The Neon Show
00:09:32 · Siddhartha Ahluwalia, Luca Ferrari
[00:09:32] S0: So so essentially there is no scope of you starting any company ever again another company. [00:09:40] S1: I'm... Never say never. I mean life is complicated, but I would say right now my by far my preferred path forward is to keep contributing to Bending Spoons for as long as I have the energy for and I'm the right person for, which may not be forever. I mean, I don't think I'm necessarily the best candidate for this job for In fact, every given year I wonder if I am. And as a company, we run a survey, my direct reports, a small selection of senior colleagues and one partner from each of our institutional investors. They fill out a survey, an anonymous survey. There's only one question and it's... Well technically it's two. One question is do you think Luca is the right candidate for being CEO next year? And then there is another one saying, do you mind elaborating? And the answers are only yes or no. If more than a couple of people will say no, we will initiate a search for an alternative internally and externally. It has not been the case so far and it terrifies me every time. But that's just to say and I think it's true not just for myself but most if not every colleague here. At Bending Spoons nobody feels like their position is owned by them, owed to them. We try to deserve it by being the best version of ourselves and even if we are, sometimes someone else is more suited and I think it is only right that they then take over.
00:09:40 · Luca Ferrari, Siddhartha Ahluwalia
[00:09:40] S1: I'm... Never say never. I mean life is complicated, but I would say right now my by far my preferred path forward is to keep contributing to Bending Spoons for as long as I have the energy for and I'm the right person for, which may not be forever. I mean, I don't think I'm necessarily the best candidate for this job for In fact, every given year I wonder if I am. And as a company, we run a survey, my direct reports, a small selection of senior colleagues and one partner from each of our institutional investors. They fill out a survey, an anonymous survey. There's only one question and it's... Well technically it's two. One question is do you think Luca is the right candidate for being CEO next year? And then there is another one saying, do you mind elaborating? And the answers are only yes or no. If more than a couple of people will say no, we will initiate a search for an alternative internally and externally. It has not been the case so far and it terrifies me every time. But that's just to say and I think it's true not just for myself but most if not every colleague here. At Bending Spoons nobody feels like their position is owned by them, owed to them. We try to deserve it by being the best version of ourselves and even if we are, sometimes someone else is more suited and I think it is only right that they then take over. [00:11:20] S0: And you are so efficient as a company with only 400 employees, team members, you are able to do $600,000,000 of revenue. I think this is more efficient than even Google.
00:11:20 · Siddhartha Ahluwalia, Luca Ferrari
[00:11:20] S0: And you are so efficient as a company with only 400 employees, team members, you are able to do $600,000,000 of revenue. I think this is more efficient than even Google. [00:11:32] S1: Yeah. I mean, I'd rather generate tens of billions of dollars a little bit less efficiently. Revenues are just a number. It's not that they weigh on your shoulders and you're like, Oh my goodness, a billion I can barely stand. Yeah, we we do try to be radically efficient in everything we do. [00:11:59] S0: And now I wanna go back to the journey. Right? Your first startup didn't succeed and you started Bending Spoons after that. Right? What was the idea that you didn't wanted to do another maybe b to b SaaS company, but, like, a a company that would acquire them? How did this idea of Bending Spoons came after the failure of the first one?
00:12:24 · Luca Ferrari
[00:12:24] S1: Yeah. So maybe maybe it's useful to give a little bit of context what Evertale... The the the startup was called Evertale, and we're trying to... This is 2010, and we're trying to build a self writing diary of a user's life based on AI. At the time AI was not in vogue, it was only talked about in academia. People barely knew what machine learning was. A lot of it was still structured algorithms rather than today's largely black boxes we work with. Different world. Anyway, so we wanted to build this product. We went about it the buy the book way. You rent a garage, get in, close the door and make sure not to get out for six months. You get out with a product that you feel is kind of polished and you hope the world embraces it and it's the next big thing. We did pretty much not quite the garage but a small apartment. And it's a long story but the short of it, we worked on it for almost three years, worked so hard and nobody uses it. And so we're like, Okay, we're running out of money because in the process we had raised about a million Euros in venture capital money. And we were left with about 40,000 Euros. It belonged to this VC because of liquidation preferences. However, it was too little for them to bother going through the legal hurdles of liquidating the company, they just essentially gifted us their shares and we liquidated the whole thing and we were left with something less than $40,000 Maybe there were some taxes to pay, not much given that we had lost so much money. And so that was the seed capital for Bending Spoons, a little less than $40,000 And that's 2013. Now the learning and it came both through our own experience with our failure and observing and studying many other startups at the time. Our hypothesis was that to find product market fit with something very new most of it was luck. We felt talent and hard work came nowhere near guaranteeing you would. I mean, maybe maybe there are some incredibly rare talents, some people can see it but I'm talking like 99.99% of people we felt finding product market fit was overwhelmingly luck and then you also needed talent and hard work. And then we hypothesized that becoming outstanding at, let me call it operating a digital business, so software engineering, AI research that came later but product management, UX design, marketing monetization, That part was mostly talent and hard work.
00:15:40 · Luca Ferrari, Siddhartha Ahluwalia
If you were smart and were willing to tenaciously, diligently worked at it for many, many years, you'd probably become better than most companies at it. And so as we didn't want our success to depend on factors other than our own abilities and efforts, at least not to a major degree, We chose to build Bending Spoons in the way I mentioned. Outsourcing, finding product market fit to the market, there's plenty of people looking to do that, plenty of VCs and angel investors investing so that bets are made. And rather Venice proofs coming in afterward to take something good and try to make it even better than good. And so that was the vision. Pretty much as we founded the company in 2013, certainly we refined our approach a lot over time, but the seeds, the main traits were there immediately. [00:16:45] S0: And what were the first two or three acquisitions like? And how did you finance those acquisitions?
00:16:45 · Siddhartha Ahluwalia, Luca Ferrari
[00:16:45] S0: And what were the first two or three acquisitions like? And how did you finance those acquisitions? [00:16:51] S1: Well, we financed them with less than $40,000 paid the rent, meager salaries for there were five people at the time and four of us lived in the same small apartment. So it was really frugal, more than frugal. The first acquisition we paid for it about $10,000 and it was an app to personalize your iPhone's keyboard. 2014. Probably, yeah, make it eight or nine months into Bending Spoons. So that was the first one. Turned that thousand dollars in a few tens of thousands, of course it's easier on a small scale. And then reinvested into hiring a few people, improving at what we do and slightly bigger acquisitions. And then eleven years later, naturally not an overnight success, lot of compounding, being a little bit better with each passing day, scale increases. [00:18:06] S0: And what was the first acquisition of scale that you did? Like maybe more than $100,000?