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?
00:41:33 · Luca Ferrari
Is your revenue growing? How fast? Because if you're invested in a company, really the upside is in believing that that company grows, there's still value in a flatter company, but there's not a lot of discussion there, it's not as exciting multiples compress, so there's this pressure for management teams to show growth at all costs, but if you only have one product or let's say a set of products in a niche in the market, sometimes there's not a lot you can do to ignite a lot of growth because maybe that market has been saturated, the truly big groundbreaking ideas have been had, and I mean, whatever missing one is out there in the universe of possibilities is difficult. And so sometimes people throw a lot of money, whether it's R and D or marketing, just desperately trying to unlock that extra growth and that improved multiple. If that business becomes part of Bending Spoons, we still really like to make it grow, of course, as much as we can, but we are not, there is no pressure to grow beyond what's profitable growth, because ultimately anybody who buys stock into Bending Spoons, yes, they like our individual businesses as well, of course, but the main thesis is Bending Spoons can generate amazing cash flows from businesses and redeploy to where new acquisitions hit very high returns and this over time compounds attractively, hopefully for many, many years. And so do I care all that much whether, you know, that particular business is growing 15% or 5%? Not really, I mean, I'd like to know and 15 is better than five, but if 15 is achieved by burning a lot of cash for very little profit many years into the future, I'd rather get five and have all that extra cash being deployed toward acquisitions that are accretive. So often these executive teams and those owners are extremely competent, otherwise they probably wouldn't have built successful businesses. They're very structured and context in which they operate puts them at a disadvantage vis a vis that business being run within management's bones.
00:43:44 · S1
[00:43:44] S1: One thing that I learned through all this is not only are the products super retentive and people might think that, oh, you might be buying this product, you'll be ruthlessly cutting headcount, you'll be making it more expensive, maybe you'll have churn, but no, retention is still good. Also within this type of organization where you, if you have really high agency, if you have really good ownership in yourself and you can kind of move around, you're giving a lot of that to your employees and they're really retentive too. So you've created two really high quality kind of systems here.