Entrepreneur Pham Thanh Hung, vice chairman of the board of directors of CenGroup Real Estate Group, a leading real estate enterprise in Vietnam, is also one of four powerful experts on the TV show Shark Tank Vietnam. Shark Hung is popular among television viewers due to his humorous yet inspring advice for young people, especially for start-up owners who are struggling on the path to build their career. His glamorous, friendly style is also appealing to fans.
Culture Magazin had a short conversation with Shark Hung to listen to him sharing his business experience and advice for start-ups as well as foreign entrepreneurs wishing to break into the Vietnamese market.
Can you share more about your passions?
I have had different passions at different stages of my life. When I was a child, I loved reading books, so much that I brought books and comics in the toilet to read. The old-style toilet in Vietnam, you know, was foul and dirty. Growing up, I loved traveling, and I spent all my money on trips, both local and international. So far, I have been to about 40 countries. In Vietnam, I have been to all provinces and destinations, even the borders, high mountains and islands. I have been to Truong Sa archipelago, Bach Long Vi island, and the farthest points. As an adult, beyond the age of 35, my passion has been business, pursuing success and trying new things. I didn’t think it was a trade-off, because I am always passionate about good things.
What was your first failure when you opened your own company? What lessons do you learn?
I stopped working at a state agency, went out to work at a private company for more than two years, then decided to open my own company in the field of consultancy and foreign investment.
I do not consider it a failure. I can even say it was a successful company. I had many foreign partners, advised them, and contributed to bringing to Vietnam many great brands in aviation (VJA), automotive (Honda), machinery (Komatsu) and banking (HSBC). Among my employees at the time, there were American and Australian experts who were my former bosses at multinational companies.
I decided to stop because there was a barrier in scaling. It was difficult to find good people to work for me. Because consulting is a type of self-employment, people prefer being freelancers. Part of the reason was that Vietnam was opening the door. I envisioned more investment opportunities than just giving investment advice, so I dismissed this company and switched to real estate. It was serendipity.
For talented graduates, is it a better choice to work for big companies or start their own businesses?
The two concepts of “talented students” and “successful entrepreneurs” do not always align. They even seem to contrast. Talented students who are often judged on based on their grades, are only good at their major, depending on the field. For example, those in basic sciences, social sciences, even psychology or sociology will often have a harder time starting a business than those studying economics or business administration. Generally speaking, I advise new graduates to work for a few companies, not necessarily big corporations. This is a very important time for you to accumulate experience, and maybe, gain some capital. Take advantage of essential short-term courses, and learn from reality. Observe and place yourself in the shoes of the CEO or leader of that company, then try to solve their problems.
You have said that start-ups need to create new values for society, rather than continue what already exists. Is it like being a pioneer in a certain field? How can start-ups avoid a premature death?
Startup means being creative, different, new. Different from being a business starter or successor, starting – up means to create something new (job, or business model), and often in the field of technology. In Vietnam, for a long time, the term startup was understood as a young person who just got out of school and started something for him or herself, such as opening a company. Recently, to avoid confusion, the term “start-up innovation” has been used. But in my opinion, it is not necessary. As I mentioned, just using start-up is enough. To start a business, you need to be well prepared. It is different from starting a career, where there is a lot of industry and market information to compare, and lessons or models to refer to. For every startup you have to do trials and fail. All of your initial calculations may be completely wrong. Globally, even in countries dubbed “startup nations,” the success rate is not high. You need to be mentally and financially prepared to face the worst scenario. My advice is: Think big, do small – have an encompassing vision, but start by taking the smallest steps.
The investor in Shark Tank, Robert Herjavec, shared that his secret to success was learning how to sell, a skill everyone should have. How can we improve our sales skills?
Everyone has to sell something. When we go to work, we sell our labor, time, wisdom, and experience to buyers, business owners and employers. In life, daily communication is also a way of selling messages in exchange for the values we want. Sales skills are essential for modern life, not just business. That skill includes matching the products and services of sellers with the right customers, and making the value of the products equivalent or higher than the price. These are key points. Skills such as capturing customers’ psychology, or flattering, or using psychological blows to seal a deal with customers are considered tricks. Sometimes they work in specific situations, but I think it will not last long if you do not have the right mindset and do not bring the real value to customers. In social relationships, and in family and couple relationships, the selling skill is also essential. The only difference is that the value-exchange intermediary here is money. I will elaborate on this topic at another opportunity.
You once said: “When doing business, don’t just think about money. Money is a tool, not a goal. When you create value for the community and benefits for customers, naturally money will come.” Were you talking about social entrepreneurs, and is this a way to achieve long-term, sustainable success?
Not just social entrepreneurs, but every entrepreneur must pay attention to the value that he or she brings to customers, to society and to the community. That is how you sustain your business. If the goal is money without care for value, the business will eventually fail or be limited.
You once confessed that you were not a good manager, nor could you pay attention to details in implementing specific tasks. Instead, you had an abundance of ideas, so you chose to hand over your ideas to others to execute. What are your criterias for a good executor?
I discuss this with my colleagues, mainly in the member companies of CenGroup. Then the CEO will set up a task-force group. In many other cases, there are start-ups already doing that same business, but I see them running things the old way, and I give them ideas to change their business model.
The people I choose are those who have the ability to manage, to take action, to use limited resources effectively, and to turn ideas into reality.
In partnerships, conflict is unavoidable. How do you handle this?
Remember common goals. When we have conflict with others, we must think about why we started. Try to find out what is wrong, not who is wrong. Finally, if I can’t solve it, I will often give in and then spend my time, heart and mind on other things.
About the show “Shark Tank Vietnam”, what do you think about Vietnamese start-ups?
This is something I am very concerned about. Never has the start-up movement been so hot. Everywhere people talk about start-ups, about the industrial revolution 4.0, about innovation. It seems to be a movement but in fact, the number of successful start-ups is very small. Resources for start-ups are scarce. Compared to developed countries, start-ups in Vietnam face more difficulties, not only because of the business environment, the basic conditions for start-ups such as incubators, mentors, and coaching are missing and under-prepared. You have to teach yourself a lot. That is just the external environment. Many Vietnamese start-ups are not equipped with business knowledge or management knowledge, so they feel perplexed and spend tons of time on governance, instead of focusing on product development and finding markets. It is easy to see that most of the start-ups who gain investments on Shark Tank Vietnam are trained abroad, or have lived and worked abroad then return to Vietnam to start a business, or they have a foreign partner.
To buy or not to buy real estate in Vietnam is a concern of many Vietnamese people living abroad. As a real estate tycoon, what do you advise?
Vietnam is a strong developing country with a high rate of annual growth, plus attractive foreign investment policies drawing an enormous amount of FDI and remittance. If you want to seek high-profit real estate investment opportunities, Vietnam is a hot spot. But in business, high profits are always associated with risks. And maybe that is the reason why overseas Vietnamese are concerned. My advice is to learn and keep updated on the latest market information and policies, through professional and reputable consultants. If you are too cautious or conservative, losing golden opportunities is also a big risk.
You have gold standards for investing in real estate. Many Vietnamese people abroad are interested in your advice for buying a property to live in versus to invest in. Can you share your thoughts?
It is necessary to specify the purpose of buying real estate in the first place. If you buy a property to live in, convenience and affordability come first. If you are buying for investment, what is the purpose of your investment? For example, if you have large savings and are looking for a long-term investment, you can put the money in riskier projects with a higher potential rate of return. If the money is borrowed, or mobilized, it must be invested more safely, where there is good liquidity, the ability to make a profit, and generate a cash flow to offset the investment cost. The calculation of the correlation between the capitalization value or the utilization value of a property compared to the investment rate, and compared to other opportunities is always a key to assessing the potential of a property. Currently, in Vietnam, the efficiency of real estate utilization (yield) is increasing quite quickly and this will further attract investors. Lastly, compared to other countries in the region, Vietnam is an emerging market. There is much potential, real estate is expensive compared to the income of the people, but cheaper than the income of developed countries, including overseas compatriots.
What are your predictions on Vietnam’s economic situation in 2019? What are the potential changes in the Vietnamese real estate market?
I think that 2019 will be a year of steady growth, continuing a successful cycle of Vietnamese economy. In particular, areas such as retail, industrial production, and logistics will see strong growth. Housing, banking, and securities will be slower. I personally believe that Vietnam still has many opportunities ahead, not only in 2019 but also decades to come.
More and more overseas Vietnamese intend to develop their businesses in Vietnam. What do you think about this? What are the opportunities and challenges?
This is a good opportunity for overseas Vietnamese. The time has come, the market is open because in 2018 Vietnam fully fulfilled its commitments when joining the World Trade Organization. Policies and legal corridors have approached international standards, but the market is still open in many areas. Natural resources and human resources are abundant. The challenge here, if any, would be the environment and business culture of Vietnam. After many years of operating under the mechanism of centralized subsidy, there are many shortcomings. There is a lack of transparency since the market has been open only for a short time. But that is exactly the chance. If you wait until the economy and business environment of Vietnam reach the level of the United States and Canada, there is no chance for overseas Vietnamese investors.
What advice do you have for foreign businesses in general and overseas Vietnamese entrepreneurs in particular before they enter the Vietnamese market?
You need the spirit of an adventurer conquering new lands. Although Vietnam is not too primitive, it is still full of risks and pitfalls. Be well prepared, but don’t be afraid to act. Find yourself reliable local partners, have a deep understanding of the local market and have a professional working style at the international level. Finally, glory always belongs to the pioneers
This post is also available in: Tiếng Việt