I am making financial investments more accessible to people in Southeast Asia.
AP: Can you tell us about your family background. What was it like growing up in the US?
JV: I was born in Ho Chi Minh City, Vietnam. We left Vietnam for California when I was 12. Our family wasn’t well off. We left Vietnam after the war so my parents were on the older side by the time we arrived in the US. My mom often fell ill so it was just my dad working. That was the context in which I grew up in. There was no question about having to work hard and succeed.
We were poor, but my parents refused to let me feel that we were poor. In retrospect, that was probably not good. Some people are rich but they make their kids feel like they’re poor so they have this respect and appreciation for money. My parents never wanted me to work, they just wanted me to do my best in school. My parents were very focused on education. I remember that my mom bought me an Intel 486 computer, which cost $2000 back then. It was probably all our family’s savings at the time.
I started school in the US in the eighth grade. I didn’t have any schooling before that so school was a challenge at the time. I was an English as a Second Language (ESL) student, trying to catch up with English while learning math for the very first time. In math, for example, I knew basic arithmetic, but I knew nothing more advanced. I had to study very hard but I managed to catch up and got into Berkeley. That experience shaped my view of education.
I think you can have kids who are average, let them skip a bunch of grades and they would still probably do okay. When somebody who has never done K-8 could still catch up, it probably means not much was learned in those years, though definitely not due to the lack of the educators’ effort. I don’t think I’m that special. The more important thing is that I didn’t have the pressure of education like other Asian children, so I appreciate being given the chance to learn and absorb everything like a dry sponge.
AP: What was your dream as a child, what did you want to do?
JV: I had no dreams! I was oblivious to what I could do, to be honest. I remember when applying to college, I chose electrical engineering and computer science because my friend from high school said that his brother was doing electrical engineering. People get good jobs graduating with that major. Since I was good in math and science, he thought I should consider it.
So I applied to a range of schools, ranging from city colleges to U.C. Berkeley, which was a moonshot to me. Thank goodness for my English teacher, who encouraged me to apply for my dream school and to go for the moonshot. She encouraged me to write a story for my application essay that would move people. Berkeley was the number one public college at the time, so I didn’t think I would be good enough. I wrote the essay anyway and got accepted. Again, that was never in my dream.
AP: Tell us more about your early career after Berkeley.
JV: I did electrical engineering and computer science (EECS) at Berkeley. After my first year, I got an internship at Hewlett Packard (HP) Labs, the people there were doing super leading edge research. I stayed in Silicon Valley after college to work at HP as a chip designer. I remember the feeling at the time was ‘Holy cow, I’m living the dream!’. I couldn’t imagine that this kind of opportunity would be available to me.
Then during the Netscape and Yahoo dot-com boom period, I became too antsy to sit around in HP and wanted to join a start-up. I joined a company called Pluris as a chip designer. I joined a team that designs the network processor for the terabit router, which was a seven feet tall router that carriers like AT&T would buy for the backbone of the internet. We were known as the terabit router company. The dot-coms were driving all this data traffic through the traditional carrier network, which traditionally has been voice so the carriers had to upgrade the equipment. It was a lot of fun being a part of the startup, and unfortunately, the bubble burst in 2000 and things weren’t so fun anymore. Pluris raised $200 million and finally shut down because of the telecom meltdown in 2000 that followed the dot-com meltdown. The internet busted so companies weren’t upgrading anymore.
AP: What are some themes that you’ve learned early on in your career?
JV: I learned that advanced technology really is indistinguishable from magic. It’s a well-known quote from Arthur C. Clarke. I learned about the magic of venture capital and Silicon Valley and most importantly, that building a startup is a worthy life pursuit. I also realized that I needed to know more than just engineering.
When I was working at HP labs, there was a PhD who was doing research and working on what ended up being radio frequency (RF) filters that you put in mobile phones. The reason the mobile phone was so massive before is because these filters were big. He was able to use a process called fabrication to miniaturise the silicon semiconductor wafers. That’s why we can have tiny RF filters and phones today. I learned how a wireless mobile phone connection would work and it just blew my mind.
I had this fascination with Silicon Valley because it was a booming era. Many people were getting so rich from all these stock options. In 1997, I received over 10 offers after graduating from Berkeley. I was living the dream to be in such a magical place like Silicon Valley, seeing the amazing things that technology can do, and observe the whole startup industry boom and how it can make people so wealthy but also change the world. I was on cloud nine.
It was definitely not all rosy. There was a part of me that was worried when I was working at HP. Within two years, I was leading the team and one of the team members was an old guy in his 40s. I realized that if I don’t stop learning, I’m going to fall behind quickly in terms of technology like my colleague. I saw trends where companies would move hardware roles overseas to China and software roles to India. That planted the seed to look to Asia.
AP: What did you end up doing after the dot-com bust and what led you to venture capital?
JV: After the first startup, I took a break and toyed around with starting a company. Having only worked for three years, I didn’t want to have a gap in my resume. I was anxious and got another job in another startup called Confluence, later changed to Candera. It was a network storage equipment company. I was very excited initially, but realized that it would not pan out. The important realization was that the company missed the market. We designed something that we thought would be useful; it turned out that we missed the market in terms of specifications. I discovered that marketing and product management are also very important business functions. The engineers would work overtime to meet deadlines but when we finally have the product, it was all wrong because the marketing people didn’t do a good job.
The failure of the first company was because of a lot of circumstantial factors. With the second company, I realized that to better prepare for launching a startup later, I needed to learn more than engineering. I applied for an MBA and went back to Berkeley’s Haas Business School in 2004. I finished my MBA in 2006 and became a Director of Product Management at a publicly-traded company called Form Factor, a semiconductor equipment company. I was doing product management there, but I couldn’t focus on the job since I wanted to do something more with my life — either starting a company in the Valley or going into venture capital.
While studying for my MBA, I chose entrepreneurship, private equity and venture capital as my specialization. I learned all I could about the startup world. It planted a new seed, which was to be a venture capitalist. I applied to different venture capital funds while working at Form Factor and also to Kauffman, where I was accepted into their fellows program. Kauffman’s mission is to groom future leaders in venture capital, but they also want to export the venture capital model to the world. They were encouraging people to join overseas VC funds at the time.
In 2006, Vietnam joined the World Trade Organization and the stock market went crazy in 2007. An opportunity came up, and I was matched with Henry Nguyen’s team at IDG Vietnam. In 2008, I was the first Kauffman Fellow in Southeast Asia. Most thought I was nuts to be investing in Vietnam. Now we have over 30 Kauffman fellows with large funds in Southeast Asia such as Golden Gate Ventures, Jungle Ventures and Insignia to name just a few.
“We were very early. There were still a lot of dial-up connections in 2004 when the fund started. We started investing more actively later on as Internet users climbed because dial ups were phasing out and there were ADSL connections to the office and some homes. Now, we’re living in the mobile revolution. Everyone has a mobile phone with a cheap data plan and free Wi-Fi connections everywhere.”
AP: What was the startup environment like in Vietnam back then? What kind of founders and businesses were you looking at and what was the average size of the check?
JV: IDG Vietnam was the first venture capital fund in Vietnam. We had to define the term ‘venture capital’ in Vietnamese because it didn’t exist back then. We called it đầu tư mạo hiểm, literally translate to “risky investment”. The locals couldn’t understand why we want to invest in early-stage companies that are very risky. We explained to them that even if most of the companies in the fund would fail, we only need one investment to succeed in order to return the entire fund and make up for all the failures.
We were very early. There were still a lot of dial-up connections in 2004 when the fund started. We started investing more actively later on as Internet users climbed because dial ups were phasing out and there were ADSL connections to the office and some homes. Now, we’re living in the mobile revolution. Everyone has a mobile phone with a cheap data plan and free Wi-Fi connections everywhere.
When we were investing, there were very few funds. There were DFJ VinaCapital and CyberAgent Ventures. There weren’t many angels, seed funds, accelerators and incubators back then like there are now. Before, we had to continue to back some companies in subsequent rounds all by ourselves.
We had a $100m USD fund so we had a lot more money to deploy at the time. The average size of the first check was anywhere from $300,000 to $500,000 USD. We invested in all stages because we were the only fund that can also do later stage investments. We needed to do series A and series B ourselves because no one else was doing it.
In the early days, we were looking for good founders, but we were also looking at verticals that we know would take off. We had the foresight from observing the US market and the Chinese market so we were aware of the different business models in e-commerce, media, and tech companies. We knew where the tech startup industry was going, so we were looking for startups with similar models. We would back anybody who was trying to tackle those verticals and had a talented team. We had too much money and limited quality startups to invest in.
AP: What companies did you invest in while at IDG Vietnam? Which portfolio companies stood out at the time?
JV: As a team, IDG invested in many companies, but I was personally involved with companies such as Global Equipment Services Inc. (GES), Digital Marketing Solution (DMS), Hotdeals.vn, Bongda.com.vn and Early Risers Media Group from 2008 onwards. I would say Friendster was most interesting. It was the very first major social network in the world, even before MySpace and Facebook. In 2008, Friendster was losing the US market but was still very strong in the Philippines and had momentum in other markets in Southeast Asia. A lot of the companies back then came from the web-based world, they weren’t mobile-first companies. Later on, we had to change strategy to get into mobile-first companies.
AP: When did the mobile revolution occur in Vietnam? How much has the ecosystem improved since 2014?
JV: It was 2014 when mobile took off in Vietnam. Companies like Oppo introduced cheap Android phones, which made the internet very accessible. Facebook and chat apps accelerated mobile consumption and things took off in a big way. For many people, their first experience with the internet is on a phone via Facebook, and then later on Zalo. It was very clear that mobile was the way to go by 2014. We launched some e-commerce companies in 2012, but we didn’t make apps because mobile users weren’t a big segment at that point. Now it is unthinkable to do something in Asia that doesn’t involve an app.
The quantity and the quality of the deal flow have both improved over the last six years. There are now a lot more people who understand what khởi nghiệp or startup is. Some of them have worked as product managers or did marketing in companies like VNG, Vietnam’s unicorn and an IDG Vietnam-backed company. They now want to go and start their own startups. They know what VCs are looking for so when they see opportunities to solve new problems and build new products, they can use stock options to attract good people and start their own companies. Vietnamese founders now know how to play the game that has been so well played in Silicon Valley. The growth in the ecosystem has attracted a lot more talent into the startup scene in Vietnam and in Southeast Asia.
AP: You are a serial entrepreneur for quite some time. Can you talk us through the transition from being a venture capitalist to a founder.
JV: I was with IDG Vietnam for six years from 2008-2014, though I stopped investing on behalf of IDG Vietnam in 2012. Before that we were discussing whether we wanted to do another fund in Vietnam. The answer was no because there just wasn’t much happening as this was before Southeast Asia became a hot startup region. We had a lot of money for the first fund but we were too early. There weren’t enough great companies to invest in so we didn’t see the point of raising more money for another fund. It would make us terrible, undisciplined investors because we would have very few good enough startups to deploy the capital. So we all decided that we will not raise another $100m USD fund and that was it.
There was an opportunity for me to get my hands dirty and go do a startup. Since I used to sit on boards and tell founders what to do, I figured it would be an interesting challenge to see if I can do it myself. So I tried. I have to say that the e-commerce company, BeYeu failed but the digital media company, Webtretho didn’t. We made good revenue and it was profitable. At one point, we had over 20 million users visiting the website. Line Corporation acquired the company in 2017 and the team became Line Vietnam.
After a year, I had an entrepreneurial itch and wanted to do something else so I left Line Vietnam to do a new venture. I’ve been working on “invest tech” since the beginning of 2019.
AP: What is your motivation for entering the retail investment space and what is Infina?
JV: Infina is a digital investment platform with the mission to make investment accessible, easy and low cost for retail investors. Vietnam’s economy is growing rapidly. There are a lot of investment products that the average investor cannot access since the amount of capital required is enormous. As more people move to the cities, urban trends are going to drive up prices. The real estate asset class is only limited to the rich at the moment. It is very difficult for an ordinary person to buy a piece of land or property since it’s very hard to get a bank loan. If a person does manage to get a loan, the interest rate is usually quite high. The mortgage rate in Vietnam is around 12 percent pre-COVID. So the questions I had were:
- How can regular people benefit from the rise of Vietnam’s economy?
- How do they take part in these asset classes that are not accessible?
I also realized that many people don’t have the financial knowledge and aren’t financially competent. A lot of millennials want to travel and have wonderful experiences. They never think about savings, investments or strategies to grow their money. Then there’s another distinct group of people who just want to make money very quickly. They don’t care about safe investments like bonds. They just want to get into things that promise them crazy returns, so they go into cryptocurrency or naively get into scams that promise huge returns. These individuals speculate on the crazy stuff like land in the middle of nowhere, hoping that it would double within a year. So there are two groups of people — the first group is clueless about their money and the second group is talked into taking extreme risks.
Investing in real estate takes so much research too. Unless you’re an insider — who knows a lot of the dynamics, which developers are good and which location is worth investing in — you’re likely going to make an awful choice. Why not leave it to the professionals to help and only invest in the amount that’s suitable for your financial need? If you are a retail investor, you don’t have much money so nobody cares. Nobody would want to talk to you. Take an average Vietnamese person, if they want to invest 20 million VND, they will be asked to come back when they have more money. There is a huge opportunity to help retail investors but due to regulatory issues, these financial services don’t exist yet but technology makes it possible.
What we aim to do is to be a full-suite online investment platform, allowing ordinary people to access other sophisticated assets such as bonds, CDs, ETFs and mutual funds. Allowing them to get into things like fractional ownership of the real estate. This model is everywhere in the US and in other developed markets but not yet in Southeast Asia. It’s definitely not yet in Vietnam. Once we satisfy the objective of allowing people to participate in the real estate market, the next thing we are going to tackle is opening up access into other financial products that have always been tailored to the rich.
We are also starting to see robo-advisory software teaching retail investors how to manage their money or helping them to allocate their assets based on their age, marital status, personal goals and risk tolerance. The software will recommend suitable assets to provide the expected level of return with the associated level of risk. Basically, we want to make financial services very easy for consumers to understand but also participate in at a low cost. We have to use technology to do that at scale. We are using the internet, social media and other software to acquire customers more cheaply and also manage them so that we don’t need to hire as many people or financial advisors who charge a commission.
“Vietnam’s economy is growing rapidly. There are a lot of investment products that the average investor cannot access since the amount of capital required is enormous. As more people move to the cities, urban trends are going to drive up prices. The real estate asset class is only limited to the rich at the moment.”
AP: What are some challenges that you faced while setting up Infina and upcoming challenges? Why aren’t there more competitors in the market and where do you see Infina and the FinTech industry in Vietnam heading?
JV: There are definitely a lot of challenges, it’s by no mean easy. Elon Musk talks about first principles thinking, boiling things down to “the most fundamental truths” and then reasoning up from there. We also try to go back to the fundamentals in terms of human needs and logic. Why is it not possible for more people to participate in real estate or other asset classes mostly limited to only the rich? The answer could be that regulation doesn’t exist, fraud or different people not agreeing with the terms of the sale etc.
I would say that some big items in terms of challenges will be regulatory and how to navigate that. The Vietnamese government is very supportive of innovative fintech solutions. They are proposing a sandbox to support companies that are doing very innovative things but don’t fall into any existing legal regulatory framework. They will then be able to have new regulations in place that make sense for these types of new companies, so that part is good.
Then the next challenge would be to build trust. How do you get the people to believe that you will not run away with their money? This will take time, transparency, consistency, and holding trust building as the highest priority in everything we do and every decision we make, big or small.
The third challenge would be to boost the understanding of financial products. Ordinary investors might not understand what they’re investing in or if the investment makes any sense. They might also think that the return is not compelling because they have been lured into other investment schemes that promised them sky-high returns. For example, a return of 8-10 percent per annum is quite attractive but not if you have been promised a guaranteed return of 25% per annum by others. Those factors need to be overcome.
AP: So beyond finance and investment, are there any other issues or causes that you care about?
JV: I’m a father of two so I care a lot about children’s education. I think many parents worry about their children, thinking new forces are going to steer them down the wrong path. Some things that I worry about is how social media and screen time are damaging our children. Just screen time alone makes them a lot less able to focus. I also worry about the educational system being way too out of date and ineffective. I think we’re stressing too much over what our children are learning before they’re 11 or 12. A lot of parents cram their children with endless classes and things to do before and after class and weekends. Is that necessary? Or would that be counterproductive and kill their thirst for knowledge because they are being forced to learn and not knowing why it will be useful for them? I just think the school system needs to be significantly reformed because it is too out of date.
AP: You’re a very calm person. What has Zen meditation done for you?
JV: I am a big fan of Zen but I would not say that I’m in any way good at it. I practice it. If you buy into Zen, it’s not about being good at it. It’s about paying attention and then realizing that there are things that are going through your mind that you should have an awareness of. You’re aware of it, and you put the attention back to something else at the moment.
I try to practice it just to be less stressed. If I’m very stressed out before I go to sleep, I will sit there and just pay attention to my breathing. When I realized that my mind drifted off thinking about some issues with the company, I had to bring it back in. It slowly calms me down and I can go to sleep.
I think the calmness comes with age. It comes with also having seen a lot of things and realizing that suffering is caused by your own mind.
“One thing that I have learned is that if you put your mind to doing something, and you stick to it — over a long time and also potentially frustrating and heartbreaking time — you’ll be able to find a way.”
AP: What advice would you give to someone who’s in their early 20s and wants to become an investor or founder and has no idea where to start?
JV: One thing that I have learned is that if you put your mind to doing something, and you stick to it — over a long time and also potentially frustrating and heartbreaking time — you’ll be able to find a way. If you are able to get through it often enough, you realize that maybe nothing is that hard. Instead of saying something is hard, it might be more useful to say that it requires more effort, dedication, and sacrifices than normal.
My younger self did something that was super useful and helped me so much. I was doing the course, Seven habits of highly effective people and Stephen Covey stressed the importance of having a mental map. To get from point A to point B, you can have a ton of energy and a positive attitude, but if you have the wrong mental map, you will exhaust yourself and give up. If life is like playing a game, then this is like you get a “cheat code” to move through walls and skip levels.
It’s that mental map of the next level that I think young people should always strive to find. Do I have the right map right now for what I want to achieve? Maybe the first map is figuring out how to get a good job. Then, how can I start a company? After starting a company, can I grow and scale it? There are so many levels. Always challenge yourself to seek the right map. By paying attention and working hard, then pay more attention to find those inner workings of things. And also don’t forget to ask people for help. Even at my age, I feel like there are still so many more levels.
AP: Do you have any book recommendations?
JV: Ego is the enemy by Ryan Holiday. As people become successful in career and in life, their ego can start becoming the barrier to further growth and achievement. Their ego gets in the way of paying attention and continuing to learn, of understanding themselves and seeing their own weaknesses, of taking the risk that might put us back in a vulnerable state. Only until a person drops their ego, do they realize that, for example, maybe they’re not such a good founder or an outstanding leader, or maybe there are some critical flaws in their businesses. Personally, I have so many areas I need to do better in despite my relative successes so far. So the ego is the enemy.
AP: That’s a good reminder to us all. We usually put successful founders on a high pedestal but doing a startup makes everyone humble again. Thanks for sharing James!