Starting a business is a tough path to take. With so many new startups popping up by the hour, the competitive landscape can be intimidating, and the pressure to stand out can be beyond overwhelming.
However, even the most successful entrepreneurs have experienced failure — or failures — at some point in their business journey. Many have had to invest their entire life savings into a venture that eventually sank; some have poured their hearts out to a business idea that didn’t even see the light of day.
But it’s an essential part of the process, as many would argue. Working on an idea and trying hard to let it take off is the only way to know if it’s going to thrive or not. More often than not, great entrepreneurs are defined by the lessons they learn from their failures.
Vietcetera talked with several startup founders who have experienced the highs and lows of entrepreneurship firsthand. Here they share stories of their “worst” business ideas and the hard lessons they learned.
‘The more we sold, the more money we lost.’
Nguyen Hoai Xuan Lan, co-founder at CoolMate
Before the popular local clothing brand CoolMate was launched in 2019, co-founder Nguyen Hoai Xuan Lan first tried her luck in business with backpacks and crossbody bags in 2016.
“I was searching for backpacks on Google and saw how limited the options were for my specific needs. It was then that a business idea sparked: Why don’t I import backpacks and crossbody bags from Vietnam? Within just a week, I was already taking pictures of the products and posting them on a website my friend and I built on Haravan.”
Lan was so eager to succeed in her entrepreneurial venture, so much so that she exhausted all her efforts and funds marketing the Vietnam-made bags. She ran ads on Facebook and eventually got orders.
“It was an exciting time for me. But then I slowly noticed that it was not going as planned. The more bags we sold, the more money we’re losing, as the cost per order was too high.” She further admitted that not having enough experience and the right skills to develop a website was also a barrier to the success she was hoping for.
“Eventually, we ran out of funds and could no longer sustain the business. My friend and I decided to split the remaining backpacks between ourselves and cease our operations altogether.”
The business failed. But Lan gained valuable experiences and learned important lessons that made the whole experience “not bad at all.” Realizing the business model was flawed and failing to properly calculate costs resulted in losses, but “understanding where we had failed was critical to the learning and growth,” she explained.
“Although our business was not profitable, we were able to identify areas where we could have improved and applied those lessons to future ventures.” About two years later, Lan helped push CoolMate to become one of the go-to fashion shops among young Vietnamese. It was later named one of the ten “emerging giants” blazing the digital trail in Vietnam.
‘Survival demands adaptation.’
Marina Tran-Vu, founder at EQUO
Vietnamese-Canadian Marina Tran-Vu birthed the idea of EQUO at a coffee shop in Ho Chi Minh City in 2020. A wordplay of “eco” and “status quo,” EQUO creates products with minimal impact on the environment, a calling close to its founder’s heart.
Marina’s working to address UN Sustainable Development Goal #12, which is to ensure sustainable consumption and production patterns. Her fervent passion for sustainability brought her and EQUO to places — from being part of FLIK’s 21 Womxn Entrepreneurs to Watch in 2021 to getting accepted into American seed accelerator Techstars and getting million-dollar funding from renowned venture capitalists.
But Marina’s journey with EQUO didn’t come easy. To get people curious and excited about her eco-friendly drinking straws and utensils, she chose to mass-produce a box packaging that has a “window” so people could see what’s inside.
“We thought this would make sense since it was something a lot of consumers have never seen before, so it would help with consumer education and familiarity. It didn't work well because after COVID hit a few months later, everyone got scared about germs and bacteria (rightfully, of course). After that, we had to recycle much of the packaging we had just produced. It cost us a lot of time and money.”
Adaptability, she said, was her key takeaway from her startup’s first major setback. “You have to be able to quickly adapt to outside market conditions; otherwise, your brand will not survive.”
If she had been stubborn about keeping the packaging design and taking the fallout as an attack on her creativity, “our product would not have been sold and resonated with the right consumers.”
The young female founder persevered, and today, EQUO products are now on Amazon, making the proudly Vietnamese products available for customers in the US, Canada, and Australia, creating a better, more sustainable world one plastic-free straw at a time.
‘Customers tell everything.’
Taku Tanaka, founder at Kamereo
Founded by Japanese expat Taku Tanaka, KAMEREO is arguably one of the most successful tech startups in Vietnam. The startup is ambitiously aiming to “Redefine the food business in Vietnam” through its food supply procurement platform. It’s the first tech-powered B2B food sourcing platform in Vietnam, instantly connecting buyers with fresh produce farmers on their website or mobile app, and taking care of negotiations to speed up the entire purchasing process.
When the pandemic halted movements and disrupted enterprises, KAMEREO’s B2B business endured its most challenging time yet. With F&B businesses, the startup’s primary customers, temporarily ceasing operations, KAMEREO products have nowhere to go.
“At that time, we had no idea how long COVID-19 restrictions would last, so we had no choice but to launch a B2C online grocery,” explained Taku. “It worked very well during the lockdown as many people didn’t want to go out or couldn’t go out. However, demand decreased after the lockdown, and the value of the proposition of B2C online grocery went down relatively.”
KAMEREO shut down its B2C operations before it could incur more losses and revived its B2B business — where the startup’s core foundation lies and where its corporate culture is based.
“As we are a B2B company in nature, it’s quite hard to compete with purely B2C companies with lots of marketing budgets in that space. As it was a special case related to COVID lockdown, we had no choice at that time but to innovate. We learned that we should focus on the core business while the company is still in the early stage, at least. Now, we are supporting lots of B2C businesses as their main source of F&B needs.”
Taku’s team was able to quickly determine why the B2C operations weren’t too sustainable, allowing them to pivot before it was too late. The startup attributes its success, and most especially, the lessons learned from its missteps, to its established strong communication channels with customers.
“Customers tell everything. When you are on a small scale, you could ask customers to get feedback. When you scale, that means customers already value your business. Startups need to keep monitoring their KPIs relating to customer satisfaction and retention rates to know whether what they’re working on has the potential to be revenue-generating and to grow.”
‘You can’t just copy and paste an idea.’
Nam Bui Hai, founder at SoBanHang
When funding was a little scarce during the peak of the coronavirus, SoBanHang was one of the few to gain big wins. The startup, in fact, was born during the brutal outbreaks, with the aim of helping to bring microsized Vietnamese businesses into the digital forefront.
Founded by brothers Bui Hai Nam and Hai Long, SoBanHang started with bookkeeping services before shifting its user proposition several times to best serve its target market.
“We saw the bookkeeping for nano and SMEs became a phenomenon in India, Indonesia, and many other emerging markets. So we thought it would be incredible to bring the idea to the Vietnamese market. We spent four to five months to prototype, build, and test in a couple of provinces.”
After exhausting all efforts, Nam found the concept unviable. “It didn’t work at all. It wasn’t strong enough for nano and micro merchants, plus the digital payment in Vietnam wasn’t as popular as in India or Indonesia.”
Nam saw other Vietnamese startups try the same model, and they all pivoted to new business models to keep their businesses floating.
“We realized that you really can’t just copy and paste an idea from one market to another and expect the same outstanding results. It needs lots of localization to hit product-market fit.
But the team’s effort didn’t go in vain. It was through the process (and the failure of it) that they saw more comprehensive problems that they could provide viable solutions. Nam eventually launched SoBanHang as a digital storefront to help users grow their revenue instead of pushing for the original bookkeeping idea.
Today, the startup employs mobile ERP (enterprise resource planning) that solves pain points of accounting, human resources, demand and supply materials, and other crucial segments of small businesses.
“Despite strategy changes, the target customers we want to serve remain unchanged. This is where we believe we can give more value.”