WeFit, a well known name in the technology startup community, has filed for bankruptcy. Whether the startup died because of inner problems or Covid-19 remains a controversial issue.

Clever Group president Nguyen Khanh Trinh

Among the arguments, Trinh’s warning that WeFit may be the start of a wave of startups going bankrupt in 2020 has caught special attention.

Trinh is president of Clever Group, which has just taken over Orion Media. Trinh has also invested in Soi Bien clean food chain, Phong Vu home appliance retain chain and Teko.

In an interview with Cafebiz, Trinh commented that Vietnam would see a ‘bankruptcy boom’ and WeFit’s case is just the first explosion.

“All the activities related to funding have been suspended. We are losing a large amount of money which could go to the economy in general and startups in particular. Therefore, the startups living on fund raising won’t be able to continue,” he said.

WeFit, a well known name in the technology startup community, has filed for bankruptcy. Whether the startup died because of inner problems or Covid-19 remains a controversial issue.

He said the biggest problem of Vietnam’s startup is the bad management. Most Vietnam’s startups are established by IT developers, who have deep professional knowledge, but don’t have knowledge about finance and corporate governance. And this is a big problem.

“They don’t attach much importance to legal issues, finance and accountancy, and corporate governance. They pay too much attention to products. They think good products will be enough. Meanwhile, good products just make up a part of success,” he said.

A business needs to have three things – Business Logic, Vision & Strategy and Operation – to succeed. Of these, Business Logic, which means optimizing ads, ideas and creation, makes up 33 percent of success.

As for Vision – Strategy, Trinh said many businesses still live well without this, but it is extremely important for financiers, because their world changes too rapidly.

Meanwhile, Operation makes up the remaining 33 percent of success. It is very important for some businesses, especially retailers.

Asked about crucial points of Vietnam’s startups, Trinh said he can see three problems.

First, they don’t care much about legal issues. Scond, they have bad operation.
Third, they are bad at financial management. They don’t know how much to spend and what to spend on. They think that if they have good products, high numbers of users and have good ad content, these would be enough to succeed.

Meanwhile, in many cases, the more users the products have, the bigger losses they would incur. The problem is that businesses cannot calculate the costs of products.

Kim Chi 

Vietnam’s startup makes delivery drone, gets patent in US

Established in April 2019, Drone Pro Vietnam is a company operating in the field of hi-tech air transportation. The company develops flight technology in combination with automation.

More than 90 startups in Vietnam join hands to fight against Covid-19

Ninety-three projects and startups are ready to provide technological solutions to help solve problems and assist frontline workers, isolated communities and indirectly affected people.