Tech | Refugees who fled communist Vietnam lured back by startup dreams

During Dang Van Tran’s numerous attempts to flee Vietnam at the age of seven he was shot at twice, nearly drowned at sea and stranded on an island. Now 40 years later, he is back in the communist country doing something unthinkable when he finally escaped with 150 others on a fishing trawler: running a startup in Saigon called Butterfly Hub, which helps businesses make data-

based decisions in the beauty and fashion world.

Tran is part of a wave of overseas Vietnamese defying personal traumas and family objections to invest in a country they once risked all to escape. That includes his father, who lost everything to the communists in 1975 before seeking a new life for his family in the U.S. On his return, Tran found a country more enamored with iPhones than Karl Marx and with a burgeoning tech startup scene.

“It blew my mind,” he said. “So I decided to stay.”

The aftermath of the communist victory had a devastating impact on many of its citizens, resulting in a massive displacement of humanity. More than a million were put into re-education camps, where many died, according to the United Nations High Commissioner for Refugees. By 2010, more than 1.5 million Vietnamese had resettled in the U.S. alone, while others fled to Australia, Canada and Europe.

“For many, including most of my family, those memories are painful and can be recalled as if they happened yesterday,” said Binh Tran, co-founder of San Francisco-based Klout Inc. who returned part-time to Vietnam as a partner at Silicon Valley’s 500 Startups, which started a USD10 million fund this year.

The nation they have returned to presents a much different face to the one they fled. The government is actively trying to lure investment in high-technology sectors, education has improved and so have living standards.

Overseas Vietnamese, known as Viet Kieu, are now a driving force in the economy, sending $13.2 billion in remittances to the country last year, a 900 percent increase since 2000, according to the World Bank.

“Time heals old wounds,” said Than Trong Phuc, who fled on a helicopter from the U.S. embassy and returned as Vietnam country director for Intel Corp., playing a role in the decision of the world’s largest semiconductor company to invest $1 billion in Vietnam.

Taiwan, China, India and other countries have for decades benefited from former citizens returning from tech centers such as Silicon Valley. Now Vietnam is trying to catch up and is seeking even more investment.

“Frankly, investments from Viet Kieu do not meet the country’s needs,” said Le Hoai Quoc, head of the management board of Saigon Hi-Tech Park. A lack of trust in the government has deterred some from investing, he added.

The government offers Viet Kieu incentives, such as visas for up to five years and duty-free imports of used cars. A $40 million tech park dubbed Saigon Silicon City is being built in Ho Chi Minh City to attract Viet Kieu with tax breaks and subsidized rent.

The county’s youthful demographics and growing middle class are more of a lure. Vietnam’s annual economic growth accelerated to 6.4 percent during the third quarter, from 5.8 percent in the previous three months, the General Statistics Office said Sept. 29, behind only the Philippines in Southeast Asia.

More than half of the country’s population are online and the number of mobile phones exceeds the number of citizens, Binh Tran said. Flappy Bird, the 2014 gaming phenomenon developed in Vietnam, inspired a generation of new tech entrepreneurs. “We are looking at Vietnam without the painful scars of war and simply see an incredible opportunity for growth and prosperity,” said Binh Tran, the 500 Startups partner, who left when he was one-
and-a-half years old. “The education system has a strong foundation in math and science, building blocks for computer science. And Vietnam is in love with startups – it seems like every other day there is a hackathon or a pitch competition.”

Fossil Group Inc., which sells 30 million watches annually, last year acquired Misfit Wearables Corp. for $260 million, gaining the wearable device maker co-founded by John Sculley and Vietnamese-American Sonny Vu. Vu returned to Vietnam after leaving as a child to oversee the company’s 160-member Ho Chi Minh City software team.

“These people are skilled at world-class levels,” Vu said. Esther Nguyen, who grew up in Silicon Valley, returned to Vietnam eight years ago to found digital entertainment website Pops Worldwide, which signed a partnership with Turner Broadcasting Systems Inc. this year.Hao Tran, 24, spent his first two years after graduating from Brown University working for San Francisco-based startup HotelTonight, which offered employees a well-stocked bar, catered meals and free hotel rooms. He moved to Ho Chi Minh City this year to work for 500 Startups’ investment team after being inspired by Binh Tran.

“My parents were very anti-Vietnam, like most overseas Vietnamese,” said Hao Tran, who also founded a lifestyle website, Vietcetera.com. Now he is working to improve his Vietnamese language skills, which had been limited to what he picked up around the family dining table.Still, Vietnam remains far behind other regions that have attracted successful tech entrepreneurs because of a dearth of early-stage startup funding. The talent pool, while eager, hard-working and low-cost, lack some of the skills found in Silicon Valley, said Ho Chi Minh City tech entrepreneur Dang Van Tran.

And the legacy of war is an obstacle for many Viet Kieu, said Don Phan, 33, a Yale University graduate who founded online baby products store Taembe.com in Ho Chi Minh City in 2013. 

“Many of my peers have said they could never do business in Vietnam because of what their parents went through,” he said.

After the war, Dang Van Tran’s father, a former military officer, was imprisoned as “a traitor” and his mother was sent to a re-education camp for being “a capitalist.” Putting the past behind him, he sleeps on a cot in an office outfitted with artificial grass carpet and chairs designed like hands.

“I’m a technology guy,” the entrepreneur said. “I want to help create a startup culture. I want to disrupt Vietnam.”John Boudreau, AP