1.Introduction and Context
1.1 Introduction to
Vietnam is a Southern Asian country with a high
population around 96 millions of people (CIA, 2017). The country is unified in
1975 after Communist from the North seized the South of Vietnam. Two decades
ago, people link Vietnam with images of the wars however nowadays, that
perception has gradually changed. Since the reformation in 1985, the country
has adjusted its rigid policies in order to receive to a lot of economic
opportunities and supports from foreign countries in term of capital investment
and knowledge transfer. Those premises set the ground that helps Vietnam nowadays
to achieve the annual GDP 6,2 % growth which implied “a strong domestic demand
and strong manufacturing export” (CIA,2017). Vietnam has a young population
from the age of 15 to 54 which occupied 70% in total of population. That number
brought up a huge potential human capital. The young Vietnamese people are well
educated and have passion to change their lives and the world. A report from
GEM mentioned that “becoming an entrepreneur is the desire of nearly one-fourth
of adults living in Vietnam” due to a high respect of society and the
attraction of becoming prosperity (Gem Vietnam report, 2015). A lot of young
Vietnamese had been studied abroad and decided to come back Vietnam to start-up
which means to start an entrepreneurial venture working on finding solutions to
solve problems, turning them into business opportunities even though the
success is not insured and sometime the market need hasn’t proved yet
(Robehmed, 2013).For long, entrepreneurship has been recognized as a factor
directly 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 that
nurture and encourage startups as aiming ambitiously to turn the country into a
start-up nation by 2020 with one millions of startups.(VnExpress,
1.2 Research problem:
Even though there is a boom of startups within the nation
however those number could not be meant if the success rate is low. A research
from Vic Lance (2016) has posted on Forbes confirm that the first and the
foremost reason that startups fail is no market need. Furthermore, though the
market need is satisfied, there are a big chance of failure due to having poor
marketing or distribution channels (Peter
Thiel as cited in Weinberg & Mares, 2015). Marketing channels here “refer to an array of exchange relationships
that create customer value in the acquisition, consumption, and disposition of
products and services” and they play important roles as facilitators in
marketing process (Pelton, Strutton, & Lumpkin, 2016, p.5). For
startups at the early stage, poor marketing usually happens because of lacking
of resources hence knowing which channels of marketing that worth to invest is
really important for start-ups. Nowadays in this digital world, startups have
great chances reach their potential customers through social media, online
platforms…Among those channels, which are the most appropriate and the most
effective channels to invest in regard of startups at the early stage? The
current literature of startups marketing is limited hence by finding out this
questions that would contribute to knowledge of startups worlds and help
Vietnamese startups to overcome the limited resources by choosing appropriate
key channels of marketing.
1.3 Objective and
In this master thesis, researcher want to conduct in dept.
interviews with key management people of Vietnamese startups that successfully
operate for 2 years to understand what they have been through in term of
marketing channels. The purpose is to gain the insight knowledge of those tech
startup cases. The research is focused only Vietnamese startup due to the limit
of data access and researcher’s networks. The overall mission of this research
to help Vietnamese tech startups have solid understanding of best working
marketing channels and having shared knowledge of those previous tech-startups
as learning marketing lessons that would contribute in their future success.
The main question and sub questions:
The best marketing channels for tech-startup at early
stage in Vietnam?
1.How Vietnamese tech start up do marketing at the early
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 marketing
Relevance of the Research Study and its Limitations
The research studies the marketing channels of tech startups in Vietnam,
more specific through conducting interviews with target sample to explore the
best channels would work for Vietnamese tech startups regards to offering high
rate of customer acquisition and low cost incurs. Base on that, the tech-startup
community would benefit and have reference for doing marketing in the future.
Different types of startups have different marketing channels hence this
research only cover a small sample of those tech startups who use advance of
technology for operating their products or services so its results are not
applicable for all. However, this topic hasn’t been conducted in literature so
far therefore it could build a first step for further research later.
1.5 Data collection
The researcher had been involved in Vietnam startup community in the past
so reconnecting those networks to access target sample is not an impossible work.
Furthermore, accessing startups are often not difficult because they tend to
open and willing to talk about their products and services.
2.1 Tech Start ups
Startup is a new term that
arise recently hence, its definition is varied. Generally, a startup is a
company at its early phrase of development. It offers products, services or
solutions to address current issues in which the potential demands may exist.
Startup is initiated by founders who believe in their business ideas. In order
to grow and to turn ideas into a business model, startup constantly need money
to operate however due to high risk of failure, it’s not easy to attract
investment (Staff, 2007a). On other hand, a
concise definition from Professor. Steve Blank of Stanford University see start
up as “an organization formed to search for a repeatable and scalable business
model” (Shontell, n.d.).
According to Barringer and
Ireland (2013) there are three types of start-up:
Salary–substitute firms: is a firm which operate in
small scale to offer less innovative products or easy services such as:
restaurants, retail stores, etc. The profit from this firm could give the owner
as the same amount if they employed for others.
Lifestyle firms: is a firm that allow owner to use
their 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 grow
fast in the future.
Entrepreneurial firms: bring new products and services to the market
by seizing opportunities to creating values or exciting experiences to
customers for instance: Google and Facebook are most successful examples of
this type of start-up. Their products are innovative and the company is
expected to scale large and become big in the future.
(as cited in Putranto,2013)
start-up is a short form of Technology Start up where “Technology can be
defined as scientific knowledge applied to useful purposes” (Viardot, 2004, p.7).
Within this research, tech start-ups are limited to any startups that adapt
technology as a method or medium for conveying their business ideas for
instance online booking platform…rather than referring to the high and
sophisticated technology products. Furthermore, the startups here are only meant
to the third type: entrepreneurial firms.
Start up life cycle:
Despite start up is a hot
topic, 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 cycle
as descripted below:
Figure 1: Life cycle of
startups (Salamzadeh & Kawamorita Kesim,2015)
stage: this is the very first stage of startup where founders try to turn their
ideas into a business model. They have to work hard to prove the demand for
this business exist. The original funds to operate are mainly from founders,
their families and friends even they are not big amounts. Another primarily financing
source 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 to
invest in return of some equity of the company with expectation to have profits
when the startup exits. In short, bootstrapping refers to a stage that startup
“develop and grow without necessarily incurring additional debt (which would widely
perceived, 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. In
this stage, the startup could be employ more people as team work is important
to emphasized for product development (prototype), market entry, valuation of
startup. 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 receive
enough supports in term of finance and know-hows.(Salamzadeh & Kawamorita Kesim, 2015).
stage: this is the last stage of start up before turning into a profitable
company if succeed. In this stage, the market need has been proven with traces
of sales. The products and the core team are stabilized. These are reason that
they often received a big investment from venture capital at this stage to
actually shoot for the moon.(Salamzadeh & Kawamorita Kesim, 2015)
According to above definition
of startup’s life cycle, the early stage could refer to both bootstrap and seed
stage where the amount of investment is limited. On other hand, the early stage
could also refer to the stage before reaching break-even point, often less than
42 months. (Metelka ,2014). The phrases of startup could also be divided
base on its financing cycle. Since money plays an important role for startup,
it association with finance is unable denied.
Another map that explain in more
details of the early stages by Sheng Huang (2017):