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?
00:26:04 · Luca Ferrari
[00:26:04] S0: A lot of iteration, you know, one of the big lessons as an entrepreneur, my colleagues and I learned early at a failed startup in between 2010 and 2013 and some lessons we learned that were instrumental to building management was that you need to be intellectually humble. It's good to have a vision at the same time, it's good to assume they're probably wrong. And so for our technologies, we operate in a similar manner. We try to be opinionated on what ideal looks like, but then we never make multi year investments. And before we test them on the ground, we like to identify smaller pieces we can build, put in the hands of our different businesses to see if they're useful and depending on adoption reception, we will further develop or rethink. And also we, while we have platform teams who own all of these technologies, we have found that it's never a good idea to take a platform team and task them with building something entirely new. It's much better to have the people who need it build it. So we will identify one of our businesses where that particular tool will be especially important, and then they will build it themselves. And if it's, once it's successful or if it's successful, it'll be handed over to our platform teams to be further refined, expanded. And the reason why this works is that when you need something, when you have experienced the pain of a certain problem, you're far more likely to develop a... An actually useful solution as opposed to taking a more academic angle where you think you know what the problem is, and then you get more excited about the engineering challenge than actually solving the problem. So these are probably the two main principles. Iterate with small iteration cycles, quick iteration cycles with high levels of intellectual humility, assuming you're wrong, you wanna constantly test and and and confirm you... We are... You're in fact right. And if not, you know, just... And and to always start building with people who have faced the problem, people in the trenches, and as opposed to with centralized teams who are in an ivory tower and I haven't actually gotten their hands dirty with that particular issue.
00:28:20 · Luca Ferrari, S1
They're fine later to to refine, expand and manage, but I think when when you go from zero to one with a new technology, it's better to have it built if you if you have that possibility by the people who understand the issue very, very well. And for us, it's fine because ultimately we have engineers in our businesses and in the platform. So it's, you know, it's not that we lack the capabilities either way and we can move them around all the time. [00:28:48] S1: You're taking an extreme first principles approach to software companies, but you also have a bit of an algorithmic of bend to it. Where's the tension between the intuitive approach versus deploying a system?