A guide targeted towards a starting entrepreneur in Armenia, but suitable for anyone who want to start an IT business being far away from Silicon Valley

1. NOVICE ENTREPRENEUR’S SURVIVAL GUIDE Gevorg Sargsyan BarCamp 2011 Yerevan, Armenia

2. Survival Guide Hi this is the “Novice Entrepreneur's Survival Guide" session. My name is Gevorg Sargsyan and I am here to talk about how to survive as entrepreneur in 3rd world country like Armenia. All of you realize in what kind of environment you live, and though it is beautiful and nice for you personally, it is called Armenia and it is a 3rd world country. Not only that - but we are 3rd world country citizens, and sad enough we are not doing as well as we would like to, right? By the way I am skeptic by my nature (which is quite useful for being an entrepreneur). So if things look brighter to you than to me in this environment - what can I say - better for you. I am also an optimist, and I do believe in step-by-step growth, which is required for entrepreneurship. You are going to water flowers that you believe will grow.

3. Survival Guide Who am I I think I can be here talking to you as I am a 5 years entrepreneur. My 1st startup was founded in Thailand, then the next one is in Armenia, after this i am going to US. But for myself I am quite far away from where I want to be. For start let's state some problems. What is the situation for IT companies and startups in Armenia The situation is not good at all :))... To be honest it is hard to state any positive fact about Armenia regarding entrepreneurship and startups. We can compare some facts with Silicon Valley. You know, Silicon Valley is like heaven for anyone who has ambitions in IT. Developer, designer, project manager or entrepreneur - it is the best place to be for you. The greatest thing about the valley is the crowd that is gathered there.

4. Comparing realityThings are not so good… :))) VS and many more…

5. Comparing reality Here on the slides are the most successful businessmen we have here, and just some of the successful ones from the valley. And the thing is that those guys influence on the crowd is huge. They are like examples. They are the role models. Many of the guys from the right part of the drawing are teaching at Stanford or other universities. Imagine being a student at Stanford - and have Eric Schmidt talking to you personally about the next big changes in the web … I can't remember anyone from the left side businessmen to read a lecture about entrepreneurship in Yerevan State University... and honestly, better they don't do that.

6. The other side of the world Silicon Valley is also quite far away from Armenia.11,000 km from here, or 12 hours difference. It is like other side of the planet.But distance is not the problem. There are some other more serious ones.

7. Comparing MarketsArmenia vs. US vs. China - Web users by June 2010

8. Comparing Markets This is Armenian Web users number by June 2010 compared to US and China. For me personally the most hostile factor for my businesses here, is the market size. Most of Armenians can't even imagine how small it is. 208,000 Web users. That's a joke. People in general tend to come with ideas that are related to their local environment, and almost all Armenians do so. Just to keep it short, most of ideas you get to know about here are for businesses nobody in the world is interested in, except some local Armenian people. Small environments influence people to think small as well. This is one of our biggest problems. If you are going to suggest me any idea related to Armenian culture, history or market and etc., I am not interested. Again the reason is Armenia is a tiny market. GUYS, BETTER TO FAIL IN A HUGE MARKET, THEN TO SUCCEED IN ARMENIAN WEB MARKET. No IT investor will invest into company targeting Armenian market. And if will - i guess it is someone with humanitarian intentions, and not business ones. If you want to do something for Armenia just from your patriotic reasons, do it - and i will respect it. But, then you are not a businessman or entrepreneur, you are just a patriot. And that is not bad at all, just don't have false expectation from what you are doing. And you could do 100x more for Armenia if you succeed internationally.

9. Comparing Markets You can have the best idea ever - but it can become a failure just because the market cap is low here. As you see - there are not much examples you should take from local businessmen. My advice will be even to stay away from local investors in case you have got some. Investor is not just someone who gives you the money. Investor is your partner, and after he invests - he will have some, if not many rights, towards your business. So be very careful about raising money from someone you don't know. It is like a marriage, divorce will be very painful. You should chose investor more thoroughly, then investor chooses you. So are there any advantages in Armenia to be used in your favor? Not much - but there are some. To me, the most valuable one is the following.

10. THE PEOPLE! This is the reason I am still in Armenia. Armenians are VERY talented. They are great as developers, designers and just as creative people. There is a huge not used intellectual potential here. That's is our only advantage! That is our treasure! Believe me - it is very hard to build a team! But in Silicon Valley it is even harder as demand for developers there is extremely high. A young startup in San Francisco have almost no chances for getting a great senior developer. Here you can build a great team much easier then anywhere else!

11. Want to be Entrepreneur? Now I would like to talk to people who are entrepreneurs or are planning to become in near future. The ones that want to build big companies, not in the scale of Armenia, but in scale of the whole world. Are there any of you here? Tell me what is your biggest problem? Most of you are saying "money" is the biggest one! The big insolvable problem. In reality - it can be a problem, but it is far not the biggest problem.

12. The Money Problem! Imagine entrepreneurship is like cooking a pie. You have ingredients and the recipe. Then you put ingredients in some proportions and order, then you turn on the fire, and put the pie into the oven and then the pie is ready. But this is the ideal case. In reality almost no-one of you knows how to cook, doesn't have the recipe and doesn't have at least half of the ingredients. And then we go and ask investors for some fire (which is the money). Now tell me, if you get any amount of fire you want, how you will be able to cook a pie - if you don't know what you are doing at all. Result will be disgusting, and usually that's how it happens. Fire is needed only when you have everything ready, and need to accelerate the process. Too much fire can be deathly dangerous for your creature - your company, and sometimes for yourself as well.

13. Business Mind In reality your biggest problem is the lack of business knowledge. You might be a great developer, or designer or anyone else. All what you know is secondary in business and entrepreneurship. Business is an intellectual sport, you need to have business skills, and you should know how to use business tools. This is the biggest problem Armenian IT entrepreneur have. The culture of business education here is absent. People in general are less business minded, and actually have quite wrong and poor understanding how international markets are working. To solve this i recommend you to travel as much as possible. About getting business skills and tools – I can say you one thing you live in wonderful times. Every kind of information is accessible for anyone.

14. Get a Mentor!Keith J. Cunningham I would recommend ALL of you to listen Keith Cunningham's audios and videos. I personally learnt a lot from him. He like my personal virtual mentor. He is an outstanding entrepreneur and business speaker. Having a mentor while building a company is VERY important. How you should choose a mentor? It should be someone not related to your business. Someone who did what you are doing several times, and knows much more than you about that. Sadly you hardly will find a mentor in Armenia. But I hope you are lucky, or you get someone from elsewhere. http://www.keystothevault.com/

15. Marathon VS Sprint Remember, building a company is a marathon, not a sprint. So what you got to do is - learn to run a marathon! Business skills and tools is the most important part in this for you. Mostly startups are being started by developers, and developers are the ones who have ideas for startups. Sad enough they are doing very bad about improving their business skills and tools. Building a company and achieving a success - will take MANY YEARS. Usually people hear about success of someone in IT, like Marc Zuckerberg, or Angry Birds (Rovio). But only few people know that it took Marc Zuckerberg 7 years to achieve what he have now, and Rovio was developing games for 8 years before they made Angry Birds. Entrepreneurship is not a quick way to become reach. It is a way of life. If you choose it, you have to stick to it. Another thing I want to mention is the obsession with ideas, which is typical for entrepreneurs. Everyone likes his own idea, as idea is their baby. But, the reality is that your idea worth nothing. There are millions of great ideas in the world. And almost all of them will stay ideas, and will not be realized except few ones. Don't focus on your ideas that irrationally.

16. Business skills Business models. Think in business models - and not ideas. That's how you should talk to an investor. How your startup is going to make money! What are the channels? What additional ways will you have? Gettho testing Always do a Gettho tests of your ideas before building it. Learn how to do it better every time. A/B Tests How many of you are doing User Test via Split tests or A/B tests? This is the critical skill you should have. Know all metrics You should know all the metrics for modern Apps. DAU, MAU, DAU/MAU, ARPU, ARPPU, UPS, retention, churn and many more. Learn to talk on entrepreneurial language!

17. Business skills Hiring Hiring people is a skill! Learn how to do it better. This is critical for building a company. Negotiations How many of you are training your negotiation skills? Pitching Take your time to improve your pitching and presenting skills. Raising money Raising money - is a skill as well. You need to know the basic principles and using them will increase your chances dramatically. Accountancy Believe me - if you are going to build a company, you should get to know your local accountancy. This is necessary. Never ignore this topic.

18. Win the Game! To win the game being in Armenia or in any other 3rd world country - there is only one choice to have. It is to improve every single day. You have to be outstanding - not just good or excellent. That's how it is. No one will help you. Government will not support you, local businessmen will not invest in you (and better they don't). If you want to make it big, start your journey today. It is really worth it, even in case of failure. I see that there is a chance for Armenia to become a strong IT country. Will that chance be realized - depends only on us!

19. Some goodies! Eric Ries’s Lean Startup http://theleanstartup.com Make Maple’s speech at Founder Showcase http://vimeo.com/16098382 Marc Pincus and Bing Gordon talk at Stanford http://bit.ly/ahbUie

20. Thanks for listening :) And please ask questions! Write me at: gevorg@plexonic.com My blog – Singular Choice: http://spy.tumblr.com