01:44:51 · Luca Ferrari, John Coogan
[01:44:51] S4: Oh, absolutely. I think the I don't think we have any significant business that's that hasn't been around for at least fifteen, sixteen years. Yeah. On the one hand, you know they're not gonna go to the moon, you know Yeah. Which is bad. I prefer it to be the case. But but on the other hand, yes, they've gone through so much and the customer base is so self selected at this point. Yeah. It's a huge advantage. You when you bet as a VC, for example, in a fast growing company, of course, that's exciting. Also, you need to believe that growth will stay. That company typically is the end of one offering that product or that product in that way. As competition comes up, you don't know what's going happen. You haven't seen it happen before. But for AOL or Eventbrite or Vimeo, we have seen it all. Like, they've had basically, they've lived in a perfect competition kind of environment for a decade plus. Yep. So plenty of clones Yep. Emulators of those kinds, you kinda know what you get. And then there's volume in that for sure. [01:45:46] S1: Yeah. Are you getting calls from VCs who are trying to offload shares or whole companies of zombie corns? There's a article in The Economist this week about zombie corns, companies that were valued at over $1,000,000,000 and have not raised an up round in years. What kind of deal flow is getting pushed your way? And then what are you doing with that deal flow? Is it interesting or not?
01:45:46 · John Coogan, Luca Ferrari
[01:45:46] S1: Yeah. Are you getting calls from VCs who are trying to offload shares or whole companies of zombie corns? There's a article in The Economist this week about zombie corns, companies that were valued at over $1,000,000,000 and have not raised an up round in years. What kind of deal flow is getting pushed your way? And then what are you doing with that deal flow? Is it interesting or not? [01:46:11] S4: Yeah. Look. We we we look at every it's like you got it. I mean, it's a particularly good time for a serial acquirer. There's a bit of dislocation Mhmm. Fear fear due to the drop disruption from AI, which I think is a lot of truth to it in many cases. It's a bit nuanced, but and we can only do so. One of the disadvantages of our model where we almost rebuild some of these business from the ground up, we try to keep everything that's great and rebuild everything that's less great. It's I mean, the good thing is I think it's much more challenging and interesting than than going a little bit more shallow, and also it's delivered very high returns. But but at the same time, you can do it a million times a year. It takes a a lot of time, a lot of effort from a big team, our engineers, designers, product managers, so on and so forth. And so we have to be very selective. So, yes, it's a good time with a lot of opportunities, but equally, we we can only do a few. So the key is, you know, listening to what's available, the opportunities, but also not get too excited, stay patient for the right one. [01:47:10] S1: Yeah. More than 50 deals done.
01:47:10 · John Coogan, Jordi Hays, Luca Ferrari
[01:47:10] S1: Yeah. More than 50 deals done. [01:47:12] S0: Yeah. How much of an advantage is is being public can actually give you in in net new acquisitions? I imagine a lot of acquirers are gonna be, you know, it's potentially a lot more compelling to get, you know Sure. If they're gonna sell to you, to get, you know, depending on whatever the cash equity debt split is, to actually just have exposure to something that they feel like can compound while having access to liquidity. Sure. [01:47:38] S4: I think I mean, you may be right. We will see. Of course, it's, know, day one in that regard, so I don't have a track record. We we chose to go public primarily to improve our access to debt. Yeah. It turns out that lenders really like lending to privatecom public companies. They're better regulated, more externally transparent. They like valuation, all things a lender loves. Mhmm. You know, and historically, if you look at our the capital we have deployed, it's been, like, 80% directionally from debt and, like, 15%, 20% free cash flows. So it's important for us to to have access to debt dollars and and cheap debt debt if possible, this should help on the margins a little bit. But, yeah, I I think you're right. We may find opportunities that wouldn't have been available to us had we stayed private. [01:48:27] S1: Do you think any of that new debt market access might unlock sort of like a white whale acquisition, some mega deal where you're taking down a company that it fits the thesis but is much larger than anything you've done in the past?
01:48:27 · John Coogan, Luca Ferrari, Jordi Hays
[01:48:27] S1: Do you think any of that new debt market access might unlock sort of like a white whale acquisition, some mega deal where you're taking down a company that it fits the thesis but is much larger than anything you've done in the past? [01:48:45] S4: Look, I I would say I believe that as a good strategy is predictable to some extent. Mhmm. And our, you know, our predictable strategy is do three, five, eight deals a year of relatively speaking, same scale more or less, and it's gonna grow as we expand. But but, yes, that's an upside. That's a cherry on the cake. That's you know, I'm sure that in time, some something like that will happen, and we'll try to move quickly and seize the opportunity. So yeah. Mhmm. Possible? Likely, no. Possible, yes. I think if you look at this over enough you know, long enough a period of time, it's almost guaranteed to happen before or later. [01:49:23] S1: Yeah. What oh, sorry, Jordan. [01:49:25] S0: Do you think how how do you how do you think about people's like nostalgia around software products in general? I feel like we were talking with Scott Galloway yesterday for his podcast. Yeah. He was saying that he's quite excited about Bending Spoons specifically because he was like, they're great brands that people have like positive association with. And in fashion, everything that's old and uncool eventually becomes cool again. [01:49:54] S1: Mhmm.
01:49:54 · John Coogan, Jordi Hays, Luca Ferrari
[01:49:54] S1: Mhmm. [01:49:54] S0: Right? I would say like, you look at an example of you know, one of the hottest brands in the world, Chrome Hearts, right? Has gone through periods where it wasn't the hottest thing, but then it, you know, and these things go in cycles. So like I can imagine a world where five years from now every gen z kid is like, oh, of course I'm using AOL. Like, it's like it's like, you know, it's it's like vintage and it's like cool and nostalgic and like and the so I can imagine like at some point, and it feels like software is going the way of of of fashion where it's like, know, it's very easy to make a new fashion brand. Right? Like it's it's very easy to go compete with a Gucci or or a legacy brand, but but there's some there's just brand value is like a real thing. Do you see a potential where where you see a reacceleration or or renewed cultural relevancy in in any of the brands or is that not something you think about at all? [01:50:51] S4: I I would say it's possible. It's not something we would embed in a business case. We we we are kind of math, science, and engineering people. We look at the numbers and try to make sure that we base our capital allocation on assumptions that we can be close to certain about. And I would say what you just described is plausible, but does it happen when it's so, again, you know, maybe we'll try to make these products better to the best of our abilities. And if that helps ignite some of that, we'll you know, we'll be incredibly happy. But even if it does, our investment thesis does not hinge on on it.
01:50:51 · Luca Ferrari, John Coogan, Jordi Hays
[01:50:51] S4: I I would say it's possible. It's not something we would embed in a business case. We we we are kind of math, science, and engineering people. We look at the numbers and try to make sure that we base our capital allocation on assumptions that we can be close to certain about. And I would say what you just described is plausible, but does it happen when it's so, again, you know, maybe we'll try to make these products better to the best of our abilities. And if that helps ignite some of that, we'll you know, we'll be incredibly happy. But even if it does, our investment thesis does not hinge on on it. [01:51:26] S1: Yeah. I mean, it certainly could be true for Vimeo. The community there has always been very culturally different and like anti brain rot. You don't have YouTube style slop on there. [01:51:37] S0: Yeah. I I associate Vimeo with like quality Filmmaking. And it's still. Right? Like when I think about my favorite surf movies growing up, they were always always there. Snow you know, snowboarding, all all these different kind of niches I was into. Like the quality was Yeah. Going there. So [01:51:54] S1: What And by the way,