When I published my ten actions post last month, it got a bunch of views. On one side, it’s because I got the number ten in there, and people love clicking lists. But the key reason is Vietnamese entrepreneurs care about their startup scene. There’s a resounding sense that the community needs to work together and build. And I’m beginning to get the sense that, after traveling around Southeast Asia and speaking to movers and shakers throughout the region, that this might be something quite unique to Vietnam, at the moment.
In other words, Vietnam is hot already, the startup scene doesn’t need to be saved. It just needs to keep its momentum. Son Tran, founder and CEO of Tiki.vn, which recently got a round of series B funding, told me he thinks that Vietnam’s startup peak is still coming and we won’t see a slowdown until 2015 or 2016.
First, the numbers.
Vietnam’s entrepreneurial numbers for 2013 are showing serious progress. Here’s a few.
- 1. New businesses are on the rise: At a presentation last weekend at the TIGERS@Mekong event, Mr. Nguyen Hoa Cuong, deputy director-general of the ministry of planning and investment, noted that the number of new registered businesses has been declining since 2010. A clear indication of the steady decline of Vietnam’s economic growth. But in 2013, the growth rate already far exceeds last year’s number of registrations. By mid 2013, there are already 39,000 registrations compared to the 69,874 registered in the whole of 2012. These numbers tell a story; the economy is turning around. Or, in the face of a poor economy, Vietnamese are still able to be entrepreneurial.
- 2. Vietnam is the regional leader in startup investments and exits: Look at the numbers, Vietnam has had five significant exits since January and over 15 significant tech investments. That’s more than any other country in Southeast Asia (besides Singapore). Essentially, this means two things: investors see potential in Vietnam’s IT landscape, and startups in Vietnam are delivering.
- 3. An aggressive and hungry mentality in a post-communist landscape: After Vietnam opened up in 1989 with the socialist-oriented market economy, Vietnam has been on a ferocious growth path that pulled it out of the extreme poverty line by 2008 and experienced rapid GDP growth. Of course, one of the biggest engines of growth has been the advent of Vietnam’s many young corporations. The fierce growth of Vietnamese companies and competition can be attributed to the hardship and values of the previous generation being poured into the young hardworking modern generations. It’s gone from generations of restrained poverty and war to waking up to opportunity. This carries over into Vietnam’s startup scene. The mentality is that untapped markets and opportunities are ripe for the picking.
- 4. People are wily: There’s a saying in Vietnam that goes to the tune of “laws are as numerous as a jungle but the people follow the laws of the jungle.” In other words, despite the hurdles and minefields of Vietnam’s legal and political system, people still build hugely successful companies. Despite Vietnam’s so-called corruption, it’s local companies still seem to build into very successful corporations. This comes out of a practical business mentality from the younger and older entrepreneurs in all industries.
- 5. “Vietnamese people are inherently entrepreneurial”: At least that’s the saying that you hear all the time in Vietnam. People open up mom-and-pop stores left and right. If a new shoe store opens up on a local street, within months you’re bound to see a new competitor. People are always thinking about how to make money. Although this has manifested in scams and greedy business people, it’s also instilled an underlying entrepreneurial spirit.
- 6. The Vietnamese diaspora: Regrettably, Vietnam has experienced many wars with outsiders over the years. But this has also caused a large amount of Vietnamese people to live abroad. And as these individuals start to become more interested in the Vietnamese market or connect to local entrepreneurs, we’re starting to see a few benefits. For example, Nhom Mua, one of Vietnam’s top daily deals sites that saw exponential growth from 2011 to 2012 before it crashed, was under the management of a team of foreigners and overseas Vietnamese returnees.
The ecosystem is on a growth path
Now, if all of the above continues its momentum, we may see Vietnam fulfilling Son Tran’s startup prophecy that Vietnam’s scene will continue to increase until 2015. Well, here’s hoping.