Invest Like the Best with Patrick O'Shaughnessy
00:02:25 · Patrick O'Shaughnessy
[00:02:25] S0: My guest today is Luca Ferrari. Luca is the cofounder and CEO of Bending Spoons, which he describes as 25% private equity and 75% technology company. Founded in 2013, Bending Spoons fully acquires and operates digital companies like Evernote, Meetup, Vimeo, and most recently AOL. Our conversation explores the unique model behind Bending Spoons and the culture required to scale it. Luca shares exactly how their acquisition playbook works from identifying promising businesses to rebuilding every part of them across product, design, monetization, and marketing. We discussed their approach to financing long term ownership through both debt and equity, Luca's obsession with finding and developing exceptional talent, and his decision to build the company in Europe. I found Luca's description of himself as perennially unhappy to be the clearest window into how he builds. It's a mindset that fuels his pursuit of excellence and defines the culture at Bending Spoons. Please enjoy my conversation with Luca Ferrari. For those that don't know about it, since we're in Milan today, it's not New York City. Not everyone yet knows about Bending Spoons, soon they will. Can you just tell us what it is, and then we'll go from there?
00:03:31 · Luca Ferrari
[00:03:31] S2: We are a pretty unusual beast. Unique almost, I think, as far as I can tell. I think a good representation will be 25% private equity, 75% tech company. Meaning we acquire companies as a key engine of growth. 100% acquisitions, no minor ities. And then unlike a private equity, which would typically look to sell them three, five, seven years down the line, we buy off our balance sheet to own and operate forever. And unlike a private equity, which typically would make relatively shallow interventions, maybe change the management team, We actually rethink the entire company, try to come up with a vision for the most successful version of that company and work as hard as we can to close the gap between the Cisco and that vision. And it could be rewrite the software, rearchitect the cloud infrastructure, launch lots of features, redesign the UI, optimize monetization and marketing, rebuild big chunks, sometimes the entirety of the organization. So it's very extensive, deep, time consuming work, sometimes radical work. And if we do it right, that creates a lot of value. We can reinvest in making our platform more powerful. So build better proprietary technologies, better access to talent, more knowledge and go after new bigger acquisitions.
00:04:40 · Patrick O'Shaughnessy
[00:04:40] S0: Can you say a little bit about the vision you have for the business? Not in terms of how big it will be or the number of acquisitions or anything, but five years hence, I know you care very deeply about the culture of the people here, what the home office looks like and feels like. You have a huge ambition for what you're building. Maybe describe that ambition and that vision a little bit.
00:04:59 · Luca Ferrari
[00:04:59] S2: We felt inspired at the prospect of building the company being our product. Building an institution, Berkshire Hathaway, that sort of company that people look at and think was a defining company of its generation. And so to do that scale is important. I think it's unlikely that you can be in that conversation unless the company is large and dominant. But also there needs to be some level of excellence along certain dimensions where the company really stands out vis a vis the others. And for us it's always been, besides being absolutely exceptional at the functional things, like being incredible at running these businesses, one part that we really want to be awesome at is spotting some of the best inexperienced talent in the world and being the ideal place for that talent to just skyrocket toward the maximum realization of their potential as quickly as possible. We want to be the ultimate testing and training ground for incredibly talented and motivated people. And so the company five or ten years out, I think will still be conglomerate of very interesting digital technology businesses, hopefully much more and generally the company would be bigger. And I hope we can be much stronger at everything we do and have even higher levels of talent density and hopefully inspire others to try to raise the bar in how they run their businesses. And by the way, we started in Europe. We like the idea that Europe... It's fascinating that if you think about most of the very large super successful companies globally, you think about almost entirely US or Chinese companies, historically US, now China is more. Europe has very little to offer in that regard, but it's 700,000,000 person continent. Very good education. I'm not saying we should have $10,000,000,000,000 companies, but we don't have a single one pretty much, I think last time I checked. We hope we can be part of that movement showing that you can actually build such a company. We're an international company with operations in The US too, but the deeper roots, the original roots can be here too. We are not a periphery of the empire.
00:06:51 · Patrick O'Shaughnessy, Luca Ferrari
[00:06:51] S0: It was actually Daniel at Spotify who introduced us originally. Obviously he's built one of the great European origin businesses. Why do you think there are not more of them? Like obviously you're seeking to change this, but there's not that many. What do you think the deep reasons are? [00:07:04] S2: I think the main reason is a matter of default. Why does California has had so much success over the decades? One of the reason is you have seen incredible companies being created and grown in California. You just assume that's where you go and do it. Especially as a founder, you don't know much like you are ultimately, at least I was, I think that's true of many founders, you are a passionate, determined, maybe talented idiot essentially. You don't know the world enough to actually determine what the ideal location will be. If you even think about it, because typically how many times have you heard of founders doing a location study, where should I start my company? It tends to be Momentum. I happen to study here. I know people are there. I should probably just do it. And so a lot of talented Europeans, many of the most talented Europeans who have an entrepreneurial streak, I think they just default to building in The US, which has been fantastic for The US of course. But there is a gap I think. And if we had more virtuous examples of people who have built incredible businesses, again, with a seed in Europe, I think more people would not default to that and think, oh, I could actually build such a business from France or Portugal or Italy.
00:07:04 · Luca Ferrari, Patrick O'Shaughnessy
[00:07:04] S2: I think the main reason is a matter of default. Why does California has had so much success over the decades? One of the reason is you have seen incredible companies being created and grown in California. You just assume that's where you go and do it. Especially as a founder, you don't know much like you are ultimately, at least I was, I think that's true of many founders, you are a passionate, determined, maybe talented idiot essentially. You don't know the world enough to actually determine what the ideal location will be. If you even think about it, because typically how many times have you heard of founders doing a location study, where should I start my company? It tends to be Momentum. I happen to study here. I know people are there. I should probably just do it. And so a lot of talented Europeans, many of the most talented Europeans who have an entrepreneurial streak, I think they just default to building in The US, which has been fantastic for The US of course. But there is a gap I think. And if we had more virtuous examples of people who have built incredible businesses, again, with a seed in Europe, I think more people would not default to that and think, oh, I could actually build such a business from France or Portugal or Italy. [00:08:14] S0: Was that a key part of the original vision that you wanted it to be a beacon for European talent to show the world that a company like this could exist here? And if so, why? Why did you care so much? Why not just go to California?