How Vietnam’s e-commerce leader built his company

• Nguyen Hoa Binh says it’s best to start off the entrepreneurial journey while in university
• A key move was to stop coding and focus on strategy, operations and business development

IT was somewhat surprising that MOL Access Portal Sdn Bhd, the online payment unit of MOL Global, only took a 50% stake in Vietnamese online payment company NganLuong in a deal that was announced last week.
 
Typically, MOL has taken a majority to full equity in the payment companies it has been buying over the past four years.
 
However, a conversation Digital News Asia (DNA) had with Nguyen Hoa Binh (pic), the chief executive officer of the PeaceSoft group and chairman of NganLuong, sheds some light on this joint equity deal.
 
“We are both geeks who started our entrepreneurial journey as students; as a result, our similar backgrounds helps us understand each other very well,” says Binh when asked about the equal shareholding with MOL Global founder and CEO Ganesh Kumar Bangah.
 
Binh says he started writing software and doing outsourced projects as a 19-year-old in university in Vietnam in 2001, where he was studying computer science. Ganesh started even earlier, when as a 17-year-old, he would take the bus into Singapore from Johor Baru on the weekends to buy tech hardware and software – which he would then sell at a profit to classmates.
 
Ganesh graduated to repairing PCs before moving on to other things in the tech space, including becoming the youngest CEO of a listed company in Malaysia back in 2003, when he was all of 23 years old.
 
There are other similarities too. Like Ganesh, Binh is recognised as one of the leading Internet entrepreneurs in his country, with numerous local and international awards to his name. Like wise with Ganesh, who is also the current Ernst & Young ICT Entrepreneur of the Year for Malaysia.
 
While MOL Global is strong in the gaming and online payments space in Asia, Binh’s PeaceSoft is the dominant e-commerce player in Vietnam. Aside from the payment gateway, it has various complementary businesses such as a logistics company, affiliate advertisement network, online marketplace and various vertical e-commerce portals.

Binh also became the first Vietnamese Internet entrepreneur to get funded by an international venture capital fund, IDG, in 2005. It came with a sizeable stake that he says was “somewhere between 30% and 49%.”
 
“When someone is giving you money to help you achieve your dream, you will take it,” he says to explain the large stake he gave away.
 
It has turned out to be sweet deal for IDG. Binh says it has seen the value of its investment into PeaceSoft go up around 100 times since 2005.
 
But it all really started when he wrote a voice-over-IP application, a Vietnamese version of Skype, in 2001. This garnered him quite a lot of attention and media publicity. It also opened his eyes to the possibilities of the Internet as he received expressions of interest from Vietnamese living in the United States to license his software.
 
But it was not an instant success, he says. “I also failed in many projects, but that is the best thing about being an entrepreneur as a student. You don’t have a big weight of responsibility hanging over you, like family and kids, and can take risks.
 
“But after graduating, your time and responsibility do not allow you to fail many times,” he adds.
 
The failures were valuable experiences, he says and how he dealt with failure was simply to take a long sleep and wake up the next morning, leaving his failure behind while keeping the lessons learnt close to heart.
 
The company kept growing at a steady and measured pace with 300 staff, but realisation hit in 2005. “It dawned on me that I could not get rich doing outsourcing projects for others, or writing code. But you write software for the Internet once, and it can be used and bought by many,” he says.
 
This was before the IDG investment came in. He then made the strategic decision to stop writing software himself or getting involved in R&D projects. “Instead, I started focusing on strategy, business development and operations. Getting a sense of the big picture was important,” he says.
 
He started noticing some interesting trends from his group’s involvement in various projects and realised the challenges they faced were also the challenges that Vietnam faced. “This meant that if I solved my problems, I was solving the country’s problems too,” Binh says.
 
For example, there were numerous problems with online payment around 2005 as the early adopters of e-commerce started visiting local online marketplaces. “A big company came in with a comprehensive solution, but I realised they did not actually understand e-commerce enough to solve it properly,” he says.
 
Binh then launched his own payment platform, startup-style. “We did it fast and knew the platform would only have a one-year lifespan, but that we would learn a lot while building it up.”
 
Targeting small and medium enterprises (SMEs) and individual sellers, they made the platform very easy to sign up for and cheap to use. There was no need for merchants to sign any contract. They just needed to open a merchant account.
 
“It became very successful and this is a typical approach we take to solve our own problems, and at the same time for the country too,” he says. That product became NganLuong, the Internet payment gateway Ganesh bought into.
 
Next: How PeaceSoft is competing against Rocket Internet, and its dream of building the ecosystem to help SMEs in Vietnam
  
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