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.

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.

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.

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.

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-enshittif...

Long on business keywords; a more soulless perspective than the above article: https://ahapartners.co/thinking/goodwill-isnt-a-rounding-err...

Thanks for that, loved the worseonpurpose article

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.

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.

It is. They are also enshittifying Komoot and EventBrite. Also by default they acquire a company and fire all staff within the week. Fuck Bending Spoons.

Pre-bending spoons Komoot was a beautiful app and community. You could operate it one handed with your brightness turned all the way down and easily get the info you needed. Now when I pull it up mid ride to route home I have to click through multiple upgrade to premium pop ups with tiny exit crosses. All good things etc etc

And here's the thing, what should have the original company done if they were not having profits/growing (but shrinking)?

You don't sell a company if you don't believe its future can be better with you in command (most of the time)

Founders decide they want to do other things with their lives all the time, and in the case of komoot reportedly exited at a €300m valuation for a company that had raised very little VC money, which is going to tempt most people no matter how much they hate popups...

I wish they'd buy Spotify...

Keep one SRE to keep the servers running, one guy to do security updates to the app, and the team that acquires rights to music.

Why do you think that a platform with so many customers as to be industry defining, with dozens of interface options, with a massive feature set, with a global footprint and basically flawless uptime requirements, could be kept running by two guys?

It was a tongue in cheek complaint about their terrible apps and the user hostile way they force unwanted "features" on people.

I'd pay 2x my subscription price to be able to use a third party client again.

You need at least 3 devs to keep adding popups to the app with offers, upgrades, and other "related content".

This will never happen.

Labels literally negotiated their own royalty rates down in exchange for shares in Spotify. It’s the perfect way to push artists out of receiving earnings.

I think record labels would be first in line to buy Spotify if it was ever for sale.

is firing staff after acquisition inherently bad if it's the same staff/management that led to the app being devalued and losing users in the first place though

Isn't a PE firm going public just an admission of failure, and an attempt to make their private investors whole on the public market's back?

BendingSpoons isn't a PE fund. It's just loose terminology that has become rife on HN like the misuse of "VCs".

Right, if we get really literal about it, Private Equity can really just mean “any private entity’s money.”

Isn't it just a different form of private capital designed for the later stage of a tech company? I'm not saying its good, but I am not remotely surprised by tech's transition from growth/disruption/hiring to cost-cutting/M&A.

> Is it not just a private equity fund

It’s executing a private equity (and conglomerate) strategy out of permanent capital. That makes it more similar to Berkshire Hathaway than a private equity fund. (It is also less levered than most private-equity funds, though more levered than most companies.)