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Dinesh Moorjani — Comcast Ventures

Wednesday, May 25, 2022

Today’s episode is with Dinesh Moorjani, managing director of LA-based Comcast Ventures.  Comcast’s sweet spot is a Series A check ($3-20M) but they are flexible.  Dinesh explains how Comcast operates, tells us about the early days of Tinder, his experience of private equity, and much more.


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Today we’re here with Dinesh Moorjani, managing partner at Comcast Ventures.

Hi nice to be with you. Thanks for being here.

Comcast Ventures I believe you guys are writing checks. I think you said between $3 and $20 million.

Yeah we do see checks all the way to growth checks. I think our sweet spot is really focused on product market fit which often is described as a series a check but we’ll invest before and after that as well.

Great. Great. So we’re definitely going to ask you a lot of questions about gas ventures. We’re here in your office. So we’re going to learn a lot more about what you’re doing here. I want to start actually have a super interesting background so you did many things that you also are known for being the founder and running labs which hatched tinder. So super interesting to know more about what you were doing and and some of the stories from that site.

Sure. So to maybe understand hatch it would be helpful to understand the origin story. I was running mobile at I see with my team and had told Barry Diller and the team that I had planned to resign to go focus on building a lab to incubate my own ventures. We were essentially running mobile for a number of companies inside IAC which operated as independent panels focused on on mobility. But I felt like there was an opportunity this is back in 2010 to build our own companies and I had built companies before and was missing the entrepreneurial endeavor to do that.

So we were in Berry’s office on his couch and I told him that I was gonna start a lab. And he said Well would you want to do it here and I said it’s probably not a good idea. We don’t have the incentive model of governance and having a large public company build these things might be a treacherous recipe. And he he said we’ll give it some thought and the next day he put me on the spot you know in our quarterly CEO meeting alongside Jack Wall she was an advisor to Berry at the time in our quarterly meetings and Jack asked me if I was going to do it and I said Well I’m giving it some thought and he pressed me to consider it.

And so after five months of negotiating the terms we formed a new company was a Delaware C corp called Hatch labs and IAC was an investor and I had had a requirement for an outside investor which was extreme labs. So we brought in two investors into the company and we were our own company to build our own new technology startups in the mobile space.

So we went off into funding starting from October. We started building companies from October 21st 2010 over the next couple of years and one of those companies we built in the early part of 2012 was Tinder is originally called matchbox.

So we were fortunate to get intro to Sean and at the time we were looking to hire my second employee in the West Coast office of our first employee was a senior engineer named Joe Munoz who was very talented and I got to know Sean over a period of time in really January 2012 and at the time we were focused on building something in local merchant loyalty think of a modern day belly or level up or ritual focused on rewarding behavior around local merchants in your area that patrons would go visit.

But at the time Sean was deciding what he wanted to work on and he liked the idea of doing something around local merchant loyalty. We hired him specifically for that venture and to answer your earlier question we specifically have theses and ideas around a particular consumer enterprise software product in the mobile space that we would fund so we would have our own ideas

Were there other companies or did Tinder eat the whole thing. 

I think Tinder ended up absorbing a lot of the resources in fact. For example in Los Angeles we had a really talented CTO and early employee at another company and we put him on the co founding team of Tinder as the CTO his named Ryan because Tinder needed more fuel in terms of talent to continue growing so it did end up absorbing a lot of the resources at least on the West Coast office.

I’ve been married too long to have used Tinder and it’s very hard to like check it out if you’re married. But I remember in really early on maybe to a 2012/2013 being at a party and a guy who was single was using Tinder and he said if I had to buy this phone and this brazen plan that I’m on and if all of that just did Tinder, no phone no text no other apps. I do it. I was I was thinking that’s that’s product market fit that’s really kind of something. When did you know it was gonna be that level of hit.

So we saw early signs of product market fit just with our own dog shooting when we were playing with the product in the summer and fall of 2012.

But just because you’re eating your own dog food and you think there’s a successful product it doesn’t mean it’s gonna be promising. So in the fall of 2012 after we’d had the product and market for a little bit of time so just to be clear we launch it in August 2012 into public beta. I’d moved to California to oversee the team to launch the product. And one of the things we observed about the metrics this was late September in October is that we had really high engagement.

So we didn’t have a large user base. I think it was only a couple thousand users if I remember the numbers. So the question to ask when we saw that level of engagement was is that engagement replicable across a larger user base. And we felt that social discovery was a problem that the world was dealing with it wasn’t just limited to this small segment of users that that we’d introduce the product to. And as a result if we knew we had this engagement with this segment of users we felt it could scale across a number of users through a high viral coefficient. So at that point we wouldn’t say it was successful but we had enough promising engagement metrics to justify continue investing in building the company.

What do you think drove that engagement. What was he saying. Because there are other dating apps out there. 

That’s right.  I think it was a it was a confluence of things. But I might distill it down to a couple things this product did well.

I think swiping certainly enhanced the usage because it was fun it was a gesture that was really fun and natural. But I maybe further refined it to the double blind introduction model as the primary driver behind why Tinder took off. And if you move away from the technology in the product and think about human behavior and the psychology of people if I walk into a restaurant or a bar and I happen to see someone across the way who I find attractive the idea if I’m single that I have the motivation or comfort in approaching that person that I don’t know and striking up a conversation at it it clearly demonstrates that a lot of people would not do that because they’re worried about their own risk the risk and then concern over rejection.

So if you had that same situation but a friend whispered into your ear that that person had expressed interest in you suddenly your confidence level might change and you might feel comfortable walking over to that person.

And so that double blind introduction model was a technology solution or programmatic solution to solving a human psyche or human behavioral challenge. Then the question is that works but can that scale the way software can and in the case of Tinder and that mobile application the answer was yes. So you had a double blind introduction model which I think helped demonstrate product market fit. And then you had the ability to scale that across a large number of people through software and distribution through a mobile app. And that was probably the secret sauce around Tinder.

Did you start charging right away. No. How long was it before you started charging.

We waited I think at least a couple of years before we started charging. There were some experiments around subscription that were being tested particularly in other countries. But in the beginning for a high end network effect driven product the goal was to help make sure that the problem Tinder was solving was being solved for large number of people. And we weren’t putting in paywalls or barriers to make that happen eventually. It’s still a product until it really begins to monetize. To become a sustainable enduring standalone company and we introduced that monetization in addition to ads eventually.

But we wanted to make sure that we were careful about how we introduced it in as well as the price points.

Yeah I’d love to know even a little bit more about how you think about that because we we have this conversation with founders all the time who don’t wanna put anything in front of scale but also want to start monetizing and there is inevitably a discussion about like when is a little bit of friction OK it’s a it’s a good question.

I think it’s a trial and experiment experimentation process just to be clear I had left Tinder I was no longer on the board by the time monetization had started and I had spent time and been a sounding board for the team on it but absolutely was not making operating decisions about rolling out monetization. However the tea leaves are pretty clear when you think about how to monetize a software product.

If I back up and and share the three ways that companies make money outside of generating money on the float or fiscal or monetary policy done by governments it’s essentially some form of advertising which could be legion advertising brokerage commission display ads whatever it might be some form of membership which is a form of a subscription you’re delivering annuity value for ongoing fees and payments and some form of a transaction essentially selling a product or service so that there’s actually a limited set of choices even though we see innovations in business models and go to market strategy.

You can mix and marry different ways of monetizing among those three buckets and all the subcategories of monetization within those three buckets with a product. And so all three in this case could’ve been tested out it could have been a freemium model it could’ve been a subscription model or an ad model. It turned out there was always a proven track with social discovery with a number of dating products that existed in version 1.0 of the web with Match.com and others that demonstrated that the value was so high to users and consumers that they’d be willing to pay an ongoing subscription fee for access to that application.

Back in the day before these resource companies these were application service providers ESPN and so we knew that you could deliver an ongoing source of value that people are willing to pay a monthly fee for because it was that important in their life. And if the advertising wasn’t disruptive to the user experience you could add on advertising. But as we know an advertising revenue model requires a law of large numbers.

Now luckily Tinder had that but many businesses don’t. And so if you can deliver enough value to charge a subscription fee it’s a much more reliable annuity revenue business.


So there you made the choice to leave Tinder

So we had we had closed operations for Hatch and all the resources were focused on on Tinder. I tried to take some time off. Candidly since we had moved to L.A. to to oversee the tinder team and my wife and I talked about staying here we should we should go back to New York and we decided to stay.

We had family in California as well.

And in my effort to take time off I was involved with another company called clever beast that I’d co-founded with a number of other folks and became the interim CEO of that company just to get it through its next stage of growth and we relaunched that company. I eventually sold my stake and again tried to take some time off but by that point in 2013 I was in conversations with Warburg Pincus. I got to know a couple of the partners there and was extremely impressed with the organization and the private equity firm so as it turned out I joined them as an executive in residence and began working with them officially in early 2014.

So no not really curious so I’m curious just what what was what were you doing.

Good good question. So a couple of things one is that Warburg Pincus was looking at investing in mobility and innovative mobile companies and I’d spent a lot of time in that space.

Most of my focus was taking companies from zero to one and not from one to 10. So the the stage of which we take a company public and continue growing it is a large market moving independent enduring business. So it was an opportunity to do that and at the same time they were pretty progressive and looking for innovative mobile companies that they could put their capital and resources behind to build larger businesses and create delivered harvest value. So I was fortunate to get to know their team they were doing a lot of growth equity investing when we shared some investment theses and began talking.

It seemed like a natural fit. They didn’t have an operating partner role. So instead there at the time they’re their best and closest fit was an executive in residence which is what they offered me. So I sat on boards for what we think is co-invest with them not just sourcing the deal and working with them to close investments but also co investing in the deal which I’d done on a couple of companies with them. And it’s worked out pretty well and frankly I think of the firm as family. It’s an incredible very courageous very talented very low key and high integrity firm that operates around the globe.

I think they’ve made you know eight hundred and nine hundred investments and deployed well over 80 billion dollars of capital into startups across 40 countries it’s usually start he is more like a venture backed business industry here.

I just have that you know.

I think if I roll the clock back 10 years my conventional uninformed view of private equity was probably similar to yours and I’m not.

No no I’m not suggesting you’re uninformed at all I actually quite quite the opposite. But I think there is an impression that is created by the media and also what we read about private equity and I think there is a lot of flavors of it.

And I think firms are drastically different both in terms of their reputation how they treat their employees how they work with their companies. I found Warburg Pincus to be exceptional at being empathetic to founders recognizing the value of companies that needed capital to grow. But at the same time we’re at a unique stage where they could become a force in the particular industry they were in. And Warburg was well suited to help shape what those companies look like as they grew. And it’s evidenced by the quality of talent at the firm.

If you took that take a look at the leadership I think it’s quite clear.

I think there is a heavy overlap so classic venture capital moves from product market fit to a capital expansion stage of the company and scaling and then reaching growth equity where a business is typically reach a certain scale and is starting to look at cultivating its options as it becomes a larger business to go through a financing event that can open it up to public market investors for example which would be an IPO or maybe set itself up for for acquisition by another company. The those lines are very blurred. When a company is going through those transitions and a lot of firms only play in one particular space i.e. elbows or roll ups others focus more on growth equity.

In the case of Warburg Pincus is I think their bread and butter was growth equity over a number of decades. They had built some of the most successful technology companies in their growth equity investing within TMT and they’ve done it across a number of other industry sectors but they had a wide palette and aperture for the types of growth equity and roll ups and buyouts that they could do.

But the strength of their TMT and growth equity practices what I was attracted to. Yeah I usually think of P as taking a majority ownership stake and control versus growth equity that doesn’t necessarily take a take that.  Is that fair or equally uninformed?

No I think I think many firms do take a control position but many also focus on growth equity in take minority positions and we’ve seen that with a number of firms.

And so I think the model for private equity is change where they’re doing essentially late stage venture capital growth equity in addition to elbows and majority control investing in you know if I started this start up and group B C I could be looking for Warburg could potentially be providing my lead around equally so to say thank you.


I I’m I’m curious about you know the difference what you learned there about road and know mistakes do you see scale.

Well from the start of phases to the growth visas do you see common mistakes or for founders the founders that are really successful in the earliest stages tend to be very resourceful scrappy and hack their way to to an outcome. And the skills required to do that an early stage are very different than at a later stage. And there are a few entrepreneurs who can cross that proverbial chasm. But it’s it’s rare for early stage entrepreneurs. When we described them as resourceful they’re sort of embracing the definition of entrepreneurship which is you essentially have insufficient resources or fuel to get to your goal but you still managed to get there.

And that’s kind of a working definition if you will of entrepreneurship. Once the companies get gotten from zero to one and it’s beginning to scale the organization the skills required have to do with managing people and inspiration and complex financial engineering. Large commercial relationships managing risk dealing with lawsuits and and you know legal chess plays and all sorts of other skills that early stage entrepreneurs oftentimes don’t like to do let alone have the skills to go do comfortably which is why they often setup people around them that are really smart to help grow them as entrepreneurs either through a board of directors or their advisors through their own network and coaching.

That kind of brings us to comcast ventures which I guess is in some ways part of Congress in many ways it isnt. Can you explain how Comcast operates?

Sure. So we operate as a venture capital fund with a single LP relationship with Comcast. Comcast is a very supportive partner in helping to work with our companies when there is an appropriate commercial relationship channel partnership or other other connection to a portfolio company. But first and foremost we’re fiduciary as with our portfolio companies and we focus on delivering returns to our LP investor at Comcast. But we operate as an indefinite independent fund. And we’re motivated by the carrying economic incentives of an independent fund. And and I think or from a differentiation standpoint able to distinguish ourselves because we can help companies in ways both through Comcast as well as a program called Forecast labs that we have which can provide digital and TV marketing support for portfolio companies at at a cost basis and cost per acquisition that’s very competitive in the marketplace that we haven’t seen any other venture capital firm introduce. So it can severely advantage for example an e-commerce company that’s doing direct to consumer acquisition and we can do that because of our relationship with NBC Universal on the back end to have built this program. And of course we don’t charge anything for it. 

We generate our returns based on investing in companies not running a cost structure to to charge an allocation to a portfolio companies because it was clear to me that for what we have we do have vintage years yes that we use internally.

I don’t think we disclose them externally but we have an investment committee that is our investment partnership. Those are our managing directors inside Comcast Ventures. And if you look at our processes for making investment decisions our quarterly reporting to our LP and and the way we work with our companies if you were to talk to our CEOs I think you’d see a lot of similarities to how any venture firm operates.

The distinction is we’re not driven by purely strategic need to satisfy the growth opportunities for our LP. We’re focused on delivering financial returns.

But we have specific areas we look in and the stage at which we invest also shifts based on where our investment thesis lies in what stages that we’re multi-stage investors as I mentioned earlier we invest from early seed stage or will often lead a seed round all the way into growth. But our sweet spot is effectively the equivalent of a series where we have product market fit. If you took a sector like commerce marketplaces in a marketplace especially many to many marketplace you have two constituents on each side of the marketplace and you have to win both over and at the same time create enough supply and demand to create liquidity in the marketplace.

So doing those at the seed stage tends to be very high risk because it’s almost like you have to win to customers and create liquidity between both customers. So I’d call that a much higher risk investment and an early stage but once it reaches scale it’s very defensible because of the network effect.

So we have specific investment theses but the stage might affect what what entry point we come into a company with.

Do you personally in particular areas of focus you were saying are there some that are yours.

Yes there are. We work as a team with respect to the sectors we focus on but there are some areas that I spend the most time in. I’d say one of those investment areas is sustainability. Now sustainability is a very broad topic so it breaks down into a number of areas. It could be around food clean energy and clean energy buying transportation obviously. So if we look at what’s happened with transportation we’ve essentially created a society where we have rapidly increasing congestion pollution wasted time GDP loss modes of transportation that are unaffordable for the general population modes of transportation that don’t fit the use cases within Intercity or intercity travel.

Well when you talk about the mode doesn’t match the need I’m paraphraisng roughly. Do you mean that in terms of like a public transportation or just share or what do you think about there.

We need to we need an intelligent transportation network that works in conjunction with cities municipalities departments of transportation in addition to private companies operating vehicles and transportation that makes sense for different consumers so we’re investors in bird. We do believe that there is a different mode of transportation in a and short form transportation typically under three to five miles that aren’t as well suited for cars especially for single passengers or sometimes four for two passengers. It should be eco friendly essentially you know all of the new modes of transportation are built on EV platforms 

So there are other challenges with how our modes of transportation are evolving as a society. But the broader theme is we need better data sharing across private companies and better data sharing. Municipalities and departments of transportation so we can inject a networked transportation environment 

We need a comfort with sharing data in controlled and safe environments where it’s not releasing proprietary data to your competition but releasing it to better the region that you’re serving

Let me ask about corporate venture.

It seems like there are more and more corporate venture arms coming up every day and I think you have said that you really don’t think of Comcast Ventures so much as corporate venture.

So a lot of companies have introduced affiliate venture capital arms but they vary to a great degree. So I always encourage entrepreneurs to understand how their investor operates what are their incentives. our confidentiality and our fiduciary responsibilities are first and foremost to those to the CEOs we work with and to the founding teams and those companies that would distinguish itself from the other end of the spectrum where you have a corporate venture capital firm that is investing to advantage the strategic R and D needs of a large corporation.

And I think what you’ll find is Comcast Ventures pairs the best part of operations of an independent venture capital firm with a single LP so we’re not spending all our time fundraising we’re focused on building relationships with our portfolio companies and advancing the mission of those companies with some of the strategic advantages of a large technology and media conglomerate that can serve as a channel partner and customer to some of those particular companies.

We do. That’s correct. Great.

So that’s still active and people could reach out and say where’s the difference. Is someone else managing that.

Yeah they can reach out to any partner at our fund or any other investor at our fund. In fact we’re looking at a catalyst investment right now. And we have a team that that focuses on that and catalyst is still very active in fact it’s not just new investments that we’re looking at. We’re working with new investment rounds with our existing portfolio companies.

And as of now I’m actually helping one of those companies through a product pivot a catalyst fund raisers more presidency.

Typically it’s more precede in seed rounds. Yeah we’re very early with our investments and underrepresented founders and minorities.

That’s great.

Make sure that that exists and it exists nationally in fact globally so we look at companies overseas as well as across the U.S. for a catalyst.

Great. I want to just ask a tiny bit about you before we wrap up. It just seems like you had an amazing career and your degrees that you think you attribute that to some piece of your personality some of your talent.

So my childhood probably played a pretty instrumental role in the things that motivate me and why I’m doing what I’m doing. So if I roll the clock back I grew up in the suburbs of Houston from the age of four to eleven and growing up I was a very curious kid and had an insatiable wonder with lots of things particularly how things worked. And one of those areas I had directed a lot of that attention was how how planes fly

when I turned 16 I realized that I needed to earn enough money to have a car because you have to drive. Typically when you’re here especially back in the 90s and so I used to wash dishes for eight to twelve hours a day on weekends to help pay for some of my expenses and I even used to take fliers and put them on doors of houses and I’d canvass a neighborhood essentially the early days of guerrilla marketing. 

So if I take that curiosity that I had growing up and marry it with with the work ethic what I found was.  I applied as a chemical engineer to Northwestern and probably the two things you need to make sure you’re successful in that program is a really strong work ethic and a lot of curiosity and fortunately those were sort of the themes in my childhood and as a result of those two themes in my childhood I graduated as a chemical engineer in 1998.

And along the way realized that it wasn’t technology decisions that drove the commercialization of technology. And it certainly wasn’t engineering decisions. It was business decisions. So when I graduated I decided to focus where chemical engineers often focus which is the energy and chemical sector but do so as a business analyst so I did. I became a strategy analyst at a firm called Arthur D Little and then use that as a stepping stone to focus on strategy work. But in the technology industry. And that was my first entry point into real technology as it’s defined today and started building companies from that point onward.

Over the course of my career. hopefully the entrepreneurs get some value out of it and we create a vibrant ecosystem where everyone’s helping each other.

That’s great. I love it. Terrific.

Thank you. Thank you so much for coming on board today it was it was wonderful having you. Thank you so much for having me.