Young entrepreneurs catch foreign attention

Foreign investors have expressed their faith in Vietnam’s millennial entrepreneurs by being willing to invest.

Founder of Uiza Nguyen Duc Anh and his young team are proud of their first successful deal, after raising an undisclosed sum in pre-seed funding from homegrown venture capital firm ESP Capital and Japanese IT Corporation Framgia Inc. two months ago. The 8x-generation team finally convinced the foreign investors to invest in their video livestream cloud API platform, mainly thanks to their passion and competency. Other young Vietnamese founders in Generation Y, born between 1980 and 2000, have also been given the seal of approval by foreign investors and funds in recent times.

More investment in millennials

In addition to Uiza, ESP Capital is investing in five other business belonging to Vietnamese millennial entrepreneurs: Canavi, Cooky, WeFit, Luxstay, and JAMJA. “Investees are strongly committed to building the best quality products and delivering great value to clients,” said Ms. Vy Le, General Partner at ESP Capital. “Founding teams also have impressive backgrounds in both business and tech, which we believe will allow them to gain tremendous success.”

South Korea’s Nextrans has paid special attention to local millennial founders in the last few years. Except for one company, the founders of Leflair, Luxstay, VLeisure, Ecotruck, JAMJA and two other undisclosed deals where Nextrans has made an investment are millennials. “The founding members always focus on how to gain traction in the market,” Mr. Seung-ho Chae, Manager of Nextrans, told VET. “Among them, I expect JAMJA could be the next O2O (online-to-offline) leader in Vietnam matching supply and demand in real time, like Meituan Dianping in China, which is now a successful business model in time-based deals.”

Being a young CEO or founder is a positive factor but not the key factor when investment decisions are made by investors such as Ms. Le and Mr. Chae. “We prefer young CEOs because they tend to be more creative, coachable, and adaptable to changes in the market,” said Ms Le. “However, the capacity and the commitment of the team are key factors when we assess an investment.” From her observations, young Vietnamese entrepreneurs are very capable and definitely able to compete with their regional peers.

“Millennials definitely had better conditions growing up, as the country and their families had better financial resources and they also now have much more exposure to the rest of the world,” said Mr. Do Hoai Nam, Co-Founder of UP Working Space. “More millennials have the opportunity to be ready to be an entrepreneur. Vietnam has a large number of millennials and they are the main force in the country’s young population, and the number of young Vietnamese entrepreneurs is huge.”

Different generations

Mr. Nguyen Viet Duc, Chairman of Innovation Capital Management, who has met many young founders, even students, at meetings and conferences, sees that they are very active. “Many founders are both working for other companies and also executing their own business plans,” he said. “They can manage their time to fulfil many tasks at once. I find they want to challenge themselves and are more prepared to fail then the previous generation of entrepreneurs.”

Mr. Chae said that one good point for millennials and new-generation entrepreneurs globally is execution and flexibility. They are active and enthusiastic about finding solutions to problems. One weak point, however, is a focus on short-term goals only. “Founders and entrepreneurs should be strategic at some points,” he said. “They lack a bit of experience in taking time to have a big vision and goals that other members can focus on. Founders have started, however, to gain more experience and can tackle obstacles, always finding a way to overcome.”

In general, young people are a driving force in any business and why working and promoting young people is the key to survival for many. “I don’t think the former generation had a choice,” Mr. Nam said. “I personally feel that, in general, millennials have less drive. A lot of them don’t take pride in what they do and are quite passive in figuring out their own way of doing things. While previous generations worked hard and competed by putting more hours into their business, millennials tend to separate work and life, demanding more life and less work.”

Hard work can combine with talent and if combined with greater exposure they create a lot more opportunities for themselves compared to previous generations, according to Mr. Nam. Millennials need to work harder, he believes, to change the future of the country.

Society of the future

Mr. Seán O’Connell, Human Rights and Innovation Officer at the United Nations Development Programme (UNDP), sees a readiness among young entrepreneurs to develop the business solutions for some of the country’s biggest social and environmental challenges, but doesn’t feel this from the former generation. In UNDP’s 2018 report on Fostering the Social Impact Business Sector in Vietnam, prepared together with the National Economics University and the University of Northampton, UNDP found an increase over the last three years in particular in new social impact businesses being developed. UNDP has trained over 350 young social entrepreneurs in design thinking, social innovation, 21st century skills, and implementation of the UN Sustainable Development Goals by 2030 in the last two years.

UNDP’s Youth Co:Lab program, co-led by Citibank and the Ministry of Science and Technology, has also seen increased interest from young people keen to learn more about social innovation and entrepreneurship with a focus on achieving the UN Sustainable Development Goals by 2030. “Young entrepreneurs are driving social impact through new business ideas,” Mr. O’Connell said. “But beyond this, they are changing the shape of business in Vietnam.”

In days gone by, most founders ran their business mainly for profit. Young Vietnamese entrepreneurs, though, also care about social issues rather than just money. More have launched businesses in the social impact sector in order to resolve social problems such as poverty, pollution, and inequality. Many successful millennial entrepreneurs are also willing to contribute in various ways, such as charity work, mentoring, and investing. “I think young Vietnamese entrepreneurs are able to reshape entrenched trends in entrepreneurship,” said Ms. Le.

Vietnamese millennials also tend to be better at multitasking and risk-taking than previous generations. ESP Capital has seen more young Vietnamese become serial entrepreneurs, starting multiple businesses and handling different roles at the same time. This is not at all common among business owners in previous generations, who mostly focused on one single endeavor.
Mr. Nam, though, believes otherwise. “I don’t think our young people are reshaping trends or entrepreneurship,” he said. “The world is changing faster than ever with technology reaching into every corner of life. I think millennials, with all their exposure, are better at keeping up with the rest of the world. Our millennials are quite good at applying technology, so they definitely have a big advantage.” Previous generations, however, were established in and own the domestic market. More importantly, they make their names by “adapting”, so are faster than millennials.

Mr. Chae said that young entrepreneurs want to change society. For example, in Silicon Valley, many serial entrepreneurs invest in young entrepreneurs who want to innovate to make society better. And if the investees succeed, they in turn also invest in young entrepreneurs, creating an ecosystem. This movement is needed to build a better Vietnamese society and Nextrans is now planning to build such as ecosystem. “I always talk with the CEOs of the seven companies we have invested in to build a similar ecosystem,” he said.

Nowadays, young Vietnamese pay more attention to social issues. Thanks to the high penetration of the internet and the high level of tech savviness, the young Vietnamese generation are more connected with the rest of the world than previous generations and can easily stay informed about what is happening. They like to explore new things and are willing to raise their voices through different channels. “As we have seen in recent years, more young people play significant roles in the business community as well as in the political system,” said Ms. Le. “We expect the new generation will be more and more active in the future.”

[Source: 13th October 2018]