American dream or Made in “Silicon mountains” in Armenia
Armenian startup and IT ecosystem is building role models!
With already several acquisitions during the past few years by VMware, Cisco, Oracle, Science Inc, GFI Software, and other big names in its story board, the latest buzzes go around Joomag, Sololearn, PicsArt, Teamable, Renderforest, ggTaxi, Shadowmatic, Menu.am, Codefights, WiCastr, Ginosi, Yecup, Dasaran.am, Benivo (formerly Flat-club), Ucraft, SCDM, Bazillion Beings , inKin, Armacad, Earlyone, Arloopa, ONEX , Inapptics, Zangi, BeSafe.io (formerly Skycryptor), Koreez games, Plexonic, Rafa Solutions, Neews Deeply, Xcloud Networks, Chessfimee.com (spin out of Fimetech) and many others, which have disrupting solutions for a global audience. Some of them have already become world known names, are backed by top VC firms, and are successfully growing in international markets and also putting Armenia on map as an awesome startup hub, and some of them are in their early stages of growth with very significant user base and set up operations ready to scale to international level. The success of these companies motivates and inspires innovative youth in Armenia to think about establishing their own startups and hundreds of startups are created annually but only very few of them succeed in this rally.
The reasons vary and I will talk about them in later posts but the research of the recent developments in startup and IT field show the following picture:
1.The significant majority of teams develop B2C consumer startups, which is somehow explained by the success stories of startups in this field. For example Renderforest which allows people to create promotional and other type of videos easily. GG, an App for ordering a taxi which has thousands of daily orders. And in MIC Armenia’s or other startup related programs or other startup events usually the number of applicants building some enterprise solutions is less than 10%, because building an enterprise software usually requires very different skills and experience in both sales and engineering and most importantly networking compared to the skills required to build a consumer end product. But here there is an interesting trend that startups try to build things which could be validated in local market, and this is the reason why there are more startups in certain verticals like tourism, ecommerce, entertainment, education, consumer end chatbots, social apps, etc which are not too regulated by corresponding government authorities. And due to this Armenia still sees lack of new startups in fin-tech, health-tech and other tougher regulated industries.
2.The startups target the global market from day 1 with Armenia being sometimes the test market. Once the company reaches the product-market fit and gains momentum, it usually relocates to Silicon Valley, mainly to get access to top VCs and strategic partners, but here there are lots of challenges Armenian startups face especially regarding poor understanding of the market and fundraising culture, and here is where some startup acceleration programs, incubators, VC firms, and other formal or non-formal networks and entities (just to name few of them: MICArmenia, IBM ISTC, TUMO Center, HIVE Ventures, EIF, GranatusVentures, HyeTech, RAU IT club, EPIC, Luys foundation, SmartgateVC/coming soon/, KolbaLab, ProductTank, ANEL supported by NI, Mergelyan Club, Impact Hub Yerevan, CEED, FAST/IDEA, Sevan startup summit, StartupCup Armenia, UITE, Barcamp Yerevan, StartupFactory, Startup Armenia Foundation, Startup Grind Yerevan, AYB community, Irava-Tech, etc) come to help the startups, (some support early stage ones some support growth stage ones) to connect with entrepreneurs and mentors with the startups to support them in finding the best model for building disruptive solutions for global/regional markets and also creating networking opportunities for them. The pre-acceleration programs mostly take the role to help the get up from the ground, build the product which satisfies certain needs for big markets and the VC-s and the networks help more mature ones with funding, setting up the right legal-operational structure, partnerships and growth by opening up doors to the network opportunities for further fundraising, partnerships and scaling.
3. Most of the early stage startups are good at technical aspects and lack skills like “relationship building and networking” with potential partners, customers, they also lack skills in marketing, business development and working with potential angel investors. Here is where some ecosystem players are trying to cover that gap with their experience and connections mainly connecting startups with their network in Silicon Valley and other parts of US, UK, CEE, ME, CIS and other parts of the world bringing in top startup pitching, networking, engineering, hackathons and other events and opportunities (for both early stage, idea stage startups and growth stage startups) like Seedstars, Slush, StartupGring, HiveSummit, HyeTech Retreat, createTogether, STEP, EurasiaMobileChallange, ProductTank, Startup Boost weekend.
4. Growing interest and understanding of the concept that “Data is the new oil”. Armenia could take advantage of its traditional strength where we are really good at mathematics and science. The number of engineers in ML/AI in Armenia per 10,000 people is 8–10 times more than in neighbor and other countries in the region. Some companies (like PicsArt, Teamable, Fimetech, others) are significantly contributing to development of AI/ML in Armenia and there are also lots of fantastic initiatives collaborating with various corporate and educational stakeholders to educate more AI specialists, doing research projects, partnering with international organizations and as a result heavily contributing to the development of this filed; just to mention few of them:the biggest one is YerevaNN, and other non formal networks like NLP or YerevanML etc. Having these developments in mind it might be a great opportunity for Armenia to leverage this to get an advantage on whole country level and grow the economy by applying AI and similar technology in various fields.
So what: A very promising future for Armenia is in the horizon. But it needs to step up its game in order to join the big leagues, and there are many driving forces contributing in the local startup ecosystem, which will lead to the ARMENIAN DREAM of building the “Silicon mountains”.
