6 hours ago
Eddie Thai and Binh Tran are the kind of American entrepreneurs you’d expect to meet in Silicon Valley.
Binh Tran is the co-founder of a successful tech company, Klout, which he sold for $200m (£140m) in 2014. Eddie Thai, the younger of the two, was educated at Harvard and Yale.
But the pair have decided to set up their venture capital firm away from the ultra competitive corner of California that’s home to Google, Apple and Facebook.
Instead, 500 Startups is based in Ho Chi Minh City, in southern Vietnam.
“Vietnam in the past 20 years has been one of the fastest growing markets in the world,” says Mr Thai.
“Ten years ago, there were only about four million internet users. Now there are more than 40 million. Ten years ago there were virtually no smartphones in use here. Now there are 30 million smartphone users.
“The trajectory is phenomenal.”
Mr Tran adds: “If you look at scores for Vietnam in reading, math and science, they actually score higher than countries like the US and the UK. That’s the foundation for computer science that’s given Vietnam an edge.”
Saigon Silicon City
There are some who believe this communist country could even become the next Silicon Valley.
“If you were here six or seven months ago, this was like a rice farm,” says Hieu Minh Nguyen, as he motions to the dusty plain beneath our feet, about 15 minutes drive from the centre of Ho Chi Minh City, formerly known as Saigon.
“But if you’re here in six months, you will see Saigon Silicon City right here. We will build high-rise buildings, and along the river we will have a landscape with a park, and also a golf course and tennis, all kinds of entertainment.”
Aiming to create the world’s next Silicon Valley is ambitious. But Mr Hieu, a Vietnamese-American investor and chairman of the project, is a believer.
Late last year, a ceremony was held to turn the first sod on what he hopes will become a technology hub that will attract two dozen companies and $1.5bn worth of investment.
Samsung and Intel already have offices in Ho Chi Minh City at the nearby hi-tech park, attracted by a young, well-educated labour force and generous tax incentives.
Add to that a vibrant start-up scene and Mr Hieu’s dream might be more achievable than it first appears.
When it comes to choosing which start-ups to invest in, Eddie Thai and Binh Tran say they’re looking for companies that solve problems.
“I don’t like anything that’s super trendy,” says Mr Tran, in an apparent move away from Klout, which ranks users’ social media influence.
“I just like basic building blocks, technologies that are going to help businesses run better.”
“We’re funding the next VNGs,” says Mr Thai, referring to Vietnam’s biggest tech success story – the gaming, chat and e-commerce platform VNG, valued at $1bn in 2014.
But for both entrepreneurs, the decision to work in Vietnam was about more than a promising start-up scene and good demographics.
“I don’t have any family here,” says Mr Tran, when we meet in a rented conference room on the 42nd floor of Bitexco Financial Tower, Ho Chi Minh City’s gleaming skyscraper, famous for its protruding – though reportedly unused – helipad.
“My grandparents, aunts, uncles, they’re all in the US.
“So being able to come back here, to understand the people and get in touch with my roots, [while] at the same time, be a part of the foundation for Vietnam’s future, that’s an opportunity I just had to do.”
For Eddie Thai, entrepreneurship is a family trait. He proudly recounts the story of his grandfather, a Vietnamese farm worker who saved up money to buy oxen, then rented the animals to other farmers. “A kind of Uber for oxen,” he says with a laugh.
His parents migrated to the US with nothing, but were able to start a restaurant and build up a small real estate portfolio, which he says allowed him to have “a normal American life”. He visited Vietnam as a teen.
“I saw how far Vietnam had come, but how far there was still to go. I knew at some point I would be back here to empower others.”
That’s a feeling shared by Quynh-Huong Duong, the French entrepreneur behindGetSpaces, a booking platform for meeting rooms and event spaces in Ho Chi Minh City. She moved to the city from Paris two years ago.
“I wanted to do something for Vietnam,” she says. “The people here are really entrepreneurial. There’s a different kind of mindset than in France. French people are very conservative. Here it’s really like in the US, like: ‘Yes, we can’.”
But Vietnam’s tech scene isn’t made up of eager ex-pats alone.
In 2004, Vietnamese entrepreneur Dinh Anh Huan co-founded the mobile phone retail chain Thegioididong.com, which means The Mobile World in English. Last year, the company made its stock market debut, raising more more than $250m.
“I got around $30m,” says Mr Huan. “I invested in around 20 companies in Vietnam. Right now, my vision is not about the money. My vision is to create products in Vietnam and export them to other countries.”
Those products range from the agricultural – he has tea, coffee, strawberry and flower farms – to retail. Mr Huan has invested in a chain of mother-and-baby stores, a women’s shoe factory, an online fashion site and Vietnam’s second largest e-commerce site, Tiki.vn.
But the 35-year-old’s main focus is Vietnam’s millions of small business holders. His company Seedcom.vn offers website building, point of sale software, digital marketing, call centre services and logistics.
Google chief executive Sundar Pichai visited Vietnam in December and, after meeting with Prime Minister Nguyen Tan Dung, announced that the search engine giant would help train about 1,400 local IT engineers.
He said Vietnam would soon become one of Google’s most important markets.
“It will easily be in the top 10 countries for many companies and people who are building products. I think you’re in the process of that transition,” he said.
“The transition is under way; just give it a bit more patience.”