Interview with Viken Douzdjian
Hello everyone, hope you are all enjoying your week. Continuing with our interview series, this week I had the chance to interview Viken Douzdjian who is a partner at Argonautic Ventures, a global venture capital fund.
Viken is a mentor at Hye Combinator, and I have gotten to know him over the past ~18 months through a mutual friend/family member, Raffi Chalian. He is super sharp and is an expert all things venture. He has also been very involved in the Armenian tech community as a mentor, advisor, investor, and more.
My interview with Viken below…
HC: Thanks for taking the time Viken, we greatly appreciate it. Maybe we can start with a brief overview of your background?
VD: I was born and raised in the US and moved to new states often in my early years. My family settled in Portland, Oregon where there was not a large Armenian community so we spent most of our summers in LA. My three brothers and I were campers and counselors at AYF Camp in Angeles National Forest for 10+ years, which helped to shape our Armenian identity and community. Following high school, I attended Claremont McKenna College in Los Angeles and graduated with a degree in Financial Economics.
I started my career in investment banking in San Francisco at Wachovia Investment Bank (acquired by Wells Fargo) and I covered technology companies during that time. After banking, I joined Marlin Equity Partners in LA and focused on large software acquisitions. My experience at Marlin equipped me to enter the start-up world and I co-founded a cannabis compliance software company called Trellis. Around the same time I launched Argonautic Ventures with my two co-founders to focus on early-stage investing.
HC: That is great. Why don’t you tell us a bit more about how you are involved in the global Armenian tech ecosystem?
VD: Sure, of course. I am an active investor and advisor in the Armenian tech ecosystem. Several of the best founders I have come across are from Armenia and I strive to do my part in nurturing the ecosystem.
Argonautic Ventures has invested in two Armenian-based startups, Cognaize and DataOwl (acquired by Fyllo in 2021), and we hope to continue investing in the region. I also personally invest in early-stage Armenian companies and funds. The tech ecosystem in Armenia has impressed me and I’m eager to support founders as they scale globally.
HC: That’s amazing. It’s great to hear that. Talk a bit about Argonautic. What is the investment strategy and framework?
VD: We are a seed and pre-seed fund that writes checks between $250K-$1M. We also have a growth equity fund that invests in series B and beyond, which invests $3M-$5M. Our team is made up of 12 partners and advisors and every investor on our team has experience as a founder or operator. We understand what it means to be a founder and we take an active role in the early stages to help our founders map and execute on their vision. We invest in B2B software (construction technologies, cannabis technologies, fintech, commerce tech), machine learning, biotech, agtech and crypto.
HC: The fact that each member has experience as a founder or operator is invaluable to entrepreneurs… maybe talk about one of your more successful investments - personal or professional. What did you see in Springbig and Cognaize?
VD: Cognaize is the company I am most excited about. They are a deep learning platform that creates actionable intelligence from unstructured documents, such as financial statements or loan documents. We had the opportunity to co-lead their seed round and the founder, Vahe Andonians, continues to impress with his resilience and ability to understand his customers’ pain points. Vahe’s deep learning background bridges the theoretical and tactical to create a platform that provides a differentiated offering to the largest financial institutions in the world. This was also a personally fulfilling investment because they have over 200 employees based in Armenia. They are still in their early stages, but Cognaize is a company I would keep my eye on.
Springbig was one of my most successful investments to this point. They are a loyalty management platform for retailers and brands in the cannabis space. We were their first investors and in June they are entering the public markets via a SPAC merger; they will trade under the ticker SBIG. What excited me most about Springbig is their ability to adapt with a highly regulated and fast moving market and, ultimately, win market share. Their net retention is 125%+ and they continue to grow as the team solves emerging pain points in the industry. They have only been around for 4 years and we are bullish on their future prospects.
HC: How about one that did not work out? What were the key learnings?
VD: Founder conflict is one of the leading reasons I see start-ups not fulfill their potential. I don’t want to name specific companies, but I encourage co-founders to address different perspectives early on and build a conflict resolution process. This is especially relevant as you begin scaling your team and building a culture. Healthy conflict is good and needed, but unhealthy conflict at the most senior level will trickle down through the organization and can derail even the strongest business.
HC: Great takeaways and learnings… turning to Armenia specifically. How would you describe the health of Armenia’s startup ecosystem?
VD: I am impressed with Armenia’s tech ecosystem, especially over the last three years. Most of the founders and companies I have come across have well-developed, early-stage products catalyzed by our countries focus on computer science and machine learning in early education.
HC: Where can it improve? What is lacking in the ecosystem?
VD: The products that come out of Armenia are strong, but we need to continue to build our understanding of the of larger markets and successful go-to-market motions in those regions. SmartGate VC is a great example of this with their Hero House campuses in LA and Yerevan. Ashot and the team are giving start-ups an setting to understand the US market.
HC: Yes, they have been doing a great job. From your perspective, what are the 2-3 most common reasons why entrepreneurs fail at scaling their ventures? And how do you recommend they overcome or avoid those?
VD: A common mistake I see at the earliest stages of company building is over-prioritizing revenue before product-market fit. Often times in the earliest stages of a company, founders over-prioritize revenue versus other traction metrics, such as usage. It’s important to understand how your initial customers are using the platform. For example, if this is a tool that should be used daily, but users are only logging in monthly, that is a bad sign and needs to be remedied regardless of whether they are paying for the tool.
Another common mistake is not properly defining your ideal customer profile. Your earliest customers drive the product because their feedback is ultimately what leads to product iterations. If you are not learning from the right customer in early days you will not find product-market fit. Step one is interviewing a wide scope of customer profiles to understand their pain points and refining the scope of your ideal customer from these learnings. From this you can begin formulating your value proposition and earliest stages of a product.
HC: If you were giving advice to an entrepreneur who is meeting a VC for the first time, what advice would you give?
VD: Regardless of your stage, identify your short-term priorities and long-term vision. Start-ups have limited resources and you want to show that you have clear priorities in the short term that are pushing you towards your long-term objectives. The ability to prioritize is one of the hardest jobs of a founder You typically can only focus on 1-3 priorities at any given time so communicating these and how they align with medium- and long-term objectives. I’d also suggest you interview them – it’s important your early investors bring value beyond financial capital. Ask them how they work with portfolio companies in the early days to get them to the next stage.
HC: Any other advice or recommendations for our entrepreneurs?
VD: Two things:
(1) Obsess over your customers! You should be talking to customers or potential customers almost daily.
(2) Being a founder is one of the most challenging, scariest and rewarding thing you will ever do. You will get more “no’s” than “yes’s” over the course of your start-up. Be resilient and keep learning from your experiences and customers.
HC: So many great companies have been built with a relentless focus on the customer… what resources do you think are most helpful to help aspiring entrepreneurs get their ideas off the ground? How about for more established companies that are scaling?
VD: Every founder needs to have a basic understanding of accounting and financial statements. I’d suggest you spend time on YouTube to understand what the financial statements are, how they’re structured (at a high level) and why they’re important.
HC: Anything else you’d like to touch on?
VD: I’ll end with two of my favorite phrases:
(1) “You don’t know what you don’t know.” This is relevant professionally, personally and socially - you should always be learning.
(2) “Good things happen to good people.” Treat everyone with respect, even if it is not reciprocated. Your reputation and ability to manage difficult situations will take you further in life than any technical skills.
HC: Amen. And thank you Viken, this was very informative. How can people get in touch if they are interested in learning more about you?
VD: You can email me at viken.douzdjian@argonauticventures.com. In an initial email, it is helpful if you explain your background, clearly define your company’s value proposition and list targeted questions.