When I published my ten actions post last month, it got a bunch of views. On one side, it’s because I got the number ten in there, and people love clicking lists. But the key reason is Vietnamese entrepreneurs care about their startup scene. There’s a resounding sense that the community needs to work together and build. And I’m beginning to get the sense that, after traveling around Southeast Asia and speaking to movers and shakers throughout the region, that this might be something quite unique to Vietnam, at the moment.
In other words, Vietnam is hot already, the startup scene doesn’t need to be saved. It just needs to keep its momentum. Son Tran, founder and CEO of Tiki.vn, which recently got a round of series B funding, told me he thinks that Vietnam’s startup peak is still coming and we won’t see a slowdown until 2015 or 2016.
First, the numbers.
Vietnam’s entrepreneurial numbers for 2013 are showing serious progress. Here’s a few.
- 1. New businesses are on the rise: At a presentation last weekend at the TIGERS@Mekong event, Mr. Nguyen Hoa Cuong, deputy director-general of the ministry of planning and investment, noted that the number of new registered businesses has been declining since 2010. A clear indication of the steady decline of Vietnam’s economic growth. But in 2013, the growth rate already far exceeds last year’s number of registrations. By mid 2013, there are already 39,000 registrations compared to the 69,874 registered in the whole of 2012. These numbers tell a story; the economy is turning around. Or, in the face of a poor economy, Vietnamese are still able to be entrepreneurial.
- 2. Vietnam is the regional leader in startup investments and exits: Look at the numbers, Vietnam has had five significant exits since January and over 15 significant tech investments. That’s more than any other country in Southeast Asia (besides Singapore). Essentially, this means two things: investors see potential in Vietnam’s IT landscape, and startups in Vietnam are delivering.
3. An aggressive and hungry mentality in a post-communist landscape: After Vietnam opened up in 1989 with the socialist-oriented market economy, Vietnam has been on a ferocious growth path that pulled it out of the extreme poverty line by 2008 and experienced rapid GDP growth. Of course, one of the biggest engines of growth has been the advent of Vietnam’s many young corporations. The fierce growth of Vietnamese companies and competition can be attributed to the hardship and values of the previous generation being poured into the young hardworking modern generations. It’s gone from generations of restrained poverty and war to waking up to opportunity. This carries over into Vietnam’s startup scene. The mentality is that untapped markets and opportunities are ripe for the picking.
4. People are wily: There’s a saying in Vietnam that goes to the tune of “laws are as numerous as a jungle but the people follow the laws of the jungle.” In other words, despite the hurdles and minefields of Vietnam’s legal and political system, people still build hugely successful companies. Despite Vietnam’s so-called corruption, it’s local companies still seem to build into very successful corporations. This comes out of a practical business mentality from the younger and older entrepreneurs in all industries.
5. “Vietnamese people are inherently entrepreneurial”: At least that’s the saying that you hear all the time in Vietnam. People open up mom-and-pop stores left and right. If a new shoe store opens up on a local street, within months you’re bound to see a new competitor. People are always thinking about how to make money. Although this has manifested in scams and greedy business people, it’s also instilled an underlying entrepreneurial spirit.
- 6. The Vietnamese diaspora: Regrettably, Vietnam has experienced many wars with outsiders over the years. But this has also caused a large amount of Vietnamese people to live abroad. And as these individuals start to become more interested in the Vietnamese market or connect to local entrepreneurs, we’re starting to see a few benefits. For example, Nhom Mua, one of Vietnam’s top daily deals sites that saw exponential growth from 2011 to 2012 before it crashed, was under the management of a team of foreigners and overseas Vietnamese returnees.
The ecosystem is on a growth path
7. Local and international events on the up: In the past, I’ve noted that Vietnam’s events have been growing very fast with the addition of new hackathons and local conferences. There’s everything from locally-organized events like StartMeUp to internationally licensed ones like DEMO ASEAN. It shows the level of interest in startups and entrepreneurship is not only organic and coming from the community, but it’s also an interest from more mature markets. This serves to feed the ecosystem.
8. More leaders than you think: I mentioned in my 10 actions post that Vietnam’s startup leaders are in hiding. That means there are more than you think. There are folks like Tai, founder and CEO of Socbay, one of Vietnam’s more successful mobile tech companies, who are considerably more low key about their moves and investments in the scene. Just because they’re in hiding doesn’t mean they’re not doing something. That makes for a more competitive atmosphere, but it’s also a resource that needs to be tapped into more.
9. A network of people that get things done: Vietnam has long had a reputation for being a hard nut to crack. It’s not nearly as open and easy to access as its neighbors. Despite this, a strong network of people connects Vietnam’s two major cities and it requires just a few steps and legal hurdles to get in. If you look at the recent McDonald’s entrance, it’s a classic story of how the impossible is made possible in Vietnam via connections. All the other major businesses that successfully opened offices in Vietnam also understand this, including Samsung, Nokia, Rocket Internet, Microsoft, etc.
10. A growing number of startup initiatives: 5desire, Hatch.vn, Startup.vn, Startups.vn, Saigon Hub, Start Center, Hub.IT, Seedfund.vn, VYE Bootcamp, Launch, Action Space, and Founders Institute are just a few initiatives that have been growing, especially in the last year. We’ve seen a steady explosion of co-working spaces, listing sites, events, and programs that adapt to the needs of startups in the ecosystem. If this growth keeps pace, we will see a healthy and mature startup scene by the end of next year. And by healthy, I mean startups that can raise money, possibly exit, or acquire staggering amounts of users.
- Bonus: 11. Foreign educated startups: As I wrote before there’s a new generation of young founders who were educated abroad and then came back to Vietnam to start a business. This more educated group understands the Western way of thinking and can apply those principles to Vietnam’s economy.
Now, if all of the above continues its momentum, we may see Vietnam fulfilling Son Tran’s startup prophecy that Vietnam’s scene will continue to increase until 2015. Well, here’s hoping.
(Editing by Charlie Custer, Paul Bischoff, and Steven Millward)