Vietnamese youth gain opportunities from startup promotion

Thursday, 2018-04-19 12:34:07
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Do Hoai Nam has earned success in a high technology startup in Silicon Valley with the Emotiv Systems product, offering an electrophysiological monitoring method to record the electrical activity of the brain.
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NDO – Vietnamese youngsters have found opportunities in the challenges offered by Vietnam’s startup context, thus adding further value for the startup community in the country.

The statement was made by Do Hoai Nam, a former student of the Hanoi - Amsterdam High School for the Gifted, who has gained success in a high tech start up in Silicon Valley with Emotiv Systems - a headset capable of reading human thoughts. In 2010, his company earned revenue of US$10 million, with 20,000 customers worldwide. The famous Avatar movie had used the product to measure emotions from viewers before its premiere. In 2012, Nam left Emotiv Systems to found SeeSpace and returned to Vietnam to promote the startup movement in the country which was still in its initial stage. He recently granted Nhan Dan Monthly an interview regarding the startup movement among Vietnamese youth.

Q: What do you think about the startup movement among Vietnamese youth nowadays?

A: Since 2014-2015, the Government has recognised the tremendous importance that the startup movement has to the economy and has accelerated its development. The movement has been boosted but is still not strong enough to bring about great success, as in the Silicon Valley in the US or in other countries in the region. The startup movement still needs to be further strengthened as everyone in the field knows about the symbolic statistics that only ten startups can survive among 100 projects, and among the ten aforementioned companies only one gains success.

The problem is that if Vietnam only has 100 startups, it is not certain how many of them can survive, or gain success. If you have 10,000 startups, you will probably have 1,000 living ones and about ten successful models. The problem now is that Vietnam only has around 200 startups and it is a must to boost the movement by increasing the number of startup projects in Vietnam to 10,000 companies, thereby increasing their quality.

Q: What factors do Vietnamese youngsters need to ensure their success in startups?

A: I see that young people lack a very important thing, which is knowledge when competing with foreign companies, as almost all Vietnamese startups only focus on the domestic market. The Vietnamese market, with nearly 100 million people, has huge potential and is big enough for them to make money, but still too small to facilitate the development of a giant force such as Alibaba, Google or Facebook. When young people find that they can make money in the domestic market, they tend to lose the ability to compete internationally, as they dismiss many startups when seeing international companies entering the market. We talk a lot about a “flat world” but few really understand the meaning of such words. “Flat world” means that when you make a product, you have to think of the global market, not just the domestic one. Small countries such as Israel and Singapore have succeeded because their domestic market is small, so they have had to head towards the global market.

However, young Vietnamese people also have great strength. Their technical level may not be as high as that of their foreign partners but they are effectively making use of technical applications. Another advantage is the cheap resources. Vietnam is in good condition considering the ratio between the level of technical application and the cost of resources. That is the strong point for startups, so Vietnam should develop policies to make use of this advantage as this strength does not last forever. If we do not take advantage of it and do not promote the wave of startups and technologies, it is likely to "turn opportunities into challenges" as said by former Trade Minister Truong Dinh Tuyen.

A counseling session related to raising startup capital held by the Supporting Centre for Youth's Startup (sYs).

Q: Startup ecosystems are an important factor for each startup project. How do you assess the startup ecosystem in Vietnam?

A: If asked that question within the past two years, I would’ve answered that Vietnam doesn’t have a startup ecosystem; but now I would say that it is still in its “pregnancy” and the ecosystem has not been “born” yet. There are many factors to create a startup ecosystem, such as young people's knowledge, capital, the investment environment and legal corridors, but there are still many inadequacies, particularly in terms of the investment environment. In addition, a startup ecosystem also needs a market, resources and investors but all of them depend on good policies.

Q: In your opinion, what should the competent authorities do better in their "midwife" role for the “delivery” of a startup ecosystem?

A: Startup is an ecosystem in which each element cannot be separated one by one. The Ministries of Planning and Investment and Science and Technology in the past year gave more support to the startup movement but several agencies did not, such as the Ministry of Finance which has been sluggish in renovating its policies to promote startups. For example, the Party and State always insist on encouraging domestic production, but in the electronics industry import tariffs for spare parts are higher than import taxes on completed units, leading to the fact that the cost for domestically made electronic products is more expensive than importing them from foreign partners.

Now the internet and technology has created a new dimension for the economy, pushing the policy-making perspective into a new adaption with new changes. For example, we cannot force Uber and Grab to pay taxes under the old framework but there should be a new tax bracket. Technology pushes some models ahead, thus we have to timely update and change policies in a transparent manner.

Q: As an “angel investor” for some startups from young people in Vietnam, how do you evaluate the quality of the young people's ideas?

A: I think that the quality of startup ideas by young people now has much improved compared to two years ago because we have a much more developed startup movement. Accompanied by that movement, bad ideas will be revealed, but along with that the Vietnamese youth also turn impossible ideas into reality. There are inadequacies but they do bring about opportunities. Young starters have found opportunities in such difficulties. It is worth mentioning that startups by young people are focusing on value, not money. The measurement for a successful startup now is on which new value I create not how much money I earn. Normally, those who create the most value and serve the most of people will be paid the largest amount of money. It is very fair in startups.

Q: Do you believe in the startup movement among Vietnamese youth nowadays?

A: I do believe in it and only put my trust in startups. I thought that I was successful in persuading the government leaders to believe in startups. The reality is that Vietnam will soon to be at the end of the “golden” population structure, which will lead to the withdrawal of foreign manufacturers from the Vietnamese market. The aging population will also lead to the unemployment of millions of people, creating a large social impact. In addition, State-owned enterprises have still not fulfilled their backbone role in the national economic development. Under such a context, it is necessary to create favourable conditions for startup businesses, which is the only way to put the country forward and escape the middle income trap.

Q: Vietnam had four billionaires named in the Forbes World’s Billionaires list, but none of them are tech billionaires. Do you believe that Vietnam will have a tech billionaire in the near future?

A: Certainly, the next wave will be the tech billionaire. Until now, rich people in Vietnam have been enriching themselves from their motherland, doing business based on what their homeland offers, such as from fields, rivers, land and mines. However, it changes now as the market is transforming to put great faith in technology. Previously, in the United States, only Bill Gates - an owner of a technology company - was in the top ten richest billionaires, but now the top ten are mostly tech billionaires. Vietnam is a latecomer on that route but will not follow a different path. Certainly, the giant companies in Vietnam in the next ten years are now two or three member companies. If the whole society recognises the potential of startups, many investors will be willing to invest in it. In the next decade, technology will become an industry.

Thank you very much!