How Corporates Can Actually Innovate: Lessons from RBC Ventures’ Mike Dobbins

[Full Podcast transcript at end of page]

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Most corporate innovation efforts fail before they even begin. Why? Because companies apply core-business thinking to ventures that demand a completely different approach.

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In this episode, Mike Dobbins, Former Group Head RBC and Founder of RBC Ventures, joins us to unpack what it really takes for a corporate giant to build, scale, and sustain ventures beyond its core business.

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We cover:

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✅ Why most new ventures are built on assumptions, not certainty—and how to de-risk them.

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✅ The disruptor vs. enabler dilemma: Do you compete with incumbents or sell into them?

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✅ How to decide when to build inside the core business vs. spin out a venture.

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✅ The real reason corporate-startup partnerships move too slowly (and how to fix it).

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✅ Lessons from RBC Ventures—what worked, what didn’t, and what corporate innovators should learn.

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If you’re a corporate leader trying to launch something truly new—or a founder wondering how to work with big companies—this episode is a must-watch.

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Transcript

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Ben Yoskovitz  00:00

When you're building new ventures, particularly in this context, beyond banking, most of what you're doing is built off assumptions, whereas when you're building a new bank product, you've got maybe not everything locked in, of course, or you know, everything will work exactly the way you think it will work. But you have some models, be they financial models, distribution models, go to market playbooks. There's infrastructure that would say this is the right way to launch a new bank account or a new card. Whereas ventures, there's no playbooks, or there's very few playbooks for executing those things repeatably without assumptions.

Mike Dobbins  00:35

Yeah. And I would say even within banking, the more far afield you go from the core. The more for a field you are, the more the risk increases as to whether or not it's going to work. So like, if you're the mortgage business, you create a new flavor of mortgage. Probably a good chance it's going to work. If you decide, I'm going to get into a totally new business, like, buy now, pay later, for, you know, e commerce. I mean, again, you could argue it's a bank product, it's a loan. But just because you do loans doesn't mean that one's gonna be successful because you've now, you've gone farther from the core. I think that's pretty obvious. So the further ways you you go from here, the the more challenge, more risk, you know, and hopefully more upside. Because, you know, you're also playing in a in a space where maybe it's not as congested, you know, those sorts of things.

Ben Yoskovitz  01:22

I Mike, thanks for joining us today. We met. The three of us met. It's already many years, like 2017 when you were first starting RBC ventures, and we got involved at that very early stage. I think there were about five people there. The office wasn't even ready, and everyone just jumped right in. And the goal of RBC ventures, the way, the way you stated it was to go beyond banking, which was to build new ventures, but also invest and acquire startups. You were at RBC ventures, and we were working with you till about 2021, so it's been a few years, and today, I know there are, you know, a handful of ventures that are still scaling inside of what is now called RBC X. You know, myself, having been involved from the very beginning, I still find the story of RBC ventures fascinating in part because of how bold a step it was for the bank to take. So let me, let me ask you this. We'll start, you know, jump right in what convinced RBCs leadership that going beyond banking through RBC ventures was worth the investment and the risk. Yeah,

Mike Dobbins  02:28

I think, you know, our, our senior leaders assembled a group of us, you know, probably, you know, in 2015 to really think about the future, to think about, how do you drive differential growth in an industry there, many of the products are commoditized. The world is digitizing. You know, new threats could emerge. Big tech platform players could come into your space. And so, you know, we looked at kind of the offense and defense of that scenario, and, you know, and then we put a big goal out there, which is like, how do you double the number of customers you have under those conditions, which is pretty audacious, when you think about it, you know, especially if you're already the largest and as we thought about it, and for me, personally, as somebody that always ran product businesses, I know what it's like To compete, like if you're in the mortgage business, people care about rate, so how do you get two times more than the next guy if everybody has rate? And as we thought about the situation, it just, you know, we traveled around, I mean, we looked around the world at different models, and it just became obvious that the answer was to go beyond banking to solve more than just that problem, to enter kind of adjacent spaces. Because if we were right on the problem that the industry is a bit commoditized, and people don't really find this checking account sexier than this checking account, but you still want the checking account. What's the way to do it without always going head to head with like, five other behemoths. And, you know, that's, that's really where the logic started. And then, you know, as, you know, as we started getting into the venture building and asking people to think about adjacent spaces, like so many things are adjacent to banking, and the ideas started to, you know, flourish. And, you know, it just started getting really interesting. So that's, that was kind of the impetus. And that was before we called adventure. And, you know, that was, that was literally when we were just, you know, we were just focused on this. How do you do twice as much?

Marcus Daniels  04:33

I think it's really interesting. You know, back to that time in 2017 RBC had a lot of innovation assets. I think you had about seven different innovation labs, Borealis AI was happening already at that stage. You had an Orlando lab, I think, focused on payments. It must have been really interesting. How did you frame that opportunity to those other stakeholder groups to also get that buy in? Because

Mike Dobbins  04:55

I think there's horizons to innovation, right? I think you just have to put the. A framework around it. I mean, you know, RBC is a very large institution, you know, AI applied inside of, you know, the big institution, there's a lot of innovation that can come from it. But, you know, this topic of, and we were very focused on, how do you win more clients through this? So I think it really was about setting, you know the kind of parameters of innovation, right? And if you say, well, one level of innovation is, you know, innovate who you are that might lead you to subjects like Rpa or AI or different initiatives like within, if you say, how do I win significantly more businesses by starting not in the industry. It just is a different it, and I wouldn't classify them under the same basket of innovation. I think they're very different things. And I think organizations can be innovative in lots of places and lots of different ways. So because oftentimes, like venture building, Dr studio, they they tend to get wrapped under that umbrella. That's all innovation. And I think it's a horizon thing, like, you know, today is horizon one. You know, people on Horizon one should probably be working on Horizon two as well. But then, you know this, if you want to go from banking to medical billing, is probably like horizon, you know, three or four is how I would look at it. And that's kind of how I frame I framed it.

Ben Yoskovitz  06:23

That makes sense. So you mentioned, you know, you're, you're looking at adjacencies, and you realize there's a lot of adjacencies to banking, because banking touches just so many things. And you mentioned medical billing, which maybe we'll have a chance to talk a little bit more about, you know, Dr Bill, and what you did there. But, you know, I know when we were starting to things were starting to take shape, you sort of created four pillars, or four groups. You know, there was B to C, which makes sense, B to B, auto and home, because those are four, sort of the way the bank thinks about those, those different businesses. And I remember at one point talking to the B to C team, and we're like, you know, but the canvas is open. We can do anything in B to C. And we're like, Are we are we doing dating? Are we doing pet? You know, things related to pets. That's a big market, and people were chasing all kinds of random things. So, you know, as you were trying to bring shape to RBC ventures, how did you think about those thematic areas and start to make decisions around well, what do we do and what don't we do, and how does that fit strategically in with the

Mike Dobbins  07:23

bank? Yeah, I mean, again, admittedly, in early days, you know, the Canvas was wide, and there were some ideas. But, you know, I think through natural evolution of something like this, right? Like ideas become clearer, and I folks gravitate towards the things that are getting traction, you know. So, you know. But as we thought about the you know, the world, you know, we did say, you know, there's only three sources of net new, bankable population growth, right? Kids becoming a certain age, a la Mido, right? Newcomers arriving, Allah arrive, and new businesses, starting owner, right? So like, and you didn't need to do more than one really good one in each space. You just need to have really practical reason for why that was where you were kind of laying down your footing. And so, you know, the power group mattered. And so as you know, people kind of coalesced on things. And you know, they got closer, you know, to the they got closer to the strike zone, as far as what we were trying to do. And I think that just came naturally. But like, as you said in the beginning, I think you have to align on a big problem, and you have to have a lot of conviction for it, right? So it's got to be, you know. And conviction can either be you're so excited or you're so scared, you know, whichever. But it's got to be big. That gets you started. And then you got to start assembling people. You don't want to slow it down by probably putting too much structure around it. Initially, ideas will start to flourish. I mean, you guys were there for it. I mean, it was a little chaotic in the beginning, before it took shape, but we a little a little chaotic. I mean, we also could have spent three years putting a framework around it, agreed, yeah, and we would, and we wouldn't have moved forward. So, you know, I've thought about it over the years, and you know, what I could have done differently and what would have been better? But you know, I think at the time, it was so unique that, you know, you just had to trust that if you hired some more creative people, and, you know, you had a North Star, like, eventually, you know, blocks would get built, and you could use those blocks to build on top and, you know, I think at the end of the day, knowing that there's still, you know, five or so of whatever number we did, like 18, you know, that are doing well in the market. I mean, you know, I think that's pretty good.

Ben Yoskovitz  09:37

I was just going to say to me, it felt like we were building the playbook, building the operating model while doing the work. It was sort of doing both at the same time, as opposed to implementing a rigid structure on top of everything, and then making sure everybody followed that rigid structure, because that was the quote, unquote perfect way to build things. We were just sort of building and designing the play. A book and the operating model, while simultaneously actually trying to build new businesses.

Mike Dobbins  10:05

A lot of that came from your guidance, right? Which is, you know, in a traditional organization, you know, like, like, man, I've been doing banking for 35 years, right? Like, if you're going to do a big implementation, you'd start with, you know, a solution design document that could be 1000 pages where you'd write out chapter and verse, everything it had to do, all the logic, you know, etc, and that could take you a year of a lot of people, and then you'd contract it out, and then you'd build it, and then two years later, you put it in front of a customer, whether it was internal or external, and decide whether or not it was good. This idea that if you had an idea, like, you know, get digs, you had an idea, you could pay rent with a rewards credit card, and you create, like, you know, a stub page and just see if you could get traction with people commenting that the idea is good. That took you all of but a couple of weeks, and it didn't cost very much money. So, you know, to me, it's just reversing it. And the reason I think it worked is because it wasn't like banking is a big, serious topic. It's got to be perfect. And so, of course, you go through these processes. But on some of the other stuff we were doing, you know, that gave us, you know, reasonable courage. They could just put the idea out there. And, you know, see if people, you know, see if it resonates with people. And I, you know, I think it's a different way of doing things, but, you know, I think it, I think it worked. I think it allowed things to happen quickly enough that you'd get a sense pretty early, is this going to thrive, or is this like kind of a dud? And then you recycle your resources and you move on.

Marcus Daniels  11:33

Yeah. I mean, we've been doing this for almost 10 years, and the amount of opposition we normally see in the speed and how a lot of these organizations work is not at the pace of what you're able to accomplish, which I think was quite impressive. I think back 2017 I think the time really does matter in the context, we met July, 2017 I remember we had an ecosystem off site on kind of the strategy was like around October, and then publicly, you went out there and announced that we were collaborating to create new ventures, and so within a span of six months, normally, people won't have the courage to actually even make an announcement that they're doing this publicly. But also, you had, you had ventures in flight. They were, you know, a good collaboration, partnerships with core ventures that were coming into the into the environment of RBC ventures. What was your thought or even your own surprise with? There wasn't that much opposition to kind of go forward. Was that really attributed to kind of your willpower and desire to do this, or was it just great alignment at the executive

Mike Dobbins  12:31

level? I mean, I mean, our CEO is a, you know, a dynamic guy, bold vision. You know, he assembled people appropriately. He supported. I mean, it was not, it definitely wasn't me, you know, I got to do the I got to do the work. But it was, it was with a wrapper of support and an executive level. Because, you know, this idea of really wanting, not saying it, but really wanting to problem solve, like, how do you 2x you know, what you're doing, or, how do you, I mean, it's, you know, it is very unique in this industry, you know, to have, you know, that kind of, you know, leadership and support and to really take on bold things. So, I mean, it was, you know, I mean, it was honor for me to do it, and especially doing it at the tail end. My career was, you know, a lot of fun so, but I would say a massive team effort, and important. Remember, like, when this, this ball all started, you know, kind of rolling. Most of the people weren't even in the chairs they ended up in. So this was, like, you know, I was still running personal finance, so I was the guy trying to figure out, how do you acquire two times more mortgages without giving up interest, you know, without getting a rate and so, like we were all struggling with the same thing. It was just that we got organized and assembled in a way that allowed us to think about it in a broader context and say, Okay, well, you know, in my day to day job, 90 plus percent of what I do is running the it. I don't have a ton of capacity to reimagine the future of the it. And so maybe the answer is, we need to have a second speed. And if we were going to do that, how do you do it in a way that, you know, the organization is comfortable? And I think an important part was, again, we all thought of this before we had, you know, titles of, this is what you're going to do. We all just said it as bunch of operators like, here's what, you know, this is you have the challenge. So I think, I think the the impetus of, eventually, what led to that, you know, was, you know, again, it was, it was framed, you know, by a bunch of business people who really just wanted to figure out, how do we win differentially?

Ben Yoskovitz  14:42

I'm glad you brought up arrive and newcomers as a target segment, sort of, you know, the point you made was, there's, you know, there are not that many segments where there is no banking. Newcomer comes to a country, they need a bank account, they need to set that up. So that was one of your targets. But you. The reason I find arrive interesting in part is because there was also a newcomer team in the core bank. So you have a newcomer, of course, RBC recognized newcomers as a target customer before RBC ventures happen. So you have a newcomer team inside the bank doing a whole host of things to market to that customer group RBC ventures forums. You create this new venture called arrive, which takes a different approach. So, you know, why tackle it a different way, how? And then I think, really the core is, or the core challenge is, how do you balance what the core business wants, what you're doing is that really h2 or h3 you know, that challenge of driving value back to the core versus doing things that are, in fact, you know, completely out outside of the core. We saw that a lot, so arrive is just a good case study of that, because you literally have a team inside the bank doing the same thing.

Mike Dobbins  15:54

And the team inside the bank that was doing the same thing used to work for me in the previous job, you know that I was in, you know, I mean, one on the banking side, there's other things that you do, right? So don't, you can't view it as it's all about winning net new, right? Because a newcomer can come into a bank and open a checking account without knowing that there's, like, a newcomer group, newcomers have different needs, right? Like they have different credit needs, they won't come with a credit report. So a lot of what you know, the internal teams have to worry about is, you know, how do we retrofit what we do, you know, to be supportive. I think where we try to have arrive is, you know, more in a pre arrival state, trying to hit on topics that we're not banking right, like we talked about things like, when people arrive in the country, they don't have medical insurance for the first 90 days. So is that really where you, you know, could, could that be the tie in now, with many of these? I don't know that we got it right, but, but we explored because, you know, like with owner, you know that one strikes me, that if you could solve the point of incorporation and the point about the product being somewhat commoditized. You're the, you know, the pipe that's convenient in there, you know, I think those worked well. I think there's others where, you know, we probably could have experimented longer and done things, but like, you know, any organization, you know, you got to recycle resources. We had some ventures that were scaling and so, but, you know, I think at the core, what you're, you're getting at is, you know, again, it's whether you consider two speeds, or you'd say one, like the here and now is vertical, and Ventures is horizontal. I mean, I think in any organization, those are constraints, right, like in a legacy company, and they will create friction. I mean, it's, somewhat unavoidable, because one has to pay for the other, right? You know, this one creates earnings. This one creates NPV. I mean, it's it. So, you know, I think one of the most important things that came out of all of this is learnings. You know, now that I'm a venture capitalist, I'm on the outside of the system, and I talk with people around the world about, you know, their own I mean, I talked to him less about an idea like, Hey, have you thought about doing this? I talk a lot about the structure of getting this right, and what kind of appetite you have to have. Because, you know, ironically, if you're wildly successful on the horizontal, it actually has a more punitive effect on the vertical in the here and now, right? Because, you know, let's say you knew, if you spent $100 million on marketing, and you did it all in 12 months, you could win 100 12 months, you could 100% of market share in the adjacency, but it would create a hole in the next three quarters. It's not immaterial, right? It's it and but I think it's important that the companies have the discussion, right? I think we had a great organization because we were aligned. We talked about stuff early. We had huge support from the top, which was awesome. I don't know that everybody would have the same set of ingredients that we had, but I do think you know, at least talking through what potential, you know, challenges you'll face, including the challenges of if you are wildly successful, because again, somebody inside will see that as a challenge and not as and I've talked to people all over the world about this, and it's, it's, it's a pretty common thematic, right? So and So, there's value just in the in the exercise and in the process. But net, net, I think we tried to explore, to figure out if there was something as intuitive as incorporation, you know, in this other space, and that's, I think, how we approached a lot of these.

Marcus Daniels  19:24

Yeah, I think, I think portfolio strategy became such an important way you approach things. I know when we first met, you were talking a lot and asked us often, can I just buy this? And then I think I saw this, this change in this orientation, because you're such an obsessor and such a passionate individual that once again to these ideas. So what really was that helped you make those decisions on either to build, invest or to buy. Like, how did I How did your thinking change in the first year of RBC ventures, and obviously now on the outside is a venture capitalist, you have a completely different lens. But I would love to, you know, dive into some of those. Insights.

Mike Dobbins  20:00

Yeah, I mean, I think in the beginning, I did, I didn't know what I didn't know. You know, I was, I was more of a builder than not. I was a product guy. And so, you know, this hypothesis of come up with ideas and build it. Maybe it was just part of my my legacy. But, you know, learning how hard it is to achieve product market fit, learning how hard it is to achieve, like, appropriate economics, you know, and looking at the successes of some were, you know, we either bought or had, you know, some augmentation, like founded with with owner. You know, I think my thoughts changed. And if I was writing the novel of it today on things I would have done differently, you know, I probably would have deployed more capital to see certain things, because I think, you know, it's more of a complete picture at that point than when it's, it's just on a whiteboard, you know. And there's some I look at today that I might have done, you know, I might have stuck with but, you know, in the confines of what we were trying to do and balancing this vertical and horizontal, you know, I did care about a clear path to profitability and earnings, even if a lot of it was coming from, you know, the selling of bank products. But, you know, you look at a you know, we entered the rental business. We had this idea that people would pay, you know, rent on a card. And, you know, I loved it. The people loved it, but I couldn't get my head around. Well, how do you make that work? If the only thing they're doing is paying their rent? You got to pay the cost of, you know, kind of interchange. But now you look at built in the US, and you know what? You know. So, I mean, again, to me, it was all win, because whether it's standing or you learned, it's like experimentation is really important. It's really hard being a legacy company, you know, 150 year old company, and you're competing with people that are getting, you know, inexpensive capital and, you know, going out there. And so to me, the whole journey was valuable. I don't look at any of it as, you know, anything but, and there's so many things that, you know, RBC and other banks are still doing today. I don't care if you call it ventures or this, or it's, you know, everybody is at it, right? They're all trying to solve for today and solve for tomorrow. And they're doing it in interesting and ways. And what I love about what I get to do now is I get to see all of it where before, I kind of only solved my part of it. And so, you know, and you know, and I try to share, you know, and I talk to ventures all the time that would have never thought of partnering with a bank. And like, Oh, you guys don't get, let me explain why this could be really good for you. And so, you know, now I get to have the benefit of doing it all the experience, the ups and downs. And, you know, just try to help the ecosystem where I can

Ben Yoskovitz  22:42

right. It sounds Diggs is a you've mentioned digs a couple of times pay your rent on your credit card. You know, I remember, lots of people love the product, you know, particularly folks that were are camera, the name for them. But people who love optimize points, optimizers, you know, people who love point. Optimizing points was like, now I can leverage I leverage my credit card to pay my rent. And, you know, you mentioned like it didn't quite work out, but there's examples in the US, there's examples in Canada, where those businesses do, in fact, seem to be scaling. It strikes me like part of the challenge there was, you know, trying to fit the business model of something like Diggs into the business model of the bank, and that that balance between those two things, similar to other businesses you had, where you wanted to sell through, you know, bank products, so feels like Diggs maybe suffered a little bit from the how do I make this work with the bank's business model? But then owner, which you've also described had a perfect connection, which was, when you want to start a business, you use owner and owner makes money doing that. And then after you started a business, the most logical thing you need to do is open up a bank account. And that one seemed to be like a very strong strategic fit, whereas others just maybe didn't, didn't fit quite with how the bank was selling products and monetizing and its business model?

Mike Dobbins  24:03

No, I don't, I don't necessarily think that's case. I mean, I think it really just came down to, I couldn't figure out how we were going to make money. You know, I think people wanted something and it had great value, and I think that was part of the discovery of product market fit. But then there's this other side that you need to figure out, how am I going to monetize? And I don't think that the people would have paid a fee, right? Because, you know, to also then earn, you know, the the points and so, you know, but, but again, as we talked about in hindsight, you know, if I felt like I had unlimited time and resource to and we were doing a lot of these at the same time, you know, I mean, maybe, but, you know, now, being a venture capitalist, I mean, you know, having X amount of resources to achieve, you know, why? By a certain time, it's the nature of the beast, right? And so, you know? I mean, I think it's, I want. It's just a learning experience. I think it's interesting though, that we hit on some topics. Said, you know, years later, other people are hitting on, you know, differently. But I think just because you landed on a square doesn't mean that, you know the whole answer, right? I mean, you still have a lot of work to do. Just just because you figured out, like, you know, you can't just say newcomers, oh, we know we got, you still got to figure out, what's the it, and if there is actually an IT, which in some cases, I don't know that there is

Marcus Daniels  25:22

yet. Yeah, I was gonna say timing and stage really matters. I mean, the lens you have now on the outside is being more of a kind of a series, a and beyond investor, right? And a lot of these ventures do need more time to marinate. There isn't the direct connection, as Ben described, into how you make that money in the business model, you know? I think, you know, it's interesting to think about the roles of unlocking other assets quicker, like you described, like the power of corporate startup collaboration, and how you're really championing that even now on the outside. What other advice would you give to kind of leaders executives, about how to really facilitate corporate startup collaboration faster? How do we get the pilots faster?

Mike Dobbins  26:00

I mean, part of it is to just, I mean, part of it is to land on the right idea, right? Like, when you're when you're a banker, like I was for so long, you're immersed in banking. So your, your mind isn't necessarily totally free to, you know, look at the whole universe and say, there's a different way to get banking without banking, right? Like, so you got to kind of, I think, you got to have the freedom to step away and come up with an idea, and you got to develop some conviction around it. Because the one thing at the end of the day that I think is true in all cases is, you know, at least in Canada, I mean, every bank here is pretty big. So if you're going to do something, it needs to be pretty big, right? Because otherwise, just going to be a peanut inside of, like, a big thing, which means, you know, it's got to be really important. You got to be excited about it. You got to put your shoulder into it. Because if you're not willing to do those things, it'll just be an interesting also that you have going on. But it probably isn't going to be a needle mover. Because, again, you think, how big, how big it has to be to be a needle move in this, in the scheme of some of these things. And so that would be, my advice, is you got to figure out, what are you trying to solve? Open the aperture so that you could think about it, or bring folks in, like you guys, to help facilitate thinking about it like differently, right? Because, and then, and then, you know, building your conviction. And then, then really saying to yourself, I'd put my shoulder in this, you know, you guys probably remember you I would say, fail fast, but fail fast big. And what I meant, and what I meant by that is not that I wanted to see somebody like, you know, do, uh, whatever they call that thing in skiing, where you like, garage sale. That wasn't what I was wiped out, whatever, but that's, that's not what I was trying to say. What I was trying to say is, if it's gonna, if you're gonna kill something or you're not gonna pursue it, you should at least know that you gave it everything you could have given it, right? Like, that's what I wanted. I didn't, I didn't want to take an idea we all loved, and then, you know, because we gave it such small effort. You know, it was out there for a week, and you know, you know, whatever, because that, to me, would have felt bad not knowing that we gave it what we felt it needed. And that's when we decided, should it continue or not continue? And you know, again and over time, you you learn a little bit quicker. You have better intuition. You have some experiences to go along with it. In the beginning, you know, what do you really have, right? You don't know. So,

Ben Yoskovitz  28:32

yeah, yeah, that makes sense. I think the, you know, take taking us taking a swing while focusing on experimentation, and not just assuming you know every answer out of the gate, but taking a big enough swing that you feel like it wasn't sort of death by 1000 paper cuts, and finding the right balance between those things is tricky to say. You know, did we give this a good enough try? Did we put too much into this thing? Should we have maybe taken more money and put it, you know, double down on A or B and drop C and D faster. I think those are a lot of the challenges that people who are building venture studios, or these types of, you know, venture building groups really, really sort of struggle with, you know, maybe I'll ask you about, you know, you mentioned, you know, it has to be big enough to matter. And then, you know, we talked a little bit about, look some ventures you just couldn't figure out how to make the revenue part of it work, which ultimately is what you were gunning for is, you know, doubling or significantly increasing customers, which significantly increases revenue. But before you got to that stage, there would have been other metrics. There were other metrics you were tracking, you know, sort of usage and adoption and other things. More startup like metrics, I'm curious how that differed from, if at all, from how you would have been building products inside of the bank, where maybe it would have got bigger, faster, focus, more on the marketing side you knew a new credit card was going to sell, versus. Is these more experimental things and different metrics you had to focus on to give yourself the conviction to pursue something.

Mike Dobbins  30:07

They're different. It doesn't mean everything you do as a bank product manager is, you know, going to work, right? I mean, but you know, you think you have a lot of fixed assets inside of, you know, you got a distribution system, you've got, you know, lots of stuff when you're a big, mature company, right? So the parts you're really dealing with are kind of marginal, right? Like it's, you know, will I get take, you know, uptake? I mean, that's a question, but I think you can do a bit of a, you know, I think you could, you could test that with customers, before you put something out there, and then, like, you know, the assumptions that you're making around usage. There's established paradigms for margin and fees, right? You can make projections around loss rates and and, you know, capital consumption, and come up with, like, an idea of the roe, and, you know, all that good stuff harder to do in in ventures, because there's more assumptions, right? Like, I mean, you start with, can I acquire people, and what's the cost, right? Then you get to just some of the traditional product market fit. Will they actually even use it? Then you get, can I pivot them to something that is, you know, revenue generative, and, you know, and then you we can even be like, you know, I can get them to merchant funded, and then, so that's good. And then can I get them to on us, you know, etc, etc. So I think it's, it's it is harder to get to comfort early in in something that is experimental and requires a lot of other beliefs. And again, it's all you know, in that case, it's all in right? You don't have this fixed base of 1000s of great people, and you know, whatever you're doing, everything from scratch and etc. So I'd say it's very different, and it's, it's harder for sure, but I think that's the nature of ventures. And when you look at success rates of ventures, especially the ones that go on to, you know, kind of unicornish status and like whatever. I mean, there's a lot that don't succeed. You guys know this, I now know this. So it's, you know, it is, it's, you know, it is, it is part of it is part of the process. Yeah,

Ben Yoskovitz  32:22

I think, I think the key there for me, what you said, Mike, is that when you're building new ventures, particularly in this context, beyond banking, most of what you're doing is built off assumptions, whereas when you're building a new bank product, you've got, maybe not everything locked in, of course, or you know, everything will work exactly the way you think it will work. But you have some models, be they financial models, distribution models, go to market, playbooks. There's infrastructure that would say this is the right way to launch a new bank account or a new card, whereas ventures there it just there's no playbooks, or there's very few playbooks for executing those things repeatably without assumptions,

Mike Dobbins  33:04

yeah, and I would say, but I would say, even within banking, the more far field you go, from the core, bringing it back to the name of your podcast, right? Because there's a lot of experimental stuff that you wouldn't call ventures that happens within banks, right? Like somebody enters a new line of business, or they, you know, etc, the more for a field you are, the more the risk increases as to whether or not it's going to work. You know, I've seen plenty of banks launch things out there that is bank ish, right. It's not, and they pulled it back in because it did not, it did not work. So, like, if you're the mortgage business and you create a new flavor of mortgage, probably a good chance it's going to work. If you decide I'm going to get into it totally new business, like, find out, pay later, for, you know, for, you know, e commerce. And, I mean, again, you could argue it's a bank product, it's a loan, but just because you do loans doesn't mean that one's going to be successful. Because you now, you've gone farther from the court, I think that's pretty obvious. So the further ways you you go from here, the more challenge, more risk, you know, and hopefully you know, more more upside. Because you're, you know, you're also playing in a in a space where maybe it's not as congested, you know, those sorts of things,

Marcus Daniels  34:18

yeah. And you know, you've been talking a lot. I mean, Ben specifically, with respect to the venture metrics, and Mike talking about, you know, the business metrics, you think a bit about the studio metrics and more of a macro perspective, you know, I think it was an interesting use case of, how do you score points on the board for RBC, how do you value these ventures? You know, gave some, you know, relations to like valuations and startups that exist in the ecosystem. I think, you know, I think was maybe in the second or third year, you were starting to really think deeply about how these not just how they scale, but how do we value these corporate ventures? I think it's a lot of corporate I think a lot of work was done with within the corporate development group and even the CVC. Group. I remember Jonathan Shepherd and Barry laver trying to, like, make connecting the dots, right? What's your thought now on the outside, in reflection of just even telling the story to the stakeholders in the board about the value created of RBC ventures?

Mike Dobbins  35:13

Yeah. I mean, it's obviously important, right? Because, you know, it was highly visible, and you don't want, you know, I mean, like, I mean, again, in the scheme of the institution, not, you know, at least, in my opinion, not like a super material, but you want people to know the value is, is there, and it's difficult because you don't have a mark, right? Like, you can't. It's not like an external venture where somebody writes you a check and now you market at, you know, whatever. And so bringing in external parties to look at them to, you know, and also that a material source of contribution was in the form of, you know, like coming up with a proxy for transfer price, right? Like, what would this be valued at, you know, on a horizontal basis, right? So like, if you were only ever going to get 20% of a certain segment, and now with this, you're getting, you know, 30, we got to discount the first 20. Can't take credit for that. That could be cannibalization. So now you're looking at 10. Now you got to say, Okay, well over time, what's the lifetime contribution of the incrementality? And what, what would you ascribe like value to? And, I mean, it's really just looking at horizontal economics, you know, versus like a vertical contribution, and you'd load all of your marginal cost. You'd load in your cost to acquire, you know, come up with it. But I just felt it was really important, no different than a venture in the ecosystem. Because if you're, if you're asking somebody to give you capital right on the outside, you have to be able to articulate this, right? And so, you know, to me, it was one of the more challenging things, because we had a lot of people that just, you know, really loved creating, which is great, but you know, you know, we have shareholders and other people, so they go creating for creating sake isn't going to work. So, you know, you have to, you know, you got to put some rigor around it. And that's like, you know, what we tried to do is to make sure that everybody kind of articulate, how do you think about what we're doing economically? And, you know? And so, yeah, I think it was important that we inject that, and I think we did it, you know, at the right time and maturity. So,

Ben Yoskovitz  37:25

yeah, I mean, it's amazing to reflect back, because I mentioned that October off site, and I looked back at even the calendar invites, and it said, you know, 2025, and year we are today, right? And you think about the portfolio approach, you know, taking those bets. And look, there's been some great successes of ventures, corporate venture scaling. There's a lot of great talent, I think, informally as well, that have spun out, you know. I think of like, you know, Amy, you know, from equity homes. I think of, you know, Derek and Adrian at Walnut insurance, and the list goes on right. And also, I think amazing entrepreneurs, maybe talk a bit about the legacy and kind of, you know, some of the things that often don't get attributed to some of the success and really the efforts and the hard work that was put through during that time, yeah. I mean,

Mike Dobbins  38:16

listen, I think we hired hundreds of smart creatives. I mean, some of them, I still mentor today. I am just so impressed with when you think of what they got to do at these young ages, right? Like to, you know, to think about building a company from scratch, right? To think about doing a deal like M and A to augment what you're doing, and to do this at those ages, and to have the and then I look at where they're at now, right? And so many of them are in, like, big senior roles in the bank. They're some of them gone off on their own and started things. And so I couldn't be more proud of it, because I think culturally, you know what they got to do there as, as an education, as a confidence builder, you know, it's, it's unique, right? Like I came up through the system, you know, I went into, like, bank management training, and then went into managed branch. Then, you know, it was all very, you know, whatever. But to get thrown into, you know, kind of the big ocean, including getting locked in like, a room with one other person that you're now calling your co founder, trying to come up with the idea that is eventually gonna have to be the thing that pays your rent, like, like, it was just different. And it was so interesting to see people thrive. And I'm just so impressed by it, because we had so many and you guys know, I mean, we had so many great examples. And it just shows, you, know, if you empower people, align at a high level and let them go, really cool things can happen. And they develop faster, and they, you know, they, they, you know, it doesn't like you might fail a lot, but you're building all that, that toughness. You know, as you're. You're as you're going through, and it just, I think it's, it was real character builder. So I'm incredibly proud of all of the folks that that went through. And I think it was, yeah, I think it was absolutely something.

Marcus Daniels  40:11

It was such an amazing blend of talent, I think between, you know, people who had that banking experience and other talents were able to attract, but no, it's really, it's really amazing to see even the legacy of what was achieved with just the people where they are today. No, I

Mike Dobbins  40:25

was just gonna say, I mean, you know, I come at it from really interesting perspective, right? Traditional banker for over 30 years, you know, get, get to work at an unbelievable place like RBC, with a great leader and great leadership, you know, colleagues to do something so different that, again, you know, I think it really at the time and even today, I think this idea of, you know, ventures and legacy businesses, you know, how do you create different things? And you know where, you know, where the world's going. It's, it was just super exciting. Like, I can't it's, I still get excited talking about it. You guys were, you know, a huge part of it, right? Because you came in when, like, I had no idea, like, how do you, you know, we had the funding phases. Like, you know, Series A, Series B, replicas. And so it's, you know, it's, it's great. And I, and I see it all around the world today. I mean, people are still, you know, trying to figure out this. There's some models that are amazing, you know, where people have done, like, just incredibly big things, like, you know, building in their own markets, like, new, you know, like ubiquitous things for a certain, you know, it. And so I think it's a super exciting time.

Ben Yoskovitz  41:48

Yeah, what so I mean, as we wrap this up, well, I have to, if I can ask just two questions and smoosh them together, maybe first one is, you know, as you, as you look back at RBC ventures, what do you think the longer term impact beyond the ventures themselves that were built and scaled, I'm curious about your perspective on the long term impact for the company because, and part of reason I ask that is also to get your advice for other corporate leaders at other organizations that are looking at this venture building, venture studio model and and trying to figure out what they should be doing, you know. So, yes, there's the venture building itself, of course. But you know, question one is, really long term impact. What do you think there is there at RBC? And then second thing is, you know, what advice would you give other corporate leaders that are trying to come up with their own venture building

Mike Dobbins  42:42

models. Yeah. I mean, here's what I would say, and I don't, I would say it's not, I wouldn't attribute this to like RBC ventures. I would attribute it more broadly. I mean, if you look at the types of innovations that have come out of RBC Borealis, if you look at, you know, the types of ideas that have come out of, amplify the youth program that you guys help with. If you look at things that have happened organically within the businesses, right, like this idea of pushing forward, like, you know, look at, you know, we try, you know, we built amply, you know, and amply rolled into RBC rewards. And now you look at RBC rewards, and, you know, there's a browser extension, there's, you know, 1000s of merchants. It's advertised throughout the branches. I mean, that didn't have anything to do with ventures. I mean, some of it might have been informed by some of the stuff, but, you know, this whole just changing, you know, the speed of the ship, this idea of, you know, getting into new adjacencies to create different economic outcomes, to enrich your products, to create better experience for customers. I don't think ventures create, I mean, I think different organizations have, like, you know, ventures. I think was something within a great organization to begin with that had the courage to push even further where, you know, I think some of the successes on a standalone basis are great, like, you know, whether it's a Dr Bill or a Mito or whatever. I think others, maybe, you know, are more derivative to something else. That's, you know, but in the scheme of things, I mean, I think a lot of it is just, you've got to have the right culture. You got to have the right leadership, and you got to be thinking about not just the here and now. You have to be thinking about the future and always staying, you know, kind of, you know, how am I going to keep going, you know, further and you know better. And I think it's just a unique organization that's got, you know, again, I mean, just had amazing, you know, leadership and support, you know, and still does mean as you know, as a retiree, and as a, you know, as a customer. I mean, I see it every day. And I mean, I'm incredibly proud to to have, you know that lion shield on my you know, my pedigree, and you know it's so I mean that. What I mean that that, I think culture and, you know, bias and focus, and I think those are the important things for lasting success. But the list of things that that organization is doing today and has done that are venture esque. I mean, it's, you know, again, I think it's, it's, it's something to be proud of.

Ben Yoskovitz  45:18

It's significant. Yeah, ventures wasn't built out of nothing. There was other innovation going on at RBC before there were other types of ventures adjacent work being done in the adjacencies RBC ventures was an attempt to structure some of that a little bit more. And, you know, even going forward, there's a whole host of other things going on. So it sounds like it's part of the culture of the company to you know, is it has to be there in order to create something like a venture studio, like an RBC ventures to begin with. And even if RBC Ventures has evolved and morphed and things change, as they always do, there's still lots of that kind of work and thinking going on within the organization.

Mike Dobbins  45:57

I mean, I think you said you hit it on the head right there, which is, I don't think you start this from scratch. I don't think you go from being, oh, you know, venture studio. It's, it is a glide path from things you're doing, right? You've got a legacy business. You're doing cool innovations within the legacy business, you know, I remember in personal finance, you know, running the mortgage business. And then the team came up with the 62nd pre approval calculator. You know, at the time, those were all they, you know, we didn't have a name for it, but they, they were pushing right like and so there has to be something culturally that propels you for this as the next evolution. You just don't wake up one day and say, this is the, you know, the answer to the case. And so I think you know, so, yes, this has to evolve within an environment that is conducive to its evolution.

Marcus Daniels  46:50

Saying you have an amazing foundation in assets, you know, that were in place to build, to build off and evolve from there. But I think it's, it's amazing to see even how it's continuing to evolve as well, right? And I think you really put it in the set into stage, yeah.

Mike Dobbins  47:04

I, you know, I meet with, you know, I meet with the folks, you know, regularly, the leader of RBC, hacks the I mean, I love watching, you know, and again, I mean, I'm probably the biggest fan. I mean, I love watching, you know, everything that just continues to happen. And, you know, again, it shows you the power of culture and, you know, kind of the right ability to focus on, you know, today, to focus on tomorrow, to, you know, to put the right investments in place and the right bone structure. And so, yeah, it's like, it's, it's, it's great. And I like the role that I get to play now with, you know, with framework and on the outside, because, you know, again, whether it's the lessons learned or, you know, or or new ideas, or helping people see things a little bit differently. Guys to, you know, because you know everybody you know, I want to win more customers. Okay, well, you also have competitors. So like, what are you going to do to be, you know? I, you know, I call it defensively different. What are you going to do to be defensively different that nobody can easily match once you start? And I like helping people get out of their, you know, their, their kind of box. I It's fine. I mean, it's, you know, it's Yeah, so it's, it's great. And then, by the way, I mean, I was just in the UK. I was in, you know, I've been traveling a bunch lately. It's this sort of thing is, it's everywhere. I mean, it's all over the world. Everybody's trying to kind of solve their the problem a little bit differently and different types of segments or whatever. It's a lot of fun. Yeah,

Ben Yoskovitz  48:40

I appreciate that. Mike, by the way, I don't know. Does everybody remember what the original name of RBC ventures was? Oh, I do remember. Do you remember what Anthony called

Marcus Daniels  48:53

Blue seed ventures? What do you call it? Blue seed ventures?

Mike Dobbins  48:59

No, no, no, they also had northern ventures. That's right, that was

Marcus Daniels  49:03

up there. And we had the whole Yeah. So I remember

Mike Dobbins  49:06

when we we, we were very democratic. So I remember at the time where we said, you guys, can, you know, pitch names, and all the names came up, and I'm looking at these, I'm like, yeah, that may be too far from for that maybe too far from the money. Yeah,

Ben Yoskovitz  49:21

yeah. Totally agree. Mike, I know we're almost at time. One last question for you. You know, as you think about your work at RBC ventures, now you think about your the work you're doing is in VC, what's something that you fundamentally believe that most people in our space venture studio, venture capital would disagree with

Mike Dobbins  49:40

that's a great question. What's something I believe? You know, I mean, I mean I fundamentally believe beyond the core, because I haven't seen anybody. I mean, perfect answer. I think that may be the answer. I actually think the answer is beyond the core. I think the question. Question is whether or not you get your mind, your heart, you know, and your wallet, you know, beyond the core. And there's lots of ways to go beyond the core, but you know, like, again, if you're sitting there struggling, you know, how do I move the needle by more than a basis point here or there in the established industry? And you're you're stuck for an answer. That's kind of your answer, right? Because if it's not working with these few ingredients, I need more ingredients and so, and it's not that, it's not that there couldn't be some big, you know, revolution, which, you know, just takes the world by storm, but it hasn't happened in 30 years. I haven't seen it, and I can't imagine what it is, because it really means you have to have a piece that none of the other people have, right? And so that's kind of the point, right? Like, I mean, if, because, if it's about fees and margin and distribution and whatever everybody can have, that it's just where you set your dial and, you know, and that creates the playing field of today. But that idea that it's going to be breakout, defensively different, it doesn't affect your margin. It's all positive then. Yet, you're, you're, you're seeking a different, you know, you're seeking something new. And I would also say that when you think about the margins of business in the world, there's money being spent that maybe is being spent inefficient. And so if you could figure out a better way to connect the dots and repurpose the economics, like introducing your businesses to your consumers, where normally, your businesses would have to pay, you know, online advertising to find Well, it's new money, and if you can uniquely find it and stack it, you've created value that is, in essence, defensively different. And so it's, it's the pursuit of those things that I think is, you know, there. And since I know we're at time, I am going to just say this a little plug for you guys, for, you know, beyond the court. I can't over. Yeah, I really can't overstate the role you played as challengers, as supporters. You know, this is not something I think companies could just jump into. It requires facilitation. It no different than the point I just made that you got to kind of look outside. And I think you guys played that role. In fact, you played, you both played different roles. And, you know, I've obviously been, you know, a big fan, and, you know, advocate for what you do. And I'd say, you know, if you're out there in your company, and you believe, you know, the point of, you know, we don't know what defensible difference is. We are in semi commoditized, but you can at least accept and have a belief that there's a different answer. You don't have to know it. You don't already have to be conditioned to thinking about it. You just gotta take the first step right, which is, bring in, bring in a different thought process, like, just invest a little bit of time to just do the what if, because you may just find that you know, once your your brain is out of the here and now world, you come up with a whole new set of ideas in the, you know, the adjacency world and and then it just takes again, conviction, you know, put your shoulder into it, etc. So, you know, I would, I'd endorse anybody that's not doing it to at a minimum, you know, think about it. Yep,

Ben Yoskovitz  53:25

I totally agree with that, Mike, and I won't ask you which of us you enjoyed working with most. We are out of time. Thank you so much. Super interesting conversation. I'm glad we got to dig into a bunch of really interesting and key topics. So thank you for your

Mike Dobbins  53:41

time. So you guys

Marcus Daniels  53:42

take care. Much appreciated. Mike, thank you. We owe you at least one seafood tower Take care.

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