Interview with Zoltan Vardy, business growth mentor, creator of The Launch CodeTM and key mentor in our Mentoring Program.
(Photo credit: Zsolt Nyulászi)
People deserve to feel the satisfaction of creating something from nothing – says Zoltan Vardy, business growth mentor, creator of The Launch CodeTM and key mentor in Design Terminal’s Mentoring Program, who also knows that this process has a lot of obstacles in store for startups. We sat down with him to talk about how he mixes the corporate and the entrepreneurial business mindsets, how developed Hungarian startups compare to international ones and how businesses can live through the Covid crisis.
Design Terminal: Tell us about the beginnings of the Launch CodeTM framework. When did it start, how did the idea develop?
Zoltan Vardy: The Launch CodeTM is a business growth framework that helps entrepreneurs create a clear path to building a profitable, growing business. I created the method by using a unique combination of two different worlds: the corporate and the entrepreneurial. I have a 20-year career in the corporate world. I was the CEO of TV2 Hungary and have held senior executive roles at NBCUniversal, ProSiebenSat Media and CBS in the UK and the United States. I realized that what I did most during these jobs was planning. These organizations are very good at creating a path towards execution but they are not very good at actually going down that path. After I returned to Budapest from London, I was approached by a venture capital firm to take on the Interim CEO role of an early-stage technology company that had been having some problems. What struck me was how disorganized and chaotic everything was at this company. I thought that I had probably arrived a bit too late to build the company to the scale that would have made it worthwhile for me to stay long-term. After this experience, I remember feeling really disappointed that I had to choose between these two extreme business environments. So one day, I sat down with a blank piece of paper and started mapping out the benefits and the drawbacks of these two different mindsets. What I realized is that what differentiates the corporate and entrepreneurial approaches: is their approach to planning and execution. I thought to myself, what if you could take that concept of good planning and match it with good execution. That became the basis of the Launch CodeTM. I chose this name because I believed that this was a blueprint to make your business “Blast off!” from a stagnant position. I then started mentoring startups and early-stage companies and realized that the concept itself wasn’t enough. I had to create a set of building blocks that brought this approach to life. So, I created ten principles: five focused on planning and five focused on execution.
DT: What were your first experiences with startups?
Z.V: One of the companies I worked with, for example, works in a field called social media analytics. They had been around for three years, had raised some financing but they really hadn’t found a proper go-to market strategy that would enable them to scale quickly. We spent the first couple of months working on planning: what was their value proposition, what were they selling and to whom? Then we started talking about their product offering and what their business model should look like. Once we had these planning elements clear, we set out to create a “Destination” for their business – a snapshot of where they were going to be in 12-18 months – and finally, we set out an action plan that would get them there. We then turned to working on real execution issues: how to communicate their product offering, how to generate inbound leads and build strong partnerships via outbound sales. Throughout this process, the biggest challenge is finding and maintaining your focus. You have so many directions that you can go, so many impulses that are coming your way. You need to work out which ones you follow, and which ones you ignore.
DT: If we reverse the formula, how can the principles and processes of startups help large companies that naturally have a more structured and solid system of operations?
Z.V.: One thing big corporations can learn from startups“plan, but don’t overplan” because you don’t want to be in a position when you are losing out on an opportunity because you want to achieve such high level of certainty in advance. Secondly, they should be able to create a culture where people are allowed to be innovative, to make mistakes, try new things without being punished for doing so.
DT: What do you think, what motivates Hungarians to launch a startup? What are the trends?
Z.V.: Being a “startupper” has become a bit of a fashion these days. Young people think it is a glamorous and exciting thing to do. I think people who start a business because they want to say they are startuppers are going to be very disappointed and unsuccessful. I don’t think there’s anything more difficult than creating something from nothing, but there’s nothing more satisfying than doing so either You have to be passionate about a problem that you’ve discovered, that you believe that you can solve better than anyone else. That’s the fundamental building block of a successful business. You are going to face an emotional rollercoaster — one day you are at the top of the world, the next day you feel like the entire world is looking down upon you you’ve got so many obstacles to overcome. If you’re not committed 150% to achieving your goals, it’s too easy to give up along the way.
DT: You gained experience during crisis management in 2008 and previously, in another interview you talked about being able to apply it even during mentoring. Did last year’s Covid crisis overwrite these experiences somehow?
Z.V.: I was the CEO of TV2 from 2007 until the end of 2010, and right in the middle of that is when the financial crisis hit. Unfortunately, it happened the year after we had the most successful financial year in the company’s history, so the contrast was quite striking. The first lesson I learned from this experience is, “Hope is not a strategy.” You have to create an action plan and take decisive steps to solve whatever situation you face. I think the same principal applies nowadays. It’s critical that startups and early stage understand their financial situation, even if it’s not a very rosy picture. You have to either rethink your product offering or commit to solving a particular problem and reenforce it. There are companies that benefited from Covid, for example, companies offering homedelivery of food. So, the challenge for them was how to serve this sudden surge in demand for their service. You have to set clear and achievable targets and then you’ve got to start delivering“quick wins”. That will give you some oxygen to breath – mentally and business-wise. You must continually evaluate and adjust your actions as needed to make sure that you’re heading in the right direction because circumstances can change quickly. Finally, you have to have a plan for your future. Even though a crisis may seem overwhelming when you’re in the middle of it, it too will pass. For example, I was very vocal with certain clients that they shouldn’t slash their prices in half because of Covid. If they do, they are going to have an impossible time trying to raise your prices to their normal level when this situation is over. Make decisions that make sense in the short-term, but be careful not to damage your business in the long-term.
DT: What do you consider your own success or what could be the long-term success for the ecosystem through The Launch CodeTM?
Z.V.: The only reason to start a business is because you deliver value to someone, and that’s my motivation, as well. I strongly believe that people deserve to feel the satisfaction, the thrill of creating something from nothing. My fundamental purpose is to have as many people as possible experience the rewards of building a successful business. Sometimes this means working with companies that are in a very early stage and helping them get started, but sometimes it means working with advanced companies and helping them grow to the next level, whether through international expansion or building a more robust team and organization. My hope is that by doing so I’ll also give back to the local ecosystem by introducing knowledge and experience that I’ve gained from my 30 years of operating in global business.
DT: How developed are Hungarian startups compared to businesses of other countries around us or even overseas?
Z.V.: The ability to be innovative in a very cost-effective way is the greatest strength of the ecosystem in Hungary. It might take millions of dollars in Silicon Valley to develop the exact same technology that you can develop locally for a few hundred thousand dollars. The biggest gap is the lack of commercial thinking and market-driven focus. Most startups in Hungary tend to be driven by technology people, but if you look at the most successful startups in the world, they almost always had a very strong commercial approach that matches a strong technology approach from the very beginning. I think Hungary will experience a natural progression into this “technology meets business” approach as the ecosystem generates more success stories. My first angel investment was ten years ago and even compared to then, I can see how much the ecosystem has developed in this direction.
DT: How do you enjoy working with Design Terminal’s Mentoring Program and its startups?
Z.V.: I became acquainted with Design Terminal back in 2017 when I met Founder-CEO Gergely Böszörményi-Nagy informally. I had just returned from three years in London and I was interested in getting involved in Hungary’s startup ecosystem. Gergely was very open and happy to take me onboard as a mentor in the Design Terminal Mentoring Program. From the very first moment, I was struck by Design Terminal’s strong spirit and professionalism. DT creates a really positive environment for startups and one that draws people in to become part of the larger startup ecosystem. A lot of the insights that helped form my current professional work as well as The Launch CodeTM come from my first experience mentoring teams at Design Terminal. I’m always impressed by the amount of energy and commitment that DT, and particularly the people dealing with the Mentoring Program put into the whole process. The program gives participating startups a clear path they follow as they progress over its three months.