startup
Last Wednesday night, @Bowei Gai of the World Startup Report made his stop on his year-long globetrotting tour to the center of the Vietnamese startup scene at Saigon Hub in Ho Chi Minh City. He gave a talk that had been honed over many months and included lots of interesting bits from startup scenes around the world, from the amazing size (trillions!) of Chinese e-commerce companies, to the equally impressive adoption of mobile payment in Sub-Saharan African countries (30%!). Later, in private, we heard of the incredible arrogance of French startup people and corruption around the world. But we were also humbled by the recent multiple-hundreds of million dollar exits of Nepalese technology companies. And perhaps secretly identified with the conditions of economic crisis under which Argentinean entrepreneurs had to run their businesses - 20+% annual inflation driving up business costs, a local currency constantly losing value leading locals to buy dollars when they could...
Bowei has been flying to a new country every few days to study a brand new local startup scene. Originally with the intention of writing up the local report as he was traveling, that was clearly impossible. And so it'll be at least a few months before we see his Vietnam Startup Report. So let me share my own thoughts while they're still fresh.
Read the rest of this article...Today I'll be speaking, mentoring, then judging at Keewi's Hack Day event.
Over a decade ago I joined a group of "hackers" in developing an open source ultra-secure UNIX operating system called OpenBSD. As the most secure OS in the world, it was designed to keep out hackers, as in crackers, those seeking unauthorized access to computer systems. But we were also hackers, a type of "artisanal" programmer. OpenBSD hackers are spread across the world and they gather themselves together periodically into one place to be super productive on a common goal over the course of several days. OpenBSD invented the hackathon, even coining the word itself.
I attended my first hackathon back when I was still in school, which I graduated from over 10 years ago. It was organized by our university's open source club, the only extracurricular activity I was involved in. We got permission to use one of the classrooms overnight and even got funding to buy a couple pizzas and pop. That was it. There were no corporate sponsors. There were no spectators watching us code except for our confused girlfriends. There were no headhunters or suits looking for geeks they could make use of. And there was no prize money because we were just there to see what hacks we could pull off in a night and then show each other.
Nowadays, hackathons are more and more common and are seen by corporations as something they can take advantage of.
Read the rest of this article...[Are you an investor interested in investing in Vietnam, especially in startups? This blog post comes from conversations with visiting investors from other countries and answering a lot of questions they had in common.]
For years, tech startups in Vietnam operated in a sort of vacuum, with no local ecosystem to help them.
Of course, this didn't stop them. Maybe there were even benefits with less scene distractions.
Now there is something we can call a scene, like a subculture of startup. There are wannabe entrepreneurs (wantrepreneurs), kids who dream of startups or want to experience working for one. There are serial events (Startup Weekend Ho Chi Minh City, the Start Me Up series, even Barcamp Saigon which I'm most personally attached to) as well as larger traditional conferences with international involvement. There are hackathons. There are training programs. There are incubators. There are angels and venture capitalists, although so few that finding appropriate investment among them is challenging for many reasons. There are online forums (in Vietnamese) and there is now coverage of the country in the three largest regional tech news journals out of Singapore (e27, SGE, TechInAsia) as well as local PR mouthpiece Action.vn.
And there are even some startups within Vietnam's startup scene!
(Though there is confusion about what is or isn't a startup)
What kind of startups you'll find in Vietnam
Read the rest of this article...What is a startup?
We're in the middle of a tech boom and it's become fashionable to either work for a startup or to be a startup. But what is a startup? How do you know that company offering you a job in exchange for a few years of your life is really what they say they are? How should you compare the hobby or side project you're working on with a "startup"? How is a startup different from a business? What kind of company would attract venture capital and what kind might get other kinds of funding, but not from VCs?
First of all, there's more than one definition of "startup". Paul Graham defines startup as "a company designed to grow fast". That definition says three things: a startup is a company, a startup has a plan, and a startup is about growth.
My definition has more words: "A high risk venture to flesh out and scale up an as yet unproven business model with an aim to reach a massive known market or an unknown or unknowable market."
Definition
A high risk [startups, unlike hobbies, are necessarily risky - nothing ventured, nothing gained]
... venture [usually a business, but this could apply to a team's activities within a larger organization - uncertainty is implied]
... to flesh out [as in an unproven business model, many blanks must be filled in by the entrepreneurs as a result of experimenting, trial and error, course correction]
... and scale up [scale is really key - without scale, you're just a local mom&pop, or all the hope and risk-taking investment dumped into you has no potential to garner large returns - more on scale below]
... an as yet unproven business model [a startup's business model doesn't yet exist as a known successful and proven model from the start, and when that model does become proven and successful then it's no longer a startup]
... with an aim [without or before an explicit and conscious effort to market and sell a product or service then it's just a research project]
... to reach a massive known market [this is where scale is required, where the risk has the potential to result in sufficient reward]
... or an unknown or unknowable market [early in the discovery stages, an entrepreneur may have a hunch that they're developing a product with a large potential market, but not feel out the depths of the market until later]
Google, Apple Computers, Intel, Ford Motor Company, Instagram, YouTube... in hindsight, these were once all startups. They all faced huge risks but eventually found themselves delivering products to massive markets and also successfully scaled up to serve those markets. And at the time, it wasn't clear at all how those business models would succeed or whether they would at all.
What isn't a startup?
But what about a research project at a certain university being taken on by a certain Larry Page? Surely, this research had the potential to become a massively-valued company used by much of the Earth's population. Was it a startup? Obviously not (not at that point in time, which brings up the thornier issue of at which exact point to call the genesis of conception of a startup). While the kernel of the idea was on a clear path to scaling the entire web, what was the risk? Whose lives would be affected if Larry had failed in his research? The time investment was no different from any other student.
What about the neighborhood sandwich (banh mi) cart? It's a risky business and who wouldn't like to sell increasingly more sandwiches month by month? The difference is that there are many sandwich carts everywhere trying numerous variations of the business model. But that business model is well understood. You could take your growing sandwich business to the bank and get a loan after quantifying a few common metrics of your particular variant. The banker would have absolutely no expectation of getting 1000% interest on their loan. Conversely, while not being a sure thing, the risk is more than manageable by competent parties. You're very likely to not lose lots of money, and you're extremely unlikely to huge amounts of money. [Franchise restaurants are more scalable. But they also fall within the bounds of relatively well-known rather than innovative business models.]
So what if you're bringing a new service to the market? You plan to offer a widget-configuring service around town, because widgets are the hot new thing right now. You see growth potential there. Except that you have no way to scale this business to other cities which are outside your driving range and all you're really doing is trading your time for money. When you're not working, you're not earning. And outside of cloning yourself you have no way to multiply 100-fold what you're doing.
What about a blog, like the blog you're reading now? Could you be reading a startup right now? No.
Hobbies are not startups. Hobbies can turn into anything but there's no intention of a hobby itself being a startup venture, otherwise you treat it as such and not a hobby. A hobby is never seen as a risk. Time spent on a hobby is the reward itself. With a normal business, you expect to get back what you put in plus some. With a startup, you hope to get back much more. With a hobby, you're not putting anything in and you expect to get just as much out.
Working at a startup will be exciting. It will necessarily move fast, and if you're doing anything financially promising at all, there will be the pressure from the threat of competition. You'll see lots of mistakes being made. It will be different. Traditional roles will be upturned as CEOs become janitors and developers do customer service. But it will be a chance for those young idealists to get their fingers in a number of fields they would have otherwise had to wait decades for. And best of all, you have the potential of becoming a billionaire. And that's what sets a startup apart from business as usual.
I have had some personal experience with startups.
Also, read about startups in Vietnam.
- tomo's blog
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I've been involved in start ups for over a decade now. During that time I've worked for companies in varying stage of development. Not all of them were startups. But how can you tell if it is or not?
Read the rest of this article...Boulder's big VC investor dude Brad Feld has a house in Kansas City now. He doesn't live there, even for just part of the year, but he owns it. He's letting YOU live there. For free. FREE!!! But should you live in Kansas City (a mid-sized town in the American southwest midwestern state of Missouri) to bootstrap your startup? If the rent is free?
Awhile back I talked about bootstrapping your startup in Ho Chi Minh City on the cheap. And what's better than cheap besides free?
Read the rest of this article...Hackation. That's what people are calling hackathons (sponsored hackathons!) away from home. It could be in NYC, Bali, Berlin. But a lot of people are moving to the Bay Area or quitting their good-paying jobs in the Bay Area and sticking around and building their startup product from there. There are a lot of good reasons to be near Silicon Valley when you're a tech startup. Access to capital, a local consumer market who's up for and used to using experimental products.
But not every product needs to be developed in Silicon Valley. Not everybody needs to submit themselves to the pumped up rental prices there right now. Not every product person needs to be in the echo chamber of tech startup talk. Not everyone needs to live in a van just so they can afford to bootstrap in the Bay.
Haters gonna hate. Hackers need to hack.
Why Vietnam?
Vietnam? Isn't there like a war going on there? Answer: No. But due to nearly two decades of disastrous economic mismanagement by the government the country, and its remaining people (those that didn't risk their lives to escape on boats), remained in a post-war stupor until the turn of the millenium when things really started turning around economically due to open market reforms culminating in entrance to the WTO. Today, Vietnam's economic capital Ho Chi Minh City (which you may call Saigon) has a sheen of modernity to it. Western fast food chains like KFC and Pizza Hut abound. Downtown Saigon is full of new shopping malls and department stores - great for window-shopping. Young people increasingly choose between carrying iPhones or Samsungs, although Nokia still dominates. Traffic, once dominated by bicycles and rickshaws, is now completely gas-powered - but mostly scooters, not cars. Wifi is freely available and 3G internet can be had for $2/month. Of course, underneath it all is a missing public transit network, lack of public safety controls, regular brownouts, streets that flood due to poor urban planning and rapid development, an Internet that is reliant on a handful of undersea cables, and a currency that is subject to periodic devaluations. For the Vietnamese citizenry all is not rose-colored.
Low cost == Longer runway.
For foreigners though, late economic development, a huge population of underemployed people, cooling foreign direct investment sentiment, and a perenially weak currency means cheap guesthouses vie for customers, beers cost from 1 to 4 bottles per dollar, and a hacker can hack it in this country for $10-$20 a day. Are you consisting on ramen? Living in your car? Or otherwise roughing it to save money for your startup? Maybe I can convince you to reweigh your options.
Incubators, events, community
Vietnam is not particularly good at a lot of things. It's also not an Asian Silicon Valley - that's a title Singapore is trying way too hard to earn. There's no Y Combinator (okay, there was a V Combinator....) and no Google or Facebook. But we do have a scrappy and growing community of tech entrepreneurs. We have programs like Topica Founders Institute, shared work spaces like the Start Network, incubators like Officience, mLabs in the Saigon High Tech Park, annual events like Startup Weekend Ho Chi Minh and BarCamp Saigon, and smaller events like Start Me Up and Mobile Mondays.
It's not a lot but it may give you just enough sense of community to concentrate on building your own damn product. You won't overhear product pitches at every cafe (of which there's an order of magnitude way more of in Saigon than anywhere in the States).
But once you do need to hire help you will be able to do it affordably, whether for software development, testing, usability, marketing, research... While you're here, take advantage of the fact you don't have to pay Silicon Valley salaries.
Link to Silicon Valley
With all that said, there are a lot of reverse refugees from the Bay Area now living in Vietnam. After the Vietnam War (referred to here as the American War) ended and hundreds of thousands of Vietnamese, especially the educated and merchant classes, fled the new government, many of them wound up living in San Francisco and then San Jose. Others ended up in Orange County, Dallas, Houston, and other parts of the world. But today, a huge population of Vietnamese-Americans lives and works in Silicon Valley. Now that business opportunities are better in Vietnam, many experienced technology workers have returned to their birthplace to start companies. And so, thanks to their experience, today a large software industry exists in Vietnam. And many non-Vietnamese have come to join them. Maybe you'd like to be one of them?
Anyways, it may seem like a crazy idea at first. Moving to a foreign country and all. But if you're young, single, a bit adventurous, and determined to strike out on your own - or already have and are now ramen-profitable - then consider the costs: $1200 for cheap-ish rent in the Bay Area, buys you a round trip ticket from SFO to SGN. And every month of rent thereafter buys you two whole months of living nicely (all expenses) in Saigon. If you have a couple thousand bucks in the bank you can easily triple or quadruple the length of your runway by spending the time in Vietnam.
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Who the heck would retire in the Bay Area? Retire to Vietnam instead.
© 2010-2014 Saigonist.
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