Good Evening, Vietnam…

Imagine all the people in Times Square in New York City or Central in Hong Kong or Piccadilly Circus in London…then double it…then put them all on motor scooters – which is what my family and I experienced in Ho Chi Minh two nights ago. An ambitious American entrepreneur here has built a business providing evening Vespa tours, stopping at various street food stalls eating your way across the city over four hours. It is chaos here but among all the bedlam the city actually seems to work.

I have been captivated by this country for many years (having grown up in Hong Kong in the ‘70’s when the “Vietnamese boat people” escaping persecution literally washed ashore daily). There are 92 million people in Vietnam, making it the 14th most populous country in the world. There are 36 million internet users and 20 million Facebook accounts. Analysts estimate that ~65% of the population is less than 35 years of age. And while it is a technically a Socialist Republic, incredibly exciting entrepreneurial forces have been unleashed. The GDP is $142 billion and has experienced a trailing 10-year annual growth rate of around 7% per annum. Many believe that if the total “cash economy” were included, the GDP would be 50% greater. Some other fun local facts:

  • The lead story in today’s Vietnam News (local English paper) trumpeted that this March Vietnam will have the lowest increase in monthly inflation in ten years (0.08%) – reflecting increased stability – annual inflation is now running less than 5%
  • The World Bank just loaned $100 million to build public IT infrastructure
  • Intel invested $1 billion in a chip plant in Ho Chi Minh
  • Samsung just built a $2 billion production facility
  • Retail consumption is estimated to be $23 billion but there is only the beginnings of an e-commerce economy – people will often buy cars with cash (there are 21,000 Vietnamese Dongs to $1 US dollar – which my son finds hilarious)

And yet it is “under venture capitalized” – there are fewer than six VC firms that matter and increasingly a handful of incubators and accelerators. My great pal, Henry Nguyen, runs the leading VC firm in the country – IDG Ventures Vietnam, which manages $100 million and has invested in nearly 30 companies. He also has just opened the first McDonald’s the country – and his midnight tour of that store and the “back of the house”  may have been one of the highlights so far for my kids and me!

This flagship store is simply killing it! Running 24 hours a day and employing over 250 people, we visited at shift change. The grand opening last month was the third largest in McDonald’s history – behind store openings in Russia and China (Henry quickly pointed out that those stores were twice as large as his which is only 13,000 square feet). The lines are so long that there are red velvet ropes to queue everyone outside. In its first month they served 61,890 Big Macs. A typical drive-through can handle 60-70 cars per hour; Henry has processed as many as 144 cars per hour at peak times. They are typically serving over 1,000 customers each hour. We stood with the woman who initiates each hamburger order – she was simply amazing. All the lettuce is hand-cut as there is not a vendor in Vietnam that can deliver fresh-cut lettuce.

The next day Henry and I spent some time discussing the healthcare scene in Vietnam (My firm, Foundation Medical Partners, is privileged to be working with some of the most important global healthcare companies so I am always interested in what is happening in other parts of the world). Not surprisingly there is much work to be done but he was excited by some of the recently launched telemedicine initiatives (Henry has an MD as well as an MBA) and the introduction of some “light weight” consumer healthcare engagement platforms – but this is still a country without EMR’s for the most part and only recently have new private hospitals opened. Much of healthcare is being delivered today in the pharmacy as doctors make most of their money filling prescriptions. Many wealthy Vietnamese with complicated cases leave the country for care.

Before leaving Ho Chi Ming for Da Nang it was important to visit the War Remnants Museum, which is in the heart of the city and vividly portrays the horrors and consequences of the war. Scattered around the grounds surrounding the museum are captured American tanks, troop convoys, planes and other heavy armaments – which inadequately prepared us for the horrors depicted inside.  Nothing fancy, in fact the photos are stark and speak for themselves, the artifacts are irrefutable. The “Agent Orange” room is haunting. As an American you experience a confounding array of emotions as you pass from room to room: obviously there is horror, some confusion, some shame, deep and profound sorrow – probably some anger realizing that history does indeed continue to repeat itself. I am still trying to reconcile those feelings a few days later.

There are echoes of the war everywhere you go in Ho Chi Ming but with the exceptional youth of the country comes great optimism. The entrepreneurs one meets are very much excited about what is possible, and like my kids, seem very focused on the future.


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11 responses to “Good Evening, Vietnam…

  1. What’s so hard to take in is how some 55,000 Americans lost their lives, and millions of Vietnamese, in a conflict to “save” Vietnam from a future under Communism. Yet you go there and it’s the most bustling, exciting place, with predominantly happy and ambitious people. And we expected at least pockets of hostility toward Americans, but never found any sign of it. The people were kind, gracious, and understanding. “Don’t feel bad about losing the war. Things like that happen.”

  2. C.A

    I love your posts. Always substantive and insightful. Keep them coming!

  3. Charles L Cooney

    three years ago when traveling in Viet Nam I was also struck by the vibrancy of the city culture and the calmness of the countryside. a sting work ethic and dedication to moving the country to a new place. There has been a movement to a manufacturing economy with good and relatively inexpensive labor. the challenge is moving up the technology ladder as there is limited research capability and technically trained human resource is still limited. both of these sectors of the economy need work but the foundation on which to build is there. i look forward to hearing more of your impressions of opportunities for technology based entrepreneurship, especially beyond software and ICT. hope you enjoy the trip as much as we did.
    Charlie Cooney

    • spot on Charlie – simply amazing place. my third trip in 6 years and remarkable the changes even in such a short period of time. it tracks remarkably to the china market developments, but later by 5-7 years. seems so inevitable. and what wonderful people. will be interesting to see how they handle healthcare issues. see you soon at deshpande reception!

  4. Misrach

    For the United States, Vietnam War is a somber reminder of the loss of too many young Americans, but it seems like Vietnamese people have moved on from the past and are focusing on the present and the future. This is the latest trend that I have observed of the countries that have had horrible war within or with other nations. Younger generation does not care anymore which party system is in ruling. It’s interesting to see their main focus is on economic development of the future. This makes you think, there might be all kinds future possibilities for international businesses.

  5. Diane Hessan

    Provocative and so interesting. I hear that the Vietnamese call it The American War. Thanks Michael.

  6. Hunt Henrie

    My dad was in the Vietnam War and I have heard many stories of his time there…some good and some bad but he always spoke highly of the people (in the south of course). Sadly he passed away before I could get him back to visit, but I plan to travel there soon. By the way, do you think you would find the same environment in Hanoi/the northern part of the country?

    • complicated times for sure but the Vietnamese seem to be very much focused on the future and are excited about that. Many that I have chatted with feel greater animosity to other countries than ours (China, Japan as they occupied this country longer). am amazed at how warm everyone is – and young!

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