01:34:13 · Luca Ferrari, David Senra
[01:34:13] S1: Let's say more than 100, less than 200. [01:34:15] S0: Okay. So there you go. That's the range of revenue. It it is profitable, and you just gave a hint as to what the operating profit percentage might look like. Right? And you're doing this to 20 people. [01:34:27] S1: Yes. That's right. Yeah. Plus the help, slightly unquantifiable help of that platform that keeps pumping out technological improvements, those automatically benefit everybody. You can allocate it by dollars in revenue, whatever. But yes, people wake up in the morning and fix bugs, Evernote, launch features, optimize monetization, that's about 20 people right now. [01:34:50] S0: So this kind of efficiency, are you seeing that in the rest of the businesses that you own as well? [01:34:54] S1: Yeah, for the most part, I think that not all functions are equally [01:34:57] S0: Are you optimizing for that?
01:34:59 · Luca Ferrari
[01:34:59] S1: No, we just try to make each business as successful as possible. It's not like we want to have like, the smallest number of people that we can. I mean, if more people create more value for customers and for Banish Spoons, we would... Assuming we can we can hire enough, you know, and fast enough, we would certainly deploy them. Sometimes we have situations where we will gonna have more people, we just don't have them. So, okay, that's a separate issue. But we don't aim to minimize the number at all, just to run these businesses as well as possible. We often find that some of these businesses, when you take them back to startup mode, so they had been large, slightly bureaucratic, sometimes political organizations for a while, things tend to grind to a halt. It's difficult to be entrepreneurial, enthusiastic, move fast, move work on what matters. If we bring them back to a much smaller size, much higher talent density, get rid of a lot of red tape. Then even though the team is smaller, perhaps precisely because the team is smaller, product development and optimization of monetization pick up again. And Evernote is a good example. If you look at the it's difficult to precisely quantify innovation, if you look at the timeline of, say, product improvements, features, before we acquired it in the, say, two, three years before and after, it's night and day. I feel very comfortable saying it's at least three times as fast under almost any frame of measurement, despite the team being much smaller. But it's really think despite is the wrong word. In many ways, it's because it's a lot smaller. So these people are against startups. Instagram was built by, I suppose, I don't know, like 10 people. I'm not sure. Something like that. I think
01:36:37 · David Senra, Luca Ferrari
[01:36:37] S0: it was like 12 when [01:36:38] S1: they got [01:36:38] S0: acquired some is crazy mind proof [01:36:40] S1: that small teams of very capable people with extreme ownership who really care can do, can outwork and outproduce vast organizations where either not enough people care or they do, but there are so many feet to tap onto and so many hurdles to overcome to get stuff done that they they fail to do so. And it's not... Mean, nobody wants that to be the case. It's more like frog in the boiling water kind of phenomenon where you keep adding teams and and and and processes and rules. And then at at some point, it's very difficult to it's very difficult to care, and it's very difficult to get stuff done. This is what
01:36:40 · Luca Ferrari, David Senra
[01:36:40] S1: that small teams of very capable people with extreme ownership who really care can do, can outwork and outproduce vast organizations where either not enough people care or they do, but there are so many feet to tap onto and so many hurdles to overcome to get stuff done that they they fail to do so. And it's not... Mean, nobody wants that to be the case. It's more like frog in the boiling water kind of phenomenon where you keep adding teams and and and and processes and rules. And then at at some point, it's very difficult to it's very difficult to care, and it's very difficult to get stuff done. This is what [01:37:17] S0: I meant about, like, it goes back to how I've been describing to other founders that it's just like this Galapagos island of entrepreneurship. Because I know you mentioned, like, being influenced by Henry Singleton, for example, and he would do this too. He was like, over and over again, says, hey. I think at one time he owned 130 different businesses and 129 of them were profitable, but he wanted to break business units into the smallest possible parts. Difference was, between you and him, you like breaking things down to smaller parts, less people, more efficient, but he didn't he essentially kept kept the business units separate. Yeah. Where you're actually studying them all and then using insights and spreading across your entire organization. It's very similar to like what Mark Lender did with Constellation. Is there anybody else that you've been influenced by or do you take an idea or two from?
01:38:01 · Luca Ferrari, David Senra
[01:38:01] S1: Frankly, not a lot. Going back to what we were discussing earlier, we were growing up as a business in no man's land in Italy, purposefully chose to stay a little bit isolated to try to, at the risk of reinventing the wheel, also coming up with some real powerful innovations. So not not so much. I'd say maybe Netflix, I think. I don't really know Netflix from the inside. I don't know anyone who works there, but, you know, their their famous deck, cultural deck, and then there have been a couple of books that have been written about it. I think some of those ideas that you wanna beat complexity with talent, not process, and keep rules to a minimum, I think some of that, I think, rub rubbed off on us. But other than that, I think we've tried to be quite autonomous in coming up with our [01:38:49] S0: own ideas. Do you describe Bending Spoons as a conglomerate or no? [01:38:52] S1: I It's a conglomerate to the extent that [01:38:54] S0: But do actually use that word? [01:38:56] S1: No. I've never [01:38:56] S0: used I don't think so. [01:38:57] S1: It bother me, but I think it's more... At least in my mind, a conglomerate is a set of relatively distinct and separate parts. In our case, we try to make everything as homogenous and integrated as possible, as [01:39:12] S0: I described. So Berkshire and Teledyne would be much more conglomerate
01:39:12 · David Senra, Luca Ferrari
[01:39:12] S0: I described. So Berkshire and Teledyne would be much more conglomerate [01:39:15] S1: Yeah, than exactly. And I think what Singleton and Buffett did well, well, better than almost anybody in history, is quite different from what I think we've been doing really well. They were, and in the case of Buffett, it still is, exceptional at selecting, at picking companies, management teams that should be worth more than the market was valuing them. I wouldn't say either... Certainly not Berkshire, think, by their own admission would... That most people wouldn't consider them exceptional operators. They generally, in fact, would avoid buying businesses where they thought a lot had to be fixed. They didn't like that. They liked business. [01:39:54] S0: For the people listening to this, they haven't studied Singleton. I just did an episode on him on my other podcast. It's remarkable how many ideas that we've heard from Buffett and Munger that Singleton discovered like twenty years before them. They both [01:40:07] S1: Munger and Buffett. [01:40:07] S0: Yeah. Buffett and Munger were both saying, this is