01:51:45 · Luca Ferrari, David Senra
[01:51:45] S1: Yeah. Generally, yes. I don't think we increased it almost ever by more than five or 10%. [01:51:51] S0: So did you ever hear about the way Buffett bid for Clayton Homes? No, I don't. The founder of Clayton Homes wrote an autobiography. I can't remember what it's called, but I think his name is Jim Clayton. His son was handling negotiations because he had sat down and his son is the CEO. His son goes to Buffett. He's like, yeah, we'd... They were debating on price per share. He's like, board would entertain an offer at 17. Buffett goes, 12.50 bid. And then the guy comes back, he's like, all right, we talked over. We'll we'll take $15 Buffett goes, 12.50. He goes, all right, went back, we're gonna do $14 And he goes, dollars 12.50 is my final offer. And then his closer was, I can assure you, if every capital market in the world closed tomorrow, he's like, You can still rely on this offer. And they're like, We'll take $12.50 dollars
01:52:39 · Luca Ferrari
[01:52:39] S1: I will not name names, but we have had one or two situations a little bit like that. And look, I think it's easier to do because we're so confident. I don't believe to this day that we have ever been outbid. I don't remember a single case, at least not in the last five years, in which we put forth an offer and then the seller sold to someone else. We have had cases where they chose not to sell. Maybe they thought it was too low. I suppose they thought the offer was too low, but we have never seen that business being sold to someone else. And that... And we have been able to deliver the extremely high returns we have while winning essentially all winnable sales processes because of that massive advantage of an... As an operator where we can deliver such a improved performance vis a vis product equities per merchant and most of your people. When you have that ability to basically bid higher than... I mean, it's fair. I can't say everybody else every single time. Of course, there will be exceptions, but almost everybody else almost every time, then you can be confident in your offer. And we've seen that sometimes we put forth the offer and the sales party thought they could get more and they choose not to engage further. And then maybe we hear back from them, say, nine months later or six months later, and then they're willing to transact at that price because they needed to convince themselves that actually that's what you can get. It's harder to do if you think your offer is weak. Then you need to be much more persuasive and try to get it done before people shop it around. But in our case, we always say, Do you want to shop it Often people try to look for exclusives. They're like, this is my offer, but unless I get exclusivity within five days, the offer is gone. Because they know that their best chance is to win on timing. Like, I'm here now. They know the offer is not that great. In our case, when we're asked, we almost always say, look, if you want to, we encourage you to go and shop it around. Because in fact, once you convince yourself that this is the best offer, it'll be easier for us to. Like, it'll be a lot smoother from we'll sign faster, we'll close more easily. We want you to be fully satisfied that this is the best value for you and your shareholders that you can get. That's me, generally speaking, our approach.
01:54:48 · David Senra, Luca Ferrari
[01:54:48] S0: Think from the outside, I I would ask, like, how much of your business is run by numbers? Remember the discussion we had on jujitsu and MMA? [01:54:58] S1: Vaguely. Okay. Which part? You [01:55:00] S0: mentioned... You may... Named some people that you were fans of in the sport of jiu jitsu and MMA. Then you said the Don't weird [01:55:07] S1: even hire her. We discussed. And [01:55:08] S0: then you said one of the weirdest shit anybody's ever said to me in my life. And you're like, oh, by the way, I don't know what they look like. [01:55:14] S1: Oh, yeah. [01:55:14] S0: Yeah. Yeah. I'm like, how can you be a [01:55:16] S1: I don't remember. Yes. Yeah. [01:55:17] S0: Yeah. How can you be a fan of a sport and not know what the person looks I [01:55:21] S1: wouldn't say I'm a fan of the sport, but I knew something about this. I'm a little bit of a geek for stats, numbers. And so, yeah, Same for for a lot of sports, like, for example, CrossFit. I don't practice CrossFit. I barely have. I've I've probably seen You don't watch the sports. No. [01:55:45] S0: You study the data that comes off [01:55:47] S1: the sport. That's what I'm trying to get to. I would tell you that miss Tumi, she's the greatest prostitute of all time. She probably won, like, eight prostitute games. She only missed once when she was pregnant, I think, a couple years ago, and then she came back and won a game. So I don't know. I just love to... The stats. [01:56:01] S0: But you don't know what she looks like? I'm... If she's walking down the street, would you...
01:56:01 · David Senra, Luca Ferrari
[01:56:01] S0: But you don't know what she looks like? I'm... If she's walking down the street, would you... [01:56:05] S1: No. I I don't think I've ever seen her. If I've seen her, it's maybe as I was googling it, but guess the picture, but... [01:56:10] S0: So help help me understand this. So, like, this part of you, which is one of the most memorable things you've ever said to me, right, where you have, like, this you had a bunch of knowledge about these people. Like, so clearly, you retain these numbers. Are you running your business the same way? I would say
01:56:10 · David Senra, Luca Ferrari
[01:56:10] S0: So help help me understand this. So, like, this part of you, which is one of the most memorable things you've ever said to me, right, where you have, like, this you had a bunch of knowledge about these people. Like, so clearly, you retain these numbers. Are you running your business the same way? I would say [01:56:24] S1: I'm a strong believer in logic, rationale. I think logic and rationality, properly defined, are perfect. They're always good for you. I'm skeptical about numbers actually, meaning numbers can be very dangerous because they are an approximation of reality. If you take numbers at face value, you're not sufficiently skeptical and inquisitive, you risk being misguided. Numbers are wonderful and very useful, but they need to be held with care. What we try to breach at Bending Spoons is there's never a decision that you have to make where being logical and rational isn't the optimal strategy. Ever. No matter how quantifiable or unquantifiable the matter at hand is, you're going be as logical and as rational as you can. Whether you should be data driven, let's see. I mean, some things are very clearly well informed by numbers. Other things are probably useful to bring numbers to the table, but they don't tell you everything. Some things are somewhat dangerous. For example, today we generate well over $4,000,000 in revenue per tumor. 4,000,000 [01:57:37] S0: per revenue per employee?
01:57:38 · Luca Ferrari
[01:57:38] S1: Per core team employee. Technically, we pay some of the highest compensation in the markets where we operate because we want to work with some of the best people. And that's not the main thing, but we want to make sure it doesn't become a thing. Like, we want them to feel that they're highly valued and so that we focus on the things that are actually more exciting and motivating than the extra dollar. So pay needs to be high enough that nobody forgets about it, but it's not front and center, let's say. Having said that, we... As as is only natural, we don't wanna waste money and compensation if it doesn't bring better talent. Right? I think I'm not saying anything shocking here. And so I remember having this discussion with some of my colleagues whether we should raise salaries or pay in general. And I was firmly of the opinion that we should, and we have, by the way, and we will further in the future. Someone suggested that we run an experiment, and that was we would put out their job descriptions with the higher salary number than we would typically pay the company and see whether that would get us more applications, better applications, more conversion rates. I was in favor of running that experiment, because had we seen major uplifts, that would have very strongly supported the view that we should be increasing salaries. But I told the team before we ran the experiment that I thought, even if we didn't see any uplift, I would still be of the opinion that we should raise salaries. And the reason why I believe so is that I think that the people who click on a job ad and actually then decide what to do is actually a fraction of the people that could be clicking on that ad. And by the way, a lot of those people will have already decided whether they're inclined to apply or they're just curious. If you look at conversion from a piece of information you're changing so late in the final, essentially, and running an experiment that's going to last two months, you're going to fail to observe all the compounding effects of you establishing a reputation as an extremely high paying company, those will never show up immediately. You need people to spread the word at universities and workplaces. You need to start showing up in the job boards, as you know, there are websites comparing. That will take many months at a minimum, probably multiple years.