What Happens If Entrepreneurs Dream Big, But Investors Have No Balls?

via Reddit

Every entrepreneur in Asia is looking enviously at Singapore and its government as they pump millions and millions of dollars into new tech startups . It’s natural to be jealous. But across the region, we’re slowly seeing new influences in investment across the cities of the world. And as you should know already, Asia’s got more billionaires than North America.

The money is there, but creating a tech startup is really only a trend that has taken off in the past decade or so, whereas Silicon Valley has been the center of technological innovation since the early 1960s when Gates and Jobs were still green. Investors like the PayPal mafia have grown out of a culture of risk. They’re primed for risk. But in Asia, investors come from a hodgepodge of sources disconnected across the region.

For Vietnam, the effect of this has been that investors don’t take as many risks. Some of the previously biggest investors in technology in Vietnam are slowly moving away from technology startups and back into more traditional investments like brick-and-mortar industries with more visible income streams. For some, it’s brought up a worrying question: are tech and web startups not lucrative enough or are investors not risking enough?

For some entrepreneurs I’ve spoken to (who wish to remain anonymous) the trend is obvious. “E-commerce sites get more funding these days because investors have short-term thinking. They want to see the money now, and they’re not willing to invest in startups that are playing for a longer term strategy,” says one founder of a startup in Vietnam. There’s certainly no denying that e-commerce is currently the most crowded space in startups in Vietnam these days. Many think it’s the result of investors having no guts to invest in the long-term.

This line of reasoning becomes even more compelling when you look at the amount of startups that are largely subsidized by an outsourcing model. Ubox, Terrabook, Vietnam Maps Puzzle, Silo.vn, and a lot more, are all doing product development now but their main source of income remains outsourcing. One reason is because there’s no money out there to support independent startups that do it on their own. On the other side, investors here are also struggling to find startups that they find worthy to invest in. It’s a catch-22.

And yet, there are plenty of startups in Vietnam nowadays that are getting investment from investors outside of Vietnam. Is that because investors in Vietnam have lost their risk capability? Have they become cynical after investing in Vietnam for too long? What’s it like in your country?