Core tech critical for start-ups to develop sustainably
Core value and core technology are important factors for start-up firms to scale-up and develop sustainably
Core value and core technology willhelp start-ups to grow sustainably.— File Photo
According to the CEO of Le Group of Companies Le Quoc Vinh, the model of burning-cash to scale-up is no longer appropriate and proved to have weaknesses in the context of the pandemic.
For a start-up, a key problem is choosing which way to go in developing business strategies: burning-cash to scale-up to seize market opportunities or to go the long way towards sustainable development, Vinh said.
Bui Thanh Do, Founder and CEO of Thinkzone Ventures, said that the investment trend in start-ups was changing in recent years, adding that a number of start-ups were focusing more on core value and core technology.
Still, start-up firms must choose models of rapid growth which is critical to attract venture capital funds, he said, adding that venture capital funds often eye companies that could potentially expand by at least 20 times over four to five years because the initial scale of start-ups was often very small.
He said that ThinkZone was now investing in a taxi operation platform which was developing core technology to connect 110 taxi companies. This platform never scaled-up too fast an its revenue remained modest.
However, Đô said that start-up firms could develop rapidly and sustainably at the same time if they had core value and technology to help solve big problems for large markets.
According to Nguyen Chi Thanh, deputy director general of Viettel Telecom, a key partner of the national digital transformation competition for start-ups Viet Solutions, after two years the competition received more than 600 applications, about 10 per cent of which had cooperation with Viettel to provide services to more than 120 million customers in countries which Viettel had invested in.
Thanh said that start-up companies which cooperated with Viettel after Viet Solutions were not prominent in the media, but were sustainable.
"Start-ups today tend to be more cautious and choose sustainable development models, while focusing on core value to create different values, not following market trends," he said.
Thanh said that start-ups could still scale fast if they could grasp market opportunities, then focus on developing sustainably later, adding that burning-cash to scale-up was a risky model, especially when there were market fluctuations.
To survive and succeed, start-ups should determine what their core strengths were and focus on doing well with core value, he said. Start-ups which lacked market experience should choose investors who already had market share for cooperation to develop quickly and effectively.
"Start-ups need to identify what the market, society and economy needs to place focus on," he said.
Vietnam will emerge as the third largest start-up ecosystem in Southeast Asia next year, according to “The Southeast Asia Ecosystem 2.0”, a new report by venture capital (VC) firm Golden Gate Ventures.