Vietnam is truly a country of entrepreneurs, pretty much every house facing a street is a business of some kind. Many are traditional family-owned businesses like small clothing stores, corner shops, restaurants, coffee shops, but you will also see a new wave of small startups. Progress and growth are being created by entrepreneurs in a diverse set of fields in Vietnam, but here I will focus on Internet startups in Ho Chi Minh City.
The Advantages and Disadvantages for startups in Ho Chi Minh City
Ho Chi Minh City is Vietnam’s largest city and is closing in on 10 million people. Even though it is not the capital, much of the business is done here due to being a much more international city than any of the other major cities in Vietnam. The quick flight to Singapore also makes it easily accessible for regional investors.
Look up: More about Ho Chi Minh City
Benefits to enjoy
- The energy: It is hard to not get affected by this city’s energy. Everyone seems to be moving forward, and of course this is fueled by a young and ambitious population where many dream of running their own business.
- The cost of living: When starting a new business it is always good to save where you can, then it doesn’t hurt that you can have lunch for a dollar and a beer for less if you want to. Rent can get expensive, but if you are ready to share an apartment it gets affordable as well.
- Places to work: There are hundreds if not thousands of coffee shops with WIFI and a brand new co-working space called Saigon Hub where you can mingle with other startups while building the next big thing.
- The startup eco-system: It is getting better day by day, and since it is still a fairly small community, it is easy to get in touch with people. There is a growing number of accelerators in the region wanting teams from Vietnam, and quality learning and networking opportunities are also becoming more common with Startup Weekend etc. Venture capital albeit limited, is available, the most active VCs in Vietnam are IDG Vietnam Ventures, Cyberagent Ventures and Digital Media Partners.
Pitfalls to avoid
- Lacking focus: Entering a developing market as a foreign entrepreneur can feel like the beginning of a modern-day gold rush, but be aware, there are too many good opportunities for any single person/company.
- Underestimating the local competition: You often get the feeling that almost everything has been done on the Internet here, but very few things have been done well. Do not underestimate local entrepreneurs and websites which might not look like much, design is a cultural thing, so what looks less developed might be a local giant.
- Placing funds in Vietnam: If you are not Vietnamese, avoid placing money inside Vietnam. Banking regulations make it hard to get it out, much better to have an offshore entity in Hong Kong or Singapore as the holding company, and then a local company to hire staff.
- Underpaying staff: Don’t get really cheap staff just because you can, competition for good staff is fierce, and quality beats quantity every time.
- Focusing on only Vietnam: Vietnam is a large but immature market, so it is not a bad idea to look at some neighboring markets as well. An added bonus is that investors often love a regional plan. There are some who have managed to do it successfully such as GreenGar and Not A Basement Studio.
Look up: GreenGar, Not A Basement Studio
This is a guest post was written by Anders Palm who founded Eat.vn and some other projects in Ho Chi Minh City.