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Vietnam startups encountering difficulties

Categories: East Asia, Vietnam, Economics & Business, Technology

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

FaceViet [1], launched in August 2007 and hailed as Vietnam’s first Facebook clone was reported to be bankrupt [2] already. (FaceViet founder denies this report [3]). There is a rumor that Vietnam Online Network is looking for buyers. Cyvee [4], 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 [5] but adds that “It is unfair to pin the blame for the misfortune of these start-ups 2.0 on the recession.”

Harry Do [6] 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 [7] identify some of the startups in Vietnam

Blog.com.vn [8] – Teen social network
Caravat [9] – LinkedIn clone in Vietnam
Chacha.vn [10] – iLike clone
Chuyendong.vn [11] – Teen social network
Clip.vn [12] – YouTube clone
Cyvee [4] – LinkedIn clone in Vietnam
Linkhay [13] – Digg clone
PhunuNet [14] – Women social network
Sannhac [15] – Online karaoke community
Tamtay.vn [16] – A hybrid of Facebook and MySpace
TeeVN [17] – Zazzle clone
Thodia.vn [18] – Yelp clone
traitim.vn [19] – A social network for lovers
buzz.vn [20] – A combination of Digg and Delicious
Zing [21] – Vietnam’s largest portal for teens
Vietnamworks [22] – Online job service

Clipvn [12] is first web service in Vietnam to reach 1 million users [23]. Sannhac [15] recorded the fastest growth with 200 thousand users in 6 months. Vietnamworks [22] is recognized as among the most successful start-ups to date.

There are only three thousand Twitter users [3] in Vietnam. But Twitter-like platforms have been developed. For example: Ola Me [24] and Loop [25]. Aside from FaceViet, other Facebook clones include TheGioiBan.com [26] and Guongmat [27]

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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 [28]:

“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?”