“Today, he’s here back in the country of his birth because he said his personal passion is improving the life of every Vietnamese.”
Although this sentence, uttered by Barack Obama during his historic official visit to Vietnam in 2016, wasn’t aimed at Thu Nguyen, he felt that the former US President was addressing him directly. An American of Vietnamese descent, Nguyen is among the thousands of Vietnamese who have returned after years or even decades abroad.
Their homecoming is seldom spurred by sentimentality or longing for their ancestral land. More often than not, returnees cite a mix of reasons, such as Vietnam’s boom economy, which has risen by an average of six percent in the past 10 years. Its nascent but growing tech scene, low cost of living, relatively cheap labor, as well as the availability of tech talent are also key factors.
“There’s a diversity of talent from around the world coming to Vietnam because of all this excitement and because it’s easy to bootstrap stuff here,” says Nguyen. The 35-year-old entrepreneur founded Christina’s, a Ho Chi Minh City-based travel and accommodation startup, in 2014.
Nguyen and many other returning Vietnamese have work experience at multinational companies, an understanding of different cultures, and English proficiency – skills that are often sorely lacking in Vietnam’s startup scene. These have helped them make their names as startup founders, enabling them to leave a significant mark on the burgeoning startup ecosystem.
Growing outside one’s comfort zone
After graduating from Boston College and a stint at an investment bank, Nguyen returned to Vietnam for the first time in 2007. When he got there, he was finally able to satisfy his deep curiosity about his birthplace by taking motorbike trips across the country. Being on the road allowed him to know and appreciate Vietnam’s landscape and cultural diversity, and this set him on the path towards entrepreneurship.
Named after Nguyen’s German wife, Christina’s rents out hotel-standard apartments on behalf of their owners – similar to the new Airbnb Plus – and offers trips with its own tour guides. What started out as Nguyen’s side hustle four years ago has now grown to a company with more than 200 employees and US$2.5 million in funding.
Christina’s is focusing on growth so it hasn’t been profitable, but Nguyen explains that his business is “operationally profitable.” He declined to share any revenue figures. A “strategic partnership” between Christina’s and Airbnb may also be in the works, as he says that he’s currently in discussions with the US startup.
Returnees like Nguyen are commonly called overseas Vietnamese, a term that refers to the more than 4 million Vietnamese living in diaspora all over the world, with the largest community based in the US. They include refugees who left at the end of the Vietnam War plus their descendants, economic migrants who left for work, and natural-born Vietnamese who go abroad to study and stay in those countries to work and live as permanent residents.
Eddie Thai, general partner at 500 Startups’ Vietnam-focused fund, says that repatriates have played a “major role” in the rise of the country’s economy, specifically as startup hubs, just like Chinese and Indians did in theirs.
“Overseas Vietnamese are a source of capital – through remittances and investment – but more importantly of knowledge, ideas, and connections,” Thai, an American who’s also of Vietnamese descent, tells Tech in Asia via email.
Thai points out that of the 26 firms 500 Startups Vietnam has invested in thus far, more than half had founders who are overseas Vietnamese. He also notes that most of the co-founders of the seven unicorns across Southeast Asia, including ride-hailing firm Grab and online marketplace Tokopedia, are locals with “meaningful time abroad.”
Leaving a mark
Although it’s hard to quantify the net effect of returnees like Nguyen on Vietnam, they’re the country’s “secret super weapons,” says Lars Jankowfsky, the German founder of NFQ Asia, a three-year-old IT outsourcing startup based in Ho Chi Minh City.
Bobby Liu, co-director of Hanoi-based accelerator program Topica Founder Institute, shares a similar view. Liu says that most successful Vietnamese startups have founders with extended exposure outside the country. “This is particularly important when these startups start scaling across the region.”
Christina’s, for instance, is already operating in six Vietnamese cities and plans to break into the Thai, Japanese, and Australian markets near-term.
Another good example is lifestyle app WisePass, which is available in Ho Chi Minh City, Hanoi, and Bangkok. It offers membership to more than 230 upscale hotels, restaurants, bars, clubs, and (soon) airlines that includes a complimentary bottle of wine, spirits, lunch, or dinner on a daily basis.
By the end of the year, WisePass wants to expand to Indonesia, Malaysia, Singapore, and Hong Kong, according to 34-year-old founder Lam Tran, who was born in France but moved to Vietnam eight years ago. Tran is an ex-Googler who also worked for Vietnamese ecommerce firm Tiki.vn before launching WisePass.
His startup has raised close to US$1 million to date and recorded less than US$100,000 in sales last year. It isn’t profitable yet.
His communication skills and international network have helped him the most in business, explains Tran. “When you speak the language of some of your partners, you can simply connect and close deals faster.”
Re-investing in Vietnam
Launching businesses isn’t the only way returnees are helping the startup ecosystem grow. Some also invest by using the money they earned during their international stints.
Among them is Justin Nguyen, operating advisor at Singapore-based VC fund Monk’s Hill. Born in Vietnam but raised in California, he played instrumental roles in four startups in his birth country as well as Silicon Valley and Shanghai. He relocated to Ho Chi Minh City in 2015 after selling the gaming industry supplier company he had founded in 2008.
In an article for Tech in Asia titled “Why I returned from Silicon Valley to Vietnam” last year, he explained why Vietnam will become the “next technology hub.”
“The country has all the necessary ingredients for an explosion in innovation: a young, educated population and a sizable returning diaspora serving as a catalyst,” he wrote. “I’m convinced it’s a chain reaction in the making.”
Official data from Vietnam’s government is sketchy at best, so it’s hard to tell exactly how many overseas Vietnamese have returned to their homeland and whether their number has increased in the last few years.
But Liu of Topica Founder claims there has been a “steady gradual rise” in the influx of returnees since the country opened up its economy in the mid-1980s. 500 Startups’ Thai also sees a “growing trend,” especially among those under 35.
Vietnam’s leaders are encouraging far-flung compatriots to come back and help build the economy with relaxed visa programs and by giving them the ability to regain their citizenship under specific conditions. This might exempt them from certain foreign investment requirements.
Understanding the local market takes time
However, while overseas Vietnamese bring a lot to the table in terms of network and know-how, they don’t immediately understand the nuances of the Vietnamese market, contends Liu, who grew up in Singapore. “Like other foreigners, they still need to spend considerable time in Vietnam to fully grasp the local market.”
Some also complain about a prevalent “information asynchrony.”
“Not everything is as clear-cut as in more structured and developed countries where people had time to build up the systems,” said Nguyen of Christina’s. So he urges returnees to decide for themselves whether dodgy practices like bribes are something they can tolerate. Thai agrees, mainly because of a still prevalent “scarcity mentality” among locals due to decades of wars and deprivation.
Overseas Vietnamese play a role in fostering the whole ecosystem. “Folks like the founders of Christina’s and WisePass combine their experience in other markets with local operational ability to build something for 21st century Vietnam. Their commitment to the notion that Vietnam can be a launching pad for world-class, international tech enterprises reinforces the development of Vietnam’s startup ecosystem,” explains Thai.
However, he also cautioned against overemphasizing the role of returnees. “At the end of the day, the success or failure of the ecosystem will depend first and foremost on local Vietnamese as founders and other stakeholders. What overseas Vietnamese can do is clarify and facilitate bringing together the necessary ingredients for future success materializing.”
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