Success is hard-worn in Vietnam’s start-up world
HCM CITY, Vietnam (Viet Nam News/ANN) - Start-ups often face difficult challenges in their first few years. Those that make it, and succeed, are usually driven by passion rather than profit.
When I first went to Phleek, a start-up company, I was immediately struck by a blackboard on which a business plan with five targets was written.
It said: “Ten outfits per day, average sales increase 18 per cent a month, average price of each order VND490,000 [US$22], 10,000 Facebook likes and 3,000 Instagram followers, and 1,000 orders per month.”
The targets were set by founder and CEO Kinh Van Quan Dao and her team.
Most people who follow the start-up scene in Vietnam know about Dao and the challenges she and her team overcame to survive and then thrive.
She exemplifies the can-do spirit of young Vietnamese entrepreneurs who dare to follow their dreams.
Dao was born in HCM City in 1996. While in her last year at university and working as an intern at an advertising agency, she got the idea of setting up an online fashion shopping channel to change Vietnamese customers’ consumption habits.
“I found that the fashion industry was strongly developed with a lot of products and companies offering many options. However, there was little time to shop. Furthermore, I found that many of my friends and people around me had demand for this kind of service since sometimes they bought clothes and then did not know how to mix them.”
She wanted to set up company that helped clients create their own style.
After a lot of research, Phleek was established in 2016, becoming the first app in Viet Nam to connect users with stylists.
When users download the app and fill in the information about their size and style preferences, they are connected to an in-house stylist who sends clothes and accessories to them on a returnable basis every week.
But things were not easy in the beginning, especially in 2016 and 2017.
Dao tells the Viet Nam News that like most other start-ups, she too faced many challenges.
“In the beginning, I did not understand the market trends and failed to meet the demand and could not achieve product/market fit. The market was not like I had thought.”
The biggest challenge came recently when she had no more money to continue the business or pay her team.
She then decided to solicit investment.
Meeting with investors, she candidly and clearly told them about her struggles.
Her efforts paid off and she managed to raise VND3 billion ($131,000) from two investors earlier this year. After doing due diligence and satisfying themselves, they gave her the money.
There had been only one occasion when she felt she could no longer continue.
“That was the time I was waiting for funding. In fact, I was just worried I did not have the money to pay my team members who had worked since the middle of 2017.
“But even at that time I was determined that even if no one stayed with me, I would go it alone and start from scratch. I will pursue my dream as long as I have that belief.”
With the funding from the investors, she has decisively turned the corner.
“The team now has 10 members. The first target on the blackboard has been doubled, the second one is going to be reached, the third has not been reached, the fourth has almost been reached with 6,000 Facebook likes and over 2,000 Instagram followers.”
The company continues to fine-tune its business strategy, she says.
“We will keep going until the change is optimal.”
Soon she says she will set up a website that will serve as a platform for consumers to buy products on.
It was not easy to reach Lam Anh Tu. Harvest of the new crop is due and he is very busy working with farmers in the Mekong Delta to produce the best rice products.
Tu is co-founder of Hoa Nang Company, a start-up that distributes organic agricultural products.
It is probably the only one in the country whose founders did not invest a cent, and has been dubbed the “zero-dong start-up”.
A few weeks ago, however, Hoa Nang caused a stir in the start-up community when an angel investor, Louis Nguyen, agreed to invest VND10 billion ($439,000) in it.
It was the latest in a series of tumultuous events at Hoa Nang.
Talking about his “risky” investment, Nguyen gave three reasons, one of which was somewhat touching: “I saw strong determination in the two young entrepreneurs who founded Hoa Nang.”
It began when Hoa Nang’s founders took part in a TV reality show in which start-up entrepreneurs make a pitch to potential investors.
It had been 94 per cent owned by an investor with the two founders owning 3 per cent each.
Tu and Dang Thi Truong An got the idea of setting up the company four years ago and launched it last April. Its products were sold at more than 250 stores and supermarkets.
Nguyen, one of the prospective investors on the show, made the decision to invest.
Unfortunately, soon after the show was broadcast, the investor who had owned 94 per cent decided to pull out due to some problems.
Luckily, Nguyen decided to stay.
The two then set up another company but with the same name.
Nguyen helped them tie up with an export company to ship Hoa Nang’s products to foreign countries.
Tu says orders jumped by 50 per cent after the TV show and they plan to target the domestic market next year while also striving to export to the EU and US.
They also plan to diversify from rice into other kinds of organic produce.
Though in two vastly different sectors and with personalities like chalk and cheese, the founders of the two companies have a common message to young entrepreneurs: love your ideas and your products.
“Love your products; be patient; don’t start up just because you want to be a company owner and don’t do it for money.”
They are shining examples of the fact a start-up can be successful without money but not without passion and enthusiasm.