CHALLENGES FACED BY INNOVATIVE STARTUP IN VIETNAM DURING COVID — 19
The outbreak of COVID — 19 has had tremendous impacts on the world economy. As a result, Vietnam is not a bystander. Innovative startups, which embrace specific features of developing methods based on intelligence and idea exploitation, innovative methods, and under progress to finalize their business models by interacting and receiving feedback from the market, have undergone arduous time during COVID — 19. The ISEV Office (The Initiative for Innovative Startup Ecosystem in Vietnam — National Program 844) has done a survey about the difficulties which innovative startups went through. Since the survey was published on April 20th, 60 out of 100 surveyed innovative startups have handed in their responses.
Delving into the survey result, 03 main groups of difficulties faced by innovative startups can be identified: (1) Financial issues, (2) Relations Management issues, (3) Productivity issues:
Regarding financial issues, according to the survey by ISEV Office, struggled innovative startups accounted for 60% of the responsed ones.
Firstly, the revenue of innovative startups declined sharply, compared to the annual ones. The reason behind this is a swift in the means of market access, from the traditional models (through agents and distribution channels) to online model (by utilizing technological platform). Take the response from Đi Chung — a ride-hailing startup offering peer-to-peer ridesharing services, for example. During the outbreak of COVID — 19, the company contended with difficulties to operate on a zero — revenue scheme.
Second, innovative startups had to incur several fixed costs to run their business, including office rental costs, infrastructure costs, manpower, and operation costs.
Thirdly, many innovative startups which raised fund from investors faced up with a series of unfavorable deal offers.
Regarding Relations Management issues, the nationwide social distancing campaign led to the lack of direct interaction and remote work, which reduced the relationship quality with previous partners and clients. Besides, the past few months witnessed the drop in the potential chance for collaboration. According to Vietnam Blockchain corporation, the company projected to establish connections with 10 investors and raise 2 billion VND of capital. However, the turbulent situation of Covid — 19 prevented the company from achieving the target and ended up with only investors. At the same time, the refusal of annual orders by clients also led to a slip of over 50% bills. Moreover, social distancing is the culprit of the several delays of events to connect and interact with customers.
With regard to productivity issues, 44,68% of responded startups registered a decline in productivity. Not only remote work resulted in a decrease in productivity but the cut in HR costs also slowed down the working progress. For instance, Tubudd — a startup providing a platform that connects travelers with a network of local buddies, had to lay off 4 out of 10 full — time employees. Additionally, the startup found difficulties in recruiting talents later on.
