[Vnbiz] Networking with Vietnam: Group's leader sees rewards for risks

[Tai Phan]

Networking with Vietnam: Group's leader sees rewards for risks
By John Boudreau
Mercury News <jboudreau at mercurynews.com?subject=LA Daily News: Networking
with Vietnam: Group's leader sees rewards for risks>
Article Last Updated: 10/28/2007 07:57:39 AM PDT



When Huy Do took over as chairman and president of the Vietnamese Strategic
Ventures Network in 2004, the organization's dwindling members wouldn't have
been enough to staff a small start-up.

Do and other leaders turned the organization around with a lot of hard work,
a shift in vision and a dash of serendipity. In other words, the usual
ingredients for Silicon Valley success.

The networking group now has 1,500 members, a chapter in Southern California
and plans to open an office in Vietnam soon. Do, an attorney who specializes
in international and intellectual property law, did not want the
organization to simply replicate other valley tech networks, such as TiE,
the Indus Entrepreneurs or or the Asia America MultiTechnology Association,
he recalled.

"People would say, 'They have bigger networks. And I don't care if you are a
venture capitalist of Vietnamese descent or Italian descent. I just want the
money!' " he said.

So Do and other members of the VSVN leadership team focused on their areas
of expertise - doing business in Vietnam and the local Vietnamese community.
The rebranded organization also got more than a little boost from good
timing: Vietnam, which just recently joined the World Trade Organization,
has become the new hot spot for global entrepreneurs.

In August, VSVN hosted a conference in Palo Alto that drew hundreds of
participants, from officials from Vietnam's Communist government and Ho Chi
Minh City start-ups to local VCs and
representatives from Google.

Do recently sat down to talk about his vision for his growing organization,
the changes occurring in Vietnam and the sometimes rocky relations
between *Viet
Kieu,* or overseas Vietnamese, and their homeland. Here are edited excerpts
from the conversation:

*Q*Unlike other groups - the Indians, Chinese, Taiwanese - many Vietnamese
first came to the United States as refugees fleeing the Communists who took
over South Vietnam in 1975. How has the Vietnamese community here reacted to
efforts to develop business links between the valley and the Southeast Asian
country?


*A*In 2001, when we held a conference at Stanford, we saw an organized
effort to protest. We haven't seen that since then. We see increased
membership. We see increased non-Vietnamese joining our network. We see
investors going to Vietnam. But we don't see proportional e-mails protesting
us. I can only speak anecdotally, but it seems people are beginning to
accept the fact that there is a group of people from the valley doing
business in Vietnam. They are not doing it to endorse the political
underpinnings of the government.

*Q*Certainly, the United States and Vietnam have inched closer during the
past six years.


*A*The reality is, the U.S. government has endorsed Vietnam. The BTA
(Bilateral Trade Agreement between Vietnam and the United States in 2001)
laid a path for Vietnam to join the WTO because the requirements for the BTA
were in line with the requirements for the WTO. I still see people having
issues with Vietnamese people in the United States doing business in
Vietnam. But I think they are recognizing these guys are not endorsing
anything. I wouldn't say the tension has gone away, but it's definitely been
reduced.

*Q*Though the Vietnam War ended more than 30 years ago, the wounds still
exist.


*A*Dialogue about this is very hard because there is a lot of emotional
turmoil. It's not un-based. These people lost a lot. They had businesses.
They were professionals. They were having a good life and it was totally
turned upside-down. They lost friends in the war. It's a tragedy. Those are
losses you can't get back. But if you look back and see how Vietnam was in
1975 and in the early '80s, and look at what has transpired since then, it's
a different place. Hopefully, it has been transformed on a permanent basis
and it's not just a façade. I think it's on a permanent basis. There are too
many foreign investors there now.

*Q*Is the Vietnamese government, which realizes the important role Viet Kieu
can play in the economic development of the nation, doing anything to help
improve relations with overseas Vietnamese?


*A*I think they are. There are two types of Viet Kieu: the ones who go back
and start companies, and those who are very successful in large U.S.
companies. They have decision-making authority with Sun Microsystems or
Texas Instruments or Microsoft or Intel. They are behind the scenes pushing
their companies to go to Vietnam. The Vietnam government sees both of them.
I think they are reaching out. I don't know if it's enough, but they are
reaching out. There is the new visa (classification). If you are a
Vietnamese and you live abroad, they will give you a yearlong visa. They
also have a special Vietnamese Abroad Committee. The committee is under the
Ministry of Foreign Affairs. When government officials visit here, they
reach out to community leaders.

*Q*Do you visit with high-ranking Vietnamese officials?


*A*It's useful to talk, but given my role at VSVN, I want to keep everything
business-focused. So I'm careful of what I do because what I do reflects on
VSVN. I don't want my actions to reflect on VSVN in any way other than as
commercial ones. We are a business support group. It's best to keep VSVN
focused on what we are about.

*Q*Like any developing country, Vietnam offers both rewards and risks to
investors, multinationals and entrepreneurs. What are the risks of operating
in Vietnam?


*A*The biggest risks are knowing how to work with the government, and
complying with the U.S. Foreign Corrupt Practices Act (which has
anti-bribery provisions and guidelines for accounting transparency). Under
the act, you can't give gifts to government officials for any purpose. But
sometimes that doesn't jibe well with local practices. Culturally, you take
people out to dinner and give them small gifts. So you have to put in
guidelines for people to comply with.

People don't speak English very well, so there can be misunderstandings.
There is a risk that disputes can't be resolved with a sophisticated
understanding of international law because it's new there. They've just
entered the WTO. Judges there aren't trained to the standards multinational
companies are used to. So enforcement can be a tricky issue. There are still
abuses in the judicial system. They don't have the independence they need
without the fear of repercussions. Those are big issues companies face when
they go to Vietnam. And there aren't that many licensed lawyers in Vietnam.
The people there work hard and are smart, but these local lawyers aren't
used to arguing big cases.

*Q*Still, from a business perspective, Vietnam is a success story. The
government expects economic growth to jump from 8.2 percent last year to 9
percent in 2007. Its population of 84 million is young and companies from
Intel to Google are looking at the Southeast Asian country. How would you
describe the opportunities that are there now?


*A*In Vietnam, being the first mover is almost like having a monopoly hold
on the marketplace. The structure in place there lends itself to incumbents.
To displace an incumbent is very difficult. I don't think there will be
three or four Web portals; I think there will be one or two, and

one will have a substantial market share. Here you have three big search
engines - Google, Yahoo and MSN. Vietnam is not a big enough market for
three.

The window of opportunity in Vietnam - to make the most money - will be in
the next five years. If you have a good business plan, the right partners,
you can do very well for yourself
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