March 5, 2025
[Full Podcast transcript at end of page]
In our recent conversation with Amar Varma on Beyond The Core, we explored the nuances of corporate venturing through the lens of someone who's mastered it from multiple angles – as the co-founder of Hatch Labs (where Tinder was born), the architect behind Ford X, and now the founder of Mantle.
One insight that particularly stuck with us was Amar's counter-intuitive approach to securing corporate buy-in. Most founders try to get their foot in the door with small-budget initiatives, but Amar revealed why this frequently backfires:
"When you work with a company at that scale, like Ford did $180 something billion last year in revenue... a hundred grand is a lot of money, but it's not a lot of money to them."
Instead, Amar recommends making your corporate partner commit to a budget that's just beyond their approval threshold, "forcing them to justify it to their boss, add it to their OKRs, and track it weekly." Without that level of organizational commitment, your innovation project becomes "nice to have" instead of "must succeed."
Amar shared a framework that has guided his corporate venturing approach across industries: the distinction between revolutionary technology and tech-enabled innovation.
"What are industries that could be revolutionized by technology and what are industries that can be tech-enabled?" he explained. Revolutionary innovation creates entirely new business units or opportunities – like when IAC leveraged mobile to transform their web properties. Tech-enabled innovation uses technology to make existing businesses more efficient or slightly vary the business model.
After working with dozens of Fortune 500s, we've noticed most companies fixate exclusively on the second path because it feels safer and more tangible. But as Amar's success with Tinder and Ford demonstrates, it's often the revolutionary path that delivers the greatest returns.
When we asked Amar about AI's impact on corporate innovation, his perspective was illuminating: "There's the tech-enabled, the business AI-enabled, and then there's the AI replacing a bunch of existing processes. The latter is like a cost reduction and the other one's a revenue augmentation."
Many corporations remain fixated on using AI primarily for cost reduction. However, Amar believes AI's true potential lies in augmentation. He emphasizes how AI can enhance human capabilities, enabling people to accomplish more high-quality work while maintaining customer focus. The key questions become: What are the customer's genuine needs, and how can we fulfill them efficiently? AI's real value comes from augmenting employees to deliver these outcomes effectively.
Perhaps the most critical lesson from Amar's experience is the absolute necessity of CEO-level support for corporate innovation initiatives.
"You have to have the CEO of the company infinitely excited and positive about these things. Because if there's no support at the CEO level, you might as well not do it," he explained.
Without that executive air cover, internal politics can quickly derail innovation efforts: "Never underestimate people's desires to have things as an agenda and have things in a negative context of an agenda."
Amar's latest venture, Mantle, addresses one of the most significant barriers to corporate venturing – tracking and managing investments. As corporations make more bets on startups and innovation, they need systems to maintain transparency and governance.
“If you work at a large company and are involved in making investments or owning equity in startups, perhaps as part of the board or part of a committee involved in governance, you need a system of record, written down, to track and manage things." Amar explained.
To hear our full conversation with Amar Varma, including his insights on turning Ford's iconic vehicles into platforms for innovation and the surprising story behind Tinder's creation, listen to the complete episode of Beyond The Core.
Marcus Daniels 00:00
What are you seeing now? Just with respect, we fast forward to today, AI and corporate venturing. Oh, wow, this
Amar Varma 00:06
is a great one. But what does AI really mean? Is it like, oh my gosh, gonna save us in our P L, we get to, we get to fire a bunch of people who are no longer needed. Just two vectors. There's the tech enabled, the business AI enabled, and then there's the AI replacing a bunch of existing processes. So the latter is like a cost reduction, and the other ones are revenue augmentation, right? These are just types of ways to think through it. If
Ben Yoskovitz 00:29
we think about it in corporate context, it's augmentation, or it's eliminate the humans.
Amar Varma 00:34
It's augmentation. And the elimination of the human isn't something that it's going to come from me. It's going to come from the customer saying, hey, let's use this augmentation to take cost out over here as well, repurpose people into something new.
Marcus Daniels 00:55
Welcome to Beyond the core. This week, we're sitting down with Amer Varma, who's a triple innovator. He's been a successful serial entrepreneur, pre seed investor, corporate venturing expert. So really excited, Amr, for you to have be of you on the show today, so we can dig into some of these issues. As an investor, you've effectively done such an amazing job. Pre seed investing, finding being first check investors in companies that have sold to Facebook, Salesforce, Electronic Arts, Apple, you've been a corporate venturing expert by building companies that have sold to the likes of Ford. And really excited to have you here today and dig into some of these corporate venturing insights. So I'll probably get right into it. I mean, Amr, tell us a bit more about some of your corporate venturing experience. And let's start maybe at the hatch labs experience.
Amar Varma 01:44
Well, pleasure to be here. Thanks for having me. I'm always excited to catch up with you too. Always so many things in your orbit that are circling there. So, so awesome to hear about. Let's get into it. You know, part of being successful as an innovator is knowing where to look luck and timing as well, right? So one of the key pieces that we've just been looking through over the decades and decades of experience here is just what are areas, what are industries that could be, you know, revolutionized by technology, and what are industries that can be tech enabled? And I think those are key places to take a look at. Let me give you some examples of things that are falling into those two buckets. You know. One would be something like, you know, a piece of technology that that really creates a new business unit for folks. So, like, in the case of some of the hatch lab stuff, you know, the corporate partner there was interactive Corp, IAC Barry Diller's company out of New York, the mobile phone really created a new opportunity for them from web properties to mobile properties. And I think that was a big shift from a technology perspective. Click Enabled would be something more like, hey, let's use technology to make your existing business more efficient or augment some of the things that you're doing or create like a slightly varied business model for you, in the case of like an industrial company, you could go from just selling, selling or leasing heating and air conditioning units to providing digital footprint, digital Information, carbon emission, specific data for the use of the equipment that's that's tech enabled. So those are two types of categories that we look at quite often
Ben Yoskovitz 03:28
on the hatch lab experience. Maybe just, you know, the date, like, when did you start that? What was the intent behind hatch labs? You know, hatch Labs created some, some pretty well known brands. So maybe you can just share a little bit about, you know, how did, how did that start, and what was the mission of that, with IAC as the sort of backer, supporter,
Amar Varma 03:50
yeah, so around the time of starting hatch labs, you know, a couple of years before I had a business in creating mobile applications, this would have been around the time the App Store came out on the iPhone, and the Android Marketplace came out for that series of devices. And I see, at the time was a prominent web property. They owned a lot of different brands, things like, and I'm going to date myself here, you know, City Search, Angie's lists.
Ben Yoskovitz 04:17
Love it,
Marcus Daniels 04:19
dictionary. I remember those friends here, you know.
Amar Varma 04:23
And then more, more, more collective things like match.com was, was another one, just for context of what that company was, and they had about 50 of these brands. And then we started working with them in a customer relationship, where our customer where we were working with them on various mobile applications for their existing properties, you know, so if you ever, if you ever used match as a mobile user, or if you did looking for a restaurant, like on City Search, or any of these things back in the day, those are all things that we powered. What had happened over time is we had. A great relationship and experience back then. I know Dinesh borjani, who was the GM for mobile at the time, has become a great friend over time, and just was a real supporter of the initiatives and working together, I approached him and said, Hey, let's do something bigger, broader. You've got 50 apps that we can do, but I think there's a chance to create a new category of experience for your for your audience, and people who are generally out there. And that's when we started to talk about doing something in the corporate, you know, call it venture or, you know, however you want to categorize the relationship where there's us and them working together on on some innovation and some new, new, cool products. I'll say Ash is probably the most successful corporate venture in history, if you had to ask me, out of it was nine things he never heard of, the 10th of which is a little company that was called Tinder, and that was really the thing that got, got notoriety, and kind of was a business model. There's a Harvard Business Case on it. Now, if you go, if you go, if you go there, and you're taking the case, now, it's exciting. And there's just a bunch of things that have happened over time that have used the hatch, I see model as a reference point,
Marcus Daniels 06:15
and that, and that was the last investment or venture in that lab, was, is that correct?
Amar Varma 06:21
You know, hindsight, and there's always a bit of a revisionist history. But bear with me on this, that we had approximately 1010, different things that we had looked at. You know, some of the things off the top of my head was like, There's something in how to how to share music back then, which was a novel, novel digital sharing experience. You know, bookmarking ebooks so collaborative, social reading and understanding somebody's thought in a book at a certain point. And you know, book is a time in a point in time of looking at somebody's insights. And then when somebody reads it and reads a note, it's the same text that was read by someone else, leaving a different perspective. And you could kind of share those, those things over time. Long story short, none of them panned out. You know, the 10th project was something in using your mobile phones to present coupons because they could detect you at a restaurant or at a location. That was kind of a cool, neat idea. You know, there was this whole concept preventing presenting coupons and swiping them left and right. The coupon business didn't take off, but that they had a chance to think through it again, and they came up with, well, what if we use this swiping left and right to match people and not not restaurants and coupons, and the swipe right has become obviously a thing, and, you know, the rest is history
Ben Yoskovitz 07:43
on that was the idea there with IAC to leverage corporate assets from them, you know. So it was like, let's build something new. Let's not just, you know, you know, provide the service of building mobile apps for these guys. It's like, let's build something brand new. So was the thesis behind that, or hypothesis, hey, we can leverage the assets they have, whether it's users, network, whatever the case may be, to try to scale, you know, those 10 things you tried to try to scale them up a little faster.
Amar Varma 08:13
Well, super, super interesting. So the initial thought was, we would do something like that, because it was like, it's linear consulting thinking, right? It's like, hey, like, here's something you're very good at over here. Here are the ancillary things that touch it. And it's really easy, we could leverage this asset to give you something there and scale and distribution, right? And then it was on paper. It made a lot of sense. But then we started thinking through it deeper, and we had a working session with Barry Illa himself, and you know, he kind of really encouraged us. And if you've ever dealt with Barry, his encouragement is very distinct and disruptive. Yeah, how about if you did the opposite, and when you went through the hell did you think of the opposite type of thinking? It gave us a much broader perspective for like, okay, what can change with a mobile phone versus a web browser, right? What's the behavior, location, ar, VR, social integration that moves with you? That's not something that's pegged to your laptop or desktop, and it just opened up a whole new category, and Hindsight is 2020, on this, right? We ended up getting things like Instagram, things like Uber, things like Tinder. And at the time, I know Instagram had already happened, it already started. Picture sharing was a big deal. Ride sharing had just emerged. But that wasn't tangential or core to their their business, and it might have been the right one to go after, because it was totally out there. But that was, you know, that was just a different, different era of what it was then we were, we were working through different ideas that didn't exist before, and we weren't shackled by being the framing of of something that was there inside.
Ben Yoskovitz 09:59
The so more more disruption, like, more more, maybe not. I don't know about disruption on business well, I'll ask, but it sounds like more. Hey, don't, don't try to leverage what we're doing. Maybe disrupt or create net new. What about business model? Was it? Geez, mobile phones, if they take off the business model here, of you know, probably primarily ad based on web might get mucked up. We should maybe look at other ways of generating revenue. Was that
Amar Varma 10:28
part of it 100% right? Like the at the time, search and lead gen was like 99% of revenue run the whole the whole subscription premium was, it was kind of emerging as a concept construct. You know, freemium is a very common thing today in enterprise software applications, but at the time for net new mobile assets or mobile communities, it was like, even if I remember back, I think match has always been a I think you always have to pay. There was no there was no get on for free. And it was based on geography, demographics. And the whole concept now was like, let's create a whole cohort of people through some some k factor in the social engineering of it, and then we can facilitate exchanges of information, emotions and people connection, right? And that was, that was kind of what the basis was. And then, you know, who to pay, who was going to pay, and how much you were going to pay, kind of emerge over time,
Ben Yoskovitz 11:28
right, right? Yeah, got
Marcus Daniels 11:29
it interesting. How are things, how are things evolved, you know, from in your corporate venturing journey, and, you know, co founding, you know, autonomic with Sunny Matra, and just that whole experience with Ford maybe dig a bit into that,
Ben Yoskovitz 11:43
yeah. How'd you get into the car game? Like, like, that's the question. Like, how do we go from dating to cars? That's what we want to know. Yeah. Look,
Amar Varma 11:51
I'll give you a quick history on myself to see you can have it. You know, I did a degree in engineering, electrical engineering at Waterloo, and I moved to Silicon Valley when it was about silicon. I worked on GPUs, which were graphic, graphical processor units at the time, for graphics cards, that's just to age myself, pretty important, pretty important, pretty important today, given, given this map into those in terms of the AI revolution. And then I also worked on computer interface, one which, you know, some smart marketing folks walked in the room and called it universal serial bus. So USB, we're now on USB, letter C, if I, if I'm, if I'm up to date on it, and it's much, it's still the same idea to connect profiles, very interesting. And then, you know, I have a career in software. I was a venture investor. I ran my own fund, and this is now my fifth company that I'm running and with, right place, right time. Had four exits and an IPO, and had a really, really good run as an investor. But the key, the key in Ford was, you know, the mobile apps company had extreme Labs was purchased by a company called pivotal software. Pivotal software was, you know, a cloud, a cloud platform. And, you know, I got to work for his guy, Paul Moritz, who's probably a pretty seminal figure in the history of tech. In my book, he was the, I think the number three person at Microsoft, Steve Ballmer gets the job after Bill Gates retires and he leaves, I guess, couldn't stay home and ended up running this small company called VMware through its heyday, and then pivotal. We took, we took pivotal public got bought again by VMware and Broadcom after I ended up being the exec sponsor for various customers, and Ford Motor Company was one of them while I was at Pivotal. Yeah, Pivotal that became a nine figure customer quite quickly for us, I got to know the folks at Ford pretty well, including first family, and I had a pretty good insider view on what was the Ford Motor Company and American icon. I don't think there's any more American company than what that I can speak of. But you know what, they were really good at, what their ambitions were, what they wanted to do. And at the time, there was kind of this revolution happening of on demand, electrification and autonomous in the vehicle business, right? So on demand was really, you know, Uber was emerging, electrification, Tesla was emerging and autonomous. There were various factions out there. You know, Google had started. So there was those three vectors and pillars that really needed to be stood up. If you've been to Detroit, not a lot of people taking public transit that work at Ford Motor Company, right? So the the on demand capability was was not as well understood. Electrification was like, okay, you know, Bill Ford was very much behind it, but the rest of the company was like, not struggling, but trying to understand, how does that fit the autonomous piece? When you go from being a vendor like a marketing wizard. Company that aggregates suppliers to, hey, we got to create, like, the human brains behind driving like, that's a much different thing. And that's not something you order up on, on the, you know, the the tier one supplier, like Bosch's website, you don't order autonomous car. It's big farm. So I understood what was happening in the in the industry. I understood what we were working on at Ford, for pivotal we're working on car connectivity. So the first vehicles were coming out with modems, and all of a sudden, oh, this is like the Flip Phone moment for a vehicle, right? It's flip phone to smartphone. Now you have this ability to interface with the vehicle. And you know, I remember sitting there talking to some of the executive team about it, and they were like, Oh, it sounds great. And they gave me this look, and I'm like, What's that look? Either they think I'm like, making stuff up, or it's so great, and they're kind of telling me it's really great, somebody should do that. And I ended up being the latter,
Marcus Daniels 15:52
both. Could it be both of those looks? Probably just both. Yeah,
Amar Varma 15:55
both. No, I'm and again, revisionist history. It was. It was probably 1% 99% if you had to ask me, but you know, I said, Okay, let's take this, this concept of connected vehicle, and see what we can do. And autonomic was born. It was a data streaming platform. They wanted the company Ford was a customer. They wanted to become an investor, and kind of 10 months after starting the company, they announced they were going to connect all their vehicles to the internet. I remember I was like, Oh, this is so great. And then I'm like, Oh, they reminded me that was our platform. A month later, discussions with procurements came to a grinding halt, and I was like, why? What happened? Days later, I got a call to come to Dearborn and met with this new group of folks who were wearing suits. And they're like, I'm like, Who are you all? They're like, we're the Corporate Development mid for Motor Company. Like, Ah, okay, so this, this whole thing, they had to do a build versus buy and then a buy versus procure decision, and we came to a price. Like biasI says everyone has a price. So we had a month, 12 month life cycle of, you know, starting the company, to exit, and
Ben Yoskovitz 17:12
they invested. Did they invest at the very beginning, when you when you started the company, they were they had the intent to buy, not buy the company, intend to be a customer. Did they also invest? So they were on the cap table sort of day one.
Amar Varma 17:25
They were also, they were, they got their way in, into the cap table, you know, they're like, Hey, we gotta, we gotta also be an investor. And I was like, Well, okay, so we got a pretty good, pretty good arrangement with them in terms of, like, terms and all these other things. So it worked out quite well for all parties. And then now that that that platform was powering, I don't know, every vehicle that came out, over the over the line, and Ford produced somewhere between five and 7 million vehicles a year. And you know, so there's like, billions of signals going through it every day. And you know, the number one signal is Door, door lock, door unlock. If you're, if you're, it's, you know, these things, there's more, there's more sophisticated ones. And it's, it's truly allowed them to create applications with the with the vehicle that were otherwise unable before. So like, you know, fleets and other things that have been really, really fun to unlock for them
Marcus Daniels 18:21
as the exec sponsors, or any kind of insights or hacks that you kind of learned through that experience, because you're navigating so many different types of stakeholders, execs,
Amar Varma 18:33
you know, I think, I think one of the things companies trying to work on innovation projects with, with corporate ventures, tries to do. They always have this, like, I need to just get in the door so that I can be doing something. And that works in some cases. But, you know, I'll tell you what works even better when you work with a company at scale like Ford did 180 something billion last year in revenue. Right? It's a company, and it's got, you know, whatever, it's gonna punch out 1010, 12 billion. So there's a lot of cost in the in the system. 100 grand is a lot of money, but it's not a lot of money to them. So you kind of need to get engagement from people on the other side who are exec sponsors that have a threshold of, like x, and you need them to commit x plus $1 so they have to go to their boss and justify to their boss that we're doing this thing. And it's on my weekly tracker, my quarterly goals, you know, my, my OKR, whatever, whatever the system is. So there's a definite focus on it being successful that has, like a mutual success, instead
Ben Yoskovitz 19:43
of trying to sneak it in, right? So you're saying like you got to go up, you got to make it hurt maybe a little bit for them, so that it becomes a priority, as opposed to trying to go in low at a number that you think they could put on a credit card, right? So,
Amar Varma 19:57
so just to this point, I. I went in because I'd been the supplier, so I knew kind of the thresholds, and I had a pretty good relationship, so I knew what to ask for. But had I not known what to ask for, I probably would have underbid it. And the exec was very astute, they probably would have pushed me up to a bigger number anyways, right? So like Iris, Marcy clabourne was the exec sponsor. She's just fantastic. She was the CIO at the time, and she was just, like, very helpful, very instrumental, very, very critical of what we were doing, and very critical of how to integrate, how to get pressure points in the organization to be successful and proliferate so that, like, credit to her on the other side for running with that and making it all
Marcus Daniels 20:41
happen. And post acquisition, was there any other insights on how to make these corporate ventures successful, or just how to get more scale that you could share? Yeah, look,
Amar Varma 20:51
yes, I think what happens is, in corporate venturing as a category, you have to have to have a few things line up. And these are some of the necessary conditions. You have to have the CEO of the company infinitely excited and positive about these things. Because if there's not support at the CEO level, you might as well not do it. That's kind of the experience I've been so when you get that checkbox, CEOs, CEOs excited. Has budget, has interest. You're made from there, the folks that are running with the corporate ventures very much need the ability, when the timing is correct, to plug the ventures into the organization, because stitching together what's doing being done in a silo of a venture capability, and then integrating it into a product line or a service offering or or some kind of internal process is critical, because if you get that you really made, you really made, you've really made you've really made something that's a 10x improvement, either in product offering or something that didn't exist before, and that becomes the
Ben Yoskovitz 21:59
real big win. What I remember when I was running product at go instant, which was acquired by Salesforce. We had exec buy in CEO 100% he was, you know, Marc Benioff was the one who said, We need to buy this company, because the tech is just so cool. It can be used in Sales Cloud. It can be used in service cloud. We didn't have the second thing, which was the integration. Like we were in Node js, Salesforce hadn't used no JS. Like at a technical level, we had to rebuild the platform a couple of times to try to integrate, and by that time, it kind of petered out. So you guys, you already had Ford as a customer, but it was only 1011, months. So a lot of this work had to happen post acquisition, of actually taking the tech and integrating it in to an actual car. That must have been painful.
Amar Varma 22:53
Yeah, without without oversight and interaction and engagement by the senior leaders, you're not getting it. So that's one. And then never underestimate people's desires to to, you know, have things as an agenda and have things in a negative context of an agenda, right? It's like, you know, so and so, So and so has moved on or retired. I need an agenda. I need to burn down the house. So
Ben Yoskovitz 23:21
you're saying there's politics. There's some politics maybe involved in this experience a
Amar Varma 23:26
little bit. There's a lot of politicking. There's a lot of like, well, that's somebody else's mark, not mine, right? They want their name associated with things at times, and, you know, to each their own. I have a lot of opinions and comments on it, but like, you're getting the thing, just getting the thing done is hard, getting, getting the thing to be, you know, everlasting over time, and becoming a long tail thing, which is, like, kind of, some of the things that we've been able to do over time is, like, really hard. Like, there's a bit of, there's a bit of luck in there, yeah, now,
Ben Yoskovitz 24:00
inside of, inside of Ford, you, you ended up sort of creating co creating Ford x, so you were doing more than just integrating the company that you had built and sold into them. So you were trying to do other things as well inside of Ford, right, correct.
Amar Varma 24:15
So the concept really was, was building off the experience with hatch labs and IAC interactive Corp building off, you know, Google had made a big deal out of Google X over, you know, it's time, and you know, Ford, at the time was like, we're battling market Share in domestic markets. We're battling market share abroad. We're trying to grapple with electrification and autonomy, right? There was just a bunch of things, but there were just a bunch of other possible elements to it. So like, you know, I think, I think other other folks talk about this. I think I've seen Etsy Neil. And talk about this as well. It's like, the reason it's very difficult to make a car company from scratch is the business itself usually relies on after warranty period parts. And what that means is you need to go through a period of time where cars roll off a warranty, which is usually, I don't know, four years or something, right? So you need to get cars in market for four years, and then, you know, run through that four year cycle, then you can start doing the maintenance of parts and replacement parts in electric vehicle. There's not a lot of that, right? I know Ben, you have an electric vehicle, and if
Ben Yoskovitz 25:39
you way fewer parts, there's just less parts. There's actually very little maintenance and like that. That's part of the attraction, as far as I'm concerned. Of EV is just like there's nothing to do. You rotate the tires and you're
Amar Varma 25:48
done. See, you kind of have to figure out how to make money on other services, whether it's connectivity, whether it's premium features, you know, autonomous driving capabilities, all those types of things, right? So it's like we were just going through that investigation, spending a lot of time to understand that, you know, Ford, to its credit, has, I think, the second biggest franchise in America, at the prime which, you know, after iPhone, was the f1 50. F1 50 was the best selling vehicle, not only in America, not only the best selling pickup, not only the best selling vehicle in America, was the best selling vehicle in the world. Selling vehicle in the world until the model Y took it over. If I have my my data correct, and I think the numbers is something like, you know, $40 billion a year. You know, 2530 points of margin. Like it was, it was a really impressive thing. What's super impressive is there is a cult following in this pickup market of like, things, racks, lights, peppers, bumpers, accessories, winches, like you don't underestimate how every pickup truck needs a winch.
Ben Yoskovitz 26:56
I've never personally owned a winch, so I don't know. I
Amar Varma 26:59
can't imagine what that's like. And then, how are those things available? Well, they're available on the website. Well, you know what else happened is, is e Commerce has really taken off, so like investigating how to optimize, you know, throughput of those products with targeting and inventory management, because, you know, they're not as sophisticated sometimes as you think, and there's a lot of room for improvement, especially for things that have, like, runaway success, like, like, you should see the cult following. You can see the Reddits. You can see the you can see the groups. You know, the messenger groups are real big. The Email groups are real big. They have these annual or quarterly, seasonal like meetups, where you can bring your vehicle, go on, if you're a track, you're offload, whatever it is, right? And kind of the thing that that's special with Ford is each vehicle they have is a, is an icon. You know, they have like the bronco. Now they have the Mustang like they like that. I had to Ford Focus RS. It was like, everybody had a had a thing on it, on Instagram, right? It was just kind of, kind of really fun. So it's like, there's, there's this element of pride and ownership that exists. And kind of, you know, did you get that new part? Did you get that thing? What's customized to your thing? And there was a huge market of that and aftermarket parts. Almost, if you go look at the balance, the profit, the P and L of some of these car businesses, it's like, you know, they make, I don't know, five 7% margins every year. The f1 50 was, you know, call it, I don't know, 1010, points of margin aftermarket parts was, was, you know, another few points. The bit the bank business was another few points. Everything else lost money, right? It was just some of those. So that'll give you a sense of how, how popular the aftermarket parts and
Ben Yoskovitz 29:03
stuff are for fordex, the goal there was not disrupt. The goal was diversify revenue, grow revenue through other streams other than just the sale of the car. Is that? Is that a fair sort of that's how you would pitch fordex, and say, Guys, we have to keep growing these other streams of revenue provide more and extended value to the end customer. Yeah, there was, there was
Amar Varma 29:27
some like, what are some of the things that might be sort of tangential, and as I said before, those are okay, but we start thinking outside the box of like, hey, how do we optimize, like, throughput of of, you know, targeted marketing on aftermarket parts which otherwise were inbound only. Like those, you start getting into different realms. Um, well, because the reason I bring up the pickup trucks is, you know, the number one use of these trucks is for work, and the number one problem is, you're on the job. You're doing work. Yeah, and all of your tools, gear supplies in the bed, and somebody comes and thiefs you. This is like a classic problem. And so, like, one of the products that went to market was the, you know, the whole, the whole monitoring system to make sure that the car, like the truck itself, had an aftermarket option, kind of like a wing doorbell would be for your house. You'd get one of these for your your truck, and it would it would take a look and make sure nothing's not or if something happens, it alerts you, monitors you. And it's sometimes easier in these bigger companies to have an axillary product than something to be baked in, because the product life cycles are so long to bake stuff in, right? That was one of the other observations.
Marcus Daniels 30:43
Yeah, I just love to segue a bit into, I mean, you've sat in so many different boards, both startup boards, corporate venturing boards. I mean, I've been, I've known you for 12 years. I've been on boards with you. I'd love to get a bit perspective on some of the differences, and just especially on the corporate venturing side from your lens,
Amar Varma 31:02
yeah, look, board. Boards are, are very important, right? If you're going to have a board, it needs to be productive, it needs to be useful, it needs to be candid, it needs to be transparent, and it needs to, you know, really help shape direction and philosophy of how things get done, and it really sets the tone. So I take those, those very seriously when I when I'm on them and part of them, and I'm generally very serious person with these things. So it's kind of just an extension of my my persona. But, you know, governance is really important. I think people, people sometimes forget, and sometimes people mistake what governance is. Like, you know, somebody saying, Hey, give me a five year plan for this new product. You're, you're thinking about, you know, developing corporate venture. It's not government. Governance is government, right? Like, that's, that's the wrong thing, right? Like, instant, like, I think you're missing the point of what we're doing here, right? Governance is like, hey, you know, instead of your five year forecast or your idea that you don't understand, like, what are some of the areas that are helpful? What are some of the connections you need to make? What are some of the, you know, the guidelines that you need to understand, what are some of the lanes you need to stay in, you know, like, you want to really, honestly, be as helpful and productive as possible. And if you happen to have a, you know, a product zero to one mindset, you can, you can dig in like, I know, I know you guys both dig in on different vectors and stuff, and sometimes the same vector, and sometimes together, sometimes part, like, I've seen it, and it's great. So it's really important to be able to know what you're being asked to do and how you're being asked to do it. And then you're also responsible for communicating with the corporation, right? And I think communicating with the corporation is is super important, especially inside of a corporation where the venture is small in dollars compared to the overall budget, because usually in big corporations, it's like, how many people work for you? What's your budget? And that's how people kind of do the pecking order. And if I were to, if I were to think about that in context of like hatch labs and Tinder, it was the wrong it was ultimately the wrong way to look at it. Like Tinder upended the entire dating business, right? It was just like, Whoa. That small little thing usurped this large giant that was there, right? So it was like, You got to be it's got to be mindful of the communication and priority. Because again, back to the CEO of the company needs to be bought in. He or she needs to be very prominent, proud and excited to know what's going on in there. Because without that support, you kind of get marginalized.
Ben Yoskovitz 33:47
Yeah, is that? Is that really the unlock here? Because, like a couple of things, one is, you know, five year plans for something where you know, you don't even know what the idea is. I've lived it. We've seen it, pitch deck after pitch deck, or, you know, presentation after presentation. Look at my P and L, it makes perfect sense. But we know zero to one, it's never actually going to play out that way. So that feels kind of like an exercise in futility. And then the other one, which is, well, this thing is so tiny to begin with, the company is so gigantic. How do I get the air cover and support? Is the unlock, really, as long as the CEO remains excited and keep saying, keep going, keep investing, keep trying. I know this thing will not be a billion dollar business in six months. That's is that the call it the secret, or are there other things that you you were doing or you saw that work to sort of get away from guys. We got to just do p and Ls, or also just being told I hire more people so that your team looks bigger, so your budget's bigger, so you're more important. Like, What else was there beyond just a CEO who's like, keep going, I love this.
Marcus Daniels 34:55
Yeah, knowing Amr, I don't think he's hiring more people.
Amar Varma 34:59
Yes. So there's a lot, there's a lot in there, but it boils down to a couple of very existential things. If you're involved in a corporate venture and you have, you know, you have the influence and you have the ability to connect and be useful inside the organization, that way, that's super valuable, super important. And if it's not you, somebody in that group needs to have it, somebody else needs to be able to, you know, say, Hey, this is like a young a young a young opportunity, like a child that needs nurturing, it needs education, it needs pampering. And, you know, over time, it'll start to blossom and grow. Don't, don't step on it, because it's easy to step on these things. And in the context of the hatch labs, IEC like, you know, Dinesh was there. He, he understood to navigate the the organization he had been there, but he rented it to people who were, you know, maybe not always on his side. And you know, having air cover of Barry Diller to fix those or solve those, or communicate those, was, was infinitely, infinitely valuable. Then, in terms of the Ford Motor Company situation, like, yeah, you need that executive that's able to to, you know, get people on board for a direction or a decision, or is able to tell you know, like that thing no is also equally important sometimes to be like, that's not what we want, that's not what we need. And it has to be something on their scorecard, back to their like, OKRs, or some, some kind of they're trying to get promoted, right? Like, at this level, these people are probably gunning for a C level role, or authority C level role. You know, you know they're gunning for the job, right? So make it personal. Make it, make it, make it important that if it's successful, that they're going to get that jump or next jump, or they're going to get pulled by by leadership to be like this person really knows what they're doing, and we need them in this organization at a higher level.
Marcus Daniels 36:59
And what are you seeing now, just with respect, we fast forward to today, just AI and corporate venturing into some insights, perspectives of how we build and fund for the future.
Amar Varma 37:10
Oh, wow, this is a great one. Okay, so there's a lot in here. I know we're, we're today's February 7, 2025, last week was the deep sea week. You know, deep seats been out for a period of time already, you know, last year calendar wise. But people really got their heads around it early last week. So there's a lot. But what is, what does AI really mean? Is it like, oh my gosh, it's going to save us in our P L, we get to, we get to fire a bunch of people who are no longer needed. You know, there's, there's two vectors, there's the there's the tech enabled, the business AI enabled, and then there's the AI replacing a bunch of existing, existing processes. So the the latter is like a cost reduction and the other one's revenue augmentation, right? So these are just types of ways to think through it. I feel like, for a while people have been like, let me sprinkle some AI sauce. It doesn't sprinkling AI sauce. It's really fundamentally thinking through what can be, what can be driven with AI and the models are moving super fast, right? Like, I think we were to contrast a year ago, the inference in the reasoning capability of these models was, was, you know, toddler at best. Now we're seeing operator, researcher. It's, it's not just PhD level in some context. It's what I call, you know, Emeritus or Nobel candidate type context in some areas, and the ability for it to return an instant answer is one thing, the ability for it to pause and think like a human does, and kind of just go through, go through and like, if a model is taking, like, 20 seconds to do that, or, you know, Like, it could be a lifetime for humans going through that thought process and coming up with it. So, if you, if you, if you start playing around with some of the models, start asking it, like deep philosophical questions, or deep questions that have, you know, 100 inputs or 1000 inputs that need to kind of come in and give an out, an output like, you know, timely something about the economy, you know, what if, what is the policy of such and such country, and what are the rates? Should they go up or should they go down? You know, like, you'll get a very, very, very detailed reason to answer of somebody who's like, not in high school writing, you know, economics paper, but somebody who's been in administration and can tell you what's going to happen, right? Like, it's super impressive. Are you
Ben Yoskovitz 39:46
in the So, are you in the camp of, if we think about a corporate context, it's augmentation, or it's eliminate the humans.
Amar Varma 39:55
It's augmentation for now, right? Like, in the elimination of the human. It isn't something that it's going to come from, from me, it's going to come from the customer saying, Hey, we've been able to now do this thing. Let's repurpose people into something else, right? Let's take the cost. Let's use this augmentation to take cost out over here as well. Repurpose people into something new. Like, I think it was clarna, who came out last year saying, Hey, we got rid of our entire data call center, right? And I'm like, okay, like, Those are types of things where people can just make a call and be bold about it and try and looks like they did a wonderful job with that experiment in terms of what they wanted to do. I see, I see these operator, researcher models now, like it's it's showing today, again, you know, February 7, 2025, is showing you an operator taking on a web browser and doing things, you know, how long till that's just API driven, and how long, and we don't see it, and we can't, we can't see a record of it, and it Just happens, right? Like, you know, it's, it's, it's gonna happen sooner than we think. And what I, what I, what I'm really hoping for, is that it's being used for product, productive things, right? Like this is kind of the the excitement. But you can't, you can't really once the cats out of the bag. You can't tell people do this, don't do that. You can't regulate this stuff that way. It's, it's, you know, Americans, Americans tried through executive orders in the last administration, and you know, that didn't, that didn't help, in my opinion,
Ben Yoskovitz 41:29
yeah, I mean, we, we've been using it more. We've been using AI broadly more and more. I've started dabbling with building agents, started playing with deep research, you know, from chat, GPT and like, put in the prompt, and I'm I get lazy with prompting, so just like, I write something super fast and yet it still spits something out. And I send it to the team, and they're like, that's pretty damn good, you know, actually, to kick off an ideation, or kick off something, or it's just it works, and it can really help speed things up, because
Amar Varma 41:59
you're one of the better product minds I've met in my lifetime like you understand this intimately well. What's happened now, from versus a year ago is there would have been this human fine tuning of these models, but now the models tune themselves and are learning themselves, right? And that's, that's how a human works, right? They're like, Hey, I better, I better adjust what I said or how I think about things, and then I better do some more work to learn more. And it's like, it's an autonomous beat, an autonomous thought process. If
Ben Yoskovitz 42:33
you've tried deep again, like I tried the deep research, and you watch it thinking, and it literally, it's actually a little bit creepy, you know, it says I'm thinking about this now. And then it's like, I'm reading this. I found this thing, but I'm now going to go verify it. I'm now thinking about it this way. I'm like, that's all the steps I probably, as a fairly logical I'd like to pick a logical person. Those are probably the steps I would have gone through. But I didn't. I don't even know what step eight, 910, are. And obviously it does almost instantaneously.
Marcus Daniels 43:02
And you don't need to know those steps too. So, yeah,
Amar Varma 43:06
so you know, much like, you know, we're an era of the web. We knew, we knew rotary dial phones. We knew auto reversing cassettes, things like, like, now, now the whole music library is available instantaneously. Of anything you can create music on the fly too, right? Like, like, that's this generation. We had search, you know, it's not really been anything like search, social, mobile, cloud, AI, right? Like, an AI will be this thing now, like, that'll, that'll be the next, the next thing for this generation, knowing how to use it, knowing what it can do, knowing when you can rely on it, how to rely on it, how to leverage it. That's going to be the the augmentation piece that people have been looking
Ben Yoskovitz 43:55
for, right? I think it's still early days, too for companies. You know, we're working with companies that are, of course, using it, testing it out it, I think it still makes a lot of folks very nervous. I think that's okay, but you know, big companies could genuinely use some of the this technology to speed up their innovation if we always say, hey, startups are always going to be faster than big companies. I don't know that you. I think we would all agree on that, but and startups will use the stuff faster, so maybe that'll just accelerate them. But big companies could actually leverage some of this tech to speed up their innovation processes. You
Amar Varma 44:29
know, you all did, I think you all did a one with a beverage company collaboration, yeah. And I'm always like, how do they come up with new flares flavors? It's always like a test group. You know, there's some process to doing that right that doesn't need to be a human defined process. Anywhere. You can be like, hey, which flavor should we launch? Which markets right? Like, you could instantaneously get a get an answer for that. How do I roll it out right? Like, and you can quickly adapt and learn. Learn and understand if it's correct. Like, I think if you ever go to the Coca Cola Museum in Atlanta, you'll see the global brands of Coca Cola across all globe. And it's in as you travel, you see these products. It's super interesting, right? Like, it took decades, and now you could do it in an hour. I
Marcus Daniels 45:18
think there's also this new opportunity that we're seeing with just in the corporate venturing side that you know as a traditional VC, you're hit, you're really investing only 1% of things that you're seeing, and now it's giving a lot more courage to kind of experiment, to go through that validation process a lot faster, to maybe hopefully build more corporate ventures. And so back to your point earlier, of just repurposing kind of a talent in the venture building process. I think it becomes also an interesting
Amar Varma 45:42
unlock. Yes, yes, yes, yes. We
Ben Yoskovitz 45:45
only ask questions where the answer is yes or no. That's the whole the podcast is called yes or no. So
Amar Varma 45:51
where you go, swipe right, swipe left. Yeah, yeah. I think, I think it's
Marcus Daniels 45:56
worth it. Actually highlight a bit now, Emerg, just on the latest venture that you're building. The thing has a lot of applications, you know, specifically with respect to building private startups, corporate ventures, corporate VCs. So maybe talk to a little bit about mantle.
Amar Varma 46:13
Yeah. So mental is my current company, like I mentioned, my FIP, and it's really a culmination of experience of a lifetime. You know, having been a, you know, involved in in technology, is a lifetime. You know, private companies, private funds, over decades. So mantle is really a platform that helps, helps manage, track investments in private assets, whether they're investments in companies, investments in funds, and really gets your gets your handle around it. Because, you know, if you do it at scale, it gets unwieldy real fast. And there hasn't been, in my opinion, software that was built for the modern era that really does this, and that's been, that's been the opportunity we paid
Marcus Daniels 46:57
on. That's fantastic. And talk a bit about how you're seeing the uptake, also with respect to corporate VCs, again, the one of the challenges a lot of corporate VCs have specifically is, how do you manage all these small equity bets? And that's been a huge barrier for them to participate. Often,
Amar Varma 47:15
yeah, by coincidence, some of the people who've worked with me over the years have all taken prominent venture, you know, corporate venture roles. And so I've had the ability to watch this from a front seat, and kind of being, being close friends and seeing it. And some of them just knock the cover off it, you know, that's such a great job. And in the mind of Treasury and the CEO, it was in this person's head, and this person's like, well, I get hit by a bus tomorrow. It needs to be somewhere. It needs to it needs to live somewhere. It needs to be a record that somebody can pick up and take and do stuff with, right? So that's that's been a lot of the challenge, especially as you go from like, one off to like, Okay, we do, we've got, we've got 10 plus dozens like, you know, I think, I think one of the more prominent ones would have been Cisco back in the day. Then Google ended up doing it at Sep scale. And now every, everybody in technology seems to have their hands in a bunch of different investments and stuff like that. And, you know, do they live in Treasury? Do they live on the balance sheet? Do they live off like, there's just a bunch of things. And when you're at scale, you know this, this gets to get rolled into some kind of corporate, you know, accounting policies, rules, and you can't, you can't muck around with them, right? So it's really important to have organization structure, no, no, no, the list of the assets, know the cost, know the fair market value, and then knowing underneath what's happening in each of them, as the core, core tenant is, is just you can't work otherwise. You shouldn't work otherwise.
Marcus Daniels 48:49
And we've seen that's been one of the barriers even to start. It's exactly to those points, and it's not just managing it is, what's that fair market value, right? And I think the compliance around it, the risks associated with it. So I think what you're building right now, not just for startups, but also for corporate venture leaders, I think is really instrumental.
Amar Varma 49:09
Yeah, I think back to the board thing, right? If you're involved in this organization as a corporate venture, and you're part of the board or part of the committee, and there's a governance aspect and a communication aspect, your word is great, but you know, you need something that's that's a system written record, things that other people can look into for transparency. And if, if you're not doing that, I encourage you to do it. And with mantle.com, is obviously a self plug. But there are other platforms as well that can, can be really helpful. There
Ben Yoskovitz 49:36
are no other platforms. Just to be clear, there's only there's only one. Come on, we're allowed to say that. We know there are other platforms, but we know mantle's a good platform, so
Marcus Daniels 49:47
portfolios on it. So that's just three volumes right there. Look. Really appreciate the time the support. You were one of the first investors in Highline beta. You've been there for the whole entire journey. You helped us build something. Startup side, but also the corporate venturing side, and I'm sure we're going to be co creating more with you in future. Well,
Amar Varma 50:07
great. I can't believe already at time, that's a Okay. Well, look, I will, I will finish with this. I've enjoyed our relationship since day one. I I, you know Ben, Ben and I have each other a lifetime and as well. And it's just like, I love what you all are doing. I love how you're working with industry to really come up with these innovative not just ideas or concepts, but getting people to think about innovation. Because it's like, I hear this zero cost budgeting thing a lot, and I'm like, no, no, you got to think about it in like, what's a 10x return on that dollar. Let's turn these $5 off. Let's put $5 to work on something that gives 50 in return, right? Like this is kind of the mindset that you're all working through, which I think is hugely important, and I think how corporations will work going forward.
Ben Yoskovitz 50:53
Turning five into 50 is pretty good. I could do that all day long. That would be all right.
Amar Varma 50:59
Thanks, Amber. Cheers, guys. Thanks. Cheers.
We always enjoy conversations about innovation and startup building so please get in touch.
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