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.
00:44:20 · Luca Ferrari
[00:44:20] S0: Yeah, think it's a good way of looking at it. We have businesses with lower retention, businesses with higher retention, but I can't recall a single instance where retention got worse after Bending Spoons took off. Often it's improved, it's at least stayed the same, but ultimately we win by being relatively better, we don't need to, it's not that we necessarily need to buy only businesses with perfect retention, as long as these businesses do better under us than under the previous owners. And so we're, you know, we bought businesses with mediocre retention and business with great retention and generally preserved or improved those retention rates. And yes, when it comes to our team members, we are fanatical about creating one of the best work environments on the planet. And and I I think, you know, there's a lot we could improve and no doubts about it. We've put plenty of flaws, but we've done pretty well there overall. We we have had essentially no unwanted churn of Spooners, of these people part of the core team. Last year we had point 6%, so 0.6% were most companies in tech as far as I can tell. Now 5% is considered actually pretty good, and a lot of that super high retention comes from the excitement of being able to learn and grow across all of these different challenges. It keeps it fresh and interesting. Whereas if you're working on say Evernote, maybe it was exciting the first couple of years, let's say our product manager, but then after a while, you know, refining and refining and note taking, it can grow stale. But what can you do? You like the company, but ultimately you have to look for a different employer to take another step, learn something new. At Bending Spoons, just raise your hand and say, I feel I've exhausted my creativity and excitement for Evernote, what else can I do? And we may put you on a platform team to build an internal technology, you could move to AOL and trying to improve email UX, which is a completely different and fascinating challenge. So yes, we have been able to retain people very effectively when it comes to the retention of teams that come on board through acquisitions. I was quite worried initially that a lot of people would feel disheartened because, you know, it's it's... Know, we got acquired. Sometimes this is perceived as a failure even though it's it's not...
00:46:50 · Luca Ferrari, S1
It's maybe success meaning that you actually got a nice exit, but then you may feel that you're not as important as the core central team. I think there too, there is a lot to improve and we value these teams and we're trying to do better, but overall I think things have gone a lot better than I thought they would. We have an excellent relationship with old team members, retention rates for those team members, in no case are they lower than pre municipals, sometimes they have improved substantially. So at least we're not damaging the quality of those workplaces, if anything, in many cases improving it. But those retention rates are not as high as those we have in the core team. They're more in line with what I said before, that's considered okay for most technology companies. [00:47:40] S1: What would you say is core to the culture here?
00:47:45 · Luca Ferrari
[00:47:45] S0: There are several things, but probably the one or two that truly stand out as particularly distinctive, one is something called extreme ownership. We want everybody to care deeply, tremendously about being amazing at what they do about helping their team and the company succeed. We'd rather work with slightly less intelligent people if it comes down to that, but they have to really care. We don't want to work with anybody for whom doing well here, seeing the company succeed is not our super high priority. And the second aspect of our culture that I think is unusual is that we are highly scientific in how we approach the work. Again, first principles, being logical, being rational, being enthusiastic and putting a lot of effort into probing again reality for, you know, so that we can refine that model of the truth. We do a lot of that. Last year alone, we ran more than 3,000 experiments across our products. And those are just the ones that are like super quantitative and recorded and documented. Of course, there are a lot more initiatives that maybe don't qualify as a perfectly rigorous experiment, they're motivated by a desire to learn and understand things better. And that building Bending Spoons as a learning machine has been instrumental to, in general succeeding, specifically being able to expand the competence circle so that we can successfully acquire and transform and drive returns from a broader and broader set of businesses. If you look at what we were acquiring, you know, when we started, it was very simple iOS apps, very basic, and then more complex and larger iOS apps, then Android apps, and then web products, and then we went from self serve to now substantial enterprise sales organizations, and we even did, like I mentioned earlier, hardware recently with Tractive, and I mean, it's early, but it's going really well. So we try to keep expanding the share of the world that we believe we understand and improve that understanding continuously.