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Vietnam startups encountering difficulties

In the past two years, almost 100 web 2.0 startups were launched in Vietnam. Many of these projects are encountering difficulties today.

FaceViet, launched in August 2007 and hailed as Vietnam’s first Facebook clone was reported to be bankrupt already. (FaceViet founder denies this report). There is a rumor that Vietnam Online Network is looking for buyers. Cyvee, Vietnam’s first social network for professionals, is laying off 75 percent of its workforce.

Fresco 2.0 thinks the failure of some of these startups is inevitable but adds that “It is unfair to pin the blame for the misfortune of these start-ups 2.0 on the recession.”

Harry Do is worried about the status of other startups:

“If FaceViet’s bankruptcy rumors are for real, this would be a sad, but predictable chapter of Vietnam’s web 2.0 bubble. It would leave a lot of implications for web 2.0 Vietnam and more than 100 Vietnamese web startups still struggling to establish a sustainable business model in Vietnam, especially in the wake of the current financial crunch.”

He analyzes the failure of FaceViet:

“FaceViet failed to gain enough traction and reach critical mass not because of their vision…Poor execution and a lack of thorough understanding of local insights cannot compensate for a good vision, adequate funding and a passionate management team. If FaceViet could address these issues in the beginning, I thought FaceViet would be very much different from what they are now, and this is a real pity”

Harry and Fresco 2.0 identify some of the startups in Vietnam

Blog.com.vn – Teen social network
Caravat – LinkedIn clone in Vietnam
Chacha.vn – iLike clone
Chuyendong.vn – Teen social network
Clip.vn – YouTube clone
Cyvee – LinkedIn clone in Vietnam
Linkhay – Digg clone
PhunuNet – Women social network
Sannhac – Online karaoke community
Tamtay.vn – A hybrid of Facebook and MySpace
TeeVN – Zazzle clone
Thodia.vn – Yelp clone
traitim.vn – A social network for lovers
buzz.vn – A combination of Digg and Delicious
Zing – Vietnam’s largest portal for teens
Vietnamworks – Online job service

Clipvn is first web service in Vietnam to reach 1 million users. Sannhac recorded the fastest growth with 200 thousand users in 6 months. Vietnamworks is recognized as among the most successful start-ups to date.

There are only three thousand Twitter users in Vietnam. But Twitter-like platforms have been developed. For example: Ola Me and Loop. Aside from FaceViet, other Facebook clones include TheGioiBan.com and Guongmat

ola
Screenshot of Ola Me, a Vietnam startup

Fresco 2.0 notes that startups in Vietnam should develop better models and services in order to be financially viable:

“Web 2.0 start-ups are surely hot, with a slew of new-comers springing up every now and then. But how will they go about making money? So how would all of these emerging technologies start monetizing their products?

“The key here is: before you start to think about money, think about your service first. I don’t understand why most Vietnamese entrepreneurs get so excited about their products and I don’t get the same kind of excitement when I use them. Am I a bit out of touch?”

13 comments

  • Tim Russell

    The prevalence of the word “clone” in the list above explains why so few of these startups have been successful. Facebook, Twitter, Yelp, Digg, LinkedIn etc have all been successful because they were ORIGINAL IDEAS! Why bother to join a clone when you can join the original and have access to a bigger and more diverse user network?

    It seems that in Vietnam people would rather copy a successful idea than actually be creative and come up with something original.

  • James Nguyen

    I completely agree with the above comment. However, it is not completely true, see StudivZ or other Facebook clones in Russia. This can possibly works in other countries if you know how to target specifically the population and with a good marketing, which was not the case for most of those startups.
    For example, if you look at coolviet.com, which is a very popular Vietnamese network in the US, they have been able to target specifically that population, doing even better than any Facebook clones in Vietnam (thegioban, etc.).
    This is a lesson for those new startups in Vietnam.

  • I disagree. It’s easy to pull out the ‘clone’ tag everytime you see a similar service. Sure, there are many many sites that are straight copies but many Vietnamese start-up’s are adding their own flavour and ideas for the local market.

    Facebook was not original, but it was an evolutionary next step from it’s predecessors. The same for Linked-in, MySpace…

  • @simon: you got it, some people have a habit of take a glance at a website and immediately jump into conclusion that the website is a “clone” of something.

    Serious reviewers would spend a bit more time, dig a bit deeper and then would be able to tell which ones are dumb “clones” and which ones are taking the original model some step further and/or adapt it to a local situation.

    If one looks at things with instructive eyes like that, one’d actually find out quite a bit of good efforts and initiatives by VN web companies.

    In any market most of start-ups would die but a handful would survive and finally win. Anyways, IDG venture certainly not stupid when they pick VN their second investment destination after China, even before India and Korea, and pumped a $100mil to the market already

  • You’re right. We all laughed at Jeff Bezos at Amazon in 1999, we all said how will Google ever make money in 2000, and how will Uncle Rupert make a $400m investment in MySpace payback (a year later they closed a $1bn advertising contract with Google).

    VN internet is not in that league :) but it is producing more well crafted products than I’ve seen in many countries in Europe…

    I see a lot of people beating up the industry here…but there’s no need. The eyeballs are there, the revenues will come at some point. In the meantime, everyone has to experiment and invest to find the right way for VN internet. As you say, some will fail, some will reinvent and a few will pull through.

  • I understand why you tell that. But with our network http://www.traitim.vn, we build our site based on our ideas. And i have already met a lot of passion man, who are creating new online system at Vietnam.

  • Joe

    From the list of start up above. I have a few questions

    How many of them are considered in trouble? are they in the same hole or different hole?

    Was it because they concentrate too much on product and technology and not enough about the solving the problem or need of the local market?

    Was it because they dont have any experience in the operating natures of sites such as these? or more specifically what are the benefits of each feature versus the cost of making/running them?

    Or simply invest without answering questions?

  • Sỹ Ben

    I understand why you tell that. But with our network http://www.laptopvip.vn, we build our site based on our ideas. And i have already met a lot of passion man, who are creating new online system at Vietnam.

  • I think that In the meantime, everyone has to experiment and invest to find the right way for VN internet.This can possibly works in other countries if you know how to target specifically the population and with a good marketing. It’s easy to pull out the ‘clone’ tag everytime you see a similar
    service. Sure, there are many many sites that are straight copies but
    many Vietnamese On ap Standa | On ap Lioa

  • techvietnam

    good
    If FaceViet could address these issues in the beginning, I thought FaceViet would be very much different from what they are now, and this is a real pity”
    lioa
    lioa
    on ap

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