#613 Innovation Is Not the Bottleneck. Commercialization Is | Roland Austrup

Mehmet: [00:00:00] Hello, and welcome back to a new episode of The CTO Show with Mehmet. Today, I'm very pleased, joining me, Roland Austrup. He's the chief growth officer at Innventure. Roland has a lot of experience when it come to a mix, which I like usually to talk about, business and technology growth and, you know, creating new ventures.

So this is what we're gonna discuss today. Roland, as usual, all my audience know by now, I don't like to spend much time on introduce my guests because I like them to introduce themselves. So tell us a bit more about you, you know, your background and then, you know, what you're doing currently at Innventure.

Later we can start diving into our discussion, so the floor is yours. 

Roland: I appreciate it, Mehmet, and thank you so much for having me on the show. It's a pleasure to be here. Uh, I likewise don't like to talk much about myself, but I'll- ... I'll try to give you, uh, uh, a background on how I got here. Um, you know, I actually started my career in a completely different space.

I started as a currency trader and worked for, uh, for two, uh, [00:01:00] bank-owned investment dealers for the first eight years of my career. Uh, and then went off to start my own asset management company, um, which I ran for a number of years. Uh, along the way, I had met the principals of, uh, of Innventure. So, uh, I met them at an alternatives conference, uh, uh, many, many years ago, probably around 2014, just as they were starting Innventure and, and then became friends with them.

Fast-forward a number of years, I was, uh, planning my exit from the, uh, asset management company I created. Uh, and, uh, Innventure called me, one of the principals called me and, and asked for some help in the capital strategy around the first company they created, which was a company called PureCycle Technologies.

And, uh, I joined them. Uh, I helped them monetize that first business, uh, helped them with the capital raise. Uh, ultimately we took PureCycle public in 2021 and, uh, and, uh, in, in that process they asked me to join as a partner. And what [00:02:00] really attracted me about Innventure, uh, you know, and, I mean, I, I think we can get into this as, as we talk, but Innventure is a company that creates companies around transformative technologies that it develops.

So it's a company creation engine. It's a technology commercialization company. What struck me very strongly about Innventure coming from the asset management industry is they were doing something very unique that mitigated risk but created value. And as a former fund manager, you're always measuring yourself on the basis of what are you doing that can reduce the risk of index investing or improve the returns?

Are you adding any value to what you can do passively? And I saw that what Innventure was doing was doing exactly that in comparison to traditional company creation or venture capital private equity. They had a philosophy of, um, mitigating risks, being very focused, being very selective, versus a strategy of let's invest in a number of different [00:03:00] ventures and hope a small probability win.

So I thought there was something really unique that Innventure was doing, and that- that's how I got to where I am 

Mehmet: Great, and, uh, thank you again, Roland, for being here with me today. Now, I gotta start with what Innventure does today, and it's quite interesting. I will-- I read a lot about the topic. You know, I'm, I'm fan of anything that create new ventures, right?

So, um, because, um, you know, it's, it's a power of creating new economies sometimes. Sometime, you know, uh, affecting other people's lives also. But at Innventure, you know, usually the, the company starts with technologies that already work inside large corporations, right? So- That's right ... yeah, so, so why do so, so many valuable technologies, though, never become successful businesses inside the companies that invent them?

Roland: That's a good question. I think the, the heart of the issue is that, uh, what it is, that there's a specific skill set that's required to create a new company. You need an entrepreneurial [00:04:00] mindset, and you have to be able to start things from zero. Large companies, uh, are very good at incrementally improving what they already have, but they're not designed to be entrepreneurial and, and start from zero.

Um, and it just, it's-- the comparison is, uh, you know, uh, an agile speedboat to a, you know, a large aircraft carrier. One can move much more nimbly than the other. Um, and so it's just a different skill set. And, and I would argue that that's also a different skill set from traditional company creation, 'cause often traditional company creation, when you're thinking of the entrepreneurial side, um, an inventor might have an interesting technology, but it's a completely different skill set to know how to productize a technology and bring it to market, and how to build a business around it.

Uh, again, just so, but whether it's an entrepreneur or a large corporation, it's a different skill set to start a business from the ground up. You actually know how, how to, have to know how to [00:05:00] commercialize a strategy or go to market with a new company. 

Mehmet: Right. And, and I think there is similarities even when entrepreneurs want to start companies from scratch, like if they don't have the know-how, go to market, let's say, and how to reach customers and put the technology in front of them.

So these ideas, they die sometimes even before they come out to life, which is, uh, I, I think make a lot of sense. Now, when, Roland, you are evaluating a corporate technology, what kind of, I would say, signals you look for that you would say, "Hmm," like based on this, I think, you know, there's a large chance that maybe a standalone company can be spun out of, of this, you know, larger organization to take this new technologies to the new level?

Roland: Yeah. So that mean the, the biggest thing that we have to do and, and look at, I mean, there-- we, we have a very disciplined process, and [00:06:00] I'll kind of walk you through it. There are really, I think, four gates is the best way to describe it. The first thing is you have to be able to, um, quantify the opportunity set and, and what is the market need that that technology's addressing.

How large is that market need? Is there... And then, and then are there, are there solutions for that market need? Because that's effectively what we're looking at. We're looking at technologies that address major unmet market needs. Um, we're not trying to find things that incrementally improve. We're trying to find things that will transform or, uh, disrupt or will create a solution to a problem that exists.

Um, and that's often the starting point for the multinational doing the research. The multinationals that we collaborate with They have deep R&D budgets. I mean, the, the top 2,000 companies have an annual R&D budget of something in the area of $1.5 trillion a year. That's the ore body in which we're looking for gold.

But what we're really-- what the part of their R&D, uh, [00:07:00] is focused on solving problems that they can't find a solution for, but that they want a solution for. So if they go to market and can't find something, they will invest R&D dollars in, in identifying a solution. Um, but they may not be the right entity to commercialize it, and that's really where we come in.

So, um, you know, but what we're looking for first and foremost, and the first gate that we look at is that qualita- we quantify the information, but we're basically trying to qualify the opportunity set. How large is the unmet market need, uh, and is there, um, uh, is there competition in there already, or do we have a unique value proposition and a moat, even if that moat's just time to market, um, where we can attract significant market share?

So we're trying to calculate the size of the opportunity. Um, then we have to go through a technical, uh, assessment of the technology itself. Uh, so we have to basically, um, uh, determine [00:08:00] whether there are technology risks still in play, whether the technology works, can it be scaled? Um, so these are a lot like, you know, you know, looking at, at your background as a, as a go-to-market operator, it's a lot like how do you qualify your customer, but we're qualifying the technology and the opportunity for the technology.

So we have to say, does the technology work? Can it be scaled? Um, we start with the, uh... And the nice thing about working with multinationals is they've already done most of the work. When we're taking on a technology- Mm-hmm ... we're not really taking on a technology risk because they've already developed it to a TRL level that's going to be, uh, or TRL that's, that's, that's significantly higher than startup.

Um, and, uh, but once we've done the technical validation, then we have to do the quantification. You know? Again, that's really where you're looking at the capital efficiency of the, of the model. You know, what's the CapEx? What's the OpEx? What are your cost of goods? Uh, what's the supply chain feasibility?

Um, you know, if-- are we gonna disrupt the supply market and, and, [00:09:00] and, and have to adjust the pricing or can it accommodate what we're doing? Um, and, uh, and the most important thing that we have to arrive at i- is two things. One, there's an economic value proposition that's gonna compel adoption in the market.

So there has to be an economic motivator for the customer to adopt. Uh, is-- it can't be a nice to have. We want it to be a must-have. It could be a must-have physically, or it could be a must-have because the economic benefit is so strong. Uh, and then there also has to be strong margin for us. So, uh- Mm-hmm

this, because at the end of the day, we're looking at what's the capital efficiency of our model, and, and that's measured by basically saying things like Um, how much money are we gonna have to spend, and what's the enterprise value we're gonna create from that? 'Cause that's how we measure ourselves, is how much do we invest, and what's the, what's the economic value or the enterprise value or shareholder value that we create, uh, from that [00:10:00] investment?

And then of course the la- last stage is then you have to negotiate the deal with the multinational, uh, and- 

Mehmet: Yes, indeed. Now, one out of curiosity question, Roland. So let's say, you know, this, this quantification, um, uh, it's very obvious that there's a, a huge opportunity, uh, ahead of us, but are all organizations ready, let's say from maybe structure, organization structure perspective and culture perspective?

Because, you know, sometimes, especially in, in, in our world, in the tech world, like we hear about, you know, how sometimes like bureaucracies, uh, structure complexities make kind of complexities in front of these kinds of innovation and getting the technology even out. So do you also kind of rank that when you study the company that you're gonna work with?

Roland: Uh, the complexity? Is that what you're asking, Mehmet? Like, uh, how, uh- 

Mehmet: As, as [00:11:00] organization, not as technology. Like, I mean, how much this organization is flexible in terms of, you know, um, getting into new things. Like, or let's say, do they have the culture that allows, you know, for this innovation to flourish, if, if that makes sense?

Roland: Well, we, we create the companies, so we sort of we have to create, create the organizational, uh, um, culture of the business. But by definition, every company that we create has to be malleable and adaptable because when you're transforming markets, um, there is no roadmap. You're not playing into a traditional roadmap, you're creating new pathways.

So every company that we create from day one has to go in with the mindset that if we're disrupting something or transforming something, we don't know the path, so we have to be adaptable. You know, it's like Yogi Berra's line, "When you see a fork in the road, take it." Didn't say which fork, but the point is we're, we're, we're facing those decisions every day, so you [00:12:00] have to have a culture and an organization that is flexible.

So you have to be grounded in the first principles of the business, and the, and the, and, and, and you have to have a go to market... Each company has to have a go to market strategy, which actually we help create because we're creating the initial commercial blueprint when we start the company. Mm-hmm. But we know going in that you have to be adaptable.

In, in every business that we've created, uh, it's followed a different path than we initially anticipated. Uh, and, and so you have to have a very, you know... A- again, this is part of when you asked earlier why do major multinationals not commercialize the technologies themselves? Right. It's you don't have that organizational culture to be able to, um, on the fly so to speak, adapt your go to market strategy because you're, you're getting feedback all the time about what's working and not working in a new pathway that you're creating 

Mehmet: Right.

Yeah, that, that make a lot of sense. Now, once the technology is [00:13:00] validated, Roland, and you start to, you know, work, you know, on, on the floor about it, what's the hardest part? Like, is it building the product, building the business model, finding customers, assembling leadership team? Like, wh- which, which part is, is the hardest part in your opinion?

Roland: The hardest part is being able to do all of that, uh, because, um, there's, there's, there's, uh, there's points of potential points of failure at every single juncture. It's not just the technology, as you said, it's how do you productize it? Uh, what is your go-to-market strategy? How do you assemble a leadership team?

Um, that's again, where Innventure has a lot of value. Typically with our companies, they're started with in-house management. So, uh, in, in three of the four companies we started and, and created, uh, the initial management team was the Innventure management team that did the work to start the company, and then over time, we bring in industry experts.

Uh, so part of the initial stage of company [00:14:00] creation is us running it and us building a management team, but it's the people that did all of the vetting that started the companies that are typically running the businesses to start. Uh, only in our third company, uh, which, which today is obviously one that, that the market is paying close attention to, our third company, uh, Excelsius, is a, is a data center cooling business.

Um, so it's direct to chip two-phase cooling. We saw that that business was going to grow very, very quickly, and so we immediately brought in permanent management that had deep experience in productizing technology, uh, because we saw that one growing much more quickly than the other businesses. And, and- Good

the proof point of that is we created that business in 2022. . It's telling your investors to pay attention to this part. So, it's, uh- Yeah ... but, but, uh, no, I mean, but the third company, uh, Excelius, as I said, it's, you know, direct to chip two-phase cooling.

Uh, and, um, we saw that the, [00:15:00] the, the, the, the convergence of high performance compute and AI was going to cause a real tailwind, and we needed-- And this business was gonna scale quicker. So we started it in tw-2022, um, and less than four years later, you know, we've had significant investment in the company from the likes of Johnson Control and Grond, you know, and evaluations, uh, that were, you know, 665 post, post their investment.

So that shows you how we're growing businesses. But, you know, you start them from zero, and you're, we're trying to grow billion-dollar businesses. Um, and each business is different. Uh- Right ... to the question of what's the most difficult, uh, it's putting it all together. Um, it's not one point. It's, it's putting all of it together, and that includes capital.

You know? Uh, one of the things that we have to do is fund all these businesses. So you have to-- Uh, that's, I think, the part that most operating companies forget about. They, they believe that if they have a good business, the capital markets will simply be there [00:16:00] and show up. But there are a lot of good businesses out there that are competing for the same capital, so you actually have to have a capital market strategy as well.

And I would argue that that's an often overlooked part, is finding the capital to make it all happen, uh, is, is a critical piece of the piece of the puzzle. 

Mehmet: Absolutely. And happy you brought, you know, the, the example of Excelius because, you know, there's a lot of opportunities there. And I cannot skip any episode nowadays without asking about the AI and, you know, from your perspective.

Like we know that there are a lot of bottlenecks currently, and AI compute, you know, demand still on the rise. Do you think like there are a lot of, um, underestimation for what the industry need in that space? Because some people, they think, "Okay, we've done it all. We are building data centers. We're investing, you know, in AI as the inference layer, which is the software layer."

Do you see some more opportunities for innovations in, in, in that side, which is more about the infrastructure? [00:17:00] 

Roland: Yes, and I think that's how we, we look at Excelsius. It's, uh, we're what... I always looked at them as, uh, you know, the picks and shovels of the gold mining industry as opposed to being the gold miner itself.

That infrastructure, the cooling infrastructure technology is absolutely required. The other things are required as well. We're seeing problems in, um, in, uh, in, uh, you know, in, in the community pushback about energy usage and water usage. So we're going to have to solve those problems. Those aren't problems that are insurmountable.

I mean, human ingenuity i- is, is, uh, something that we can look back at and say it has always shown up. I mean, um, in the, in the growth of, you know, simply the internet itself, uh, you had a lot of networking problems to solve, of how are you gonna build networks across the globe? But they did, you know.

Cabling underwater, what, you know. Uh, they, they solved the problems. They look at wh- Th- that's what, that's the whole beauty of, uh, the whole [00:18:00] system is, uh, is the-- What we are doing is commercializing innovation. N- not just in venture, but I mean the economy at large. If you look at, um, you know, all of the companies out there, we're really just trying to find ways to live better and more comfortably and find solutions to do that.

And then when there are roadblocks in the way, we find solutions to those. So are there a number of opportunities? There are a number of unknown opportunities. Uh, and you know, my belief on Uh, AI, my personal belief on it, of course, is that, uh, um, it's not a panacea, but it's a huge productivity growth tool.

Mm-hmm. Uh, uh, discovery, uh, creating efficiencies. Uh, I mean, uh, it's, uh, you know, uh, it's, it's, it's, you know, trite to say it's a calculator on steroids because it's much more than that, but it's, it's very significant. And so when I hear people talk about things like the fourth industrial revolution and things like that, I actually believe that.

Um, and it's a lot like, [00:19:00] you know, right now if y- y- if you look at, uh, you know, the United States when, when, uh, they were building, uh, railways across the country, they were building the infrastructure for the country. Well, this is what we're doing now. We're actually backfilling the infrastructure that's necessary for what AI and high performance compute can do for us.

So I, I mean, I think it's-- I don't think anybody can forecast the size of it or the opportunities simply to say that this is a major significant development, uh, that has, I think, a lot of legs in front of it. So I think very early innings in what it can do. Um, and I think the only caveat I would put to it is that, you know, again, as important as AI is, don't underestimate the importance of, uh, human ingenuity which created AI and, and y- you know, that can- Absolutely

that can never be replaced, so. 

Mehmet: Absolutely, Roland. Now I'm happy because you, you mentioned the pick and shovel, right? So gold rush, I don't know, people call [00:20:00] it hype. So in moments like this, Roland, and we've seen, at least in, in, in my era, I saw it like a couple of times. I know people you just mentioned about the railroad in the United States, which was, you know, a huge opportunity change, you know, the, the, the economy for, for good, of course.

And then we start to see like these cycles of innovation that leaves marks on, on the economy and for us as humanity on the long run. Now- But in moments like this, what really separates, you know, an industrial deep tech company that really is creating a lasting value from ones who are like just trying to, as we say, jumping on the, uh, you know, on the, on the bandwagon and then they say, "Hey, like we are also part of this and come and join us."

So what really makes sure that a company can materialize what they are trying to do with really value for investors, [00:21:00] because at the end of the day, you know, people who are gonna invest in this, they want to see the returns on the long run and they don't just want companies that they are following the hype for the sake of following the hype.

And we are seeing it now in the AI maybe-- I'm sure you are seeing that every day, Roland, where p- companies comes and say, "Hey, we're adopting AI. We're like doing everything related to AI." And then when you really dig down and figure out that, okay, they just maybe, um, kind of doing automation for some processes, but there's- Yeah

really no deep tech there, like there's nothing. So From your experience, what separates, like, these two paths of real innovation, last, um, you know, lasting, um, uh, value versus just, you know, a bubble as we call it sometime? 

Roland: Yeah, and that's, that's the important distinction because I think that, uh, bubbles do crop up and they burst.

And, and separating what's real from, from hype is, is, [00:22:00] is, uh, is, is kind of the biggest challenge. And, you know, your, your comment about when, when I look at, uh, uh, companies that say they use AI, but m- somehow magically most companies say they use AI now. So that's like, uh, you know, when, when, you know, in o- over the last few years, uh, a- another analogy, there's a lot of greenwashing going on on, uh, you know, carbon footprint and environmental issues, uh, about sustainability when, when, uh, you know, when people were talking about it.

Uh, a lot of people were saying they were doing things, but they really weren't. Um, and, uh, um, and you could say the same now. If a company says that they're incorporating AI in their business model, um, I don't know how you would go to evaluate it. From our perspective though, um, you know, I think when we look at technologies and say, "Is this a real technology with real scale and potential?"

Um, y- it-- you have to look at companies that follow systematic processes and can [00:23:00] describe those systematic processes versus just jumping on the bandwagon. Um, so, uh, you know, uh, in our business here, you know, particularly at Excelsius, Excelsius is not an AI company, it's an AI infrastructure company. It's providing critical infrastructure for that industry.

Um, so it's, it's a different thing to be able-- for me to be able to look at companies that are, uh, utilizing AI and say whether they're, whether what they're doing i- is really incorporating it or just borrowing language. Um, but that's not really relevant in our case. Our case is really saying, is AI a real growth story?

Does it have-- Is it a technology that will create many opportunities, many products? And if so, um, uh, are we able to supply the infrastructure for that technology? So we're not playing in the AI game, we're empowering- Mm-hmm ... the AI game. 

Mehmet: Which is, you know, based on all the researches I, I [00:24:00] did, it's, it's really the actual opportunity because, um, uh, I'm not claiming, but I mean, anything which is done on the software layer, kind of it can be replicated fast, the mode can be lost very quickly.

But if you are doing something on the infrastructure to your point, whether it's like cooling, for example, like, or maybe the power, you know, that, uh, uh, these data centers, they are power hungry, as we know, and they-- you need to keep, you know, find a way to increase the gigawatts and, you know, the, the, the power, uh, that these data centers want.

So this is where actually the opportunities, you know, I, I see them personally from my own readings and interacting with people in, in the domain. Uh, and yeah, people, they need to understand that AI is not just the chatbot, which is whatever tool you use today. It's like something more deep than this.

There are like the chips. There are like, you know, the manufacturing. 

Roland: Yeah. 

Mehmet: And we can go on, on and on and on. Now- I gotta ask you something, Roland. Now, when [00:25:00] you operate in public markets, you know, people often prefer predictable execution, while in innovation, you know, you have to do experimentation. How can you balance those two realities when building new companies?

Roland: Yes. Well, what we like to do is work with the large companies that have the large budgets to do that innovation and to try things out. We like to pick them up when it's much more executable and, and direct. So we're not taking the technology or the innovation risk. We're working with the multinational that has already developed it.

They've spent the time and money to get it to a point, and then what we try to figure out is how do you productize that? Again, we, is there market for it? Does the technology work? But by the time we launch a company, we want to reduce many of those risks to scaling risks. You know, we, we, we know the technology works.

We've identified a, a, a, a, a, a [00:26:00] product roadmap for the technology. We've figured out how to, how to, how to, how to, uh, uh, bring that to market. We figure out supply chain, adoption curves. Uh, and so for us, uh, not to diminish what we're doing and make it less exciting, but we're plain vanilla execution. Uh, we just repeat a process over and over and over again, and that goes right back to what I said in the beginning.

What's our unique skill set? Our unique skill set is bringing technologies to market. It's evaluating them, and it's knowing how to commercialize and bring those to market. Um, so, uh, that's where we innovated. Our innovation was doing something that other people weren't doing. We, we, we were... We took a very systematic approach to saying, how do you make early-stage company creation better?

Is there a systematic process you can do? And it started with, let's not be the innovator ourselves. Let's go and talk to these companies that have deep R&D budgets, that don't have these valleys of death where you're s- you're trying to [00:27:00] evaluate the technology in the market. They, they are developing the technology, and they have the budgets to do it, and they have the market data to do it.

They have sales forces, global sales forces, that's feeding them information about the unmet market needs, and about the opportunity, and about the customer behavior. And, and we take all of that when we launch our, our businesses. So, um, the innovation that we created was, was, I would say, an innovation around early company creation.

How do you do it systematically, and how do you mitigate the risk? Start by working with the multinationals. Start with their technology, their market data, and hopefully them as your initial customer and channel to market so you're mitigating all these risks. So when we look at things, we like to think that we, we, we have come up with a very systematic, repeatable process for company creation, and that's the innovation that we, we bring to the table.

Um, and even for us, if you talk about, you know, looking at your background again on go-to-market strategy Our go-to-market strategy, how do we productize that? Our productization of that was to actually build a public operating [00:28:00] conglomerate where, um, so h- our product is the companies we create, but the way we productize this versus initially when Innventures started, the model was different.

It was let's start companies, uh, let's seed them. We'll, we'll, we'll, we'll arrange the financing in their A and B and C rounds, and then we'll monetize them and distribute the gains out. That was the wrong product strategy. The right product strategy wasn't wash, rinse, repeat. It's let's build an operating conglomerate.

Let's maintain control of those businesses. Let's consolidate their financials and upstream them, and rather than having to sell our companies by shows of their value, if we're the public entity, you know, like a Danaher or a Constellation, a Roper, they'll get all of that, you know, uh, benefit in, in our share price.

So that's how we, that's how we productized what we do, and it was to create a public operating conglomerate of the industrial giants that we create. So- 

Mehmet: Yeah, it's a unique and [00:29:00] different, uh, model to do, but I think, you know, still you follow, you know, it's about s- you know, being able to spot the patterns, Roland, somehow, and, you know, having some common characteristics, uh, constantly while evaluating these opportunities.

So what make you, for example, predict whether a new venture will succeed? 

Roland: Well, again, it's the, it's the output of all the things I talked about earlier. The unmet opportunity, how big is it? Is there competition? How much can we get of that? Is there a compelling economic value proposition? What's the CapEx associated with it?

Uh, is it... So, so we measure the capital efficiency of it. Um, those are the things that we look at to say, "Is something going to succeed?" But it starts with, is there a major unmet market need? That really is where it starts with, and, uh, and, and that's the, that, that's the number one gating item that we look at, [00:30:00] and then everything else just follows downstream from that.

Mehmet: Right. Roland, if you, let's say I'm, I'm a CTO, I might be, like, even non-technical role, but I'm an executive on a company, and I know that we have internally a very promising technology, right? Uh, but we don't know what to do with it. Like, what are, like, s- kind of like actual practical steps you would recommend to me before even attempting to, to do commercializ- uh, like, the commercialization part?

Roland: Well, are you, are you an entrepreneur, or are you working within a larger... Are you a CTO of a- 

Mehmet: Large, large company. I'm, I'm, I'm, I'm CTO, let's say, in a large company. 

Roland: Yeah. Well, so that's where you have a, a, you know, y- y- if, if you don't have a pathway to commercialize it internally, uh, you are... The, the right strategy is to say, "Well, who can we partner with in order to do that?"

And then, and that's where there's a, where there is [00:31:00] a gap in the industry, that CTOs do have a gap in the industry because oftentimes you'll say, "Well, you know, um, okay, this doesn't fit within our mandate." And you can look at it, you know, I, I, I can't put words in companies' mouths, but, you know, um, if you look at some of the businesses we've created, you know?

Uh, uh, the first two businesses we created with Procter & Gamble, and, uh, and one is a business to recycle polypropylene plastic. That's PureCycle that we took public. The second company, which we, which we own, or, or the largest shareholder of, uh, that we created is Aeroplex, which is a sustainable packaging company.

It's a, it's a package that's, uh, that combines the best attributes of a flexible package in a rigid bottle. Uh, and, and, and- All I can say is that the, you know, within P&G, it wasn't in their corporate mandate to be in the plastics recycling business, nor to be in the packaging business, but they want their product to go into the packaging that they created, uh, and to use more recycled content.

For them, it was very important that their [00:32:00] product go into more sustainable packaging and more economical packaging that had better features. So, but they didn't want to be in the packaging business, nor did they want to be in the plastics recycling business. So the question for them is, well, how, how do we, how do we get these things to the market?

And the choices are limited. You're not gonna go to private equity or venture capital because they're investors, not operators. Um, you may not go to another packaging company because the other packaging company might not have the same priority to commercialize something. They might do it on a different timeline, or they may not-- they may simply not want to have it compete with them.

So the, but they have competing priorities, I guess, is what I'm saying. So, so you need, the industry really needed a company like Innventure that says, "We specialize in bringing, productizing and bringing technologies to market." So as a CTO, if you're trapped in an organization with a great technology and you don't know how to commercialize it, I mean, you, you can always call Innventure, uh and...

But, uh- Yeah ... but that's what we look to do. We actually look to work [00:33:00] with the technology officers of major multinationals so we can offer pathways to collaborate and grow, grow these technologies. 

Mehmet: You know, to, to benefit- Yeah. I, I, I think, Roland, they need to dare to actually of course, like maybe we made it a joke, but this is the reality.

They need to dare to-- If they believe that this can be commercialized and that it can bring value to the company, they should reach out really, because I've seen it again, time and time again, where they, they have this, not, I would not call it fear, but you know, they've didn't experience the commercial part before of, of tech, so they were always kind of technology users.

Roland: Mm-hmm. 

Mehmet: And they became actually technology producers without knowing that, oh, like we can actually add value to the company. I think CTOs, they want to be more, uh, leaning towards thinking, you know, big about the whole picture of how us as technology [00:34:00] group within the large organization, we can contribute to the P&L of the company.

And that's why, you know, the whole idea of the show is, you know, trying to get these business insights to, to, to technology folks so they can open their, you know, uh, I would say pathways to these new ways of adding value to the organization they are in. And yeah, let them call you, Roland. I would be more than happy if someone pick up the phone and, and, or like, uh, look up you on, uh, on LinkedIn or something.

Now, you see a lot of technologies today, Roland, I'm sure about it, and we talked about AI, we talked about infrastructure, but, you know, other than, you know, that the inflection point that AI is causing in a lot of industries, what other trends maybe we're not hearing much about, but you're seeing them, that they are also at an inflection point and they will be largely overlooked by investors and maybe enterprise leaders, I would say in, in the coming two, three years, five [00:35:00] years maybe?

Roland: Yeah, I mean, it's, uh-- Well, I don't know if they'll be largely overlooked. I mean, there are, you know-- We've already talked about AI, and there'll be a lot of other spin-off opportunities in solving the problems of that story. Like, are you going to have solutions that, uh-- energy solutions? Um, I think, uh, uh, you know, as there's more and more strain put on the public grid, there has to be innovation around, uh, improving the grid.

Um, so are there going to be energy, uh, opportunities? Um, if you look at other things that the US has faced, uh, as an example, um, critical minerals and the processing of critical minerals, uh, magnet technologies, you know, those are all areas you're seeing now, uh, announcements, uh, uh, about onshoring an industry that used to exist in the United States that, that, [00:36:00] that- 

Mehmet: Mm-hmm

that 

Roland: went away. Um, you know, but if you look at the companies that-- our businesses, again, you've, you've, you've seen a few things in plastic, which I think will continue. Um, the last company or the latest company we launched, uh, Definity, and we launched that just around when we went public, just after we went public.

We launched Definity in, uh, December, uh, of two thousand and twenty-four. Um, again, that was an innovation to create a new feedstock for the chemical companies. So companies like Dow and LyondellBasell and, um, you know, uh, BASF, they, you know, they need monomers, and right now they get the monomers for their, for their products from, uh, from, uh, fossil fuels, from, from steam crack and, uh, fossil fuels.

Um, we're able to take mixed plastic waste and extract those monomers that bypass the steam cracker. You know- Mm-hmm ... we're able to take mixed plastic waste, put it through a fluidized bed process, which basically means you're taking mixed plastic waste, mixing with some particulate matter like sand, [00:37:00] gravel, and you're putting compressed- Mm-hmm

air through it or gas through it, sorry, and it acts like a fluid, which causes rapid depolymerization. That friction causes rapid depolymerization, and you're extracting out the monomers. That's a huge opportunity. That, that, that-- The, the olefin mark or the market for ethylene and propylene and, you know, the monomers that, that, that, that, that the chemical companies need is about a three hundred and fifty billion dollar market.

It's a massive market. And, and, and, uh, so this introduces an entirely new feedstock for that industry and that market, um, so that they can diversify away from hydrocarbons, uh, if there's price volatility. Um, they can, uh, also create circularity, which I think the industry has demanded. Um, so I think the opportunity set looking forward is, um, somewhat boundless, Mehmet.

Like it, it, uh, it's, it's, uh, uh, it's on- it's only as wide as your imagination. But yeah, some of these things we talk about now, um- [00:38:00] Uh, I think the infrastructure for the next generation of high-performance compute and AI is gonna continue to create opportunities, and then everything downstream from that.

Again, power, uh, the, the grid infrastructure. Um, everything downstream from that is gonna create new and multiple opportunities. Uh, I, I, I quote a line that my son told me once about where we are in, in the arc of human evolution. We were talking about technology, and he said, "Dad," He said, "We're not modern humans.

We're the first recorded generation of ancient history." Uh, and I thought that was a very, uh, profound comment, actually. So, um, uh, that's a long-winded way of saying I couldn't possibly tell you the range of opportunities, but I think the right way to look at it is you look at where innovation is happening today, and then you look at everything downstream from that, and that's where you see the future opportunities.

Mehmet: 100%. And, you know, I can't agree more with your, uh, son Roland because, you know, like we, we're, we're witnessing [00:39:00] something I think we are the first to witness, right? Like, um, uh, the verge of all these, um, emerging technologies that at this moment in time where they all, you know, kind of united together to give us, you know, these opportunities.

And of course AI in, in the forefront because it's the most obvious thing that we were able to harvest from, you know, the development that happened over, I would say, at least the last 150 to 100 years in, in, in, in technology and, you know, we were able to finally get something that can produce technology for us.

And to your point about, you know, the other aspects, like you just gave examples from manufacturing and chemicals and all this, and this is where the deep tech, you know, I think this will be very big. Again, it's my humble opinion, uh, based on my readings and my interactions with people. There are a lot of things we don't hear about them in the mainstream maybe because, you know, of course the, now the large language models are in the forefront, like the known suspects, [00:40:00] always their names comes up.

But, you know, there are a lot of other things happening in the background. Like I attend conferences and I hear a lot of exciting things, whether it's in energy, in, in, you know, chemicals, in, in even like, uh, uh, pharmaceuticals, medicine, like all these other ranges that we don't hear them, you know, uh, about them in, in the main media very often, but I think we're gonna start to see breakthroughs.

Um, and again, using AI and other technologies- 

Roland: Exactly. I think ag- you, you hit that right on. I think AI is going to be a real tool for discovery in general, whether it's drug discovery or medical breakthroughs or just breakthroughs in terms of processes, industrial processes, uh, and, uh, and industrial technologies, which is where we tend to focus.

We're industrial B2B technologies is, is I would say the, the area that we focus on. But there's going to be so much innovation, and again, when you see those innovations happen, the question to always ask then is what's the knock-on effect downstream? [00:41:00] People always look at the top line. "Oh, AI." No. 

Mehmet: Right.

Roland: What's going to enable AI? What's the critical infrastructure that's gonna underlie that? And that's where you're gonna see the follow-on opportunities. 

Mehmet: Absolutely. Absolutely. And AI, you know, back to your, uh, you know, when you mentioned about the railroads in, in the United States, and I think AI will become just like the railroads, right?

It's just a medium for- Yeah ... uh, you know, building new things similar to how, you know, the whole, uh, you know, gold rush era, like it was enabled because of the railroads, right? So AI will become the, the, the mean, the way, but we're gonna discover new things because of this, so 100% on that. Roland, as we are coming to, to a close, and like maybe final words you want to share and how people can get in touch.

Roland: Final words are just never underestimate, uh, the power of human innovation and our ability to continue to evolve. And, uh, I think, uh, [00:42:00] um, investors generally speaking should mostly have a positive outlook when they look forward. You know, it's often people look back as they grow up and say, "Oh, in the good old days," or, "The world...

How's the world gonna continue to grow?" People look at the walls of worry, they forget about the fact that we are capable of incredible ingenuity and, and, and, and harnessing that, uh, and evolving. And I just think that people should always be more bullish than bearish when they look in the future is, uh...

And, uh, you know, from our perspective, as I said, we think we're doing something very unique at Innventure across multiple platforms. As I said, we're, we're plastic recycling, packaging, data center cooling. Uh, uh, uh, you know, it's, it's, uh... But what underlies that is the systematic process and what-- But we think we're bringing to market that's unique is that, um, we're a pathway for commercialization for great technologies.

There should be more companies like Innventure. Mm-hmm. [00:43:00] Uh, so we think we're certainly, um, trailblazers in creating this. There've been a lot of innovations in private equity and venture capital over time, and we think we're, uh, an evolution of that because much like our packaging business that has taken the best of a flexible package and put it with the best of a rigid bottle, we think we're doing the same thing at the innovation level.

Um, you know, we're taking the best aspects of venture capital, uh, and private equity, and we're trying to evolve that with being owners and operators of the businesses, not just being investors. We're the owners and operators with a unique skill set. Um, we specialize in, in commercializing businesses in a systematic fashion and, and there should be more companies like us out there.

So. 

Mehmet: Great. Where people can find more, Roland? 

Roland: Always find more on our website, uh, to- or, or just looking up our ticker. We're INV on, uh, Nasdaq, and the website is www.innventure, I-N-N-V-E-N-T-U-R-E, . [00:44:00] com 

Mehmet: Great. Thank you so much, Roland. The links will be in the show notes. I can't thank you enough. You know, it was great discussion with you today to uncover this special model, as you described it, you know, for uncovering technologies in large organizations and taking it them to the market to be successful and creating new companies based out of it.

It's, it's a unique business model. It's proving its success, I'm sure, about also, like, future success also as well. So thank you for sharing that with my audience today. And as I say always, this is how I end my episodes, this is for the audience. If you just find out about us, thank you for passing by. I hope you enjoyed.

Give me a favor, subscribe and share it with as much people as you can. And if you are one of the people who keep coming again, again, thank you very much for the support. Thank you for bringing the podcast always to the top 200 charts on different countries, you know, now, so we keep changing, you know, countries from week to week, so thank you for that.

And as [00:45:00] I say always, stay tuned for a new episode very soon. Thank you. Bye-bye.