Preparing for the roads of tomorrow

Valerann cofounder Michael Dan Vardi MBA2017 is optimistic for his company’s future in intelligent road traffic management solutions

1140x346_Think_Michael Dan Vardi
  • Dan Vardi did not begin his MBA with the intention of become an entrepreneur
  • Prestigious Blavatnik Family Foundation Scholarship enabled him to undertake the MBA programme
  • He and fellow LBS cofounders raised pre-seed funding for Valerann between the first and second year of the MBA
  • State-of-the-art solution is well positioned to capitalise on the huge global market for automated traffic-management systems

The traffic-management industry today is the equivalent of UK healthcare before the NHS,” Michael Dan Vardi says. “Only a very few, very well-funded projects have traffic management. They cost a lot both to deploy and to manage. Millions of pounds go into infrastructure and thousands more into managing it, so only 3% of roads in OECD-type countries currently have traffic management systems. Globally, it’s probably less.”

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"Imagine if we could target 30% of the world’s roads? Managed roads have around 31% fewer accidents and 20% less congestion"

Vision for the future 

The 3% of managed roads are worth about US$70 billion per year to the industry, Dan Vardi points out, so the opportunity for Valerann to deploy automated traffic-management systems worldwide is huge. “Imagine if we could target 30% of the world’s roads? And the societal impact – managed roads have around 31% fewer accidents and 20% less congestion. That’s millions of lives saved and millions of tons of CO2 avoided. We want to create a platform that can be deployed anywhere in the world at the click of a button and at a budget which means every road will win by using a Valerann solution.”

It was another Valerann cofounder, Shahar Bahiri, who realised the space was ripe for disruption and came up with the idea of putting IoT sensors across motorways. Dan Vardi was on board very quickly: “Several things were compelling to me about this idea. It was a huge and incredibly vital industry – roads as an infrastructure and the services they provide as an asset are vital and as global as it gets. The sector was laden with competition but with little differentiation between existing players, so a newcomer could make a dent. It was also unbelievably underserved, both in terms of technology advancements and the number of roads that had any type of technological backing.” 

Developing the idea was anything but linear, however. Working closely with stakeholders to define the most relevant product offering, the Valerann team eventually made a full pivot from hardware to a SaaS (software as a service) offering. Dan Vardi says, “If you go to any control centre, you’ll see lots of systems – CCTV cameras, radar cameras, data coming from vehicles, data coming from apps, screens everywhere – but ultimately what people do is answer phone calls, look at cameras to detect events, then send a patrol out. So, you have something like 70 million data points and a very manual response.”

Lanternn, Valerann’s state-of-the-art system, bridges the gap between data and action. “Mountains of data are just noise unless you can process, prioritise and decide how to action them,” Dan Vardi says. “We detect what’s happening, gather the data and syphon through it, then analyse and prioritise it to enable people to act more quickly and effectively.” 

Dan Vardi didn’t begin his MBA at London Business School intending to become an entrepreneur, he reveals. “I don’t have to be the person creating the idea – my value-add is that I can run with an idea and make it work. I wanted to build something. I also wanted to have unique impact – impact generated by taking on a challenge, as opposed to filling a role. And that type of unique impact is something I found in entrepreneurship.” 

Doing the MBA helped get Valerann off the ground: “About 10 of us were pitching ideas in a sort of informal entrepreneurship club. I actually pitched an idea and started working on it with friends, but after a few industry interviews we realised the economics didn’t work and we dropped it. Soon afterwards, my LBS cofounder Gabi [Gabriel Jacobson, MBA2017] approached me. He was already mulling this idea with Shahar and I started working with them.” 

Opportunity and belief

Was it a meeting of minds? “We’re actually all very different,” Dan Vardi says. “Each one of us brings something to the table that the others don’t. For example, Gabi brings enormous grit – when he gets knocked down, he just gets back up again – which is an indispensable trait in an entrepreneur. It was a combination of opportunity and the fact that each one of us felt we could make this work. An MBA is an amazing place to do a startup because it gives you two years to grapple with an idea and materialise it with very little risk. If it doesn’t work out, you still have the MBA. You also have a lot of smart people around you who are very willing to help.” 

The team raised their pre-seed funding in the summer between the first and second year of the MBA, Dan Vardi reveals. “We raised US$800,000 – that’s how we started the company.”

Along with the offer of a place on the LBS MBA programme, Dan Vardi was awarded the prestigious Blavatnik Family Foundation Scholarship worth around £40,000. “The scholarship was amazing. It meant that, during my MBA, I had to take on very little debt. That meant I could take on risk, which I otherwise wouldn’t have been comfortable doing. In that respect, my scholarship played a big part in defining my career trajectory.”

“I’m proud of being an LBS scholar but it’s something I don’t take for granted”

Dan Vardi believes the longer LBS programme, which contrasts with most other European MBA offerings, brings huge benefits. “Two years gives you the time to think things through and plan what you really want to do. More importantly, the relationships that you build are much stronger. In the first year, everyone is trying to figure out this new world and it’s in the second year that really close groups form. That’s when I made the friends that I still have today.” 

LBS was always his first choice, but he acknowledges that a second year comes at a price. Awarded offers at a number of European schools, the scholarship made his choice to attend LBS much easier, he says. “I’m proud of being an LBS scholar but it’s something I don’t take for granted. I know many people had to work hard to get in and take on a much more significant burden to put themselves through their MBA.”

The importance of transparency

Dan Vardi greets a question about his takeaways from his MBA with a wry smile. “I was reminded about the phrase ‘Jack of all trades’,” he says. “Towards the end of the programme I had to start prioritising things because if you try to do everything you realise you aren’t doing anything well.” 

More importantly, he learned to be proud of what he has to offer. “I’m someone who cares about things a lot. At Valerann I care about our customers, I care about the tech we’re building and I put in everything I have to realise that. I learned to be proud of that trait at LBS.”

The learnings from crisis-management classes and the importance of ‘over-communicating’, clarity and transparency have also been vital. “We’ve dealt with our fair share of crises. I wouldn’t say Valerann is on the home stretch yet, but I think we have managed well so far because we are transparent – with customers, our employees, our investors. At LBS, I learned a lot about how I communicate and about other people’s sensitivities, including the importance and challenges associated with diversity and how important it is to manage that and be intentional about it.”

"I paint the tough picture" 

Dan Vardi remains highly engaged with the LBS community. There are strong personal relationships – “I literally bought a house because my best friend from LBS bought one in the same street” – and Valerann now recruits from the school for internships and full-time roles. He also attends a lot of events and alumni clubs, and recommends people he thinks could be a good fit for the MBA programme. He has spoken about entrepreneurship at one of Professor Kamalini Ramdas’ classes, but admits that his version of the entrepreneurial life is not for the faint-hearted. “I definitely don’t give the glorious picture – I paint the tough, mucky picture, because one of the most important things for an entrepreneur is staying power. And where I enjoy giving back and feel I can add the most value is to people who want to share my style of journey. If you are an entrepreneur interested at LBS, then I will help you in any way I can.” 

And what’s next for Valerann? “We’re not as successful yet as we want to be,” he admits. “Our future is in supplying the needs of the roads today while preparing for the roads of tomorrow. But if you’d told me when we graduated that we’d raise US$25 million and that we’d be working all over the world and employing lots of people, I’d have thought that was amazing.”