00:17:44 · Luca Ferrari
[00:17:44] S0: I think we use AI as much as anybody. As far as I can tell, we're probably in the ninety ninth percentile by aggressive deployment of AI in our operations to improve our products, we have developed a lot of technologies powered by AI internally. So I'm very bullish on AI overall also concerned, it doesn't mean I'm bullish about all or even most of the startups that are coming up. I'm pretty sure that some of the most valuable companies of all time, sustainably valuable companies of all time will be coming out of these broader cohort of businesses. Businesses built over the last, let's say five years with AI the center of the thesis, but I'm equally confident that most of these companies will fail or at least basically fade away because everybody it's a gold rush. When you see people raising massive amounts of money at billion dollar valuations with pretty much nothing other than any idea, maybe a good track record in academia or elsewhere, anybody who's half credible because they were a great student or they did well at a big company, was not too worried about their reputation. We'll just run and try to raise money because you know, what do you have to lose other than your credibility and reputation? So a lot of this is just fluff, but there is real substance here and there. Have been as many as from side, right now we're not considering acquiring any of these companies. I think we, I said earlier, key criteria for us is being able to predict how things will go in the medium to long run. And it's very difficult to know, not just because some of these businesses are up and coming, growing super fast and when something is growing a 100% a year, it's very difficult and you only have one or two years of history. It's very difficult to know whether there'll be growing at a 100 in three years or at 12% in three years, and that changes everything. So plus valuations are very high, often irrationally high. So we don't think we can compete there and deliver good returns for our shareholders. You know, but, maybe later down the line, when the market is a little bit more mature, we'll look again and find something interesting.
00:20:07 · S1
[00:20:07] S1: Well, I want to go into your centralized platform because you guys, to your point use AI a lot, it's core to the business. I think 95% of your code is AI. It's written by AI. So can you walk me through the centralized platform, how you built that out and kind of, I mean, you made various different types of acquisitions from Evernote to AOL to Vimeo.
00:20:31 · Luca Ferrari
[00:20:31] S0: Yeah. So we, because we, at our core, we try to be the most capable operators of digital businesses on the planet and part of achieving that vision is to have access to the best toolkit possible. It's almost like if you wanna be a great cyclist, obviously that's not all there is to it, but you wanna have a great bike. I'm not saying anything shocking here. So we have invested into this operating system, into this technologies for a long time because of, it was strategically critical to us also my co founders and I are all engineers, so perhaps there is a bit of a passion angle too, so for the past decade, have tried to develop the best technologies we could. We buy from vendors when relevant, we use Slack, for example, we don't need a more sophisticated version of Slack. Slack is a wonderful product. So we buy Slack them and use it, but a lot of the tools we need to maximize our potential, we need them to be more sophisticated than almost any other companies out there would need them to be and providers of business tools that generally optimize for the mass market of enterprises. It makes sense. You don't wanna, like if someone were to build what we need, then they have a market of one or two, I don't know, like it's not a very appealing market to go after. And so, most of the tools out there are relatively simple. Need more sophistication, so we have to build it ourselves. And also we, by building all or most of these tools in house, we can make them natively integrated with one another, and that creates a lot of efficiencies effectiveness. So everything kinda like every tool talks to every other tool as relevant, which is impossible or very difficult to do if you buy from different vendors and then they change something and you have to change everything else. And last but not least, we get to save on costs. Potentially it's difficult to know exactly much we're saving by building this in house but I'd wager it's at least a $100,000,000 a year in costs. So it's pretty significant. But yes, it's key source of competitive advantage and building these tools would be uneconomical for pretty much any one of the businesses we acquire as they exist as standalone companies. It would be too much money to be poured into R and D to build these tools.
00:23:00 · Luca Ferrari
The returns will be on a excessively long timeframe, whereas we can amortize those investments across the entire portfolio and also the portfolio, our expectations of the portfolio expanding in the future. Future. So it's just a scale advantage that's unavailable and another big advantage in building this operating system is that as all of our businesses use all of these tools, when they find that one of these tools does not serve their needs as it should, perhaps there is a bug or a certain corner case is not handled or an entire area of need is not fully covered, that business can improve tool almost like if you were an in house open source community, and then those improvements are propagated to benefit all the other businesses. And so as we expand our portfolio and our organization grows, our ability to make these tools effective expands with it.
00:23:57 · Molly O'Shea
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00:25:50 · S1
[00:25:50] S1: I find this super fascinating because you've effectively created one operating system where you can use across anything. What was kind of like the unlock and how did you determine how to architect that system?