Armenian business

[Guest]

Armenians everyhwere have succeed in a variety of businesses. From "traditional" ones such as carpet dealers, jewellers to used clothes wholesale (one of the biggest businessmen in this line of business is a Hamburg based Armenian). Why is so that there is no large, or even medium size Armenian owned bank ?

 

In the Ottoman Empire there were quite na few important Banking houses owned by Armenians.

[Guest]

Just trying to revive the topic...

[Guest]

I have thought a lot about this topic and even wrote down my ideas on a piece of paper. Every time I drive down the Wilshire Boulevard in Los Angeles, and see Korean and Chinese banks I keep thinking about possibility Armenian owned bank. I did a research in 97 for my current boss about Internet based banks, and acquired a lot of good knowledge about banking culture. I think Armenian owned bank is overdue. It’s very profitable to get into small niche markets. It can even be done through Internet. The bank should not be specialized only in commercial aspect of banking, but should take some of the functions of investment banks. A lot of small Armenian business enterprises with appropriate funding from an Armenian bank can break into mainstream. The proprietors possess excellent knowledge of the market they operate in, yet lack know-how about financing the growth of their company. Small niche banks can be found through securitization of assets, and then keeping money flow to maintain appropriate liquidity levels. For the first couple of years, it shouldn’t even be FDIC insured. Some wealthy Armenian Americans can become founding members of Armenian American banks to get recognition in finance community. There are a lot of Armenians in finance community that would support this idea; they just need a leader.

[Guest]

Several years ago, while residing in Michigan, I was really hot on these issues. I had discussions with some Diasporan Armenians, as well as with some high profile representatives of the Armenian Governemt at the time. The issue got stalled at the level of then Armenian Government. Not that they didn't want it, but felt that at that time it was unrealistic.

 

Maybe the times have changed for better, now?

 

On the other hand, I also recognize that if you want to get something done, you don't have to count on the governments.

[MJ]

Armenian committee to implement national unity programme

 

16 Feb 2001

Snark

 

 

[FBIS Translated Text] Armenian committee to implement national unity

programme

 

Text of report by Armenian news agency Snark

 

Yerevan, 16 February: More than 1m dollars are needed to implement the

Armenian national unity programme. Talking about the said sum at a news

conference today, the head of the Armenian Ayrenik-Spryuk

(motherland-diaspora) committee, Grach Ter-Yeseyan, made the above

statement, when asked about the prospects of the programme by a Snark

correspondent.

He said that the programme, which aims at bringing together all the

Armenians, will be implemented in several phases. He added that, without

an expectation, offices of the Ayrenik-Syuprik committee for rasing money

will be established in all Armenian provinces and among diaspora. One of

the main tasks of the committee is to create an all-Armenia bank and a

parliament. About 100,000 dollars are needed for the registration of an

all-Armenian bank alone, Ter-Yesayan said.

At present the Ayrenik-Syuprik committee, which includes 170 political

and social organizations, is using its own fund. Ter-Yeseyan said that

20,000 dollars have already been spent on the preparatory work. The

committee is counting on the Armenian diaspora for the necessary fund.

[Boghos]

Before anything, thanks MJ for reviving this topic.

 

I think there is an inherent lack of trust in an Armenia bank, by Armenians themselves. That is part of the reason why there has been no Armenian bank, or at least major Armenian bank in the diaspora. There is clearly enough capital and expertise to create such an institution. But there is no will.

 

If we look at Israel for a moment, they used to have major state owned banks with an international presence. Happoalim, the trade union´s banks was privatized. Bank Leumi remains, it has offices everywhere there is a large Jewish community, it operates the way most Armenians would like to have a bank operate.

 

In Armenia we have Midland, which is only technically a British bank, since it is really sponsored by a wealthy British Armenian. Why diaspora Armenians have not set up a bank in Armenia ?

 

First and foremost because it probably isn´t profitable for a normal operation, and many feel, safe. Armenian capital is highly linked with Russian and Russian-Armenian capital, which nobody knows well what it is.

 

The other question is why the Armenian state hasn´t created a bank as described above ? Well, they have been dealing with so many things that they haven´t come around to that. I am not quite sure whether the idea of creating a bank by the pan-Armenian committee has much merit. I think it needs to be a state sponsored bank, backed by the full faith of the Armenian state, with a number of prominent Armenians in charge of the board. Professionally run.

 

Many other questions and ideas come to mind. But I will stop here for the moment.

[alpha]

What’s the purpose of having an Armenian Bank? In other words what do you think should the mission statement of this kind of institution be? I personally think that pan-Armenian bank should not only serve the purpose to facilitating business activities in the Republic of Armenia, but also it should be a business facilitating entity in Diaspora. Something between a commercial bank and a business incubator, where business plans will be reviewed and potential entrepreneurs will be helped in establishing successful ventures. I don’t think Republic of Armenia is creditworthy enough to create a bank of any significance. I think overall Moody’s rating of sovereign credits of Armenia are Baa3, which inherently makes receiving funds expensive. Also, I don’t think Republic of Armenia has the professional resources to operate an international institution, as Pan Armenian bank should be. In addition government involvement in financial activities creates bureaucratic inefficiencies and the climate of favoritism. The only viable means of creating this kind of institution is expanding the current capabilities of Midland, and getting more partners involved in it. Also, I am a strong believer that this type of corporation should be domiciled in the Republic of Armenia, and should be incorporated by the laws of that country.

[Boghos]

What I envisioned was an institution that was established in Armenia, backed by the full faith of the Armenian state. So there would be no doubt about its solvency. I do agree with you that state owned banks tend not to be well maneged, etc. But this is a bit of a different proposition. The bank should be managed professionally. the stae should be its major shareholder, but it should listed bank. Not only in Armenia but also outside Armenia.

 

Some of its major objectives: reduce the cost of borrowing by the Armenian government by offering outside investors Armenian treasury paper; small and medium size business financing in the diaspora and in Armenia. Counselling and financing of foreign investment into Armenia.

 

The idea is the creation of a profitable, well run bank that can benefit the state and the population at large. Of course, we need our best and most honourable brains to run it. Finance is the heart of any economy. We need a strong and well focused bank.

[Berj]

The Armenian Weekly Online

 

Chinese-Armenian Cyberguru Sets Toy World on Fire: For David Yang, Cybiko may be just the beginning

 

By Antranig Kasbarian

 

MOSCOW-As I shuffle along the grimy, ice-paved streets of this city, I look up to find my destination: a glass-paned, pencil-shaped spire that stands out amidst the gray, drab scenery of old kiosks, awnings, and Soviet-era office buildings. This hypermodern landmark is the headquarters of Cybiko, Inc., the internet appliance company that has stormed the cyberworld by appealing to gadget-hungry US teens.

 

Once inside, I feel even further apart from the rest of Moscow. First, there are the shiny, antiseptic corridors; then there are the numerous labs echoing with beeps and whistles of new products being tested by young Russian "cyberfreaks"; then there are the dozens of programmers and engineers who are all abuzz, producing new software or instant computer games for posting on the Web; and then there are the plush dining and recreation facilities, all amidst an environment that is constantly in motion.

 

Frankly, this is a setting more befitting of a James Bond movie than a newspaper interview. And yet, the man behind it all is remarkably calm, soft-spoken, and understated; hardly what you'd expect from the CEO of one of Russia's fastest-growing companies.

 

His name is David Yang, a 32-year old wunderkind of Chinese-Armenian ancestry, who grew up in Armenia, moved to Moscow in 1985, and has never looked back since. Extremely relaxed in appearance and demeanor, Yang impressed me with his ability to discuss complex, technical subjects in simple terms, and also with his willingness to discuss his ethnic background and attachments to his Armenian homeland.

 

Born in Yerevan in 1968, Yang is the product of parents who met as students at Moscow State University in the 1960s, his mother having come from Armenia and his father having come from Shanghai during China's Cultural Revolution. Upon graduating, the newlyweds moved to Yerevan, where David was born and raised.

 

Although he has fond recollections of his Yerevan days, Armenia was unable to hold on to him for long. He relocated to Moscow at the tender age of 17 to study solid-state physics at the prestigious Moscow Institute of Physics and Technology, which held a reputation for training the brainpower of the Soviet defense industry.

 

David Yang, however, moved in a different direction, choosing instead to concentrate on robotics and artificial intelligence. In 1987, even before graduating, he started his first company, ABBYY, which has since become a leader in developing scanning equipment and scanning-related software internationally.

 

A frontrunner in market share as well as scanning accuracy, ABBYY has expanded in recent years toward developing speech recognition systems and language translation systems, new fields which according to Yang are in high demand but are also difficult to perfect. As he explains: "The accuracy of these systems depends greatly on context, which is often difficult to handle in a machine setting. Right now, many programmed translations are often intelligible, but not readily usable."

 

"The key to speech recognition," he adds, "is actually not recognition but understanding-understanding what a person is trying to say. That's where real-life settings are most important." To this end, Yang and his associates have brought in dozens of linguists, speech therapists, and other non-technical professionals who truly make ABBYY a multidisciplinary enterprise. Yang expects the upgraded translation system to be ready for market by 2003, covering more than 200 languages, including Armenian.

 

But all of this is mere foreplay for the main attraction in Yang's life today-Cybiko, a cutting-edge internet company which he dreamed up two years ago while lying flat on his back in a US hospital.

 

"Even though ABBYY was really doing well, I had wanted to start something new, and ironically enough, the perfect opportunity came when I had a serious illness in the summer of 1998," Yang notes. "For the first time in my life, I had two weeks where I was doing absolutely nothing because I was sick. I couldn't hold a notebook, cell phone-it was terrible. The doctors confined me and immobilized me, and so I began to come up with ideas for a hand-held communications messager." Specifically, he conjured up a small device that would offer communication links with nearby friends as well as strangers, and it worked so well that he decided to market it. After conducting market research in Russia, Western Europe, and the US, Yang went ahead with product development, guessing that American teens would prove to be a strong customer base.

 

He was right. Beginning in January 1999 with a group of 10 specialists brought over from ABBYY, Yang has expanded Cybiko's operation to include 220 programmers, designers, hardware and software engineers, artists, music composers, and others, all under one roof at the company's development center in Moscow. Sales and marketing efforts involve a smaller staff based in the Chicago suburb of Bloomingdale, Illinois, while mass production takes place in Taiwan, presumably involving the efforts of hundreds more laborers who cheaply produce the product for worldwide distribution-mostly to the US.

 

Like his product, David Yang himself spans multiple, hybrid locations. While Moscow may be his home base, he regularly weaves back and forth between Chicago, Moscow, and Taiwan, seeking to coordinate the business strengths of Russian brainpower, American management, and cheap, Far Eastern labor. There are also plenty of trips to New York and Europe in-between, for while he retains some family ties to Armenia, many of his immediate relatives-including his father and mother-have moved to other countries. Meanwhile, he is fluent in several languages, among them Russian, English, and Armenian, each of which serves him in good stead as he navigates a multicultural existence.

 

Perhaps most important, though, is that David Yang has managed, in this case, to reverse the flow of Russia's new economic geography. With much of Cybiko's product-development taking place in Russia, and with huge sales registering primarily in North America, Yang is combating the stereotype that Russians are great engineers and scientists who have no clue about turning good ideas into successful products. In doing so, he has provided a rare and uplifting triumph in a Russia more known for its collapsing infrastructure, technological backwardness, and heavy-handed business practices than for its cutting-edge entertainment industries. While industry insiders call Yang "unique" and far ahead of the pack, there is hope that he can become a role model for other budding Russian entrepreneurs

 

As for his ethnic attachments, Yang speaks fondly of his experiences growing up in Yerevan, and still calls Armenia "my native country." He also maintains many of his friendships with his former schoolmates, some of whom have since become business colleagues. When the subject turns to Armenia's struggling economy, however, Yang registers serious concern. When I ask if there is anything he can do to help reverse the flow of skilled labor out of the country, he responds in the affirmative: "I think there are definitely things we can do, given our expertise, to assist in Armenia's economic development," he says. "In fact, we're thinking of putting together some sort of group with a laboratory and development center. But so far, it's been difficult to coordinate with the center we have in Moscow. I do have some of my local associates working on the matter, and I expect that eventually we will do some substantial work there." In the meantime, Yang and his colleagues have begun offering support for various Armenian causes, further proof that his desire to assist Armenia is a genuine one.

 

As for the product itself, Cybiko gurus call it a "wireless intertainment system," which basically combines the functions of a Game Boy, a personal digital assistant, and a wireless communicator. As Director of Production Aleksey Logoshin told me, "The key to Cybiko's success is in its combined functions. It's a Game Boy, but with the hardware. It's a Palm Top, but with the wireless functions." Add on a price tag of about $100, and you have a gizmo that has become particularly attractive-and affordable-to American teens.

 

One of the most talked-about features of the toy is that it enables chatting with other users. Coverage is about 50 meters indoors and 100 meters outside, but through a so-called "daisy chain," users can link up with each other over much longer distances.

 

The company expects to sell more than half a million Cybiko toys in North America this year, after selling 300,000 since last September. Yang admits that demand outpaced supply late last year, when the gift-giving season went into full swing and many in the US media branded Cybiko as the year's "must-have" Christmas gift. This summer, the product goes to Mexico and next year to Europe. Yang says he would love to market the product in its birthplace, but with the prevailing hard times economically, demand in Russia is not considered large enough to launch it at present.

 

Cybiko's success also lies in its ongoing communication with users through an interactive Web site-www.cybiko.com. According to Logoshin, Cybiko receives around 40,000 messages on its Web site every day, with the number jumping over 100,000 during the Christmas rush. Nor has Cybiko escaped the interest of international venture capitalists, who over the past year have ploughed millions into the company in search of even greater profits. Yang notes that part of that investment-around $16 million-would be spent on marketing and developing Cybiko-2, a smaller version that will be tailored toward the 20- and 30-something set and could appear next year.

 

As for David Yang, hold on to your hat. It appears that Cybiko is just the beginning of a career that promises to impress, excite, and entertain.