The scenario: You’re a tech savvy youngin’ with the next billion dollar internet idea tucked in your pocket. It could be the next Groupon or Twitter. Maybe even the next Facebook. Whatever it is, it’s big. But you’re in America and you’re worried the market is getting saturated. Everyone and their 12-year-old cousin is developing apps and designing sites. There’s something viral catering to just about every niche market imaginable. Oh the woes of being an entrepreneur: there are so many start ups but so few venture capitalists. Will your pitch, stellar as it may be, fall on deaf ears? Can you make it to the last round of the Y Combinator applicants? Should you…go to Vietnam?
At least that’s what Businessweek is suggesting. According to Businessweek, Vietnam may be on the verge of a dotcom boom. There are over 88 million people in the country, and a third of them are online. Most of them are young–the median age in Vietnam is 27—so when they aren’t busy making money, they’re eager to spend. Many young Vietnamese turn to the internet to satisfy their consumption and entertainment needs. Nevermind government censors–if the Vietnamese netizen wants to get something online, he’ll get it online.
Where there’s so much demand, it’s only natural that investor excitement follows. Deepak Natarajan, a Singapore-based director of Intel Capital quoted by Businessweek, stated, “There’s a lot of interest in Vietnam’s information technology space right now…There’s huge growth potential there.”
Also cited by Businessweek, Bryan Pelzi, an internet entrepreneur who has consulted for VinaGame, sums it up in plain English: Vietnam is “basically a country of young and very bored people.” And so they flock to the internet.
But a few words of caution before you pack your bags and book the next red eye flight to Saigon: first, there’s that whole business of doing business in Vietnam. In the 2012 World Bank “ease of doing business” rankings, Vietnam ranked 98th out of 183 countries. In the bottom 50 percentile.
Second, Vietnam still lacks much of the physical and technological infrastructure needed to run a fruitful enterprise. But this can be an impediment or a call to creative solutions. For instance, since a lot of Vietnamese don’t own printers, Nhon Mua, a Groupon mime, “employs a team of over 100 couriers who scoot around Ha Noi and Ho Chi Minh city on sky-blue Honda motorbikes delivering vouchers to customers.” Maybe it’s costly compared to the print-and-purchase model in developed countries, but at least it’s job creation and an incentive to pick Nhon Mua over its competitors.
Finally, there’s that whole uncertainty thing about Vietnam’s overall economic direction. It’s growing, that’s for sure, but if Vietnam ends up taking a strictly state-directed approach to capitalism and decides its wants to subsume parts of the internet industry, many a good start up idea could be quashed in its infantry.
Entrepreneurs, be brave.
Image by Thomas Wanhoff (Creative Commons)