An increasing number of young Vietnamese are taking the startup route, willing to take risks and wait for rewards. Pham Khanh Linh seemed to be all set on a rewarding career, finding a job at global financial firm Goldman Sachs after graduating from the Cambridge University. But she quit the job in less than a year. Instead of pursuing a corporate employee path, the 25-year-old decided to return to Vietnam and start her own business, which she did last year.
She said her ambition is to make a difference in her country.
“I didn’t feel like I could make a difference with a corporate job. I wanted to influence more people,” she said.
Linh is the founder and CEO of Logivan, a logistics service which optimizes trucks’ routes and reduces their empty load return rates. She came up with the idea after observing that about 60-70 percent of truck drivers in Vietnam go back to their base with empty trunks, because they cannot be connected with potential customers.
“I saw a big problem for the logistics sector in Vietnam, but also an opportunity to make an impact.”
Linh is one among an increasing number of aspiring entrepreneurs in Vietnam who are seeking to make a difference with startups in a country that is encouraging young people to start their own businesses.
Le Anh Tien is another. While many of Tien’s friends at the University of Science and Technology in the central city of Da Nang began a quest for a stable corporate career immediately after graduation, he demurred.
Tien joined with two other partners to found Chatbot Vietnam last year, a startup which provides solutions for businesses on Facebook Messenger to answer customers’ questions and help them order a product without the need for a customer service officer.
With 13 employees, the 28-year-old plans to expand the service to Indonesia and the Philippines next year. “There are investors who are interested, but I haven’t said yes to them. I’m waiting for someone who could offer me a million-dollar investment.”
About 75 percent of fresh graduates in Vietnam are interested in starting their own business, according to a recent survey by Navigos Search, a leading provider of executive search services in Vietnam.
Fifty-two percent of them have never attempted a startup before but want to in the near future, while 22 percent of them have attempted at least once, said the survey, which polled 1,600 graduates with less than two years working experience.
Nguyen Phuong Mai, managing director of Navigos Search, said that Vietnam is seeing a young generation of entrepreneurs who are determined to pursue the startup path.
“These young people have a strong entrepreneurship spirit. We can observe this spirit in large companies, and even in our own,” she said.
Supporting environment
What motivates these people to start up is the support from the government and local companies in recent years, Mai added.
At the Youth Startups Forum 2018 in Hanoi last November, Prime Minister Nguyen Xuan Phuc said that the Vietnamese government is willing to make changes in regulations to facilitate timely funding for startups.
“We need a breakthrough innovation in policies from government bodies to help startups succeed with their ideas,” he told the forum, which attracted 300 entrepreneurs from across the country.
Investment funds are also ready to pour cash and back aspiring young entrepreneurs. In August, Linh’s Logivan, dubbed “Uber for trucks,” received an investment from the Vietnamese fund VinaCapital Ventures, which has set aside $100 million to invest in technology startups.
Singapore-based Ethos Partners and Singapore-based Insignia Venture Partners have also invested in the startup, bringing the total investment that Logivan has raised in the second round to $1.75 million, after raising $600,000 for the first round in March.
In early December, Logivan became one of four winners of Pitch@Palace Global 3.0, a platform hosted by the Duke of York to accelerate the work of international entrepreneurs.
Linh became the only Vietnamese representative to win the Entrepreneur of the Year title in a competition of 23 entrepreneurs from countries like Australia, China, Hungary and Singapore and the U.K.
Tien’s startup, Chatbot Vietnam, also received financial support of $30,000 last year from Amazon and Facebook in the FbStart program, which is designed to assist mobile startups in their early stage.
Another reason why more young people, aging from 26 to 35 years old, want to open startups is a desire to make an impact in their own country, said Mai of Navigos Search.
Although there are a high number of young people who found a startup because they want to be successful and rich, Navigos surveys show that other popular reasons are “wanting to be a boss” and “wanting to have a personal value on the market,” she said.
Inevitable failures
The number of Vietnamese startups successful in attracting investment has been increasing in recent years, reaching 92 in 2017, a 45 percent increase over 2016, according to the Topica Founder Institute, which organizes an annual program that trains and connects startups with potential investors.
The total value of the deals was $291 million in 2017, up 42 percent from 2016, the institute said.
However, challenges are unavoidable for the new companies. Mai said that with a large number of people attempting startups, venture funds can only select a small number, leaving the rest to their own devices.
The lack of funds is a vital challenge to startups. “80-90 percent of startups fail in the early stages because they don’t have enough funding to move on to the expansion stage,” Phan Hoang Lan, head of the Financial Planning Division under the Ministry of Science and Technology’s Market Development Department, said at a forum earlier.
Mai added that most startups also fail because young leaders, no matter how passionate, lack the skills to manage a new company as well as the capability to create a complete product that is well-received by the market.
Tien’s knows this struggle too well. His previous startup, a service which connects laborers with potential workplaces, could not continue due to a lack of funds. Other projects have also failed because the team members weren’t on the same page.
But the failures are not in vain.
Tien’s goal to pursue his own dream seems to have been partly achieved when Chatbot Vietnam became one of the top five companies in the Startup Viet 2018 competition in November. It also received a prize from Grab Venture, an innovation arm of ride-hailing firm aimed at supporting Southeast Asia’s startups.
“Every time my startup fails, I learn something which I could never have known without the failures. Starting a business helps me become more versatile and complete.”
“If this startup fails, I’ll do another. I still have a couple of ideas left,” he said.
