Vingroup, a leading real estate and retail conglomerate in Vietnam, knows better than most the value of innovation. Founded in 1993 as a dried foods producer, the company expanded rapidly into new industries – property, healthcare, education, entertainment – and is now made up of tens of thousands of employees spread across dozens of subsidiaries. The latest of these, VinTech, was launched in August – and is at the heart of Vingroup’s plan to become an international Technology-Industry-Service group within the next decade.
Embracing new technology is more than a strategic play for Vingroup. The software industry in Vietnam is small but blooming, growing an average of 20-25% per year since 2001, and the traditional sectors in which Vingroup operates are prime targets for technological disruption. By stepping into the tech sector themselves, Vingroup aims to become the leader of a new market and bring their current businesses into the future, all in one fell swoop.
Executives from VinTech came to SVIC for a custom four-day immersion program into the heart of Silicon Valley innovation culture. Their goal is to bring the Silicon Valley model back home in the form of VinTech City – 70 hectares of land in Hanoi that the company hopes will become the cradle of technology in Vietnam. VinTech will build office buildings, data centers, and accommodation to host startups, scientific researchers, tech incubators, and more. Their objectives in visiting Silicon Valley were thus:
- To learn how successful companies grow through technological innovation; and
- To understand how to create cultures, networks, and partnerships that foster such innovation.
The Birth of Silicon Valley
VinTech’s program began with an introduction to the history of Silicon Valley at the Stanford University campus. Stanford is one of the most successful schools worldwide in producing company founders, funding student ventures, and facilitating technology transfer – second only to UC Berkeley, whose groundbreaking Innovation Group (BIG) VinTech heard from too. By exploring these breeding grounds for technological progress, the VinTech executives got a personal taste of the culture that produced Silicon Valley – and first-hand knowledge of how to go about replicating it.
The co-founder of BIG explained this replicability in his Design Thinking Workshop by stressing that innovation is a “scalable, repeatable process” based on four components: discovery, insights, ideation, and experimentation. Armed with these principles and a clear guideline for implementation, VinTech was able to sharpen their vision for a Vietnamese tech industry capable of rapid, sustained growth.
Continuous Digital Transformation
Learning how to start innovating is one thing; learning how to stay innovative is quite another. To understand how some of the world’s biggest tech companies continue to transform in the face of corporate inertia, VinTech visited the campuses of giants like Google, Apple, and Facebook.
The Engineering Director at Google shared one secret to sustaining innovation: empowering employees. Because VinTech plans to help develop 100,000 engineers over the next decade, this part of the program was of particular help. The executives wanted to know what to look for in new hires to maintain a lean company culture, as well as how to differentiate between employee incompetence and mistakes made in the pursuit of progress. Understanding the difference between structural weaknesses and teachable failures is a crucial tenet of the agile philosophy that allows Google to fail fast and follow success.
Later in the program, VinTech heard from the Principal Engineer of Cisco’s Strategic Innovation Group on their digital transformation journey. Cisco – ancient by tech industry standards, founded in 1984 – has had to pivot from one networking technology to another to stay relevant in a constantly shifting landscape. In the Internet of Everything era, they run Innovation Centers designed to help them stay ahead of the game. The VinTech executives learned about Cisco’s process for generating ideas and asked about the financial, temporal, and labor costs of constant iteration. As the success of Cisco and Silicon Valley implies, the price is worth it. In learning how to anticipate and calculate them, VinTech can now build the cost of innovation directly into their models for a new industry.
Strategic Partnerships to Accelerate Growth
If innovation in one company is worth the price, innovation across many companies is worth a fortune. VinTech had the opportunity to visit startup accelerators, venture funds, and corporate innovation consultancies committed to bringing the benefits of Silicon Valley worldwide. The executives learned about the latest ideas being used to leverage emerging global networks of multi-industry partnerships. Developing local accelerators and partnering with international companies is an untapped opportunity in Asia and a central part of VinTech’s plans to jumpstart the Vietnamese tech industry.
At RocketSpace, one such international start-up accelerator that provides velocity (“both speed and direction”) to companies of all shapes and sizes, VinTech learned that a foundation of open collaboration is a fast track to the future. The founder of RocketSpace shared how his company brings entrepreneurs, startups, and corporate professionals together to capitalize on multiple threads of innovation at once. VinTech took away valuable lessons in fostering collaboration within their industry – and a potential partnership of their own with RocketSpace, with which they secured another meeting.
Taking Silicon Valley Innovation to Heart – and Hanoi
VinTech came to SVIC looking to understand what makes the Silicon Valley ecosystem thrive. They wanted to understand the cultures and values that have produced so many successful companies, and – more importantly – the tools, techniques, methodologies, and people that allow these companies to continue to grow and shape the world economy. VinTech executives learned how to create and foster a culture of innovation, collaboration, and employee empowerment even as companies scale. They went back to Vietnam with valuable networking experience and new international colleagues, first-hand impressions of successful company cultures, and a potential partnership in RocketSpace.
In-depth, up-front experience of Silicon Valley innovation through SVIC has primed VinTech to hit the ground running with their creation of a leading international tech industry in Vietnam. As Vingroup’s Deputy General Director Nguy?n Vi?t Quang noted at the signing ceremony for VinTech: “This is our destiny.” One facet of Silicon Valley culture where no extra guidance is needed: ambition.