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.