Interview with Pavel Grman, shareholder of Virtual Reality Media
Q: Can you tell us how you started your business?
PG: After the revolution in ’89, I was fired as a young engineer because of organizational changes, and my colleague Július Berith was fired as well. I set up my own business and started to do business in several areas, but modern PC computing and the software for it was top of the range at that time. Julio started a business in this area as well, with his whole family, and it was thriving. I did business mainly in Bratislava, he in Trencin. We were young, everything was new and beautiful, and we had the desire to achieve something more than selling computers, copiers and paper, although I know people who, if they had been with us then, would have persuaded us that we should not be visionaries, but do business on this, because after all, this is security and stability. Thankfully, we only had ourselves and our appetite to be exceptional.
After discussions and agreement, we decided to do business together in the field of graphic applications and related computers. In 1993, COCOM was disbanded, which meant that the powerful systems of the American company Silicon Graphics came to our region of Central Europe, and we agreed with the management of the company’s representative office to offer, sell, service these machines in several countries – and to different customers who could use the software, including technical applications in engineering, architecture, 3D imaging, rendering, graphics in general, and the enormous computing power of those machines.
At one exhibition of military technology in Trenčín we exhibited some of the most powerful Silicon Graphics computers and various devices that were unique for that time – the company loaned them to us for the exhibition. Our stand was visited by the then Slovak commander of the Air Force, who after the division of the republic and the army was given the task of building up the military air force in Slovakia. Among other equipment, he had new MiG-29 fighters to manage and pilots who needed ongoing training, for which he did not have the resources if he did it on real equipment.
That’s when the power lines in space came together, and to his question, which only a brilliant, sane commander could ask, if we could build him a modern simulator for these planes, my colleague Julo said, yes, without hesitation. And he gave us a chance. He tasked his people to work with us to see whether or not we had what it takes. Incredible story, isn’t it?
Within a few weeks we put together a team that produced a very high quality study, which then went to the Ministry of Defence for approval. We cooperated with the Trenčín Aircraft Repair Plant, with which I still have a very good relationship and cooperation. We then submitted an offer, which was accepted. It was amazing, we were young 32 year old guys who seized the opportunity. We built a team of people who are still working in the company today, along with other great professionals. They are specialists who are world class, knowledgeable and experienced. In those 30 years, together with them, we have put together simulators that are now on 4 continents, we have facilities and a set of services that are world class and have built a company that is internationally known and accepted.
Q: What was your first product?
PG: In 1996, we produced a simulator for the Slovak Air Force – for the then new MiG-29 fighter aircraft.Generations of pilots have trained on it a number of tasks that they have to handle professionally, without hesitation and in cooperation with other parts of the entire national defence system. These were then practiced in the real world. Of course, they also practised on the simulator what cannot be practised on a real aircraft, whether it is in terms of the cost per flight hour or the situations they need to practise, such as various malfunctions, reactions to them and their management, or the use of weapon systems in the military domain, which cannot be practised to such an extent in the real world, among other things, because of the cost. The simulator is still in operation today, although it is not currently in use, as the MiG-29s have been donated to Ukraine.
Q: When did you start thinking about expanding into foreign markets?
PG: Foreign markets was a perfectly natural idea and development because simulators are devices that are unique, expensive and highly specialized. They are either used in the military, in commercial airlines, or in other companies that have specific users. Already when we produced the first simulator, we contacted similar partners in Slovakia, the Czech Republic, Poland and Hungary. We then entered into further contracts with the Czechs and gradually went on to the Arab world, Africa, Asia, the Russian Federation, Western Europe and the United States.
Q: Could you describe the most interesting specifics in your segment?
PG: It’s not so much about the territory. It’s first and foremost a top partner from the country where the biggest simulation market is, and that’s the United States. In 2009, we started communicating with the U.S. government and the relevant agencies. The U.S. government needed to supply simulators for certain types of aircraft for its partners in other countries. These were helicopters and turbo prop aircraft. From 2009 to 2020, our company, in cooperation with an American partner, produced 14 large and very high-quality simulators, which we then supplied to countries such as Afghanistan, Iraq, the United States and Hungary. These systems were supplied through US government programmes designed for this purpose. I know that very few companies in our region have been able to do anything like us, to produce the systems that the US government needed. We delivered them to that country, we installed them there, and we serviced them for several years according to the needs of the American government, and we have excellent references from its representatives, which declare that we managed all the requirements of a demanding customer to a high level and completely. We are very proud of that. Of course, you need partners, traders and lobbyists who know the environment and processes in acquiring such contracts, without them it is not possible.
We had a top American partner working with us on this project, who is a great businessman and a great person, living in Arlington, near Washington. I would like to extend my warmest greetings to him.
Q: You mentioned different areas from Africa to Russia. What are the specifics of these markets?
PG: You have to open up that market first of all. Find partners and know how to negotiate with them. You have to have good technical information and a top-notch product. You have to be open with the customer, you have to be polite, you have to be able to explain things to them, you have to give them full support and of course you still have to offer them something that you don’t think other companies can offer. We Central Europeans have one big advantage in markets such as Central Asia. Unlike our partners from Western Europe, we speak and read Russian, we know their technical standards and norms, we are close to the processes they use and need to modify them, because we did something like this twenty years ago. It creates an immediacy of contact and speeds up the negotiations because you’ve met people who are closer to each other than when somebody comes in and brings a product that they’ve made, but that product is not always as fully compatible as it is when we deliver it. That’s very much appreciated and then we also add to that our ability to work with people and humanly as well.
Q: Do you have any activities in Slovakia?
PG: We do. Misc. Honestly, we’ve been heavily prefaced by Covid, as have a number of companies that also do this type of specific technology. Processes, needs, negotiations have stopped. Another reason was that you had to go to meetings in person. In our industry, you can’t do everything through Zoom or other systems. You have to have a personal relationship, without that you don’t get beyond a certain level. And because you couldn’t travel, so for example a colleague who went to an African country for a week on business came back in 3 and a half months having not met anyone because it took a couple of weeks to get there, then you couldn’t find dates to meet all the necessary customer reps, everything was tied up. A lot of potential projects that we had in the works were getting pushed back at the very least, but also cancelled.
And for me personally, but also for the company, probably the hardest blow came at that time – my lifelong partner and friend Julius fell ill with cancer and died in 2020. And you had to react to that as best you could, deal with it and move on.
In this period, a completely new geopolitical situation was emerging. All the countries of the NATO eastern wing region were rearming, from the Poles to the Bulgarians via the countries of the Western Balkans. They are all giving old equipment away and buying new equipment. These systems are expensive, they are complex, and all the training of specialists, from pilots or ground crews, operators, through to the training of command elements and other specialists, has to be carried out on simulation systems. This is up to the level of tactical interconnection of those facilities at supranational level, as defined by the new requirements and standards of NATO, the relevant agencies and national authorities.
I see it as a once-in-a-generation situation and we have to approach it that way.
We are a system supplier of training equipment for new platforms being introduced to the Armed Forces of the Slovak Republic, we are working on contracting our products for other customers in the region.
We work intensively with multinational institutions, which define the objectives and the respective tasks and tasks to be fulfilled, and our aim is to gain a position and a place in them. It is a task and a goal, the acquisition of competences, which is supported or directly provided by the state and the relevant governmental authorities, and you as a technology partner provide your skills, qualifications, cooperation. You know, we are a very experienced company, with know-how that is unique in the region. I am glad that our partners in our Slovak government, in the ministries, are also aware of this and are taking advantage of it; we have their support and we are negotiating to meet the relevant objectives.
Training and equipment for it are reaching the next generational level and the volume of training as well as the need for more of these devices, their functions is increasing dramatically.
Q: Do you work in the civilian sector in addition to the military?
PG: Yes, especially for commercial companies or government institutions that provide training for pilots and cabin crew. When you fly in an airplane, the pilots sit in the front and the cabin crew serves you. These people have to be perfectly trained for their job. That is what the pilot simulators are for, where the pilots sit in the cockpit of the simulator and with the instructors they fly the whole flight, or parts of it, from take-off to landing, and they have to learn how to react to any situation that arises on or off the aircraft that causes a problem, so that the passengers don’t notice it at all, and when they do notice it, so that they are able to do something with the aircraft and the other members of staff so that they land and save the people. There are worldwide regulations and regional standards for that, which are based on the regulations and you have to make simulators according to them. We have made them and delivered them to some training centres in Europe and we have efforts to deliver them to other countries and regions as well.
Q: Can you assess the competition in a regional and global context?
PG: We are the oldest and, dare I say, still the strongest and most experienced company in the region, but I don’t want to offend other companies that are also our partners in projects. We are accepted and we cooperate with large multinational companies. We want to keep that position. As for our global position, statistics show that our company has 1 – 1.5% of the global market.
Q: An investor joined your company a few years ago.
PG: In 2019, my colleague Julio and I had a slightly different vision for the development of the company. We had two big activities in the works that were going to take us immediately into the simulation market in the US and China, but Covid put the whole thing on hold in 2020-2021. We recruited a Slovak financial investor who was interested in co-financing these activities. I have to say that this saved us in a way, even though the investment activities that we had in the pipeline could not be realised in the end because of Covid. But the modification of the use of the investment and the professional qualification of the investment management team helped us to survive that difficult period and we are once again a very viable company that has probably the most contracts awarded in the last 10-15 years.
Q: How do you manage risk?
PG: The way we look at it is that there are specific customers who simply need those facilities. And when we get a contract, we know it’s an institutional customer. It’s primarily government institutions, ministries that have their status. They are certainly a stronger guarantor of contract stability than a commercial entity. I appreciate every customer, but a commercial customer on the other side of the world is not as stable as a ministry in your own state or in a nearby country that is in a stable grouping, whether it’s military or economic. This is also how financing banks view contracts.
Q: What is your long-term vision?
PG: The opportunity is the already mentioned generational exchange of military equipment, but we would like to go much more into the civilian sphere and into the so-called developing countries, because there is a lot of investment, the whole infrastructure is being built, including training, so there you have a significant opportunity for application, unlike in Europe and the United States, where everything is built. Next, India. This wonderful country is developing its aviation market in an extraordinary way. My idea is that we will build a joint venture there and, together with a strong Indian partner, we will produce training systems there that will be used for training not only in India.
Q: Tell me what makes a good leader
PG: We’ve always tried to be a team, but more and more I’m realizing that there has to be someone who brings
the basic ideas, who is not afraid to say the basic goals, even if they look or are difficult at first glance, but only then can you be successful in that area. I always say to my opponents, show me an easy market and we’ll go right there. And it’s finished.
You also have to have a very strong team of people behind you who can translate those things into reality. So it’s on the one hand being able to be in a position to be able to push your vision and then on the flip side you have to have the ability to work with a whole team of people to take the whole idea and translate it into first a business opportunity and then be able to execute it.
Q: What advice would you give to potential exporters?
PG: Every export is specific in some way, but it also has some common features. First of all, the exporter has to decide to go to a certain territory. It has to export a product that is competitive enough to be marketable in that country or region. What I am saying is that territories and opportunities are being colonised today, not just for companies like ours, and either it will gain more space or it will become an irrelevant player. So, first of all, it has to do a very thorough review of the risks, the positives and the opportunities in order to be successful in the final analysis, so that it does not end up leaving with the fact that it has lost everything, someone has either taken it over, or it is a market that is absolutely unable to accept its product, or, conversely, you become a significant player in a given territory or market segment. These are very important things to be aware of. That beginning, that opening of the door, is the most important thing. You must not make a mistake there.
Thank you for the perfect interview.