Silicon Valley Investor: This is Why Vietnam Is One of The Hardest Market I've Ever Seen | EP 383
Vinnie Luria, founding partner of Golden Gate Ventures, shares insights on scaling businesses globally, emphasizing that failure often stems from people and cultural misunderstandings rather than strategy. He highlights Vietnamese founders' resilience and tech talent, but warns against premature US expansion and horizontal scaling. Key lessons include building trust authentically, adapting to local markets, and understanding true competition.
Key points
Detailed summary
Market Difficulty and Scaling vs. Expanding
Vietnam is described as one of the hardest markets to do business in, alongside the US. The speaker questions the logic of moving from one hard market to another. The host distinguishes between scaling and expanding, noting that she feels she is 'growing chaos' instead of scaling. Scaling involves using technology and putting people on the ground, as seen with Google, Meta, and OpenAI.
Primary Reason for Scaling Failure
Scaling failure often comes down to people—specifically leaders and the choices they make. CEOs fail when they go too wide too early, cannot align incentives, or get too ambitious about entering multiple markets at once. The key to global success is the founder's ability to scale themselves: hiring great leadership, sharing responsibility, and building a disciplined team.
Vietnamese Founders: Superpowers and Blind Spots
Vietnamese founders' superpowers include resilience and strong tech talent. However, blind spots include targeting the US as the next market (like jumping from high school badminton to the Olympics), not leveraging international experience, and going horizontal too quickly. VCs prefer founders who are 110% focused on one idea.
Importance of People Skills vs. Technical Skills
The speaker believes people skills are more important than technical skills because tech talent can always be hired. He spends time understanding a founder's motivation, history with co-founders, and potential to lead. The VC model looks for 10% of investments to be huge, so they take risks on people.
Cultural Gaps and Transcreation
The greatest founders bridge cultures rather than cross borders. Cultural gaps are the hardest part of global business. Transcreation—creating a new product adapted to local conditions—is essential. Example: Carousell's light version for Indonesia due to slower bandwidth.
Contract Fluidity and Trust
In emerging markets, contracts are fluid and require adjustments as conditions change. Trust is built differently: in Asia, it takes time and involves due diligence on authenticity and behavior during tough times. The speaker learned to dress formally in Vietnam and bring a team to meetings in Japan.
Most Expensive Mistake: Rakuten in Indonesia
Rakuten lost $10-15 million in Indonesia because they didn't hire the right local team or give them authority; the operation was run from corporate. This contrasts with Tokopedia (local team) and Shopee (international team with capital). The failure came down to team and culture.
Key Takeaways for Cross-Border Business
Adaptability is crucial, balanced with strong leadership. Determine if you are pulled into a market by demand or pushing yourself in. Understand true competition—often old behaviors like cash, not just other tech companies. Solve the pain point the way customers need it, which may differ by market.
Transcript
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