Vietnam is increasingly a thriving tech ecosystem connected with SEA
Jun Wakabayashi, Analyst (若林純 / 分析師)
Jun is an Analyst covering both AppWorks Accelerator and Greater Southeast Asia. Born and bred in America, Jun brings a wealth of international experience to AppWorks. He spent the last several years before joining AppWorks working for Focus Reports, where he conducted sector-based market research and interviewed high-level government leaders and industry executives across the globe. He’s now lived in 7 countries outside US and Taiwan, while traveling to upwards of 50 for leisure, collectively highlighting his unique propensity for cross-cultural immersion and international business. Jun received his Bachelors in Finance from New York University’s Stern School of Business.
Several batches ago, we started to see a steady influx of Vietnamese founders applying to our AppWorks Accelerator. It was a rather curious phenomenon because at the time, we had only begun expanding our scope outside of Taiwan to include Southeast Asia and had really only seen inward interest coming from developed markets like Singapore and Hong Kong.
AppWorks Analysts Natalie Lin and Jun Wakabayashi (from left to right) join several Vietnam founders at an AppWorks Founders Forum in Hanoi, Vietnam November 2019
Indonesia had long been earmarked for obvious reasons, but Vietnam was nowhere on our radar. And yet, we ended up having founders of startups such as Innaway (AW#17), Triip.me (AW#18), KardiaChain (AW#18), and Abivin (AW#19) join our program. Granted, each of them had different motivations for coming to Taiwan, but it was enough to pique my interest in understanding the Vietnamese market, specifically the context and mentality in which these founders were coming from.
A handful of trips and dozens of meetings later, I’ve grown to become quite fond of the ecosystem in Vietnam. There’s an almost festive-like energy reverberating throughout the local startup scene. The country is experiencing a level of economic prosperity it has never seen before, and as a result, a generation of eager entrepreneurs laser-focused on tapping into the limitless possibilities at hand. Based on my observations, there are several key factors currently driving this growth.
The macros
Vietnam’s ascension to the regional, if not global, spotlight has been nothing short of an economic miracle. Just three decades ago, the country was one of the poorest in the world, with gross domestic product per capita treading around US$100 and over 70% of its population living in poverty.
Thanks to the Doi Moi reforms introduced in 1986 that gradually saw the liberalization, privatization, and diversification of its economy, Vietnam today is a comfortably middle-income country, with an accelerating market driven by a large, increasingly wealthy, and digitally connected middle class. From 2000 to 2015, Vietnam exhibited an average GDP growth rate of 6.9%, most recently clocking in at 7.08% in 2018, placing it among the fastest-growing economies in the world.
With 95.5 million people, Vietnam boasts not only the third-largest population in Southeast Asia, but also a young one, with over half under the age of 35. Levels of disposable income have also never been higher, and internet and mobile adoption are becoming more ubiquitous among its consumer base.
These are the fundamentals that should whet the appetite of any early-stage investor worth their salt, and many seem to agree. In the 2019 eConomy SEA report by Google, Temasek, and Bain & Company, Vietnam was designated as the third-most funded country in Southeast Asia after Singapore and Indonesia, having attracted over US$1 billion in funds over the last few years. The country’s internet economy has expanded by 38% on an annualized basis since 2015 – growing far more quickly than its regional peers with the exception of Indonesia – and is now set to reach US$12 billion or 5% of its GDP in 2019, according to the report.
It was only a few years ago when Vietnam lagged behind the majority of its peers in terms of capital allocation, deals done, and overall interest. But now, the conversations are evidently shifting from “Why Vietnam?” to “How do I get a piece of Vietnam?”
The tech talent
A classic characterization of the ideal Southeast Asian startup is one that is headquartered in Singapore, targeting Indonesia, with designers in Thailand, customer service in the Philippines, and engineers in Vietnam. It’s a gross oversimplification of each country’s strengths, but it’s nonetheless rooted in some degree of truth.
Vietnam’s heavy investment in science, technology, engineering, and math education over the last 15 years, combined with improved internet connectivity and a young, low-cost workforce, has spawned a thriving IT outsourcing industry. Vietnam is now home to roughly 30,000 IT companies, while churning out 80,000 IT graduates a year from its universities, according to Vietnam’s Ministry of Science and Technology. The country has also usurped China as Japan’s second-largest software outsourcing partner, right behind India, and houses substantial research and devvelopment bases from the likes of IBM, Intel, Oracle, Samsung, and Grab.
What does this mean for startups? This country is producing a legion of skilled developers ready to join a startup or bootstrap one of their own.
Many of the local founders I met previously worked for an outsourcing company (or in many cases simultaneously), but turned to entrepreneurship and startups in search of greater opportunities for growth and impact.
Of course, the talent pool is not without its challenges. The talent is certainly there, but it’s raw, and it’s young. As the ecosystem is still relatively nascent, there are very few people who have experience managing teams and solving problems at scale.
Moreover, while Vietnam’s education curricula in technical subjects like math and science have evolved tremendously in the last two decades, outsourcing is still an inherently low-level, low-value process, leaving a void of product-focused engineers that understand the holistic impact of their efforts on end users.
Nevertheless, the foundation is there. Vietnamese students regularly outperform the majority of their regional peers, while notably surpassing student performance in several Western countries, such as the UK and the US. Especially now, as we embrace the onset of deep technologies like AI and blockchain, Vietnam’s massive talent pool – if properly refined and nurtured – gives the country a unique comparative advantage over other Southeast Asian countries when it comes to producing prospective tech startups.
The sea turtles
In Taiwan, they’re called “hai gui;” in the Philippines, “balikbayan;” and in Vietnam, “Viet Kieu.” Collectively, they’re commonly referred to as “sea turtles”: locals who lived overseas, typically in Western countries, and eventually returned home to work or start their own businesses.
These returnees are often a primary driver of value creation for developing markets. That’s largely due to the experience gained, best practices learned, and network accumulated from some of the world’s leading universities and companies, which they’re able to integrate into their own ventures. Among Southeast Asia’s current crop of unicorns, the majority of their founders received some form of education abroad. For example, Grab’s Anthony Tan, Gojek’s Nadiem Makarim, and Traveloka’s Ferry Unardi all studied at Harvard Business School.
Looking at Vietnam’s current startup hall of fame, the majority of founders studied abroad at some point or another:
Son Tran, founder of Tiki.vn, University of New South Wales
Hai Linh Tran, co-founder and CEO of Sendo, Nanyang Technological University
Ba Diep Nguyen, founder of Momo, Curtin University
Tuan Pham, founder and CEO of Topica Edtech Group, New York University
And the list just goes on from there. In fact, even Minh Le, chairman and CEO of VNG – the country’s one and only unicorn – received a part of his higher education abroad at Monash University.
But this is just the beginning. There’s an estimated 4 million Vietnamese currently living overseas, with more than 130,000 of them studying abroad every year. Ho Chi Minh itself receives approximately 30,000 young Vietnamese returning from overseas annually to seek business and startup opportunities. The government has also doubled down on its efforts to attract overseas talent by creating relaxed visa programs for Viet Kieu and exempting them from certain investment requirements.
The homegrown ecosystem
Although Vietnam has yet to produce a regional success story the likes of a Grab or Shopee, the country does have its fair share of rising stars and homegrown champions that are effectively holding their own against foreign entrants. There’s Tiki.vn for ecommerce (reportedly raising over US$100 million in its latest round), Momo for e-wallet (recently raised US$100 million in series C funding), Zalo for messaging (owned by VNG), and also a handful of local ride-hailing contenders including Be (started by VNG’s co-founder) and FastGo (recently expanded in Singapore).
The fact that consumption hasn’t been completely dominated by international companies is indicative of a robust, end-to-end, and local ecosystem, underpinned by key pillars of support including angels, institutional investors, accelerators/incubators, media, and co-working spaces collectively split across major tech hubs in Ho Chi Minh, Hanoi, and Da Nang.
The tone at the top has also played a pivotal role in the proliferation of the startup scene in Vietnam. Techfest, for example, is an annual event organized by the Ministry of Science and Technology that draws out over 5,500 attendees, 250 investors, and 600 startups. Earlier this year, the ministry also hosted the first iteration of the Vietnam Venture Summit, which brought out over 100 domestic and international funds to “unfreeze capital flows” and jumpstart innovation.
The time is now
Vietnam has come a long way since its agrarian roots. The country’s transition into the digital era is full steam ahead, with the transformation of its major cities into sprawling metropolises and key economic centers already well under way.
And the ones at the heart of this metamorphosis are the Vietnamese people, defined by a growing population of students, coders, engineers, entrepreneurs, and innovators.
For locals, there’s never been a better time to start a business. The country’s overall development and rapid urbanization over the past 20 years, sprinkled in with a formidable sense of national pride and ethnic belonging have collectively opened up a waterfall of opportunities that are now ripe for the taking.
For international stakeholders, especially those from developed markets where several generations of serial entrepreneurs and investor know-how have already run their course, there still exists a level of experience arbitrage in Vietnam. It’s a unique window of opportunity to diffuse tactics, playbooks, and best practices into an emerging market just now coming to terms with increasing affluence, consumer sophistication, and digital transformation.
隨著越來越多 AI 新創冒出頭，台灣在創業加速器、教育、研究等面向，也呈現蓬勃發展。在創業加速器部分，2010 年成立、自 2018 年 8 月 (AW#17) 起限定招募 AI / Blockchain 新創的 AppWorks Accelerator，目前為止已經招收三期 AI / Blockchain 共 89 個新創，其中有
44 組 AI、11 組 IoT 新創，持續為台灣 AI 生態系挹注新能量。
AppWorks 之外，包括微軟新創加速器 (Microsoft for Startups)、Taiwan AI x Robotics Accelerator 等，皆是以 AI 新創團隊為主要招募對象的創業加速器。台灣人工智慧學校、台灣人工智慧實驗室，則分別是台灣在 AI 教育與研究領域的代表性機構，也期望越來越多的資源會注入 AI 領域的發展。
The Taiwan’s AI Ecosystem Map 19H2 由 AppWorks 製作，每半年更新一次，有任何指教與建議，請 email 至 [email protected]。
關於電子商務、乃至於近期衍生的「全通路」營運模式，對實體零售造成的影響，外界已經有太多觀察與論述。事實上，數據為大型網路平台帶來的優勢，意味著平台業者能夠輕易切入並控制所有終端消費通路，線上通路也毫無例外。Facebook
陸續在全球各地推出 Marketplace
拍賣商城、Google 也讓用戶逐漸習慣使用 Book
On Google 線上訂房服務，諸如此類大型平台與身為合作廠商的新創團隊，從昔日盟友成為競爭對手的例子，屢見不鮮，儼然是實體零售天王
Costco 建立自有品牌 Kirkland Signature 成功故事的翻版。新創團隊暫時享有平台提供的通路與廣告服務、減輕接觸潛在消費者的初期困境，卻是將寶貴的數據貢獻給平台，反而成為平台直接競爭的助力。
雖然這樣的網路平台競爭新法尚未實施，歐盟執委會卻相當罕見以數據的角度切入，調查
Amazon 是否基於中介者與賣家的雙重角色 (Dual Role)，藉由獲取其他賣家的銷售數據，優化自身在產品推薦欄位的排序，從而違反現行 TFEU
(Treaty on the Functioning of the European Union，歐盟運作方式條約) 有關「限制競爭合約條款」與「濫用市場地位」的競爭法規範。
姑不論這些新法與調查行動能否真正處理平台業者「球員兼裁判」的問題，大型平台還有許多其他合法措施，也可能嚴重影響新創團隊的日常運作。例如，Google
近期更新「BERT」(Bidirectional
Encoder Representations from Transformers) 開源系統，透過較長查詢字串
(Longer Query String) 強化自然語言在搜尋系統的作用，以求更深入了解使用者的需求、情境與脈絡，卻可能徹底顛覆團隊以關鍵字
(Keyword) 為基礎長期建立的 SEO (Search Engine Optimization) 成效。
然而，就像洗衣精與洗面乳，雖然本質上都是界面活性劑的化工產品，卻有著截然不同的配方和功用。同樣的，在每一個不同的垂直應用領域，對於數據以及
AI 數據分析的需求，也各自有別，交通應用強調即時性、醫療應用強調精準性、內容應用強調社群性、商品推薦強調個人化等等，同樣都是「數據」，在不同的應用領域，卻能展現不同的智慧，端看團隊的洞見與取捨。
Google 在 AI 領域，無疑掌握強大的「數據支配地位」，Nest 也早已是智慧家居裝置的先行者；Umbo
CV 關注產業懸而未決的痛點與自身強項，堅持走一條新路，證明了乘著 AI 的大趨勢、大潮流，未必意味著必須與網路巨頭正面對決。正因為數據優勢不在自己手中，新創團隊更應該認清，唯有降低對網路平台的依賴，這些數據，才能真正成為你的智慧，並產生價值。
三、AI 的問題可以從 Blockchain 找方法：
AI 應用日趨廣泛，衍生惡意造假、演算法歧視等問題，已經有許多開發者提出更高明的
AI 技術加以制衡。AI 作為數位經濟的推進器，也使得企業對數據的追逐永遠無法停歇，從而引發數據壟斷的議題。
此情此景，在秉持自由開放精神的 Internet 技術誕生五十週年，以及
World Wide Web 標準推出三十年後的今天看來，無疑是莫大的諷刺。World Wide Web 發明人 Tim Berners-Lee 也點名大型網路平台，系統性追求廣告獲利而犧牲使用者價值，是造成網路失能的禍首之一，為此，他透過社群力量發起「A
Contract for the Web」宣言，明確納入反壟斷執法的訴求，也積極開發
Solid 平台，作為對 Facebook 隱私問題的回應。
Internet 的出現，讓年輕世代的創業者，可以在資源有限的情況下，有機會打破傳統產業根深蒂固的尋租與裙帶關係，藉由科技與商業模式的創新，為用戶創造全新的價值。Facebook、Apple、Amazon、Google
為我們演示了如何從無到有，以短短10、20 年時間，成功擠身全球最有價值企業名單，搶下持續近半世紀由石油、電信、藥廠宰制的衛冕者寶座。
