VIETNAM: A TECH HUB READY TO BOOM
Everywhere I look these days I see cranes. Not the kind that flies, but construction cranes. While some look at them and see ugliness, I see something else: the towers reaching skyward symbolize Vietnam’s striving ambition, Vietnam’s promise.
Welcome to my Vietnam, a land now full of the kind of vibrancy and youth that reminds me of my days in Silicon Valley.
I’m returning here to the place of my birth not out of sentimentality or longing for my homeland (though I do love it here), but because I believe Vietnam is poised to become the next technology hub, birthing startups that could become international companies.
It doesn't hurt that entrepreneurship is baked into Vietnamese culture. Shophouses line the streets and Facebook feeds, filled with the usual mix of selfies and #foodporn, are also sprinkled with ads for goods folks have picked up on trips overseas.
It feels like everybody has a hand in the entrepreneurial economy. If you haven't been to Vietnam lately — or at all — you might be surprised by the vibrancy of the tech scene in particular. Calendars are filled with meetups, events, and hackathons. New startups, incubators, accelerators, and venture builders are popping up every day.
The energy here is mesmerizing.
But buzz alone doesn’t pay the bills; great returns do. So I wouldn't have uprooted my life and relocated here as a venture investor unless I had something more than a gut feeling.
Vietnam has all the ingredients necessary for an explosion in tech innovations: a largely young, educated population plus a sizable returning diaspora that serves as both catalyst and accelerant. I’m convinced it’s a chain reaction in the making.
Let me break it down.
Education and Engineers
Despite being a relatively impoverished country, with a per capita GDP of USD2,100, according to the Central Intelligence Agency, Vietnam has a 94.5 percent literacy rate.
Perhaps more importantly, when it comes to startups, Vietnam does surprisingly well in math and sciences, especially given its relatively low GDP.
Look at international competitions and you’ll find a disproportionate number of Vietnamese students on top. For instance, a Vietnamese student just won the International Mathematical Olympiad competition.
They’re so impressive that researchers are actually studying what they call the “Vietnam effect:” scores that no one would predict based on the country’s GDP.
The Western effect
To make it as an international tech company, you really need to understand Western cultures and markets.
Vietnam, with less than one-sixth of the region's population, accounts for nearly half of the region’s college and university students in the United States. In 2016, Vietnam sent 21,403 students to the United States, more than Indonesia, the Philippines, and Thailand combined, according to the Institute of International Education.
But there’s another factor that makes me really believe in Vietnam: a large Vietnamese diaspora who are returning to Vietnam after migrating in large numbers in the 70s and 80s. People of Vietnamese descent along with those who, like me, who were born in Vietnam but raised in the West, is coming back to launch tech companies.
They’re drawn here for the same reasons I was: abundant, highly–qualified, yet inexpensive talent, an educated population, a culture nurturing startups, and a fun, vibrant place to live. They have the unique experience of being truly bi-cultural, understanding both the West and the East.
Here are a few prominent examples, whom I happen to know personally because of Vietnam’s tight-knit tech community:
Sonny Vu, co-founder of Misfit, a company purchased by Fossil, where he currently serves as founder President and CTO of Fossil Group, Connected Devices. He tapped heavily into the engineering talent here while building Misfit and recently moved back.
And if they’re not returning physically, they’re certainly returning economically. Overseas Vietnamese sent Vietnam USD13.4 billion in personal remittances in 2016, according to The World Bank. That compares with USD1.3 billion in 2000.
Vietnam also punches above its weight simply because it has youth on its side. Some 86 percent of the country is 54 or younger and two-thirds of the population is 24 or younger; There’s a lot of room for growth — both as a market and as a talent source for fueling companies.
Vietnam might also have the Goldilocks phenomenon going for it.
The regional competition to go international may seem fierce, but when you look closely, Vietnam may pull ahead because it’s not too large — and not too small.
With a population of 258 million, Indonesia is the largest Southeast Asian country. It’s so big, it’s clear that billion dollar companies catering solely to Indonesians are possible, so the competition is fierce. Companies there have their hands full just focusing on the domestic market.
Singapore, on the other hand, with a whopping per capita GDP of USD51,300, is “Western” in its own right. So, with a small population of 5.8 million, you might think entrepreneurs there would naturally aim internationally. However — perhaps due to Singapore’s unique clout and influence in the regional geo-political landscape — they tend to think regionally rather than expanding beyond Asia.
That leaves room for Vietnam. With 95.3 million people, Vietnam is the 15th most populous country in the world. But, with a small (though quickly rising) middle class, tech companies here know they have to reach out beyond the country’s borders to become unicorns. Vietnam, unlike Singapore though, reaches toward the West — and it has both the skills and impetus to do so.
It just feels right
I think the case is strong. But in addition to all the economic indicators, it just feels right — it feels a lot like the Silicon Valley I grew up in. It’s young. It’s vibrant. And, perhaps most importantly, people like it here. Entrepreneurs are coming from all over the world to build companies here and bring with them the cross pollination of ideas that are the seeds of true innovation.
I don’t know if you can measure this, but I have worked with engineers and entrepreneurs in many countries. And the ones here, like the ones in Silicon Valley, believe they can change the world.
I think they can too.
I staked my career on it.
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