Economic optimism, strong technological development and the youthfulness of its population have made Vietnam a fertile field for the growth of new technological enterprises. UltimateVietnam is a portal that facilitates the organization of trips around the country and the purchase of visas.
“Vietnam is the most dynamic startup market in Southeast Asia. We believe that Vietnamese startups will have strong growth and improve people’s lives with technology,” says the director of a Singaporean company that seeks out the most promising projects in the Vietnamese market and helps them take their first steps and find investors.
His office is a cubicle in a workplace shared by some twenty technology companies in Ho Chi Minh City (formerly Saigon), the country’s economic capital. Far from the formalities of conventional offices, the center is a hive of young people dressed in jeans and T-shirts and poured into their laptops.These kinds of flexible workspaces can be found all throughout Ho Chi Minh City, just as they are in Silicon Valley.
“In Vietnam there is a very inspiring energy and optimism that makes you feel that there are many possibilities. Also, young people are not afraid to fail,” he said.
Among the advantages of Vietnam, the entrepreneur highlights the good macroeconomic data (6% GDP growth), the interest of investment funds from all over the world to enter the Vietnamese market and above all the good level of computer engineers.
“Every year 60,000 new engineers leave the universities with a very good level of mathematics and science, above the surrounding countries. It’s easy to find very high-level engineers who in other countries would have very high salaries,” he explains.
“A lot of desire and initiative”
In Vietnam, there is a lot of desire, many initiatives, a lot of capital and funds that are betting on entrepreneurs. “The funding is more courageous than in Spain and even than in the United States. There is potential to create a large market.
This favorable environment, with successes such as the video game Flappy Bird, created in Hanoi by Nguyen Ha Dong, or the investment of 28 million dollars that a subsidiary of Goldman Sachs made a year ago in the Vietnamese electronic payment company Momo, has favored the comparison of Vietnam with Silicon Valley.
In the face of slow bureaucracy
North of Ho Chi Minh City, a brand new technology park called Silicon City is trying to attract the most cutting-edge companies, while the city council has launched a $45 million fund to support 2,000 new projects over the next five years. However, Tan and Moreno agree that the comparison with the Californian valley is exaggerated, to say the least.
“Many governments around the world want that label, but here the bureaucracy is slow, it takes at least two months to register a local company. The government is trying to speed things up, but it’s going to take time,” says the director of the Singaporean company. The Baolau.com founder has experienced first hand the difficulties of the Vietnamese communist administration in creating a new business. “It takes three or four months if you’re a foreigner, it doesn’t facilitate investment,” he complains.
Despite the success of his company, which already sells 75 % of the country’s train tickets online, he questions the general optimism of “startups” and warns of the short life of many projects.
“Success here is getting a round of investment, but more than half of those projects die after a year and a half. There have been some that have come to nothing after receiving brutal investments,” he stresses. He also points out that working with local engineers is not so easy because of the low level of general English and their tendency to imitate rather than innovate. “Vietnam is a dynamic country, things are moving very fast and there is a willingness to try new things, but it’s not all about advantages,” he concludes.