A reader named Mike Nguyen just left a comment on my blog stating that FaceViet has just filed for a bankruptcy. I’ve contacted him to confirm the news but could not receive any feedback.
However, a check at FaceViet.com did result that the site was down, without any official announcement! I tried to reach Thanh Le, CEO of FaceViet, to ask about FaceViet bankruptcy rumors through his email address but could not receive any answer yet.
If FaceViet’s bankruptcy rumors are for real, this would be a sad, but predictable chapter of Vietnam’s web 2.0 bubble. It would leave a lot of implications for web 2.0 Vietnam and more than 100 Vietnamese web startups still struggling to establish a sustainable business model in Vietnam, especially in the wake of the current financial crunch.
Good vision + Poor execution + Poor local insights = ?
It is a real calamity, actually. FaceViet was launched around August 2007 as the first truly, “authentic” Facebook clone as web 2.0 business was then at the peak of hype cycle in Vietnam. FaceViet has two weak Facebook clone competitors at the time, which are GuongMat (also overseas-based) and local Tamtay.vn. Giant VC Corp, quite successful at the time with Baamboo (music search), Sannhac (online karaoke)… was also busy preparing their own Facebook clone named Zoomban. VCs were so busy then looking for potential prospects to fill in their dealflows and raising new funds like there were no tomorow.
While Xiaonei and StudiVZ have scored it big with their Facebook clones in China and Germany for hundreds of million bucks, life has not been easy for Vietnamese Facebook clones. As I’ve pointed out very early that any Facebook replication for Vietnamese population would have to pay a pricy tag, a runaway success for Vietnamese Facebook clones has never materialized so far.
VC Corp. was very smart to stop Zoomban project to re-focus on their core assets, leaving the Facebook clone bandwagon to FaceViet, Guongmat and Tamtay. With no innovation, Guongmat is still experiencing a living death. Meanwhile, FaceViet after a series of changes and evolution has failed to craft an attractive differentiation & positioning strategy. As a result, all their improvements including venturing into online music, video, books etc. only further mystified their value proposition and dilute their focus.
FaceViet failed to gain enough traction and reach critical mass not because of their vision. A similar social networking utility like Facebook is still a real unmet need of Vietnamese Internet population. However, just cloning Facebook is never enough to address this need. FaceViet team could not tap into the local insights so that they can provide something of real value to the users besides what Facebook has offered. Their team seems to be so busy to evolve and adapt their model when there were problematic signals. Poor execution and a lack of thorough understanding of local insights cannot compensate for a good vision, adequate funding and a passionate management team. If FaceViet could address these issues in the beginning, I thought FaceViet would be very much different from what they are now, and this is a real pity.
Who will follow FaceViet?
FaceViet provides a good lesson for Vietnamese web 2.0 startups, who are facing unprecedented difficulties since the world financial crisis burst out. In the past two years, nearly 100 web 2.0 startups or projects were launched in Vietnam. Some most notable:
-
Blog.com.vn: teen social network, offering video, music, photo sharing etc.
- Caravat: the second LinkedIn clone in Vietnam, developed by Vietnamworks
- Chacha.vn: iLike clone, developed by Vega Corporation (owner of Clip.vn)
- Chuyendong.vn: another teen social network
- Clip.vn: YouTube clone
- Cyvee: the first LinkedIn clone in Vietnam
- Cyworld.vn: the Vietnamese version of South Korea’s Cyworld
- Gamevui: social casual games
- Linkhay: Digg clone, developed by VC Corp.
- Noi.vn: yet another social network
- PhunuNet: women social network, developed by Vinalive (where the author of this entry works)
- Sannhac: online karaoke community, developed by VC Corp.
- Tamtay.vn: a hybrid of Facebook and MySpace
- TeeVN: Zazzle clone, offering custom t-shirts & mugs
- Thehetre.vn: yet another teen social network
- Thodia.vn: Yelp clone
- Vatgia: online classifieds
- Vitalk: mobile social network, developed by Visky, the online arm of FPT Corporation
- Yeuamnhac: music social network
- Yume.vn: teen social network, inside Timnhanh Portal (a Yahoo clone)
- Yup.vn: another Yelp clone
- Zing.vn: teen social network developed by VinaGame
- Zooz.vn: fast growing teen social network, developed by giant SMS/MVAS & cable TV player VTC
Blah blah blah….
These are only the most notable ones, as there are more than 100 web 2.0 services in Vietnam so far. Most Vietnamese web 2.0 services are struggling to find a relevant business model, notwithstanding revenues and scale. The year 2009 will be crucial for them as many would face a similar situation like FaceViet.
New Year, New You
It is not very “Vietnamese” to start a lunar New Year post with a sad story like this. However, I think FaceViet did offer some good implications for us to start a difficult new year ahead. In this difficult economic time the fittest still survive. To my opinion, those are the ones who possess the following attributes:
HarryD’s list of the fittest’s attributes
-
Clear value propositions that address local needs and based on local insights
- Clear business model, and thus revenue model & roadmap
- Secure enough funding through the end of 2010
- Product near or in completion, with users growing organically and sustainably
- Dedicated, passionate, experienced, smart, visionary management team, with excellent execution capabilities
- Know and well establish core competencies, and can leverage these core competencies into product & business development
- Own a cool brand
- Develop above-mentioned attributes into a defensible market position, preferrably as the category leader
From these, you can make some prediction what Vietnamese web 2.0 companies would still weather the difficult 2009 ahead. If you do not possess these attributes, it would be worthy to start this 2009 Year of the Ox to develop those attributes. For the Facebook clones, they would suck until these are not addressed and they are still just cloning the “surface” of Facebook the authentic and original.
I would much appreciate if you my friends who are regular readers of my blog could share your experience to add into my list of attributes above so that other Vietnamese web startups can learn from you and have a better 2009. Thank you in advance.
sad to hear this news. These clones have not made any business success so far. any local market insight for future investment ?
I think the major problems with most of the Vietnamese Web 2.0 is the lack of innovation and technology know-how. Most of the blogs about Web 2.0 in Vietnam only mentioned about funding, management, positioning etc , business stuffs. However, the core things are innovation and technical knowldege. I hardly see any technical innovation in those Vietnamese startup. They try to clone the orther Web2.0 ideas, that’s fine, but they also try to use opensource social network engines availble freely, made them nothing special. They need to develop their own application with solid and scalable system infrastructure.
A good VP of engineer with vision and innovation is a must in Vietnamese Web 2.0 startups.
You are one of the best blogger about startups in Vietnam that I really enjoy reading, althought I don’t stop by very often.
O.S
At my point of view, You should focus on e-commerce for small transaction in 2009, also re-focus your concept and business.
It’s not only about lack of innovation, Vietnamese people are culturally different from Western countries and most developed countries. Those 2.0 websites needs to understand the needs of Vietnamese people first.
As an example, coolviet.com just started recently, and they were able to target surprisingly well their niche (American Vietnamese) and they’ve barely used any marketing strategy as I know. All the American Vietnamese just join it fue to its popularity in the US.
In other words, to target a population, you need to understand better what are their needs and understand them culturally.
[...] Founder and CEO of FaceViet. He’s also working for An Binh Security. His most impressive announcement there was Faceviet didn’t go bankruptcy!!! [...]
Ok, the owner of Faceviet haven’t filed for bankruptcy yet, but Faceviet has been down for more than 2 weeks already (source: alexa.com), and without any public announcement to the members.
This just means this website is nothing than serious and goes where the grass is greener…
By the way, how in the hell Thanh Le can call himself CEO of a company that is not even incorporated or registered.
I’m just angry because I lost all my contacts on Faceviet and there’s no support on that website
Dear all,
YouSecond.com is now on the first phase of building Interest Networking using Folksonomy for semantic inferring user’ interest. I think vietnamese can build something fresh new in the world, not just clone.
The model is that user can express what they like, share with community and get what they like: news, bookmarking, music, video, job posting,……………
If someone believe that, can contact me: nguyenanhhoa2000@yahoo.com
http://sce.cl.uh.edu/nguyenho
http://www.cyvee.com/Profiles/~4459
“We are vnmese, we do something vnmese”
Thank you, Phuong.
I have been trying for years now, to collect any scrap of definitive examples of a problem I see/read/hear, which seems to be offered up from the Vietnamese collective all too often – “The western companies just don’t understand our VN market”.
But what I almost Never see, is anyone giving any sort of hard example or anything of value to define what that difference btwn VN and the rest of the world might be.
I suspect the answer would be tremendously valuable to many readers, I would like to see a discussion on this topic, in detail (not simply thrown out as the first of many reasons why outside ideas/execution fails here).
[...] Harry Do mencemaskan status perusahaan rintisan lainnya: “Jika desas-desus tentang bangkrutnya FaceViet benar, ini adalah hal yang menyedihkan, tapi merupakan babak yang sudah diduga dari gelembung web 2.0 Vietnam. Hal ini akan memberikan banyak implikasi untuk web 2.0 Vietnam dan lebih dari 100 perusahaan rintisan Vietnam masih berjuang untuk menciptakan suatu model bisnis yang berkelanjutan di Vietnam, terutama dengan timbulnya kehancuran keuangan sekarang ini.” [...]
Most of you have been talking about how FaceViet failed because it failed to recognize cultural differences between the Web 2.0 community in the West and Vietnam. Similar to the question posed by Mark McD, my team would like to find out anyone’s opinion on this?
Hi, i’ve just chanced upon your blog and i’ve been wondering why Vietnamese dont just use facebook itself? i have a few vietnamese friends who are avid users of facebook..
To answer to that question, you have to know that Vietnamese people are different culturally, they don’t want to share everything to anyone. They tend to keep their life private. Facebook is the opposite since it shows EVERYTHING to anyone, even friends of your friends.
Moreover, the layout and design of FB is not attractive at all. It is just plain and VN people are so used to pleasant designs.
That’s sad to hear that Faceviet.com closed their website but they somehow were in the wrong direction.
I hope that Coolviet.com won’t fall in the same category, but according to Alexa, CV is doing better, and much better than Cyvee.com and other Vietnamese social networks so I am crossing my fingers.
Here’s a radical idea: Stop “cloning” shit! Your list of fittest attributes is the smartest checklist I’ve seen to help companies, digital or not, to develop a successful Vietnamese product. Cheers to you.
I just did a blogpost of the subject of stolen business ideas here in country. You can see it here: http://wildwildeastdailies.blogspot.com/2009/03/detri-viral-marketing-when-internet.html
Well clone works sometime and it is not a bad thing to clone. The problem was the poor execution. The site was never gonna be able to handle bigger traffic anyway. Plus the fact that it never got over a few thousands users, most of them are fake profiles put to lure more people in tell you that it was never gonna be sustainable.
People are already using yahoo 360 and faceviet doesnt offer much more than that. There is no way to limit people to their university because vietnam doesnt even have a university email system. So what is faceviet in vietnam ? nothing, it just a normal social network like any other.
Failing is not a surprise, it is inevitable.
-L