Vu Trong Nghia: Vietnam Startup Landscape, Finding a Technical Cofounder & Managing Risk - E138

· Vietnam,Southeast Asia,Start-up,Founder,Podcast Episodes English

A lot of people do not have a high tolerance for uncertainties, we all know that there is a high failure rate for startup in the first few months and when you start a business, it’s a commitment for at least three to five years, lots of tradeoffs in terms of personal life and also at other opportunities.- Vu Trong Nghia

Vu Trong Nghia (Vince) is currently CEO and co-founder of Bizzi, a VC- backed startup providing intelligent accounts payable & receivable automation platform.

Before his MBA in the US, Nghia had an established career with different positions at multinational companies, including brand manager at GlaxoSmithKline and Unilever, and marketing manager at Dairy Queen where he successfully led the launch of Warren Buffett’s brand in Vietnam.

He also has a passion to work with early-stage innovative startups as an angel investor and mentor. Vince holds an MBA (with Honor) from the Thunderbird School of Global Management, where, as a Thunderbird SHARE Fellow, he was proudly funded by the Fulbright scholarship program.

Jeremy Au: (00:30)

Hi, Vince, welcome to the show.

Vince: (00:32)

Hi, Jeremy, thank you for having me. It’s such an honour.

Jeremy Au: (00:36)

I’m very excited because you are a founder and operator, and you’re building out from Vietnam with some experience and I’m excited to hear your point of view on Vietnam and Southeast Asia and the fact that you’re working with a very ‘hot’ vertical which is targeting the medium and small sized companies that are out there in Southeast Asia. So, excited to talk more.

Vince: (00:58)

Yeah, I’m very excited to be the first Vietnamese founder on the podcast and I’m happy to share with all the audience on what’s happening in Vietnam, about the startup scene and the opportunities as well as the challenges, especially for the B2B SAAS in Vietnam

Jeremy Au: (01:17)

Awesome, amazing. So, Vince, can you tell us a little bit more about who you are, professionally?

Vince: (01:23)

Professionally, I was a corporate guy, I have been working for ten years in different multinational companies like Unilever, GlaxoSmithKline, then working for portfolio companies of a private equity fund in Vietnam where I was having the chance to launch Dairy Queen, the ice-cream brand of Warren Buffett into Vietnam Market. At that moment, I got the chance to win the Fullbright scholarship to pursue my MBA in the States.

Jeremy Au: (01:58)

Awesome. And then, after that, the States, where did you go?

Vince: (02:02)

I went to Arizona State and did my MBA at Thunderbird School of Global Management which is now a part of Arizona State University.

Jeremy Au: (02:13)

Why did you decide to become a cofounder of Bizzi, Vietnam? What was so interesting about the problem?

Vince: (02:18)

In my previous life at the corporate work, I was involved a lot in launching new business into Vietnam market or launching a new brand with Unilever, GlaxoSmithKline, and I am very interested in doing new things, new projects and having skills to build up a new venture. So, that’s an area I was always interested in and when I did my MBA in the US, I got a chance to expose to many US tech startup when I was running an angel investment network for the school in the states, at that moment, I looked into different verticals of tech startup in the US and got really interested in B2B SAAS. I came across a company called which is also a publicly listed company in NASDAQ. I think it’s a great idea to help companies to manage their cashflow better. I looked deeper into the Vietnam market and I found that cashflow management is a problem for all the companies everywhere in the world of all size and especially in Vietnam. I read a report from KPMG saying that about 50% of Vietnamese companies got a problem to access to capital and compared to the peers in the region, the cash to cash conversion cycle is usually longer, about 16 to 20 days. So, I think it’s a critical problem and looking for a great solution. So, that’s where the idea for Bizzi come from and when I came back to Vietnam, I looked into a CTO cofounder to start building this startup together.

Jeremy Au: (04:14)

Amazing. Why did you know this was the right thing to be inspired by and localize for Vietnam because it happens a lot, so many folks work in America and they travel back to Southeast Asia. We saw that for HBS folks, Harvard Business School folks, who are doing their MBA in America, they’re like oh, we like using Uber, so let’s go found Grab, they founded Gojek. Did you go there or thinking to yourself I would like to look for an idea or you saw the idea? How did you decide that this was the right or the one idea that you really wanted to experiment with?

Vince: (04:51)

My goal after MBA was always to come back to Vietnam to build something and I looked into B2C and B2B. At that moment, in Vietnam, as you may familiar with, there are so many B2C startups, but for B2B, there are only a few, and I think this is a kind of green field where I can really make an impact and that’s why I decided to focus on B2B SAAS and I think the timing was very right when the government mandated all the companies in Vietnam to adopt e-invoices. The deadline at that time was 2021 so I think it was a great opportunity to capitalise on because when all the companies start using e-invoice, that’s where you can start the digitisation and digital transformation for companies in Vietnam easier especially in the financial operations.

Jeremy Au: (05:53)

What have you been seeing for the growth of Vietnamese enterprises because normally you look at it, there’s three categories, right? There’s the small, medium and the large. So, how would you describe the different trends for each vertical in Vietnam, in 2021?

Vince: (06:08)

Yeah, so, in total in Vietnam, we have, right now, about 800,000 companies and about 90% of them are small and medium businesses, but if you looked at the micro level, Vietnam is like a hot scene, a hot destination in Southeast Asia where we attract FDI and also investment in for VC into Vietnam market, so, there’s a lot of business going on here.

Jeremy Au: (06:38)

So, why is Vietnam so hot, why is there so much business going on?

Vince: (06:41)

I think because of the stable growth of the macro economy and also the government is really supporting foreign investment, the legal framework, the legal environment as well as the politics is also stable. So, I think that’s what attracts foreign companies and investors to Vietnam.

Jeremy Au: (07:02)

What’s interesting is Vietnam is not just a stable place to be in, it’s also seeing a lot of digital transformation, so, there’s a lot of engineers, a lot of computer engineering, there’s a lot of startups, there’s a lot of engineering teams being built out there, there’s a lot of startups being formed by domestic founders, so why is Vietnam so hot?

Vince: (07:25)

Well, I think, first is it’s kind of a micro-economy strategy from the government to push forward the digital transformation for companies as well as governments. So, in Vietnam, we have a propaganda from the government with the slogan – make it in Vietnam. So, that promotes startups and digital products in Vietnam. So, I think that’s one of the thing that supports the local startup scene in Vietnam, and obviously, if you look at the growth and success of all the B2Cs tech startup in Vietnam, I think with 90 million population and the growing of middle income population, I think that’s very attractive

Jeremy Au: (08:13)

Amazing. What’s interesting is that as you built this out, this is not your first startup, right? This is the second company that you’ve built because your first company was at Knowledge Key. So, tell us more about Knowledge Key, why did you build it and what did you learn?

Vince: (08:29)

It’s like a marketing brand consultancy. At that moment I founded the company with one of my colleagues at Unilever. After a few years where we already got experience in network in brand building and running campaigns. So, my co-founder and I started to build it as like a hustle.

Jeremy Au: (08:54)

What did you learn from that?

Vince: (08:56)

It’s a great experience, but I learned that it’s for consultancy firm, it’s very, very difficult to scale because it’s relied on the key people at the company. At that moment, I realized that my next company or my next startup would be something that is really scalable.

Jeremy Au: (09:17)

So, I mean, it’s a tough thing to learn because so many founders. If you look at the background, this is not the first time, it’s a second time, their third time, their fourth time. So why is it that you learned that you want to make something more like product or technology oriented? What drove that dynamic for you? ‘cause I know you’re saying like it’s hard to scale, but what else was there what does it mean for people who don't really understand what that means?

Vince: (09:42)

Wow. I got inspired a lot by tech startup in US and other startup in the regions where we can really make a big impact on the society or the business environment, so, it’s my inspiration to build something bigger.

Jeremy Au: (10:02)

When you think about bigger, a lot of founders are thinking about how you make something big, did you know it was going to be big when you started building Bizzi or you were like let’s start small, how do people think about big or small?

Vince: (10:13)

Well, if we look at other markets where we see similar business model that was already proven like in the US or Unified Post in Europe, those companies have been around for ten, fifteen years and they started just like Bizzi nowadays. So, this is the long-term vision and also the inspiration for me to build something that really matters.

Jeremy Au: (10:43)

So, you talk a lot about being inspired from different companies across the world. I’m just curious, what do you read in terms of global tech news, and what else do you read locally, domestically, as well?

Vince: (10:58)

Well, domestically, I follow business news everyday, popular business news like Saigon Times or Vietnam investment reviews to get to know the local business scenes and to be on top of it, to see the trend of business fellows, where they’re going, what they’re concerned about, things like that.

Jeremy Au: (11:20)

What do you read for global news? Do you follow Tech Crunch or Tech In Asia?

Vince: (11:25)

Oh, those are the popular ones that I follow and read a lot of blogpost on Medium and many other popular tech news.

Any authors you like on Medium or blogs?.

Vince: (11:38)

I’m a big fan of Y-combinator and I follow the blog and essays related to how to build a successful startup.

Jeremy Au: (11:49)

What has been the most difficult part about building this second startup so far?

Vince: (11:50)

Wow, I think that is a typical story of a founder with no technical background is difficult to recruit talent for early-stage startup. I think it’s the challenge the same everywhere. So especially for Bizzi, we are in B2B SAAS and this is very new in Vietnam so when I share with the candidates about our vision, mission and it’s also hard for them to visualise what we’re trying to do. So that’s the biggest challenge for early stage start up here in Vietnam.

Jeremy Au: (12:30)

So, how did you go about finding your technical cofounder because that’s such a common problem for, not just Vietnamese founders, but Southeast Asian and global founders, so how did you go about doing it?

Vince: (12:41)

Just pure luck. When I came back to Vietnam and decided to build Bizzi, it’s very difficult to find the right one who share the same vision and mission and I had to talk to a lot of in the network and, at the same time, prepare for everything on the business side and, one day, one of the friends in my network introduced me to my CTO cofounder and, at that time, actually he was thinking about building something else, but also in B2B SAAS and we had a meeting and discussed about the opportunities. After that, he got convinced and jumped on board.

Jeremy Au: (13:22)

Tell us how you convinced him. Was it at a coffee or…how did you convince him?

Vince: (13:28)

Over lunch.

Jeremy Au: (13:29)

Tell us, because a lot of people don’t know…I got to ask you, how many people did you talk to, looking for your technical cofounder, you think?

Vince: (13:39)

Wow! So many, I lost count.

Jeremy Au: (13:43)

Did you think a hundred?

Vince: (13:44)

Yeah, in that range. Connect with people on LinkedIn, sent messages…in Vietnam, we don’t have a kind of a platform or a something like in Singapore or in the US where we have accelerator or incubator to connect cofounders together so we have to try to reach out by ourselves. So, it took a lot of time and effort.

Jeremy Au: (14:09)

So, you were going through the hundred, and obviously, it was a two-way evaluation. You’re evaluating them, they’re evaluating you. So, how were you evaluating and looking for your founder out of the hundreds that you talked to?

Vince: (14:21)

Well, I think the first important thing is that they already have the right skill and experience to play that CTO cofounder role and, secondly, I think they must share the same vision and they really have the same passion for B2B SAAS. As I mentioned to you earlier, in Vietnam, it’s easier to talk to people about B2C startup, they get it right away, but for B2B and especially for accounting and finance, this is something very, very new to them.

Jeremy Au: (14:55)

What is it that your technical cofounders saw in you and how do they evaluate you?

Vince: (15:01)

I think I got to ask him that question as well. He’s much younger than me. He’s about 30 years old at that time and was eager to do something also to start to build something on his own and he’s also looking for a cofounder with strong business background. I think he found that I got the right skill as well in business. We complement each other

Jeremy Au: (15:32)

Yeah, that’s good. When people start to get to know each other, it’s not just one lunch, you guys started talking and building that relationship with him, how do you recommend people have that discussion about how to build that working relationship with a new cofounder?

Vince: (15:49)

Wow. I think it’s tough especially when you don’t know your cofounder previously. You just met for a few coffees and discuss ideas, but I think we gonna find out if cofounders really share the same values and especially have certain qualities that is right for startup cofounders. For me, I think perseverance, grit, is something that’s very important for cofounder at very early stage startup. It’s a lot of challenge and you must have the right mentality, never quit, otherwise we can not go so far, until now, two years. We’ve been through lots of ups and downs, but still working effectively with each other.

Jeremy Au: (16:36)

When you talk about working effectively with each other, what did you have to learn or change about how you work in order to work better with him?

Vince: (16:46)

I have to understand where my strengths and weaknesses are and then have a complete trust and ownership for my cofounder. Everything related to technical issues or problems or strategies to build the architecture, it’s up to him to make the final decision. I think that’s the complete trust between two cofounders that works.

Jeremy Au: (17:13)

When you think about that and start making a decision to work and start building it out and then you start, there’s a team of two and then you start adding more and more people, what was it like to start hiring new team mates for the team

Vince: (17:28)

Wow. It’s an interesting fact. We were actually three cofounders at the very beginning and one of them left after a few months because he found out that it's not the right thing for him. His background is in big consulting firm. One of the big 4 accounting firm in Vietnam, he’s great at what he did, but for tech startup, this is a very different culture. After a few months, he said this is not something I’m looking forward to, so, we left with two cofounders. That’s what I mentioned earlier about the perseverance and the right fit. For the first few engineers, thanks to my CTO cofounder, his network, he can convince people to jump on with us in the very early time and I think it’s very difficult at that time, nobody knows about Bizzi and it’s very difficult for them to understand what we are trying to do and obviously in the market, there’s big competition for talent, especially for engineers. So, getting the first few engineers was really tough and then people come and go; they got better offers. So, that is a constant challenge for us during the first year, but after one year when we got the product out into the market, we have some reputation, it’s getting easier.

Jeremy Au: (19:01)

Interesting, because the reputation is getting easier, can you tell us more about that?

Vince: (19:05)

For recruiting people, when we got the better brand name, we got a product that already in the market, we also have a support from our VC investors to connect with people, I think it’s easier to expose to talents and build a better brand name out there.

Jeremy Au: (19:26)

There you are and it sounds like you’ve gone through a lot of good times as well as a lot of tough times, so, could you tell us of a time when you were brave to overcome some challenges?

Vince: (19:38)

Well, I think the decision to start Bizzi was, in itself, a brave decision for a conventional career role man, a post-MBA student, could be consulting or investment bank or having a good job at a corporate with good salary, but at that moment I decided to risk it all and come back to Vietnam to start the business.

Jeremy Au: (20:09)

When you think about that, what’s so scary about setting up a business for those people who have not yet set up a business, could you explain what’s so scary?

Vince: (20:19)

Wow. A lot of uncertainties, not scare. A lot of people, if you not have a high tolerance for uncertainties, we all know that there is a high failure rate for startup in the first few months and when you start a business, it’s a commitment for at least three to five years, lots of tradeoffs in terms of personal life and also at other opportunities. So, I think that’s it.

Jeremy Au: (20:49)

What did you find was important of helpful in reducing the uncertainty because from your background I know that you seem very intentional about the fact that you wanted to build another startup and so you were going to do your MBA and then you found the idea and you came back, you were very intentional in reducing the uncertainty, right?

Vince: (21:13)

Exactly, exactly. So, I am a big fan of the lean startup methodology and I kind of calculate or define all the risk that can happen for an early-stage startup from the very beginning from the product risk, market risk, technology risk, everything. So, I try to manage the risk as much as possible. If you can control and manage risk, you can increase the probability of success, right? So, that’s where I come from.

Jeremy Au: (21:49)

What advice would you give to people who are looking to set up their own startup and they’re worried about risk and wondering how to reduce it, how would you coach them or advise them to be smarter or wiser in setting up a startup?

Vince: (22:03)

Yeah, I think risk is a normal thing for startups and, somehow, you have to be very comfortable dealing with risk, but be brave and be realistic to face and embrace the reality and try to come up with a strategy to manage on those risks.

Jeremy Au: (22:25)

How do you take risk when everyone around you kind of loves you, doesn’t want you to take that risk…like your parents, your partner, friends, your colleagues, they don’t want you to take that risk because they say it’s too risky, they say - hey Vince, it’s too risky, maybe you shouldn’t think about it, I see my other friends fail. So, how do you think about it or feel about it?

Vince: (22:50)

Right, I’m very lucky to have friends and family who are very supportive with whatever endeavour I try to do. They understand me that whatever I try to do I already calculate and think thoroughly. So, that’s something that I find very lucky, but at the end of the day, when you actually find something that you really passionate about. You have to go and deal with it no matter what other people say. So, just do it.

Jeremy Au: (23:25)

I mean, you talk about doing it, right? It’s so…tough. How does someone take care of themselves, how do you take care of yourself while being aware of all the risk and the fear and the uncertainty

Vince: (23:40)

Well, I think the other startup founders also have the same challenge. There is a great unbalance of work and life during the early stage of the business, but it seems like that’s the way it is and we have to accept the facts. I just try to manage my time better, spend time for myself as much as possible whenever I can, trying to keep my positive energy going on so that I have the right energy and motivation to deal with all the challenges.

Jeremy Au: (24:15)

Do you feel like it gets easier or harder as the company grows, in terms of taking care of yourself?

Vince: (24:21)

Yes, definitely, you get easily absorbed into work and lots of operation and everything. One side, you are passionate about your work and you really, really involve in everything until sometimes you find that you are really burn out. So, I try my best to manage my level of energy and my positive thoughts all the time so that I can balance myself.

Jeremy Au: (24:50)

When you think about balancing yourself, how do you know if you’re not balanced?

Vince: (24:57)

When you feel that you don’t have the drive or the energy to wake up in the morning to go to the office and you see the wow, that’s something that I really need to pay attention to.

Jeremy Au: (25:12)

Awesome. When you’re thinking about all this, who are some role models that you like or admire?

Vince: (25:21)

For the role model, I think it could be a cliché, but Steve Jobs is kind of this leader that really inspire me, the way he led people, the way he can create innovation, there’s many lessons that we can learn from his leadership

Jeremy Au: (25:40)

Do you have any role models in Vietnam?

Vince: (25:43)

In Vietnam, there are many successful businessmen. One of the name that I really admire is Mr Tai, the chairman and CEO of Mobile World. He built one of the largest retail chain in Vietnam from scratch, went through many failures, but still, never give up and then successfully built a really big business

Jeremy Au: (26:07)

Wow. Thank you so much for coming on the show, Vince. I would love to paraphrase the three big themes I got from you. The first is, thank you so much for sharing about Vietnam and your personal journey – from Vietnam, the states, and back, and how you actually got around to not only be someone who was working as an operator and launching markets for Dairy Queen, but also becoming a first-time founder and then a second time founder where you are today.

The second thing is. Thank you so much for your advice on how to be a business cofounder without a technical cofounder and how to go about searching for over a hundred candidates and what they were looking for in you and what you were looking for in them. So, some good advice.

The third thing I really enjoyed was I think your approach to reducing uncertainty, how to make and manage the risk of becoming a founder and using the lean startup, also your savvy moving across geographies to get inspired by new ideas and come back, as well as some of the self-awareness around your own life and work balance as well.

So, thank you so much, Vince, for coming on the show.

Vince: (27:16)

Thank you very much, I’m very honoured.