I’m Alan — a Vietnamese-American entrepreneur, and the founder of a software company called CrewFire — a word-of-mouth marketing platform for businesses.
As of March 2017, CrewFire has helped brands engage over 5,000 advocates, who’ve created over 65,000 social media posts, reaching over 10 million impressions on Facebook, Instagram, and Twitter.
We build a product people love, and get to spend our days working on fun, interesting challenges with a team of smart people, all on our own terms.
Thanks to those guys and others, a lot of this advice has found it’s way into the conversation in Western startup and tech communities.
But in my 3 years living in Saigon, I’ve noticed that much of this wisdom has been missing from the conversation in the Ho Chi Minh City startup and tech community — a disservice to the next generation of young, hopeful startup founders here.
Indeed, this post could just as well have been addressed to any hopeful entrepreneur, anywhere the world – the lessons are universally applicable – I just want to point these things out to young Vietnamese entrepreneurs in particular, since nobody else in Vietnam seems to be talking about this stuff yet.
That’s a glaring and unfortunate omission, in my opinion, so let’s do this…
1. Build a product people pay for.
Brilliant, right? This idea is so simple, it almost feels silly saying it.
But through my experiences engaging with local startups, universities, code schools, and accelerators in Vietnam, I’ve encountered many young entrepreneurs with ideas for startups that don’t follow this simple rule.
Examples of startups ideas that aren’t “products people pay for” include marketplaces (connect buyers and sellers of X, AirBnB for Y, Uber-for-Z, etc…), social networks, games, and any idea where the business model involves ads.
The reason these types startup ideas are popular is obvious: most of the big, multi-billion dollar “unicorns” of our time fall into these categories: Facebook, Twitter, AirBnB, Uber, Snapchat.
And in Vietnam in particular, the runaway success of Flappy Bird has lured many young developers to the siren-call of mobile games.
These hits dominate the headlines, our screens, and our mindshare, so it’s only natural that young entrepreneurs take stock of the products they see, use, and hear about daily, and think of similar ideas.
While these types of businesses can clearly grow into massive “hits”, the problem is that, ironically, it’s harder to build sustainable, profitable businesses with them.
With marketplaces (connecting buyers and sellers of X, AirBnB for Y, Uber-for-Z, etc…), your business makes money by taking a small percentage of every transaction that happens, or by charging listing or advertising fees to sellers.
The big challenge with marketplaces, then, is that you need to be facilitating a huge number of transactions before your small percentage adds up to meaningful revenue for your business.
Said another way: marketplaces need to reach scale (a hard problem in itself) just to have any chance of working. And then, even at scale, you might realize you can’t make the business work.
Case in point: Uber, of all companies, is having this problem now, with pissed off drivers who feel underpaid, despite Uber massively subsidizing transactions, to the tune of a $3 Billion-dollar loss in 2016.
With social networks, games, and all other ad-supported business models, the story is similar: you need large numbers of users, to generate enough impressions, to sell enough ads, to run a sustainable business.
So, once again, you need to reach scale (hard) for the business to have any shot of working. And then, again, even at scale, you might realize that you can’t make the business work. Ouch.
This realization hurts. Trust me, I learned the hard way — my first ad-supported business failed.
So save yourself the hassle. Simply build a product that your customers use and pay you for.
You’ll start making money much sooner, and building a business is so much easier when you can make money early, at small-scale.
If you do this, it’s easier to bootstrap, meaning…
2. You don’t have to raise money (and you probably shouldn’t).
If you’re like me, a nice, private, profitable business making hundreds of thousands or millions of dollars a year sounds terrific. Sign me up.
Not so for investors.
Generally speaking, investors (particularly venture capitalists) don’t want to hold equity stakes in nice, private, profitable businesses.
They only make money when their portfolio companies have big exits — getting acquired or going public for hundreds of millions or billions of dollars.
Further complicating things is this fact: as founders, we tend to be “all-in”, with the majority of our net worths tied up in our businesses.
VC’s, on the other hand, have their money (other people’s money, actually), diversified across dozens businesses in their portfolio.
What this means, for most entrepreneurs, is that your financial interests are not aligned with most investors.
Because what matters to VCs is big exits, and their diversification hedges them against the downside of failure, they’d rather see you run your company into the ground in pursuit of a billion-dollar exit, than “settle” for a nice, private, million-dollar business.
That’s a pain we chose to avoid, and because we built a product people pay for, we were able to make enough money early on to liberate us from the need for outside money.
To be clear — I’m not completely against venture capital. There is a time and a place for it.
We might, someday, take VC ourselves.
But if we do, it’ll be after we’re already profitable, with proven product/market fit, and with a proven, repeatable growth strategy.
If we decide to raise VC at that point, we’ll be much more financially aligned with investors, since we’ll likely have been able to take some money from the business as profits, and we’ll be able to raise money on much better terms, retaining more equity and control in the business.
And that control — having the freedom to decide for yourself what’s important and how you should spend your time — is priceless.
With that control, you’ll be free to realize the ultimate, under-appreciated truth of startups:
3. Don’t stress yourself out.
The dark side of startup culture that glorifies stress, imbalance, and workaholism is absolute insanity, and it pains me to think of all the entrepreneurs (and their teams) who accept this madness as the cost of doing business.
That’s no way to build a business or a life.
Instead, recognize that the work habits, routines, and culture you build today will stick with you for a long time, possibly for life.
So why not build work habits that you wouldn’t mind sustaining for a long time, or for life?
Instead of going for 16 hour days, why not try get a solid 4–6 hours of work in every day?
No matter how many hours you work, there will always be more work left for you to do tomorrow, so leave some time in the rest of your day for other things that matter: family, friends, dinner/drinks/coffee, exercise, dates, hobbies, etc…
We live by this philosophy, and let our team live by it as well.
We’d rather give our team the freedom to work at a comfortable, sustainable pace, so they can be creative, productive, and happy over the long-haul, instead of burning themselves out in the short-term.
So, avoid burnout. Live a life outside of work. Relax. Meditate.
Enjoy your life. Let your team members enjoy theirs.
Because, in the end, there is no destination. Don’t stress yourself out on the journey, on the way to an end that doesn’t exist.
So there you have it —some non-traditional startup advice for young Vietnamese entrepreneurs.
A skeptic might challenge us, saying we’re not ambitious enough, or that we’re leaving money on the table.
Maybe we are leaving money on the table. But past a certain point, more money/users/marketshare/whatever doesn’t really matter to us.
Financially, we’re doing just fine. At our current growth rate, we’ll hit 7-figures in annual revenue next year, and fully intend to grow into multi-million dollar business in the years that follow.
Just how big will it get? Who cares? We don’t.
We definitely appreciate the money, it’s just not our primary motivation. We are vastly ambitious, just in a different way.
We strive to maintain positive, internal ambitions: to be creative, to serve others, to build products people love, and to work on interesting challenges with other talented, creative people.
Money is just a byproduct and baseline enabler of all that. It’s not our purpose for being in business, any more than breathing air is our purpose for being human.
And that, I guess, is the ultimate point of this advice — when you get down to our deepest why, most of us, generally, just want to live good lives.
And when you build products people pay for, opt-out of the fundraising racket, and shun the conventional wisdom of over-working, life can be pretty damn good.
Thank you for reading.
If you’re an entrepreneur in Vietnam, I’d love to hear from you. Email me at Alan@ZenHustle.com