Startup of the Week
Interview with Albert Stepanyan from Scylla
Granatus Ventures, the first venture capital firm in Armenia, launches a series of Startup of the Week Interviews
The purpose of the series is to introduce and promote early stage promising startups to larger interested audiences. This will help to build the public profile of startups as well as in general contribute to raising awareness about technology entrepreneurship. We ask the same questions to the interviewed startups. Through these rigidly structured interviews you will learn about key aspects of startups’ life journey, challenges and success factors. Every week we will bring one story for you.
This week we’ll share with you our interview with Albert Stepanyan, CEO and founder of Scylla — a best-in class threat detection system — empowering the private security industry with next-gen AI solutions.
Albert, please tell us about your startup journey. How did you start it? How did the founding team form?
I used to be engaged as a private security integrator and an AI consultant worldwide. I am in this business from 2010 actually, I resigned from the military in 2008 and then from 2010 I engaged in different activities as an engineer, consultant and a security integrator. Me and my team have been engaged in several countries including Egypt and Latin American Countries such as Mexico.
From 2017, I was involved in a smart city slash security project in Mexico City where I found my other partner Alfonso. And then we decided to automate the services that we provided to the local law enforcement and also smart city authorities, and created Scylla. Eventually, that’s coming from my previous background and experience in Mexico City. And then we took that practice into other countries, such as Columbia, United States. In 2018 we decided to establish the company in the US, but still keeping the engineering team in Armenia. Currently we have two offices in Armenia and the United States.
What’s the problem in the world that you are trying to solve? Why did you choose that particular problem?
We believe there is a lot of work to be done in the private security space. The private security integrators are one of the largest audiences, or former military officers or law enforcement officers when they resign they get into the private security space and we believe that there’s not so much tech innovation. The space should be moving into more automation and cloud and there should be more involvement of new technologies such as AI, and Scylla is trying to empower the private security industry with the next gen AI solutions, as you mentioned in the introduction :) We believe that the market is underserved and we can fill the gap. That’s what we do eventually. I’m trying basically to solve the problems I was facing myself when I was doing services for different institutions as a security consultant. And now we are trying to solve the problem of people like myself, that I used to have in 2016–17.
Please, tell us what’s your differentiation and innovation compared to your competitors?
Oh, we have some niche technology. So the features that we have, for example, the behavior detection, I think we are one of the only companies in the world that successfully launched this. We are also very fast in training and deploying new models. One of the first models was the object detection with gun detection, but we were very quick in adding new and new models, such as a helmet detection or detecting potentially dangerous objects, etc. for the banking study. So we believe we have a very good tech and we are very fast in adopting and pinning the gaps. And obviously we have some secrets under the hood, such as behavior detection, which we are actively selling on the market. So as a tech company, we are fast, and as a SaaS business we are much more innovative than most of the security industry which is more or less old school. We are bringing innovation and invention to the market.
Let’s pass to the success factors. If you could single out one factor that is really important for the success of your startup, what would that be?
I would suggest that the entrepreneurs act very data driven because as soon as you pass the early stage, the metrics are very important. So your startup should be a very well — oiled machine. You should very well understand your customer. You should understand the metrics, the buyer economics, the buying units that are basically taking the decision. Why are they buying? It should be well written on the paper.
There should be a well-established process behind all that. And you should continue approaching and improving your business like this. That’s especially not happening and we are trying to change that in the security industry now, because again, the security business is very old school and the most of the sales process used to be done based on relationships, between the decision maker and the security company itself. I used to do the same mistake previously, but now we are more, Metrics driven SaaS company and we are trying to disrupt the market with having a more automated salesforce system, going more into the private market, in comparison to working just with the government.
What is your aspiration for the size of the opportunity you are pursuing? How big can your company become?
Oh, the market is huge. The market is predicted to grow to a hundred billion dollars within five or six years. So AI is kind of disrupting all the industries and technologies, especially security. And, specifically due to the COVID situation and the surge in violence, the more and more money is flowing into the industry and the people are starting to understand that whatever provides automation, be it robotics automation, be it a surveillance automation and reducing the human to human interaction, those markets are hugely growing and Scylla was lucky enough to be within that group. Unfortunate situation for the world because of the COVID, but fortunate situation for the businesses, which are basically pursuing robotics automation and then reducing human interaction.
What type of support from ecosystem players do you need most at the current stage?
Within private business, we are very well established. So we are growing quite fast because we can provide exceptional customer support. And then we provide our customers unique technologies and work with them as partners, not just vendors — typically security companies just sell cameras or a perpetual license and that’s all — no customer support, no help with integration and no partnership with the company.
That’s very different with Scylla because we work with our end customers hand in hand. We provide them support, we provide them integrations within different access control systems that they have, and also sometimes develop new features for them. So the customers feel that they are in good hands with us.
The support that we basically require is, I would say, within the countries that we operate and we operate within the United States, Latin America, some countries in Gulf regions, such as UAE and Oman. So within those regions, it would be much helpful if we get support on the RFP Processes.
The procurement chain within governments is super complicated and we would like to see more gov tech startups that solve this. We would be happy to see more organizations that try to help startups get into the government business, because that’s now more or less again, relationship driven. There are conditions that are being published and those people who apply for that, those are mostly usually the same players, larger corporates, wherever, there is not much place for the startups to be there.
That’s why we eventually are super happy to work with private businesses, but the support would be really precious. The same in Armenia. It’s very difficult to get into the Armenian government with any product, right? So we would be very happy if there is less bureaucracy and faster procurement chains for the startups like ours.
What are the major gaps in the Armenian startup ecosystem?
I wouldn’t say there are major gaps now. Within the last two years, a lot of things changed. We see a lot of VCs moving to Armenia. Three or four years ago it was only Granatus Ventures, FAST foundation and couple of other VCs now we see lots of them. So there are lots of VCs, they are very active and there’s a lot of money flowing into Armenian ecosystem so I would compare Armenia now with Tel Aviv five or six years ago. You know, Tel Aviv has one of the largest VC ecosystems worldwide so we anticipate that Armenia will have the same ecosystem such as Israel’s ecosystem with a lot of potential startups, which think globally. Money is not a problem nowadays, nor the number of VCs. What we miss now, basically, are more targeted or specified VCs, which invest only into the areas that they understand, because now what we see are more generic VCs, which invest early stage into everyone but we would like to see more niched VCs, which have, for example, their preferred verticals — healthcare or smart city, or, security etc.
Now what VCs are trying to do, they are trying to cover them all and especially compete with each other but we would very much be happy to see more vertical based investments. And also later stage investment because most of Armenian VCs are now just covering the gap of the early stage investment.
Whereas for A series, B series, C you basically are exposed only to Silicon Valley venture investors which is good because they open doors, but there’s a lot of Armenian wealth worldwide, right and we are super proud of that. And one thing we would like to see more, that’s later stage investments specifically for Armenian VCs.
Albert, the statistics tells that the predominant majority of startups fail. Entrepreneurship is hard and full of risks and challenges. Why did you choose this path?
Well, for me, it was obvious because I basically was working in the industry. I was working in the beginning for someone else. Then I was working for myself as a consultant. Then I decided to solve the issues of people like myself. Security is my passion; AI is my passion as well. So for me, the choice was obvious. I was trying to have a bigger impact on the industry by creating my own business. And especially, specifically moving into the software as a service space — it grows faster and solves more problems for more people. But for many people, the reasons could be different, right? Some people want to just try themselves as entrepreneurs. Some people want to make an impact. Some people are really solving issues like I am solving.
Yes, many startups fail, but you can avoid those failures — if you have the right product market fit and again, if you are very KPI or metrics driven then the things are becoming much easier. Still some risks are associated with political situation worldwide or the COVID situation or the industry can be just biased, like, some industries that we see now, but still as an entrepreneur, you can avoid many of the failures if you go the path, that is very well measured.
To sum up with one more question, what would be your advice to other startups?
Don’t be afraid of failure. Go, raise money, grow quickly, because then you have some ground to play around and you are not afraid to burn all your money and then die as a startup. So continuously, try raising money and then continuously try experimenting and then refining your business model. And don’t be afraid of cooperating with other startups. That’s also necessary, because talking to other founders, you can learn and avoid many mistakes that they have already made.