Scaling lessons from Vietnam

I was about to write more about data sources, but will have to defer to the next week to highlight a very interesting meeting I just had last week.

Last Friday, I had a chance to chat with a senior executive from VNG Corporation, the fastest growing Internet companies in Vietnam. VNG (formerly known as Vinagame), a dominant provider of online games, entertainment and social networking portal for the young and increasingly connected Vietnamese population, is on the “rocketship” growth curve, if we were to use the terminology in my previous post about technology startups’ growth path. With revenue exceeding $50 mil (which is a lot, for a small market like Vietnam’s) and growing 50% year over year, VNG must be doing many things right but at the same time, it will be a huge challenge to keep up with the growth and meeting the heightened expectations of the market.

I met with Hoanh Tien Nguyen, their VP of Operation and learned quite a bit about the experience at this company. Nguyen himself joined VNG in late 2008, having worked as an operation management consultant with SAP before. His experience proved to be the perfect fit for VNG, which in 2008 was already experiencing a lot of growing pains around its operations: it had dramatically increased its staff, it opened new data centers, adding more games to its roster and expanding into Internet content and social networking. Nguyen was brought in to help streamline the operational processes across the company, setting it up so that it would be ready for scaling further in the next two years.

If you have followed our blogs, you would know that our sweet spot is in helping companies execute better on a profitable business model. We believe that expansion stage technology companies will benefit the most not from the expansion capital, but rather the operational support that we provide in helping them streamline and scale their operations. For example, at Zmags, a portfolio company of ours, we worked on several projects with the Director of Global Sales Operations, who was brought into the company to bring more operational experience to support a very fast growing sales team. Thus, I was more than delighted to hear of a similar experience with an Internet company in Vietnam. Our value proposition does work for young technology companies all across the world.

Nguyen also mentioned that the next set of challenges for VNG will include scaling its staff – growing the team dramatically without sacrificing the quality of the people and the company culture. We recognize the same at our portfolio companies, and that is why we support them with our own internal recruiting support service. What we aim to do is to support our portfolio companies with the addition of key team members in the early stages of their growth, and then help transfer best practices to their recruitment team in the later stages.