Vietnam, for the last century, has been a tale of two cities. Hanoi is the cultural capital, full of lakes, and with distinct cold and hot seasons. Ho Chi Minh city is the economic stronghold, with its access to the Mekong river delta and its two seasons: hot and hotter. In the north, the culture is characterized by some as being more stand-offish, traditional, and formal, whereas in the south, the culture is considered to be more open, money-hungry, and casual. Sometimes, when I go to Hanoi, I feel like I’m entering a completely different country.
It’s commonly known in Vietnam’s startup circles that Hanoi generally produces more engineers, and those engineers are generally more talented, whereas Ho Chi Minh city produces much better business-minded entrepreneurs. But how deep does this go? When you look at the prominent startups that are coming out of the two cities, you immediately see the difference.
Ho Chi Minh city: identifying markets and leveraging people
Southerners are generally business-minded, market-oriented, and relationship-building types. Technology is usually not the strong suit.
In Ho Chi Minh city, there are two big success stories we can look at that exemplify these southern traits: VNG, Vietnam’s premier tech company, and Nhom Mua, Vietnam’s runaway daily deals success.
VNG, with Le Hong Minh at the helm, went into gaming and made its money by selling vouchers in coffee shops. But it’s a classic example of what characterizes the thinking of southerners: identifying a market, building a team around solving the problem in that market, and building a company around that. Minh not only loved gaming, but he saw the opportunity there. What was key to VNG’s success was building relationships with a large assortment of coffee shops, arranging deals with games for licensing. VNG is the epitome of southern success.
Nhom Mua also follows suit. But it also reveals another side of Ho Chi Minh city – a culture influenced by Vietnamese overseas. Ho Chi Minh city continues to have strong ties with overseas Vietnamese (a handful of Vietnam’s outsourcing companies are managed or owned by overseas Vietnamese). Tom Tran, who started Nhom Mua is no exception. And like VNG, he identified an opportunity – a lack of a significant daily deals site in Vietnam – and hired a team to execute it.
Many of the bigger and smaller tech-related and tech companies in Ho Chi Minh city also follow this trend. What you’ll also see down in Ho Chi Minh city is a more entrepreneurial mindset, a more money mindset, which also translates to more hype and people starting startups because they can. But it also indicates an ability to identify and create markets.
Hanoi: the engineering minded forge into markets
Some have cited Hanoi’s software engineering prowess to its greater respect for education, and others because of a more careful culture. But whatever it may be, many of the top founders of northern companies have engineering backgrounds rather than business ones.
Ngan Luong, which MOL recently took a stake in, is an example of this engineer/founder story. Nguyen Hoa Binh is an engineer by trade and he also started Peacesoft, the main holding company for Ngan Luong, in university from the engineering side. Eventually it became a full-fledged company. It’s also an indication of one of Hanoi’s key traits, engineers stick around for a long time; Peacesoft has been in the startup game for 13 years now. Engineers in Hanoi in general, not just at Peacesoft, tend to continue to code for the companies they work for. Ho Chi Minh city, by contrast, looks like tadpoles and frogs jumping from one lily pad to the next.
Appota, one of Vietnam’s hottest mobile startups, is another poignant picture of engineering a solution to a problem which then turns into a company. Do Tuan Anh, who started out hacking away at iPhones ever since the first iPhone came out, slowly turned his hacking knowledge and experience into a mobile distribution company. Classic Hanoi: start solving a problem, and eventually turn it into a company.
Hanoi’s also got a reputation for being a harder and more difficult lifestyle, whereas Ho Chi Minh city’s lifestyle is more affluent. Some have cited the lushness of the Mekong delta rice fields down south and the barren toughness of northern weather for these key differences. Either way, it’s bred a mentality that is much more careful and hardy. Although Hanoians are less willing to go out for a coffee and bullshit about news and trends, they’re much more solid when they do decide to make a move.
A tale of two cities together
In addition to the above, there are a few comparisons worth mentioning. Some have noted that Ho Chi Minh city’s English level is above Hanoi’s level. A lack of bilingual events in Hanoi underlines this fact. In fact, in general, Hanoi lags behind on events compared to Ho Chi Minh city, which is arguably much more hungry for community. It’s also been noted that Hanoian tech consumers are just not as good as consumers in Ho Chi Minh city, they’re more fickle and not as interested in trying new things, whereas folks from down south are noted for trying out new apps and products, thus making it easier to test out new products.
Of course, these are generalizations and stereotypes, and there are exceptions to the rules, but these trends indicate the cultures that foster the types of startups that you will see coming out of the two cities. As Paul Graham says, “in a hundred subtle ways, the city sends you a message”. Or two cities, in this case. Hanoi sends a message of carefulness and solidity, Ho Chi Minh city sends a message of openness and money.
In a lot of ways, these two cities are really compatible with each other. They make up for each other’s shortcomings and they are what generally define Vietnam’s budding startup scene. How they compensate for each other and mature will be a key factor in deciding Vietnam’s startup future in the region. It’s also worth noting that Da Nang, Vietnam’s most aggressive central city, is quickly becoming a new hub, but it’s still got at least five years to go before it even come anywhere near what Hanoi and Ho Chi Minh city have.
Thanks to Ninh Nguyen at Pandora.vn, Andy Nguyen at CyberAgent Ventures, Hai Pham, Hoang Nam Hai at Mana.vn, Mike Tran at Keewi.me, and Trung Anh at IDG for their input to this article.