- 3 months ago
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00:00I want us to start with what exactly the portfolio is and sort of how you want to communicate to
00:06investors what you're going to do with assets that many people remember from the world of Web 1.0.
00:14Thank you for having me, first of all. Let me explain how we operate because it's quite unusual,
00:20perhaps unique. We've spent the last 13 years building what I consider an exceptional platform
00:27of very high talent density, a culture of high performance and rationality, 50-plus proprietary
00:35technologies, an operating system for running digital businesses as effectively and as efficiently
00:40as possible, and a lot of data that helps us make better decisions at the stage of acquisition and
00:46operations. And then what we do with this engine is we go and acquire digital businesses with
00:52an express potential, and we integrate them very deeply onto this platform in a way that
00:57I haven't seen anybody do before. They share the entirely the same technological layer. We
01:04have a core team that moves fluidly across all our businesses, and we transform them deeply.
01:10We rebuild the org, the technology, the monetization. We accelerate innovation, launch new features.
01:16So it's a pretty unique model. And as you were describing, we have established over time a portfolio
01:24of brands, some of which are very well known and some of which are more dated. We also have bought
01:29more up-and-coming companies, but there's a bit of both. We win, we do well, not necessarily when the
01:35company we buy is young or old, growing fast or more stagnating, but when we can make that trajectory a
01:43lot better. So that's what we try to excel. Luca, we were talking earlier about this, and I'm just
01:48interested if you can explain for viewers kind of the path to better monetization. Again, you have
01:53about a half a billion monthly active users, but only a small fraction of that are actually deriving
01:58value from. What does that mean for the company going forward, and how do you grow that?
02:03Yeah, exactly. Half a billion people use our products. Quote-unquote only nine million people,
02:08so roughly two percent pay for them, which obviously is an opportunity. We also believe
02:14that it's important to provide excellent value to our customers, so we're not looking to monetize as
02:20much as possible, and we're happy to have a vast population of users who use our products without
02:25paying. They bring value through word of mouth, and that will probably continue to be the case. But yes,
02:31we have an opportunity to monetize better, and we have a history of doing that, I think, quite successfully.
02:36So yes, going forward, hopefully we can improve the percentage of our users who choose to pay for
02:42our products. And Luca, no, just thinking through, though, kind of what changes when companies go
02:49public. Now you have to answer to public investors, and obviously that draws the potential towards,
02:55you know, partnering with AI companies, letting them train their LLMs off of their data. How are you
03:00guys thinking about the potential partnership opportunities? Again, it's no longer a company where
03:05you and your friends are running it. Now you have to answer to the public investors. Is there any
03:09sense of pressure from them that you would need to better monetize and therefore partner with,
03:14say, an OpenAI or Anthropic?
03:16I think ManySpoons hasn't been a company run by friends like that in a long time. We feel we are
03:23a highly professional organization. We've had blue chip investors on board for many years,
03:28you know, Bailey Gifford Durable Capital have been with us for many years at this point. So
03:31we have operated, you know, as rigorously and seriously as it gets for as long as I can remember.
03:37Obviously, the constituents would be a little bit different as a public company, but we are,
03:42I don't think we're going to change our views. We're trying to maximize value 10 or 20 years out,
03:46and we'll continue doing that. In terms of data, we have never sold any data. We've never
03:52enabled any third party to train their models on our data. We don't have any plans to do that.
03:58And, you know, I'll let you know if that changes, but right now that's our stance.
04:01Look, I'm trying to understand a little bit more too about the business model. You guys have identified
04:06more than a thousand digital businesses in Europe and North America that could be attractive
04:10acquisitions over the next few years. That's according to your listing document.
04:15It feels like, are you just buying your way to growth and masking perhaps a slowdown in retention?
04:22Is that the strategy? Well, I mean, we, yes, we are buying as a key engine of growth. I think
04:31there's
04:32no difference in putting dollars against marketing-driven growth or R&D-driven growth or
04:38M&A-driven growth. They're just different levers you can pull. We found that with our platform,
04:43M&A has been by far the most efficient. We have doubled the company, roughly speaking,
04:49every year for as long as I can remember. So it's not too shabby. And we've barely raised any equity
04:55in
04:55the past, certainly much more efficient than we would have achieved through more conventional means.
05:01Having said that, almost every time the companies we've owned, we've improved retention, monetization,
05:08organic growth. So we're managing these assets for the long run. We have never sold a company we've
05:14bought, nor do we plan to. We try to be excellent stewards of these businesses, again, with a 10,
05:1920 year view, as long as we can project out. But yes, we do anticipate that the vast majority of
05:25our
05:25growth will come from acquisitions. And as long as that's where the highest returns come, we'll take
05:30it. We like it a lot. Luca, the next acquisition, look, tell us what it'll be. If you can, feel
05:40free.
05:41If you don't, I'm going to give you a gimme. Or you're going to give me a gimme, I guess.
05:46What's the theme and the theme that you're looking for?
05:50We're not thematic as an acquirer. If you look at our portfolio, we have enterprise businesses,
05:55we have consumer businesses, we've got ticketing, we've got video platforms, a little bit of
05:59everything. So what we look for is businesses that we can improve tremendously, whether it's the product
06:06as a loyal customer base, but it's a bit dated that you could overhaul the user experience,
06:11add features, improve the technology, whether it's the monetization is inefficient,
06:15maybe the cost base is bloated, maybe a bunch of these at the same time.
06:21And let's say the customer facing side of things can vary, but those fundamentals have to be,
06:25at least one or two of these have to be in place for us to be interested.
06:30So we're always looking at a bunch of companies. Hopefully we'll acquire
06:35additional companies during the rest of the year. But yeah, even if I wanted to,
06:41couldn't share any theme, we don't think that way.
06:44Yeah, we aren't surprised by that. A good one by Tim though. Luca, one question though,
06:50when you hear SaaSpocalypse, does that present opportunity or does that present risk? Just
06:55thinking through the portfolios of companies, it doesn't seem that difficult to me as someone who's
07:00not that smart to replicate some of the portfolio companies using a Claude, for example.
07:05Oh, I totally agree. I mean, it's very easy. I'd say it's been very easy for at least 10,
07:1115 years, replicating, take AOL, writing a mobile or desktop email app.
07:20You know, there's probably several hundreds of them out there. Eventbrite has been copied a million
07:27times. AI doesn't change that. If it was already very easy, it makes it even easier. But there's
07:32so many clones at this point that it doesn't make any difference. There's a world, not the world that
07:38we live in, where building a ticketing platform is impossibly difficult and Eventbrite is the only one
07:44one to exist. And it's maybe worth a billion dollars or 50 billion dollars. And now with AI,
07:51it becomes easy and that's bad news. But again, that's not the world we live in. It's been very
07:55easy to replicate a product like Eventbrite for a decade. So any success that these companies are
08:03having right now is not based on a lack of technically viable alternatives. They win because they have a
08:09brand or a network effects or switching costs. And so I don't think that will really change going
08:16forward. We haven't seen any degradation whatsoever in any metrics. If anything, AI has been a major
08:22tailwind for us. Ultimately, the main disadvantage of our model is that it's these transformations are
08:28very operationally intensive. We need a lot of excellent people to work really hard to rebuild,
08:35again, the software and features monetization. So we can do a million of these acquisitions per year.
08:41Not that AI solves that entirely, but it loses that bottleneck substantially. We are revenue per
08:46Spooner Spooner is like our core team of people who help us transform the companies. Right.
08:50Went up from about a million dollars in 2023 to a run rate of roughly four million dollars in Q1
08:56in 2026, with AI being clearly the main reason for that massive growth.
09:01Uh-huh. Well, Luca, we don't have a ton of time left and a few more questions we want to
09:04get to.
09:04I want to focus in on the AOL part of this. You bought that from Apollo, one and a half
09:09billion
09:09dollars approximately last year. AOL, full disclosure, many years ago I worked at a version
09:16of AOL. It's known for still having people who actually pay for it, but it's just a shadow of
09:21what it once was. When you say you're trying to get more people to pay for the products and services
09:26that you own, how do you get more people to pay for AOL?
09:30So AOL currently has approximately 30 million monthly active users, only a small percentage of
09:36these pay. Others are monetized through advertising, unlike most of our user base where often we don't
09:45use ads at all. Unlike people think, actually, AOL has been growing for several years. I can't really
09:53speak as to what happened 10 or 20 years ago, but at least the last three or four years it's
09:57been on
09:57a slow growth trajectory. We expect it to continue, maybe accelerate a little bit
10:02going forward. There are multiple opportunities to improve this business. As you could imagine,
10:08the product, I think the product is better than people think it is, but it's not on par with some
10:13of the competition. So we look forward to improving it substantially. Both the email client and the web portal.
10:18We believe that there is plenty of opportunity to improve the underlying technological foundations,
10:24especially the advertising tech stack and the recommender system that chooses what content you see on
10:30the web platform. I think it's one of the most exciting acquisitions we've carried out in recent years.
10:38Hey, listen, you and your co-founders, Luca, hold 100% of the Class A shares and almost 83%
10:46of the voting rights. We've seen this with some other tech companies. You're coming to market with a
10:52controlled company structure and a highly acquisitive strategy. What decisions, if any,
10:59should public minority shareholders realistically expect to influence over time?
11:05I think we will take input to heart. I'd like to think we have a history of
11:12intellectual honesty and open-mindedness. These are key values internally and externally for us.
11:17Uh, naturally, if someone chooses to invest right now, we'd have to, to, to, to trust that,
11:23you know, we'll make the right call. Uh, that's what it is with, uh, with this sort of governance.
11:27But, uh, I certainly can promise we'll be, we'll be listening, not necessarily agreeing with
11:30everything we're told, but listening for sure.
11:33Hey, listen, as you know, it's very different to be a private entity and a publicly held company.
11:38What's top of mind the pressures you think you might feel though now as a publicly held company?
11:43I don't know. I haven't done it before. I don't presume to know. Uh, I'm sure it's going to suck
11:47in many ways. We'll try to do our best not to succumb to the pressure and, and noise and stay
11:53focused
11:54on execution. We have a plan for the next, uh, 10 or 20 years since, uh, it's going to be
11:58a challenge.
11:58We can't, uh, afford to lose focus. So that, that's the, the goal here. Stay, you know, head down,
12:05work hard, stay rational. Um, we'll see when we're optimistic, but, uh, I'm sure we could make
12:10mistakes. So we gotta be careful. Well, I'll just tell you, um, every quarter, those earnings reports,
12:15we love to go over them. So we're looking forward to your first earnings. Luke, are you going to go
12:20check out a world cup game while you're here? I I'd love to. I don't think I'll have time, but,
12:25uh,
12:25uh, I, I, I hear it's been great. Uh, people are talking about repeating, uh, you know,
12:30again in the States, uh, in four years. Uh, so maybe that, that time I'll be able to.
12:35I think the folks at FIFA will have something to say about that.
12:38Luca, thanks for joining us.
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