Lydia Varmazis: Boardroom Insights - Leveraging Advisors for Startup Success

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Matt

Hey Lydia, good morning. I'm really happy to have you here today.

Lydia Varmazis

Excited to be here.

Matt

Before we start and jump in the question, I think it will be really if you could tell a few words about your current position and the role in the company.

Lydia Varmazis

Yeah, sure. Thank you.

I'll just give you a little bit of an overview of who I am. My name is Lydia Varmazis. I am the Chief Portfolio Officer and Chief Product Officer for rbcx. A little bit about my career, I would probably give it to you in maybe three phases. I started my career in product management in the San Francisco Bay area working for Adobe. I spent about 11 years there working in product management and worked on flagship products like Adobe Acrobat and Illustrator. And later in my career there I played a key role in transforming Adobe's Creative Suite, what we now know as the Creative Cloud, a global powerhouse.

Next phase of my career I really focused on global financial services, working at PayPal, leading product and engineering and also working in their identity and payments platform. And then the latter part of my career, which is where I am now, I'm really focused on transforming more companies. I'm the head of Venture Portfolio for rbcx, which is a wholly owned subsidiary of rbc, a global financial services company. And my role there, I am both an advisor, board director and mentor assuring that we build great products at scale.

Matt

Thank you for that. And I, I'm really interested in your experience as a board member. So you manage, let's say work in a billion dollar company but at the same time you're a board member for a various startups. And I'm just wondering, the first case is like how can founders of startups effectively leverage their board members from your experience?

Lydia Varmazis

Well, the first thing is that you have to really understand that as founders and CEOs your board is an asset, not an obligation. And, and I'll give you like my three key tips that I give any CEO or founder. Use your board meetings and your board for strategy, not reporting. I think board leaders should come or CEOs should come prepared with specific high level questions requiring the experience, insight and the deep topics. Like today we're going to focus on sales and we're going to focus on competitive landscape and use your board members expertise to really help you solve that particular problem that you're working on. Leverage their networks, whether it's hiring or fundraising or partnerships, your board has access to board doors that may be closed for you. So select them wisely and use them for access and leverage.

Matt

And like you already answered this Question a bit. But maybe like when you remember yourself when you started as a board member first time, right. And now you have some experience here, so maybe do you have some key lessons that you would share with yourself, you know, like a few years ago or to any like new starting board member?

Lydia Varmazis

Well, I think everyone that's in a new role suffers from a couple things like imposter syndrome. You know, you're surrounded by people that you think are much more impressive than you. I think respecting that everybody in the room has something to deliver and something to present is really important. I think it's important to understand different perspectives and, and you may think, well, I don't think that way or I see things differently. A lot of times people think when they're early in role, they need to align with the way the direction of the company as they're catching up. And I'm not saying walk in and be a contrarian, but don't be afraid to own your own point of view. There's a reason why you're in the room and present a perspective based on what your experience is and how you're seeing data and inform people from that perspective.

Matt

And you move from the role of a head of product to role of the head of portfolio management. Could you tell me like why you did it and how the role is different to the previous one?

Lydia Varmazis

It's a really great question and I'm actually kind of in both roles. I'm kind of straddling, but we can get into that. I think product and being a CPO is about building the right things to deliver value to your customers and, and your investors. When you think about portfolio management and board meeting and board direction, it's more about betting on the right things to provide value to your customers and your investors. So in my dual role, I also am the head of products. So I advise these internal and external companies on how to scale. But as a board member, I'm looking at how do we leverage the strength of our wholly owned subsidiary as well as our investments in these businesses to build at scale.

And it's always a question of how do we transition that. But also bring my experience because these particular products are product led growth, they're not actually doing sales led growth. So in this instance, it really helps having a good experience in product to help be a director and also the head of portfolio.

Matt

And when do you think it's the right time to hire the head of portfolio? Like what stage of the company? Because I've head of product, of course. I think every company needs it. But head of portfolio, what kind of problems does the head of portfolio solve?

Lydia Varmazis

Well, it's a different situation in this case. We operate kind of in a blend of a VC and a private equity model. Not many companies own other companies, but if you're trying to scale multiple companies at once, I think it's really important to make sure that in this case we have four. We're trying to build an environment where eventually we probably have a dozen. You probably need to be able to create things that scale. So you don't want to create five or six or seven siloed companies. You want to take advantage of both their independence because they're all very, very different companies, but also leverage the company opportunity at scale.

So there are certain things that you can do at scale. Now, of course, it depends on the scenario and the company and certain infrastructures that you can take advantage of. So you have operational efficiencies. Many venture capital and private equity companies do this this way.

Matt

And you work a lot of innovation. So as a venture builder and working closely with the startups, I mean the innovation is probably something that you try to do on a daily basis, but it's really challenging in an enterprises. So either you could buy something from the market which is already working, or you can build something in house. And I'm just wondering, in the meantime, you cannot break the working business. So I'm just wondering, do you have a process for that? Like when it's the right time, you know, to implement the startup, implement the innovation and not to break the things. Like what is your process behind it?

Lydia Varmazis

Yeah, it's a question of a lot of things. It's obviously opportunity cost is, I think the biggest question you have to say, how long will it take you to get to market? If you were to build it yourself, do you, are you a subject matter expert and do you have brand permission to enter that market or would it be faster and more efficient to get to market by acquiring a company? Now, of course, innovation is always about thinking about getting to market as fast as humanly possible. So sometimes if you are the subject matter expert and you have the internal expertise, it does make sense to build. Sometimes it also makes sense to partner. So you don't even have to necessarily buy.

You can license technology, which is someone to buy and white label and then actually distribute it that way. And then of course, when you're working in a regulated environment, you also have to think about if you're acquiring a company, what kind of technology are you buying? What compliance regulations do you have to Think about. And so it's also thinking about that in that environment, if you're inheriting somebody else's tech stack, are you going to be able to integrate it into your own systems? So it's a combination of leveraging the positives and negatives and figuring out what works for you at this time in your development lifecycle.

Matt

I personally really like the dappling driven decision and I'm just wondering in your case, what kind of objectives and KPIs do you track and like, you know, if those bets, those business bets are paying off.

Lydia Varmazis

Yeah, sure, absolutely. And yes, it has data informed decisions. Of course data doesn't drive your decision informs because economic conditions and the climate can always change. But there's three areas of KPIs that I always focus on and obviously get the portfolio companies to look at. So the first is portfolio health. Are the companies compounding in value? So make sure you have alignment on how you define value because not every company is about revenue.

Sometimes it's about customer acquisition or building an economic moat. And of course depending on what stage they are in their growth cycle, it could be different for different reasons. So you're looking at the portfolio health, both lighting and leading indicators. It's also about capital efficiency. If you're making investments, are you deploying resources where they have the highest impact? We talked about buying a company. So what is your expectation on payback and where are your efforts going to be in your product development?

How much money are you spending on that and how are you growing and expanding your teams? And the final one is strategic alignment, which I alluded to before as well. When you're making these bets, you have to make sure that they align with your company's long term vision. So whenever we're looking at acquiring something or building something inside rbcx, it's not just about our short term gains, but how does that play with the long term vision of the organization? Again, you have to look at what does this decision look like for. Not for the next six months, but what is the story we're going to tell in the next five years.

Matt

And during our recent talk you got my attention with the concept of scaling. The scaling that the scaling the team after the MVP is harder than building the product. I mean like the variating from 0 to 1, it's easier than getting like from 0 to 1000, let's say people. And I think it would be great if we could elaborate on that.

Lydia Varmazis

Yeah. One of the reasons why I love scaling is frankly because, yeah, it's one of the hardest things you do.

So zero to one. And I think everybody knows this, it's about product market fit. It's about is it defensible and is it repeatable? Can you build something that is unique and novel and then will your initial customers come back or will you get more customers? But 1 to 1000 is really about scaling your organization, repeatability and talent density. So the product might be great on operational execution from 0 to 1, but what you do from 1 to 1000 is like really, really much more complicated. And you also have to think about how you want to scale.

Like do you want to go horizontal and acquire more customers with the same product? Like think about something like Slack. Slack works pretty much the same whether you're a ten person company or a thousand person company. So it's really about a horizontal scale. When you're thinking about expanding vertically, you want to offer more products and services to the same customer. So basically you want to get share of wallet. So maybe think like a company, like, I don't know, Salesforce, where they offer five or six products.

You might have marketing cloud, you might have sales cloud, but it might be the same company. So you have to think about expansion and where you have brand permission and where you have expertise. And then you also have to think about are you driving innovation to the point where you're actually disrupting an industry or are you creating a new market that didn't even exist? So if you think about something like Uber, they created something called like rideshare, which didn't exist before, certainly we had transportation, but they basically disrupted an industry and created a new market. So that was neither a horizontal or vertical expansion, was about actually new market creation that didn't even exist before.

Matt

I really like to hear from, I guess some examples of contraria and contrarian decisions that are, you know, maybe not controversial, but contrarian decisions that you make and lessons learned out of it. I bet you make a lot of decisions which are not popular and you have to do it. And maybe you recall some kind of examples that you could share with us.

Lydia Varmazis

Yeah, I think I might share maybe a more personal example. So one of the most controversial decisions I made was walking away from a role that was both financially and professionally really rewarding. On paper, it really checked every box title, influence, compensation. But the culture and the environment didn't align with my values and I knew there was nothing that could make up for that misalignment. So from the outside it may look like a bold or even irrational move. But what I've learned If you really want to talk about long term success in your career, it's not just about finding the right job, but about finding the right fit. And if you're constantly compromising how you have to think and it erodes how you want to lead and innovate, then ultimately you have to set out and make the right decision for you.

And so sometimes you have to walk away from something that's really, really looks really, really great, even though it's not the right fit for you. And that can be perceived as controversial.

Matt

And how about the challenges and the pay point, pain point of the current role as a head of portfolio which are maybe not visible from the outside? Right. The people apply for the job, but you know, sometimes you don't really know exactly what will be the scope of head of portfolio. So maybe in your case, based on your experience, what do you think are the challenges or pain points that are not so visible, let's say, before starting the role?

Lydia Varmazis

Yeah. So I think one of the really tough things we have with RBCX is that we are this innovation hub inside rbc. And so when you're scaling and bringing a large organization along in this journey, there's challenges on both sides. Obviously it's a highly regulated company and so we have to comply with international and obviously laws within our own countries where we do business. But then you also want to build this culture of innovation and moving quickly. And so there's always this balancing act between making sure that we are aligning with the overall infrastructure and structure of a global financial services company while building a culture of moving quickly and innovating and rapidly iterating on what we do. And so from the outside it looks like a lot of fun.

And I have been an entrepreneur a couple of times. It's probably the hardest work you'll do because of course when you actually do move the needle on a very big company, the impact is much larger. But the journey can be at times very challenging.

Matt

And the last but not least, the question that I ask all of my guests, are there any books or conferences or the blogs that you like to read and you think they were influential on yourself?

Lydia Varmazis

Yeah, I mean, definitely a book would probably be Daniel Pink's Drive. I love how it challenges the notions of motivation, emphasizes about what people really want in the workplace, which of course is autonomy, mastery and purpose. Those are the real drivers of peak performance. And I always look to lead teams with peak performance. Something that I read myself to keep me as a leader in a peak performance mode is Julie Gerners or Dr. Julie Gerners. Ultra successful.

It's a substack. And then probably from a podcast perspective, I listen to Acquired Masters of Scale, Hard Fork, all great podcasts that talk about AI leadership and how to scale organizations.

Matt

Awesome. Lydia, thank you so much for your time and sharing with us your lessons learned. I really appreciate it.

Lydia Varmazis

Thank you as well. I really enjoyed this follow Matt and Leshek on LinkedIn.

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