Raymond R. Johnson: Armenian IT lacks practice of attracting investors

Enterprise Incubator Foundation (EIF) and CRDF Global held “STEP Armenia” one-day technology entrepreneurship workshop in Yerevan on May 29.

Itel.am had an exclusive interview with American entrepreneur, angel-investor and mentor Raymond R. Johnson, who was one of workshop speakers.

-It’s your first time in Armenia. What impressions did you get from workshop participants and the technology sector?

-The audience was large and I was asked a number of good questions. Besides, a few good ideas were voiced. I was delighted to see the knowledge of the participants. Some of them said they were going to engage in entrepreneurship, and there were also some who had already started their own businesses.

Before my visit to Armenia, I had no notion of the local IT and entrepreneurship ecosystem. However, here I came to meet smart specialists with relevant technical education. At the same time, I also saw that they lack practice to attract investors. Practice of marketing and business development also seems to lack. Instead, they concentrate on the technological aspect.

In reality, to achieve success potential business angels and investors should be brought together within the framework of a conference – they will teach startups how to properly present their project to investors. I would suggest organizing a six-12-week training for local startups using Techstars, U.S. startup accelerator model.

-The most frequently asked question of Armenian startups – how and in what stage of development should they find an investor?

-Finding an investor is painstaking – it’s hard and requires connections. What about holding an investor forum in Armenia?

I would recommend startups using Crowdfunding, such as Indiegogo and Kickstarter to seek funding. We should find out whether there are any Armenian companies that have attained success through crowdfunding. If yes, how? I would also like to see a purely Armenian crowdfunding platform.

My practice has showed that one should opt for self-funding for as long as possible and only then attract investors. However, early funding is not something bad – it’s better to have funding potential than not to have funding at all. It is overly important for you to really understand your business model, to know how much cash you will need and when. Afterwards, considering the two factors, you should have an idea of how much money you need at present. If I am an entrepreneur who needs cash, I will beyond doubt find it and take, otherwise my business might “kick the bucket.” If you really have faith in your project, you will find funding for it – you should simply use all possible ways.

-Which markets would you recommend Armenian startups entering?

-The U.S. market is large but I wouldn’t focus on only it. For example, the Asian market is huge. If you have a product or a service, which meets their main needs, then in no way you should ignore that market.

In reality, everything depends on your product or service. For example, Uber started in the U.S. and then spread around the world. It has a business model in which not only the U.S. market is interested but also the entire world.

Armenia is a good testing place and the testing can be followed by the company’s enlargement. I always recommend startups and entrepreneurs passing a local testing. If the startup is a success locally, then you can try to launch it in the foreign market.

Narine Daneghyan talked to Raymond Johnson