Starting a business in Vietnam: test the idea first

To start a business in Vietnam as an Overseas Vietnamese, begin with a problem people will pay to solve, earn before you raise, and test small before you quit your job abroad. That is what the founders we have heard from would do first.

This is one part of The OV Guide to Building a Business in Vietnam, the members' guide built from OV sessions and the OV Podcast, with founders in logistics, media, deep tech, payments, education, F&B and AI. It is updated every month.

Many Viet Kieu plan a business in Vietnam while still in a job abroad. You may not need to quit tomorrow. You do need to stop treating the plan as a future version of yourself and start testing it.

Start with a problem, not a business idea

Do not start with "what business should I start in Vietnam?" Start with: what painful, valuable, local problem am I solving?

Quoc Luong, founder of Realtime Robotics, set out to use drones in Vietnam. His team bought drones from several makers, found that none could do the job, and built their own. His rule:

"The first thing is that you have to pick the right problem. If you can find a solution to that problem, there must be a lot of people who need that solution. Otherwise, you cannot sell."

Michael Liebmann of Dream Lab AI has the sharpest test. When founders show up with an app, he tells them to put it away:

"I don't want to look at the app. Bring me twenty people who validate the problem, twenty people who say, 'Yes, I have this problem and it's difficult for me.'"

Then ask why those twenty have not solved it already, and what they gain once it is solved. If the answer is "nice to have", move on.

Know which Vietnam business you are building

Be precise about the game you are playing. Each needs different things.

• For Vietnam: Vietnamese customers or companies, like the trucking marketplace Logivan or the media company Vietcetera. You need deep local knowledge of customers, pricing and distribution.
• From Vietnam: Vietnam is the base and customers are global, like Lumiere Education. You need world-class standards. Lower cost is not lower quality.
• Through Vietnam: cross-border work, with Vietnamese firms going abroad or foreign firms coming in, like the payments company Inflow, which runs its Asia office from Vietnam. This is where Overseas Vietnamese often have an edge, because they can work on both sides.

Earn before you raise

Not every Vietnam business should raise venture capital. Stephen Turban built Lumiere Education without outside money. His advice to most first-time founders, unless technology is the core of the product:

"Just get some people to pay you some money."

Starting is cheap. Michael Liebmann says a first test of a business in Vietnam can run on a few hundred dollars a month. A founder who needs $10,000 before starting waits for investors. A founder who needs a few hundred can start now.

Raising is not proof either. Robert Huynh raised more than $1 million for his first startup in Vietnam, and it still failed:

"As first-time founders, we conflated having investment success with startup success. Those are totally different things."

Some businesses do need capital early: deep tech, logistics, marketplaces, fintech. Even there, Vietnam's costs help. Quoc Luong pays about $1,200 a month for a building in District 9 that he estimates would cost at least $30,000 a month in the US.

Test small before the leap

Robert's advice is to prototype: talk to customers, sell a service, test a landing page, spend a month in the market. Michael puts it more bluntly: "You don't learn until you launch. Action produces information."

Before spending serious money, spend on context. Tuan Le, who now runs the design studio The Lab Saigon and a group of food and drink brands, had a budget of about $45,000 for his first business and spent about $15,000 of it on the logo. Branding later became one of his strengths. The lesson was the order:

"If I were to do it again, I would tap into the community, learn whatever I can, and skip a lot of lessons that wasted time, effort, and money."

Talk to people who have built here, including those who closed, lost money or changed models. A 30-minute call can save six months.

A checklist before you spend serious money

• Why Vietnam, why now, why you? Are you moving toward an opportunity, or away from frustration somewhere else?
• What problem, and who pays? Twenty people with the problem, their current workaround, and what they gain.
• Which game? For, from or through Vietnam.
• How will you fund it? Revenue first, unless the business needs capital to exist.
• What has to be translated? Pricing, sales, trust, payment terms, language.
• What are the numbers? Startup cost, monthly burn, margin, and how long you last if revenue is slow.
• Who is around you? Founders, an accountant, a lawyer, people in your sector.
• What is the smallest test? Something you can run this month.