1.Introduction and Context1.1 Introduction toVietnam:Vietnam is a Southern Asian country with a highpopulation around 96 millions of people (CIA, 2017). The country is unified in1975 after Communist from the North seized the South of Vietnam.
Two decadesago, people link Vietnam with images of the wars however nowadays, thatperception has gradually changed. Since the reformation in 1985, the countryhas adjusted its rigid policies in order to receive to a lot of economicopportunities and supports from foreign countries in term of capital investmentand knowledge transfer. Those premises set the ground that helps Vietnam nowadaysto achieve the annual GDP 6,2 % growth which implied “a strong domestic demandand strong manufacturing export” (CIA,2017).
Vietnam has a young populationfrom the age of 15 to 54 which occupied 70% in total of population. That numberbrought up a huge potential human capital. The young Vietnamese people are welleducated and have passion to change their lives and the world. A report fromGEM mentioned that “becoming an entrepreneur is the desire of nearly one-fourthof adults living in Vietnam” due to a high respect of society and theattraction of becoming prosperity (Gem Vietnam report, 2015). A lot of youngVietnamese had been studied abroad and decided to come back Vietnam to start-upwhich means to start an entrepreneurial venture working on finding solutions tosolve problems, turning them into business opportunities even though thesuccess is not insured and sometime the market need hasn’t proved yet(Robehmed, 2013).For long, entrepreneurship has been recognized as a factordirectly link to economic growth of a nation (Mcgrath cited in Knight,1944,Romer,1987)To capitalizing this power resource for economic development,Vietnamese government try to facilitate and build an better ecosystem thatnurture and encourage startups as aiming ambitiously to turn the country into astart-up nation by 2020 with one millions of startups.(VnExpress,n.
d.)1.2 Research problem:Even though there is a boom of startups within the nationhowever those number could not be meant if the success rate is low. A researchfrom Vic Lance (2016) has posted on Forbes confirm that the first and theforemost reason that startups fail is no market need.
Furthermore, though themarket need is satisfied, there are a big chance of failure due to having poormarketing or distribution channels (PeterThiel as cited in Weinberg & Mares, 2015). Marketing channels here “refer to an array of exchange relationshipsthat create customer value in the acquisition, consumption, and disposition ofproducts and services” and they play important roles as facilitators inmarketing process (Pelton, Strutton, & Lumpkin, 2016, p.5). Forstartups at the early stage, poor marketing usually happens because of lackingof resources hence knowing which channels of marketing that worth to invest isreally important for start-ups. Nowadays in this digital world, startups havegreat chances reach their potential customers through social media, onlineplatforms…Among those channels, which are the most appropriate and the mosteffective channels to invest in regard of startups at the early stage? Thecurrent literature of startups marketing is limited hence by finding out thisquestions that would contribute to knowledge of startups worlds and helpVietnamese startups to overcome the limited resources by choosing appropriatekey channels of marketing. 1.3 Objective andresearch questions:In this master thesis, researcher want to conduct in dept.interviews with key management people of Vietnamese startups that successfullyoperate for 2 years to understand what they have been through in term ofmarketing channels.
The purpose is to gain the insight knowledge of those techstartup cases. The research is focused only Vietnamese startup due to the limitof data access and researcher’s networks. The overall mission of this researchto help Vietnamese tech startups have solid understanding of best workingmarketing channels and having shared knowledge of those previous tech-startupsas learning marketing lessons that would contribute in their future success.
The main question and sub questions:The best marketing channels for tech-startup at earlystage in Vietnam?1.How Vietnamese tech start up do marketing at the earlystage?2.What are marketing channels have they use? 3. How were the results? Which ones work best?4.What your lessons so far regard to choosing marketingchannels? 1.4 PotentialRelevance of the Research Study and its LimitationsThe research studies the marketing channels of tech startups in Vietnam,more specific through conducting interviews with target sample to explore thebest channels would work for Vietnamese tech startups regards to offering highrate of customer acquisition and low cost incurs.
Base on that, the tech-startupcommunity would benefit and have reference for doing marketing in the future.Different types of startups have different marketing channels hence thisresearch only cover a small sample of those tech startups who use advance oftechnology for operating their products or services so its results are notapplicable for all. However, this topic hasn’t been conducted in literature sofar therefore it could build a first step for further research later.
1.5 Data collectionThe researcher had been involved in Vietnam startup community in the pastso reconnecting those networks to access target sample is not an impossible work.Furthermore, accessing startups are often not difficult because they tend toopen and willing to talk about their products and services. 2.Literature Review2.1 Tech Start ups 2.
1.1Definitions Startup is a new term thatarise recently hence, its definition is varied. Generally, a startup is acompany at its early phrase of development. It offers products, services orsolutions to address current issues in which the potential demands may exist.
Startup is initiated by founders who believe in their business ideas. In orderto grow and to turn ideas into a business model, startup constantly need moneyto operate however due to high risk of failure, it’s not easy to attractinvestment (Staff, 2007a). On other hand, aconcise definition from Professor. Steve Blank of Stanford University see startup as “an organization formed to search for a repeatable and scalable businessmodel” (Shontell, n.d.).According to Barringer andIreland (2013) there are three types of start-up:· Salary–substitute firms: is a firm which operate insmall scale to offer less innovative products or easy services such as:restaurants, retail stores, etc. The profit from this firm could give the owneras the same amount if they employed for others.
· Lifestyle firms: is a firm that allow owner to usetheir specific interests or talents to make money such as: ski instructors,tour guides…etc. This type of firm also is not innovative nor expected to growfast in the future.· Entrepreneurial firms: bring new products and services to the marketby seizing opportunities to creating values or exciting experiences tocustomers for instance: Google and Facebook are most successful examples ofthis type of start-up. Their products are innovative and the company isexpected to scale large and become big in the future.(as cited in Putranto,2013)Techstart-up is a short form of Technology Start up where “Technology can bedefined as scientific knowledge applied to useful purposes” (Viardot, 2004, p.7).Within this research, tech start-ups are limited to any startups that adapttechnology as a method or medium for conveying their business ideas forinstance online booking platform…rather than referring to the high andsophisticated technology products. Furthermore, the startups here are only meantto the third type: entrepreneurial firms.
2.1.2Start up life cycle: Despite start up is a hottopic, the research about its life cycle not much mentioned in literature (Boeker & Wiltbank, 2005) .Until recently,Salamzaeh and Kesim have suggested 3 different stages within startup life cycleas descripted below: Figure 1: Life cycle ofstartups (Salamzadeh & Kawamorita Kesim,2015) · Bootstrappingstage: this is the very first stage of startup where founders try to turn theirideas into a business model. They have to work hard to prove the demand forthis business exist. The original funds to operate are mainly from founders,their families and friends even they are not big amounts. Another primarily financingsource for startups could come from angel or private investors (Freear, Sohl, & Wetzel, 2002) who are wealthy person,they are often retired entrepreneurs or high status ones.
They would like toinvest in return of some equity of the company with expectation to have profitswhen the startup exits. In short, bootstrapping refers to a stage that startup”develop and grow without necessarily incurring additional debt (which would widelyperceived, if misunderstood, consequence of selling equity in the business)”(Harrison, Mason, & Girling, 2004).· Seed stage:is also an early of startup in which a lot of mess to deal and organize. Inthis stage, the startup could be employ more people as team work is importantto emphasized for product development (prototype), market entry, valuation ofstartup. They often seek supporting or coaching programs from incubators,accelerators to join. Besides, sufficient amount of finance is required for operating.This is an important stage where failure is highly occurred if they not receiveenough supports in term of finance and know-hows.(Salamzadeh & Kawamorita Kesim, 2015).
· Creationstage: this is the last stage of start up before turning into a profitablecompany if succeed. In this stage, the market need has been proven with tracesof sales. The products and the core team are stabilized.
These are reason thatthey often received a big investment from venture capital at this stage toactually shoot for the moon.(Salamzadeh & Kawamorita Kesim, 2015)According to above definitionof startup’s life cycle, the early stage could refer to both bootstrap and seedstage where the amount of investment is limited. On other hand, the early stagecould also refer to the stage before reaching break-even point, often less than42 months. (Metelka ,2014). The phrases of startup could also be dividedbase on its financing cycle.
Since money plays an important role for startup,it association with finance is unable denied.Another map that explain in moredetails of the early stages by Sheng Huang (2017):