00:31:43 · Luca Ferrari, S1
Now in our particular context, developing this, again, operating system or this technological platform is just an instance of that process of work, it's not the root cause or where our culture originates, it's just a manifestation of it. And our attention to talent, our acquisition strategy, everything follows from the same root approach. Again, seeking the truth, refining that model of the truth all the time and adjusting our strategy and execution accordingly. [00:32:16] S1: I was talking to Christie about this before recording, but I think there are some misconceptions of the business model of the company. A lot of people put you in the PE bucket, some people put you in the product manager bucket, there's also the technology bucket. So of those different angles, it seems very much you're a technology company. Why do you think so many people misconstrued that?
00:32:39 · Luca Ferrari
[00:32:39] S0: Some of the ways we are most different from private equities are number one, we're not a fund, we don't buy to sell companies, we have never sold a material business, we intend to own and operate these businesses forever. Whereas private equity for those among the audience who don't know, generally these are funds, they raise money from third parties, from limited partners, and then they hold the companies for, on average, five years, and then they sell them. And so it's a completely different approach and mindset to what you do, what you do not do. The second big difference is that private equity is typically they are a financial place where there's a small group of very capable financial operators and they'll buy these companies, they'll make changes often, change the management team, again, they may touch prices, occasionally operations. It's a relatively hands off approach. I'm not aware of many instances in which the underlying technology for that business was rebuilt, the product was dramatically changed, the organization was dramatically changed. At Bending Spoons we, and again, of course that's the case because a private equity of a small team of financial operators, financial specialists. So you just don't have the, let's say the workforce and expertise to make some of these changes. If you look at the Bending Spoons organization, at this point, approaching a thousand people in the core team over 2,000, including all the acquired teams, most people, 60, 70% of this pretty large team are software engineers, AI research engineers, product designers, product managers, growth managers. And so obviously these people are not sitting around doing nothing. What does our software engineer do? What does a product manager do? What does a product designer do? They build product and technology. So that's almost all we do. And we implement these very deep transformations in the acquired businesses where we rebuild big chunks of the code base, we re architect a cloud infrastructure, we launch a lot of features, if we think they're useful, change the user experience, trying to make it more intuitive, we experiment tremendously with monetization and often reinvent monetization in pretty significant ways, what's premium, what's available for free, the prices, the different segments of customers.
00:34:55 · Luca Ferrari, S1
We rethink marketing from scratch, or at least in very major ways. And these transformations are very time consuming and challenging. They're also some of the most fun parts of what we do. And that's where a lot of our returns originate. So difference number one, we don't sell businesses. Number two, we transform them pretty deeply at the core. And the third major difference is that we try to integrate these businesses pretty deeply altogether on top of that shared platform operating system. And we have this core team or centrally, let's say managed, and then they are deployed into the different businesses and move very fluidly across the businesses. And this is unavailable to private equity structurally because as a private equity, you wanna buy a business and then sell it. If you integrate it with all the other businesses you bought or most of them, can, I mean, it's gonna be extremely difficult if not, if possible at all to sell it to someone else? So yeah, there are similarities, but there are also pretty glaring differences between what a typical private equity does, whatever typical means, because again, private equity is a very diverse world and what Bending Spoons does. [00:36:05] S1: You've raised little equity and you've fueled most of these acquisitions with debt. I'm curious, big can these acquisitions get?
00:36:05 · S1, Luca Ferrari
[00:36:05] S1: You've raised little equity and you've fueled most of these acquisitions with debt. I'm curious, big can these acquisitions get? [00:36:14] S0: Yeah, we have almost all of the capital we have deployed toward acquisitions has come from debt or our own free cash flows. That being the majority of the capital. Over time, we have tried to acquire on average larger companies because I just discussed how hands on we are, how deep we go into these companies and how much we change them for the better, at least that's what we try to accomplish. Those transformations take a lot of time and effort. And we find that that time and that effort do not scale linearly with the revenue potential of those businesses. In other words, we don't need nearly as many people or let me phrase it differently, we can get it done for a much larger business with a relatively similar number of people as for a smaller business. And so given that we don't have infinite operational capacity, we prefer to acquire, I don't know, five or 10 businesses each year, but bigger than 50 smaller ones. So that's, you know, that's been our approach. Hence the increase in the average scale of the businesses as opposed to the frequency of the acquisitions to make sure we keep compounding revenue very rapidly. How big can it get? Well, so far we see no end in sight, there's no obvious saturation point. It's very difficult to tell if and when growth will slow down, I'm sure it'll slow down. [00:37:48] S1: I'm having some issues with Google, I don't know if that's of interest for you.
00:37:48 · S1, Luca Ferrari
[00:37:48] S1: I'm having some issues with Google, I don't know if that's of interest for you. [00:37:53] S0: Well, maybe in the future. Think it's pretty far away. We have joked, I mean, look, just jokingly, I mean, we have sometimes joked maybe one day, who knows? Some of the AOL at some point was broadly speaking, as prominent and dominant as Google has been in the past decade. So maybe in twenty years, but I actually like Google a lot. I hope they do super well and we do super well. [00:38:23] S1: You guys operate very efficiently per employee. I think the last metric you mentioned was 4,000,000 per, 4,000,000 in revenue per employee. [00:38:32] S0: Per Spooner, which is member of that core team Okay. Now approaching a thousand people. If you if you count everybody we have onboard including acquired teams, it's probably a little less than half of... It's still very high, but a little bit less than half that number probably. [00:38:47] S1: But because you know how efficiently and lean you can run a company, do you just look at all these big tech companies, all these other companies out there and, like, are you just like, what are you guys doing? Like, how do you make of that?
00:39:02 · Luca Ferrari
[00:39:02] S0: No, mean, don't have, it's very easy to criticize from the outside. It's quite difficult to run a business we know firsthand. And a lot of the ways we manage to create value relative to the previous owners are not available to those owners and those management teams under their particular circumstances. For example, again, a big part of our value creation comes from that set of proprietary technologies, we discuss it, it would be uneconomical, unrealistic for those businesses to build them, so they don't have them. Many times businesses attract very good talent during their heyday and then as they are still pretty nice businesses, maybe growing but a little bit more, you know, their opportunity has been saturated a little bit more, they're not as cool any longer, they stop attracting some of the strongest talent. Some of the people who are most entrepreneurial driven, proactive, start moving on to other businesses and so those management teams find themselves occasionally having to, or more often not really actually, having to run those businesses with perfectly fine talent but not like top notch talent in many cases. At Bending Spoons we have been able to attract, I think extremely strong talent, have 800,000 job applications in 2025, we hired fewer than 300 people and so we can introduce, add to those teams selectively individuals who are extremely high performance, extremely high agency, very competent in relevant areas, and that fuels a new wave of innovations, of efficiency. And again, that's not a shortcoming of the previous executive team, it's just they didn't have the employer brand to attract those people. And a lot of those people joined Bending Spoons because they like the idea that they can rotate over time over multiple businesses and platform teams that enables tremendous growth and it keeps it interesting and a lot of career opportunities. So that employer brand can only exist if you structure your company like Bending Spoons, you can never achieve it as a, say single product company. That's to say a second major difference that drives performance and that's not available for those teams. A third one could be different incentives. If you're running a business and it's just one product, the markets will typically almost, you know, primarily value you based on your organic growth. Is your subscriber count growing?