Starting up enterprises to be supported soon

Binh Duong is a province of dynamic industrial development; the provincial leaders are very interested in starting a business and developing a start-up eco-system to create the most favorable conditions for start-up businesses to develop. On this matter, Binh Duong correspondent interviewed Nguyen Quoc Cuong, Director of Department of Science and Technology.

Production is on-going at Vina Reishi Herbal Joint Stock Company at Lai Hung Commune in Bau Bang District. Photo: Hoang Pham

- Starting up is the concept that has been mentioned a lot recently, especially in the mass media; however, misunderstanding remains for the concept. Please raise your opinion about this.

- Not only in Vietnam but all over the world, up to this point the exact definition of start-up is still widely debated. As a general understanding, starting a business is a young entrepreneur has just been established and is initially developing. Small startup companies are initially financed and run by a small number of founding members or individuals. These companies provide products or services that are not yet available on the market, or the founders believe that those products and services are being offered ineffectively. Typically, startup companies deploy technology, such as the internet, ecommerce, computers, telecommunications or robots.

In my view, startups are organizations founded to find a business model with high growth potential and repeatability. Starting up does not necessarily have to be in the technology field, not necessarily venture capital. The only important thing is growth. Everything else involved in starting a business comes from growth. Growth potential can be understood as the growth rate of sales, the number of employees or both, or the expansion of the size of the business to provide its goods or services to a broader market.

Starting a business is different from a normal business startup in that a startup is a temporary organization designed to find a product that matches the market and business model. On the contrary, starting a business is to make a proven business model that requires financial investment from the beginning with the expectation of immediate returns.

- So, what criteria are required for startups and what challenges would lie ahead, sir?

- As I said before, the most important thing for startup projects is that they have to find a business model that is fast growing and repeatable. Opening a pho restaurant or a cafe can also be called a start-up, as long as the models have to be different to be able to replicate and create growth.

Startups projects have to deal with more difficult problems than ordinary businesses, and their failure rate is even huge, because startups are of people of passionate and dreams and ideas but startups lack too many elements needed to successfully start a business. Specifically, the six elements: human resources - teamwork, the ideas; material - facilities, office space, workplace, finance, capital to operate, survival and development; relationships - connection with experts, with consultants, tutors, large businesses, and other business entities, the ability to commercialize products; many startups have the ability to create good products but they have difficulty in bringing products to the market; capacity - ability to manage and operate its own startups.

That is why in recent times, business ‘incubation’ centers, start-up support centers, business promotion organizations and investment funds have been promoted and developed in Vietnam, in the hope to reduce the difficulties faced by startups so they have a greater chance of success.

- For a long time, many think that startup mean the work of an operating company. However, in the reality, even big and very big enterprises may face degradation and in the worse scenario, bankruptcy, if they are not active enough in starting up. Please raise your opinion about this.

- In large businesses, startup is a very common practice and I think they may be called internal startups or startups in the parent company. In the process of development, businesses will have the need to expand their business into new occupations, new product lines, new areas, new segments, new brands etc. One of the solutions to expand business is an internal start-up.

Startups inside a mature business will have a much greater chance of success than other startups, because these startups often receive a lot of support from the parent company, such as the facility, human resources from the parent company and even their investment capital that need not be mobilized from the outside. In addition, the most important factor is the parent company's experience and relationships with market partners.

Internal startups are helpful for parents companies to practice renovation and development to increase adaptation to changes and bring long-term profits.

- Please inform us of decisions of the province to construct favorable startup ecosystem for startup projects in Binh Duong.

- The ecosystem is considered a favorable environment for start-ups. Through learning many models of start-up ecosystem development, the State plays an important role in promoting the formation and development of early-stage ecosystems. In Binh Duong, building a start-up eco-system is not only the implementation of the contents of Project 844, it is also in the development orientation of Binh Duong Smart City under the decision approved by the provincial People's Committee. Therefore, building and developing a start-up eco-system is a matter of particular concern.

Provincial People’s Committee assigned Department of Science and Technology to host the consultancy of assisting the development of ecosystem for startups to reform and renovate locally. I believe that startup projects in Binh Duong shall soon be assisted that way.

- Thank you!

Interviewed by Tieu My – Translated by Vi Bao