Interview with Raffi Kassarjian, Converse Bank

iTechnology.am team got a chance to talk to Raffi Kassarjian, one of the most successful Diaspora Armenians who repatriated to Yerevan years ago. Now Raffi is the advisor to the board of Converse Bank. Besides he serves on the boards of UITE and Repat Armenia inspiring and helping the Diaspora Armenians to get involved in the growing tech industry of Armenia. Lets see what was like his career path and repatriation story.

iTechnology.am: You lived in the US for over 30 years and thought of moving to Armenia, but in 2008 you moved to Yerevan, definitely. Can you please answer the most popular question for repatriates: why did you move to Armenia to live?

Raffi Kassarjian: I first came to Armenia in the early 1990’s, right after independence and during a very difficult time for Armenia and Armenians.  I spent 18 months here, and right away felt an incredibly strong bond to my homeland, even though my ancestors are all from Cilicia.  However, I also knew that I should take my time and plan my permanent move to Armenia when I was in the right place both professionally and personally.  That time came in 2008, when I was ready for my next career-advancing step, which coincided with an exciting opportunity to start a new internet company in Armenia (iCON Communications).  On the personal side, it was extremely important for both my wife and me that our kids grow up in an Armenian environment and context, and experience had shown that it is very difficult to achieve that in the long term outside of Armenia, even in well-established Armenian communities in California (in our case San Francisco).  Looking back, we could not have made a better decision, both professionally and personally.

iTechnology.am: Over the years, you have actively participated and seen first-hand the evolution and growth of the Armenian IT sector. What are the major changes you have seen since you have moved to Armenia?

Raffi Kassarjian: I can characterize the changes into three categories.  The first has to do with infrastructure and environment: over the past few years, there has been a revolutionary change in the quality and availability of broadband internet, and penetration of consumer internet access devices, in particular laptops, smart phones and tablets – this has enabled access to global technology trends that was acutely missing prior to that.

Next, we are seeing the results of the first wave of significant investments and acquisitions by international tech companies in Armenia – not only have these growing organizations created meaningful employment opportunities for Armenians graduating with technical degrees, but they have introduced western management techniques and culture to the Armenian market.  These companies have even spawned multiple new start-ups, when engineers from these established companies decide to break out on their own.

Finally, and this is tied to the previous point, I see a fundamental change in young engineers’ willingness to take risks and launch their own start-ups. You can measure this in the number of new start-ups, in the number of participants in hack-a-thons and various competitions, and in the number of young people coding away on laptops in cafes around Yerevan and beyond.  In the long-term, this is the greatest positive change in the tech industry in Armenia, as a healthy start-up environment is a significant engine of growth and innovation for any tech eco-system.  Of course, we still have a long way to go to reach the levels in more innovative markets such as Israel, Estonia and even Jordan, but we are heading in the right direction.

iTechnology.am: You have more than 16 years of experience in the tech industry. Can you please tell us more about you and your career. What have you are focusing now?

Raffi Kassarjian: You’re right that my entire career has revolved around the use of technology, even though my formal training is not technical.  My fascination with technology started when I saw the first Apple Macintosh, right after its introduction in 1984.  I was still in high school, but immediately realized how technology could fundamentally change the way we interact with each other and accomplish tasks.  Since then, I’ve tried to guide my career on the intersection of technology and business strategy, in other words how companies in different industries can use technology to gain competitive advantage.  In fact, that’s exactly the topic that I teach at AUA, in a class called Enabling Competitive Advantage through IT.
Even though my first work experience after college was to work for a start-up in Silicon Valley, our “product” was really more of a service to connect technology companies around the world with each other.  My first real tech start-up experience was establishing a brand-new internet service in an established company, in 1999.  Our task was to enter a market for an internet product that used our core technology, even though we were late to market and there were many new start-ups trying to attack our space.  During this time, I learned how to develop a strategy, weigh risks, make decisions quickly and act decisively to gain market share and traction.  These experiences were key as we created iCON and entered the internet service provider market in Armenia, especially as this market became highly competitive with the entry of 3G internet and then fiber-to-the-home.

iTechnology.am: What drives you to serve the Armenian IT industry, helping it in many ways, taking into the account that you serve the boards of UITE, RepatArmenia and act as an advisor to Corporación America?

Raffi Kassarjian: I fundamentally believe that IT is one of the strategic paths for the development of Armenia as a competitive economy and more progressive society.  As such, much of what I do, both within my formal role at Corporacion America, and in the various groups and projects that I’m involved in, is focused on the development of IT in Armenia.  I am often asked “what is your interest in this project” or “why are you doing this” – the answer is simple: we all gain when the base and foundation of IT in Armenia grows.  I am very excited about UITE’s new focus and support on start-ups, and with Repat Armenia, we have a specific strategy to attract diasporan IT professionals to Armenia to help drive the growth of industry here.

iTechnology.am: Can you please share your tips for those Diasporan Armenians, who want to move their businesses or open new ones in Armenia?

Raffi Kassarjian: I am asked this question fairly often, and I try to stay consistent in my advice:

1) please treat any investment in Armenia as you would treat an investment in any other country (including your home country): understand the market, be aware of the risks, and most of all, make rational business decisions rather than purely emotional ones to “help the country”.

2) Even if you’re establishing your company in Armenia, make sure your focus is on external markets – Armenia’s internal market is very small, and inversely, the global market is huge and offers many more opportunities.  My friend Aram Salatian, who established National Instruments’ operation in Armenia, has a very simple “formula” for this.  He urges all of us to remember the number 377 – 3 is for 3 million population of Armenia, which means 3 million potential engineers.  7 is for 7 million Armenians living outside of Armenia, which means 7 million potential salespeople.  And the second 7 is for the entire population of the Earth – 7 billion people.  The 3 million should be building products that the 7 million will sell to the 7 billion!

3) Make sure you do everything by the book when launching a business here – I know of too many Diasporans who have come to Armenia, and have either willingly, or through the advice of their local partners, tried to cut corners or otherwise adopted non-western standards to launching and managing their businesses.  While that might seem attractive in the short-term, it always results in disappointment and even worse, because a clean operation is the best weapon and defense in the context of a corrupt environment, and each new company operating 100% in the open helps to reduce the influence of the “shadow economy”.

Interview with Raffi Kassarjian by CivilNet TV

iTechnology.am: What are your thoughts on how Armenian IT sector can become more attractive for investors? What do our startups need to do to attract venture capital investment from around the world?

Raffi Kassarjian: The answer is both obviously simple and devilishly difficult to implement.  First, the world of start-ups and venture/private equity financing is a difficult one to understand and succeed in.  Even in America, the most developed start-up market in the world, a very small portion of start-ups develop beyond seed financing or “bootstrap capital” (financing by founders).  It’s tough to convince other people to give money for your idea, even if you believe you can conquer the world.  So step one is to understand the real dynamics at play in the start-up world:  what do investors look for?  How do you differentiate yourself?  What are the sequence of steps you should take to seek angel/seed, then early-round, then late-round financing?  Fortunately, there has been much written on this subject, but more importantly, there are now more and more successful tech entrepreneurs with Armenian backgrounds to act as advisers and mentors.  Next, since venture financing is by nature a very risky business, most venture capitalists and other private equity players try to minimize exposure to additional risks, such as cross-border financing.  As such, until there is a well-developed Armenian (or regional) venture financing environment, it probably makes sense for Armenian start-ups to establish some form of corporate presence (even it’s just formal registration), in a well-developed market such as the US to gain access to financing there.  Finally, understand your target market, finely tune your product, and think big – most VCs want to invest in ideas with huge potential as a way to mitigate the high risk of failure in start-ups.

iTechnology.am: Your lectures and workshops always inspire your audience. Please share with us your most valuable tips regarding startup creation, marketing strategies, market entrance and product development.

Raffi Kassarjian: Wow, this is a hard question that probably deserves its own interview and article.  I’ve shared some of the key ideas in the previous answer, but let me try to elaborate more here.  Venture capitalists invest first in teams, next in market potential, and finally in the idea itself.  Therefore, always focus on the backgrounds and capabilities of your founders, and even try to actively recruit team members that have proven track records in the key parts of the business.  As I mentioned before, think big – your addressable market should be at a minimum in the multiple tens of millions.  Next, do your homework – you should become an expert in the market you’re targeting, the pain points that exist and how your product will eliminate those pain points, and intimately study your existing and potential competitors so that you can differentiate yourself properly.  Finally, allow yourself to dream big – it’s the sheer belief that the impossible is possible that fuels most entrepreneurs’ relentless energy to succeed!

iTechnology.am: Thank you for your story. Ou readers will enjoy your CEED Talk right below!

CEED Talks - Raffi Kassarjian: Idea to strategy