Photo: NextTech Group
Chairman of the NextTech Group, Mr. Nguyen Hoa Binh, shares his thoughts with VET on startups in Vietnam and the company's ecosystem.
by My Van
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As an experienced technology business owner, what are your thoughts on Grab recently buying Uber?
Grab has picked up all of Uber’s operations in Southeast Asia and, in return, Uber will receive 27.5 per cent of Grab’s shares, worth $1.6 billion. For the benefit of the country, I objected to Uber joining Grab. With this deal, the technology taxi market has lost its competitive edge and created a new exclusive market. As Uber retreats from Southeast Asia, Grab is almost exclusively in this field in Vietnam and other regional countries. They do business in Vietnam, but the Vietnamese Government does not receive any taxes, while the driver and the consumer are likely to be damaged by less competition. There are many merger and acquisition deals around the world that are blocked by the local government for security, tax evasion, and antitrust reasons.
What do you think about the status of Vietnamese startups?
Vietnamese startups have received some support from the government and investors recently. The number is rising sharply but the quality hasn’t improved. The quality of many Vietnamese startups in technology is low, with the greatest weakness being a lack of orientation. Most startup enthusiasts don’t know what they’re strengths are and what society needs.
These startups also lack a companion when starting out. It’s not easy to get a startup off the ground because the owner must perhaps cope with failure, stress, and fatigue. If there is no one else to share the burden, failing is easy. Startups therefore need at least two people involved at the outset.
Most recent startup entrepreneurs are young and have a big ego and sometimes ignore suggestions from their mentor, and so the relationship between the facilitator and the startup is often problematic.
On the issue of attracting capital, Vietnam is not a preferred destination of investment funds. Venture capital funds (VCF) are still relatively rare in the country. Support models for startups are only now being created, but mostly consist of training courses.
Why do Vietnamese startups struggle to attract foreign investors?
The main reason is that Vietnam still lacks effective companies, especially startups. Secondly, Vietnam is seen as a market that has not really developed. If there is a regional preference, investors usually choose Indonesia. Investors also prefer Singapore, Malaysia, or Hong Kong, as their startups have regional visibility. Technology, ability, and markets in Vietnam are not inferior to other countries in the region. But Vietnam is only one-third the territory of Indonesia, so capital doesn’t come in. The population of each country in Southeast Asia is only equal to a province in China or a state in India. Huge funds often give priority to startups with products that can be taken to other countries, such as Grab and Traveloka.
Capital flows are very strong in two destinations. The first is Indonesia, with its large population land area. Malaysian and Singapore also have a good view of the region and their people have good English skills. Enterprises in these countries also have the capacity to develop into a multinational business in Southeast Asia.
How would you evaluate the support offered by investors, organizations and the government to develop startups?
Support is mostly limited to an exchange of experience, which is difficult to make work. Coordination between the facilitator and the startup requires cohesion.
The government’s support is mostly words, with no specific support available, but it is nonetheless a positive move. In Asia, the Hong Kong and Malaysian Governments provide financial support and office space. Singapore’s Government pays the establishment costs of startups entering foreign countries. Conversely, it is difficult to obtain Vietnamese licenses for domestic enterprises wishing to enter foreign countries.
What are the special features of NextTech’s startup ecosystem?
There are many startups in our ecosystem and many different products, so they should share their advantages with each other and identify opportunities.
I believe that business opportunities come only after experience is gained. The difficulty for us is market need and business direction. For example, when I first became involved in e-commerce, online payments were not yet developed, so I decided to create an online payment app. And then, when I met problems regarding delivery, I became involved in that field.
I am currently expanding and grasping new trends, like blockchain. In the field of technology today, you must be willing to “surf”. When others jump in, I find another field.
- Nguyen Hoa Binh