Startup Rising Vietnam: Navigating the Next Massive and Complex Opportunity

There is no better caution sign of an American investor about to lose a lot of money than the one who gets all excited about a new market — geographic or technological — based on first impressions and a ton of macro data.

But one has to start somewhere, and Vietnam at first blush does not disappoint. Few Americans appreciate that this is a country now of nearly 100 mm people, changing so rapidly that Price Waterhouse Coopers believes it is one of the three fastest growing countries to watch (with India and Bangladesh) in the coming three decades. Infrastructure is rapidly improving, airports among the best in Asia which says a lot.

Like many rising economies, it is young, urban and tech-empowered. Over half of the population today is born after 1988, college grads are up 40% from a decade ago, and world class engineers (trained in country and abroad) are among the largest and most capable in South East Asia. Millions are seeking opportunity in Ho Chi Minh City (1/4 of the country’s GDP), Hanoi, Danang (with some of the best front-end developers I’ve met anywhere) and many other rising urban centers. Over 50% are online; 2/3 of mobile users have smart phones; 58 mm are on Facebook alone. Tech incubators and shared work spaces have sprung everywhere. Women are leading the charge in many tech companies. All numbers are moving quickly up and to the right.

The country is stunningly beautiful; the history rich and unique; the people generous, warm and entrepreneurial. Time to invest!

Stop and breathe for a moment, and before taking another step (or better yet while on an airplane to this remarkable country) read Andrew Rowan’s new book, Startup Vietnam. Andrew is an American entrepreneur who has spent several years here, and he has written a data-rich, comprehensive, sensitive and candid look both at this remarkable opportunity and the many challenges faced by those unwilling, or unable, to understand it on its own terms.

And it is less a call to invest, than a call to learn — slowly and deliberately and appreciatively.

Through comprehensive looks at research to date, hands on personal experience, extensive interviews with investors, entrepreneurs, policy makers and more and a good eye for daily life and cultural detail, Rowan’s is both an enthusiastic and cautionary tale of a place he clearly loves. City by city, and in many communities, he sensitively shows the nuance and questions a new-comer should watch for and experience.

Commitment to a new market is not a passing engagement anywhere, and Rowan frames a good building we should take both for the long commitment but even for our early investigations.

1. Learn the local language. (You'll save much time and build relationships more quickly)

2. Learn the local business culture. (You will be able to avoid faux pas, as well as participate and contribute effectively and appropriately in business settings)

3. Learn the history. (The Chinese, the French, the Japanese, and the Americans—among others—have all directly influenced Vietnam’s history at one point or another—how might that affect the Vietnamese perspective toward foreigners?)

4. Understand the “pulse” of the city and country. (What might the city you are in be like in a year? Or five years? What are the major ongoing infrastructure or development projects?)

5. Recognize opportunities and how to leverage them and your global network. (Do you see a product or service that Vietnamese consumers would want or need? Do you have a friend who has skills that would be valuable to a company in Vietnam? Make connections, both in person and for potential opportunities.)

He tours the successes and pitfalls of the relatively early days of the tech ecosystems here. We meet juggernauts in spaces often successful when first seen in rising markets — gaming companies like Vinagame (which has filed to go public) and Flappy Birds (which reached massive global customers through the Apple store); local chat platform Zalo; online portal Zing. We see bridge-building companies to Silicon Valley like OhmniLabs Robotics, and AI-enabled English language education and training tools. Historically underbanked, but with mobile devices in so many people’s hands, no surprise that the growth of OnOnPay as a mobile top-up service is doing so well. World class regional investors like Monks Hill and Golden Gate Ventures share their insights and concerns. This is only a taste.

Opportunities are significant locally and in-market, but it is telling how many entrepreneurs are thinking globally across the region, China, Europe across to Latin America and more.

But the challenges are equally clear. Rowan quotes research from the Maastricht School of Management, summing up: “In a nutshell: Vietnam is young, dynamic, cheap, and a land full of opportunity, but finding the right product and people is absolutely critical. Entrepreneurs may not lose their shirts, but they might lose their patience.”

Rowan notes, “The devil is in the details as the saying goes… and most importantly, don’t believe what you see or read—even this account. Talk to as many people as possible, get as many different points of view as possible, and then make your own decision about what is really going on.”

He is often at his best when he is most visual. “At times, the Vietnam experience can be absolutely crazy,” he notes. “Things are slow until they are not. Sit on the side of any road and observe: Vietnamese rush through traffic on motorbikes as if their lives depended on getting to their destination as soon as possible—only to sit and casually sip coffee or tea once they arrive.” He draws out the feel and smell of the country taking us to meet the young people in cafes; how iPhones dominate; how jarring are constant sounds of honking horns and motorbikes (Go Jek and Grab, the regional ride-sharing players, have become so dominant that Uber has pulled back); that new construction is everywhere; that people waste nothing and recycle everything; that name brands are deeply desired; that community engagement is so valued. 

I look forward to extensive examination of this remarkable country later this year, and we are clearly in early days of great opportunity and impact.

But, as one of my favorite investors has often told me, “new markets of any kind are not for the faint of heart — do your homework, find the best local partners, build trust, bring value.”

This is sound advice anywhere. It is at the foundation of this powerful read.