Bootstrapping with Services at the Cusp of AI and FinTech

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In this case study, Cognaize Founder Vahe Andonians talks a lot about bootstrapping – bootstrapping to exit, bootstrapping with services, so on. You will also learn a nifty way of building domain knowledge on top of horizontal AI expertise. This is a valuable and extremely interesting way of building AI companies for entrepreneurs to consider.

Sramana Mitra: Let’s start at the very beginning of your journey. Where were you born, raised? What kind of background?

Vahe Andonians: I was born in Iran. When I was a couple of weeks old, we moved to the United States. Then my parents moved to Austria. I grew up in Austria. I studied there. I studied high-frequency technology. I did my first job there. From there, we went to Germany. I’ve lived in Germany now for 12 years.

Sramana Mitra: The company is headquartered in Germany?

Vahe Andonians: In New York. We have an operation in Germany, Armenia, Malaysia, and Portugal.

Sramana Mitra: Help me a bit with your professional background. Give me a sense of the years during which you were developing yourself leading up to this company’s story.

Vahe Andonians: My first job was at a bank. I was a trader. I was very successful, but everybody was. This was in 1998. After that, I wrote code to trade. The idea was to make this a separate independent asset management out of the bank. That didn’t happen, so I left. I started to do startups in 2001.

Sramana Mitra: What was your first startup?

Vahe Andonians: The idea was an e-learning platform. Back then, WBT was very new. I built a converter that would convert a PowerPoint document to a WBT. Most of the internal knowledge in a company was contained in a PowerPoint. That worked well. I did a couple of subscriptions. It was interesting.

Sramana Mitra: You were bootstrapping this company?

Vahe Andonians: Yes. Except this one, all my startups were all bootstrapped or had friends and family as investors.

Sramana Mitra: What happened to the first one? How long did you do that one?

Vahe Andonians: Six months.

Sramana Mitra: You sold it to whom?

Vahe Andonians: I sold it to a client. They liked it so much that they didn’t want the competition to have it, so they bought the whole company.

Sramana Mitra: What denomination are we talking?

Vahe Andonians: A couple of hundred thousand.

Sramana Mitra: It financed your education. You got a solid education in how to do startups.

Vahe Andonians: That’s true. Of course, I spent all the money in a week or two buying fast cars and traditional things that a 20-something-year-old would do. The next startup was called SCDM focused on structured credit data management. We started extracting information out of reports for one client. That grew steadily in the client base and services that we delivered. We did everything from data management to risk management. That was much bigger. It had about 250 employees when I sold it.

Sramana Mitra: How many years did you do it?

Vahe Andonians: 11 years.

Our conversation continues here.

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