Backed by the government, Vietnam’s latest breed of entrepreneurs are fast turning Ho Chi Minh City into a technological hub. BY ATE HOEKSTRA
In the last five years Peter Nguyen saw four of his companies fail. Where others would have given up, 34-year old Nguyen decided to give it one more try with his new company Buzzmetrics. It quickly became a success.
“I had no money, absolutely zero dollars. But without money you become very creative. Now I have 49 people working for me,” the Vietnamese entrepreneur says.
In Ho Chi Minh City, the economic powerhouse of Vietnam, Nguyen is no exception. Just like tens of thousands of other young Vietnamese, he couldn’t see himself in a 9 to 5 office job. Instead, Nguyen wanted to start and develop his own business. For Vietnam’s booming economy these often well educated people are becoming an increasingly important factor. With their technology and internet-driven businesses they are creating a Vietnamese version of Silicon Valley in Vietnam’s largest city.
“I estimate that about 95 percent of the startups here fail in the first two years,” Nguyen says in a luxury coffee shop in downtown Ho Chi Minh City. “But we Vietnamese are extremely driven and if you find the right people you can really become successful and create something beautiful.”
Buzzmetrics has developed an application that scans social media behaviour and gives companies the opportunity to discover how internet users think about certain products. The demand for such an application is high, with Coca Cola, Samsung and even the Vietnamese government on Nguyen’s client list.
The combination of internet technology, smartphone use and entrepreneurship is typical for Vietnam. With an average economic growth rate of 7 percent per year since the 1990s Vietnam is one of the fastest growing economies in the world. The government is determined to continue that growth – giving more economic freedom to the public, privatising state-owned enterprises and stimulating entrepreneurship.
Information technology and high-tech products are already a fast growing part of the Vietnamese economy. In 2012, the government set a target of around 45 percent of GDP for hi-tech products and applications by 2020.
With tech startups an essential component for attaining that target, the government launched the Vietnam Silicon Valley project in June 2013, declaring it “the beginning of a dynamic and exciting ecosystem for technology entrepreneurship and startups in Vietnam,” on its official website – www. siliconvalley.com.vn.
Vietnam’s deputy prime minster, Vu Duc Dam, is a huge supporter of tech startups. In August, Dam sat down for a talk with some of the country’s most promising young entrepreneurs. The deputy prime minister, himself a doctor in economics and one of the country’s youngest ministers, discussed practical initiatives with them, such as greater transparency on legal issues, tax advantages and favourable regulations for startups, designed to smooth the process for setting up companies.
“Vietnam needs to get richer not by natural resources, or by playing the stocks, but by new technology,” Dam told the startup community.
Although many young entrepreneurs welcome the twin promises of less regulation and greater transparency, this is mixed with skepticism towards the traditional political divide between words and actions.
Hoang Tu, the technical director of Charity Map, discovered that obtaining the necessary business licences can be a bureaucratic nightmare. Tu created a website to help aid organisations start crowd funding campaigns. Originally focusing on orphanages, as soon as he decided to widen the website’s remit he began to encounter legal problems.
“After three months we wanted to extend our service to all Vietnamese charitable organisations, but we needed a fund licence and a social network licence,” Tu, 24, explains. “Without a licence it’s very difficult to be a credible organisation. It makes it impossible to grow. To solve the problem we eventually partnered with an organisation that already had the license. Now we have greater opportunities.”
Vietnam’s young breed of hi-tech tycoons are not so easily deterred. And it is easy to see why – the rewards can be great. Flappy Bird, a mobile game developed in 2013, has made its Hanoi-based designer a millionaire, and according to TechInAsia Thuy Truong, a young woman who launched three successful companies before her thirtieth birthday, sold her most recent success for an undisclosed seven-figure sum to Weeby.co, a multi-mil- lion dollar company in the US.
But it is not just the potential financial rewards that is luring young Vietnamese to establishing their own companies. Many are drawn by the freedom and independence this allows. “I think many young people in Ho Chi Minh City are open-minded. Many of them studied abroad and came back to do something special,” says Khiem Wu, 22, manager at Work Saigon, a co-working space that is proving increasingly popular among young entrepreneurs.
In Work Saigon’s café-like setting, in the heart of Ho Chi Minh City, men and women work quietly on their laptops. Coffee, meals and even a swimming pool are available. “They realise they don’t have to work for a big company,” Wu continues. “They can have their own startup, get rich with it and keep control over their company.”
Wu doesn’t have his own company yet, but believes this is just a matter of time. “I’m thinking of having my own fashion line,” he says. “Or maybe I will develop a website where you can find the cheapest price for a product. I think it’s easy to have a startup. As long as you have the right plan.”