The young entrepreneurs take advantage of the opportunity

Deputy Prime Minister Vu Duc Dam meets with the start-ups enterprises at the Vietnam Innovation and Creation Start-up Day 2017 (TechFest 2017).

Which is playground for the young entrepreneurs?

Revolution 4.0 is having a direct impact on many enterprises. Along with the companionship and sharing of the “big companies” in the business community, the young entrepreneurs have to face many challenges. In addition to the difficulties and barriers, the 4.0 technology era creates a smart market network, which makes it easier for the young entrepreneurs to access the market information.

The economist Nguyen Tri Hieu said that although the young enterprises were only small and medium ones, they would be able to become the pillar enterprises of the economy in the future, so, it was necessary to develop those businesses to big businesses. But the risks for young enterprises always exists and it is very easy to fail. It could be said that the young enterprises were small and medium enterprises, and in fact, more than 90% of young start-up enterprises easily failed within the first three years of operation. Most of the young entrepreneurs would take a long time to work their way up.

So how could young entrepreneurs find a place in the marketplace? According to Hieu, two channels that the young entrepreneurs should look for were the business associations and the banks. The business associations should guide the young entrepreneurs with the opportunity to gain access to the market. The banks were a helpful channel for the young entrepreneurs. The banks might not dare to lend, but the young entrepreneurs should make a borrowing history gradually by borrowing a very small amount of money or using secured assets to mortgage their loans initially, after a good history of repayment, the banks might expand credit gradually to enterprises. These two channels were two channels that the young entrepreneurs could apply for their businesses to find a place in the market, expand their capital.

Motivation for the startup movement

As young entrepreneurs are part of the community, the start-up entrepreneurs are receiving a lot of support from the community as well as the Government. In recent years, the movement of supporting the start-up enterprises (start-ups) and policies to support the development of start-ups has been paid special attention by the Party and State. As a result, the community of start-up enterprises has grown at an impressive rate, many organizations for supporting the start-ups were born and operate effectively, many start-up projects have been paid attention to by the investors. At the same time, innovative and creative environment and eco-system have also been improved in Vietnam for the investors to pour capital - this is considered as a solid foundation for the young entrepreneurs wishing to start a business.

According to statistics from the Ministry of Science and Technology, more than 900 start-up projects created with 300 start-up products connected to the community and investment funds. More than 40 venture capital funds have been operating in Vietnam, typically IDG Ventures, CyberAgent Ventures, Captii Ventures, Gobi Partners, 500 Startups..., up 30% over 2016. Now, there are 30 business incubators (BI), 10 business advanced organizations (BA), and about 40 shared spaces and creative spaces. The number of angel investors is not much in Vietnam but has started to increase. Some angel investment networks such as VIC Impact, Hatch! Angel Network, iAngel (angel investor network of Vietnam), Angel4us started to form.

In addition, many large Vietnamese enterprises have been involved in founding the investment funds such as CMC Creative Fund, FPT Ventures, Viettel Venture, or Vietnam Innovative Startup Accelerator (VIISA) with 4 investors including FPT, Dragon Capital Group, Hanwha Group (Korea) and BIDV Securities Joint Stock Company. VP Bank also decided to support with more than US$ 1 billion for start-ups. Large cash flow has been flowing into the Vietnamese start-ups, which also confirms the strong development of the national innovation, creation ecosystem after the Prime Minister launched the National Year of start-ups.

According to Tech in Asia, in 2017, Southeast Asia has attracted US$ 7.86 billion invested in start-ups, so the amount of attracted investment in Vietnam counts for a very small proportion, less than 5%. This is both difficult and an opportunity for start ups in Vietnam, showing the amount of adventure investment capital in Southeast Asia was quite plentiful.

Besides the capital problems, the situation assessment of start up enterprises in the past, the economist Vu Dinh Anh said that the startup enterprises were still looking forward to starting up by the movement and trend, there were some start-ups with their own advantages, new and strange elements, or special competition. As a result, 80-90% of startup businesses were broken up.

According to Mr. Nguyen Khoi, CEO of WeFit, a successful startup in Vietnam, many people are discussing busily the ideas while ignoring the start-up model. This led to unsuccessful start-ups despite many ideas given. Many startups considered themselves as Uber in one area but still failed because they do not understand the meaning of the shared economy. “If we start up in Vietnam, we need to study a successful model abroad and apply it to Vietnam in a clever way. When choosing the right model proved overseas, it will be easy to succeed,” - Mr. Nguyen Khoi shared about his successful start up.