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Young Vietnamese entrepreneur learns hard lesson from overoptimism

Saturday, September 05, 2020, 21:00 GMT+7
Young Vietnamese entrepreneur learns hard lesson from overoptimism
Luong Cong Gia Huy is seen in a supplied photo.

At the age of 32, Vietnam’s Luong Cong Gia Huy has tasted both success and failure after launching two small businesses — flashcard maker BlueUp and restaurant chain Bun ca Ninh Hoa.

One of the most important lessons Huy learned from his business endeavors in the last few years is that the lack of industry knowledge and a mentor — both crucial to a fledgling business’ success — can put any young entrepreneur in trouble.

A young business

Huy first discovered his interest in doing business when he was an IT sophomore at the Ho Chi Minh City University of Science.

“Although we did not know what kind of business we would do, we were excited to study business-related subjects and get to know about entrepreneurship and markets,” Huy recalled.

During his senior year at college, Huy sat down with five of his classmates to brainstorm business ideas they could do. Eventually, then decided on launching their first business — a flashcard maker.

Flashcards are cards that bear information — eighter texts or images — on both sides, designed to be used as an aid in memorization, especially for vocabulary learners.

They came up with the idea after a member of the group shared the desire to have an effective method for learning English, a challenge for many technical students in Vietnam.

“We found that flashcards are a highly effective method for learning English [vocabulary] that is immensely popular in many foreign countries,” Huy explained.

The undergraduates started building their first sets of flashcards in October 2010 and launched the first commercial products under the BlueUp brand one year later.

“As we were all college students, our thoughts were simple: we wanted to do something unique and of value,” Huy admitted. “Maybe it was the wishful thinking that gave us the courage to start the business.”

They also developed business plans and drew up their budget, but all were done without practical experience. They later found that their methods had been gravely ill-informed.

“Such terms as business mentorship were quite strange to us at that time,” Huy said.

Despite their inexperience and naivety, Huy’s team secured the second prize at the Startup Weekend 2011 competition with BlueUp, which successfully attracted financing from two investment funds.

It was not until 2016 that the company finally found its right path forward with a proper business model that brought in high-quality recruits and good revenue.

By then, BlueUp had successfully developed an effective sales network both in the conventional market and on online platforms, according to Huy.

In addition to that, the young entrepreneur was also making money from his restaurant chain Bun ca Ninh Hoa — which sells ‘bun ca’ fish noodle soup, a famous specialty of Ninh Hoa Town in south-central Vietnam.

Huy admitted feeling overwhelmed with the newfound success, to the point that he “did not know what to do with so much money,” he confessed to Tuoi Tre (Youth) newspaper.

Crisis in the making

But the success did not last long. Two years after BlueUp’s launch, customers in Vietnam began to shift their attention from physical flashcards — the company’s main products — to digital vocabulary learning solutions.

Huy’s company was forced to move away from its primary distribution channel via physical bookstores to focus on the virtual market to adapt to the new consumer trend.

But the online realm posed its own sets of new challenges — the young company was having difficulties managing its online marketing channels because of constant changes in the platforms’ algorithms.

The BlueUp team soon found themselves spending too much money on online advertising that did not produce expected results, which plunged the company into crisis.

Huy hit rock bottom in 2018 when BlueUp was in trouble financially while Bun ca Ninh Hoa also faced numerous challenges.

“We built the business model of Bun ca Ninh Hoa on the basis of taking advantage of sidewalks [to place tables and chairs], so when Ho Chi Minh City began its sidewalk clearing campaign we lost up to 40 percent of our total revenue and had to shut down one of our four food stalls,” Huy recalled.

While the operational costs continued to rise inversely proportional to the revenue, Huy felt as if he was at a dead end.

All the money they had saved up from the previous period of success was spent on rescuing BlueUp and Bun ca Ninh Hoa from trouble.

Having sold some of his most valuable assets, Huy resorted to borrowing large sums of money to try and salvage the businesses.

Many employees had to be let go while the team had no resources to launch any new products.

But the most terrible feeling Huy faced at the time was doubts about his own ability.

A fresh start

He did not open up about the crisis with anyone except his wife, whose empathy eventually helped him overcome the stressful period.

Huy and his coworkers tried their best to rescue BlueUp. They streamlined the business model, scrapped non-essential parts, and focused on smaller groups of target customers.

Huy also optimized the operations of Bun ca Ninh Hoa by adding more new dishes to the menu and redesigning the food chain’s brand identity to appeal to more eaters.

“I have learned to accept what I have right now and try to build up from it instead of blaming myself on past failures or missed opportunities. That’s what has picked me up and helped to guide me on my way forward,” Huy said.

He has also received a scholarship to study MBA at the Rotman School of Management at the University of Toronto, Canada’s prestigious business university.

With a small family of his own and a relatively stable business, Huy said he still wants to go back to school to gain more business knowledge that he hopes will empower him in the long run.

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Kim Thoa - Cong Nhat / Tuoi Tre News


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