Rebecca Fannin is the author of “Startup Asia”, a book published worldwide in October. The Saigon Times Daily spoke with Fannin about Vietnamese startups she interviewed while she was writing the book. Excerpts:
The Saigon Times Daily: Your research for “Startup Asia” brought you also to Vietnam, besides China, India and other Asian countries. And you’ve found Socbay. What can you say about this search engine?
– Rebecca Fannin: Socbay is a Vietnamese, mobile version of Google. It is the market leader in mobile search market in Vietnam. It is quite an amazing success story from Vietnam. They even turned down an offer from Google to buy the company a few years ago.
How about other startups you’ve met in Vietnam such as VNG, Vinabooks and Tamtay?
– They are young startups in Vietnam, and many of them are copies of Western models or Chinese models.
Can you go into details about the cloning? They are all clones, right?
– Socbay is a mobile version that has a lead in the mobile search against Google. So it’s not a straight copy and it’s also in the Vietnamese language. VNG is a combination of Shanda and Tencent (China); VinaBooks is a clone of Amazon and Dangdang (China). Tamtay is a clone of Facebook and Renren (China).
But each one of these Vietnamese startups has their own local twist for the market. So twists or micro-innovations from the outside models, in order to adapt to the local marketplace. Anyway, they do take their clones from models that work.
What do you think is interesting with these Vietnamese startups?
– Their CEOs are very lively, dynamic individuals. I think the energy level is interesting, it’s high energy level and it’s very entrepreneurial. It reminds me of where China was 8-10 years ago.
How about them compared to Indian startups?
– Well, Vietnamese startups are different from Indian startups. They are not as advanced as most of the Indian ones. The market in Vietnam is just not nearly as big as India’s or China’s.
China has the world’s second largest venture capital market. India has the world’s third largest venture capital market. Vietnam is really small, but the entrepreneurs here, they are very dynamic. And I think there are some good investors, venture investors in Vietnam that can help them such as IDG Ventures.
Do you think that the Vietnamese startups have room for growth?
– Yes, I think that they do. The Vietnamese market has a lot of mobile users and a lot of Internet users, so there is room to grow. As Vietnam develops, they will also develop. If they can pick the right sector, they can also develop.
What do you mean by “the right sector”?
– It’s something that is also growing in Vietnam, like the mobile Internet. It’s the Internet on the mobile phone.
Do you see that they have similarities only, or are there some diversifications between these Vietnamese startups?
– Each one is tailored for the Vietnamese market. They are not trying to go international. They are not trying to go outside of Vietnam. They are very targeted for the local market. Not all the Chinese or Indians are going international either, but more and more Indian and Chinese startups are starting to go outside of their home country. Vietnam is nowhere near that. Vietnam is really new in this. It’s a frontier market, but it has a lot of advantages, because the digital communications market is strong here. They also have strong venture investors in Vietnam, who are able to look to other markets, like China and India, to see what else worked in another market, and then take the ideas to Vietnam. And they have local Vietnamese entrepreneurs, who are able to start a company and manage it. Sometimes they bring in somebody from overseas to manage it too.
Can you give us an example?
– Well, VNG have brought in Bryan Telb from the U.S. to help manage it. He is now an adviser, but before he was more involved.
Anyway, can Vietnamese startups one day go global?
– That is unlikely today, because of the Vietnamese language. Maybe they want to reach out to Vietnamese globally, in other markets. At present, there’s really nothing unique or innovative from Vietnam that would be something that could go global. To go global, they need sophisticated managerial teams capable of making the leap outside Vietnam. They also need products or services that offer a cost or service advantage for overseas markets.
The language barrier is not a real obstacle, because you can ask somebody to translate for you. Maybe the mindset…
– It could be the cultural mindset, as in gaming. Only some games will do well in the local market, because games are very culture specific.
Is money also an obstacle for them, when trying to go global?
– I would think so, yes. They need to have sufficient finance, in order to go to another level.
How much money do they need, for the time being, according to you?
– I don’t know. It’s hard to say, because Vietnam is on a different scale than other markets. The investments are much smaller in Vietnam than they are in other markets. China, for example, has a startup investment of US$100 million. There is nothing like that in Vietnam. It would be really surprising if you would ever have a US$100 million investment. Right now, even if it were US$5 million, it would be very big for Vietnamese startups.
Do Asian startups share something in common?
– They are all led by visionaries. Their CEOs have picked growth markets and have managed their startups in a lean way, in a cost-efficient way. In addition, they have often been able to attract good partners to work with them.
In what way is this new generation of entrepreneurs in Asia different from the previous one?
– The first ones were mostly returnees, people who came back to their homelands from the U.S. in around 1999-2000 and they set up startups there. So those were returnees to their homelands, mostly. Today, there are more startups coming from local home-grown entrepreneurs. And Vietnam has several of those started by the local entrepreneurs.
Is there any secret to the success of this new generation of entrepreneurs?
– Their secret to success I’ve found is: be a visionary; pick a fast-growing market; stay focused; keep the company; partner with others, not trying to go solo.
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