Luca Ferrari: Scaling to 500M Downloads, $360M in Reported 2023 Sales and a $2.55BN Valuation |E1127

1. 0:00 – 0:41

   Intro

   1. LFLuca Ferrari0:00

      (instrumental music) The moment you think you're very smart, the likelihood that you make very dumb mistakes skyrockets, in my opinion. We let others seek pro- market fit, and then we... if they will sell it to us, we will acquire their company and try to make it even better than they, they have made it up to that point. The reason why we, we took that route, I think, is precisely because we crashed and burned by being arrogant in thinking we knew what the market would want and we could build it for them.

   2. HSHarry Stebbings0:26

      Luca, I am so excited for this. I think Bending Spoons is one of the coolest stories that, uh, we've seen in recent times in startup land. So first, thank you so much for joining me.

   3. LFLuca Ferrari0:36

      Thank you for having me. It's a pleasure.

   4. HSHarry Stebbings0:38

      I would love to start with a little bit of context.

2. 0:41 – 2:51

   Luca’s Background

   1. HSHarry Stebbings0:42

      What would your parents and your teachers have said about the young Luca growing up? How would they have described you?

   2. LFLuca Ferrari0:47

      Well, parents are probably not a good, uh, a good source. It seems to me they tend to be biased. Uh, I would say my teachers probably would say that I was, uh, incredibly shy. Some may even say I was pathologically shy. Uh, weird, I think. They would say probably, probably weird. And gentle, I think. I was considerate. Uh, kind of, uh, very careful not to hurt, uh, people's feelings. Yeah, probably those three.

   3. HSHarry Stebbings1:18

      I would have been described as weird too. Can I ask, did you feel like an outsider when you were growing up? I di- I didn't have many friends at school, and it shaped a lot of how I do what I do.

   4. LFLuca Ferrari1:28

      Yeah, probably. I really wanted to, to make friends. I couldn't for the first, probably, 10 or 12 years of my life. Yeah, I would say it's 10 years. Uh, I had major struggles socially. I'm not, um, incredibly well versed with, uh, socializing these days, but I (laughs) have definitely improved a lot. Um, so yeah, I guess you could say an outsider. But an outsider who wanted to be an insider, who was an outsider because he was, uh, incompetent, uh, at, uh, being part of, uh, you know, of, of people's groups.

   5. HSHarry Stebbings2:02

      Sorry for this weird tangent. Did you s- ... Would you say you've become an insider or you just accepted being an outsider?

   6. LFLuca Ferrari2:09

      No, I think I, I had different phases. So I was, by, you know, your definition, I was probably an outsider initially who really wanted to be an insider. Then I became, you know, uh, kind of average, so make it an insider. Like, I started having friends and being invited, uh, to, to doing things with others. And then as I grew older, particularly the last five or six years, I think I've become a little bit more of an outsider again. Uh, mostly because I find my bandwidth and my patience, uh, have become more limited, or perhaps have been tested more aggressively. And so I've learned to build more walls and

3. 2:51 – 7:33

   Early Days of Bending Spoons

   1. LFLuca Ferrari2:51

      more protections.

   2. HSHarry Stebbings2:52

      One of your friends told me one of your points for improvement could be a willingness to accept more dinners and social events. So, maybe they were, maybe they were onto something. (laughs) Uh, I would love to start, I, I heard that you, you were at McKinsey, and you were essentially sharing your salary with your co-founders to fund the early days c- of Bending Spoons. Can you just take me to that and those early days of Bending Spoons? So, tell me a little bit about that.

   3. LFLuca Ferrari3:16

      Yeah, that's, that's almost true, but I would say it wasn't Bending Spoons. It was another company called, um, Evertale, which I founded before founding Bending Spoons. It only lasted for about two and a half years. That was a failed startup. Pretty, you know, by the book failure. Um, and, um, and I had two o- I had two co-founders there, and all three of us also, you know, founded Bending Spoons plus two other people.

   4. HSHarry Stebbings3:42

      Can I just jump in and ask, w- w- I didn't know that. What did you learn from the failing of that company? I think we learn a lot from failings. What did you learn from that failing?

   5. LFLuca Ferrari3:50

      Oh, well, many things. I, I would probably say two in particular. One is the importance of building a good team. We were... At the time, we were quite, uh, naive and superficial in that regard. Um, and we got lucky with some people. But overall, I think we were pretty, uh, unsophisticated. And the second one was to be very thoughtful as to what you build, or more broadly, what you do and why. I feel we, we had this idea and we just thought we were right, and arrogantly got into execution mode. And of course, we crashed and burned, um, and, you know, you can still crash and burn even if you're thoughtful, but your odds are better. So, I would say we learned to be more, um, uh, to do our homework a lot more, and iterate more and faster, and...

   6. HSHarry Stebbings4:40

      How did Bending Spoons come to be then? So this company failed and the three of you went and go, "Hmm, what now?"

   7. LFLuca Ferrari4:46

      Yeah. So, uh, yeah, connecting to your previous question, uh, so the three of us, we started it. Um, we didn't have any money, um, so we had this agreement whereby we... all, all three of us would look for a job, and then whoever got the most, uh, lucrative job would, uh, work and pay fo- for food and rent. And the others would work full-time. And then once we, we get, uh, an investment or some sort of, uh, uh, you know, ability to do without the financing from the person working, th- you know, this, this person would join full-time. So I, I, I, I ended up getting this in- uh, offer from McKinsey, which I took. I told them before accepting that, you know, or as I accepted, that I meant to work in the startup, uh, part-time and then, uh, resign as soon as we hopefully got this investment. And they, I thought they would basically kick me in the, in the ass and tell me to go away. Uh, but they were great, actually. They told me, "This is awesome, and we love the ambition, and s- sure, you know, this works for us." And so I worked there for about a year, I think a year and three months, give or take. Um, and then I was working, uh, nights and weekends and my vacation also on, uh, on Evertale. I, I like to joke that once I joined full-time, I made it fail very quickly. And then, uh, we immediately pretty much, uh, started Bending Spoons.... uh, right there and then on the ashes of, uh, of that startup.

   8. HSHarry Stebbings6:07

      Can I ask, what was the insight with Bending Spoons? It was a straight-off transition to founding Bending Spoons. What did you believe? What did you see? What was that opportunity set?

   9. LFLuca Ferrari6:15

      With Evertale, we went the usual path: you have an idea for a product, you focus on building that, you hope it, you know, it- it, uh, finds a- a fit with the market, it grows, and you're successful, and the rest follows. We- we took the opposite direction, as in we focused on building a platform of technologies, know-how, company culture, uh, employer brand. Fully optimized, not for launching a product or specifically a technology product, because that's- that's what, you know, we love doing, but, uh, acquiring a, uh, product that has shown, uh, fit with the market but where we feel there is, uh, some, you know, substantial, uh, untapped potential, and then we- we work to try to unlock that additional potential. So, that's a very different approach. We let others seek pro... market fit, and then we, if they will sell it to us, we will acquire their company and/or, you know, um, product and try to make it even better than they- they have made it up to that point. The reason why we- we took that route, I think, is precisely because we crashed and burned by being, uh, arrogant in thinking we knew what the market would want and we could build it for them, and it turned out we were wrong. Uh, and so we- we decided to see whether a different direction was more

4. 7:33 – 10:25

   Acquiring & Improving Products

   1. LFLuca Ferrari7:33

      efficient for us.

   2. HSHarry Stebbings7:34

      Can I ask a weird question? Which is, how do you determine what has product market fit or enough signal to be interesting? Because things can be volatile. Things can be transient, short term. How do you determine whether an asset has enough signal to be interesting to partner with?

   3. LFLuca Ferrari7:50

      Uh, the assessment process is fairly... or method is fairly sophisticated. But, you know, the very simple way of summarizing it is to say we like a user base, a customer base, a recognizable brand, or, uh, good positioning in a, um, distribution channel. That's the short of it.

   4. HSHarry Stebbings8:13

      What was the first product, and how did you acquire it given you didn't have funding or money?

   5. LFLuca Ferrari8:18

      The- the company, we founded it with around $40,000, which was the leftover, uh, capital from Evertale, and then the venture capital firm, uh, at the time preferred to sell their... The- the money would've been theirs 'cause, uh, they had, uh, liquidation preferences. It's pr- pretty typical for a VC deal. But they, f- for them, it was more of the hassle of going through the liquidation process for $40,000 and paying law- for lawyers and all that. And so they sold their shares to us for, uh, I don't know, a euro, I think, or something. And then we liquidated Evertale, and then we founded with a different group of people, as I mentioned, the same three founders plus two employees we had at Evertale. We founded Bending Spoons. Um, the first product wasn't acqui- wasn't an acquisition. I think the first two or three were not, were very simple apps. Uh, the first one I remember 'cause I coded it myself with one of my co-founder, uh, co-founders. I think it was called Fontsy. Uh, it's not- it's not... It hasn't been on the App Store for, like, probably almost 10 years. Um, uh, but, um, it was very basic fonts app. We built it in, like, a few days, and- and- and, you know, neither o- of us was an expert, uh, software engineer. So, long story short, I think we made around $10,000 in all-time revenues from that particular app. Uh, launched another one or two, maybe one slightly more successful, maybe made $100,000 from it. But soon enough, we, uh, made our first acquisition, I think early 2014, so we're talking maybe six or seven months into the- the startup at the time. Uh, it was for a keyboard app, uh, paid $15,000 for it, um, and, uh, we managed to make it grow a little bit. And I reinvested the proceeds into building, you know, a team and learning a few more things and building some in-house tools. Bought a new- a new slightly more, you know, high-potential, larger app, and, you know, rinse and repeat, compounding all those things over a decade now. I mean, we're going for 11 years in a few months. We've gotten to a much, uh,

5. 10:25 – 22:42

   Bootstrapping & Long-Term Vision

   1. LFLuca Ferrari10:25

      bigger scale.

   2. HSHarry Stebbings10:25

      Luca, when did you know that you had something? When did you sit down with your other two co-founders and go, "Hmm, this is working. We have enough signal"?

   3. LFLuca Ferrari10:33

      Yeah, it's a good question. I... So, on the one hand, we were pretty confident early on, but it was mostly based on some observation and first principles. We didn't have a track record. Uh, on the other hand, I tend to be paranoid by nature, so I always second-guess myself and- and wonder if there isn't some huge risk lurking in the shadows. So, I- I don't know. I- I never, not even today, am I massively confident. So, I think our lev- at least my level of confidence, I can't really say for the others, but has s- more or less remained between, uh, you know, decent and good. But n- it was never super high or super low for- for the whole of this decade.

   4. HSHarry Stebbings11:13

      Do you think that's a European mindset? And I don't mean that rudely, Luca, but I spend so much time with, you know, US founders, and it's just, "We're gonna dominate from day one. We're gonna change the world. It's all gonna work." Do you think that's an inherently European mindset of being much more even?

   5. LFLuca Ferrari11:28

      So, I don't know. I would say the level of ambition has been wild since the beginning. We pretty much, day one... Uh, I remember I was sending emails to people we wanted to hire, and we were claiming our... And it was really honestly so that our goal was to build one of the best companies of all time, one of the largest, most admired, and positively envied. This was when we had nothing, okay? So, that was... I mean, of course, ambition is quite subjective. At least from my perspective, that's high a level of ambition almost as you can have. So, we didn't lack ambition. But yes, maybe we were not bullish about our ability to get there, uh, which might be a European trait. I'm not sure. I really don't have a benchmark.

   6. HSHarry Stebbings12:09

      In terms of the bootstrapping nature, why did you decide to bootstrap? You were three very smart guys. I'm sure you could have raised. Why did you, in those kind of in-between periods, 2014 to 2019, why did you not raise?

   7. LFLuca Ferrari12:22

      So, I don't know. We could have. Um, I guess you can always raise, but I don't know that we could have at sufficiently appealing terms. Consider that we founded the company...Well, we, we founded it in Copenhagen, Denmark, but we moved it to Italy pretty soon after. Um, and so, we were three people with a failed startup behind us, uh, building a technology company in Italy, which had a negligible VC scene and, uh, attracted absolutely no interest from international, uh, venture capital firms. Um, with a strategy that was, as far as I can tell, unheard of. To this day, w- I don't really have a comparable company. I mean, there are... Of course you can come up with examples, but nothing that's really spot on, like, w- exactly what we do. And so we felt our likelihood of attracting capital at, uh, sufficiently appealing terms was very low. To this, you have to add we really wanted to build this for, with a multi-decad- decade view and we felt that it was quite dangerous to relinquish control so early. Uh, of course, we would have done it had the terms being sufficiently appealing but... And lastly, we could afford not to. I mean, that's a big factor. If you, if you're building a business that's losing money f- and, uh, you expect it to lose money for, for a while, then there's no other way, right? We, for better or worse, we had a model that, uh, you know, maybe was more... It's not the fastest growing model. We never grew by 300% in a year, ever. You know? Like, so it was more, uh, of steady pace. Uh, on the flip side, we were cashflow positive early on. At least, w- you know, we made it so, and so we could afford .

   8. HSHarry Stebbings13:59

      Luca, how would you respond to me saying it's like a PE model? Buying kind of distressed assets potentially, turning them around, and having a roll up play? Is that wrong?

   9. LFLuca Ferrari14:12

      I would say yes. Uh, but again, it depends on the level of depth and sophistication one is looking to categorize us with. Um, and I would say the main differences are we... The private equities typically, they focus o- on, on, you know, uh, finding sufficiently cheap financing and then making some relatively high level improvements, uh, and then make a profit a few years down the line. In our case, we, uh, are incredibly hands-on. So unlike a private equity, we generally rewrite the whole software, or at least the most critical parts of the, of the code base. We completely change the IT architecture. We, uh, redesign the user experience and the user interface. Uh, we add lots of features, remove other features, revise, uh, the marketing and monetization dramatically. So you could say we almost... It's almost like, as if we built a product to launch it, but we do so on the foundation of an existing customer base or brand. So we're incredibly hands-on. In fact, if you look at us, you know, a private equity, in their team they will have... The, al- almost all of the people will be, uh, you know, inv- investment managers, for lack of better word. In our case, out of 400 people, at least 300 are software engineers, AI researchers, data analysts, data scientists, uh, product managers. So we are a product and technology company operationally speak- speaking, but we do have a second soul, and it's the capital allocation soul, which is the soul of a private equity. So we're, I think we're a hybrid. It's almost like a private equity had a baby, baby with Google or something like that, you know? (laughs) That's the closest metaphor I can come up with.

   10. HSHarry Stebbings15:54

       (laughs) I, I, I like -

   11. LFLuca Ferrari15:55

       And by the way, we don't acquire, we don't necessarily acquire distressed assets. I know that people, some people have characterized it that way after Evernote 'cause Evernote some people thought would qualify as such, but we have acquired a lot of products that were on the way up, some that were flat, some that were on the way down. We really don't have an opinion in that regard. It just, we just need the price to be right and the opportunity to improve the product to be significant enough.

   12. HSHarry Stebbings16:19

       Can I ask you, in terms of capital allocation, how does capital allocation in Bending Spoons work? Because you have, you know, several different products, um, you know, Meetup, you have Evernote, you have Remini, you have a lot. How does that work? Is it like cash that's in top co. and then is allocated by you into sub-products? I'm just intrigued.

   13. LFLuca Ferrari16:37

       Yeah. The, uh, yeah, the cash is managed at the top company level, yes. Uh, not just that. All resources also are, uh, our team, team members, uh, you know, we, we're very fluid in that regard. Um, the, the principle is simply to apply our resources to the next most valuable opportunity. So, in other words, we will ask ourselves the question, if we were to allocate our resources, both capital and, and the talent we have available, uh, to this product or that product based on the backlog of ideas we have to improve the product and the marketing of the product, where would these resources unlock the most value on a per unit basis? Um, and of course, that's an assessment that remains, um, uh, fairly noisy. It's not that you, you know, uh, you have it very precise, but, uh, that is the principle we try to implement in practice.

   14. HSHarry Stebbings17:29

       Do you ever kill projects?

   15. LFLuca Ferrari17:31

       Yeah, no. Yeah, absolutely, um, if we feel that it's not working. I remember one particularly we built, uh, a few years ago that cost us a lot. I think we invested, uh, six or seven million dollars in it, and we, we, we completely eliminated it.

   16. HSHarry Stebbings17:45

       Whoa, whoa. Talk, talk, talk to me about that. That's unbelievable.

   17. LFLuca Ferrari17:48

       Yeah, yeah. Uh, so that was, um, oh, like four years ago, give or take. It was called PlayOn. And the vision was to build a kind of a Netflix of mobile games. So a Netflix not, not in the sense of streaming, but in the sense of, uh, you pay one subscription, you have unlimited access to basically as much content as you can possibly consume. Uh, at least that was the vision. And we, we built a team. We licensed, uh, many games, uh, 50 to 100 games, some of which pretty significant games on mobile, and the licensing was quite expensive. Uh, and we built an app to, for the user to be able to subscribe and then access the, the, the library of games and, uh...And, uh, we really thought it would be... That's ex- exactly the case of us thinking, "Okay, this is, this cannot possibly fail because it's such a good deal." There was plenty of players spending hundreds of dollars a month to try many, many different games, uh, most of which are pay up front, you don't even know if you'll like it in the end. And we only asked for, you know, we had different price points and we tested all sorts of things, but, you know, even the most expensive monthly subscription was maybe 10 or $12, so relatively inexpensive for someone who looks to play maybe one hour per day. That's a very good, uh, value for money. And, but it never flew. I mean, the KPIs were terrible, we could never make it work. And then a- roughly at the same time, Apple released, uh, Apple Arcade, which, uh, is almost the same thing. And we were like, "Oh my God, this is so unlucky." But you know what? I think it really didn't play a role in our product failing, I think.

   18. HSHarry Stebbings19:26

       What did you learn-

   19. LFLuca Ferrari19:27

       Arcade is not a great success either.

   20. HSHarry Stebbings19:29

       No, it's not, but what did you learn from that failing? I'm intrigued again there.

   21. LFLuca Ferrari19:33

       Well, I think it reinforced the lesson we had with the, the Eretail startup I mentioned earlier that, um, you have to, at least, we, we, we feel we have to be intellectually humble when it comes to our ability to predict what the market will want, particularly when it comes to very new things. And if you're replicating, say, something that works in the US and you do the same in Germany, uh, I think you can be more, uh, sure that it will work. Uh, still not certain, but, uh, it's more likely to succeed. But if it's something very new, and at the time, to my knowledge, what I just described was unique. I'm sure someone will have seen something similar and now claim, uh, uh, I'm uninformed. But based on our research at the time, there was nothing, uh, like it, uh, certainly not on mobile. Um, and so when it's something so new, the likelihood that you are, um, delusional as to the chances of suc- success is pretty high. So, I always suggest lower the odds in your equation, assume you're being positively biased toward your idea. Uh, the truth is probably worse than you think it is.

   22. HSHarry Stebbings20:42

       I love that. Um, can I ask you then, if we switch tacks, 'cause that's like creation of a product, and again, thinking that you can create product market fit with a new one. If we then switch, I'm sorry, you must be really fucking bored of hearing it, but then you switch to Evernote, which is a very well-known brand, and a very significant customer base. What was the thinking around that acquisition? Because I just call a spade a spade, people were like, "That's a turnaround of brand is going down and declining." But you saw value there. Can you talk to me what you saw that others didn't and how you thought about that acquisition?

   23. LFLuca Ferrari21:16

       Well, I, I don't know what others saw in it or didn't see in it, but we, we thought we could, uh, improve the product, monetize it more efficiently, and also run the company more efficiently in terms of costs. So, we felt all three, uh, levers were offered a little bit of space for improvement. Um, and so we're very excited to, to acquire it and work on it. It's also, I won't deny it, it's, it's, uh, it's especially exciting when you get to, as a tech person, you, you know, someone who's loved, uh, working on digital technology products for now almost 14 years, it's particularly exciting to, exciting to be able to work on something that is so relevant. Uh, sometimes people have, uh, uh, characterized Evernote as, as you said, kind of on a decline. And it can be true in some ways, but it's still, uh, as used or more used than a lot other brands that people think are more successful or cooler. And I, I don't wanna name names, but Evernote is very important. I mean, there are millions of people who have built their professional workflows on it and use it every single day and have thousands upon thousands of notes. Um, so it was very motivating for us to be able to at least try to make it better. And I think we, we have, we have done... The team, I haven't done much, but the team has done a lot of work

6. 22:42 – 28:22

   Misjudgments & Lessons Learned

   1. LFLuca Ferrari22:42

      in that regard in just one year.

   2. HSHarry Stebbings22:43

      How do you think about pricing these assets? 'Cause pri- you know, I'm in early stage venture where we all lie and say that price doesn't matter, where it still does matter, by the way, but price really matters when you're you. How do you price these assets?

   3. LFLuca Ferrari22:56

      The theory is simple, uh, now applying it successfully is difficult, but the theory is that you try to project... In, in our case, well, before you were asking me, "How are you different from a private equity?" And I said, "The biggest difference is that we are incredibly hands-on product technology operators, so it's not just a financial play." The other big difference is that we acquire to hold forever. We never sell, I won't say it will never happen, it may occasionally, but it's, it's never happened to any of our significant assets. And so we, we buy to retain for potentially decades. And so, uh, the, the way we value these assets is consistent with this. We don't speculate as a private equity typically would on what the, you know, price earnings multiples or EBITDA multiples could be once I sell it in four years, you know. Um, we literally just look at, um, uh, free cash flows. So, we project free cash flows for as far as in the future as we can and discount them, uh, and so it's an IRR NPV calculation, uh, that informs our willingness to pay a certain price. Now, uh, again, that's financial theory, that's pretty straightforward. The difficult part is how do you project that accurately? That is devilishly difficult, of course.

   4. HSHarry Stebbings24:10

      And the hard thing is you've gotta make the seller wanna sell at the price. And actually, you know, it's like secondaries today, which is, there's a big chasm between what, what the buyer's willing to pay and what the seller's willing to sell at. How do you find seller response to your pricing analysis?

   5. LFLuca Ferrari24:25

      So, we, we don't really convince (laughs) anybody to sell. I, I think people are, uh, well, these people are always adults, uh, generally highly competent.... intelligent professionals who have, uh, their own clear view of value. What we try to do is be quick, uh, and decisive in determining our price. We try to make an offer that's not a bluff. It's an actual, you know, um, very good offer and close to the maximum we are reasonably willing to offer. And then they decide. I mean, we, if, if they don't like it, we, we walk away. But historically, uh, we have never lost a process. Meaning every single time there was willingness to sell and we had a chance to bid, 'cause sometimes you don't get to know about the opportunity and you only hear about it after, uh, the deal is done, every single time, to my knowledge, our offer ended up being the highest. Um, and I think the reason is, uh, well, one reason could be we're terrible negotiators. Uh, another reason is, we, because of our model and being so operationally involved and trying to improve the product, the operations, the marketing, the monetization, everything so deeply, it's a lot of work. It doesn't, uh, you don't scale it as quickly as buying just from a financial point of view would, but you can unlock more efficiencies, and therefore you can offer a better price.

   6. HSHarry Stebbings25:52

      In terms of... Uh, I'm, I'm a venture investor for my sins, uh, I, I quite enjoy financial engineering, when you think about, like, the, the weight of capital, how do you finance the acquisitions? Is it on, like, raised capital now? Obviously you've raised. Is it on debt capital that then you have, like, you know, very low cost of capital on? How do you think about efficient use of cash for acquisitions?

   7. LFLuca Ferrari26:11

      So, debt certainly, uh, is pretty, you know, common playbook. Uh, equity for sure. Most of it has been, uh, retained earnings. We have raised, I think, a remarkably little equity relative to our financials and our valuation, um, so that has helped. Uh, but really, up until Evernote included, which is a year ago, I can... On first approximation, I can say that all what we have done, we have done through our own earnings and debt. Y- when we raised... We have pri- pri- prior to Evernote, we had raised a little bit of equity, but it was almost immaterial in the grand scheme of things. Now, more recently, we have raised more equity, uh, roughly, um, $200 million over the past 10 months. Um, but again, I think most of it is our own cash flows and, and debt.

   8. HSHarry Stebbings27:08

      When you think about the deals that you've done, uh, without sounding ba... Have you mispriced any? And in the ones that you mispriced or misjudged, what did you not see that you should have seen or would like to have seen?

   9. LFLuca Ferrari27:20

      There hasn't been a single one we have priced correctly. Thankfully, we have made, uh, mistakes in both directions. So, sometimes things went better than we thought, and sometimes they, they went less well (laughs) . Um, I think the more... Probably the most significant problem or, or error we've made in th- particularly from the, let's say, the downside negative point of view, has been to project future rates of user acquisition too optimistically. Of all the important KPIs in determining the success of a product, uh, in internet pr- product at least, um, I would say rate of user acquisition is the hardest to project accurately by a huge margin, at least in our experience. And this is what we know today. So at least once, it's h- it's happened multiple times, at least once we were way too optimistic with that, and the... ultimately, the returns from the acquisition turned out to be t- t- much, much worse than, uh, we

7. 28:22 – 31:10

   Challenges of User Acquisition

   1. LFLuca Ferrari28:22

      had anticipated.

   2. HSHarry Stebbings28:22

      Why is rate of user acquisition so tough? I'm sorry to ask, but they're ten- they tend to be quite baked assets. You've got historical data, you've got very baked customer acquisition channels. Why is it so variable and volatile to predict?

   3. LFLuca Ferrari28:35

      Few factors. One is, it, it depends on more drivers than other key, um, let's say, uh, inputs to the success of a product. And these drivers tend to be outside of your control more than, than drivers that are behind other, other key, key factors. And so the combination of more... Basically, if it's an equation, you have more variables, uh, and you control them less. And so your ability to then, uh, force the future, the direction you want it to go, is lower. So, when you make a mistake there, generally you don't have a, a, an opportunity to, to fix it, um, whereas in other cases, maybe you thought something... you could, you could achieve something, um, and you thought it would be easier, it turns out to be harder, but you can go the extra mile, allocate a few more resources, somehow you get there. But if, uh, the rate at which you're acquiring users isn't where it needs to be, often there isn't much you can do. Uh, I mean, you can spend more in advertising, but, uh, you're gonna lose money. Uh, otherwise you would be spending it already, right? So, the problem is you can't find ways of acquiring users efficiently, and that has to be the end of it. Uh, you just accept the trajectory.

   4. HSHarry Stebbings29:59

      Do you find scale network effects? And what I mean by that is, given the portfolio of products, there's, uh, cross-promotion, referrals, the ability to increase one's distribution.

   5. LFLuca Ferrari30:10

      No. Not a factor.

   6. HSHarry Stebbings30:11

      Not a factor?

   7. LFLuca Ferrari30:13

      No. At least, maybe it's because we, we, we, we have failed to, to leverage it. But, um, in our case, no, no value coming from that.

   8. HSHarry Stebbings30:22

      In, in the one that worked out really well, what were the lessons from that? We spoke about kind of the challenge of predicting user acquisition. In the one that went to the upside, what was the lesson from that?

   9. LFLuca Ferrari30:33

      Yeah, there, there are some small tactical lessons. I, I don't think they're even that interesting. But the, the, the bigger lesson...... uh, I don't, I don't teach it. I think, uh, you know, Warren Buffet teaches it and other great investors, is acknowledging the incredibly high level of unpredictability of some of this and bake in appropriate, uh, safeguards, particularly a sufficiently large margin of safety. So when you are wrong, as long as you're not massively wrong, you, it doesn't destroy you. Maybe you won't be happy with that investment, but it doesn't destroy you entirely and you can move on to, you know, live to fight another day

8. 31:10 – 31:51

   Building Margins of Safety

   1. LFLuca Ferrari31:10

      as they say.

   2. HSHarry Stebbings31:10

      How do you build margins of safety? Is that in diversification of product lines? Is that in pricing or-

   3. LFLuca Ferrari31:15

      Well, that helps. Yeah, probably wanna do it both on the individual, let's say, capital locations, for example, an acquisition, but the same concepts would work if you allocate capital in R&D marketing 'cause, you know, that's, that, that is still cash. It's no less real than if you buy a company. So, uh, you probably wanna bake in a good margin of safety as you do that. And then, uh, naturally if you, if you have a broader portfolio initiatives, whether it's multiple product like we do or, you know, multiple R&D projects, then you're further protected. Um, uh, statistics are, are on your side.

9. 31:51 – 34:59

   Taking Too Much Risk

   1. LFLuca Ferrari31:51

      But, uh, risk, risk assessment and mitigation is a fairly complex topic. I think it, we could talk about it for hours. But I think that's the high-level concept that I would recommend, uh, following.

   2. HSHarry Stebbings32:02

      What do you know about risk and risk mitigation today that you wish you'd known 10 years ago?

   3. LFLuca Ferrari32:08

      Well, I mean, the bigger lesson is assume you're not as smart as you think you are. (laughs) That is the more, that, that's probably the most valuable. The issue here is that most people will end up making significant capital allocation calls. Generally, those people tend to... They wouldn't be there if they hadn't been somewhat successful by most measures. Um, sometimes, you know, acad- academically and then professionally, but at least professionally, right? Otherwise, it's unlikely to imagine that someone would be managing 50 billion dollars or, you know, a, a scale up worth billions. And so if that's the case, uh, it's very easy to think too highly of yourself, and that is very dangerous. The moment you think you're very smart, the likelihood that you make very dumb mistakes skyrockets, in my opinion. So now you need to retain a little bit of self-confidence, otherwise you won't make any moves. But I think a healthy level of, uh, second-guessing yourself, uh, assuming you're biased, uh, in favor of your ideas, um, uh, that you're lazy and don't wanna look into a certain risk factor because you know it's gonna take you 50 hours of grinding through, uh, benchmarks and analyzing data, that you should assume that's the case and adjust your aim, uh, accordingly.

   4. HSHarry Stebbings33:33

      Luca, when did you take too much risk on an asset, too much that you shouldn't have taken?

   5. LFLuca Ferrari33:37

      It's difficult. In hindsight, you know, it's, it's like if you play a hand of poker, it's quite dangerous to assess whether you played it well based on the results. Um, so I'm thinking based on what I knew at the time and what I could have possibly known, yeah, I think w- we did buy, I mean, f- maybe multiple times, one that's obvious to me, we did buy this, this app. I'd rather not mention it by name, but, um, you know, pretty significant product. We made the mistake I mentioned earlier. So we, we were quite bullish that our projections of user acquisition rates were conservative, and I think we were a little bit lazy in really studying the underlying factors driving user acquisition historically. We just looked at it, uh, in aggregate and, uh, a bit naively. Had we done our homework more thoroughly, I think we would have spotted that some of the underlying factors were waning and dropping quickly, and that consequently, the rate of user acquisition was likely to, to shrink, uh, faster than we had anticipated. 'Cause we had actually projected it to decline, but not nearly fast enough. And so, you know, um, that's certainly a case where I feel I'm not very proud of the way we handled ourselves. I think we did a mediocre

10. 34:59 – 35:27

    Learning from Mistakes

    1. LFLuca Ferrari34:59

       job there.

    2. HSHarry Stebbings34:59

       Did it change how you do it? Like, did you review the process?

    3. LFLuca Ferrari35:04

       Every year or so, we, we try to spend an hour reminiscing that particular situation, like a, a repeated retrospective. We have, uh, dissect- dissected our mistakes ad nauseum. So it's not that we're gonna learn anything new, but I think it's healthy to remind yourself just how lazy and dumb you were at some point so you don't assume you've become hardworking

11. 35:27 – 37:39

    Caring About Other’s Opinions

    1. LFLuca Ferrari35:27

       and smart all of a sudden.

    2. HSHarry Stebbings35:28

       I do love your humility. Um, can I ask you, on the flip side, was there a time when you didn't take enough risk and you're like, "Come on, Luca, you should've done more there. We could've been more aggressive."

    3. LFLuca Ferrari35:38

       I think so, yeah. I think it's probably one of my greatest, uh, shortcomings as an entrepreneur and, uh, and manager. I feel I, I'm too concerned, scared even, of disappointing others, colleagues, investors. And as such, I believe we have waited a little bit too long to raise capital. We have waited a little bit too long to push on the, you know, on the accelerator to implement our strategy at the fastest speed we were capable of. I feel our level of caution has been, generally speaking, excessive. Uh, and, uh, I think had we been more aggressive, we would have made more mistakes. But overall, I believe we would have created more value for our share owners, our colleagues. You can't really A/B test life, and so maybe it's not the case. Uh, who knows? But that, that's my read in hindsight.

    4. HSHarry Stebbings36:35

       Do you care?

    5. LFLuca Ferrari36:36

       Unfortunately, yes. That's the second... It's part of the, I was just mentioning I'm too concerned ab- about disappointing others. I think it's basically that. I, while I've thought about this quite a lot, I don't think I want others to think highly of me.I, I don't think I'm egocentric in that way, but it really bothers me if they hate me or think poorly o- of me. So, it's more like the, the downside that I ... Or the negative end of the spectrum that really annoys me or, or, or frustrates me. The ... I don't necessarily seek to be on the other end of the spectrum and be ple- pr- praised, but, but I hate it when they really don't like me. And that's a major handicap in, in my role. I ... If you've ... Many of the best CEOs, they don't give a shit. To, to, to a, to a fault even. Um, I think it's a superpower to have. I've tried to be more resilient, emotional in that regard. Over time, I've gotten more fatalistic and you grow a, a thicker skin, you know. When you get criticized a lot, then at some point it, you either die or, or, or give up or grow a thicker skin. So, I've been able to grow a thicker skin, but th- that's an issue

12. 37:39 – 39:29

    Resilience & Self-Criticism

    1. LFLuca Ferrari37:39

       for sure for me.

    2. HSHarry Stebbings37:39

       I was walking in the park with a, a friend of mine who's a founder of a $20 billion business and I was moaning about something, and he was like, "Harry, shut up. Your job is to get punched in the face 50 times a year and just get up every time. That, that's life as an entrepreneur, like, get on with it." My question to you is, what do you tell yourself when you do get punched, when you do get that hit down? What does that voice in your head say?

    3. LFLuca Ferrari38:05

       Well, I think I'm, um, very sel- self-critical to, to a point where maybe it's unhealthy. Um, I wouldn't recommend that necessarily (laughs) to others. But I, I don't, I don't think it's part of my character to, to give up. Now, at least in the situations I've been so far, 'cause there's always something harder and maybe there's a point where you break down, but ... And I, I know I, I don't think I can claim to have, to have gone through, you know, the truly difficult things in life that some people have to go through. My, my challenges have been business-related, which I find are frankly luxury problems to have. It's almost a ... I've been, you know, I've been in the situation where I was complaining to, particularly to other people in similar roles. And then in hindsight, like you were just, uh, telling about you and your friend and ... But in hindsight, I think it's irritating that people like you and I complain about this sort of things 'cause we really are privileged. I mean, come on, we, we were born and raised in somewhat affluent countries and, and clearly had a chance to, to try our hand at, at things that are certainly not, um, not terrible. I mean, it's a privilege to be able to do what, at least what I do. I, I think you probably feel the same way as, about what you do, so maybe we should just, uh, we should probably just take a step back and have a laugh, you know, the real problems in life are

13. 39:29 – 41:43

    Talent & Motivation Density

    1. LFLuca Ferrari39:29

       not these ones.

    2. HSHarry Stebbings39:30

       Absolutely not. The life of a venture capitalist is brutal, Luca. We, we are positively, uh, (laughs) suppressed as a, as a class of people. Uh, no, I, I completely-

    3. LFLuca Ferrari39:40

       (laughs) Exactly.

    4. HSHarry Stebbings39:40

       ... I completely agree with you. Um, my grandfather br- I found out earned like seven pounds an hour shoveling gravel on a golf course at 82, and I was like, "You know what? A little bit of, um, perspective is important." I, I wanna touch on-

    5. LFLuca Ferrari39:56

       And, and there's worse than that. I mean, that's the thing. That's not even as, as bad as it gets, you know. So, um, anyway, I think we agree.

    6. HSHarry Stebbings40:03

       I, I do wanna touch on the people around you, because so many people told me about the talent density that you built. And you mentioned before to me about talent and motivation density. It's quite a specific use of words, actually. It's not like, "Oh, we have great people." What did you mean by talent and motivation density?

    7. LFLuca Ferrari40:22

       Yeah, I, I think ... So, we, we built a framework internally to describe exactly this sort of things. Um, but the short of it is that three important components are talent, which is how good you can be, in our definition, I'm not saying this is, you know, kind of, like standard definition. Then there is experience, which is the, the exposure, accumulative exposure to relevant ex- experiences, which will help you based on your talent, uh, unlock your potential. And then there's motivation, which is kind of a multiplier factor go- going from zero, let's say, to, uh, to one, where based on how much you care to be great in that particular context, you'll do better or worse within the range determined by your talent and, and experience. It's a trade-off when you hire people. You can say I wanna hire for experience, talent, motivation. You can, but, um, you're gonna do worse at any one of these than if you focus on just one or two. In our case, we chose to focus on talent and motivation, uh, almost entirely disregarding experience, uh, because we, uh ... Experience, we can provide. Talent, we can't. Motivation, we c- we can try to create the conditions for it, but, uh, you, you don't change what s- what, what someone wants and cares about. And, and this is the way in the long term we have the best team

14. 41:43 – 43:35

    Assessing Talent & Motivation

    1. LFLuca Ferrari41:43

       we can.

    2. HSHarry Stebbings41:43

       Let's just unpack this. Like, talent. What, what does that mean and how do you test for it? Is it raw skills? And how do you test for them?

    3. LFLuca Ferrari41:52

       We, we try to test people as much as possible, practically and measurably. We have come to, to be wary of interviews. At least, the more traditional and structured interview where the interviewer will just ask a bunch of questions and then tell you how they feel about the candidate. We felt, we, we discovered that is not a good predictor. And so, we try to have practical tests or at least tests that, uh, simulate, uh, or require the underlying abilities that the actual job, uh, will require. And, and we try to go more toward general problem-solving abilities than, as I said before, acquired knowledge. So, we're fine to have someone who doesn't know the things as yet, as long as they show us that they have the work ethic, uh, the, the ability to learn, the right, uh, uh, teamwork mentality to, to then be great at our company.

    4. HSHarry Stebbings42:50

       So, that's talent.Motivation. How do you test motivation?

    5. LFLuca Ferrari42:54

       You need to try to understand, uh, what triggers the person in a good way. What are the factors which when present drive the person to really give their best? With recruiting, like I- I should say everything in life, the goal is not to be perfect, it's just to be less bad. And so, it's not that we are great and all of a sudden can predict... gets people to- to be as motivated as possible, we just aim to be a little bit better than most companies and a little bit better than we were yesterday. Uh, and I think we have improved substantially, but it's still wildly, um, uh, inaccurate, our prediction, but better and that- that's worth

15. 43:35 – 46:20

    Biggest Mistakes in Hiring

    1. LFLuca Ferrari43:35

       something.

    2. HSHarry Stebbings43:35

       What have been the biggest mistakes you've made in talent identification and hiring?

    3. LFLuca Ferrari43:39

       Yeah, I mean, many, too many to count. But I would say broadly speaking, the biggest one was to assign too much weight to experience in that- in that trade-off I mentioned earlier. Ultimately, if you assign a lot of value to experience, you get someone who's more valuable immediately or early on, but then because you- you've had to trade- to trade talent and motivation potential off for more experience, you'll have, uh, a lower level of contribution in the long run. And so, and we- and we saw that quite clearly, um, uh, and we- we hired multiple experienced people who turned out to be absolutely amazing. It's not... you know, it's just on average that I think we did that a little bit too much, but we have since adjusted our- our- our aim accordingly.

    4. HSHarry Stebbings44:31

       In terms of density, how important is it for you that people are together, that there's a physical co-location?

    5. LFLuca Ferrari44:37

       Yeah, huge topic. I- I don't know. I... We have seen that, um, working together physically tends to drive, uh... Well, I won't say tends to drive, tends to correlate with, uh, higher perfor- levels of performance. It's really hard to tell whether that's because people are in the same place on site or it's a consequence of the fact that people who are intrinsically more motivated about working at the company or doing what they do, they also want to be with others. Because if you really care, you typically tend to want to be where the action is. And so it's simply that it's self-selected, that sample. I don't really know, but we have incredibly high performers who work remotely all the time too, it's just on average slightly less probable. Our decision has been to fully support remote work, um, because we, you know, we get to attract, uh, talent from broader pool of candidates. And again, we do have some of our best performers are working almost entirely remotely or completely remotely, but we do pay a price for that. It's not clear-cut. I... When a company decides to only do on-site, I don't feel I can say it's a stupid move. I don't ha- I don't have enough information. The... I could see how that could ultimately prove to be the right move. For us it's kind of toss of a coin. We're not sure. So, we- we just keep all options open. And again, we're very happy with our remote colleagues. They are great. And again, some of them are some of the best, uh, colleagues we have.

    6. HSHarry Stebbings46:07

       Do you pay remote different to normal? Standardized pricing is a hard thing to get in terms of remote talent, depending on where they are, different prices.

    7. LFLuca Ferrari46:15

       Currently, we have the same salaries regardless of where

16. 46:20 – 49:47

    Ambition & Hard Work

    1. LFLuca Ferrari46:20

       you are.

    2. HSHarry Stebbings46:20

       Can I... Obviously being i- in Italy and in Europe, I suffer from this, uh, assumption too, but a lot of our American friends and counterparts say, "Ah, you- you lack the ambition. The young people don't live to work, they work to live." Um, do you agree with that assumption on Europe? I know it's a general statement, but do you think it's fair?

    3. LFLuca Ferrari46:40

       Well, I don't think anybody should live to work. I- I don't know that you should even try to make a distinction between life and work. To me, you know, life includes work, includes play, includes love, includes exploration, includes sorrow, happiness. It's... So, I think they are just on two different dimensions and it's just illogical to- to compare them. But having said that, I- I will... I- I will say, I believe... I- I don't have a lot of certainties in life, but this is one of the strongest opinions I have, and that's that if you want to have a chance to be the best or one of the very best at what you do, not only do you need to be very talented, whatever talent means for... relevant to that particular pursuit you have, but- but also you need to work your ass off for a very long time. In a competitive world, this seems pretty straightforward to me, and I've seen it, uh, proven out with almost 100%, uh, um, uh, uh, let's say, uh, with a track record of almost 100% in- in the people I've seen being great at what they do, it is very rare that they haven't tried very hard to be great for a very long time. Um, so if... you know, so that's my general appreciation for hard work. I don't think it should be imposed on anybody, I don't think it's either morally good or morally bad to wanna try hard to be great, I think it's really arbitrary, whatever you wanna do with your life. Now, I don't know if Europeans are more ambitious with themselves and/or more willing to put in the hard work that's needed to then fulfill that ambition than, say, Americans or- or Asians or Africans or people from Oce- Oceania, um, I- I have no idea. To be honest, I've found lazy as well as hardworking people from pretty much every conceivable geography. I'm not really sure there's a correlation there. But there could be. I mean, these things have a strong cultural root to- to- to them as well, so I- I wouldn't be shocked if we found that different, uh, populations tend to- to behave differently in- in this regard.

    4. HSHarry Stebbings48:52

       I don't mean this rude, so forgive me if this is too direct. You feel like you're quite hard on yourself. People say the same to me.Do you ever give yourself a bit of a break?

    5. LFLuca Ferrari49:01

       Maybe I am, maybe I'm not. I think, as I said before, uh, I feel very privileged. Um, so I- I- I don't wanna sound like I pity myself or being hard on myself. It's okay. I'm, basically, I'm as lucky as it gets. I have a big dream. I've been very fortunate to find and- and be found by amazing people I love working and living- living with. I get to pursue my dream to be part of a team with, you know, with a big ambition. Love my job. And yes, it's- it's- it's a sacrifice often, including the- the hard truth of not being great at many things and trying to be better. But yeah, I think I wouldn't want any oth- any other way, to be honest,

17. 49:47 – 50:55

    Building Strong Co-founder Relationship

    1. LFLuca Ferrari49:47

       so...

    2. HSHarry Stebbings49:47

       Final one for you before we do a quick fire, but many mutual friends said I had to ask about your co-founder relationship, saying that it's a very unique pairing. What have been some of your biggest lessons on what it takes to have a great relationship with your co-founders in the way that you do?

    3. LFLuca Ferrari50:01

       If you were Italian, I would- I would tell you that it takes a lot of cullo. You know what it means?

    4. HSHarry Stebbings50:06

       N- no.

    5. LFLuca Ferrari50:08

       So that- that translates to- to ass, um, like the body part, and it means a lot of luck, a lot of luck. I- I, um, I could tell you that I was, you know, in- in, um, very thoughtful and I engineered my co-founder relationship, but the- the truth is I got lucky. I- I had been friends, particularly with one of them, for the longest time before we even started the first startup. And then, uh, we went through, again, from the entrepreneurial perspective, quite a bit of hardship together, a failed startup in which we had poured our hearts and souls for multiple years, and the relationship didn't fracture, but actually got stronger in those lowest moments. Um, and that is the best proof that you have

18. 50:55 – 52:18

    Choosing Investors

    1. LFLuca Ferrari50:55

       something to build upon.

    2. HSHarry Stebbings50:56

       How did you choose your investors? They're another form of partner, capital partner. How did you choose your investors?

    3. LFLuca Ferrari51:02

       Oh, I mean, it was easy. Nobody else would give us money, so we... No, sorry. (laughs) I'm joking. No, no, um, y- I mean, there have been different, uh, moments in which we welcomed new investors, and the- the answer would change a bit, but for the sake of brevity, I will say we- we have some advisors we- we trust. One, for example, is called Allen & Company. It's a- an equity M&A financing advisor from the US. Excellent. I guess it changes from partner to partner, but I think the firm is great in general, and the partners we work with are awesome. Uh, so they, you know, they know a lot of investors. They've seen them in different situations, particularly the shitty ones where you really see what, uh, sort of principles they abide by. 'Cause it's easy to be lovely when, uh, you have been generating great returns, but, um, it's a lot harder to be professional and fair when things, uh, aren't going that well. And so they provided us with a short list of firms they, uh, thought highly of. Uh, and then we- we had a few relationships, so we added a few names to that list, and then we went through a process of they studying us, uh, us studying them, and talking to people who had had them as investors for a long time and had to- had, um, difficult moments with them on board, and ultimately, you know, it was a mu- mutual

19. 52:18 – 53:45

    Improving the Fundraising Process

    1. LFLuca Ferrari52:18

       selection.

    2. HSHarry Stebbings52:18

       Is there anything that you do differently about the fundraising processes, having been through them? Different things on negotiation, on price, on, uh, length? Anything that you would do differently?

    3. LFLuca Ferrari52:29

       Yeah, I think you wanna create a certain level of competition if you can. I think we were... I'm very happy with the investors we have. I will say we could have obtained better terms. I mean, I think we had good terms, but better terms early on, and we could have closed faster had we created a little bit more competition. 'Cause often what they tell you, and they might actually mean it, um, in the initial enthusiasm, the- you always hear, "This is awesome. We're definitely gonna invest. We're gonna cover the whole round. You don't need to talk to anybody else. This will be amazing." And then once, uh, due diligence starts, there's always a tendency to then commit a little bit less capital, try to walk back on a few of the key terms, and, uh, and if you don't have any competitive tension, it's hard to avoid that from happening. But if you have a reasonable amount of competitive p- pressure, then... And- and you keep it up all the way to the end. Big mistake is to just base your selection on the early feedback and then wave goodbye to all those you don't plan to take on board and pro- and proceed only with the one or- or two that you plan to take on board. Uh, you shouldn't do that. Just keep a broader spectrum of parties involved up to the very end when you're signing, if you can. Um, that's my- probably my most useful

20. 53:45 – 55:06

    Immovable Terms in Fundraising

    1. LFLuca Ferrari53:45

       piece of advice on that regard.

    2. HSHarry Stebbings53:46

       What's the immovable term for you? You mentioned terms that are important. Is there one that's like, "Hey, no, no mas, not gonna budge on that one"?

    3. LFLuca Ferrari53:55

       Well, it changed, uh, each time, but I would say one that's stayed the same throughout our rounds was liquidation preferences. We never... All our share owners, myself, our institutional investors, our colleagues who got equity through their work in the company, nobody has any liquidation preferences, so we're all on equal terms, uh, economically. The reason why we fought very hard to avoid that, uh, is we didn't want our colleagues, who, despite our efforts to educate them financially, of course, are not as financially savvy as an investor. And unlike an investor which has maybe dozens or even hundreds of investments, uh, many of them bet their, metaphorically speaking, th- their house on the company. We really didn't wanna be in a situation where had things gone poorly, uh, then everybody would be left empty-handed, uh, but, uh, one or two investors. So that was something we really pushed against.

    4. HSHarry Stebbings55:00

       Well done. (laughs) That, that's a good thing to be able to push against and that's not an easy one with the scale of cash

21. 55:06 – 1:02:29

    Quick-Fire Round

    1. HSHarry Stebbings55:06

       you raised. Uh, I do wanna move into a quick fire, Luca. So, I say a short statement, you give me your immediate thoughts. Does that sound okay?

    2. LFLuca Ferrari55:12

       Yeah, I'm used to that.

    3. HSHarry Stebbings55:14

       What have you changed your mind on in the last 12 months?

    4. LFLuca Ferrari55:17

       I should try to read as many books as possible. Ended up, uh, changing it to quantity, obviously, is irrelevant, but not so important. What's really valuable is to select them well and try to read each and analyze each in-depth, really ponder it. You learn a lot more, it's a lot more useful that way.

    5. HSHarry Stebbings55:37

       What three books would you most recommend to someone listening?

    6. LFLuca Ferrari55:40

       Our Mathematical Universe by Max Tegmark, um ... So, I read a lot of books, so I could probably come up with many, many. But, um, I would say The Selfish Gene by, um, um, Richard Dawkins. And then maybe to go non-fiction, uh, fiction, uh, versus non-fiction, just to make it a little bit of more varied list, I would say A Gentleman in Moscow by Amor Towles. I believe that's how you pronounce it. Wonderful, wonderful novel. Maybe the best novel I've ever- I've ever read. One of the best. They're really great.

    7. HSHarry Stebbings56:20

       I was gonna suggest Venture Deals by Brad Feld, and so you have a lot more diversity than me, Luca, so don't worry.

    8. LFLuca Ferrari56:27

       (laughs)

    9. HSHarry Stebbings56:28

       Uh ... (laughs) Uh, some people tell me-

    10. LFLuca Ferrari56:29

        It's okay.

    11. HSHarry Stebbings56:29

        ... I need to get out of venture. I- I probably agree with them. What does a day look like for you, dude? Do you have a routine? I'm just intrigued, like, y- you look like a fit dude.

    12. LFLuca Ferrari56:37

        I mean, I don't think I have anything incredibly surprising. I wake up around 7:00, 7:30, walk my dogs, go to the gym, you know, can run, maybe lift weights. I try to mix it up a little bit. Uh, then I have breakfast and read at the same time. That's my half an hour of, uh, um, let's say meditation, not like proper meditation, but to me, reading, uh, and eating a light breakfast is really recharging. And then I have my, my work day. I try to have a lot of time to do individual work. I think you'd be surprised by how few meetings and external meetings particularly. This is ... What we're doing here is quite rare for me. I maybe do two of these, three per year max. Uh, so most of the time I spend it doing individual work. We promote individual work a lot at the company at all levels. We want all of our managers to be incredibly hands-on.

    13. HSHarry Stebbings57:23

        Do you not have direct reports that report to you, Luca?

    14. LFLuca Ferrari57:26

        Yeah, I do. I do. We do one once, once, uh, every two weeks. So, that doesn't take, uh, you know ... Maybe it takes about five hours a week. And then I have other meetings, but I would say I probably have no more than 20 hours of meeting a week. And I, I squeeze in maybe 40, 50 hours of individual work each week doing those sorts of things. Yeah, and then I try ... I tend to be done, uh, around maybe 8:30, 9:00 in the evening. Um, I spend an hour with my fiancée, with my dogs again. Um, you know, maybe just chatting, watching, um, part of a movie, eating dinner. Um, then walk the dogs again, read a book, fall asleep. Pretty simple.

    15. HSHarry Stebbings58:08

        (laughs) Uh, tell me, if you could choose one person as a board member, who would it be? Can be anyone.

    16. LFLuca Ferrari58:16

        I will pick Siddhartha, the fictional character from the book by Hermann Hesse. I think he'd be great as a board member.

    17. HSHarry Stebbings58:28

        (laughs) Well, I wasn't expecting that. Uh, you know, most say Bill Gurley. So, you know, good. That- that works for me.

    18. LFLuca Ferrari58:35

        (laughs)

    19. HSHarry Stebbings58:35

        That works for me.

    20. LFLuca Ferrari58:36

        That's boring. Come on.

    21. HSHarry Stebbings58:37

        That works for me too. What's the biggest piece of BS advice that you hear most often, Luca?

    22. LFLuca Ferrari58:42

        Well, there's a lot of BS in the world. That seems to be the norm. But I will say so maybe ... No, I don't ... Uh, it doesn't qualify as advice, but, uh, the opinion I hear most often that I think is really we- uh, poorly informed and poorly thought out is that artificial intelligence will create more jobs than it will eliminate. I believe, and again, the future will, you know ... We'll s- We will see. I might be very wrong, but I think, I'm quite confident that it will prove to be otherwise.

    23. HSHarry Stebbings59:16

        Destruction of jobs?

    24. LFLuca Ferrari59:17

        Yeah, far in excess of job creation in the medium-long term. I don't know if it's a few years or a few decades, but, uh, I'm quite convinced of that.

    25. HSHarry Stebbings59:25

        An ultimate one. What's the kindest thing anyone's done for you?

    26. LFLuca Ferrari59:28

        Oh, this is easy. I've been asked before. Um, it's two friends from middle school or classmates. They ... It would take a long time to explain, but the short of it is, they ... I told you I was almost pathologically shy at the time. They went out of their way to pull me out of my shell and teach me how to socialize with others. They ... For, for two kids of, you know, 10 years of age, uh, both of them, to, to, to do that showed a level of, uh, I think selflessness and maturity that I still remember today with incredible gratitude. Uh, and it changed my life for real. Uh, what an incredible moment.

    27. HSHarry Stebbings1:00:19

        And as thanks-

    28. LFLuca Ferrari1:00:20

        Moment. I mean, it lasted for months. It was an effort they did, they, they made for months. And it was very meaningful to me.

    29. HSHarry Stebbings1:00:26

        And-

    30. LFLuca Ferrari1:00:26

        I'm very grateful to this day.

Episode duration: 1:02:30