买下公司并永远经营下去的打法

I remember the stress levels from working our asses off for 3 years on the startup, which failed. Having so little money to try to make the dream come true, I had a real breakdown. 10 years go by and you look back and think, “Oh, wow. I remember we were making 500,000 a year; now we're making 1 billion.” There is no shortcut, and I've seen nobody try because they just understand it's too painful.

1. What is Bending Spoons?

Luca, this is going to be very fun. We first met a couple of years ago, and I've followed the Bending Spoons story ever since with great interest. For those who don't know about it, since we're in Milan today—not New York City, where not everyone yet knows about Bending Spoons, although soon they will—can you just tell us what it is, and then we'll go from there?

Right. We are a pretty unusual beast—unique, almost, as far as I can tell. A good representation would be 25% private equity and 75% tech company. We acquire companies as a key engine of growth: 100% acquisitions, no minority investments.

Unlike a private-equity firm, which would typically look to sell them 3, 5, or 7 years down the line, we buy them off our balance sheet to own and operate forever. And unlike a private-equity firm, which typically would make relatively shallow interventions, maybe changing the management team, we rethink the entire company. We try to come up with a vision for the most successful version of that company and then work as hard as we can to close the gap between the status quo and that vision.

That could mean rewriting the software, rearchitecting the cloud infrastructure, launching lots of features, redesigning the UI, optimizing monetization and marketing, and rebuilding big chunks—sometimes the entirety—of the organization. So, it's very extensive, deep, time-consuming work, sometimes radical work. If we do it right, that creates a lot of value that we can reinvest in making, let's call it, our platform more powerful.

We can also build better proprietary technologies, get better access to talent, gain more knowledge, and go after new, bigger acquisitions.

Can you say a little bit about the vision you have for the business, not in terms of how big it will be or the number of acquisitions or anything, but 5 years hence? I know you care very deeply about the culture of the people here and what the home office looks like and feels like. Did you have a huge ambition for what you're building? Maybe describe that ambition and that vision a little bit.

We felt inspired at the prospect of building the company as our product. We wanted to build an institution—Berkshire Hathaway, that sort of company that people look at and think was a defining company of its generation.

To do that, scale is important. I think it's unlikely that you can be in that conversation unless the company is large and dominant, but there also needs to be some level of excellence along certain dimensions where the company really stands out vis-à-vis the others.

For us, besides being absolutely exceptional at the functional things, like being incredible at running these businesses, one part that we really want to be awesome at is spotting some of the best inexperienced talent in the world and being the ideal place for that talent to skyrocket toward the maximum realization of its potential as quickly as possible. We want to be the ultimate testing and training ground for incredibly talented and motivated people.

2. Early Days: From $10K to Billions

So, 5 or 10 years out, I think we'll still be a conglomerate of very interesting digital technology businesses, hopefully many more of them, and generally the company would be bigger. I hope we can be much, much stronger at everything we do, have even higher levels of talent density, and hopefully inspire others to try to raise the bar in how they run their businesses.

And, by the way, we started in Europe. We like the idea that Europe should have companies like ours. It's fascinating that, if you think about most of the very large, super-successful companies globally, you think almost entirely of U.S. or Chinese companies. Historically, they were U.S. companies; now there are more from China.

Europe has very little to offer in that regard, but it's a 700-million-person continent with a very good education system. I'm not saying we should have 10 trillion-dollar companies, but we don't have a single one, pretty much, I think, the last time I checked. We hope we can be part of that movement, showing that you can actually build such a company from Europe.

3. Why Europe Lacks Trillion-Dollar Companies

We're an international company with operations in the U.S. too, but our deeper roots, our original roots, can be here as well. We are not a periphery of the empire.

It was actually Daniel Ek at Spotify who introduced us originally, and obviously he's built one of the great European-origin businesses. Why do you think there are not more of them? You're obviously seeking to change this, but there aren't that many. What do you think the deep reasons are?

I think the main reason is a matter of default. Why has California had so much success over the decades? One of the reasons is that you've seen incredible companies being created and grown in California, so you just assume that's where you go and do it.

Especially as a founder, you don't know much. Ultimately, at least I was—and I think that's true of many founders—a passionate, determined, maybe talented idiot, essentially. You don't know the world enough to actually determine what the ideal location will be.

If you even think about it, how many times have you heard of founders doing a kind of locational study—where should I start my company? It tends to be momentum: I happen to study here, I know people are there, I should probably just do it.

A lot of talented Europeans, many of the most talented Europeans who have an entrepreneurial streak, I think they just default to building in the U.S. It's been fantastic for the U.S., of course, but there is a gap, I think. If we had more virtuous examples of people who had built incredible businesses with a seed in Europe, I think more people would not default to the U.S. They would think, “Oh, I can actually build such a business from France, Portugal, or Italy.”

Was that a key part of the original vision—that you wanted Bending Spoons to be a beacon for European talent and to show the world that a company like this could exist here? If so, why? Why did you care so much? Why not just go to California?

It's difficult when you talk about the sense of purpose and what inspires you. We can try to rationalize it, but something comes from the gut. We just felt that there was a vision there that was worth pursuing, and that turned on our drive, our passion.

Ultimately, we love to build a business because we love learning and we love challenge. I think the business arena is arguably the most competitive field in which you can test yourself of any field—even more than sports or academia. We liked it to begin with.

Whether we fail in Italy, Denmark, Canada, or the U.S., nobody cares. But if we build something remarkable from a country that doesn't see as many successes, that means something extra. It can be an inspiration, like I just said. It can help local businesses aim a little bit higher and raise their standards. It can create competencies locally that can have a positive effect.

4. The First Test: From Failure to Founding

So, we just chose to do it that way. We don't regret it. But there were very good arguments for us to maybe start in California, for sure. That was a very reasonable point to make.

You said this idea of testing yourself. If you think back on Bending Spoons' history, what was the first example of you really testing your own limits?

At the very beginning, we actually had another startup called Evertale, and that was a failure. We learned a lot, and we actually came up with the strategy for Bending Spoons through the failure of Evertale.

At the time, with Evertale, we raised about 1 million euros in VC money in total, and ultimately the company was about to go bankrupt. We had about 40,000 euros left. That money belonged to the VC because of liquidation preferences, but it was too little for the size of that fund. They told us, “Look, it's just too much hassle and legal cost for us to go through this administrative process of the liquidation. You guys were honest and worked as hard as anyone could demand of you. You keep the money. We'll sell our shares to you for a nominal 1 euro, and you'll probably get something after taxes from it. Just go and get a nice vacation.”

But we were, you know, sick in the brain, so rather than going on vacation, we took whatever we could, and that was the seed capital for Bending Spoons. This was in 2013, and it wasn't a lot of money—40,000 euros. We all lived in the same apartment. The burn rate was very low, as low as it gets. Still, with 40,000 euros, you don't do much.

Particularly because our vision was to acquire a company, that's capex-intensive, especially at the beginning. You can't use that because you're nobody and you don't have a track record or cash flow. So, we figured the easiest way was to just write software and build products for third parties.

We were decent at programming and design. We should be able to do that. It seemed like an easy business to start, although maybe not to scale to a gigantic level. A co-founder of mine and I spent a good 3–4 months, 12–16 hours a day, emailing anyone on the planet and cold-calling people, just trying to offer discounts. We were like, “Just hire us to do something.” I swear to God, we couldn't get anybody.

I mean, not a single soul hired us to do anything. The only contract we got was for about €10,000 from essentially a friend of one of my co-founders, who I think took pity on us and said, “Yeah, we need an app for our small chain of burger places. We’ll give you €10,000 to build it.” That was an utter failure.

I remember the stress levels. After working our asses off for 3 years on a startup that failed, having this little money to try to make the dream come true, and then failing miserably at this sales effort, I had a real breakdown. I don’t cry much—I cry maybe once a decade—but I cried. I had a moment where I cried at that point.

I remember I left the office. I just had to cry because I thought, “Goodness, it’s been like 3 and a half, almost 4 years, where we’ve been working 100 hours a week and we have nothing to show for it.” So that was a massive challenge to my resilience, and I owe it to one of my co-founders, who I think is naturally more optimistic and has better perseverance than I do. He comforted me, and we said, “Okay, at least we’re in this together. Just keep going.” So we did. Of course, I’m happy with it, but that was a pretty low point.

5. The McKinsey Years & Funding Co-founders

Didn’t you have to get a job at McKinsey at some point to fund everybody else?

That was the previous startup.

Okay. Yeah, that’s a cool story. At least I think it’s cool.

We basically graduated, and 2 friends of mine, Francesco and Matteo, happened to be co-founders at Bending Spoons too. We had this idea of building this Evertale company. The idea was to create a self-writing diary of a user’s life with AI. This was in 2010, so nobody was talking about AI in 2010.

Interestingly, we were very early on AI—too early, in fact—because the product just didn’t work well. The app’s machine learning didn’t work well, at least not in a way that you could scale for users. We had no money whatsoever because all of us essentially came from pretty low-class families, whatever you want to call it. We didn’t have a lot of money.

As much as we didn’t have an idea for a business that would require a billion dollars in capex, like a lot of startups today, we certainly needed some money at least to eat and pay for rent. So we decided, “Okay, the 3 of us are going to look for a job. Whoever gets the most lucrative offer goes to work and pays for rent for the other 2. Once we raise seed capital—VC money, somehow—then this person would resign and join full-time, and then we’d go and conquer the world.”

We all looked for a job, and I got an offer from McKinsey. By our standards at the time, it was very lucrative, so I said, “Okay, this is perfect. I’ll be the one paying for rent and food.” I was terrified that they would withdraw the offer once I told them. I’m incapable of not being transparent, let alone lying, so I had to tell the partner at McKinsey that I would be working on the startup on the side.

I thought it was unwise in many ways because I was absolutely certain they would withdraw the offer. But I thought, “I just can’t. It feels dishonest.” He was actually enthusiastic and encouraged me. He said, “Absolutely, we’d love to have you, and if and when the startup takes off, I wish you the best.” I was very grateful. I still have a very fond memory of McKinsey for that reason—a lot of gratitude.

I worked there for about a year. Then we managed to raise initially €500,000, and later another €500,000 from a VC. I completed my project and resigned.

Willingness to do anything to get going. I’ve never heard that before: 1 person funds the other 2 to build, and then you join them on the weekends. There was no contract, nothing—100% just trust.

6. The Strategic Insight: Why M&A Over Building

I don’t know. I just think it’s a really good way to live life. Sometimes you get some sour moments because of it, but it makes 99% of it so much more enjoyable if you don’t have to be too transactional.

And so, between Evertale and Bending Spoons, where did the insight come from to be sort of an M&A-driven acquirer of businesses rather than building them? Evertale was your startup by the book, meaning this idea that probably won’t work, but if it works, could be huge and very innovative. Nobody had attempted, as far as we could tell, anything like that before.

We worked super hard on that project for about 3 years. Naturally, as a startupper, when you do something, I think you tend to network with people in a similar situation for a bunch of reasons. Over time, we got to observe probably a couple dozen teams go through similar journeys as we did.

Through that observation, we saw that, of course, most failed, which you would expect. Maybe 3 or 4 had levels of success. We saw almost no correlation between the teams we considered more talented and more hardworking and those who came out on top.

We concluded that, probably—I mean, it’s not a huge sample—but probably to go from 0 to 1, luck plays a huge role. There are so many factors and variables that, even if you’re a genius and you work your ass off, you’re still likely not to succeed. The stars will probably not align for you anyway.

At the same time, we also found that our skills in all the functional things—software engineering, AI at the time, for what it’s worth, product design, product management, and marketing—were still pretty crude 3 years later, but night and day relative to when we started. We were on a clear path to, I’d like to think, excellence.

So we thought being really good at the functional knowledge and skills necessary to run a digital business really well is probably, assuming you’re reasonably talented, a matter of perseverance, effort, and discipline. We know we can bet on that. We don’t want to bet our entrepreneurial lives on getting lucky.

Why don’t we try to be excellent at the functional things and then buy businesses from people who either got lucky, or who are actually very good but whose passions changed between going from 0 to 1, 1 to 2, and 2 to 10? It’s a different job, and maybe they’re very talented people who have gotten far but are a little bit fed up with it. They’re not interested in running the next phase of it.

We should be able to find situations where it’s a great deal for both parties because of these factors. That turned out to be true. In hindsight, all 12 years later, there’s a lot more to it. There are structural advantages in integrating different businesses under the same roof, but at the time we didn’t have that insight, which today is probably more important than what I just described.

What we had identified was enough to drive some level of success for the first 5 or 6 years.

I’m going to come back to the beginning and the early acquisitions, but since you mentioned it now, describe what you’ve learned those advantages are in having, I’ll call it, a home office that sits on top of a lot of different business units.

I’ll give you 1 obvious one and 2 not-so-obvious ones. The obvious one is, of course, that you can negotiate with a vendor of cloud infrastructure or an advertising partner better. So that adds probably a couple of percentage points to your EBITDA margins. It’s good. It’s useful. It’s not transformative, but it’s helpful.

Or you can make an R&D investment in a general-purpose technology that many businesses can then leverage. Although that investment would be prohibitively expensive and irrational for any 1 of those businesses individually, it’s actually very appealing if you can deploy it across them.

The 2 more important ones—at least equally important, but I think more important—are, 1, that we can move R&D and marketing resources fluidly across businesses. In my experience, the R&D opportunity when you run a business is quite fleeting. It changes quite rapidly over time.

Maybe you’re new in a certain field, or that field evolves, and there’s an opening to expand the feature set or upgrade your technology. In time, that’s going to be table stakes. There’s a window when doing that actually yields substantial returns. But hiring people, coaching people, training people, and organizing people is very slow.

So you’ve really got 2 choices. Either you make it happen in a few months, but you’re going to do massive damage to your team and your culture, and your talent density is going to be low; or, if you’re going to do it right, it’s going to take years.

At the same time, as you go after an R&D opportunity, basically, you build the features. Every business has a kind of saturation point where there’s nothing more—at least nothing more very substantial—to build. But then you’re stuck with a larger team, and of course it’s costly and emotionally taxing for all involved to shrink that team. It’s difficult.

Because of all these factors, in my estimation, most companies are years behind in terms of optimal staffing. They’re actually years behind where they should be if they could control the people factor perfectly and instantaneously. Some management teams are better than others, but it’s really just an inherent inefficiency of a single-product model.

Because we can pull at least part of our R&D resources, and because we really work on hiring people who are super flexible and adaptable, we can move them very quickly and attack these opportunities, then withdraw as the opportunities are no longer there. There are a whole bunch of things you need to do for this to be feasible in practice. This makes us super efficient, both on the offensive and on the defense.

Another major advantage of our model is that—take Evernote. It's a very nice business, nice product, beloved product. Most people would consider the prospect of working at Evernote, on average, appealing. It's a nice product and a nice company, but I'm not as excited as I would be thinking about OpenAI or the next big thing.

On average, a business like Evernote, no matter how charismatic or intelligent its leaders are, will attract somewhat average talent. There will be a Gaussian function, with some people better than others, but Bending Spoons has a model that's very appealing to people. First of all, it's growing fast, so it feels like we're going places. You have variety, so you know that you can test your skills and fine-tune and expand your skill set across a variety of challenges, businesses, and technologies.

From the talent-attraction perspective, it's in a way much better than an Evernote standalone. So, all else being equal, we can attract stronger talent. Layer on top of that the ability to make massive investments in all the processes, knowledge, and tools required to attract and predict talent. We have a massive investment in AI applied to predicting future performance based on CVs, cover letters, and test results. It's a very expensive investment to make, and it's difficult to justify for a smaller company that maybe only hires 20 people a year.

We can build on top of that inherent advantage by doing even better at selection. We basically have access to better talent, plus we'll be better at selecting within that talent pool than most companies would. That gives us a major talent edge that's just not attainable for most companies. I'm sure, again, OpenAI probably has access to much of the best talent, but 99% of companies cannot say that.

This year alone, in 2025, with almost the year at an end, we'll be receiving about 800,000 unique job applications. We'll be hiring 250 people.

Wow. That's 1 in 3,000 or 4,000.

It's super selective. It's not because I'm smart or anything. It's just the inherent advantages of the Bending Spoons model. And, of course, there's the employer brand built over a decade of investment. People who work here say it's amazing, and the talent density is great.

Yeah.

7. Talent as the Ultimate Edge

So, you can't shortcut it. It takes forever, but you couldn't do it as a standalone company even if you had the patience.

I heard somewhere that, for a long time on Slack, your label was “recruiter,” which is pretty cool.

I think it still is.

It still is. I think it's “recruiting.” Is it still there?

Recruiting.

You mentioned the idea of building an employer brand for a decade plus. Talk about those 2 things, how they go hand in hand, and what you've done that's been most successful at building the employer brand.

By far, talent density. We think about the jobs we offer as our most important product. You need to know who your customer is, what you're offering, and how you're differentiated. That's the core of really focusing on that sharply.

I find a lot of companies are almost afraid of someone not liking them, or some team member getting offended by some practices. I think they're unappealing in general because they're too vanilla and too boring. They're nothing, in a way. They're everything and nothing. Certainly, they're not appealing to the most brilliant and driven people who want a very clear, exciting opportunity.

We've focused pretty much from the beginning on getting better over time at being the ideal place for incredibly talented, hungry, and determined professionals. We make a promise to them to surround them with incredibly high talent density. I just mentioned how selective we are at the entry point, and we continue to be selective throughout.

8. Rejecting Consensus

That certainly forces us to have difficult conversations, and there are moments of stress, but overall it's a clear net positive. It's a more intense, challenging workplace, but for people who want to be the best version of themselves professionally as quickly as possible, it's almost a unique opportunity. That's our customer. That's the person we want to surround ourselves with.

Why is testing yourself so addictive? What is it about it as a function that you and the team so enjoy?

It's difficult to tell. I suspect, though, it's a common trait of a lot of people who have achieved greatness in their vertical. I'm thinking, for some reason, tennis comes to mind. When I look at Novak Djokovic and Rafael Nadal—I don't know them personally—they both strike me as people who were absolutely turned on by the idea of testing their limits and pushing against those limits.

I don't think they wanted to win for the sake of saying, “I won 23 Grand Slam tournaments.” They love the idea that it was supposed to be impossible. “You know what? I'm going to prove it's not.” It's one of the ways some humans are wired.

The truth is, a good enough number of humans are wired that way. Those humans tend to have breakthroughs and excel in their fields, whether it's academia, sports, or business. If you feel that way yourself, if you want to win and excel in an area like we want to do with our approach, that's the kind of person you want to surround yourself with.

Have you learned anything surprising about yourself or about how the world works in all these years of testing yourself?

One thing I've learned that's cost me a lot of sanity and caused me some sleepless nights is that consensus is overrated and even dangerous, at least when you're trying to achieve something. To be clear, I don't believe in the model of the brilliant jerk or anything like that. You can not be a consensus seeker while being a perfectly respectful, nice human being. That's the model I would espouse.

In general, if you're striving to stand out in your field, if you're very concerned about aligning everybody around that particular vision or approach, or not causing anybody to dislike or criticize you, I think you're absolutely doomed to fail.

Unfortunately, I'm naturally wired to enjoy consensus. I quite struggle with friction and criticism by nature. I think, at least personally and certainly in my capacity at the company, that's slowed me down and caused me some pain that, in hindsight, was unwarranted and didn't bring any good to anybody. I felt pain, and others benefited as a consequence.

Instead, when you have a clear idea that you believe is the right approach, and, of course, you've listened to input with intellectual honesty and openness, it's not a matter of pride, just a matter of intellectual conviction. Being able to accept disagreement, piss some people off, and go very straight toward that goal is a superpower.

I'm not perfect at that, for sure, but I'm much better today than I was when I started. At least the first 7 or 8 years, I think I was absolutely terrible at it. Thankfully, others on the team were better. As usual in a team, you complement each other.

I think a lot of management teams are too worried about having a percentage, for example, of their team disagreeing with them or criticizing them. Instead, if they believe they've got the solution or the path ahead, they should be willing to be uncompromising in that regard.

9. Structural Advantages of the Platform Model

If we rewind time now to the early days, where you've got this core insight that 0 to 1 is really hard and maybe somewhat random, you have this skill set that's probably really viable in 1 to N, and you're going to acquire businesses and apply the talent and skill set to make the products way better, bigger, faster—everything. What are the first couple of years of that process like? How are you looking for companies? How do you have enough money? I'm sure you must have started small. What were some of the first acquisitions? Talk us through the early lessons and early activity in the M&A markets.

Oh, yeah. In the beginning, again, we had those 40,000 euros. We were trying to do some consulting, like I said, which never worked. It basically brought in no revenue. The first acquisition, I think we closed it within the year, so pretty quickly. We paid 10,000 for it. I don't remember what it was called, but it was an iOS app to personalize your keyboard.

We ultimately made 20,000 off it. It was a very good return in a short period of time, but at a tiny scale. Then that 20,000 went into a couple of other acquisitions and maybe turned into 40,000. But again, they were similar in nature: small products, amateurishly built, certainly no institutional investors, no investors of any sort, and definitely no professional management teams. Typically, it was 1 person selling an app.

In parallel, we also launched a handful of products from scratch, again to complement the acquisitions, learn things, and hopefully make some revenue. If you don't acquire almost anything because you've got no money, you're also not learning. We had a couple of mild successes, enough to extend our runway.

There were many small things like that, and we kept adding and compounding. Slowly but steadily, 10,000 turns into 20,000, 40,000, and 80,000, and we were compounding at pretty fast rates. If you look at our per-share revenue or EBITDA growth over the past 4 years, when we're at a decent scale—I guess it's about 1.3 billion this year—it's still about 75% per year.

We're still compounding pretty fast. Ten years go by, and you look back and think, “Oh, wow, I remember we were making 500,000 a year. Now we're making 1 billion.”

So, in those early days, what were the key lessons that you were learning? What did you start to realize were the right attributes of an app, a piece of software, or a company that you might acquire? What were the things that you were after?

It's always been the same things at a high level. Number 1, so far we've always focused on digital technology. We haven't bought supermarket chains, nor do we plan to, because I feel you want to stay reasonably within your circle of competence.

Ideally, here and there, you want to take a step kind of half outside of it. You need to keep pushing the boundaries, because that will keep your TAM expanding as you expand within the TAM. But I don't think it would be wise, especially as long as the model works well and is efficient, to take massive leaps outside of the circle of competence just because.

So, digital technology and scale. Scale is relative, but because our approach is so hands-on and so time-consuming, I mentioned that we can sometimes radically rethink a business or at least several components of it. We will do maybe 5 acquisitions a year. It could be 1; it could be 10 at most, if it's really a stretch.

Each one, some more than others, will really involve going super deep and rethinking the details. The time investment and the effort do not scale linearly with revenue. So, for us to do an acquisition that will bring in 500 million in revenue is not 5 times as time-consuming as one that will bring in 100 million.

No, maybe it's, on average, a little bit more time-consuming because it tends to be more complicated, but nowhere near linearly. And so we want to do fewer acquisitions, but bigger. The first criterion is scale. Again, at the time, 10K looked like a big bet, although we feel like today we're actually hoping to invest easily 1 billion-plus. Conceptually, it's the same thing.

The second thing is we need to be able to predict the future performance of that business; otherwise, there's no way we can make a confident investment. We've gotten very sophisticated over time—statistical models and lots of assumptions and probability distributions—but at the essence of it, we need to buy stuff where we know where it's going, at least with sufficient confidence.

And the last one is we need to believe we can make meaningful, substantial improvements to that business. It's not that it's a necessity, but it's difficult for us to imagine being able to make an offer that's super exciting for the seller and then being okay with saying, “This is a perfect buy.” They probably wouldn't sell it to us for that price.

These are the criteria, and they have remained the same, but the level of sophistication in our understanding of these criteria over time is incomparable.

10. The Evernote Transformation

Maybe we could talk about Evernote as a great case study, because I used to use it all the time. It was my place of record for keeping my notes and book highlights and all these things, and people have heard of the brand. It was a big acquisition for you, and I'm curious what you think of it as one of the milestone acquisitions in the history of Bending Spoons.

I'd love to dive into that one, especially to hear an example of the whole story, soup to nuts: how you found it, what you saw, what you did, how you thought about price, what your team did, and what's happened since.

I mentioned earlier that, at the beginning, it was all what you call asset deals—individual apps and whatnot. Then we had a period of maybe 3 or 4 years where we saw that that very basic, small-scale model was going to saturate at some point in the not-so-distant future.

We thought we should do this at a bigger scale with structured companies, with management teams, large teams of professionals, and institutional investors. I think we lacked the confidence to take the leap immediately, and so we started losing a bit of focus and looking at alternative strategies while taking tentative baby steps into that next level of the same thing, really.

I guess it's a bit like I played locally, and now I want to do an international tennis tournament, to go back to the tennis metaphor. Will I be able to compete?

And probably yes, if you're doing super well locally. Of course, you will not be the best at that yet, but I think you can empathize with there being a little bit of hesitation and insecurity, right?

I think Evernote was the first such company, clearly within that definition. My guess is that we paid about 50% more than the next-best offer, so it was really a win-win, which is the way I believe you should try to operate. Any good strategy needs to be somewhat win-win; otherwise, it will not go far.

We were invited to that process. At the time, it wasn't something we took for granted because we were not so well known. Many times, we missed out on sales processes that happened, and then we took a look at it. I think we were very fast in making what turned out to be the winning bid.

We just saw a very good brand, although certainly slightly tarnished. Still, 250 million people had used Evernote. It had a strong brand, an important use case, and a lot of customers with thousands or tens of thousands of notes using Evernote to run their lives, really.

The product had probably not kept up with the times as well as you, as a customer, would have loved to see. Of course, you can only realize that fully once you're on the inside and really open the hood, but you can get a sense of that as a user.

So, we bid, we won it, and then we began our usual transformation process on a different scale. Essentially, we had a team of some of our best functional experts—growth, product, design, and engineering—and then we met everybody, spent a lot of time with everybody on the team, and worked on projects.

We really got acquainted with the nitty-gritty details of the business, broadly speaking, and then developed a roadmap for how to make Evernote more successful and got to work.

It's a completely different business today. I think in 2 and a half years we have released by now probably about 250 significant product improvements. It's difficult to be 100% quantitative about product improvements because there's no perfect definition, but in my estimation, we've been improving and innovating probably 3 to 5 times faster than before.

We've been able to do this with a smaller team, really working on keeping all the positions that were critical, getting rid of projects and initiatives that we thought were tangential and not adding a lot of value, and working on talent density, the culture of impact orientation, and rationality.

We're really trying to make sure that what we do moves the needle. It's a million things that you bring in as a business with our platform, but we rebuilt almost the entire codebase and the cloud infrastructure. There's almost nothing left, at least nothing of the core components.

It's now far higher-performing. Notes sync up in less than 10% of the time, and in some cases 1% of the time.

I remember that being a problem when I was using it. That's why I stopped.

It is super fast. You would not tell the difference at all compared to the products you probably consider the best in broader productivity. Maybe you think Notion is top-notch in broader productivity. I think if you tried Evernote today, you would consider that they do different things, but the quality of the experience is probably on par.

Yeah.

So, we had to close a big gap there. Retention is at an all-time high despite prices being higher, because now Evernote is substantially more expensive. It varies by country, but it's probably, on average, say, 60% more expensive.

It's substantially more expensive than before, but retention is better. We did lose, say, 10% of customers who were already not so sure, and once the price went up, they said, “Okay, I'm out of here.” But all the more engaged, loyal customers are still on board, and customer satisfaction by any quantitative metric is better than it's ever been before.

But it was a very time-consuming effort, not something I think is completely beyond what, say, a private equity firm could do without having its own R&D team and having to maybe be ready to sell within a few years. Again, we can't do it with 100 companies each year, but we can do 3 or 5 or 6.

11. Pricing Power & Monetization Sophistication

How do you know when there's pricing power? If prices are 60% higher, you've made it a better product, so maybe that's why the price can go higher. But how do you think about the price charged to end users across your universe of applications that you own?

It really depends on each case. I'll give you another case that's quite different from Evernote, and that would be Meetup. Historically, you could only use it as an organizer; you could only use it if you paid for it.

We introduced a free tier, so you could organize quite a lot for free. We actually do quite a lot for free, which kind of qualifies as a price decrease, in a way. We gave away more for free, and we actually increased the price for the more advanced use cases, for the truly dedicated.

Yeah.

Based on my observation, there's room for being more sophisticated about pricing, which is different from increasing prices. Being better at segmentation—what's paid, what's given away for free—personalization, communications, and experiences ultimately all blend into monetization and the maximization of user LTV.

Our direct experiences are that there’s a wide range of levels of sophistication in the market. I’d like to think of Bending Spoons as being at the very top of that sophistication spectrum. Whether that translates into higher prices, lower prices, or the same prices, I don’t know, but it certainly translates into a very different overall approach to monetization.

Just as a quick aside, why is it called Bending Spoons?

When we started, we knew that we weren’t going to be a 1-product company.

Mhm.

We still wanted the name to connect to something for us. A lot of companies are named after the problem they’re trying to solve or the product they’re trying to deliver. So we figured, okay, why don’t we look for a name that somehow connects to some principles or values that we find inspiring?

Mhm.

One of my co-founders, Matteo, is a big fan of The Matrix, the movie. I think he watched the movie the night before—I’m not sure—but anyway, he told us, “Why don’t we call it Bending Spoons?” He said, “I watched the movie, and there’s this little bald guy who bends a spoon with his mind, and I think it’s cool.”

Initially, we didn’t like it. I still have a spreadsheet with the different names, and Bending Spoons, I think, got 4 out of 5 stars. There were a couple of others that got more stars. The one I remember in hindsight, I thank God we didn’t pick: App Appeal, because we were doing only apps initially. Now we do all sorts of technology and software.

Mhm.

I think it’s awful, for some reason. The Luca from 2013 thought it was brilliant, so it got 5 stars out of 5. But we picked Bending Spoons, and the reason why we liked it was that it connected to 2 principles or values that are still very dear to us.

One is, call it, the power of the mind. The idea of bending spoons somehow, at least to me, inspires this vision of a powerful mind that can do things that appear impossible. We’re big believers that the human brain has incredible potential if you work on it and at it and try to really give it the tools.

The second reason why we loved it was that, even if you have that brain, it just intuitively feels like, to get to the point where you can bend spoons, you have probably worked really hard at your craft. We like the idea that almost anything in life that has value, you’ve got to work at it. I think it’s true with a family, romantic relationships, your craft as a professional, and your abilities as an athlete. I think almost anything that will really give you satisfaction requires work.

Plus, it was kind of a unique name. We hadn’t heard of any company called Bending Spoons, and so we figured it’s probably memorable. Let’s go for it.

I love it. I love that, and I love that movie. So now, knowing the reference, it’s great.

Going back to the Evernote acquisition, you mentioned you paid 50% more than maybe the next-highest bidder. How do you know the right price to pay? How do you think about pricing assets as you buy bigger and bigger ones? We can talk about Vimeo, we can talk about AOL. These bites at the apple are going to get bigger and bigger. Price matters, of course.

12. The Art of Valuation & Deal Discipline

You have the ability to do a lot after buying it, so maybe that allows you to pay a higher price. But still, I’m sure you want to pay a good, fair, responsible price. How do you think about it? One is, how do you determine your expected returns as a function of price paid? The second one is, how do we stay disciplined so we will really not pay more than we believe is right based on our expected returns, opportunity cost—what else we could be doing with that capital and at what returns?

The first one is a matter of sophistication, and the second one is a matter of psychology, really. I think discipline and patience are important. The third one is, how well do we negotiate? How efficient are we at positioning the ultimate price on that curve?

The fastest but stupidest approach would be to immediately offer the very most you can pay, and the opposite of offering a ridiculously low price is probably equally stupid. So you want to find the right balance. Interestingly, actually, we’re much closer to the former. We believe it’s better to have a reputation as someone who offers a very fair price immediately but who’s not going to be very willing to negotiate much.

For the first one—how do you determine that return-as-a-function-of-price curve?—you’ve got to be very sophisticated at knowing what you’re doing, having first-party data for benchmarking, asking the right questions, and having good models. The output of the model is only as good as the assumptions you put in it, assuming at least the model is mathematically sound.

We certainly have very sophisticated cohort models and whatnot, but the main competitive advantage is being able to run these businesses a lot better. We don’t win because we’re good at predictions. We win because we can run them better, so we can offer a good price. But it certainly helps. It’s really marginally important to making good predictions.

You want to have 12 years of experience running many businesses from the trenches, in the details. Unlike private equity, I think this teaches you a lot more. So you understand why things went a certain way with a certain business, and you’re wiser when you set the assumptions for your next acquisition.

If you stay on the financial layer or talk to management every week, you think you understand. I don’t think you really do. There is a cost to pay; it takes time. But then, on the bright side, you’re basically smarter at predicting the future when you find yourself in a similar situation again.

Assumption setting is critical for us. We have many assumptions, and each has a probability distribution. We debate assumptions extensively without ever looking at what the model will spit out as a consequence. That’s forbidden.

If you see the P&L—basically, the business plan—as you do it, there are all sorts of biases. It doesn’t look good enough, and you’re like, “Oh, maybe this is conservative. Let me push it.” We do not look at the output, only at the input. We debate, analyze, and dig for more data.

Once we’re happy that that’s the best we can do at this stage, we run a Monte Carlo simulation. Then we look at the distribution of IRR and NPV, and that’s the truth. Nobody can say, “Well, but now that I see it, I think maybe we were a bit pessimistic with the assumptions.” No, too late. This is now the truth. This is what will guide our negotiation.

So that’s phase 1. Then you make an offer. As I said, we try to make an offer that is sometimes the maximum we’re willing to pay, or close to it, because we think that although we could probably get a better deal in the moment if we started lower, we don’t want to establish a reputation for being people you can push around and get more out of.

We’re more like the Warren Buffett model: “I’ll give you what I think is actually a very good offer.” I’m okay if I hear no, but don’t think you can get 25% more out of me just by asking. Then you’ve got to be disciplined when they ask for more than you’re willing to pay. You absolutely need to not have fallen in love with that particular business and say, “Okay, you know what? It’s not to be. We’ll move on to the next.”

What’s your walk-away rate? For every AOL, Vimeo, or Evernote that you buy, how many did you want to buy that you ultimately didn’t?

We need to define this because we look at, actually, thousands of businesses each year. We don’t make an offer to thousands of businesses. I’d say we probably make an offer to maybe twice as many as we buy.

You know what? We have never lost a bid before. There has never been a business we made an offer for and someone else got it. For those we didn’t buy, ultimately, the seller just chose not to sell to anybody.

13. Financing Strategy: Bootstrapping to Billions

That tells me our offers are typically supercompetitive. It tells me we’re probably not very good at negotiating, because I think some level of failure would indicate a more optimal strategy. I guess you fail, you learn, and you get better.

Can we talk about the history of the financing of the business? Like you said, you’ve done very little direct equity capital raising before. You’ve done some debt. Has most of this just been a buildup of free cash flow from earlier businesses until you have enough to buy the next thing, and then just rinse and repeat?

In short, the more sophisticated version is that what you just said is completely true for the first 5 years. Then we started using debt. It was pretty basic debt from commercial banks, with not very high leverage ratios—3.5 times EBITDA on a good day, generally lower based on trailing EBITDA in the last 12 months.

That helped accelerate things. Before, we couldn’t use that because you need to have an established track record before they take you seriously. I would do the same if I were them. Since then, it’s been essentially debt and reinvested earnings.

We have raised a bunch of equity, but mostly to fuel secondary transactions. If you’re in business for a long time and start to get to a good scale, people are saying, “Okay, I’ve invested in this company.”

I’m talking really just about team members because, from the beginning, we enabled people to choose. We pay just cash, with no variable pay of any kind, and people can choose, though, to receive some of their cash pay in equity at a discount. It’s very unusual, by the way. In time, people have accumulated positions, and that equity is worth nothing if there’s never any liquidity.

So we started organizing secondary transactions every 18 months, 1 year, or 2 years. We've had maybe four or five—probably four—since 2019. Mostly, equity has been raised to finance those transactions, but occasionally, the first capital increase of any significance was in 2022, I think.

So yes, we have dilution from capital increases, but it’s very modest. Off the top of my head, I’d say maybe 10%. We could also not have done any of those at all. We still did them because we figured, in a couple of cases, it helped us get over the hump to close a deal we couldn’t without that little extra.

With that, we were maxed out. But we also figured that if we brought in a little bit more in terms of high-quality international investors, that would be helpful for credibility, firepower if we needed to go after a huge acquisition quickly, and just optionality. But we’re generally very cautious when it comes to dilution. I think if you really believe in what you’re doing, it should be painful to increase your capital base.

I don’t know if it was Evernote or some other one. We talked about Evernote, so maybe pick a different one. I’m curious, for another acquisition, whether it’s WeTransfer, Komoot, or anything else—what’s the AI photo-editing one?

Remini, which I was just looking at before we started this morning. Are there other acquisitions that have taught you personally the most about your own process and about doing this well that stand out in your memory?

There was 1 time where, let’s say, we bought a product at the peak of what we can call a viral moment. This is really not applicable to the type of businesses we buy today, but at the time, it was a thing. This was many years ago now. As soon as we bought it, that viral wave had reached its peak. We thought we’d been conservative, but it completely changed our assumptions and led to drastically inferior returns versus what we expected.

That taught us to be absolutely paranoid when it comes to the sources of user acquisition. Basically, either we buy businesses where almost all the value lies in existing customers or users—these have already been acquired, so it’s just about them now—or, if a lot of the value is predicated on substantial additional user or customer acquisition, then we need to really clearly understand the drivers of that expected acquisition and make sure that these drivers are things we can predict.

For example, we can make pretty accurate predictions of word-of-mouth rates under normal circumstances, but not during sudden viral moments. We don’t feel very confident making predictions of future rates of user acquisition through paid advertising, for example. So that was a big lesson learned.

Another lesson we learned is that we actually went after what was likely Grindr, the LGBTQ+ dating app, in 2019. The app was owned by a Chinese firm, and CFIUS was forcing it to sell. It was a big bite for us at the time. We were much smaller, and it would have quadrupled the company. We didn’t have an equally substantial track record as we do today.

So we went above and beyond to raise the capital. We almost won the deal. Ultimately, we lost it because someone else offered a bit more, and we would have offered more still, but we had capped out on available sources of funds. So that was a failure.

It took us about 9 months; it was my main thing and the main thing for several colleagues. At the time, we were also very small. We had an M&A team of 1 person, so it really paused our growth. Had we bought it, it would have been an incredible acceleration afterward, but it taught us to be very careful not to put all our eggs in 1 basket.

In hindsight, I think we could have still tried to get it, but maybe not obsessed so much over it, considering how unlikely it was to make it happen, and tried to place another few bets. That year, if you look at our growth—or those couple of years—our growth was much slower than in almost any other year, and that’s the key reason.

We put all we had into making that 1 thing happen. It didn’t happen. We hadn’t done anything else. I’d done some things, but nothing that would really move the needle. I’d say we’ve gotten almost obsessive about seeing the world in terms of statistics and, with that model of the world, acting accordingly.

Can you talk about AOL a little bit? Obviously, that’s a name that literally everyone will have heard of, and I’m fascinated to hear the story of you acquiring the business.

People know AOL as the way to connect to the internet back in the day, in the ’90s, even the ’80s, I think, actually. I think they started as pioneers. At some point, AOL was what Google was in the 2000s. It was the hot new thing. From the outside, it seems like they had a failed merger with Time Warner and whatnot. Then they had different homes.

It’s actually a very good business. It lost all the customers it had to lose over the decades. Today, it’s an email inbox and a web portal with an aggregator of news and other content. It’s a very good business with tens of millions of active users—very loyal users.

Again, there’s a lot of selection bias. People who want a Gmail have had decades to go through. People who really love that particular experience have lots of stuff there. Although the team has done a pretty good job, I think, at managing this business, there’s a next level to be unlocked in terms of polishing the product, optimizing the offering, and optimizing monetization.

It’s just a very good business that I think, superficially, people think, “Oh, it’s probably legacy and old. It’s probably worth nothing.” But actually, it’s a wonderful business. In fact, again, I won’t name names, but a lot of other companies in the broader messaging or email industry or segment that, if you just read the news, you would think are doing super well and are much larger, but actually, if you had access to the user count and P&L, including looking at trends over time, they are just not nearly as good. It doesn’t even begin to compare.

AOL is actually, I believe, the 5th most-used email inbox in the Western world.

Crazy.

Which is something. It’s a pretty competitive category.

Is it Gmail?

No. If Google ever wants to divest it, I will be happy to take a look. But it’s a very good business that will be even better, I hope. That’s the intent, as we pour our hearts and souls into improving every facet of it.

One of my mentors, who’s done a lot of investing in and building software businesses over a long period of time, said that one of the ways he made the most money, or was the most successful, was that he would enter product situations where there were 12 things going on and there should only be 3. There was always just too much stuff, too many features, too many products in the company.

Have you found that to be true at all, especially with companies that are a bit older, that there’s been this creep of stuff that gets added that’s not necessary? Is that a common element of your playbook, to take 12 down to 3?

I don’t know if it’s necessarily common because not all companies do that, but we have seen it. I guess I thought it was a contrarian view, but now that I know your friend thinks the same, maybe it’s not as contrarian as I thought it was. But yes, I think people in general overestimate the value of R&D.

Let me qualify: They think that, generally, pouring money into building stuff pays off. It’s really not true at all. What we find is that there’s a very small number of things that pay off handsomely, and most things are a waste of money. There’s an element of not knowing before you do it, so for sure, you do a lot of it.

For example, if you start from what your customers need and really focus on that, rather than what your engineers think is cool or fancy visions that have very little to do with the core problems we’re solving, you’re probably already taking big strides in the direction of greater efficiency. It’s not just about keeping costs more under control; it’s also about doing the thing that matters better.

Evernote today has a lower cost base than before, but I promise you, if you take 10 power users at random, 9 will tell you that it’s actually higher performance, more resilient, and has a better feature set. Part of it is that we’ve really focused on what these customers needed—what they painfully needed. That helps you do more with less, essentially.

How do you think about taking capital from a fund that’s a 10-year VC fund or something, or a private equity fund, versus a Berkshire Hathaway that’s got capital that lasts forever, when you’re thinking about the right partners?

All else equal, we do prefer permanent capital. It’s not so much because even permanent capital could ask you to liquidate; it’s just that they don’t have to. I think the fact that they don’t have to reduces the probability that you’ll find yourself in a situation where it’s just an unnatural, complicated moment to do it, but you still have to do it.

Incentives can become a little bit perverse. We haven’t experienced that before, but I know stories of others having done that. If there’s an evergreen source of capital, I think you’re less likely to find yourself in that unpleasant situation.

However, I will add that I side more with investors on this than entrepreneurs, although in a way I’m more of an entrepreneur. Certainly, I think a lot of entrepreneurs take money from investors and have a level of entitlement that they should never be asked to provide a return.

It’s like, “Oh, but why do you ask me to sell now? It’s only been 4 years, 5 years?” I think that’s either naive or intellectually dishonest. Regardless of the particular bylaws that investors are subjected to, where maybe they could stay forever, ultimately an investor is trying to achieve some form of IRR within some time frame.

So, you should remain very respectful of the fact that when you take anybody’s money—if you ask me, but certainly institutional money—you can’t find it shocking or disappointing, or rant about it in entrepreneur circles, that they’re putting some level of pressure on you to sell.

You’re in such an interesting seat because you’re both investor and operator, and so you have the shared perspective that you’re often buying things as an investor but then running them as an operator. If you think across all the pure investors that have come and studied Bending Spoons—some of them have made equity investments, secondary investments, et cetera—what distinguishes the best investors? What do they do that’s most different from those that are, let’s say, average?

I’d say most good investors recognize patterns. So, they’ve seen a certain business model work, and they use that to select their investments. If done right, this is a very successful way of investing.

And then there are the bad investors and the amazing investors, neither of which is a pattern recognizer. So, they actually assess each business in an ad hoc manner, on its own deep fundamental merit. But that’s much more difficult, and that’s what divides the truly outlier investors from the bad ones.

Those in the middle, maybe even leaning toward good, are pattern recognizers. But then the truly incredible ones—you sit with them and they’re not saying, “Oh, you are the Uber of bicycles.”

You’re the Berkshire for this.

They understand almost the laws of physics, to make a metaphor that makes sense: that the apple falls.

Yeah, and that gives them certainly a lot of confidence, but also the ability to see what others don’t. Because ultimately, a lot of the time, a good investment is not determining that something is good. A lot of companies, most of us could tell they’re good. But if everybody, or even quite a lot of people, think they’re good, probably the price embeds that goodness, and it’s not a great deal. It is what it is.

It’s like a lot of companies today in AI. Again, I’m not going to name names, but some probably deserve the valuation. Some, history will prove, were even cheap. But most, even the good ones, are probably too expensive simply because everybody wants to invest.

In a way, it’s the same thing. The truly outstanding investors will be able to find something that’s really good but few people think is good. And the only way to do that is not to apply a pattern, because by definition, if it fit a pattern, then everybody would either see it as bad by the pattern or good by the pattern. Everybody would be on board.

It has to not fit the pattern, and you have to find ways of determining that it’s good. That’s very difficult intellectually. It needs creativity, imagination, lots of logic, and rationality. Cognitively, it’s next level.

In that specific effort for Bending Spoons specifically, where have the best investors really dug in to get that physics understanding of your business that’s different from how other things work? Where do the best dig in?

I think some of the best are really good at understanding people, at discerning who’s really smart and not promotional from those who are not so smart but very good promoters. So, when you see a business with a strong track record and someone explains it to you in a way that makes sense, it’s not just a good story but it makes logical sense, that’s a huge indication that probably there’s something there.

First of all, you now know why things have worked out, and you can determine whether they’re likely to continue working out. And secondly, if you’re investing in someone who’s made good decisions for the right reasons, not just out of luck, they’re just more likely to navigate the future variables that will be thrown at them better than most.

I know investors who invested, for example, in Amazon in the early days. One in particular told me that the main reason why he did—and he made a big bet on it, and it was a huge success—was not because he believed in the e-commerce model and all that. He did believe in it, but he believed that very few people he’d ever met had the clarity of thought and rationality of Jeff Bezos.

And so, a model he believed could have legs, coupled with a person he thought was a brilliant leader and a very bright problem-solver, alone set that opportunity apart from a lot of other stuff. Yes, it would be difficult to have wide margins for a long time, but he was confident that the company would be much better than at least it was priced at the time.

So, I think understanding people and their cognitive abilities is quite difficult. It requires, in and of itself, great cognitive abilities. I find that if someone is 8 out of 10 smart, they can only discern the 7s from the 6s from the 5s. But the 8s and a half, the 9s, and the 10s look to them like the same big batch of, “Oh, they’re so smart.”

So, to be able to distinguish the 10s from the 9s and the 8s, you need to be probably close to a 10 yourself. And, of course, experience and other elements too, which make it very difficult.

They’re not just brilliant from a point of view of logic and analysis, but also rationality. Trying to really say, “This person is really pleasant or charismatic—yes, park it. What’s really beneath that?” It’s difficult.

I mean, evolution has made us humans into animals of gut and emotion, but emotion and investing, they’re not good friends, I think—or at least emotion and good investing.

14. No Variable Pay: A Contrarian Approach

Another thing that you have to deal with in a unique way is this cocktail of incentives and motivation for different parts of the business. You have business units where a team is running Evernote, for example, that’s different from a Spooner that’s in the home office, being moved around and doing lots of different things. What have you learned about setting incentives for people to get the outcomes that you want in a fairly complex structure?

I don’t know if this will disappoint you, but we don’t. Everybody is paid a fixed salary: no variable pay, no stock grants, nothing. They can choose to invest part of their cash pay at a discount—not a crazy but a pretty generous discount—at the Topco level, and that’s it.

The way we maximize alignment of effort is by hiring people we believe are high-integrity, who have great professional pride, and then just treating them with the utmost respect. I think most people will try to do what’s right and do what’s right for the business along the lines of the mandate you gave them.

So, if you say ultimately you’re optimizing for Bending Spoons, not Evernote, 9 out of 10 people, if you’re hired well and the culture is right, will take it to heart and do that.

In fact, I believe sometimes setting financial incentives—of course, if people do well, they’re likely to get more responsibility and higher salaries. It’s not that there certainly isn’t that, but it’s not as immediately tied to results next quarter or something very measurable. It’s through observation over time. If you’re great at your job, you probably get more and do more.

But I think that sometimes when you set typical incentive plans with KPIs and whatnot, first of all, it’s very costly. It takes a lot of time. So, for that to be ROI-positive, it’s not enough that it adds value; it needs to add more value than the cost that’s implied.

It’s absolutely guaranteed to create at least some perverse incentives, because nobody can set perfect incentives. The world is too complicated; it changes too fast. So, even if you’re a genius, whatever you set as incentives will be imperfect.

There is an additional inefficiency that whatever extra efficiency is created needs to overcome before you’re even in black territory as opposed to red territory. I think also those kinds of incentives tend to hinder relationships. They tend to make things more transactional.

It’s more difficult to have a proper problem-solving session where all we’re thinking about is, “How do we win together?” I think most people will have it in the back of their minds, like, “Okay, how do I get the better bonus?” It’s difficult to be entirely resistant to that feeling.

So, I’m sure it could be done better, but we chose the simple way, which is we just try to hire well, treat people respectfully, and get rid of all that stuff and assume you’ll do the best you can.

15. Areas of Dissatisfaction & Regulatory Frustration

I’m sure you’re always dissatisfied with the state of things and want things to get better all the time. What about Bending Spoons today are you most dissatisfied with?

Yeah, I’m that kind of person, by the way. I’m perennially unhappy, which I think sounds awful, because in a way I feel very fortunate. I feel very fortunate, and I’m perennially unhappy, which is a huge superpower and a curse at the same time. You could imagine. I mean, I’m not alone; many people in this world are like that.

What is not good, or at least not as good as it could be? Well, one of the things that is critical for our growth is hiring and coaching. I am absolutely positive we offer literally one-of-a-kind-level jobs, some of the best on the planet. I’m absolutely certain.

Incredible talent density. You learn faster than anyone anywhere else. You get an opportunity to take on responsibility that’s crazy. Most of our general managers, who run businesses averaging 50 million to 100 million in revenue, would be considered to be running a large scale-up if they were at a scale-up. Many of these people are 27 or 28.

Most of them are, I think, very few are above 30. So: unique opportunities, excellent financial opportunities too, whether it's very good salaries or investment opportunities in a company that's growing fast.

We feel very privileged to get a ton of great applications. Like I said, a huge number. I think we should be getting more, better, and should be better at identifying the raw talent. I know we're rejecting a lot of great applicants who are actually better than some of the people we hire because we're just not good enough at spotting that talent in someone who has such a short track record—maybe a student or a new graduate.

That's an area of massive frustration, in a way. At the same time, I'm very proud of what the team has done there and frustrated that we can't yet do better. I know that's one of the keys to growing fast and achieving what we set out to achieve.

So that's certainly a major area. I'm always frustrated with, I think, our society: there's too much regulation. We're really working on the wrong stuff at the institutional level. People try to create economic growth and prosperity through more rules, just telling you, "If we tell them exactly where to go with lots of rules, surely we'll be prosperous." They don't understand that it's quite the opposite. You've got to get out of the way and create as free and open a playground as you can.

We keep adding rules. Elon Musk once said something that I thought was brilliant, and I fully subscribe to it. He said, "We should have a rule that every new law is automatically removed, say, 3 years later, unless someone can make a really good case that it's created a lot of value." So we wouldn't have 10,000-page-long civil codes or whatever.

We're basically trying to prevent rare corner cases—unpleasant, sometimes tragic corner cases—while making 99.99% of the normal cases less efficient, more painful, or some utterly impossible. But because they're not as newsworthy, because they're typically widespread and normal, those inefficiencies are not as interesting to talk about. In aggregate, they are just a massive tragedy, a much bigger tragedy than the one individual tragedy of one corner case.

Ultimately, when it comes to regulation, the corner case wins and we regulate it that way, but we make life much worse for everybody else 99% of the time. This frustrates me because I think we're just shooting ourselves in the foot as a society, essentially.

What's your balance of time between what I'll call maintenance hours of internal stuff—keeping the trains running—versus space that you create to tinker with the business, try new things, and stretch that comfort zone that you were talking about earlier? I guess the bigger question behind the question is: what does your week look like? How do you spend your time?

It varies by period a lot. For example, if we close a large transaction, I'm all in there with a task force, in the trenches, meeting the new team, and for weeks or even months sometimes, that would take up 50% of my time. If we're working on a big fundraise—we just raised the largest round of any private company in Italy in history, and like we said, we raised $700 million at an $11 billion valuation in equity—these 2 initiatives certainly took a substantial part of my time.

When we're not in fundraising mode, that goes down to a trickle. Maybe I have some calls with investors, but much less. It varies, but I would say probably a fair split would be 50% of my time on talent. I check each candidate before we extend an offer, I extend the offer, and I talk to many of the new hires. I help with talent density. I help push for being demanding.

So that's probably 50% of my time. 50% of my time is, on average, probably financing and external relations, I would say. 50% of my time is these transformations of companies we newly acquire, and 50% of my time would be other, call it, long-tail platform work, which is probably where I would put thinking creatively about how to improve the strategy and that work all the time.

16. Raising Europe's Largest Private Debt Round

So I probably work as 2 FTEs, like I think most people in my position would. These 4 categories are probably comparable in investment.

What did you learn during this biggest-ever debt raise? Most of the people that I talked to for this are raising equity capital. I haven't had a lot of conversations with people that have raised lots of debt capital for something like an acquisition, so I'm curious about the whole process and how you would compare and contrast equity versus debt capital markets from a raising perspective.

The mindset is quite different because an equity investor tolerates the risk of losing money vastly better because they have an upside that's essentially uncapped, within reason. A lender is almost entirely intolerant to the possibility of losing because their upside is that 3% spread, 5% spread, depending on the exact financial instrument. It's still a limited and generally fixed upside they have, so it's all about not losing it.

A lot of the questions are more oriented toward understanding the potential worst-case scenario and the risks. Equity investors are more oriented toward the TAM: how big could this be? How quickly could we get there?

The surprising part is a lot of banks, a lot of lenders, are actually quite visionary. I hear people say, "Well, they're probably more boring because they're lenders." Actually, no. A lot of them are brilliant and visionary. They're quite curious about the model and where it could go, and understand very quickly why it works.

I thoroughly enjoyed my conversations with lenders, at least as much as those with equity investors. Perhaps because they have to be so paranoid about the downside, this breeds in them a thoroughness, a thoughtfulness that's not always the case with equity investors, for whom maybe that intuition of "This team, this thing could go far" is more important. Catching the big wins is more important, and so they can be wrong more often.

They're maybe a little bit quicker in their judgment, a bit quicker in their judgment. But I think lenders are quite an interesting type of investor to talk to.

Generally, it works that you talk to a couple of anchor lenders, some of the biggest banks, typically those with a strong investment banking arm too. They help you figure out and shape the round. They commit some of the money immediately, so you know you've got some of it covered and you know where you're going.

Then you start bringing under the tent more players with other important roles, then lesser roles, and at some point it's just providing capital. Typically, some of this capital is basically—it will be permanent with that lender; it will stay with you until maturity, 5 or 7 years down the line.

Some of this capital you may want to syndicate. The lender tells you, "Okay, I'll give you $1 billion, but we agree that in the short term we'll be going out to sell away essentially this $1 billion to many providers, each with $1 million, $10 million, or $50 million. They'll hold it for 5 or 7 years, but I'm just giving you a bridge to that moment.

"You need the money now; you're doing M&A, for example, and we don't have time to talk to 20 parties. Plus, it would certainly leak that you're buying that target. So I help you get there, but then we agree contractually that we'll be transferring that credit from me to these other lenders."

That phase is also interesting, and it's quite optimized because the debt markets are huge. It's gigantic and vastly more efficient, probably, than the actually much smaller VC capital markets. So the process of how you take that credit from the point of view of a lender and syndicate it out is super standardized by now.

You create a deck, you record a presentation, it's distributed, and you show up for 1 hour, maybe 3 times, with batches of lenders. It's super standardized, very efficient.

17. AI's Impact on Software Businesses

I'm so curious what you think about what I would call almost a religious debate right now in the world of software, which is how AI will affect the sorts of businesses that you've bought historically. Will it enhance them? Will it hurt them because it's easier to create replicas or copies or new versions?

We talked about Remini earlier, which is an app that you bought before ChatGPT, or that I'm sure has benefited tremendously from the advent of AI. How does this new tidal wave of technology impact your old businesses? How do you think about new businesses? Just your take on it in general.

It's a complex discussion, and I think you're asking maybe a time frame of 5 years, because AI changes the very fabric of our society 50 years out or something—a long time frame—in ways that are both exciting and scary.

But in the medium term, I think for what was likely Bending Spoons specifically, I think it's mostly a good thing because we don't care too much about the risk to each individual piece of our business. Basically, most of our business units are 20% of our revenue or less. So even a dramatic decrease in one of them is still, in the grand scheme of things, kind of minor, percentage-wise.

It's been growing at 75% a year. I'd rather none of them decline, but some do, some will. Maybe 1 or 2 will decline fast. It's undesirable, but not existential. So for our model, it's highly diversified.

A lot of what we do is being functionally better at running this company, meaning having a higher-quality output at a lower cost across the functions: engineering, design, product, and growth. AI is an accelerator of both quality and efficiency if used properly, but it doesn't do it by itself.

Maybe it will in 10 years, but today we've seen it clearly as we've invested internally in excellence through AI in our operations. A lot of it is custom integrations, proprietary technology, and a lot of cultural work on getting people to use it the right way. Like with every innovation in the past, we'll see a small percentage of companies being at the forefront of leveraging that, and most companies being laggards. I'm pretty confident Bending Spoons will be at the very cutting edge of using it, and we're already making strides there. That, if anything, will mean the gap in ability between us and most companies will widen for years.

But again, I think it's likely to mostly benefit an aggregator and consolidator like what was likely Bending Spoons, assuming we stay disciplined with pricing, while being very disruptive for certain verticals. Some will be disrupted much earlier. So I think we, as a society and investment community, will be able to start seeing things and update our model of reality and predictions based on that. Can it be disruptive for many SaaS businesses? Absolutely.

I think the time when we open up ChatGPT and tell it, “Okay, build me Jira,” is far away. AI today can do a lot for you beyond, say, research, copywriting, and maybe some basic content production. But it'll do more and more, and fast. Like I said before, we were working with AI in 2010, so we're very early. I'm a big believer in AI, very big. However, even if it could build Jira today, it's not that easy to explain to it what you want when it's so complex.

Yeah, or is that far away?

Yeah, it is far away. It's not months away; it's not even a couple of years away. These products have been honed to customer needs for a long time. You're already using them. There is an investment in them in terms of data. So not only does the tool need to get to a point where it can replicate that with the same guarantee of performance, which is very difficult, but getting to something that works the same 95% of the time is still—we're super far from it—but that's an infinitely easier challenge than something that works essentially 100% of the time. Infinitely easier.

18. Building Culture: State of the Spoon & Retreats

But you also need to be able to guide it to build it the way you want. As long as software is ultimately a relatively small share of wallet, if you think about it, it's not an expense people will optimize first. It's not like a car that you literally plan your finances around. Before that truly eats into the overall size of the market, I think we're talking about a lot of stars that need to align. I think it's probably many years out.

You mentioned earlier that, ultimately, your main product is your company, and the people that work here are the key people to attract. The jobs are products themselves. What are some of your favorite ways of making sure, once you get these amazing people—we talked a lot about data science and recruiting and the pipeline and the crazy number of applicants and so on—that, once they're here, they get the most out of it and you get the most out of them, which is mutually beneficial? What are the sorts of traditions and things that you do that you think have most contributed to being the kind of place you want to work?

Ultimately, the most important thing is to be very clear on what kind of company you want to be—your principles, your values—and then hire people who embrace those. Then you yourself, as a person who's maybe more visible than others, try as hard as you can to be the best paragon of those values as you can be, because that's much more important than any manifesto or initiative or big proclamation.

There are certainly things you can do that help on the margins, help foster those values a little bit further. A few things we do that are unusual and that we love: One is called State of the Spoon. It's twice a year, and it's somewhat the equivalent of an Apple keynote, but it's just internal. Most of our teams take turns on stage presenting their proudest achievement, and also failures and lessons learned, of the past 6 months, as well as what they're planning for the future.

There's always an element of comedy and self-deprecation, which makes it quite entertaining. You laugh a lot. It's 3 or 4 hours, and at the end of it my jaw is painful because I laughed too much. It's just fun. We organize all sorts of almost cabaret-like things, and it's a great tradition. It helps us be proud of the things we do well, remember not to take ourselves too seriously—we're not saving lives—and meet and learn about colleagues we may not necessarily have been close to before.

Another one we do is a yearly retreat, where we bring everybody to a remote, exciting, typically exotic destination for 7, 8, or 9 days on the company's time and dime. It's just a vacation with your colleagues. The last ones, in no particular order, were the Seychelles, Mauritius, and the Dominican Republic. In the past, we went to Japan and Australia.

We think it helps establish a level of trust and bonds with colleagues, and ultimately a company is people. So if you bond with colleagues, you're bonding with the abstract concept of the company to an extent. It's not the same thing, and it's not enough, but it's part of it. We believe that it pays dividends in terms of willingness to sacrifice, to be honest about problems, and to do your best.

19. Why There Aren't More Bending Spoons

Why do you think there are not more Bending Spoons? I mean, it's kind of like asking why there are not more Berkshire Hathaways—there's only one Buffett. But why do you think there haven't been more people who have taken advantage of this ecosystem, this huge TAM of companies that are more mature now, that you can acquire, that have installed user bases and low or lower growth?

There's always a first. Private equity wasn't a thing until it was a thing. Today you have trillions of dollars in private equity. So someone tried; you could have done private equity before KKR did private equity. Nothing prevented you from doing private equity in the 1930s. But to my knowledge, nobody was doing private equity.

At some point, someone comes up with an idea. It makes sense, it's efficient, it works, and others flock to compete. Sometimes that ruins the opportunity. Regardless, you have a market. This may be the case. We'll see.

I think we have far superior competitive advantages to private equity, because essentially, in private equity, every single acquisition is almost like starting fresh. In our case, we do well because of the platform and the structure, and so it would take many years for someone to build the employer brand, the talent pool, the culture, and the technologies to really compete.

So I'm actually not at all concerned, which is also one of the reasons why you see me being pretty transparent about some of the principles. I thought about it, and I figured that if I started over, knowing all I do—which someone else typically wouldn't know at all—and someone said, “I trust you to do super well. Here's $1 billion to get to where we are now, 12 years after the foundation of Bending Spoons,” it would take me maybe not 12 years, but easily 7 or 8. It's a huge slog.

You hire 2 people, you spend a year coaching them, and then you hire 4, and they coach them, and you help them. You build the technology slowly. It takes time to write software and polish it. Presumably more will try. I would say that's to be expected, and it's going to be painful.

Again, private equity is very difficult, but if you're bright and you understand business, finding someone who will give you—not $100 billion, which is the best of the best over a decade, but enough that you can have a business and it's worth trying—is not that difficult. There are so many private equity firms. Ultimately, you just need to do well enough that you don't look bad. You're around average, and many will die, but some, even statistically, will do well enough.

So the barriers to entry are low, and you have a proliferation of wannabes. Some will prove to be great. Some will be great out of luck, and so again you have more competition. But trying to build a Bending Spoons, if you understand what you're doing—which is a prerequisite even to have a chance—is dauntingly painful.

Again, it's many years from the ground up, cultivating the little garden. There is no shortcut to it. So I think it's just not a model that, when people see it, they try. A lot of people have known about it for years, as I've talked to investors, and I've seen nobody try because they just understand it's too painful.

I have loved doing this with you. It's so fun to hear you be so transparent about what you've done to build this thing. It's such a unique business and a unique place. It's fun to do it here with you in Milan.

When I do these interviews, I ask everyone the same traditional closing question: What is the kindest thing that anyone's ever done for you?

20. The Kindest Thing

When I was a little kid, I was almost pathologically shy, to the point that I was, let's say, diagnosed with autism. I think the diagnosis was not necessarily strictly scientific, but that's to say I was so introverted and shy. I spent years in elementary school talking to pretty much nobody.

So I go to middle school in Italy, where middle school is between the ages of 10 and 13, I think. The first school year goes by, and I have talked to essentially nobody in my class. Literally. We're late in the year—I think it's probably May—and we're on a school trip in the hills, just taking a stroll with our teacher and probably seeing some ruins or some Roman thing.

It's a pretty common thing to do in Italy. Plenty of ruins. All of a sudden, 2 classmates of mine came over, hugged me, and just started talking. They were the 2 outgoing, popular guys in the class. On the bus, they dragged me with them to the back, and we started singing. I was terrified and happy at the same time because I did want to socialize; I just didn't know how.

They kept investing in this relationship for a long time. Again, we were 10 or 11, so little kids. Until months later, I felt confident in myself and had turned into a reasonably social person. I wasn't the most social or the most outgoing, but you wouldn't have guessed that I had been almost pathologically shy, to the point that my mom brought me to a doctor. I owe it to those 2 guys.

What I learned during the 3rd and last year of middle school was that one of them got mad at me for something stupid—like, a girl kissed me and not him [snorts]. Again, a stupid thing when you're 12 years old, and it lasted 5 minutes. But in those 5 minutes, he was furious, and he told me, "You remember 2 years ago, when Alberto and I did this and that and helped you and involved you and got you out of your shell? Well, we didn't do it because we thought you were cool, but because this teacher told us that you needed help." He said it to hurt me.

But actually, I'd never felt more grateful in my life, because it's very difficult, if you think about it, for someone 10 years old to implement that request from a teacher: to go with the uncool guy, go through the slog of months where the guy barely talks, invite him after classes to go to your place to play video games or play football. They literally changed my life. It's probably the single thing that ever happened to me that I'm most grateful for.

Incredible closing story. I absolutely love it. Thank you so much for your time.

Thank you, Patrick. My pleasure.