The Pragmatic Engineer
00:03:15 · Luca Ferrari
[00:03:15] S1: You correctly mentioned Evernote as one of the most well known businesses we acquired. Meetup2. We have acquired Mosaic, which is a collection of mobile products from Interactive Corporation. And we've acquired Hopin and Streamyard, possibly the most popular recording and live streaming suite of features of product in the world. More recently, Issue for digital publishing and WeTransfer for digital file storage and transfer. We also own and operate Remini, which is an AI based photonhancer and generator, one of the top two or three most used generative AI products in the world with over 100,000,000 monthly active users. But we have been doing this for a decade and we have acquired dozens of businesses. These are just the most well known ones.
00:04:11 · Gergely Orosz
[00:04:11] S0: This episode is brought to you by the Enterprise Ready Conference, a one day event in SF, bringing together product and engineering leaders shaping the future of enterprise SaaS. The event features a curated list of speakers with direct experience building for the enterprise. Speakers include people from OpenAI, Vanta, Checkr, Dropbox and Canva. Topics include advanced identity management, compliance, encryption and logging essentially yet complex features that most enterprise customers require. If you're a founder, exec, PM or engineer tasked with the enterprise roadmap, this conference is for you. You'll get detailed insights from industry leaders that have years of experience navigating the same challenges you face today. And best of all, it's completely free since it's hosted by WorkOS. Spots are filling up quickly. Make sure to request an invite at enterpriseready dot com. That is enterpriseready.com. This episode was brought to you by DX, a platform that helps organizations measure and improve developer productivity. The DX team includes notable researchers behind the frameworks like DevEx and Space, so they're constantly asked by leaders: What metrics should we use to measure developer productivity? To help simplify the landscape, DX just recently published the DXCore IV, a unified framework for measuring developer productivity that encapsulates DORA, SPACE and DevEx. The DX Score four includes four dimensions including speed, effectiveness and quality that provide a focused set of metrics that help track productivity at all levels of the organization. You can learn more about the DX Core4 and how it's being used in companies like Dropbox, Etsy, Versal and Pfizer at getdx.com/core4. Again that's getdx.com/core4. I'd like to address the... An elephant in in the room in terms of the the perception of a bending spoon. So we've already touched on this, but I I I just really wanna, like, like, double click on it. Cause from the outside, when you search for Bending Spoons, often things in the press will come up, oh, they acquired Evernote and then they reduced the original team. Oh, they acquired Meetup and then they reduced the original team. Oh, they acquired this other company and they did that.
00:06:19 · Gergely Orosz
So there's this real perception of like, oh, Bending Spoons buys a company that is struggling or that wants to be sold, and they just reduce the the the team and and then they take it from there. But how do... And this is just one side of the story. Obviously, this is the external, I I guess, the hard numbers or or or the things that make the rounds and and make people pay attention and and, you know, form opinions. How do acquisitions really look like from the inside? Like, what what is your approach? Because I... I'm I'm gonna just assume that it's likely not like we're gonna cross off. That doesn't make sense to acquire a company when, you know, like it sounds you want to make more of this. How do you approach it?
00:07:02 · Luca Ferrari
[00:07:02] S1: Yeah, definitely. I think given that we, they require companies to own and operate them forever, and given that we do so with our own money, we're not a fund, we're not raising capital from investors to buy companies, we're using our own money. Pretty much all of my worth is in Bending Spoons, and so is the case for most people here, including Francesco and Federico. We would want to do the best we can with every single acquisition with a long term view, which is what we do. The way we approach it, I described earlier a little bit, we will first of all go through a phase of learning. When you are on the outside of an acquisition of a company, you don't get to see a lot of stuff you need to be inside. So once you're inside, you get to see enough that you can decide whether you want to acquire it or not, and at what price, but you don't know enough to be able to decide how to operate it well. And so we go through a learning phase and we really look at the details, we go hands on, very deep across the board. And the more we do this, the better we become at recognizing patterns, and so we get faster and more accurate. But after generally a few weeks, maybe a couple of months, depending on the complexity we find, we form a pretty clear opinion and develop a pretty clear vision as to what we want do with the product, the technology, the monetization, the organization and so on and so forth. And then, as I said, we try to close that gap between the status quo and that vision as quickly as we can. Often there is a gap in how we want the organization to be structured. Often we want it to be a much smaller organization where people have a much more autonomy and ownership of projects, where we do not pursue projects that are not really likely to move the needle in a major way, so massive focus, massive leanness and autonomy. Making that change, and I'm talking again particularly the organization such as a layoff, sucks. It sucks primarily for the people who are let go, of course. It's also not enjoyable for those of us who implement it. Naturally, we have empathy for those people. We try to do it in a way that's as supportive financially, logistically, emotionally as we can. But it still sucks, know, there's no way around it.
00:09:27 · Luca Ferrari
However, I will say, if we believe that on the other side of that painful transition, the company is much better positioned to kick ass for five or ten years down the line, if getting there requires making unpopular or painful decisions, we will make them. And we understand we'll take flack for that in the press, and it's fine. I mean, there's a reason for it and it's okay. But it's certainly nowhere near representative of the much bigger effort and the much bigger vision we have for all these businesses and a project like Evernote, I think represents our trajectory well.
00:10:05 · Gergely Orosz, Luca Ferrari
[00:10:05] S0: My first reaction was like, oh, this is terrible, a company buys another company and then lets a bunch of people go, how terrible, let's say with Evernote. But then I was kind of thinking a little bit further and thought like, on, I've read all these articles about Evernote, how, again, this this might not represent, but what what what I understood, how they struggled to make a profit, how they struggled to to operate, how they were burning money, how they tried this, how they tried that. This this was... I mean, in this case, this was clearly a struggling company. And to to take that company to a successful company, clearly, if it would have been easy, it it it would have clearly been done. And when I look through a lot of your acquisitions, some of them, they are companies that are not necessarily doing well or they want to sell for some reason. I mean, if they would have been doing amazing, they probably would have not sell. Like, I I don't know, dude. Like, sounds like Bending Spoons does not want to sell right now. Right? So if you're successful [00:10:55] S1: We didn't steal any companies. [00:10:57] S0: Exactly. [00:10:58] S1: We didn't steal them. Promise.