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Taking a Closer Look at the IPP

In our last post, we outlined the IPP, explained its goals, and touched upon some of the challenges ahead for the program’s stakeholders. This week we are going to take a deeper look at the IPP and the cultural, comparative, and collaborative challenges ahead for the program in Vietnam.

Last weekend we sat down with Chris Zobrist, the Senior Innovation Partnerships Expert at the IPP, and he shared his thoughts on operating in Vietnam, the potential for entrepreneurship and innovation on a local level, and how the IPP factors into the changing landscape in Vietnam.

  • Can you share a bit about yourself? What’s your background, your role in your organization, and where are you located?

CZ: I’m currently working as Senior Innovation Partnerships Expert for IPP, which is a joint program funded by the Foreign Ministry of Finland and the Ministry of Science and Technology of Vietnam.  My background is as both an entrepreneur, having started many businesses over the last 15 years, as well as an entrepreneurship educator, spending part of my time teaching entrepreneurship and developing curriculum in several universities in Vietnam.

  • What kind of opportunities do you see in Vietnam over the next five years?

CZ: Vietnam has a lot of talent, especially in engineering and software development, and there are already a few high-growth companies as well as local start-ups planting entrepreneurial seeds here.

  • What’s the best way to establish trust with Vietnamese business counterparts?

CZ: It depends a lot on the individual with whom you are trying to build a relationship, specifically in terms of their background.  Generally, the best way to get to know someone is through someone they already know and trust, as in many cultures, Vietnamese really value social capital, and this can be transferred from one person to another through a proper introduction.  Besides introductions, sharing meals, and drinking together are also good ways of building trusting relationships which is an essential element of working together.

  • What’s the biggest difference between American and Vietnamese mentalities?

CZ: Coming from a developed country that churns out high quality products as well as infrastructure (roads, public buildings, etc), Americans as well as people from other developed countries have a natural expectation to see and make things at a high standard of quality.  Vietnam is still a developing country, so many things are made with what little resources were available, and so the expectation for quality coming from domestically produced goods is not high.

  • What’s the hardest part about doing business in Vietnam?

CZ: Ensuring high quality standards.

  • Do you have a favorite quote?

CZ: “I’m all for progress, it’s change I object to.” – Mark Twain, I like this quote because it is the most apt description of the greatest challenge facing entrepreneurs and innovators in almost every context, and especially true in a country like Vietnam.

  • What are the biggest differences between Hanoi and Saigon in terms of doing business?

CZ: Saigonese are generally much more open to new people and ideas, as long as there’s a clear opportunity and logic in place.  Hanoians are much more conservative, so even if they are presented with an attractive opportunity, they will be reluctant to mobilize the needed resources to capitalize on it.

  • What are the necessary attributes to succeed in Vietnam?

CZ: Social networks and building trusting relationships are keys to success in Vietnam.

  • Do you have any advice for expats/locals who want to be entrepreneurs in Vietnam?

CZ: Entrepreneurship is a team effort, so if you want to be successful, you need to learn how to network and collaborate with others to get things done.

Entrepreneurship, Innovation, and the IPP

During our discussion, Mr. Zobrist made it clear that the IPP is looking for people who have the necessary motivation, connections, and capacity to scale a company globally. That means that local companies will eventually have to implement international accounting standards, utilize English as an official working language (especially if looking to raise funding from foreigner investors), and clearly communicate a company’s Unique Selling Proposition (USP) across markets and cultures (differentiation).

While it might sound challenging, what the IPP is seeking to achieve isn’t impossible because it’s already been done before in Japan. Mr. Zobrist pointed out that Japan went from a ravaged post-World War 2 economy to the world’s second largest economy in the 1990s. What enabled Japan to be successful in its economic transformation was a stark shift in the workforce mindset, which even facilitated new vocabulary to implement innovative solutions.

Before this paradigm shift in Japan, specific industry terms did not exist to describe small batch, high quality production to factory workers. The Japanese created their own processes with their own resources to drive economic growth in 20 years; Japanese engineers, managers, and leaders took innovative ideas, applied them to manufacturing and processes and the result was innovative products from brands such as SonyHonda, and Toyota. Thus, the development of a new technical language was necessary, which involved a social level (individuals, units, company culture, etc.) of change in innovation, and ultimately led to a change in output of manufacturing (lean manufacturing).

Vietnam currently has a similar language challenge ahead of it; for example, the terms doanh nhân and doanh nghiệp can mean “entrepreneur” or “businessman” and are used interchangeably (and sometimes ambiguously) in Vietnamese. Along those same lines, sáng tạo means “creation” while đổi mới means “renovation” so combining the two (sáng tạo đổi mới) is the closest meaning to “innovation” (literally “creative renovation”) in Vietnamese. The language will have to evolve in order to reflect the high standards and creative thinking that are necessary to maintain a competitive advantage in the global marketplace.

An ecosystem like Vietnam’s needs both entrepreneurship and innovation in order to foster the creation of high growth and innovative companies with a global outlook. If a company chooses to keep the status quo then it will stagnate, or worse, die. Copying existing models can be valuable, yes, but not nearly as valuable as new ideas that lead to the creation of value for a large number of customers or stakeholders. High growth companies are innovative and innovation requires change–there is no getting around this fact.

New language can shape new segments of a culture and creating new and/or dedicated Vietnamese words for entrepreneurship and innovation will allow the exchange of new ideas more efficiently and also help to facilitate a change in mindset–goals that the IPP hopes to realize once its integrated system is fully operational (good inputs producing good outputs).

The IPP seeks to perfect the way of building innovation systems in order to turn them loose and harness the innovative and entrepreneurial resources here in Vietnam. Then, the IPP can develop iteratively by building and expanding on foundational knowledge (training individuals and teams who can then train other individuals and teams and so on). In short, the IPP is building a Minimum Viable Product (MVP), learning from the outcomes, and making the necessary changes (quickly and fully) in order to make the process of creating high growth and innovative companies more effective and efficient in the future.

When the first phase of IPP finished at the end of 2012 there were some major lessons that were learned, leading to a promotion of transparency, accountability, and momentum for IPP Phase 2 (which began in January). This public-private partnership, comprised of a core curriculum and fellowship program, will eventually fully integrate entrepreneurship and innovation–but this process will require time, talent, and commitment at the individual, community, and governmental levels if it is to succeed in its mission.

Toward the end of our conversation, Mr. Zobrist pointed out that the IPP will have its final evaluation in 2018 but for now, the short term focus is on capacity building and making grants available to suitable applicants in this “wilderness stage.” However, the first significant indicators of progress could be as early as the end of this year or in early 2016 as the Fast Track training draws to a close and the New Innovative Companies are eligible for external funding on Demo Day.

With approximately 200 Expressions of Interests submitted to the IPP for New Innovative Companies, we look forward to seeing what kinds of teams are selected for the IPP–and more importantly, what kinds of teams, trends, and lessons emerge from the other side of the Fast Track Training.

Thanks to Chris Zobrist for sharing his time with us.

The Innovation Partnership Program

Can innovation and entrepreneurship be taught? Does Vietnam have the ability to produce innovative and high growth companies to take on global markets? Are there people here who have the time, talent, and commitment to make an impact in the Vietnamese ecosystem?

The governments, donors, and people behind the Innovation Partnership Program (IPP) certainly believe so and with good reason.

Well, what is the IPP?

According to the IPP website:

“Innovation Partnership Program (IPP) is an Official Development Assistance (ODA) program financed jointly by the Governments of Vietnam and Finland. IPP is in its second phase running through 2014-2018.

Working closely with key national and international partners the program aims to scale up innovation training in Vietnam and improve support mechanisms for new innovative companies targeting international markets. Besides providing seed funding and connections for the best teams in Vietnam, IPP builds the capacity of public and private stakeholders through entrepreneurship and innovation training programs.”

The IPP focuses on three different but related areas: developing people, developing companies, and developing the ecosystem.

The Fellowship Program will develop future business leaders and entrepreneurs in Vietnam who will then lead the Fast Track training for the New Innovative Companies.

The New Innovative Companies component will help high growth Vietnamese companies bring a product or service to the global marketplace via Fast Track training and expense reimbursement.

And finally, the IPP will work with Innovation System Development Teams by providing funding for organizations that will raise standards, develop new resources, and positively impact the entrepreneur ecosystem in Vietnam.

In short:

“IPP supports Vietnam’s overall goal of becoming an industrialized middle-income knowledge economy by the year 2020. The program objective is to boost sustainable economic growth in Vietnam through the increased production and export of innovative products and services.”

One can think of the IPP as a pilot program, leading the way for other actors in the local ecosystem to continue on and influence the course of Vietnam’s entrepreneur development from a global perspective. The IPP is currently in its second phase; the conceptual portion started in September and the implementation phase has been ongoing since December. The Fellowship program is scheduled to begin around April, 2015.

The Innovation Fellowship Program

The Fellowship Program will consist of 20 fellows who will be trained by top international and local talent. The fellows will focus on innovation entrepreneurship, and once trained (over the course of two months), they will lead the Fast Track Training (six months) for selected new innovative companies. Trainers from Silicon Valley and other startup communities will come to Vietnam and work with the 20 motivated young people.

In addition to the fellowship requirements, the fellows will be selected on the basis of two primary criteria:

  1. Can they learn how to be entrepreneurs and innovators?
  2. Can they take best practices from the fellowship program and teach others?

In other words, do they have the capacity and attitude to make an impact after graduating from the fellowship program?

The fellowship requires a 40 hour per week commitment and will consist of some classroom and about 80% field work. Fellows will spend most of their time figuring out what customers need and how to find/create value in fulfilling those needs. Each week, the fellows will cover a new framework and ultimately practice and reinforce the learned concepts by the end of the week. The fellows will each receive a $1,000 allowance per month for duration of the fellowship program; the goal is to focus and train a core group of people to have all the tools necessary to create successful companies in Vietnam.

The IPP is currently seeking two local trainers who, if selected, will receive two weeks of training at Stanford University in the US, in addition to a highly competitive salary for the two months of training.

New Innovative Companies

Innovation, high growth, global; these are the words used to describe the kind of companies that the IPP is looking to fund, and eventually, is looking to see created here on a consistent basis.

The New Innovative Companies to be selected will be held to milestones and operational requirements for the duration of the program. The IPP will restrict what funding is used for (which is intended to be used on salaries and training related to development) and will cover only up to 70% of total expenses incurred by the new innovative companies. If people within the new innovative company are being paid, or external consultants are used, then the fees and services must be directly related to business activities. Thus, the new innovative companies will need to show accounting records, show payroll stubs, and show that a bank transfer took place or that the fees were paid out accordingly.

Once new innovative companies are selected, they will be injected into the six-month Fast Track Program (led by the Innovation Fellows) which will culminate in a demo day with the hope that 20 or so investors will be present and ready to look at each new innovative company for potential investment. The IPP does not to take any equity share in exchange for funding (because ODA requires it). Also, there will be no corporate governance oversight by the IPP for the new innovative companies. However, the IPP will have the power to remove teams, whether it’s because of a violation or if it’s clear that a new innovative company won’t be ready to present a compelling final pitch when the fast track training is completed in December 2015 or January 2016.

Innovative System Development Team

Local or international companies that want to be involved in Vietnam’s entrepreneurship ecosystem transformation can opt to form a consortium and submit their plans for developing specific new parts or for enhancing existing parts.

According to the IPP website:

“IPP’s grants are for covering 70% of internal and external human resource costs related to the innovation project. The first phase grant is approx. €50,000 [approximately 1.2 billion VND]. The most successful teams can receive an additional grant of maximum €200,000 [approximately 4.8 billion VND].

The potential content of the projects may include, but are not limited to, development of a new incubator, creation of new services for existing incubators, planning of a new funding program in the province, adding startup services to existing technology park or initiating a regional cluster growth program.”

To that end, expansion and funding activities, and, most importantly, imagination will be critical to finding new ways to leverage the funding to provide new resources to aspiring and dedicated Vietnamese entrepreneurs.

What’s Ahead for the IPP

February 23 is the deadline to apply for the Fellowship Program, but there is no set deadline to submit an Expression of Interest for the New Innovative Company and Innovation System Developers portions. In the longterm, IPP seeks to train individual people—not just companies. The real value of IPP is in developing people–the human talent–and getting them to share their newfound knowledge with others. Building teams takes time, and even longer to reach the point of creating high-growth companies so things won’t change here overnight, but the program is a great opportunity to head in the right direction.

One huge part of the challenge ahead for all those involved with the IPP is creating a proper technical vocabulary in Vietnamese, and in the long term, a cultural shift for attitudes toward entrepreneurship and innovation within the training programs. While the IPP has a fund amount of approximately $10 million—and it will certainly go further in Vietnam than elsewhere in the west—it will be the people on the ground, in the training sessions, and taking risks to create something great who will show the world just what’s possible in Vietnam.

Startup Israel–2014 Competition

On October 6, 2014, Hub.IT hosted an information session about Startup Israel–2014 Competition, an initiative organized by the Embassy of Israel in Vietnam in collaboration with Ministry of Science and Technology and Business Studies and Assistance Center (BSA). The information session was an opportunity for startup teams to ask Ambassador H.E Ms. Meirav Eilon Shahar questions about the competition as well as to learn more details about the application requirements.

During the event, Ambassador H.E Ms. Meirav Eilon Shahar (who has been Ambassador to Vietnam for about two years) explained that the competition launched about a month ago and it’s the first program of its kind that the Israeli Embassy in Hanoi is promoting. According to Hub.IT, approximately 30 startups were represented in the audience. The competition’s deadline was recently extended to accommodate an influx of new candidates.

The competition specifically seeks Vietnamese seed stage companies. The interesting feature of this competition is that the startups get to choose what to send to the review panel—so they need to determine the best way to present their startup’s idea, team, product, competitive advantage, etc.

The winners will be announced in mid-November and they will travel to Israel in December to take part is what has been termed a “study tour.” The exact details are unknown but suffice to say the Vietnamese entrepreneurs will meet similar startups, visit with incubators, take in lessons learned and connect with businesses in Israel, which already has a global outlook for its startup community.

Originally, the plan was to send startup founders for a few months to work with startup companies in Israel but that was deemed unrealistic due to the time commitment required. So, the project had to be adapted to the Vietnamese reality of being busy with managing a startup. Now, one representative from each team from each sector will go to Israel for primarily networking, learning from adaptation, and knowledge exchange. Ultimately, the organizational partners want to see the results of this first “class.” Maybe the results will be too limited so the project can be tweaked in the future or additional resources (except financial) can be added, such as tutoring.

The hope for the project is that the Vietnamese founders have the study tour to learn about the ecosystem and to make connections with Israeli founders. One of the big lessons learned is that startups involve failure—but despite failing one should try to improve for the next time.

According to a handout that was distributed to the participants:

“The competition brings together Vietnamese startups throughout the country to compete for the opportunity to take part in an intense startup study in Israel.

Only four representatives from four winning teams selected from the shortlist of 8 teams will go to Israel for the startup study tour in December 2014.

In order to eligible to apply for the competition, applicants need to meet the following criteria:

Age of submitting founder: 20-40

Sectors: Web/Mobile/Agriculture/Life Science

Stage of Startup: Seed Stage

Participants are responsible for reserving their intellectual property rights to the submitted products.

At least one member of the founding team of the startup should be fluent in English.”

Israeli Vietnamese Connection

The purpose of this project is to share experience with Vietnamese entrepreneurs and to expose Vietnamese startups to the Israeli startup scene. The startup scene in Israel is privately-led by businesses—although at a time it was largely government directed. The Israeli market is small; its population is approximately 8 million so everything has to be exported globally; this outward focus is true for all Israeli businesses. So in a sense, Israeli startups need to have a global view even from the onset whereas American startups can focus on the available 300+ million population. Indeed, even the VC presence is difficult in Israel but it was harder before; Israel in the 1980s was very different than today’s Israel—it improved over time, developed competition, and leveraged a strong teamwork ethic to foster innovation.

Israel is currently experiencing a debate over whether exit events by local startups and the resulting outflow of human capital is taking away innovation. Is it better to keep innovation in Israel at the expense of a potential exit? Startups in Israel simply go to US and maybe Japan. However, traditional entrepreneurs come to Vietnam as part of delegations and invest as small businesses.

Ambassador H.E Ms. Meirav Eilon Shahar revealed that the Minister of the Ministry of Science and Technology was in Israel last week for five days. During this time, the first joint committee was formed and Minister Nguyen Quan met with Israel’s chief scientist to learn more about the Israeli startup sector and the unique ecosystem in Israel. As a result, Israel and Vietnam signed a Memorandum of Understanding (MOU) to increase collaboration between the two nations in the fields of science and technology. In Vietnam, the Israeli Embassy in Hanoi is concentrating in private sector because government support is currently limited for startups.

A Winning Formula

Flexible criteria was purposely selected to be as inclusive as possible in order to spur creativity for the Vietnamese entrepreneurs who might connect with Israeli startup. What is important for startups to remember is to have the right product/market fit. It may be that the most important life experience is to go to another environment than one’s home country—in this instance for Vietnamese entrepreneurs to go abroad. Bobby Liu, founder of Hub.IT, explained, “I realized that we are only a few years behind Singapore, which started its accelerator in 2012. Being successful requires a lot of confidence. We have no choice but to explore since Vietnam may not have a suitable environment. Go somewhere else to explore: that’s what entrepreneurs do.”

Failure is a part of startups; entrepreneurs need to see and learn how to improve for the next time. It’s a long term haul—not a short-term win. One industry that Israel has focused on to grow and “own” is Homeland Security; in fact, Israel will be hosting the Israel Homeland Security convention next month which features information on cyber security, emergency preparedness, and law enforcement.

Considering there is no signup form, the challenge for startups is to submit an application that best portrays the product to the judging panel. So, 10 page proposals are out and the idea should be optimally refined to a single sentence of explanation (with supporting information). Hopefully, better judgment prevails here.

Interested parties can apply as outlined below (via handout):

An application in both English and Vietnamese includes general information about the startup and thorough business plans in PDF.

A video clip in English, no more than 2-3 minutes long, explaining why their company should be picked to go to Israel.

After screening of applications and video clips, 8 finalists will have interviews (in English) with a board of judges including representatives from the Embassy, the Ministry, and BSA. The final interview stage consists of presentation and Q&A session with judges.

Applications needs to be sent by email only to the following address: political@hanoi.mfa.gov.il

For more information, please contact Ms. Phan Thuy Trang; Mobile: 0914 551 528; Email: political@hanoi.mfa.gov.il or visit the Embassy Homepage or the Embassy’s Facebook page.

The deadline for submission is October 15, 2014 and only shortlisted candidates will be contacted.

Vientiane, Lao PDR

In the 1960s Vientiane had the reputation of being the wildest city in Asia. Today, Laos–with Vientiane as its “sleepy” capital–is known as one of the most underdeveloped countries in the world. Usually, people know one of two facts about Laos: that it is land-locked or that it is the most heavily-bombed country, per-capita, in the world as a result of being a battleground for 20th century ideology. However, these quick facts don’t do the beautiful country and its warm and friendly people justice–and this basic knowledge barely scratches the surface of the complex history of Southeast Asia.

Laos shares a linked history with Vietnam but this relationship was further strengthened during French colonial times, and continued through the Second Indochina War. Even today, there are strong and deep ties between the two countries; for example, earlier this year Vietnam funded an upgrade to the Kaysone Phomvihane museum in Vientiane.

Similar to Vietnam, Lao PDR began to open its economy to the world in 1986 but maintained strict controls on its political apparatus. Despite the current political and economical situation, there is foreign investment here; a significant portion of new construction projects are implemented by either Vietnamese or Chinese companies depending on the size of the project. For existing construction, the electrical wiring indoors, while exposed, is run neatly, and the wiring in the streets are bundled together in an orderly fashion. In homes, switches and outlets are grouped together in junction boxes that are dispersed at chest level in various rooms. Anecdotally, the power might go out for a few hours once a month in the capital.

The most visible element of consumption by the upper class, luxury vehicles, are somewhat common throughout the capital and there are some nicely designed houses in a westernized sort of style dotted throughout Vientiane. The Toyota Hilux is the unofficial vehicle of Laos as it is ubiquitous throughout the capital. Furthermore, a significant number of vehicles are modified from their stock origins in some way–be it hood scoops, snake eyes, or chrome accents–so there is a growing tuner culture in Vientiane.

Unfortunately, rush hour traffic fills up portions of the city quickly and traffic jams can occur for no apparent reason, e.g., lack of a traffic collision or police checkpoint. When there isn’t heavy traffic, whirring diesel engines and turbo-chargers spooling up in SUVs are common sounds (and the drivers love to careen down roads meant to be driven on no higher than 30 or 40 KPH). Mercedes-Benz, Porsche, and other luxury vehicle brands have dealer presences in the capital; considering Lao PDR’s economic rankings, it can be surprising to see the Mercedes SLS in a showroom—and even more surprising to see it on the roads of Vientiane.

Vientiane Through Foreign and Local Eyes

Chiang Mai, Thailand and Vientiane, Lao PDR are two cities that are similar despite being in different countries; in terms of population, consumer preferences, and lifestyles they are very much aligned. Additionally, there is a strong Thai influence in regards to fashion, youth culture, news, and entertainment in Laos. The Lao PDR capital is literally across the river from northern Thailand, after all.

Even though many Thailand-based expats (farong in Thai) travel to Vientiane for visa-runs, it’s surprising that there isn’t a larger presence of foreign freelancers in Vientiane and in Laos in general. From a visa perspective, it can seem quite attractive for remote workers and there exists the support for foreign freelancers in Vientiane in the form of Toh Lao co-working space. For foreign full-time professionals, the options range from EMC to Sciaroni and Associates to DFDL (the last organization having been founded in Lao PDR). Of course, there are also some foreign banks such as VietinBank and Sacombank (Vietnamese banks) that have branches in Vientiane and there are also many foreign restaurants in the capital to represent small expat-operated businesses—Istanbul Restaurant, Soul Kitchen, and Jamil Zahid to name a few.

Many Non-Governmental Organizations (NGOs) have a large presence in Vientiane as well so there are expat support staff who regularly work with their local counterparts. In general, locals and foreigners who might meet and develop a romantic interest in each other can’t live together and sexual relations between them are forbidden–but marriage is always an option for those who find their soul mates in Lao PDR. A good way to meet people in the Vientiane business community is via weekly events such as the meetups put on by AmChamLao. In addition to the robust expat house party scene, there are the famous get-togethers at CCC bar in downtown Vientiane. Overall, Vientiane is a small place—there is a sense of a village mentality so reputation is important since “everyone knows everyone” in both the local and expat communities.

Outside of Vientiane and into the Countryside

The youth of Lao PDR’s high-society (Hi-So) in Vientiane can be found at Mark2 or Marina wearing trendy and/or revealing clothes and dancing the night away to western style arena house music from Thursday through Saturday nights. “After hours” almost always includes karaoke in some interesting but comfortable places for all sexes (since the culture is inclusive). Yet, these experiences are so far removed from the daily lives of the average Laotian.

Outside of Vientiane things quickly become poor besides a few cities like Luang Prabang, Pakse, and Suvannahkhet. Think unpaved roads, wooden huts, shoeless children, etc. However, throughout Lao PDR there exists a deeply respectful and hospitable culture with a strong beer drinking tradition; Lao people are perhaps the most laid back in Southeast Asia. The quintessential Lao experience is singing karaoke on a nearby river or body of water while drinking Beerlao. Social gatherings are important and women and men are not always separated at these events where people are sometimes sitting on the floor and are sharing food with one another. One unique aspect of Lao culture is the use of a single glass to drink beer in addition to a personal glass, which is passed around and shared among all the guests at an special event.

Other activities that Laotians enjoy include fishing, football (there already is a healthy representation of the up-to-date Germany World Cup jerseys), and petanque. Petanque in Laos is different than petanque in France (where it originated) and government ministries usually have a petanque court on site. Half the government ministries have their signs in French, and the other half in English (besides Lao)–the same goes for the road names in Vientiane.

The three most visible brands throughout Laos are Beeline, a telecommunications company; Beerlao, a product of Lao Brewing Company—a joint-venture between Carlsberg and Lao PDR; and Johnnie Walker, which is also popular in Thailand. Beerlao is on every restaurant sign as well as restaurant equipment such as standees and cash register desks—the result is a very large market share of beer consumption in Lao PDR.

A Future Focus

Officially, the Lao PDR government actively seeks investments in agriculture, hydropower, manufacturing, and tourism, according to its investment brochure. Organically, Laos experienced its first Startup Weekend ever in Vientiane in May of this year. Last week, Nana Souannavong, president of Snap International, and co-founder of Toh Lao co-working space, was gracious enough to explain to us the state of the startup ecosystem in Vientiane.

As Nana sees it, the biggest challenge ahead of the Vientiane startup community is getting people to understand what a startup is and getting people to be more entrepreneurial because they like the stability of public sector jobs. She shared with us that a generally strong curiosity among participants and a higher proportion of female entrepreneurs are the biggest strengths of the startup community in Vientiane. Those (aspiring) entrepreneurs who are passionate are the hardcore ones who stick through the multi-day events such as Startup Weekend–and they will be the ones to get the most out of the events. It gave her hope to see so many people show up to the first Startup Weekend because if no one showed up then she knew that the community wouldn’t be ready for another five years–the fact that people showed up was a huge victory for the Vientiane startup community. Nana also revealed that the winners of the May event are still working on the concept but as a side project since the team members already had a full-time focus before winning at the Startup Weekend.

While the official Lao PDR Small and Medium Enterprises (SME) office also supports startups, there will be many challenges on the way to creating and building a suitable environment for venture capital (VC) firms and angel investors to operate in—something does not exist although there are other forms of external investments. However, the legal framework does exist for foreign investors and founders in regards to equity but only outside of the retail industry. Nana’s advice to future entrepreneurs is to “think through what you are trying to do to understand the consequences.” Along those lines, her favorite quote is “life is an investment.” She should know since her company provides financial advice in money markets for local and foreign companies.

Startup Vientiane

At the Startup Weekend, there was a mix of tech and non-tech products and services being pitched but going forward there are no obvious areas for startups to form around. Y Combinator, perhaps the most prestigious startup accelerator, has a Request for Startups (RFS) feature on its website. While the list below is not a request for startups in the strictest sense, it does provide an external view on the opportunities in Vientiane and beyond after speaking to locals and longterm residents.

Opportunities for Startups:

-Targeting tourism (perhaps first via Triip.me and then expanding on original concepts specifically for Lao PDR)

-Creating accounting controls (perhaps in the form of mobile applications) for local and/or foreign SME in Lao PDR

-Products and/or services for the many NGOs in Lao PDR, e.g., tools to train local staff or tapping into external crowd funding

-Leveraging the growing consumer communities (for example, the car tuner culture) and collecting data points on them

-Helping expats to adjust to Laos by finding housing, goods, or services more easily (a better English->Lao dictionary, for example)

Perhaps when people think of Lao PDR in the future, a third fact might enter their consciousness: a growing startup hub centered around Vientiane. The people in Lao PDR have many things to offer the world–foremost among them is their hospitality and resilient attitude–this much is apparent upon crossing the border into Lao PDR. Another Startup Weekend is scheduled for later this year at Toh Lao co-working space–hopefully, the organizers will be able to build off the success of the last event and the participants will take even bigger risks to share their ideas with the community. It will be a long road indeed, but with community leaders like Nana, anything is possible.

 

Startup Weekend Hanoi 2014

It started off with 220 online applications and eventually organizers selected 70 people to participate in the Startup Weekend Hanoi held at Hub.IT from August 29 until August 31.

While there were no specific themes to adhere to, participants entered one of two tracks: Track A, which included pre-formed teams of three-to-five people and Track B, which consisted of pitch ideas from individuals who could be joined by others to form a team if his/her idea was was approved by the audience.

Startup Weekend was created in Vietnam in Ho Chi Minh City in 2011 and then expanded to Hanoi in 2013. This year the organization aims to open two chapters: one in Da Nang in central Vietnam, and another in Can Tho, in the Mekong Delta. Last month, the event was held for the second time this year at Hub.IT.

Hai Nguyen, an organizer of the Startup Weekends in Vietnam, shared with us that the aim of the events is not only to nurture and foster innovation and entrepreneurship in Vietnam but to also promote the empowerment of Vietnam’s strength sector, e.g., agriculture, through technology.

The opening session of the Startup Weekend started on Friday at 6:30 PM and lasted until about 8:30 PM. Each participant had one minute to convince the audience that his/her presented idea should be one of the final group selected by popular vote (with Facebook “Thumbs-up” stickers placed on the most-liked written ideas hanging on the wall).

Among the various ideas presented during the initial round but were ultimately not selected by the audience included a mobile payment app, an online ticket website, and a way to repurpose unsold flowers for tea and medicinal uses. One of several recurring themes throughout Friday night seemed to revolve around vegetables and student buffets. And there was even a pitch for an online social network specifically for those born in the 1990s—perhaps a clarion call to start a new social network every 10 years? In all, about 30 ideas were shared but only seven made the cut for each track.

Newly formed and established teams returned the next day to Hub.IT from 9:00 AM until about 7:00 PM where they met with seven mentors to hash out their concepts and to prepare their final pitches for Sunday, the last day of the event. Finally, during Sunday evening each qualifying team had four minutes to present their concept, followed by a four minute Q&A session led by the four-member judging panel.

The Final Teams Presenting

First up was Team BB, which presented a compelling story time application. The team had developed a story creation landscape so that users can create stories with their family or friends. Afterward, a user can record his/her voice which is then overlaid on the story timeline. There are some quite exciting potential case uses for this technology. For example, parents can use the app to connect with their children even if they are on the road or away from home or a group of friends can get together to create a story during a reunion.

Next up was OnTot, an online tutoring service that creates a marketplace for students and potential tutors. When asked by a judge if the model was scalable, the team leader responded that he believed it could be used in the region in a country like Thailand or the Philippines. While parents may be interested in using an online tutoring service for their children, it’s unclear if students, especially younger children, will use such a service effectively. The team leader did point out that the team can launch the service in a month (although it wasn’t clear if it would be a funded or bootstrapped version) so it will be interesting to see what happens next for OnTot.

The next team presented marketing solutions software for small and medium businesses (SMB), called Beeketing. In short, the software automates the marketing process and suggests a range of tactics for a business owner to implement. It definitely could help some nascent online businesses to get the word out about their products or services or to help differentiate them from competitors. A judge asked how the service would retain customers as their knowledge of marketing improved and proposed tiers like Beeketing 1.0, 2.0, etc. to effectively approach consumers on their marketing knowledge platforms. This tiered servicing makes sense for Beeketing to meet the different needs of its customers.

One traditional concept that was presented was part-pastry shop and part-dessert distributor, Hy Hy Kitchen, named after the creator. It’s basically a handmade treats online kitchen with (at least) a single brick-and-mortar aspired location. Based on the four judges reactions, it was clear that they admired Hy Hy’s enthusiasm and gumption for her concept of “any dessert, all delivery.” Ms. Hy Hy explained the nomenclature behind her concept and told the audience that she wanted people to order Tiramisu, and to associate it with “forget me not.” We certainly won’t forget the delicious-looking photos you showed of your products.

Next up was Olymsearch, which is currently in Alpha stage of development. It was one of the few working products that were presented at the Startup Weekend Hanoi 2014 and it positioned itself as the go-to service for a personalized shopping experience. According to the Olymsearch team, the online platform is a combination of Google, Facebook, and E-Commerce all mashed up into one. The difference here is that Olymsearch is looking to fill the local e-commerce needs of Vietnamese.

AnGiNgon is a listing site for food, and is also geo-location based. Imagine checking the app to see what food options are nearby when you step out to lunch. Perhaps it is loosely based on Yelp, but what problem is the app solving? And for whom? The majority of Vietnamese consumers are extremely preferential and rely heavily on family and friends for a variety of suggestions on where to go to eat, drink, and shop.

Team OIC presented an indoor mapping solution—a service that could be offered at a mega mall like Vincom’s Royal City. The service would be able to direct users to stores that they are interested in and also provide information about on-going promotions at various retailers. The team was one of the few that utilized the dual presentation screens. The promotion portion sounds great but unless they are exclusive promotions for the app users then it may be hard for the app to gain traction.

VNspace.vn is a way to help homeowners design the interior of their homes. It’s definitely geared toward modern and trendy Vietnamese since a large component of Vietnamese decor is how ornate, or big, or traditional an item can be—usually sourced locally. VNspace.vn looks to partner with name brands in order to promote and offer their products. As Vietnam continues to modernize perhaps VNspace.vn or a similar service can fill a growing need. The site is currently in a closed beta.

Occupy Buildings Project—no, not a political movement but rather a system for utilizing rooftops to grow vegetables and other leafy greens. The team even had an irrigation demonstration to show the judges how the watering system would work. One possible way to monetize the idea was to share some of the revenue with the building owners from the sale of vegetables or whatever greens that were harvested on the roof. As one judge rightly pointed out, it is a vision of the future, perhaps 20 years ahead of its time. It’s definitely a long-term project but it could substantially transform the way ecology and business is viewed in Vietnam.

VipiOne is a negotiation service that acts on behalf of those seeking to buy a residence in Vietnam. However, it’s not clear why someone would use the service instead of negotiating him/herself. It’s also not clear why a potential homebuyer would trust the young founders to carry out the transaction.

Last but not least was Fit n’Grit, a personal trainer app. The two concept creators are currently offering personalized fitness tracking—and already have clients. The pair of friends are fitness enthusiasts who are in their last year of university where they are studying accounting and finance. The kernel of the idea is good and there’s definitely a need for proper fitness training and nutrition education—too often gym-goers are seen cranking out sloppy rapid-fire repetitions to the beat of the Vinahouse music.

Yes, there are personal trainers available in some gyms but at western prices and one-to-one personal sessions don’t scale well. We suggest that the Fit n’Grit team start by providing value on social media to create an online community ready to try out their app whenever it may be ready. Another approach could be to partner with independent gyms to provide an introductory training session (and share fees with the gym) and at the same time the team could collect contact and demographic information.

The Winners and Looking Forward

OIC and BB team emerged as the winners when the judges’ scores were finally tallied. The winners of Hanoi’s Startup Weekend event will head to Saigon to participate in Demo Day organized by StartUp.vn and Business Startup Support Center on September 12. The winners of the DemoDay will head to Seoul, ROK, where $100,000 will be on the line at the Startup Nations Summit 2014 from November 23-25.

Bobby Liu, judge and founder of Hub.IT, where the event was held, felt that this time around had a lot more solid ideas from startups and the split into two divisions was fair to the participants. On behalf of Hub.IT, Mr. Liu stated, “we’re obviously glad that we could support such a significant initiative and look forward to doing more.”

There are definitely some exciting times ahead as the BB and OIC teams represent Hanoi at Demo Day Saigon. It was also great to see the variety of the initial ideas presented to the audiences during the Friday night portion of Startup Weekend Hanoi. For some ideas, the matter is a question of timing. For others, it’s a matter of finding suitable ways to execute the idea. And for another segment of ideas, they just need some time and love to either develop or discard. No one has a monopoly on good ideas—and with the support system and effective platforms in place in the startup communities of Vietnam, the ideas coming from entrepreneurs, coders, and young Vietnamese can be turned into sustainable and scalable business models.

Hackathon Vietnam 2014

Last weekend approximately 30 teams in Hanoi and 70 teams in Saigon competed locally in a Hackathon primarily organized by Silicon Valley VC firm Formation 8 in coordination with Hanoi-based incubator and consulting firm, 5Desire. In Saigon, the event was held at the National Academy of Public Administration and in Hanoi the event was held at the University of Science and Technology. Held over two days (Friday, August 1 and Saturday, August 2), the hackathon essentially served as a startup convention featuring guest speakers, presentation panels, and workshops. But the main hackathon portion itself consisted of 23 hours of coding as teams turned their wireframes, designs and visuals they had prepared earlier into prototypes or Minimum Viable Products (MVP).

The event in Hanoi culminated in two pitch sessions where teams presented their final products of the 23-hour hackathon to a panel of judges from 1:30 PM until 6:00 PM on Saturday with some brief breaks in between. According to the Hackathon Vietnam 2014 website, up to four member teams comprised of “any student, developer or technology enthusiast in Vietnam who [were able to] travel to Hanoi or Ho Chi Minh City on the day of the hackathon” attempted to examine one of the following themes:

• Connecting More With Mobile

• Social Networking across Regional Cultures

• Integrating Technology into Education

• Pushing Wearables into Everyday

• Spirit of Innovation

After the team presentations in Hanoi, Deputy Minister of the Ministry of Science and Technology Tran Viet Thanh was able to personally congratulate the winning teams. Another distinguished guest, Joe Lonsdale, Cofounder and General Partner at Formation 8 was present on Friday to speak to the hackathon participants. Mr. Lonsdale was previously in Vietnam earlier this year when he spoke at an event in Saigon in January.

The Teams and Products

We caught most of the presentations in Hanoi. For us, the most interesting product was Dicterious, “The English Studying App.” The UI was presented in a gorgeous flat design style and what we liked most about the app was that the game mechanics allowed the user to learn some English, learn some local history, and to have fun while doing so—all at the same time. At one point one of the judges stated that a serious English learner wouldn’t use an app like Dicterious and asked the team leader if it was primarily a learning tool or a game. The team leader responded that it was primarily a game but, in our opinion, it most resembles a learning tool with gamification elements.

Early on, one team’s mission was to “solve daily problems with social knowledge and photos.” Basically, the team was attempting to create a “knowledge flow” and have users contribute to the communal knowledge for a particular geographic area. There is especially a need for this kind of service for foreigners in Vietnam because there are a multitude of repeat postings on the two main Facebook expat groups, “Hanoi Massive” and “Expats in HCMC.” Most of these postings revolve around trying to find a suitable neighborhood to rent in, where to buy a particular foreign product, or asking for general help in some way. Surely there must be a more efficient way to organize repeatedly requested information for users to consume. Perhaps there is a potential business model in finding a way to phase out the same Facebook group posts over and over again via a social platform which can pair locals with foreigners for joint problem solving and cultural exchange.

Another interesting product was a bookmarker for maps. Yes, Google Maps has a save feature where you can “star” a location but after a while it can be hard to remember why you starred one place versus another. One of the prevalent features (although not unique) of Vietnam is that there are entire streets full of stores devoted to the same product or a similar range of products (lights, engines, bathroom furniture, etc.). So if a startup can find a way to organize, classify, and present that data to consumers (especially foreigners) then there might be a way to monetize that database. Perhaps the product or service can be as simple as a more accurate online map of Vietnam in terms of addresses with an overlay feature showing where there are clusters of similar stores across Hanoi or Saigon.

9Hug.com was another intriguing concept and upon reflection it or something along those lines could be a hit here. It’s a mobile social network application which gives you the ability to record a message for people you give a gift to. In a country (and most of Asia for that matter) where pictures of food and selfies are some of the most recorded media, perhaps the team is onto something. We can definitely see younger Vietnamese use this service to declare their affection for one another via video, which can then be uploaded to Facebook for the entire world to see.

The Winners and Prizes

The top three products were Voicepedia, Genius Kid, and Imaginator with the TT team (Voicepedia) winning the Hackathon and Genius Kid coming in second place. Coincidentally, both members of the TT team have the same name: Nguyen Duc Tam. There were also five honorable mentions for the teams that impressed the judges in one way or another.

Imaginator gave anyone (the team suggested teachers) the ability to create an online course. Perhaps they can tap into the growing popularity of Udemy and tailor the product to help content creators such as YouTube Stars establish new revenue streams.

Genius Kid, an edutainment app, had a nice UI and it looks like the well-presented art style might resonate with parents as well as children. If Vietnamese parents believe that the app will give their kids an advantage or will create “gifted children” at home then the Genius Kid app will be one step closer to being successful.

The winning team, TT, utilized text-to-speech technology in order to access Wikipedia articles. For their efforts, the winning team won a cash value of $11,500 which, according to the hackathon website, includes:

“A round trip for all winning team members to Silicon Valley to visit Formation|8 portfolio companies, Introduction to Silicon Valley’s top VC’s and Formation|8 portfolio companies. Dinner with Formation|8 team[.]”

The second place team won $750 and the third place team won $500.

The Takeaway

Overall, the event was a success—it was clear to see the enthusiasm of the teams when presenting, the judges were keenly interested in the presentations, and there were a number of compelling visions that were realized by the end of the hackathon. While not the first ever hackathon in Vietnam, or even the first bi-city hackathon in Vietnam, it was the biggest one yet. What mainly separated this hackathon from others before it was the high-profile organizers from the US and Vietnam as well as participation from members of Vietnam’s Ministry of Science and Technology.

However, there were a few disappointments. The pitches in Hanoi were mostly in Vietnamese, apparently due to a change by the judges in order to accommodate some of the more nervous teams. The fact remains that English is the language of business across most of the world and if any of the teams want to end up in Silicon Valley on a permanent basis then they will have to be comfortable pitching to potential investors in English.  Also, the ending of the hackathon in Hanoi was rather abrupt. Of course, it’s understandable from the participants’ perspectives–and they must have been exhausted by the end of the 23-hour hackathon, but it would have been nice to speak to the teams at the end or to make some connections between the participants and attendees. After all, there was at least one Fortune 20 company representative in the crowd who was actively scouting startups in the region (and others in the crowd who were recruiting).

Going forward, it will be interesting to see how often events like this one will take place in Vietnam now that it has been done at this scale. The startup community in Vietnam has had its ups and downs with more of the latter lately as signaled by the closing of co-working space Saigon Hub earlier this year. More local events such as hackathons and other community-building activities are needed to continue to drive the startup community in Vietnam in a positive direction, i.e., to raise the local standards to a global level. Ultimately, the hackathon was a watershed moment for the startup community in Vietnam—now it will be up to the entrepreneurs, coders, and technologists to keep the momentum going in the months ahead.