Editor’s note:
This is the first interview in our AVYLD Q&A series with prominent Australian and Vietnamese leaders. We hope that our interviewees will inspire the next generation of leaders in Australia and Vietnam to build deeper connections between the two countries.
Phuong Mai Hoang is one of the founding partners of Seedcom and former Managing Director of Vietnam Australia International School.
Phuong is one of the founding partners of Seedcom, an ecosystem that empowers retail, e-commerce and agriculture businesses in Vietnam. Previously, he was the Managing Director of Vietnam Australia International School and co-founder Viet Tinh Anh. Phuong has also worked at Mekong Capital where he was a Board Member of investee companies such as The Gioi Di Dong, Maison Co. and Vietnam Australia International School (VAS).
Tell us a bit about your background.
I graduated from the University of Economics in Ho Chi Minh CIty when Vietnam just opened up to foreign investment. Many foreign companies and organisations were starting to invest and expand their operations into Vietnam, especially in Ho Chi Minh City. I had the opportunity to work for both domestic and foreign companies and organisations such as Unilever, Tetra Pak, Mekong Capital and the Vietnam Australia International School.
What inspired you to move from the world of corporate to entrepreneurship?
I have diverse experience in marketing and business planning but also in venture capital where my role was to invest in Vietnamese companies with high potential. However, the role that had a remarkable impression on me and inspired me was being the Managing Director of the Vietnam Australia International School (VAS). I had the opportunity to apply my management knowledge and expertise to an organisation of more than 1000 employees including teachers and staff, as well as to about 4500 students. I learnt a lot about management in that role such as business administration, managing talent and being an inspirational leader.
With that experience, I decided to follow the entrepreneurial path by investing my own money into business ideas that involves creating products and services that provide value to customers but also creating a working environment where team members can develop themselves professionally, are financially better off but also become an inspiration for their peers, customers and the community.
A motivation but also challenge for me as an entrepreneur when building a long-term, sustainable company is on maintaining integrity — ensuring that this value of keeping our promise is lived by in every single word, action and process by our staff and leadership team in the company. It is a mountain with no summit that I aspire to conquer.
Looking back at your last 10 years of corporate and business experience, what have you learnt?
I learnt a lot about business strategy from successful entrepreneurs and how to allocate resources and delegate efficiently from foreign companies when I was working in corporate. I also discovered that when plans and procedures are executed with discipline, the results exceeded my expectations. I could also see the weaknesses from businesses operating without integrity, for example, not being able to fully commit to a product or service, not living up to promises with colleagues or customers, etc. These reasons often prevent Vietnamese businesses from scaling into large businesses or even grow sustainably. This is the reason why Vietnam has so many small and micro businesses, while very few can establish themselves beyond Vietnam’s border. The companies with this mentality influence and change the business landscape of Vietnam.
Is there anything you would have done differently or applying now from lessons in the past?
One big lesson that I’ve learnt and would do different is to share and trust my business partners much more. I had the chance to work with and witness the growth of an enterprise in Vietnam, The Gioi Di Dong (Mobile World). When the business was still small, Mobile World already had a profit-sharing policy in place for their employees. The more profits created, the higher the salary and benefits received. Competitors couldn’t poach their employees because no one could compete with their salary package. Moreover, Mobile World also turned these team members from employees into business partners of the company. The biggest cultural differentiation of the company is the trust they place on teamwork and trusting staff to deliver on promises and execution. Mobile World surpassed all previous companies established before it to become one of the first wave of companies in Vietnam’s electronics consumer industry to be valued at US$1 billion in 2016.
My colleagues and I are applying this lesson into building our own businesses. We want to bring something unique and innovative to Vietnam.
Can you tell us why you and your co-founders started Seedcom?
Vietnam has the 14th largest population in the world of over 90 million people and 70 per cent are of working age. This demographic gives way to a huge and growing consumer market. Currently, the consumer market in Vietnam is worth about US$90 billion with nearly 1 million retail shops. There is also a rapid expansion of supermarket and convenience store chains by both domestic and foreign companies. We saw many fascinating business ideas in the market that nobody were capitalizing on or weren’t executing in a serious manner by providing consistent value to customers.
Seedcom targets mainly the retail, e-commerce and agricultural markets. Even though the consumer market has a lot of potential, it is still a big challenge for Vietnamese SMEs to operate efficiently ranging from inventory management, product display, delivery to managing distribution channels, online marketing and maintaining a user-friendly website. Managing the whole pipeline requires a lot of experience and expertise which majority of Vietnamese SMEs are unable to do so unless price is affordable.
What is Seedcom doing that’s innovative in the Vietnamese market?
Seedcom has set up an ecosystem which helps Vietnamese SMEs to manage their businesses in a more efficient and affordable manner. In particular, Seedcom co-operated with Haravan to build a comprehensive e-commerce platform which involves introducing new products, inventory management via POS (using KiotViet or iPOS) and connecting suppliers (Thi Truong Si) with delivery and payment services (Giao Hang Nhanh) throughout Vietnam. This ecosystem is providing the platform for retail enterprises in Vietnam which Seedcom founded and jointly manage — such as Juno, The Coffee House, Cau Dat Farm — to scale and expand at a rapid rate.
Seedcom has worked with some very successful startups and enterprises such as Tiki and Giaohangnhanh.com. What do you think are the attributes of a successful Vietnamese entrepreneur?
Based on working with the young enthusiastic entrepreneurs that Seedcom partners with, I think they all share the same common values of courage, boldness and perseverance, that is, never giving up on their dream. They also believe in sharing their success with their team including their employees.
Another big difference that sets these startup founders apart is their focus on prioritising customer-first by providing a 5 star experience to their customers. Juno has a 90 day return policy, no questions asked. Giaohangnhanh provides 24/7 delivery service. Tiki delivers and accepts returns at no charge. They keep trust with their customers by committing to what the say.
Furthermore, despite achieving considerable success in their entrepreneurial journey, these founders are constantly curious about best practices and how to improve their business by researching, experimenting and applying new methods to their business.
What are the opportunities for Vietnamese entrepreneurs exporting to Australia? What are the challenges do you think these entrepreneurs will face?
I think the two-way trade between Australia and Vietnam in recent year have been increasing and approaching to $10 billion, which includes about $5 billion of exports from Vietnam into Australia. Given such large trading activity between the two countries, I trust that Vietnamese and Australian businesses will have plenty of opportunities to trade based on their competitive advantage.
When I arrive in Australia, not only do I find that Australians are very friendly but domestic consumption is also very strong for a country with over 20 million people. The Australian government also has policies that are very supportive towards Australian businesses.
Nevertheless, I think the first barrier for Vietnamese entrepreneurs wanting to operate a business in Australia is the high cost of labor. This has significant impact on industries such as retail and hospitality. Compare to Vietnam, there are less staff in restaurants, less support staff and delivery of goods will take more time. Salary and wages makes up the majority of operation costs for those involved in manufacturing, leading to a higher unit cost of production (regardless of the level of quality). Automating certain tasks that involves human labor is a key factor to increase competitiveness in Australia.
I think there’s an opportunity for Vietnamese businesses to export consumer goods that meets international standard and have more competitive pricing since the associated costs would be cheaper in Vietnam. Examples include shoes, bags, clothing and some agriculture products such as coffee and cashews nuts. Seedcom is exploring opportunities to export female footwear and Arabica beans into Australia.
The common challenges expanding to the Australia are non-tax barriers such as quality, technology and regulations. This applies to all exporters in every country. I think the specific challenge that Vietnamese entrepreneurs will have to face when exporting to the Australian market is their ability to produce quality goods in the long term under high volumes. This requires the commitment of the leader investing in human capital, technology, process and governance.
Lastly, can you provide some advice for first time and young entrepreneurs, especially those who are Vietnamese students studying in Australia?
Startup is a very difficult journey. Ask yourself why you would want to start a startup. If you want to become your own boss, earn alot money and/or raise money from angel investors etc. then don’t do a startup.
Doing a startup is about making products or delivering services that have significant impact on the existing market, which no one has done or is unable to do so in the most efficient way. My advice to those who’s dreaming of building a business of their own: be sharp in finding disruptive ideas, equip yourself with enough knowledge to operate a business or build a team that know how to effectively manage an organisation and lastly, execute – test – fail – and repeat until you find a business model that works and never give up.