Tony Moroyan: Armenia needs to be extremely competitive in the new environment

Mediamax interview with CEO and Chairman of Viasphere International, Co-Founder and Chairman of ArmTech Congress Tony Moroyan

- Mr. Moroyan, your journey to help rebuild, revive and modernize the high tech industry of Armenia started in 1991, when you were invited to Armenia after the collapse of Soviet Union. How difficult the process actually was?

-I have been helping Armenia since 1991 when I was invited by the government of Armenia to help evaluate Armenia’s high tech level and help with the strategic plan of developing market oriented high tech industry.

My journey was difficult, complex and very challenging. I think we succeeded to bring Armenia’s IT and High Tech industry to an enviable level. I am a person with a pan-Armenian mentality, and for me Armenia is the heart surrounded by different Armenian communities worldwide. Imagine what can be done if we connect all these capabilities together in a real network. 

My personal objective is to see Armenia become a small Switzerland or why not, even a mini Silicon Valley. This will be, if the right steps are taken with the right strategic plan that includes government, academia (universities) and the industry collaborations. The key is to be able to attract investments. This itself requires Armenia to be ready to accept investments.

In Armenia, it is not well understood what investment means. This includes cash investments, time investments, the investor also makes his industry and other connections and network available, sharing his experience, training advising, etc. The money is the smallest element in investments. Foreign investments are not going to come until you give them proper environment, especially predictability and protection.  When an investor comes to Armenia he needs to be sure of the result that his investment is protected by the applications of the laws.

We have talked with the government officials and understood that there is a support from their side and that they want to see many more investors come to Armenia.  Armenia today has very enviable “bridge” to the Silicon Valley that has been established and reinforced for many years.

Armenia has many strengths and challenges. Working together, we can overcome the challenges. The selection of developing the right products and services is imperative given the relatively smaller high tech population. You have to be careful to choose the right product and the services. When it is easy to enter a market it is also easy for other competitors to enter the same domain.

I remember the times when I was involved in a company starting operations in India. If we compare Armenia and India, I would say that it took India long time to develop the IT and high tech (some 50-60 years). Armenia is developing much faster. The reason for this is not that Armenians are smarter; it is just because Armenians were much more aggressive while self-developing after the fall of the Soviet Union.  The availability and the collaboration of the vibrant diaspora also have helped accelerating the developments. What is unique for Armenia is that when you give a project to a team in Armenia they not only complete the project but they offer many other ways to solve the same problems or projects. This is very valuable.

- Viasphere International was founded in 1998 as an incubator and accelerator headquartered in California. For what purpose was the Armenian headquarters created?

- Viasphere International has many shareholders who are top people from Silicon Valley and Europe, Japan, Brazil, etc. Very few of them are Armenians. A start-up needs diversity: experiences, industry network even the board. That's why when I create startups, I make sure to bring different people from the high tech industry.

I was able to convince the Board of Directors of Viasphere International that Armenia is a country which will progress fast. Viasphere Armenia was founded in 2001. The initial idea was to create Global Business Park and Incubation: provide services for multinationals and incubate high tech start-ups. With the invitation and the encouragement of the Armenian government we came and established the successful Technopark and after the official ribbon cutting in July, 2001, we started the renovation work and establishing start-ups and even were able to help multinationals come to Armenia. For example, Synopsys which is the largest company in the Technopark. Synopsys contribution has been immense and has pushed Armenia to be one of the top 10 counties in Electronic Design Automation (“EDA”). By the way, Synopsys celebrates its 10th anniversary in Armenia this year. 

Technopark currently houses 16 multinational and foreign and domestic start-ups, mostly involved in emerging technologies. We don’t like to interfere in startups, but we provide lots of support to them - strategic planning, product and market strategy, connecting to venture capitals, potential acquirers, partners. The number of people in Armenia is limited, so we have to be very smart how to use them. That’s why when Synopsys was coming to Armenia they asked me - what do I suggest? I told them that you need to do the most advanced projects here as Armenians like to challenge themselves. So I suggested bringing very advanced and challenging projects.

- You are the Co-Founder and Chairman of ArmTech Congress. It is organized already 7 years. What remarkable results are visible today?

- In 1991 when I was telling investors in Silicon Valley about Armenia, they could not understand what was Armenia. Armenia was just a part of Soviet Union. Some thought it was Albania.  I realized that we needed a major work to introduce Armenia. This was in some ways good since we could present Armenia in its right colors. The extensive work of Evangelizing Armenia began with the IT and the high tech industry, the venture capital and the corporations.

First time when we wanted to get funding from a venture capital in the Silicon Valley for a US start-up with subsidiary in Armenia, the community thought it was a joke. We proved that this can be done with the help of actually forming such companies and promotions in the Silicon Valley. The major example was the ArmTech Congress, the Global IT and High Tech Industry Conference and Strategic Business Forum of Armenia. This set new benchmarks in the very Silicon Valley that is not yet broken by any other country.

The idea to organize such a congress came to 2005. At that time, I was able to gather few visionary people in the Silicon Valley and Armenia. We were told by everyone that this was nonsense and could not be done. We were told that Armenia had no money, how we would be able to do that, especially at Fairmont Hotel in San Francisco, the best hotel in the Silicon Valley.  We were told to hold a small gathering using a church hall. But we had another idea- to present Armenia differently and in the right colors.
Preparing ArmTech was not easy. Our vision was to create a Pan-Armenian Network with lots of people working on it both in Armenia, USA, France and other locations. On July 4,  2007 the first ArmTech took place. It started with the opening banquet at the top of the Fairmont Hotel in San Francisco while watching the July 4 fireworks. We actually were able to launch ArmTech Congress, The High Tech Industry Conference and Strategic Business Forum. The business forum included the creation of a platform that we called it internally “Mini Davos”.

We raised money from big investors, companies. Some people thought we had spent over $1 million to organize the 1st ArmTech. No, it was just about $200.000. We were also supported by very energetic and motivated 50 -60 volunteers who were worth many millions of dollars.

Just the fact that we were able to organize ArmTech for 7 times is already a big achievement itself. No country has been able to do this on this in the Silicon Valley yet! In September, 2014 ArmTech Congress opened in New York under the auspices of the President of Armenia. By the way, next year ArmTech congress will take place in Armenia and we have high expectations from it.

-Recently, the US jury made a verdict against Aram Vardanyan in the case of Viasphere International, Inc. v, Aram Vardanyan. How significant is this verdict and what it will be followed up with?

- We are sure that the verdict is a good example that US investors who set up operations in Armenia can protect their investments by pursuing legal actions both in the US and in Armenia to protect their investments against people and elements that harm the Investor’s company. 

This is a benchmark case showing that the foreign investors in Armenia can protect their rights and assets against a person who has defrauded them. We are very glad that there is so much support by the government of Armenia, the high tech industry in Armenia and Diaspora.

As I noted, in 2001 the official opening of our fully owned subsidiary, Viasphere Technopark took place in Yerevan. We hired Aram Vardanyan based on his representation and promises and executing several agreements as the General Director. After about 10 years Aram Vardanyan was terminated as general Director as a result of unacceptable revelations. In early 2012, Viasphere International, Inc. brought legal action against Vardanyan in US for major violations .The claims were Fraud, Oppression and Malice.  The Jury unanimously gave its verdict against Aram Vardanyan on all counts that were presented to them by the court.
 
One of very serious violations was the misappropriation of Zenith systems that was designed, developed and tested by Viasphere Technopark employees while Aram Vardanyan was the General Director of Viasphere Technopark. This Viasphere Technopark asset was taken away from the Technopark and US Corporation without the knowledge and the authorization of the Company. The ownership both the Zenith and the intellectual product were given to Barva LLC, a company that is owned by Aram Vardanyan and his wife Gayane Umrikyan. While a patent was filed in Armenia in the name of Aram Vardanyan's son. This alone had violated the international patent laws since the patent did not have the names of the 4 authors who were the real authors and employees of Viasphere Technopark. As a result of the verdict, Viasphere was awarded damages of USD $1 mln 74 thousand.

I would like to add that on November 19, the litigation started in Armenia relating to patent rights to the Zenith Anti-Hail system. We are confident that justice will prevail as it has in the US federal court.

- Recently, Armenia has been selected to host the World Congress on Information Technology (WCIT), to be held in 2019. Armenia also plans to be in the top 20 of most innovative countries already in 2018.  Do you think Armenia is ready to surprise the tech world with its innovations?

- I think it is a must to host WCIT. Armenia needs to get into a more serious situation. We must become the most severe critics to ourselves. The world has become more competitive and we need to be extremely competitive in this new environment in terms of capabilities, culture, delivery, etc.

Armenia developed its enviable position and level in high tech industry not because it copied models of other countries like Ireland, Israel and others, but because it needed a custom model given all the unique challenges and shortcomings. Armenia worked very hard and smart with the help of diaspora IT and high tech professionals to engineer the strategic plans and in addition the process and also benefitted from the vast knowledge base that has been accumulating from other countries.

Now we are moving to the next stage of development which is much more competitive and difficult than the previous one. The word “Innovation” or “Innovative” must be used carefully. Innovative is one thing but to be one of the top 20 innovative countries is more serious and requires strategic planning and continued hard work. I think Armenia is ready to take the challenge.

Narine Daneghyan talked to Tony Moroyan