You are the reason that NASDAQ exists.
They went from zero to $1 billion in revenue in just 10 years.
Bending Spoons CEO Luca Ferrari.
We have never lost a bid before.
Well, AOL has a new parent again. Milan-based tech company Bending Spoons announced it will buy ticketing platform Eventbrite.
Bending Spoons is stirring up the market. They go from fixing one zombie app to reviving 20 of them.
Half a billion people use our products. We're trying to build a generational company.
Please welcome Luca Ferrari.
Hey, here he is. Nice to see you.
All right, Luca, you have a great company.
Don't make fun of Luca Ferrari.
This is a great Italian entrepreneur, so shut the up.
Absolutely. Absolutely.
I asked somebody yelling like it's Super Mario Brothers in the audience.
We could have another presidential moment here at the All-In podcast. So, if she picks up, if she calls you, then just run the phone over.
I mean, there's a lot of us that have actually been tracking you for a while. I originally heard about you because you were in Milano, where, you know, my wife's family is from. And you had this incredibly progressive, methodical approach to growth. You did this fantastic podcast with Patrick O'Shaughnessy, which was great. I encourage all of you to listen to it. And you explained the arc of Bending Spoons, and I'd love for you to explain to folks the first few years and just all the misery and failure, the nadir of the company, and then the beginning of the ascent.
Yeah. So, you know, most of the, I mean, the pain, there's been plenty of pain throughout, as for most entrepreneurs, I think. But the biggest failures were in the previous startup. So with my co-founders, we launched an AI company in 2010, very early, too early, clearly crashed and burned three years later. We're left with about $40,000 in capital we raised from the VC, and, you know, clearly there wasn't a lot to salvage other than our relationship being stronger and that money that the VC pretty much gifted to us as they, you know, didn't want to go through the liquidation process, too much in legal fees and too many headaches. They had seen us work pretty hard, and so they told us, 'You guys keep it. We'll sell our shares to you for $1, like nominal value, and you go and get a nice vacation. We're clearly a little bit sick in the head.' And so we took the money and enthusiastically turned it into seed financing for Bending Spoons. And, you know, we came up with...
You started with $40,000.
$40,000 exactly in 2013. And we had this strategy which has remained pretty much the same. Obviously, you get smarter, you refine it in time. That was the idea, was we are not very good at finding product-market fit, or maybe, you know, luck plays a big role. Probably both things are true. But we have become pretty good at engineering, design, monetization, marketing in just three years of hard work. And so we should be able to be among the best in the world at that, and we should be able to buy product-market fit from people, and, you know, they get a good price, we got a good asset we can make more valuable, and then we deploy more capital into making our platform...
The first acquisition, and how much did you pay, and how did you get the deal done?
So, the first acquisition was, we paid $10,000, give or take, and it was a mobile app for iPhone specifically that you used to personalize your keyboard. Very simple. One-man kind of developer sold it to us. Obviously, very amateurish operation, not that difficult at the time to make it better and more successful. But, you know...
What were you buying? Like, you were buying one times revenue, you were buying the revenue, you were buying the app. Like...
That one specifically, I think, had negligible revenue. It wasn't even really monetized.
Which, of course, is never the case for scaled businesses.
It had users. So what we bought at the time was an app with a bunch of users and good positioning on the app stores. So it would get an influx of new users. And that's, you know, remained broadly speaking similar over time. And, you know, we keep looking for great brands, user and customer bases where we can, you know, improve everything ideally and make those assets even more valuable over time. We just do it at a much bigger scale these days, but the underlying concepts have not changed.
Did you rebuild that app? Did you take over the codebase and redo it? Just help us understand technically what's going on in the organization from that business through to some of the bigger ones today.
Is it a code business? Are you doing engineering, product, design, marketing, all of the above?
Yeah, most of what we do is engineering and product. We have a core team at this point of about 800 people, and I would say probably three quarters of them are either engineers or AI researchers or product designers, product managers. Most of what we do is actually improving technologies and products. And, of course, you know, yes, that app, we wrote it completely, but it's, you know, very early days. Today we're much more sophisticated. What we do is we bring in a, call it, an operating system of 50-plus proprietary technologies. We built kind of an engine to run technology businesses very effectively and efficiently, really our core product. We swap out the technological foundation of the businesses we buy with that one so we can run it much better. And also the people we transition across our various businesses always play by the same rules. They're more efficient because they find the same tools.
These tools cut across what, like HR, finance, tech ops, DevOps?
Pretty much everything, yeah. I mean, orchestration of AI models, check. Recruiting tools, check. Platforms, check.
And then do you bring all of the technology spend up to the top co so that you're doing one deal with AWS, one, all the licensing becomes scaled across one entity?
Yeah, that's a lever for value creation. I'd say that's a relatively small one. It probably adds, I don't know, one, two percentage points in EBITDA margins. The more important aspects are being able to drive revenue increases through better product, tech, and monetization, sometimes marketing, cost reduction through leaner teams, so more talent-dense teams. But yes, vendor optimization is helpful too.
You were doing the Elon X playbook before he did it. I mean, like, there's some stories that were written about how you right-sized Vimeo's workforce. You right-sized Brightcove.
He called me before doing the X. No, I'm joking.
Oh, he did? Oh...
But explain, explain, how do I cut all the people?
No, no, he didn't do that. I don't know Elon. So...
How did you figure out that you could cut 80% of a team and it still works? How do you figure that out? Is that accidental, or were you just pushing to a threshold?
I think it's something we learned partially because early days when we were acquiring smaller businesses, typically these people would sell us the asset, say the product, but not the team, because for them it was very small teams. They, you know, wanted to move on to whatever other project they had, and so we didn't really know any better. We were establishing teams internally to carry on the work, and the number of FTEs was much smaller than...
