Bending Spoons CEO on why M&A fails

Software is not a charity. That is the quiet part that Luca Ferrari, the CEO of Bending Spoons, is saying out loud. While the rest of the industry obsesses over culture fits and smooth transitions, Ferrari has built a multibillion-dollar machine by doing the opposite: cutting the fat, ignoring legacy headcount, and focusing entirely on the code.

The Myth of the Synergy

For most builders, the word merger usually brings to mind a vision of two teams joining forces to create something better. The reality is usually a slow-motion car crash. Ferrari argues that the primary reason M&A fails in the tech world is a fundamental misunderstanding of what makes a software company valuable. It is rarely the people, and it is almost always the product.

When Bending Spoons buys a company like Evernote or WeTransfer, they aren't buying the office culture or the visionary leadership team. They are buying a tool with a user base. The traditional playbook says you should keep the original staff to ensure continuity. Ferrari's playbook says that is exactly how you lose money. If a product requires a massive team to maintain but isn't growing, the headcount is the problem, not the solution.

The Founder's Dilemma

If you are a founder looking for an exit, this is a bitter pill to swallow. We like to believe our teams are indispensable. We tell ourselves that our 'special sauce' is the unique chemistry of our engineers. But from an institutional perspective, that chemistry is often just overhead. Most software products eventually reach a stage of maturity where they don't need constant innovation; they need ruthless optimization.

Ferrari’s approach is centered on the idea that if a company is failing to be profitable, it’s because it’s bloated. By the time Bending Spoons steps in, the original mission has usually stalled. The job then isn't to reignite the old flame, but to strip the engine down and make it run on less fuel. It’s not glamorous, and it certainly doesn't win you any popularity contests on LinkedIn, but it keeps the software alive.

Culture is a Luxury

One of the most provocative points Ferrari makes is about culture. In the startup world, culture is treated as sacred. We are told it is the only thing that matters. But in a turnaround scenario, culture is often the friction that prevents necessary change. When you acquire a struggling company, the existing culture is frequently the reason the company is struggling in the first place.

For builders, this means recognizing when your company has moved from the 'exploration' phase to the 'exploitation' phase. If you are still spending like a high-growth startup but your user count is flat, you are a target for someone like Ferrari. He isn't interested in your Friday happy hours or your Slack emojis; he’s interested in your LTV to CAC ratio and your server costs.

The Efficiency Mandate

We are seeing a massive shift in how software companies are valued. The era of free money is over. Founders can no longer hide behind 'growth at all costs' metrics. The Bending Spoons model is a preview of the new reality: software must be lean to survive. If a product can be run by 20 people instead of 200, it will be. The market will eventually force that efficiency, whether the current leadership wants it or not.

This is a wake-up call for anyone building in the AI and crypto space right now. We are currently in a hype cycle where teams are ballooning. Everyone is hiring because they can, not because they have to. Ferrari’s perspective suggests that the most successful builders of the next decade will be those who figure out how to stay small even when they get big.

What This Means for Builders

• Focus on the asset, not the ego: Your value is in the utility you provide to users, not the size of your org chart.
• Automate your operations early: If your business relies on manual processes and 'heroics' from staff, you are building a liability, not an asset.
• Be honest about maturity: Not every product needs to change the world every six months. Sometimes, just working perfectly and being profitable is enough.

A Skeptic's Take

Is this approach heartless? Maybe. Is it effective? The numbers say yes. We have spent the last decade valuing tech companies as if they were social clubs. Ferrari is treating them like utilities. You don't care about the 'culture' of the company that provides your electricity; you just want the lights to stay on and the bill to be reasonable.

The takeaway for founders is clear: Build something that can survive without you. If your company requires your specific 'visionary' input and a massive team of loyalists just to keep the servers running, you haven't built a sustainable business—you've built a cult of personality. And in a down market, those are the first things to go.

The most dangerous thing in software is a team that has forgotten how to be small.

We need to stop viewing layoffs and restructuring as failures of leadership and start viewing them as the natural lifecycle of a maturing industry. The software world is growing up, and the growing pains are going to be felt by everyone who values sentimentality over spreadsheets.

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