Is Vietnam’s Silicon Valley Made of Lead?

Blogs - Vietnam: Dec. 19, 2017

When Binh Tran, the co-founder of the Vietnam/San Francisco-based 500 Startups Vietnam, discussed his company’s new investment ventures, he did so cautiously. No company names were dropped, and when asked about the specifics of one particularly successful startup venture, he looked away. “Right now, unfortunately, they’re working on stealth mode,” he said.

It’s an odd choice, since Tran said the company in question recently earned its largest series-eight round of funding from one of the top investors in the world. Why so secretive?

Starting the Startup Atmosphere

Binh Tran, who lives in San Francisco and commutes to HCMC quarterly, said that the general atmosphere of the tech startup world in HCMC differs immeasurably from Silicon Valley. Besides the obvious difference in scale, he also notices a shift in attitude.

“I think there’s a zero-sum game here,” he said. “Because of the scarcity of talent, capital and opportunities [compared to San Francisco], people might be a little more cagey.”

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Since the birth of startup companies in 2015, Vietnam’s Ministry of Science and Technology has been vocal in its support. Last year, Deputy Prime Minister Vuong Dinh Hue announced that the government plans to foster one million businesses in the country by 2020, double the number of businesses existing in 2016. But beyond encouraging talk, no concrete plans have taken shape.

According to the Deputy Prime Minister, creating a good startup ecosystem requires four factors: an effective legal framework, the existence of innovative startups, the existence of investors and seed money, and favourable institutions that will foster startup growth.

Binh Tran, discussing the “stealth” company, said, “I think part of it is there’s no clear regulation on venture, so just doing business out in the open can potentially open you up for risk exposure, like theft of ideas and theft of code.”

Tran said some companies aren’t just worried about their competition. “The risk exposure when I think about Vietnam is often about regulation,” he said. “So, as long as these companies are following the regulations to a T, and they’re not involved with building products or selling things that are of a sensitive nature, you remove some of that risk. We’re dealing with founders that understand these types of risks.”

Confidence is Key

When asked why he decided to help create 500 Startups Vietnam in the first place, despite the challenges involved, he doesn’t hesitate to answer. “After a few months of soul searching and data crunching, I realised that it was a perfect time to invest in technology, and in particular in Southeast Asia.” The increasing connectivity and ambitious nature of Vietnam’s youth didn’t hurt, either:

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“Vietnam has the low-cost, high-tech talent opportunity.”

Success depends just as much on the climate created by the government. Mai Thanh Quang, Director of the Ba Ria-Vung Tau Province’s Department of Science and Technology, recently acknowledged that the lack of government incentives and cumbersome bureaucratic procedures do little to promote success in the startup community.

Binh Tran notes, “Ideas are a dime a dozen. Building something stronger is harder.”

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