Luca Ferrari, Bending Spoons CEO: The $40K Origin Story, Buying Product-Market Fit & Why Private Equity Can't Compete

SPEAKER_1 (0:00)

You are the reason that NASDAQ exists. They went from zero to one billion dollars in revenue in just 10 years.

SPEAKER_2 (0:06)

Bending Spoons CEO Luca Ferrari.

Luca Ferrari (0:09)

We have never lost a bid before.

SPEAKER_2 (0:11)

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.

Friedberg (0:21)

They go from fixing one zombie app to reviving 20 of them.

Luca Ferrari (0:24)

Half a billion people use our products. We're trying to build a generational company.

Chamath (0:30)

Please welcome Luca Ferrari.

Jason (0:42)

Hey, here he is. Nice to see you.

Chamath (0:45)

Ciao, Luca.

Friedberg (0:47)

You got fans.

Chamath (0:48)

All right. Luca, you have a great company.

Sacks (0:53)

Don't make fun of Luca Ferrari.

Chamath (0:55)

I'm not.

Jason (0:56)

I'm just-

Sacks (0:57)

This is a great Italian entrepreneur, so shut the f**k up.

Jason (0:59)

Absolutely.

Sacks (1:00)

Luca, I asked-

Jason (1:01)

No, I got somebody yelling like his Super Mario brothers in the audience.

Sacks (1:05)

We could have another presidential moment here at the All-In Podcast. So if she calls you, then just run the phone over.

SPEAKER_2 (1:11)

I got my phone here.

Sacks (1:12)

Okay, just in case.

SPEAKER_2 (1:13)

It's ready.

Sacks (1:14)

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 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.

Luca Ferrari (1:55)

Yeah, so the most of the pain, there's been plenty of pain throughout 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 with based on the VC. And 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 didn't want to go through the liquidation process to too much illegal 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 one dollar, 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 we came up with this.

Sacks (3:03)

You started with $40,000.

Luca Ferrari (3:04)

$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.

And 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 get a good asset. We can make more valuable. And then we deploy more capital into making our our platform more competent.

Sacks (3:43)

What was the first acquisition? And how much did you pay? And how did you get the deal, though?

Luca Ferrari (3:48)

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 a developer, sold it to us. Obviously, a very amateurish operation. Not that difficult at the time to make it better and more successful. But, you know.

Sacks (4:15)

What were you buying? Like, you were buying one-times revenue, you were buying the revenue, you were buying the app.

Luca Ferrari (4:20)

That one specifically, I think, had a negligible revenue. It wasn't even really monetized, which, of course, is never the case for scaled businesses.

Sacks (4:28)

But it had users.

Luca Ferrari (4:30)

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.