Having spent 13 years in that market, Levey has seen the Vietnamese ecosystem through from the nascent stages of 2002 to the promising tech scene it is today. What was it like building a business in an unexplored market? What challenges did he face starting up?
Catching up with Levey during Echelon Thailand, we caught a glimpse into the arduous journey of a young American entrepreneur who moved to Vietnam to build and run a startup for a decade before its eventual exit.
Pursuing a high-flying executive career in New York, Levey had a big change of heart in the early millennium. After the 9/11 attacks that devastated his city, he had also just ended a relationship and suddenly felt a ‘carpe diem’-like urge to try something new.
His antidote for his restlessness? Picking up and moving to Vietnam to begin his foray into the recruitment tech space.
From New York to Vietnam
Moving house from the Big Apple to a developing Southeast Asian country required Levey to streamline his life and pare back greatly on expenses. His new life in Vietnam was, according to him, a “super lean operation”, where he lived on US$24,000 a year, which included flights back to New York and regional travel. To put it into perspective, Levey was making more than the same amount a month back in the US.
He remembers the early days of customer acquisition: “We were working out of our house, going around on our motorbikes and visiting clients and convincing them to put their jobs on our website. It was very slow in the beginning.”
After launching VietnamWorks in 2002, Levey and his Co-founders struggled during their first year of operation before they came up with a monetisation strategy that would stick. After running out of money several times and continually re-investing their own cash into the business, they were burnt out and ready to call it quits.
When a Co-founder calls it quits
“We were a year into it, trying to monetise for six months. We were ready to give up and move back to New York and get real jobs,” he says. Thanks to a pep talk from investor Chris Freund, the Founder of Mekong Capital, Levey was motivated to continue the uphill battle with VietnamWorks.
“So, in eight weeks, we squeezed our costs even more. Sean (his Co-founder) went back to New York but I stayed behind with still no salary for an entire year. We finally grew to a point in just over two years where we were able to move into a cheap, but proper office.”
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After beginning to charge for the service in early 2003, the startup had 12 people join the VietnamWorks team. The turning point, remembered Levey, was when global consumer goods brand Unilever signed on as an employer and paid to place their logo on VietnamWorks’ homepage. It inspired confidence for future customers to post their jobs.
Then, a string of fortunate events started to trickle in for the young startup. The team hedged its bets on a new product, Navigos Group, a traditional executive search portal that brought in more revenue. Next, Ernst and Young exited their recruitment business which, according to Levey, really put them on the map. With great traction under its belt, VietnamWorks was able to raise three additional rounds of funding.
Was an acquisition on the horizon? Levey remembers having his exit strategy foiled. “We tried to sell twice and failed. The first time, it was early — around 2009 or 2010. We were in talks with a large European media company. We were visiting each other, the term sheet was signed and it was nearly finalised — but they had a change in strategy so acquisitions were put on hold,” he says.
It wasn’t until years later (and attempting to find another buyer and failing) that the company was approached by en-Japan, although that deal also came with complications — this time of a more comical nature. “Another potential buyer came along, so there was competition. Unluckily, the chairmen of the two possible acquirers ended up meeting each other on the golf course and finding out they were both talking to us, but then the story goes that en-Japan pushed out the other party,” he says.
Where a company getting courted during the talks of a potential buy-out may be talking to other buyers, Levey also likens the acquisition process to a relationship. “You know that feeling when you’re single and you really want to be in a relationship? It’s kind of like wanting to exit your startup. When you stop looking, then it comes,” he laughs.
An exit as a badge of honor
Although the handover of VietnamWorks to en-Japan was at the end of 2014, Levey said he continued to consult for them until April 2015, so it’s only been eight months since he’s been fully hands off from his company.
What do the post-exit days feel like? Levey puts it poignantly:
“I had this idea as an American entrepreneur that I needed to sell the company, it was a badge of achievement as an entrepreneur. I loved our company and our team and I underestimated how hard it was to transition away from the business.”
Now Levey is channeling his entrepreneurial know-how into angel investment and he’s in the process of making his fifth investment in eight months in the web and mobile space. He shares two deals that he has co-invested in with 500 Startups, which has announced plans to invest more in Vietnam in the future. On top of that, he also sits on the board at Mekong Capital — a Vietnam-focused private equity firm.
Outside of Vietnam, he’s also backed Myanmar recruitment startup JobNet and waxes nostalgia about the similarities between the two markets.
“I’m drawn to Myanmar, it felt a lot when I came to Vietnam 13 years ago. I’ve invested in a job portal and I know what the job scene was like in Vietnam back then. There’s an incredible shortage of great talent, especially at the experienced, non-manager and manager levels. It’s not competitive there yet and there’s an enormous need to help companies recruit. The demand is strong and it’s an exciting time to be there,” he says.
Still, the siren call of entrepreneurship continues to entice Levey and he says that if he does do another startup, you can expect it to be in his home, Vietnam.