HO CHI MINH CITY UNIVERSITY OF FOREIGN LANGUAGES – INFORMATION TECHNOLOGY DEPARTMENT OF...

HO CHI MINH CITY UNIVERSITY OF FOREIGN LANGUAGES –

INFORMATION TECHNOLOGY

DEPARTMENT OF INTERNATIONAL RELATIONS

SUGGESTIONS FOR A PROPER AND POTENTIAL START-UP

FOR YOUNG PEOPLE FROM 20 TO 30 YEARS OLD

Instructor:

Ngô Thanh Phượng, M.A.

Research conducter:

Phan Châu Cẩm Tú

1SUGGESTIONS FOR A PROPER AND POTENTIAL START-UP FOR YOUNG

PEOPLE FROM 20 TO 30 YEARS OLD

2013 – 2014

ACKNOWLEDGEMENTS

During the research, I have received a lot of supports from

many people in order to conduct this research properly and

successfully. Therfore, I would want to give my sincere

thank to them who have helped guided me through this two-

months research. The first unit I would like to give thank

to is the Depart of International Relations of Ho Chi Minh

City University of Foreign Languages – Information

Technology for giving me the opportunity to study and

conduct this research fully. Secondly, I would want to give

my biggest applause to my professor – Ms. Ngô Thanh Phượng

for being my advisor and providing me with valuable

suggestions and advices. Further, I truly appreciate the

participations of all my friends from various universities,

who have helped do the questionaire for the survey in my

research. In addition to all of the people above, I would

want to thank you Mr. Lý Trường Chiến for giving me his



valuable time to conduct a short interview that helped me

understand an over view of Vietnam current economic status.

Last but not least, I want to thank you my family for giving

me the opportunity to persue this education and the support

during the time I conducted this research which prevented me

from helping out around the house. Without all these

encouragements and helps, I would not be able to finish my

first research in time so finely. Once again, I give my

biggest and most sincere thanks to everyone who helped me

greatly in conducting this research.

TABLE OF CONTENT

Chapter 1: INTRODUCTION ...............................05

1.1. Setting....................................05



1.2. Some aspects of the problems already studied by

others ................................................06

1.3. Need for more investigation ...............06

1.4. Objectives ................................07

1.5. Value of the study ........................07

1.6. Limit .....................................07

1.7. Limitation ................................07

1.8. Organization ..............................08

Chapter 2: LITERATURE REVIEW ..........................09

2.1. Business Overview .........................09

2.1.1. Ideas for business ...................09

2.1.2. Vision, Mission, Objectives and Values of

business 11

2.1.3. Financial management .................12

2.1.4. Business management models ...........13

2.1.5. Risks management .....................14

2.1.6. Marketing ............................16

2.1.7. Human resource .......................18

2.1.7.1. Employees ......................18

2.1.7.2. Partners .......................19

2.1.7.3. Investors ......................20

2.1.7.4. Customers ......................20

2.1.8. Lifecycle of a business ..............21

2.2. Startup Overview ..........................23



2.2.1. Definition of startup ................23

2.2.2. Lifecycle of startup .................24

2.3. Self-understanding ........................

2.3.1. Personalities and Work and Management

styles

2.3.2. Passion ..............................

Chapter 3: METHODOLOGY ................................

Chapter 4: FINDINGS ...................................

Chapter 5: RECCOMENDATIONS ...........................

5.1. Vietnam current market and economic potential

evaluation

5.2. Steps to launch a startup .................

5.3. Suggestions for making startup potential for

young people from 20

to 30 years old ................................



ABSTRACT

Recently, entrepreneurial activity is highly appreciated all

over the world since it creates a dynamic and vibrant

business world; as well as helps develop the national and

world economy. There have been numerous books published on

the variable of entrepreneurship as well as newspapers

reported on the state of entrepreneurial activities.

However, these publishings were mainly focused on the

foreign economic background rather than Vietnamese economic

background. Therefore, this research paper aims at providing

an overview of Vietnam economy for young entrepreneur whose

age is from 20 to 30 years old and suggestions of what they

need to prepare when starting up business in Vietnam. The



methodology of this research is to conduct a survey among

young people from this range of age in order to understand

their intention of owning start-ups; along with a short

interview with a professional in this field in order to be

shared valuable insights of this variable. Findings pointed

out that the trend of young entrepreneurship is actually

increasing and young entrepreneurs tend to fail due to lack

of experience. Therefore, there is a need of providing the

fundamental background knowledge for them to do better

business during these years of their lives.

CHAPTER 1: INTRODUCTION



1.1. Setting

World economy has grown significantly since the concept of

globalization has been brought into practice. In which, many

countries have reduced their restrictions on trading, in

other words, the movements of goods, services and labors

between countries. This results in the fact that many

countries are both benefited and negatively affected, in

which trading helps improve goods and services’ quality and

standard, boosts the economic growth but also increases

labor exploitation. Still, globalization has brought about

the world economic growth as well as national economy

development.

According to the International Economic Development Council,

the economic development is defined as “improving the

economic well being of a community through efforts that

entail job creation, job retention, tax base enhancements

and quality of life” (1), not merely a concept in which the

suppliers meet the demands of the market like we have always

known about the economic system. Furthermore, the World Bank

Organization (2) has stated that there are five factors that

are associated with successful development of one country;

which are the ownership of one country’s development agenda,



good governance, economic growth, vibrant private sector and

the empowerment of its people to access to the social

services, have their voice counted in national decisions

that can affect their lives, shape their own lives and take

opportunities provided by the economic growth. Clearly, of

all the five factors, the last three are all related to the

economy. In addition, it is undeniable that the political

policies create the advantageous setting for the economy to

grow while the economy itself is the driven force that helps

stabilize the government. This is proved by the fact that

The US. Government had to close temporarily in the past few

days because of the disagreement in government’s budget

between the Republican Party and the Democracy Party, in

which both parties believed that their economic rights were

clashed with one another and they would not agree upon this

inequality. Overall, the need for constant economic

development is timelessly necessary since it is the answer

to problems the world and every country are facing, from

governmental matters to environmental or social issues.

1.2. Some aspects of the problem already studied by others.

It would not be overly stated that managing the economy can

be broken down to the smallest thing – managing private



sectors, in other words, companies. Many researches have

been carried out to suggest for better business management

and also point out the bad case practices of such matter.

Furthermore, managing a business is done from the moment the

business starts up; therefore, it is not surprising to see

that a number of researches have been done on the subject of

managing start-ups companies.

1.3. Need for more investigations

Despite the fact that a large number of books and

publications have been written on such matter of start-up

companies (The Lean Startup by Eric Ries; The Start-up of

You: Adapt to the Future, Invest in Yourself, and Transform

Your Career by Reid Hoffman and Ben Casnocha; The $100

Startup: Reinvent the Way You Make a Living, Do What You

Love, and Create a New Future by Chris Guillebeau to name a

few); these publications were all done in a foreign economic

setting rather than specifically written for Vietnam’s

economic background. For this reason, only some suggestions

from this kind of resource can be utilized since they are

not entirely applicable for Vietnam’s setting. Thus, there

would always be a need of more research done to give



Vietnamese entrepreneurs more inputs and knowledge to refer

as applicable learning resource.

1.4. Objectives

This research aims at providing background understanding of

Vietnam economy for Vietnamese entrepreneurs. It further

gives suggestions for starting a business including the

steps to launch a start-up business, the focuses in which

newly start business must focus on, risks management for a

start-up and mostly importantly and specific suggestions for

young people from 20 to 30 years old who want to launch

their own companies.

1.5. Value of the study

With the limited and un-synthesized information about

Vietnam’s economy and its start-up communities, this

research should add in more information on such matters

which can later on benefit any new and young entrepreneurs

who have not known where to start yet in doing business in

Vietnam.

1.6. Limit



The geographic area in which the research was carried out

was Ho Chi Minh City in Vietnam and the subjects were

certainly young people from 20 to 30 years old of all

genders, successful business owners who could be old or new

entrepreneurs in the past three to five years.

1.7. Limitations:

It should be noted that this research was carried out by a

third-year university student who was about to be an

entrepreneur in the near future and took great interest in

researching about this variable. However, because of the

ability of a university student, this research had some

limitations in time, finance and resource to be conducted on

a larger scale. Therefore, it could only provide a small

perspective on such huge matter.

1.8. Organization:

In this report, a section called literature review was

written to provide further background knowledge that readers

need to understand so that they can further understand what

being discussed in the final session. Additionally,

methodology and results sessions were also presented before



discussion session, to give more information about the ways

in which the research was conducted and what the results

were.

CHAPTER 2: LITERATURE REVIEW



In order to help readers prepare with relevant knowledge

about this variable so that they can fully understand the

suggestions in the latter part of this report, this session

provides the knowledge about things that matter in doing

business, an overview of how startup is defined and other

personal elements that can affect the process of doing

business.

2.1 Business Overview:

2.1.1. Ideas for business

Generating business idea is the first milestone that every

startup must go through. A business idea is a concept which

can be used for commercial purpose. According to Venture –

Companies For Tomorrow, a promising business idea should

“fulfill a customer need; be innovative and unique; have a

clear focus and can be profitable in the long term”.

However, a business idea itself does not have commercial

value initially; instead, through out a series of

appropriate evaluations, it can be determined whether it has

the possibility to survive in the market in a long term or

not. Therefore, when generating a business idea, innovative

and convincing characteristics should be considered greatly.



An innovative business idea can either be about creating new

products or services; or improving an existing business

system; sometimes, it can be both and once it is, though

rarely occurs, a new industry would be born. On one hand, a

business idea which invents new products or services needs

to satisfy customers’ needs; and usually, it is produced and

distributed to the customers in conventional ways. On the

other hand, a business idea which aims at developing the

business system of existing products or services mostly

focuses on improving customers’ benefits; in which, it can

lower the production costs and result in the fact that

customers can purchase these products with lower prices.

Additionally, a business idea also has to be convincing in

which it has to be beneficial to the customers and fulfill

customers’ needs as a specific form, such as a product or a

service. Also, it needs to define the size of its market,

the target customer groups that it serves and makes the

market accepts it, understands how it is different from its

competitors. Only after these things are accomplished would

a business idea has a commercial value. Last but not least



important, a business idea is convincing when it is also

profitable; which means how the money will be earned and how

much money can be brought in profit with this business idea.

In conclusion, according to Venture – Companies For

Tomorrow, a good business idea should be able to answer the

following questions:”

- “What exactly is innovative about your business idea?

- How unique is the business idea? Can be it protected

by patent?

- Who is the customer?

- Why should a customer buy the product? What need does

it meet?

- Why is the product better than comparable

alternatives?

- What are the competitive advantages of the new

product, and why can a competitor not simply copy

them?

- How does the product reach the customer?

- Can money be earned out of the product? What are the

costs involved, and what price can be asked?”



2.1.2. Vision, Mission, Objectives and Values of a business

When doing business, the first things a businessman needs to

do are not only conjuring a good business idea, but also

thinking about what the vision, mission, objectives and

values are of his business. These things help a business

navigate their development path; therefore, business doers

should not confuse these terms’ meanings.

Vision, according to Businessdictionary.com, is defined as

“an aspirational description of what an organization would

like to achieve or accomplish in the long-term future. It is

intended to serve as a clear guide for choosing current and

future courses of action”. In other words, vision describes

what the business looks like when it is operated under ideal

conditions. Also, it needs to include what your business

aims at providing and who will be served by your business. A

vision statement should be short, concrete and easy to

remember.

While vision indicates the “what” of your business, mission

should show how the business brings about the “what” into

the reality. Mission statement indicates the development

strategy of the business and what makes it stands out on the

market. Further, mission statement should act as a reminder



to the businessman, his employees and his customers of the

purpose of the business’s existence and can be applied

consistently over time.

Both vision and mission statements are permanent matters of

a business and according to these, objectives are defined to

help business doers achieve their mission and vision.

Objectives are considered to be greatly important to a

business because it helps the business doers keep track of

their business’s development. Therefore, objectives should

be measureable things. They can be either setting goals for

increasing monthly sales to a certain number/percentage, or

raising certain amount of fund. However, objectives do not

necessarily be financial; they can also be about business’s

performance or customer’s satisfaction. Whichever they are,

if they cannot be measured, they are not good objectives.

Equally importantly, another thing that businessman should

define is the values of his business. These are what help to

set the co-founders, the employees on the same page when

dealing with matters concerning the business. Values should

be a shared set of things that individuals of the business



have in common (for example: integrity, profit, quality,

etc). For that, defining the values of a business should

help individuals see eye to eye in future arguments and

establish a common mind-set during business operation.

2.1.3. Financial Management

Obviously, people do business to earn money and also, money

is used to do further business. Therefore, in order to

vitalize a business idea, put it in reality, businessman

needs capital – money for a set of things to put up his

business. This is when financial management needs to be

considered greatly. Financial management is all about

generating and allocating the financial resources of a

business into appropriate activities that would bring profit

for the business in return.

Financial management process includes financial planning,

resources allocation, in-year management and evaluation. In

financial planning, businessman needs to plan a budget which

will guide how the money is spent in order to achieve the

goals set; additionally, setting targets for revenue and

expenditure, efficiency and equity should also be included



in the financial plan. Businessman should also determine

which resource fits into what activities so that the

resources can be made the best use of. It is important to

note that planning is one thing but managing how financial

plan is executed during the year is pivotal because this

helps businessman readjusts the plan in time to bring out

the best results at the end. Further, monitoring financial

plan enables businessman to evaluate his business

activities, recognize the patterns, the trends of the

efficiency of these activities; from which, business

planning can be enhanced later on.

The financial management cycle should start with planning

and budgeting, to allocating resources, then managing the

operation of a business within a year and finally,

evaluating and reporting the financial process and status.

In order to monitor this cycle, a financial administration

system is applied in order to capture all financial

transactions and financial trends would then be withdrawn.

This system helps businessman answer the question of where,

what and how money is spent during business operation.



2.1.4. Business management models

Another aspect that should be mentioned is the structure of

a business. Management structure is extremely important in

the process of building a business since it would enable

business doers to put things in order and achieve business’s

objectives. Management structure varies greatly, however, it

is formed by reflecting upon the characteristics of the

business; therefore, it can be product-based, region-based

function-based, project-based, etc and the structure can

either be hierarchical or flat types, sometimes it can be a

mix of different types.

Hierarchical structure has many levels and the order of

these is in shape of a pyramid. Employees will report their

work to their upper levels and this float would go up to the

top level where there is only one person, who is the owner

of the business. Additionally, orders will be given in a

reversed float, from the top to the bottom. With this type

of structure, a reporting line and the system of the

business are well-formed but the communication and

cooperation would be limited.



Contrastingly, flat structure takes out the levels in

hierarchical structure, leaving everyone on the same level

and reporting to one person only – the owner of the

business. This type of structure enables the discussion and

communication within the business, fastens the decision

making process, puts more responsibilities on everyone,

makes them feel more involved in work, enhances team spirit

and also, lowers the costs spent on workforce. However, it

still has downsides such as a mix of responsibilities would

make everyone confused their roles with one another,

decisions can get stuck since there is a need of consulting

a greater number of people and this structure mostly fits in

a small business rather than a big one.

Depends on the size, the purpose and many more

characteristics of the business, different management

structures will be applied and sometimes, structure can be a

mixed of different types.

2.1.5. Risks Management

It is undeniable that no business is operating under ideal

conditions. Instead, many unpredictable events happen during



the operation and they can either positively or negatively

affect the business. Negative impacts are recognized as

risks for the business. Therefore, managing these risks is

extremely essential in terms of minimizing the damages for

the business when it encounters these risks. The activities

of risks management are identifying, accessing and

prioritizing potential risks depend on the different types

of risks. Once these activities are done, a plan will be

formed in order to provide solutions for eliminating or

minimizing the impacts of negative events. For most cases,

businessman uses risks management for financial purpose;

however, it should also be applied to secure the business in

terms of making the personnel, the facilities, the important

data and records or even the customers of the business less

vulnerable.

There are many types of risks and with each type, there is a

variety of strategies which is used to tackle with these

risks. Common risks can be related to legal issues,

unpredictable events like natural disasters or accidents

such as fire in workplace, deaths of personnel, etc. In

addition, failure in projects, security, storage of data and



records, business practices and uncertainty in financial

market can all be potential risks to a business.

Strategies that help prevent these risks can be as diverse

as the types of risks. However, it can be defined as four

main strategies. The first one is to make a back-up plan for

the situation when risk takes place (For example: data

should have a back-up file be stored elsewhere in case the

ongoing storing system encounters technical problems.). The

second type is to transfer the risk to another party like

insurance company in case of fire in workplace. Sometimes,

when a part or an area of a business is highly risky, it may

be wise to shut down this part so to avoid more loss for the

business. And lastly, businessman can plan ahead the budget

to make up for the loss that risk can cause.

The bottom is not to take every move of a business too

lightly. Every business practice should go along with a

back-up plan, in other words, a risks management plan so to

reduce as much loss as possible for the business.

2.1.6. Marketing



There are many elements that involved in the process of

putting the actual products or services into the customers’

hands. One of the most important elements is marketing. Most

people regard marketing as an activity in which it promotes

and advertises the products/services or the business’s image

to the customers. However, marketing includes more than

that, it is also about identifying and understanding the

needs of the customers in order to be able to provide them

what they want. According to Smallbusiness.com, marketing is

about getting the right product or service to the right

place, right people at the right time and making profit

during the process. Marketing activity examines every aspect

of the business and how it affects the experience of the

customers. Therefore, marketing is concerned with doing

market research, planning, pricing, and packaging,

promoting, selling and distributing products or services.

These are addressed as the 6Ps of marketing or “marketing

mix” in a marketing plan.

The 6Ps of a marketing plan are:

- Product. This is what the business offers, it can be

a product or a service and it should include

characteristics such as quality, variety, design,



features, services, warranty, sizes, packaging, brand

name and returns.

- Place. This is where customers can assess your

products. This are should include: distribution

channels, coverage, inventory, transportation,

logistics and retail outlet location.

- Price. This is also what you should take in

consideration in which you must determine to what

extent would your customers are willing to pay for

what you offer and whether or not, should you have

any discounts during the selling process or any

methods that help customers to purchase your products

with ease.

- Promotion. This is how you communicate with potential

customers. The activity can be done throughout a mix

of other activities relating to advertising, sales

promotion or public relations, etc.



- People. These are the employees of the business, who

acts as ambassadors in the process of selling the

products. Therefore, it is necessary to think of what

the business should prepare their employees with such

as product knowledge, experience, skills or attitudes

that are needed.

- Process. The day-to-day operation of the business can

also affect the marketing activities in which some

aspects such as the quality control, feedback

channel, planning, continues improvement, etc can

have impacts on customers’ experience with the

products or services that the business offers.

The key element of a marketing plan is market research.

Through this activity, business will have proper insights to

who the customer is, what they think and want and how to get

in contact with them. It also provides necessary information

about what is happening in the industry that the business

takes part in and the market trends that are being applied

in order to create or maintain its competitive edge. From



the outputs of the market research, business can build the

foundation from which it decides what to offer the

customers, where to place the products, how to distribute

them or how they should communicate with the customers.

Steps to carry out a market research are setting research

objectives, finding out existing information, executing

research, analyzing and acting on the results of the

research.

Having a proper marketing plan is extremely pivotal to the

success of a business in which it is the tool to connect the

potential customers and the business.

2.1.7. Human Resource

People are always the center of every activities and it is

no exceptional in doing business. People in business vary

from staffs, partners or co-founders, investors to its

customers. Understanding these objects would help business

doers manage their network of people and make use of this

network to bring about the success of the business.



2.1.7.1. Employees

Workforce of a business is the employees and these people

are everyone in the company but the owner of the business.

Employees simply sell their skills, knowledge, experience

and every other thing that help make them perform their work

efficiently to bring back the profit for the business, and

in return, they are awarded with money or anything else that

is agreed between the employee and the owner of the

business. It is important to find an accomplished and strong

workforce because only then, would the business be benefited

in terms of having an efficient operation. This is when

human resource management comes in to help manage the

workforce better. The process of managing the workforce is

not only about paying them fairly but also attracting the

right people to the right jobs, providing trainings and

developing the workforce to be able to perform more

complicated tasks, planning on compensations and rules that

help encourage the employees to work better and guarantee

their work performance, building a work culture and

environment for the business in which everyone can work in

their best state. Therefore, when considering hiring

someone, business doers should think of how he/she can help

make the performance of the business improves and whether or



not he/she is more capable of dealing with the matters than

the business owners.

2.1.7.2. Partners

Businessman who is in short of capital usually seeks for co-

founders or investors. In the case of co-founders, the

business ownership is shared; therefore, it has certain

advantages and disadvantages. The advantages of having co-

founders or partners are that the management

responsibilities are shared, more opportunities for tax

planning take place, losses are shared and a combination of

skills, experience and resources can help these people bring

more profits to their business. However, there is a

potential for disputes over profit sharing, administrative

control and business direction, a shared of risks or

unfortunate events caused by one of the co-founders,

difference in business orientation, etc.

When doing business together, it is essential to emphasize

the importance of every partner must understand their

rights, responsibilities and obligations. Also, co-founders

should agree upon several things that matter such as the



level of authority, expected financial contribution and a

clear procedure for disputing resolution and dissolving the

partnership.

2.1.7.3. Investors

Unlike co-founders who take part in the process of doing

business directly, investors put their money in the

operation of the business without doing any further work.

The only thing investors share with the business owners is

the profit and the amount of profit they earn depends on the

amount of the money they invest in and the agreement between

two parties. Investors spend their money on things that can

make great profit; therefore, in order to raise the capital,

business doers need to think of what will persuade more

people to invest in their business.

2.1.7.4. Customers

The main reason why a business exists is to satisfy a group

of people’s need and these people are called customers.

Customers play a significant role in business decision in

which they are the source of information and ideas for



business to plan new products or services; they also affect

the activities of the business (For example: their feedbacks

upon a product may result in a change of raw materials used

or decisions of suppliers choice of the business) and

finally, customers bring profit to the business, the main

source for sustainability of the business.

As Wikipedia defines: “A customer (sometimes known as a

client, buyer, or purchaser) is the recipient of a good,

service, product, or idea, obtained from a seller, vendor,

or supplier for a monetary or other valuable consideration”.

They can be divided into two categories: “An intermediate

customer or trade customer who is a dealer that purchases

goods for re-sale; and an ultimate customer who does not in

turn re-sell the things bought but either passes them to the

consumer or actually is the consumer”.

Also, customers are those who marketers believe to be

benefited from what the organization offers them. Therefore,

they are not necessarily those who are currently purchasing

the products of a business but in fact, customers can fall



into three types which are existing customer, former

customer and potential customer.

Existing customers are those who have purchased or used

goods or services of a business within a designated period

of time. They also represent the most potential market for

future sales of the business especially if they have had

satisfying experience with former sales from the business.

It should be noted that investing on existing customers

would bring more benefits since it is less expensive and

time consuming to access and introduce existing customers to

future sales than finding brand new customers since they

have already established trust toward the business and would

look for potential promotion if they stay loyal to the

business.

Other type of customers is former customers. These people

are those who have purchased goods or services from the

business; however, marketer of the organization does not

feel like they are existing customers because their purchase

time was out of the time frame or through other indicators

to list them under the list of existing customers. The value

of this type of customers depends on the experience they

have had with the business whether it was satisfying or not;



therefore, persuading someone who has had good experience is

much easier than who had bad impression about the business.

The last type of customers is called potential customers.

These people have not yet had contact with the business;

however, the marketers believe they can satisfy all the

requirements to become existing customers in the future. To

become a customer, one has to have the need for specific

products, financial means to purchase and the authority to

make the buying decisions. Locating potential process is

also important because existing customers may become former

customers depending on their next experiences with the

business and even though existing customers are considered

to be an important market for future sales, it is the

potential customers that are required for business to expand

their market.

2.1.8. Lifecycle of a business

Every business has it initiation, rises and falls, even

termination. These events form the lifecycle of a business

which includes seven stages. These stages can be broken down

into three phases: establishment, stabilization and death.



In the first phase, a business will go through the seed

stage and startup stage. In the former stage, business

owners need to focus on testing their ideas, deciding on

business ownership structure, finding professional mentors

and making business plan. And in the latter stage, the

business has its legal registration and the focus of this

stage should be put on establishing a customer base and

market presence, along with tracking and conversing cash

flow.

The second phase indicates that the business is growing,

stabilizing and expanding. As the business grows with

increased revenue and customer, as well as more

opportunities and issues take place; business owners need to

carry out the work in a more formal way, better management

system and possibly hire better employees to tackle with the

influx of the business. And when the business has managed to

control their work, put things in order, acquire a number of

loyal customer and a place in the market; it needs to keeps

improving and enhancing productivity in order to maintain

its competencies in an established market. Final stage –

expansion – of this phase, however, is optional. It is

considered as a stepping stone for small business whether or

not to choose to grow bigger by adding more services or



products into existing market or expanding the market and

distribution channels.

The final phase is the death of a business includes two

stages: declination and exit. As mentioned above, no single

business can always rise without going through tough times

and any tough time can become the point of the downfall of

the business. Therefore, when opportunities for grow are

rare, instead there are many challenges and issues for the

business to deal with, it needs to focus on cutting on

costs, finding way to sustain cash flow and seeking more

opportunities for venture. If the business can survive

through these tough times, it can avoid the exit stage.

However, if it cannot, closing the business and selling it

to someone else are what must be done to prevent any more

losses. Business owners in this situation should be calm to

evaluate the value of the business in order to reach the

best price with the buyer.

2.2. Start-up Overview:

There is a quest of providing knowledge background of what

startup is in order to enable readers to understand further

discussion of the research.



2.2.1. Definition of start-up

According to Investopedia, startup is defined as “a company

that is in the first stage of its operations. These

companies are often initially bank rolled by their

entrepreneurial founders as they attempt to capitalize on

developing a product or service for which they believe there

is a demand. Due to limited revenue or high costs, most of

these small scale operations are not sustainable in the long

term without additional funding from venture capitalists”.

In general, a startup can be considered as small business;

however it is still in an extremely early stage of doing

business. Unlike small businesses, startups have the

intention of growing bigger and further than staying as

small businesses or even selling themselves to other

business owners.

2.2.2. Life cycle of a start-up

Dynamicsbusiness.com.au posted an article on the lifecycle

of a start-up(3). In which, there are five stages that every

startup must go through. These stages are generating idea,



discovering the idea, validating idea, improving customers’

experience and scaling the business.

Obviously, every founder of any startup has to have the urge

for ideas that can solve specific problems. Therefore, once

the idea pops out in their minds, they can become very

attached to the idea. However, a good idea, as mentioned

earlier, needs to be tested in various ways. Therefore,

founders should be unattached to their ideas; instead, they

should be realistic and practical in order to ensure that

their ideas solve specific problems, have significant values

and have not been carried out by others or that they can

execute the ideas better than others.

The second stage of a startup is to discover the idea by

building a minimum viable product (MVP), getting it tested,

measuring its impacts and learning from the outputs then

readjusting the products. The purpose of this stage is to

see whether or not the idea can actually work and people

love it. It is important to keep in mind that the idea of

this stage is to get the product out, not necessarily be



perfect but instead be a flexible version, and see how the

public reacts to it.

After the idea has taken shape and been given certain

feedbacks, founders of startups can start to make a complete

product or service; and again, this does not have to be

perfect just yet. However, the purpose of this stage is to

see how the actual customers respond to the products and

build relationship with certain customer segments. Besides,

refining products should go along with selling them and

getting feedbacks from actual customers.

To the point where founders have gained certain insights and

feedbacks from actual customers, they need to make the

products more efficient in which it can enhance customers’

experience and minimize any cost that can be done with such

as automating manual production process, etc.

Last stage of the lifecycle is about putting startup’s

products on larger scale, with more investments to make the

products enhanced immensely and boost business growth



aggressively. This stage is called scaling, in which

founders need to generate more capital from investors or co-

founders to be able to perform further activities.

2.3. Self-understanding:

It may be off track to be providing a non-business knowledge

here; however, doing business is not merely working with

numbers and money, it also concerns people and especially,

with startups, understanding oneself is extremely important

since it can provide the right motivation for the founders

to keep on the hard work in the beginning phase.

2.3.1. Personalities, Work and Management styles

Understanding different types of personality enables startup

founders to get a better insight to who they are and from

then, they can determine what type of personality can work

well with them and predict possible behaviors toward

different situations of people around them. Having knowledge

about personalities not only helps founders to understand

what can motivate them to work best, but also who can be

compatible with them so that they can be chosen to be



partners and another aspect is that founders can predict

possible customers’ behaviors once they understand which

group of possible personality their customers may fall into.

Numerous researches have been done on testing and

categorizing personalities. One of the most famous and

liable study is the one of Dr. Myers Briggs(4), a 1920s

psychologist, who created a test called MBTI which helps

determine different types of personalities. According to

her, people can be classified as:

- Outgoing or reflective thinker. Out going thinkers

are consider extraverts, who likes being among the

crowd, vibrant surrounding, center of attention and

socializing. In contrast, reflective thinker are

introverts who like closed space, private and

thorough thinking. They also prefer being with small

group of people and unlike extroverts, they rather

stay home and party with others.



- The big picture or details oriented. Myers calls

people who focus on details rather than the big

picture “sensors”. These people are practical and

they live in the present rather than thinking too far

into the future. However, with “intuitive” people who

likes thinking about the big picture often neglects

details of the situation; they have the tendency to

generate all sources of information when dealing with

issues and have great imagination.

- Analytical or people based solutions. Among people,

some have the tendency to solve problem by starting

from the principles and work towards the result

logically. These people are “thinkers”. Others, who

use their feelings to tackle work, in other words,

put themselves in people’s shoes most of the time,

tend to take people into great consideration when

solving problems.

- Judging or perceiving types. Some people like

planning ahead things; therefore, they tend to put

things in order, from day-to-day tasks to the setting



of their work office. These people are judging types

who like finishing their job before enjoying some

leisure time. On the other hand, perceiving types are

those who like flexible working hours, going with the

flow and lay back, be ready to enjoy any fun time at

the present.

Additionally, MBTI Test not only focuses on classifying

people into different personality groups but also from that,

it predicts possible tendency of work styles and management

styles that match with these personality groups. Groups that

are mentioned above could be classified by colors:

- Yellow : creative, innovative, synthesizing,

visionary people.

- Green : organized, sequential, planned and detailed

people.

- Blue : logical, analytical people with linear,

quantitative and here - and

now people.

- Red : interpersonal, feeling-oriented, intuitive

people.



Yellow people when in work tend to take risks because they

like bringing about changes that help them achieve their

vision. These people are capable of finding solutions,

inventing and developing things since they are much more

creative than other types. However, when it comes to putting

things in order, making plan and executing plan, Green

people are the most suitable ones because they like being in

control, administering things and also providing support.

Equally importantly, in order to build plans or any other

thing, not only Yellow people can help in contributing ideas

but also Blue people are capable of implementing Yellow

people what these often lack of – logical thinking. With

Blue people in work, they often challenge people’s ideas in

order to find holes and try to find ways to fix the problems

with a logical and rational approach rather than

hypothetical one. Therefore, tough problems or intricate

issues can be solved by Blue people easily. All former types

of work styles seem to be either dry or harsh; however, with

Red people, their work style appears to be down-to-earth

rather than impractical or too rational. If there is any

glue that is used to connect everyone in workplace, it

should be Red people since they are good at and like

communicating. They are those who like verbal work,

including persuading, coaching, sharing, expressing ideas



and building relationships. Bottom line is that for business

owners, it is essential to know different types of

personalities that go along with different types of work

styles in order to be able to build a strong workforce that

can support and work at its best condition.

These types of personalities also indicate certain

management styles as follows:

- Yellow : adventurous, visionary, idealistic,

holistic, entrepreneurial leaders.

- Green : traditional, conservative, organized,

accountable, safe – keeping

leaders.

- Blue : authoritative, directive, analytical,

factual, all – business leaders.

- Red : team – oriented, supportive, personable,

intuitive, communicative

leaders.

2.3.2. PassionWarren Buffett, in giving secrets to success, expressed the

importance of finding what brings meaning to your life and

making it your focus each day. Steve Jobs of Apple Inc.

expressed that people should do what they love doing,

http://www.forbes.com/companies/apple/

http://en.wikipedia.org/wiki/Steve_Jobs

http://www.forbes.com/profile/warren-buffett/



sharing that it was his passion for his work and a belief

that “people with passion can change the world for the

better” that drove him. Mark Zuckerberg of Facebook states

that people should find that thing they are most passionate

about and pursue it. Zuckerberg said, “I think it’s

important if you’re going to take on any big challenge, that

you just love and really have faith in what you’re doing.

That I think is the most important advice I would say.” “Does being passionate about the work you do

increase your chance of success?”

(Forbes magazine, 27.03.2013)

Passion is usually mentioned but rarely seen and difficult

to be found. It is said to be the driven force of why some

people can give their 110% percent into their work,

activities and thoughts. And to any entrepreneur, having

good idea is already a hard job, but to have ideas that they

can live with day and night, makes them think about those

all the time and never cease to try to solve any challenges

or to develop things is even a more challenging work. And

the answer to how some can still perform and work in such

way is all about having passion. Most of people have

passion; however, they often set out in life on the safest

path rather than following their true calling, the one that

http://www.forbes.com/companies/facebook/

http://en.wikipedia.org/wiki/Mark_Zuckerberg



requires them to take risks and work till they drop. Still,

some believe that passion needs to be specific like it has

to be related to certain fields like medical, chemistry,

business, etc. This perspective prevents people to truly

understand what they are passionate about in life. Instead,

passion can be a desire like the craving to teach, to help

unfortunate people, etc. Therefore, understanding what

passion can be and finding it are extremely important for

someone who wants to be an entrepreneur.

CHAPTER 3: METHODOLOGY

(Setting of research). The subjects tested were 150 young

people from 20 to 30 years old, mainly university students,

and 3 entrepreneurs - CEOs from various fields. Appropriate

materials which are used to conduct the research were a

questionnaire and interviews.

The testing on young people aimed at getting more inputs

about the actual demand of owning a business; therefore,

using a questionnaire helped collect information on a large



scale within a short period of time. Questions proposed in

the questionnaire intended to understand this subject in

terms of their work intention, whether or not they want to

be employed by someone else or self-employed; their thoughts

and reactions toward owning a business; and if they did want

to have their own business, what their concerns were;

additionally, whether or not, their background major

knowledge affected their confidence in initiating and

operating a business; and lastly, which age had the highest

percentage of people who wanted to initiate their business.

Questionnaires were handed out via online channels

(Facebook, Gmail, Yahoo Messenger) and offline channel (HCMC

University of Foreign Language – Information Technology).

Closely looking into the effectiveness of the channels,

online channels helped get a more diverse data than offline

one.

The second subject – entrepreneurs/CEOs were limited since

contacting these subjects was difficult; in addition to the

limited of time allowed during the interview, researcher was

only able to conduct a concrete interview within 10 minutes

after every teaching session of YUP Institute during 3

weeks. There was only one matter that truly needed



professional opinions, which was the Vietnam economic and

market evaluation. The 3 interviewees were all professionals

in entrepreneurship field: Mr. Tạ Minh Tuấn had over 5 years

of founding more than 5 associations, companies and has been

CEO of YUP Institute, specialized in training and helping

young entrepreneurs to establish their career, since 2009;

Mr. Lý Trường Chiến also had diverse knowledge background in

various areas and has been Vice President of Vietnam

Marketing Association as well as professional consultant of

Strategic business and management, Training and developing

human, also an instructor of YUP Institute; lastly, Mr.

Vương Thanh Long was formerly Marketing and Management CEO

of Biti’s, Bibica, FPT, Trung Nguyen and has taught at Van

Lang University as well as YUP Institute for several years.



CHAPTER 4: FINDINGS

Figure 1: Participants’

Age Ranges

Figure 2: Study/Occupation

Backgrounds



20-23 23-2525-27 27-30

Business (Accounting, B.A, Marketing, Public Relations)Arts (International Relations, English, Cultures Study, Music)Social Sciences (Chemical Engineering, Information Technology)

Figure 3: Career Path

Choices

Self-employed Employed

Figure 4: Appropriate time for

start-up

Above 30Under 30AnytimeExperienced and knowledgeable enough

As all four figures showed, the number of participants were

150 people and more than half of them were still in

universities or newly graduates (20 to 23 years old). Their



study background was majorly from business study. Yet,

figure 3 revealed a significant proportion of people who

would want to go with the conventional way of being employed

rather than initiating their own business after graduation

and if they would want to open their own business, age would

not affect their decision, instead, their experience and

knowledge in such areas would.

It can be seen in figures 5 to 8 that most people would want

to start-up when they no longer wanted to work for somebody

else or that they would want to earn more money. Contrasting

to expectation, people were less reluctant to start-up

regardless of their study background. Further, participants

regarded creative ideas not as something brand new but

instead, conventional ideas if were executed in new ways

would also be considered good ideas for business.

Figure 5: What makes a

business idea good

Figure 6: Times failed before

succeed



Brand new ideaOld idea with new methods of practise

3 times > 3 times

Figure 7: Purposes of start-

up

Get richSelf-employed

Figure 8: Suitable Study

Background

Humanities studySocial SciencesBusiness

Additionally, participants’ attitudes toward starting a

business were not too negative, though a slightly major

percentage of them regarded start-ups as risky and

challenging, they would give it a try if given the right

setting and chances. Equally importantly, reasons that kept

participants from doing business were that they were in

short of capital and on top of all, they lack the right

skills and needed experience to do business.



Figure 9: Attitudes Toward

Start-ups

30%

30%

24%

7%9%

Normal and popularRisky and challengingWill try if given the chanceWill do start-upNot interested

Figure 10: Elements affect

confidence in starting-up

20%7%

10%27%

30%

7%

Lack of capitalLack of supportLack of good business ideaLack of experience in businessLack of necessary skills

CHAPTER 5: RECCOMENDATIONS

5.1. Vietnam current market and economic potential

evaluation

5.2. Steps to launch a startup

5.2.1. Fundamental process of launching a start-up:



5.3. Suggestions for making startup potential for young

people from 20 to 30 years old.

Find a business idea

Build a network

Make a prototype

Find bureaucracy

Make a business plan

Generate capital

Prepare to launch

Hire employees Operation

Marketing

Development



REFERENCES



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