2 ms·

Bingo. My wife brought them to my attention recently because she heard about them from Scott Galloway, who was speaking highly of Bending Spoons on one of his

Bingo. My wife brought them to my attention recently because she heard about them from Scott Galloway, who was speaking highly of Bending Spoons on one of his podcasts. As she was explaining this to me, I said "It's just PE." They must be doing some good PR/marketing, because, for some reason, "PE" isn't the first thing entering a lot of minds about Bending Spoons right now.

alephnerd 3mo ago
BendingSpoon isn't PE because they are not attempting a restructure to then exit out of the asset within a defined time period. When BendingSpoon or IAC acquired an asset, it's meant to be held by them in order to augment their existing portfolio. M&A isn't the hallmark of PE - restructuring an asset in order to exit out of it at a profit is. The classic PE monetization strategy is to acquire an underperforming asset, restructure said asset, and then exit the asset at around 20% IRR. BendingSpoons on the other hand is a holding company that is acquiring and consolidating stagnant but large SaaS platforms into a single mega-platform. The economics are different as are the operational and organizational structures.
- buckle8017 3mo ago
  The classic PE strategy is to buy declining buy well known brands, borrow vast sums of money in the brands name, pay the PE firm huge consulting fees, and then bankrupt the acquired business. Which isn't exactly what they seem to be doing but also isn't that far off.
  - smrtinsert 3mo ago
    Scotts point was that these brands have already declined, and that the only thing left is a very strongly loyal subscription base. That perked my ears up for sure.
    - robocat 3mo ago
      The classic PE monetization strategy is to take an intangible asset and mine it: The one we all see is buying a quality brandname and mining it into oblivion. Plus various accountancy tricks to move the gold into the PE coffers. In your example "very strongly loyal subscription base" is the asset. Fabulous article (I think evergreen through regular edits/updates): https://www.worseonpurpose.com/p/the-mechanisms-of-enshittification https://www.worseonpurpose.com/p/the-mechanisms-of-enshittif... Long on business keywords; a more soulless perspective than the above article: https://ahapartners.co/thinking/goodwill-isnt-a-rounding-error/ https://ahapartners.co/thinking/goodwill-isnt-a-rounding-err...
      - spenjovewkwhalo 3mo ago
        Thanks for that, loved the worseonpurpose article
dbbk 3mo ago
Not really. They dramatically overhaul the products. Bloated staff are cut, old tech-debt-saddled systems are thrown out and rewritten. In some cases they basically just keep the brand and the database and rebuild the product around that, in a smaller and leaner manner. I actually think the model is interesting.
- beering 3mo ago
  That is the PE playbook - buy ok company, revamp things to make it more efficient and profitable. The main difference seems to be whether the owners sell the revamped company or not.
- Woshiwuja 3mo ago
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deleted 3mo ago
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alephnerd 3mo ago

BendingSpoon isn't PE because they are not attempting a restructure to then exit out of the asset within a defined time period. When BendingSpoon or IAC acquired an asset, it's meant to be held by them in order to augment their existing portfolio. M&A isn't the hallmark of PE - restructuring an asset in order to exit out of it at a profit is. The classic PE monetization strategy is to acquire an underperforming asset, restructure said asset, and then exit the asset at around 20% IRR. BendingSpoons on the other hand is a holding company that is acquiring and consolidating stagnant but large SaaS platforms into a single mega-platform. The economics are different as are the operational and organizational structures.

buckle8017 3mo ago
The classic PE strategy is to buy declining buy well known brands, borrow vast sums of money in the brands name, pay the PE firm huge consulting fees, and then bankrupt the acquired business. Which isn't exactly what they seem to be doing but also isn't that far off.
- smrtinsert 3mo ago
  Scotts point was that these brands have already declined, and that the only thing left is a very strongly loyal subscription base. That perked my ears up for sure.
  - robocat 3mo ago
    The classic PE monetization strategy is to take an intangible asset and mine it: The one we all see is buying a quality brandname and mining it into oblivion. Plus various accountancy tricks to move the gold into the PE coffers. In your example "very strongly loyal subscription base" is the asset. Fabulous article (I think evergreen through regular edits/updates): https://www.worseonpurpose.com/p/the-mechanisms-of-enshittification https://www.worseonpurpose.com/p/the-mechanisms-of-enshittif... Long on business keywords; a more soulless perspective than the above article: https://ahapartners.co/thinking/goodwill-isnt-a-rounding-error/ https://ahapartners.co/thinking/goodwill-isnt-a-rounding-err...
    - spenjovewkwhalo 3mo ago
      Thanks for that, loved the worseonpurpose article

dbbk 3mo ago

Not really. They dramatically overhaul the products. Bloated staff are cut, old tech-debt-saddled systems are thrown out and rewritten. In some cases they basically just keep the brand and the database and rebuild the product around that, in a smaller and leaner manner. I actually think the model is interesting.

beering 3mo ago
That is the PE playbook - buy ok company, revamp things to make it more efficient and profitable. The main difference seems to be whether the owners sell the revamped company or not.
Woshiwuja 3mo ago
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deleted 3mo ago

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