Ideas

Why is Vietnam going to emerge the strongest post-COVID-19?

There are three reasons why Vietnam is outshining its neighbouring countries when it comes to handling the aftermath of COVID-19

Vietnam is one of the first countries to ease social distancing measures and reopen its society as early as April 2020, where most countries are only starting to grapple with the severity and spread of COVID-19.

Also known as the land of the ‘Ascending Dragon’ (due to the geographical shape on the world map), it the first in Southeast Asia to emerge from the global pandemic, allowing for businesses and domestic travels to reopen. Vietnam is also identified as one of the first countries in Southeast Asia when Singapore reopened its borders for travellers.

The total number of COVID-19 cases in Vietnam stands at 349 (as of 22 June), with zero deaths. This stands in stark comparison with more than 42,000 cases in Singapore, 30,682 in the Philippines, and 8,587 in Malaysia.

The international community is stunned by Vietnam’s breakthrough during this COVID-19 pandemic. An Asahi Shimbun reporter assigned to cover Vietnam was intrigued by the following statement by a Japanese national who works in the country: “Even though I talked about the very few patients infected with the new coronavirus and the Vietnamese government’s tough measures to combat COVID-19, no one in Tokyo believed me.”

Following the outbreak of the coronavirus, the IMF’s 2020 GDP growth forecast for ASEAN-5 countries – Indonesia, Malaysia, the Philippines, Singapore, and Thailand – is cut to -1.3 per cent (and Singapore -4-7 per cent), but Vietnam is expected to still experience positive 2.7 per cent GDP growth, with a strong rebound of seven per cent projected in 2021. Prime Minister Nguyen Xuan Phuc sent a positive 2020 economic growth target of over five per cent, in spite of IMF’s projection.

From this, we can see Vietnam is poised to emerge one of the strongest economies in Southeast Asia and these are the three reasons why:

Swift action and digital services

Vietnam’s ability to achieve such outstanding results due to the swift and decisive actions from the national government, followed by coordinated and dedicated efforts of the general population. Vietnam took action very early when there was minimal information about the virus.

Nationwide school shutdowns were implemented in January, travel restrictions and border closure followed quickly. Vietnam also implemented aggressive contact tracing and quarantine people who are exposed to suspected cases for two weeks.

The Ministry of Health developed an app, NCOVI, health authorities disseminated warnings and orders through Zalo, a homegrown messaging app with more than 50 million users, and the internet spread a coronavirus public awareness pop song that went viral.

The swift action and digital services enabled transparency and collective and informed decisions in Vietnam’s battle against COVID-19, enabling them to emerge fast from the pandemic.

Resilient economy and startup ecosystem

The Business Times reports “Mobility metrics show the fastest recovery of activity in Vietnam, with movements to retail and recreation venues having rebounded to just 15 per cent below the baseline, compared to more than 60 per cent below baseline before measures began to lift.”

People may remember Vietnam for their amicable people, natural wonders, and sometimes their fight for independence for over 30 years. Through this COVID-19 episode, the world now views them in a new light, as a resilient and stable country, and one of the hubs for innovation and entrepreneurship in Asia.

The innovation ecosystem in Vietnam is attractive to e-commerce, software outsourcing, AI, fintech, healthtech startups. With more than 3,000 startups in the ecosystem, total investment in Vietnam startups increased six-fold in the period of two years between 2017 and 2019.

Some of the tech startups have also contributed to the fight against COVID-19 in providing online medical consultations, medical deliveries, and on-demand access to healthcare services.

Strong cross-border collaboration

“Being ahead of the curve, the ASEAN chair is in good stead to lead and shape regional responses on the pandemic”, says Dr Huong Le Thu, senior analyst at the Australian Strategic Policy Institute told The Straits Times.

Vietnam works closely with the regional neighbours in COVID-19 response and also in terms of driving regional growth and innovation.

To drive regional startup ecosystem development and integration, Vietnam’s public and sector stakeholders have been actively partnering with international entities for two-way market access for startups expanding in the region.

Quest Ventures, in partnership with statutory boards under the Ministry of Trade and Industry of Singapore and Saigon Innovation Hub (SIHUB), supports Singapore startups entering Vietnam through Vietnam Global Innovation (VGI) acceleration.

Leading venture capital in Southeast Asia, Quest Ventures supports startups through Quest Ventures’ wide network of mentors and domain experts. Startups will also have access to high quality and comprehensive online training module topics, and (if global health situation allows) an in-market immersion in Vietnam to maximize exposure and establish long-term partnerships between startups and ecosystem players.

It is no surprise that Vietnam emerged fastest during this health crisis and this winning strategy of swift action, resilience and cross-border collaboration is also the same one that will allow the economy and startup ecosystem to rise strongly in the region.

This post first appeared on e27.

Image source: Thijs Degenkamp on Unsplash.


Central Asia good expansion option for Singapore startups

When Singapore startups are looking to expand overseas, the go-to destination has always been its backyard in South-east Asia. But in an increasingly competitive and mature market, where the fight for top tech talent is intense, this reflex strategy requires a rethink.

Fast maturing Hanoi and Jakarta have seen startups grow at a rapid pace, and have attracted significant venture capital funding. There is not a lot of room left to play for latecomers.

At the other spectrum are Cambodia and Laos, which looked ready for Singapore startups to explore and expand. But VCs’ experiences reflect markets which are still at an early stage of building their startup ecosystems, and not quite ready for significant venture capital investments.

The need for startups here to look for fresh pastures farther afield is urgent, especially in a post-pandemic world where the search for opportunities requires greater creativity, commitment and courage.

Instead of being content to be near home, take the leap into less familiar territories. A good new landing point would be Central Asia. The region provides strong conditions to develop a startup ecosystem.

We are taking action. My company Quest Ventures will roll out a startup acceleration programme called Kazakhstan Digital Accelerator by the end of the year. It aims to nurture tech startups in Kazakhstan and Central Asia over the next three years.

This came after funding into Quest by QazTech Ventures, the venture arm of Kazakhstan’s sovereign wealth fund, in April this year. Our target is to groom 30 startups, or 10 a year.

Such optimism is not based on a punt. Central Asia, with Kazakhstan at its heart, is the new frontier for startups and is well equipped to take off.

As the most economically developed market in Central Asia, Kazakhstan has sought to create a finance and investment hub in its capital city of Nur-Sultan. The Astana International Financial Centre, established in the capital in 2018, uses English as the working language and offers visa and tax waivers to woo investors and global financial players.

On the tech front, the country has shown significant commitment in developing a future-ready infrastructure. For instance, several of their government services have gone digital – residents can register the birth of a child, or report a lost vehicle conveniently online via a centralised website.

This initiative was developed under the Digital Kazakhstan programme, a government-led effort to transform the country to a digital economy. Last year, the programme created some 8,000 jobs in the country.

Also, more than 75 per cent of its population have access to the Internet. Its telco sector is highly developed, with an extensive 4G network and high mobile penetration rate.

A large segment of the population own smartphones, and have access to mobile data. On Chocolife, a homegrown ecommerce startup in Kazakhstan that offers food delivery services, youngsters regularly spend the equivalent of S$4 or S$5 to order beverages for themselves – similar to Singaporean youths who are frequent consumers of gourmet coffee and bubble tea drinks.

This is good news for startups. Consumers in the young Central Asian country, where 45% of its population are aged under 30, are hungry for new experiences, curious about the world, and have the spending power to boot.

Some might point out that the Kazakh market, ready as it may be, is small and hence offers limited opportunities. Indeed, the sprawling country has just about 18.7 million people. But just like how Singapore is often seen by industry players as a gateway to South-east Asia markets, Kazakhstan is a bridge that connects investors to Central Asia.

The region, which includes Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan, is home to 72 million people. In fact, if we expand the range to include regions within a 2,000km radius from Kazakhstan, we are looking at a potential market of 3.3 billion people, including a large swathe of Russia and Eastern Europe.

I can think of two immediate opportunities in Kazakhstan for Singapore-based startups.

First, to hunt for tech talent in the Central Asian region. While startups here have typically recruited talent from Vietnam and Indonesia, the brain drain in South-east Asia is a growing constraint. Kazakhstan’s emerging tech scene offers a rich talent pool of young, tech-savvy people seeking white-collar careers. They are educated, creative and modern.

The Kazakh government has invested significantly in developing and promoting STEM education. Students at the secondary education level are exposed to coding, robotics and even virtual reality to cultivate an interest in tech.

The country also wants to grow its startup landscape. Astana Hub, a government-run technology park similar to Singapore’s Block 71, offers support to startups in the form of training programmes, mentorships from entrepreneurs, office spaces and networking opportunities.

Second, Kazakhstan’s ambitious task of building a digital Silk Road provides opportunities for tech players. The government is pouring significant resources to develop the country’s information and communications technology infrastructure. It will require support in fields such as digital literacy education, cybersecurity and data analysis, to name a few – areas that Singapore startups are well-placed to be a part of.

Companies here may be reluctant to venture to the Central Asian region, due to differences in culture and language. But the longer we stay stagnant and stick to old formulas for growth, the easier it is for someone else to steal our lunches.

The writer is the managing partner of Quest Ventures, a Singapore-based venture capital firm.

This post first appeared on The Business Times.


The key to real transformation is not learning, but unlearning

And this is how it can help us sail through COVID-19

I am sure you have found out in (not-so-) recent news that COVID-19 beat most of the CEOs and CTOs hands down in driving digital transformation in organisations across all sectors globally.

It is dubbed as a the “before and after moment in the digital transformation” by one Forbes contributor Andrew Filev in his column, greatly accelerating previously slow-moving trends such as telecommuting, on-demand food and services, virtual events and the cloud.

“Despite the uncertainties in the macroeconomic and geopolitical environment, there is one thing we are certain – the world is moving toward digital-first and digital-everything.”

The benefits are not new, but why does it take a global pandemic to realise these transformations?

It is precisely because COVID-19 threw us off what we know as normal and the reality that we are so familiar with. We are now forced to unlearn the established and traditional ways of how society and businesses work. Only when we are pushed to unlearn, did we truly embrace the possibility and power of change and finally move into the new normal.

Why is it only through unlearning that you transform?

A word of gold from Margie Warrell, Forbes Columnist & Advisory Board Forbes School of Business & Technology: “Unlearning is about moving away from something -—letting go— rather than acquiring. It’s like stripping old paint. It lays the foundation for the new layer of fresh learning to be acquired and to stick. But like the painter who needs to prepare a surface, stripping the paint is 70 per cent of the work while repainting is only 30 per cent.”

Unlearning challenges assumptions in the conventional wisdom that may have become invalid and obsolete. The world changes whether you accept it or not.

Daniel Zhang, Alibaba Chairman and CEO, commented recently during their earnings call that “despite the uncertainties in the macroeconomic and geopolitical environment, there is one thing we are certain – the world is moving toward digital-first and digital-everything”. Before or after COVID-19, it is an undeniable phenomenon.

Through the global pandemic, unlearning acts as a catalyst to overcome the inertia of conventional wisdom and shake up the assumptions of what works and what doesn’t. For instance, it pushes organisations to realise:

  • You do not need your employees to work in the same physical space, in the same time zone, and within specified business hours to get things done.
  • You do not need to physically attend events or even fly for international forums and conferences to access content and networks.
  • You do not need that many meetings to complete and agree on a plan and execute it.

By unlearning, you remove all the prior multi-layered assumptions and pare your problems down to their first principles, a basic assumption that cannot be deduced any further.

That is when you can address the problem directly, effectively, and efficiently and identify the solutions:

  • You need your employees to be contactable, responsive, and accountable to get things done.
  • You need to leverage the rich media enabled by technology to access content and build your local and global networks.
  • You need to identify the key personnel in charge of the different tasks and projects and empower them to make decisions.

Only when you unlearn, can you relearn

With change being the only constant in the world, there is a need to keep adapting to stay competitive. Darwinists know best that “it is not the strongest of the species that survives, nor the most intelligent. It is the one that is the most adaptable to change”.

But after being put through highly structured (and time-honoured) systems of education and learning, most people would have a structured box of basic toolkits to help them understand and navigate the world.

Without unlearning, humans tend to fit everything into the box and use the (sometimes irrelevant) tools to fix novel problems and answer new questions. Sometimes, that will leave the problems badly fixed and questions badly answered, but all will agree and adopt it because it will not shake up the systems and disrupt the comfortable status quo.

That will no longer cut it, as waves of innovation and tech startups come in to disrupt the status quo. And more recently with COVID-19 catalysing this process. Businesses, government, and the people came to unlearn the old ‘rules’ and relearn the new ones.

Unlearning breaks imaginary limits

Unlearning is not about forgetting. It’s about removing limits and choosing an alternative mental model or paradigm.

Michael Porter’s five forces is a foundational framework that most business and strategy experts learn and use to build their competitive advantage. It is about setting limits to achieve based on what you know.

However, in a VUCA (Volatile, Uncertain, Complex and Ambiguous) world, it may become irrelevant by the time you set the limits and definitions to achieve, causing the organisation to always be falling behind.

“The Porter model of strategy isn’t obsolete. But it is decidedly incomplete. It takes unlearning to see the model as only one possibility rather than canonical truth”. From design thinking to lean and agile to Ross and Lemkin’s From Impossible to Inevitable, recent popular frameworks that guide businesses and strategy starts with breaking imaginary limits, rapid prototyping, and iterations, and finding a combination that works for you.

This had allowed breakthroughs of immensely successful companies such as Google, Facebook, Uber/Grab, and Airbnb, as they focus on removing limits rather than setting them.

In all, real transformation is not just about learning but unlearning. By unlearning, you challenge obsolete assumptions and conventional wisdom, enable yourself to relearn, and achieve breakthroughs in mindset limits. Let me end with a short story I came across:

“Once a very bright student from Japan comes to see a Zen master with excitement and pride and says ‘Master. I’ve gone all around the world and studied all religions; I master now all philosophies, the only thing I don’t know is Zen. Teach me everything I don’t know about Zen so that I can become a master myself.’

The master doesn’t respond, instead, he puts an empty teacup in front of the student and starts pouring tea. He doesn’t stop, he keeps on pouring and soon the tea starts spilling on the table. The student got very upset and almost yells at the master. ‘Master stop!! You can’t pour any more tea in it. It’s full.’

The master stops, smiles, and says, ‘Like this cup, your mind is also full. How can I teach you Zen unless you empty your cup?’

This post first appeared on e27.

Image source: Tim Mossholder on Unsplash.


Carousell and Series B

The biggest news in Singapore recently was the announcement by Carousell that they have raised USD 35 million for their Series B: TechCrunch, TechinAsia. Rakuten Ventures led the round while previous investors also contributed.

The round drew the attention of Lim Der Shing, who writes one of the more frank and penetrating entrepreneurship blogs in Singapore. He noted that this appeared to be the first time that a pre-revenue startup raised Series B in Asia. There could be other examples, but Carousell was the most recent one, and a brand that most people know.

A week before the announcement, I was at Startup Weekend 2016. Invited to give a pep talk, I mentioned Carousell (and Vulcan Post but that’s another story). Someone taped part of the speech and put it on Instagram.

By now, Carousell’s story is well-known: that they started from Startup Weekend 2012; that they renamed their original creation, Snapsell, to the catchier Carousell; that they raised their first round of funding, ie, angel, from NUS (ACE “YES” grant) and us; that they went on to raise funding from other funds subsequently.

Startup Weekend 2012 was the first startup event that we sponsored in Singapore. Being based in Beijing, I could not attend the event but asked the organisers to introduce the winners to me on my next trip to Singapore.

At that meeting, the Carousell team was not ready for fund-raising. Meeting at the Yellow Room at Blk 71, they said the product was not ready and that they wanted to focus on that.

A few months later in Beijing, I received an email from Elisha Ong, then CEO of Burpple and by then one of the top foodie apps in Singapore. Elisha re-connected Carousell and me. We arranged for a call that same night and I remember negotiating the terms with Siu Rui in the living room of my Beijing home and wiring the funds over shortly.

I got to meet the team again some months later on my next trip to Singapore. They were working two rows away from me, at the same NUS Plugin space that I also hot-desked out of. They were bootstrapping like every other startup at Plugin, eating cheap chicken rice from the old hawker centre and taking the last bus home every day to maximise their working hours and reduce the time they spend on the road. They were working long hours every day including weekends.

When Carousell raised the next round from 500 Startups, Golden Gate Ventures, etc, they offered us pro-rata. They did not have to but the gentlemen in them did.

Very honoured to have been part of the journey.

Image source: Huffington Post


QQ and why we have not moved to Slack

Late last year, we started experimenting with Slack. This was when Slack was still relatively new, and most people were using HipChat or some other group chat.

We have been using QQ for years. The Chinese (China version) of QQ is loaded with features such as screen-sharing, voice chatting, video calling and of course, plain text messaging.

QQ is free to use and, until WeChat came along, was the dominant tool for PC-based communications. Fetion, a Web SMS service from China Mobile, could not compete despite the huge base of China Mobile users. Fetion required senders and recipients to be on the China Mobile network. Each of the three telcos had their own offerings but none could compete against the network-agnostic QQ.

We use QQ for group chats. We have a general company-level group where our entire “global” team that is scattered across cities in China, in the US, in Southeast Asia, are placed in one group. Each of them download and create their own QQ UserID but when they join, group admins give everyone nicknames based on their functions. For eg, someone in the investment team would be “Analyst-NAME”.

In addition to the company-level group, we also have smaller project- and function-based group chats.

We also use QQ for voice and video calls internally. Call quality between users inside and outside of China used to be bad but it has improved significantly in recent months such that we seldom use Skype as a backup anymore. The QQ mobile app is a delight to use.

Slack is as good in all the areas above, if not more so given its rapid new releases. There is only one problem with Slack and it is significant enough that we hesitate to adopt it. That problem is we do not know when Slack will be blocked in China.

Right now, to access our mails, we either use a VPN to get into our Google Apps for Work, or, like many of us, we forward our mails to QQ Mail or 163 or one of the local email services. This also means that we forgo many of the collaborative features of Google Apps. Since VPN can be unstable at times too, we decided to have a blend of East and West — for instant communications, we use QQ; and for all other purposes, we use Google Apps. This ensures that there is always at least one way to reach us.

This has worked for us for the last three years and we don’t see it changing soon.


Startup Leadership Program in China

The Startup Leadership Program took place in Beijing today at the office of Cadwalader. SLP has been running for one or two batches before this, and being volunteer-driven and relatively new in China, had been progressing in fits and starts so I am glad that there is a new group willing to get it going this year.

Incubation/ acceleration/ entrepreneur training programs has ballooned in the last year. There are now many locally run, “foreign-inspired” programs modelled after Y-Combinator, 500 Startups, and others. Foreign-based, equity-driven programs such as Founders’ Institute has not had success coming in due to regulations around foreigners investing into or owning internet companies.

Beyond branding, there really is not much the non-Chinese programs offer when compared to the local programs. Content is very much local, and especially so in China where what we do in marketing in, say, the Bay Area, is not the same in China because of different channels. Sure, quantifiable data are measured the same way (MAU is MAU anywhere it is measured), but to listen to an “international expert” speak in a foreign language (English) and describing what they do on foreign channels (eg, Facebook) is difficult to relate. Hence, most if not all programs have local mentors, and rarely include international mentors.

We work closely with local programs but participate in the foreign ones when we can too.

This batch of SLP at Cadwalader was run by volunteers from Peking University and Startup Noodle. I participated as a mentor and heard and gave feedback on the teams that presented. The afternoon went by quickly.


Plaques and official recognitions

Official recognitions are big in China. Enter any office and you can probably find a few metallic, embossed plaques or paper certificates adorning the walls. These are usually not licenses, for eg, the license to operate an F&B restaurant. Rather, these are awards issued because the establishment met certain criteria in a campaign or best-in-class.

I was at the official award of the Beijing Youth Innovation and Entrepreneurship Centre plaque award ceremony for the Venture Cinema today. The Venture Cinema is literally a cinema in the central business district that has been converted to an events venue that hosts demo days. 500 Startups’ Dave McClure and angel investor Lei Jun have gave talks here before, as did many other investors (more than 500 individuals have done so according to Venture Cinema). Such is the scale of the ecosystem, and how old, disused venues can be re-purposed.

I sat beside Mo Weigang who was the guest of honour and gave out the award to Venture Cinema. Mo is the head of the enterprise department of the Communist Youth League in Beijing. He has been driving entrepreneurship initiatives and the community has been reacting positively to it. The atmosphere in the Venture Cinema this afternoon was palpable. The auditorium was completely filled including the stairs. I think there were more than 200 people present. Most are young graduates. Can’t imagine that happening in an old cinema in the Bay Area.


Zhongguancun taking shape

Today was the third meeting for the Beijing Committee for Youth Entrepreneurship organised by the Beijing chapter of the Communist Youth League. The CYL is famous for its alumni of political leaders who rose through its ranks to later lead China, including Hu Jintao and Li Keqiang.

The initiative to revamp and rejuvenate Zhongguancun is taking on momentum. Among the list of gripes, lack of cheap working space for like-minded entrepreneurs and investors to gather, lack of structured seed financing, and lack of training similar to Y-Combinator (or “YC” in local parlance).

The increasingly larger group was hosted at the office of Beijing Software and Information Services Exchange, a sort of clearing house for intellectual property registration, commercialisation and financial advisory services. The meeting lasted from 2pm to 6pm, followed by networking over dinner until 8pm.

This has been the most productive meeting so far because of the range of topics discussed and the depth that each important topic could be dived into because of the time we had. Dinner (and copious liquor) certainly helped to break more ice. I expect many partnerships and initiatives to come out of this committee.


Burpple and Series Seed

Burpple has announced that they have raised USD 500,000 from a group of investors including us: TechCrunch, e27, Forbes.

Burpple is more than an investment. It is symbolic of our commitment to Singapore and the larger Southeast Asia tech ecosystem,. Burpple is the flag bearer of a new wave of tech entrepreneurs, many of whom are housed at the new Blk71. The “Burpple Boys”, as they are popularly known, are key community drivers, are humble, and work hard.

We are proud to be part of this journey with the awesome team driving Burpple’s phenomenal growth in users and engagements.


Why we moved to Zhongguancun

When Quest started, we worked out of a service office in CBD and took meetings at the cafes nearby. One of our favourite meeting places was the Hong Kong cafe at Guomao before it had to shut down due to renovations by the mall.

One day, Zhaoying, our super plugged-in marketing manager, said that there was a new co-working space that was launching at Zhongguancun, and asked the company to consider moving there.

To put things in perspective, all VCs work out of either CBD or Financial Street. Only one well-known fund — Innovation Works — had located itself in Zhongguancun and even that was due to its need for incubation space as it runs acceleration programs.

The name Zhongguancun literally means Zhongguan Village. Lenovo (Legend) started from a tiny shop here, as did many hardware companies of that era. Baidu, Sina and Google had their offices there too. So it was already a vibrant tech hub in its own right. The only issue was no investors were based there as it was far away from the city center.

Zhaoying arranged for a site visit and a month later, we have moved into our new office at the Kumi Co-working Space, one floor above Innovation Works, and thus becoming the first VC we know to move into Zhongguancun.

Kumi’s layout was not optimised. Lack of full-height walls meant that our co-working neighbours could hear our discussions. But we had fantastic views of the western mountains of Beijing and we didn’t complain. Unfortunately, Kumi had to shut down within a year due to poor management (their staff were great though) and we moved next door to Virtue Inno Valley, managed by Tsinghua Science Park, and where I am writing this now.

We are now an anchor tenant at Virtue Inno Valley and the only VC based here. It’s right above the Zhongguancun subway station and in the heart of what we think will become the Silicon Valley of China. Formerly a building of computer peripherals shops, the government is planning to gradually remove these merchants and replace them with startup cafes, co-working spaces and offices. Next to our tower stand the offices of Sina, Microsoft, and Founder.

We are looking forward to the transformation of Zhongguancun.


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