but sometimes you know that growth might not be necessary. So you have all sorts of, misaligned incentives. And ultimately, long story short, is that you end up with a company, whose promise was we'll have more people, we'll do more things, but then everything kind of slows down and, and that doesn't happen.
00:45:34 · Matteo Danieli
And it's not because people are not talented, it's just the consequence of, you know, incentives being placed wrongly or, you know, organization growth and stuff like that. So this is all to say that what we really try to do when we acquire a company, go in and we allocate a team is we try to bring back this, startup mode, we try to bring back the sense of ownership, We try to to make sure that, whenever somebody has an idea, that idea can be pursued very quickly without having to, involve, you know, four different teams. And as a consequence of that, you see, you know, the frequency with which we ship improvements increasing, and, you know, you even have fewer intermediaries between users and customers and the product itself. Often when we acquire products that are mostly sales led in terms of their growth, we'll have one product manager that will be responsible for managing the product and at the same time managing the relationship with customers so they get an unfiltered view of what's necessary and they have all the knowledge to be able to talk to a customer knowing what's gonna be easy to implement, what makes sense to prioritize, etcetera, etcetera. So there are plenty of advantages that come down to simply undo some of that corpora... Corporaification, if you can say that, of companies that happen through time. But to that, we add a lot of, other things. So for once for one talent, talent density. You know, even if you believe that all other things being equal, the companies we acquire are equally attractive to talent than we are. We do have an advantage that's very hard to replicate, which is that... And we were talking about this before. Within our portfolio, have plenty of products. So people that come into Bending Spoons, they don't need to come in because they wanna work specifically on Vimeo or WeTransfer or AOL, but they need to be in love with the idea of being at Bending Spoons and they can actually be exposed to a to a lot of different products, which has the nice consequence that they can have the same CV that they would get by jumping from one company to the next every couple of years, but without the need to go through another hiring process, learning the culture in a company and learning how the company operate, proving themselves to demonstrate that they deserve certain positions or certain roles.
00:48:23 · Matteo Danieli, Molly O'Shea
So, you know, we actually offer this insane combination of variety but within the same culture, within the same organization. And, at the same time, of course, we're better known because we are larger, we have scale, we're better known that every single, product we acquire. So even that contributes to, being more attractive. So through that mechanism, we actually... We're actually able to attract and retain talent, that contributes to our talent density being higher typically. And so if you have fewer people that are where talent density is higher, the typical result is that you can do, much more, with less. And then on top of that, you you also add the fact that by having experienced, working on so many different products in different verticals, we've just learned a lot of lessons. We failed a bunch of times to the point that we now know that it's best not to try that thing again because the likelihood of success is very [00:49:31] S5: What are the hardest lessons that you've had to learn?
00:49:33 · Matteo Danieli
[00:49:33] S4: As a product person, you actually need to be optimistic. You need to believe that if you come up with an idea, there's a possibility that that idea will be revolutionary, will lead to great things. It's the basis of being able to generate those ideas in the first place. If you don't have that optimism, you're going to be like, Oh, nothing will work. What am I even doing here? So you need to start from there. But being optimistic about a thing and a thing sounding plausible and a thing sounding like it could work is very different from actually working in practice. And so I think like the general, like, you know, one of the things that you learn by working for decades on so many different products is how often your ideas are wrong, how often you end up failing. And again, you need to... It's a sort of, you know, it's trade off, it's a fine balance between retaining that optimism that at the tenth attempt or the fifteenth attempt will show you the way, while at the same time retaining the common sense and the knowledge of probabilities that will tell you that a lot of things will fail. And so you avoid over investing in things that sound good, maybe you don't have validation for, or as I said earlier, you avoid investing in things that they sound pretty reasonable, pretty rational, but you see them fail a bunch of times before and you don't think that it's just a matter of not having found the right product for them to succeed. Right? So, that helps a lot. It gives you a lot more common sense, it gives you a deeper understanding of reality, and it helps you focus your resources on the few initiatives that could really, move the needle rather than having a more kind of spray and pray approach.