Written by Lian Jye
As featured on the Economist, Appota is the success story of Vietnamese startup. Appota started in 2011 with 20 employees and determined to become the best mobile content provider in Vietnam. By December 2013, the app had reached 15 million users in ASEAN and opened its first overseas office in Singapore.
However, the reality of startup scene in Vietnam is not as rosy.
On June 2014, Greengar, one of Vietnam’s most famous startups, officially ceased operations. The news was announced by its founder, Truong Thanh Thuy in a blog post titled “Failure of a success”. In her post, she graciously thanked all her supporters and investors even though the success of Greengar is not long term and sustainable.
According to Tech In Asia, Greengar’s failure is its lack of a serious revenue model. Even though the startup has released 15 apps and its star app, Whiteboard, has garnered more than 15 million downloads, the business is not sustainable.
All entrepreneurs will argue that no success comes without failure. Failures teach knowledge, enrich experience and instill discipline. Most importantly, failures induce pivoting. Startup founders may start off with a very idealistic view of their products, only to discover the lack of sustainable revenue model. Instead of burying oneself in rejections, founders should do a reality check on strengths and weaknesses, before proceeding on with new business ideas.
To further illustrate the importance of pivoting, there are more than a couple of successful examples to quote from. Groupon started off as an online fundraising platform for NGOs. Odeo, a podcast subscription app, transformed into Twitter, after seeing strong challenges from iTunes in podcast niche.
According to Anh-Minh Do’s article, “A comprehensive look at Vietnam’s startup ecosystem in 2014“, there are at least six known venture capitals and ten known incubators currently in Vietnam. The appetite for startup nurturing has grown. Co-working space such as The Start Network and Saigon hub has appeared out of the needs of entrepreneurs’ gatherings and startup events.
Not willing to be left out of the scene, Vietnamese government has started to get involved. Back in 2010, Prime Minister Nguyen Tan Dung launched a campaign meant to “transform” Vietnam into an “advanced IT country”. As a result, “Silicon Valley Project” was launched by the government in October 2013. The project aimed to create two accelerators in two major cities, Hanoi and Ho Chi Minh City, which involves mentoring and seed capital. The idea was to create strong startups that will lead to IPO offering.
However, startup founders are not as enthusiastic about the government’s initiative. Many are concerned with legal issues and bureaucratic limitations. The founder of Digi-Gps, Dinh Minh Quan, chose to accept investment from an international venture capitalist firm instead for evaluation and consulting advices. In addition, the unclear legal framework may cause startups to be categorised as SMEs and more cost to be incurred.
–Edited by Kristine Diaz