The Young Investor at the Center of Vietnam's Startup Explosion
WHY YOU SHOULD CARE
Because Ho Chi Minh City is a mini Silicon Valley in the making.
By Daniel Malloy
Eddie Thai was just a kid when he started visiting some of the roughest neighborhoods in Philadelphia, where his father owned rental properties. He remembers being told to be careful when playing outside, though he didn’t understand why. When he got older, he gained an appreciation for his father’s side business — in addition to his job as a professor, Khi Thai played anti-slumlord: He bought cheap buildings, fixed them up and rented them at reasonable rates. Today, the younger Thai recalls it as his first lesson in doing well while doing good.
Those values now drive Thai, 32, in Ho Chi Minh City, where he is general partner for 500 Startups Vietnam. (The investment fund’s flagship is in Mountain View, California.) “You don’t just have to go into politics and the nonprofit world to serve folks; you can actually serve through business,” Thai says, reiterating the cheerleading line of so many techno-optimists. But is there cause for such optimism in Southeast Asia? While Vietnam’s burgeoning middle class drives growth, the one-party Communist government remains unpredictable. And the homegrown industries that Thai is looking to foster are in their infancy. “As far as the economy or job creation, I would say it’s still small,” says Jeffrey Paine, a Singapore-based managing partner of seed fund Golden Gate Ventures. “They are not hiring tens of thousands of people.”
Breathless coverage painted Ho Chi Minh City as the next Silicon Valley, a notion Thai is quick to puncture.
Thai spent most of his childhood in Florida as a typical Miami Dolphins–loving American kid. But his parents, who left South Vietnam as war raged in the 1970s, brought with them their food, culture and language. A 2001 trip from north to south in Vietnam opened Thai’s eyes to the country’s potential, as he marveled at what the industrious people had accomplished without his many advantages. At Harvard, he caught the entrepreneurship bug, which was spreading fast in those days — Thai (Facebook user No. 240) was a year behind Mark Zuckerberg.
After a consulting gig and an MBA from Yale, Thai moved to Ho Chi Minh City in 2012 to work on mergers and acquisitions for a media conglomerate, with plans to jump into venture capital by 2020. But as he worked alongside startups in his day job, Thai decided to make the leap sooner. In 2014, ahead of his endlessly revised schedule by six years, he partnered with Silicon Valley seed fund and accelerator 500 Startups. Khailee Ng, a 500 Startups managing partner, says Thai has had to hustle to build local trust as a foreign-born Vietnamese, “but his perseverance has brought him far.” The accolades and media attention poured in from Forbes Vietnam (“30 Under 30”); Thai earned a speaking slot at the World Economic Forum in Davos, where he spoke on global entrepreneurship. Some breathless coverage painted Ho Chi Minh City as the next Silicon Valley, a notion Thai is quick to puncture — though he does believe his city can be “the Silicon Valley for emerging markets.”
A riot of motorbikes and skyscrapers, the 8-million-strong former Saigon is Vietnam’s biggest city. Even 40 years after the end of what locals call “the American War,” it retains more Western influence than does the capital of Hanoi. Leaders in the startup scene include plenty of U.S.-raised or U.S.-educated Vietnamese, but that’s changing. Rachan Reddy of IDG Ventures Vietnam compares Vietnam’s position to that of China not too long ago. Vietnam is starting to cash in on the potential of its 95 million residents and 49 million internet users. It’s re-emerging among world leaders in GDP growth (over 6 percent), and its universities are churning out engineers (100,000 in 2015, good for 10th in the world) to stock the local talent pool.
Most Vietnamese startups serve only their home market, which is fast growing, but still the 48th-largest economy in the world. A report based on data from Tech in Asia, one of the continent’s leading tech publications, showed just one Vietnamese tech startup had been acquired by a foreign firm in 2015. The problem isn’t the tech — it’s language. “If their English-language skills were as strong as the Indians’,” Paine says, “they could do a lot of damage in the region.”
So far, Thai has invested less than $1 million in 10 companies, while investors have pledged $8 million to his fund, he says. The investments, he adds, fall into two categories: an imitation of a successful American business for the Vietnamese market (e.g., a baby-products e-retailer modeled on Diapers.com), or a project drawing on Vietnam’s cheap talent to provide an innovative service. Thai’s favorite example: ELSA, an app that helps people learn English pronunciations — the biggest hurdle for non-native speakers — with voice recognition and feedback. Thai’s fund was an early investor, but now ELSA is making a splash in Google’s Launchpad Accelerator program.
Thai has a polished and clinical style, footnoting stories with data as he describes his life path and passions. Son Ha, whose furniture retail company Mitssy benefited from Thai’s guidance, says his first impression of the investor was “very cold,” but that eventually Thai revealed an outgoing personality. Indeed, Thai’s leisure-time pursuits sound much like that of your typical ambitious Valley-ite: He enjoys scuba diving and the geek-beloved board game Settlers of Catan, but rarely takes casual vacations. He looks settled in Vietnam for the long term; he recently lured back his Vietnam-born girlfriend after she’d spent 10 years in the U.S. Reddy envisions Thai leading a bigger fund that focuses on Vietnam or expands throughout the region.
“Vietnam has a lot of advantages that are not fulfilled,” Thai says. “I’m here to fill the gap. And I’ll do that as long as that gap is there.”
An earlier version of this article misstated the amount Thai has invested so far. It is less than $1 million, not $7 million.