Neil Patel

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Luca Ferrari is the CEO and co-founder of Bending Spoons—a technology platform that specializes in giving birth to and scaling digital products and AI startups. He has raised $500 million between secondary sales and debt. The venture has attracted funding from top-tier investors like Intesa Sanpaolo, Banco BPM, Keisuke Honda, and Maximum Effort.

In this episode, you will learn:

  • Three ways to fund your growth
  • The benefits of cofounders for getting through the failures
  • Luca Ferrari’s top advice when launching a business

 

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    About Luca Ferrari:

    Luca Ferrari is the Co-Founder and CEO of Bending Spoons. He previously worked at Evertale as a Co-Founder and COO. Luca Ferrari attended the Technical University of Denmark and Università degli Studi di Padova.

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    Connect with Luca Ferrari:

    Read the Full Transcription of the Interview:

    Alejandro Cremades: Hello everyone and welcome to the deal maker show. So today. We have a very exciting founder. You know a founder that you know has a you know experience being on the good side of entrepreneurship also before you know, not so much but they obviously he learned a lot and we’re going to be talking about that quite a bit. Is as they say you either succeed or you learn, but he learned quite a bit because he’s on a rocket ship right now. So again, building scaling financing all the good stuff that we like to hear so let’s not wait any longer. Let’s welcome our guest today Luca welcome to the show.

    Luca Ferrari: Thank you, Thank you for having me a pleasure.

    Alejandro Cremades: So originally born in italy a Luca you were there born in a small town with just 900 people so give us a little of a walkthrough memory lane. How was life growing up. Yeah.

    Luca Ferrari: Right? A very simple life. Um, small town mostly farmers Simple jobs, nothing fancy um crop with a lot of dreams but not a lot of the let’s say exposure to. Big dreams having been realized so as small world but loving parents kept questioning why I existed but the meaning of life was out of strong urge to try to build something. But definitely I realized at that stage.

    Alejandro Cremades: And what what got you into engineering out of all things Luka.

    Luca Ferrari: I’m um, I’m very curious Interestingly I’m not a technical person like I don’t necessarily like to um how to say team cur I’m more of an abstract Thinker I Love to think about Concepts and model. World in my mind and on paper and so when when the time came to decide. Um, what to.

    Luca Ferrari: And.

    Luca Ferrari: All right? all right? Um, so um, when when it you know the time came to decide what to study at University I Um I’m a very curious person. Not a.

    Luca Ferrari: No I.

    Luca Ferrari: When when the time came to to go to University I am a curious person. Not a team card though. Love to learn about everything and anything I was okay, let me let me just put them in that room I see ah no other and other solution.

    Alejandro Cremades: Look look I sorry sorry about the toy. Yeah I can completely hear the toy. So all right? all right? All right.

    Luca Ferrari: I Repeat that.

    Luca Ferrari: At this second question.

    Luca Ferrari: Um, okay, let’s say now that question is whether.

    Luca Ferrari: So I’ve always been a curious person loved to learn when I was ah five or six years old I still remember telling my mom that my greatest dream was to but to know everything? Um, which is obviously impossible. Um. So when time came to the sidewa to study university I was preopenminded. We considered literature medicine engineering math physics. Ultimately I think I had to take a leap of faith and I picked engineering because I thought it would be challenging from the point of view of you know logic. Ah, but also somewhat practical and just a better way of making a difference in the world but I wasn’t really looking to necessarily be. You know the stereotypical engineer ah building things on piece at the time I’ve always liked to think abstractly and model the wall in my head.

    Alejandro Cremades: So then so then I know that for you, you know something really opened up when you went to denmark to study abroad I think that that perhaps opened up the worldview and I made the way that you were thinking about things. So what do you think opened up for you. You know during during that day.

    Luca Ferrari: Um.

    Alejandro Cremades: That experience.

    Luca Ferrari: I think the I feel pretty fortunate for my upbringing loving parents in our peaceful life. Ah, the the part that I certainly lacked was an exposure to to great achievements. How things. Done at scale ambition and so I think ah hide strongly me I can tell in in hindsight. But sometimes you need a trigger you know to understand how to go from a an impulse of feeling a strength to an actual execution toward a goal. And and going to denmark ah put me in a more international environment I met people who you know started introducing me to interesting online publications were ah the topics for entrepreneurship or technology and I just immediately. Dawned on me that that was what I wanted to do probably the rest of my life. It was like a vocation I always had that I mean that clicked like this is what I felt as a ten year old this urge to build something to imagine a future that doesn’t exist and try to achieve it with others. Theme part is very important to me. Um, it just dawned on me. This is it. This is what I’m going to do it was obvious when I saw it but before I didn’t even know what had you asked me at age 18 what entrepreneur entrepreneurship is I wouldn’t have been able to even tell you what the word meant. Never.

    Luca Ferrari: Met Anybody would met an entrepreneur ever. So.

    Alejandro Cremades: But yeah, because obviously you know italy you know, like anywhere in Europe now startups. You know they’ve you know taken a really popular role but then back then it was either. You will become a a doctor or a lawyer or a banker. So um, so so I totally can understand that now for you. Being in university I mean that was no barrier for you to to really go at it as an entrepreneur and that’s when you started your first company. So so what was that how how did you guys you know, really come together and what was that process of hey you know I think that maybe this is something interesting. Let’s go at it with it.

    Luca Ferrari: Ah, so that’s ah, there’s it. It all starts with that. It’s sliding doors right? So first I end up in this double degree program with another another guy. Um, we both end up being selected. Ah, 5 out of I think over a hundred people applied and then we end up in the same country and in Denmark and study together become fast friends. Um, and I think we both had an act for entrepreneurship and interest in it then I got. Ah, pneumonia early on in my stay in Denmark and after three weeks that I’m sick and this friend of mine is just staying at home with me. Ah, he tells me hey I think it was a Saturday night he tells me I’m sick and tired of being at home with you I just want to go downtown and.

    Luca Ferrari: And and have some fun and so he does and he meets you know another guy who ends up being our our co-founder. So um, you know we we spend time together. We we like one another and. Ah, we start thinking particularly during us a certain trip abroad. We start dreaming of building a company and and and we have an idea at the time the idea was to build the first self and still it would be. You know the only nobody has done it yet. The first self-writing diary of a user’s life. Very difficult technical problem and we decided to try to to crack it so that was late in our university years and this third guy was having um it was starting for a ph d whereas myself and the other. Person we we were about to graduate from our master of science and but we had no money so we you know we chose to that one of us would get a job and then share their salary to pay for rent and living expenses I got the best offer which was from mckinsey. Ah, to be a strategy consultant. So I went there I remember telling my boss at the time that I had this startup and that I intended to quit at some point once we would get funding and if it was okay and it was very gracious I might say said okay, we want to have you anyway at at Mckinsey and so the ph d guy dropped out.

    Luca Ferrari: And so like he and the other one were working full time on a prototype for this idea whereas I was working at Mckinsey and then in the night and in the weekends helping with the started and about I think a year later we got funding half a million euros which at the time felt like. And incredible amount of money and so I resigned and three months later I joined full time and then I like to joke that I e was able to significantly speed up the failure process because about a year later we had to to shut it down. Um, but yeah.

    Alejandro Cremades: Yeah now now there? What? what? Why do you think he was so difficult racing money. What what were some of the hurdles that you guys were experiencing.

    Luca Ferrari: It was um, it was a good ride.

    Luca Ferrari: Well I mean first of all europe at the time we’re talking 2010 was certainly not like a Vc hub. Ah the nordics much better than italy thankfully we were in denmark at the time because we had just graduated but. Was just not a lot of capital things have improved incredibly over the subsequent 10 years or so but at the time very difficult. Also we had no clue what we were doing I mean never written a business plan never pitched anything so just incompetence on our end but we got some help. Met with a lot of investors. Ultimately someone building us.

    Alejandro Cremades: Nice now for you guys their road. You know what’s a little bit bumpy with ever tail. So at what point do you realize? hey guys you know I think that this is not going to work I think that maybe we should pull the plug.

    Luca Ferrari: Are.

    Luca Ferrari: Well, it never looked after the initial honeymoon period it never looked like it was going to work but it didn’t look like it was a for sure a failure either until a couple of years into the project when we were already running out of money and. Expecting a tax refund from the danish government and then the government delayed the refund for whatever reason I don’t remember now what the law said at the time it’s been ages but that basically put us out of business right away so we had to shut down the company. We had a team of 12 believe um, and so we we asked the 2 people we deemed most essential to try and again to build a company to stay on board and cofound a new company and then we were quite fortunate because we had about forty Thousand Euros left in the bank. And and that was I I think it was our rvcs because of some liquidation preference but nobody wanted to I mean on their end and nobody wanted to take the the pains of going through a liquidation process which would imply bigger. Legal expenses then the money they were going to take out and so they basically told us you can keep the money and um, whatever so we we shut down the company. We found ourselves with a little bit less than forty Thousand Euros and that was the seed capital for being spons and we’re talking probably about the summer of 2013

    Luca Ferrari: So a bit a bit over nine years ago

    Alejandro Cremades: Now How was that transition like because obviously at this point you you guys are probably you know, not feeling too. Great. You know after you know having had those conversations you know, perhaps the disappointment. Um, how was that transition to hey you know why don’t We just do something else and and and and then. And then what was what was what was that process like until you guys were like okay I think that we got this next idea which ended up becoming bending spoons.

    Luca Ferrari: So interestingly emotion was speaking. It was much easier to fail than to be failing. Ah the way I felt as it became obvious that we had to put an end to it was actually a lot of relief. I felt we’ve made so many mistakes and I was so eager to try again and it felt like being able to go from a blank slate was going to be liberating as opposed to trying to fix something that’s broken so actually a lot of relief and energy in trying again then I think it got quite hard. So never a doubt that we wanted to to give it a second shot I I think the peak of the like the hardest moment 1 of the hardest moments for me of my whole professional career was soon after we started bending bones when things were not necessarily going very well. I had these I think you can call it fear that we were going to fail once again and I’ve always hated failing. Um I think many people do um and and so I was looking at how things were going and I’m and I’m like you know, maybe we. But but we fail again and that would be such an indictment of incompetence or lack of talent so that was difficult I remember crying a couple of times at that stage I don’t think I’ve ever cried again.

    Alejandro Cremades: And and what about what about what about failure didn’t you like because I know obviously in in Europe failure is looked at a little bit different. You know in the us they clap and they encourage you to get back up. You know, unfortunately in Europe they point at you when you fail. So.

    Luca Ferrari: And.

    Alejandro Cremades: What piece about failure didn’t you like.

    Luca Ferrari: You know these these things are very they have deep psychological roots. It’s not that you rationalize them all that much I think deep down I’m probably insecure and I’ve always measured myself because done. The impact I have whether I achieve difficult goals. Ah, whether othersters I admire and who know me think I’m great at what I do and and naturally I mean. When there is a pattern pattern of failing. It’s hard to keep your confidence high if that’s your your Yardstick you know now.

    Alejandro Cremades: So what did you do to quiet that voice you know because obviously it’s kind of like a voice right? So so what did you do to quiet that and to keep pushing.

    Luca Ferrari: So I think part of that is you’re just to nash is I think for an entrepreneur do you have to have that or if you don’t have it. You have to find a way to to to produce it in you because you’re gone. Have different levels of failure pretty much every week you ought to keep going people will come to you for support. So I guess I was fortunate enough to have some of that in me for whatever reason I don’t know we can try to psychoanalyze my history but I had that. I was pretty fortunate to be working with people who had that too and the good thing about being part of of a team is that you are unlikely to be down or as down the same day. So one day I’m more depressed and the other guy helps me, he lifts me up a little bit and then I do the same for him next week. You know so. That helped and then the third part to me was just the bond the loyalty to the common project with these other people I already at that point called very good friends. Um I just felt that.

    Luca Ferrari: Failing with someone you you love working with your respect you. You’re basically deciding you want to spend your life with in a way. Professionally um, might be even better than than succeeding alone in some way so that gave me. I Think emotional strength to just look past that and appreciate the value of the moment.

    Alejandro Cremades: So at what point they look at the you realize hey I think that we’re turning a corner here I think that we’re into something.

    Luca Ferrari: Ben this bo was never an overnight success. It’s not that it has been a a rock ah Hawk is tea. We’ve had many many wins many losses just the wins of overall outweighed the losses. So you know.

    Luca Ferrari: Some apps early on that had some success but something that by today’s standard would look ridiculous but then on top of that success you rain best you build more competence you build better technologies you try harder and then there is a bigger success to be honest I I don’t think there’s ever been. You know one moment where we clearly felt okay. You know this is happening. It was truly truly incremental. A lot of small steps and hard work all the way to where we are now.

    Alejandro Cremades: And for the people that are listening what ended up being the business model of pending spoons.

    Luca Ferrari: Right? So interestingly our so our dream our mission so to say from the beginning was to build or or strive to build one of the best companies of all time an institution, a true inspiration for other entrepreneurs for people a company that. You know brings to the market incredible products. Very successful products high value products and creates a ton of incredible jobs. So we were never primarily motivated by solv a particular problem or building a particular product and so our strategy in line with that broader. Vision and mission was to build a platform a platform optimized for launching or acquiring and then further building and scaling a variety of digital products so you can you can you could say metaphorically that we focus on building the machine. Ah that builds products. Or that builds machines as opposed to building the product directly so we focused on developing tech that helps build and scale product. We focused on building know-how for building and scaling product. We focused on building an employ brand that would enable us to attract incredible talent. To build building scale products on and forth. That’s our platform a pretty unusual approach I like to um, describe bening spons as Google makes a baby with Amazon and Berkshire Hathaway where Google you have the love of technology Amazon the love of efficiency and berkshire hathaway the love of.

    Luca Ferrari: Ah, efficient capital allocation including acquisition. So that’s a little bit. Our Dna always has been a little bit weird but we love it. So today we have built a portfolio of of digital product from early mobile apps over half a billion people have used them at some point and now we have over 100000000 people using them each month. Um, the the most successful apps we have I would say there’s a splice which is the number 1 mobile video editor in the world by by revenues. We have revenuemi number one aidriven photo enhancer in the world over 40000000 objectiveive users several otherss we have probably about 8 to 10 relevant products and we are.

    Alejandro Cremades: And how has it been the journey to you know as you’re thinking about you know this intersection of um you know products Efficient Capital Um, you know Also the the efficient the a of of of the way that you guys have a structure your team which is you know, mainly engineers.

    Luca Ferrari: 7

    Alejandro Cremades: How do you? How do? how did you guys go about racing capital for bending spoons because obviously you had the experience from what you went through with every tail. So how was it the experience How much capital have you guys raised to date for the company and then how has it been going from one cycle to the next.

    Luca Ferrari: Memory.

    Luca Ferrari: So I would say in terms of equity. The company is bootstrapped. Ah we actually never raised substantial equity. It’s still all that forty Thousand Euro seed and then reinvesting earnings. Ah, what? what 1 reads in the news as being by and large secondary round so existing shareholders selling a little bit of shares but it was not a Capitan increase. However, for financing we have used a lot of debt over the years from banks just ah, straight that. That has been possible because we’ve been able to be profitable every single year so we have because you know obviously if you’re not profitable. You cannot pay pay down that that a bank gives you so.

    Alejandro Cremades: Got it and on the di side I mean have you guys say made any of that a public I.

    Luca Ferrari: Yeah, we we have I think we have raised the probably between equity in that different times probably over $400,000,000 I would say probably a bit more than that closer to half a billion I presume

    Alejandro Cremades: Got it and just for the people that are listening. What are those secondaries How do secondaries really work.

    Luca Ferrari: Yeah, so there are 2 2 types of equity transactions. You have a primary which means the company creates. Let’s say an additional share so it adds 1 slice to the cake and someone buys the share and the the company gets cash typically cash. Let’s say I mean it doesn’t have to be a generally cash. In in in exchange for that additional share and you know cash is naturally small owned then proportionally by each shareholder and hopefully it gets put to good use so that it will create more value than adding the slice of the cake as reduced for existing shareholders. A secondary transaction is when. And existing shareholder sells. You know one or more of their shares to someone else. So at a company level. There is no change in either number of shares or capital available simply a change of ownership. Let’s say of of some of the equity. Yeah.

    Alejandro Cremades: And in terms of scale I mean you guys have have done. You know, like really crazy stuff I mean even a few weeks ago you guys were scaling like crazy from like 1000 gpus to like over 50000. So can you explain? What are those Gpus and and also like why we’re so challenging that type of scale.

    Luca Ferrari: Right? So we we specialize in artificial intelligence. It’s one of the key legs of our table so to say and about a week ago 1 of our apps. Ah really took off It’s called Don Ai it’s for it’s an app for generative ai it creates images from textual prompts or sketch prompts or even your own photos. It’s quite magical. It uses. It’s based on some open source neural networks and and then a lot of proprietary. Stuff on top and and so the app started growing really rapidly to the point that now after a few days. It’s the most downloaded app as we speak in the western hemisphere um getting over a million new users today.

    Luca Ferrari: And the challenge there is that to serve users every user to do that image generation through Ai you have a massive amount of computation to do and an efficient way of doing computation with with the neural networks is to use ah gpu that. In principle the same hardware. You used to play video games when you want to have really good graphics. People may remember buying Nvidia Gpus to play some games they love at you know, really high resolution or whatnot but these are specific gpu it means graphic processor unit. Built to maximize the computational efficiency for for training and and and and running these and neural networks. So to to scale to from a few thousand users to millions of users. We had to scale from about 1000 of these gpus to 50000 and we did that in about two days which is. A feat of rare difficulty. We worked on it with with Google particularly um, and and it was ah it was massively difficult I mean both both on our end and on the on Google with Google cloud we worked. Literally day and night for days nobody was sleeping but it was fun I mean that’s what you live for as a technologist and entrepreneur you want to have that sort of success with with your apps.

    Alejandro Cremades: You know, kidding no kidding now now for you guys I mean imagine you were to go to sleep tonight look on and you wake up in a world where the vision of bending spoons is fully realized what does that world look like.

    Luca Ferrari: Well like I said before benice spruce is a company that has raised the bar. Ah for what a company can be It has helped ideally millions of of people. Work there achieving heights they didn’t think were possible for them whether it’s but in terms of competencies or even dearer to me in terms of their human values. You know, really grow as a human being become a better collaborator a more altruistic person. It’s a company that has brought to the market. Truly transformational products. We have not so far I’m very proud of the products we have. They are commercially very successful and very useful to as I said over 100000000 recurring users still you know I’d love for us one day to have built something of the caliber of what Tesla has done right? Those things that really. Change the world in a way so that we have not accomplished at all and we really hope we be smart enough hardworking enough and lucky enough to get there at some point so in the you know that in the dream realized that’s certainly something that we have done and then yeah, we just ah were old and but proud of. Our contribution again. We we’re not proud yet but we work toward that.

    Alejandro Cremades: And obviously you know now with bending sponce I mean this is your second rodeo. You’ve been at it for 9 years you had your previous experience with Evertail mom. So if you had the opportunity Luka of going back in time.

    Luca Ferrari: Sorry.

    Alejandro Cremades: And having a chat with your younger self perhaps that younger Luca that we’re stilling university and you know now you know had this say 2 bodies that they you know we’re thinking about like maybe like covering that gap that you were seeing in the future if you had that chance of sitting down with that younger Luka and.

    Luca Ferrari: Now.

    Luca Ferrari: See what.

    Alejandro Cremades: Giving that younger lookout 1 piece of advice before launching a company. What would that be and why given what you know now.

    Luca Ferrari: Oh There’s a lot of that one would be start earlier I think I may I might have studied less and gotten to get my hands dirty a bit earlier than I did and I one would be to. Think harder and longer before we jump into the Fray I think there is a a myth when it comes to entrepreneurship where they tell you you have to be go with your gut. You know, get into it. Ah actually the more I get experienced the more I think that it’s better to think. Your plan through before executing. It’s way cheaper to improve your vision strategy plan than it is to execute a suboptimal plan fail and adjust generally you invest 1% of the time planning and 99% executing So I would say 10 X the time you invest in thinking things through before you do them Arguably. We could have avoided a lot of mistakes should ever tell how we thought about it harder but we were so Enthusiastic. We just got to work.

    Alejandro Cremades: I Love it.

    Alejandro Cremades: Hey well that happens all the time but look at you now look Ah what an incredible story. So for the people that are that are listening. What is the best way for them to reach out and say hi.

    Luca Ferrari: Oh I can send an email I guess my my email is my initials l f at vaningspoon.com I try to reply to all emails or at least as many as I can but generally all of them. So.

    Alejandro Cremades: Amazing! Well hey look at thank you. So so much for being on the deal maker show today. It has been an honor to have you with us.

    Luca Ferrari: Likewise Thank you for having me.

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