Jeffrey Paine is one of my friends who helped me a lots during my 6-month adventure in Singapore last year. He is straight forward, friendly and a true spirit of investor. Currently, he is found partner of Golden Gate Venture. Well, a special thing to remember about him is he is called as Dave McClure of SE Asia which is so true. I have this conversation with Jeff to explore what he thinks and feels about Vietnam startup after his trip as judge of Satellite Echelon from 16 – 21 April 2013. He spent 6 days in both Ho Chi Minh and Hanoi to meet up with more than 25 local startups. He also shared that Appota, Tapmee and GHN really impressed him.
Common points of Vietnam startup
According to Jeff, there are four common points among those startups he met
Solve local problems. Have highly technical team. Many bootstrapping startups. E-commerce seems to be popular
In Vietnam, ICT education is highly focused during high school education so students have chance to play and hack things since the early stage. Five successfully (in some ways) case that I am so proud of technical side of Vietnamese startup are Socbay, CocCoc, Kleii, Appota and MisFit Without any support from government – no scheme or grant, bootstrapping is the only way and option for startups when they are not ready for fund raising. Many lucky startups successfully got seed round from angels based on their network. As a matter of fact, network, introduction and relationship is always important in all industry and circumstance. It is even stressed more in startup industry in Vietnam when you start as a small team, no one knows who you are.
Up to now, there are no platform for startups to promote themselves except for overseas online media that are covering SE Asia including SGEntrepreneurs, TechInAsia and E27. Looking on the bright side, Vietnamese startups know very well about local knowledge so that they can localize successful model then got acquired by overseas companies later. Two recent examples are Vietnamworks – En-Japan and VON (HRVietnam, Kiemviec.com) – CareerBuilder.
What are strengths or advantages of startup in Vietnam?
Jeff also shares another key strength of starting up in Vietnam
The cost of operations is low as such it is easy to pivot or to test several ideas/ products
I totally agree with him at this point and another 2 expats in local startup community holds the same opinion. This is the reason why MisFit Wearables team including Sonny Vu and John Sculley (former Apple CEO) set up development in Vietnam after raising $7.6M and are recruiting talents massively. Low cost of operations also leads to another advantage for investors when funding through stages is lower which is $5k – $25k for seeding and $100k – $500k for series A, $1 – $10M for series B…
What about challenge for local startups?
On the challenging side, Jeff’s concern is
Knowledge or experience going regional or global is limited, needs more help and capital.
Although there are annual entrepreneurship activities from government, it still cannot create huge impact to tech community. Most of reason is because they do not update from latest trends like government scheme/ grant, lean startup, design thinking,… and not focus much on tech startups. This leads to issue that entrepreneurs lack of structure and important skill set to be able to scale the platform and product. They execute with their own ways which can be good but will waste time, capital and resource on making the same mistake from others whereas they should have learned and not to make it. In the case when startups localize from successfully model, dominating the market, there are only two things left maintaining the marketing leader and finding buyer/ acquirer.
There are actually support from the community itself , however, it is not strong enough and lack of bond and structure between groups. One real example is the Facebook Group “Launch“. Although it has 5k + members, it’s very messy and looks like an ads marketplace than discussion group for entrepreneurs to collaborate. Admins have discuss over and over for year to improve it but nothing happens. We need a real leader with a heart, a mind for growth of startup ecosystem with sufficient capital support. Although there are many problems in Vietnam, it is also opportunity to fix them and we still have a lot of room for growth and improvement.
What can help to boost the startup ecosystem in Vietnam?
Jeffrey does believe the local startup community is growing very fast, hence it needs
More investors should be groomed to do more deals.
SaVVi is the first angel investor group/ forum in Vietnam. There are not many activities from the group that can create a huge impact for the community and crowdfunding concept is still new. Meanwhile, there will be more overseas investors approaching and set up locally. In the past year, StartupLabs co-invested in seed round for 3 startups, GREE Ventures, Silicon Straits and Golden Gate Ventures have kept an eye on all local activities and Silicon Straits will set up office in Ho Chi Minh soon this year.
What is your prediction about Vietnam startups and your future plan with Vietnam?
Jeffrey does confirm that
I am very bullish about Vietnamese startup companies and we at Golden Gate Ventures will be looking to invest in early stage companies in Vietnam.
And the final point that Jeff is impressed by Vietnamese startups is:
Very hardworking founders.
This is so true because most of all Vietnamese entrepreneurs are more risk taking. Without many supports, they even work harder to achieve success. They work through day & night and over the weekend when they are already in the game. This will also become another key advantage of local startups.
Thank you Jeffrey for the conversation and the sharing. I will summarize key words about Vietnamese startup and ecosystem as follow:
- Full of problem -> Opportunities to solve and monetize
- In developing -> Room for growth
- High technical skills -> Strong product
- Low cost -> Easy to bootstrap, validate, pivot and test + Opportunities for overseas investors to enter and overseas companies/ startups to expand
- Highly risk taking -> Get things done
- Unstructured -> Need leaders & opportunities for educational startups (like General Assembly)
Here is the Vietnamese version of my blog.