2016 saw an explosion in technology startups, with some proving successful while others withered on the vine.

Just three days after being launched, revenue of DesignBold stood at VND600 million ($26,520), which made a strong impression within Vietnam’s startup ecosystem. 

The product also surprised designers with its smart and convenient functions. 

The success of CEO Hung Dinh, creator of DesignBold, is a positive for information technology (IT) startups in Vietnam.

In reviewing Vietnam startup ecosystem in 2016 it’s clear to see development in almost all sectors following the government introducing policies to support entrepreneurship. 

Over the last five years the sector of most focus has clearly been IT. 

“The startup scene is quite vibrant in many areas, especially IT,” according to Mr. Hung. “But we should carefully evaluate the actual success of Vietnam’s startups under multiple criteria.”

Initial success

After 12 years researching Vietnam, Mr. Hung created DesignBold, a creative graphic design software, and launched it last year. 

The tool allows users to design by themselves through simple steps and also supports quick printing, cutting total time by six-fold. 

Mr. Hung expects that DesignBold will earn revenue of $50,000 each day in late 2016.

Besides DesignBold, Flappy Bird, GotIt, and iCheck are also examples of successful Vietnamese IT startups. 

When asked how they achieved success in the sector, most CEOs said they spent a great deal of time researching the problems they wish to solve. 

With long experience in IT they also know what problems need to be resolved and they then focus on providing solutions. 

“Selecting which problem to solve is the first key step for startups,” Mr. Hung said. 

“If you want to achieve success, you must carefully resolve pressing problems in society so that customers will choose your products.” 

Thirty-two-year-old Vu The Tuan found success with his technology software called iCheck Scanner, which provides product origin and other information to users. 

Nearly 8 million downloads, or 10,000 a day, and 2.8 million users each month are impressive figures that prove his success. 

In order to meet demand among users, a staff of nearly 40 manage and develop iCheck Scanner; four times as many as when it was first released.

Deputy Head of the Division of IT Application in Enterprises at the Ministry of Information and Communications, Mr. Duong Ton Bao, said that IT startups in 2016 identified what they want to do and set up appropriate plans for their products, but this is only the beginning. 

A pre-boom

At a startup exchange program held last May, Vice President of the Vietnam Chamber of Commerce and Industry Hoang Quang Phong said that the number of students and young people with IT startups account for the most because demand within society is based on technology platforms. 

“Vietnam had about 1,500 startup enterprises as at May, with IT enterprises standing out,” according to Mr. Truong Gia Binh, Chairman of FPT. 

Although the number of Vietnamese IT startups is quite high, not all of them have found success, as researching and identifying problems to resolve is not that common. 

“Many young entrepreneurs have not resolved pressing problems in society, and have instead focused on small problems that people can live with,” said Mr. Hung. 

He compared this to manufacturing vitamins to customers that can help just a few people, not everyone. 

Mr. Bao firmly believes that 2016 is just a pre-boom stage for Vietnamese startups. 

In the last two years the trend towards the Internet of Things (IoT) has taken hold in the country through conferences and seminars and startups have begun to apply it to their products. 

Success has been problematic, however, because deployment has not been suitable for the idea.

Vietnamese startups failing at the very beginning is a major concern. Mr. Bao said that many do not identify what society needs and instead introduce what they want. 

“These startups always hit a dead-end,” he said. 

Of a similar mind, Mr. Tran Duc Huy, General Chairman of the Vinh Tuong Industry Joint Stock Company, believes that startups should begin by looking at the needs of their target customer group and not just begin with passion and an idea.

A lack of experience counts among other reasons behind the failure of some startups, according to Mr. Hung. 

Many recent university graduates have a startup idea or an ambition to change the world. But they have no worldly experience, so their startup idea is often not valuable. 

Startup founders need experience in their target sector to build plans for their products. 

“In my view, a startup only really gets going after five years of hard work, and founders should first join a startup enterprise to learn how to manage and control systems.”

2017 trends

In anticipating trends for the year to come, Mr. Bao believes that 2017 will be another boom year for startups. 

Proof lies in government policy new and on the way, and the awards startups have received already. 

Agreeing, Mr. Hung said a great year lies ahead for startups in IT, agriculture, education, health and others. 

“IT startups will focus on the global development of their products,” he said, as the local market is not quite ready for startup products and many customers are unwilling or unable to pay $100 for each piece of new software. 

Vietnam’s payment infrastructure also exhibits shortcomings, with online payment remaining complex, and IT startup products rely on such payment services. 

In five years, he believes, startup products will be more suitable for the domestic market.

Having looked up close at the startup ecosystem in the US, Mr. Hung recognizes that startups in that country are supported by all strata of society, including the government, local management authorities, and NGOs, and all are closely connected, which builds and sustains a strong startup ecosystem. 

The Vietnamese Government, he said, needs to improve its support to the country’s startup ecosystem. 

Administrative process remain complex and this affects the development of startups. 

A key need of startups is speed of action, and with complex procedures an opportunity may go begging before the paperwork is processed. 

Mr. Tuan from iCheck said that “as a startup, you should identify demand in the market and then make a perfect product before you can attract investment.” 

In a similar vein, Mr. Hung said that investors will come very quickly to a startup with an excellent product.

Mr. Bao, meanwhile, said that IT startups should consider selecting a suitable finance resource, and if this is not possible they should cooperate with other IT enterprises before attempting to go global.

Chairman and General Manager of the Mobile World Group (MWG), Nguyen Duc Tai, advised startups that “a company can only exist when it is targeted to serving customers.”

 Regarding capital, he also emphasized that quality products will find the investment they require. 

VN Economic Times