In light of the social networks in Vietnam getting busy, I caught up with Thanh Le, a Brigham Young University graduate and the CEO and co-founder of faceViet, and had an interesting conversation about faceViet’s business and its upcoming launch. faceViet, a Vietnamese model of Facebook, is preparing for the official beta launch on November 20, 2007. Here’s the conversation:
Khoa Pham: First off, I was just curious how the team got together and how the idea of starting this project kicked off.
Thanh Le: We are all old friends who knew each other very well before. I am running the overall business, Hue takes care of the finance and accounting, while Tung and Lan focus on business development and strategic marketing. [Note: All co-founders of faceViet were born and raised in Vietnam and then went to study abroad.]
The idea started about one year ago. When we took a deep look at the Vietnamese web 2.0 market, there was no pure social networking player. As we thought of building something to connect everyone together, Myspace came first to our mind. However, we figured out Myspace model might not fare well in Vietnam due to its complexity and over-creative structure. Just too many things in one place. Yobanbe was still very small but has potential. Y! is basically for everybody. Apparently, none targeted a huge market: the high school and college students. For this audience, we think Facebook is a good model. We then started hiring coders in different countries to develop what we think Facebook should work. It was a lot of guessing and testing. As Yahoo 360! is coming to a close and Yahoo Mash! is nowhere close to finish, we’ve decided to roll off what we have so far for beta testing.
Khoa Pham: Do you think Yahoo 360 just happened to be there? I mean, it seems like they didn’t even do any marketing at all.
Thanh Le: Oh no, I think Yahoo! is huge. Almost everybody in Vietnam has a Y! id, which is why it is so easy to integrated into any kind of applications that they have. Let me make it clear. First, we are not trying to compete with Y!. Even though we have ambition, we strive to be realistic and focused. We are aiming specifically at high school and college students and building a network based on that audience. If you go to faceViet.com, check out the networks. After this month, everybody when they sign up, will have the option to join one network based on their schools or locations.
Khoa Pham: I’m not sure if you agree but I personally think Yahoo 360 is more of a blogging service than a social networking service, and faceViet capitalizes on the latter right? Just like Facebook doesn’t compete head on with WordPress or Blogger.
Thanh Le: That’s right, but we also know that Y! is moving to social networking with Mash, which has potential to be the biggest player in Vietnam. So we wanted to act quickly and capture that market [high school and college students] first.
Khoa Pham: Now, we all know Facebook started off from college email addresses and existing college networks. How do you plan to tackle this in Vietnam?
Thanh Le: Our initial target audience will be: Vietnamese students studying abroad, high schools and colleges in Hanoi and Ho Chi Minh City. Most of the big colleges in HN and TPHCM, they have their own .edu email address but the students rarely use them. So we worked the way around by giving them the option of choosing their network when they sign up. But if they want to use their emails, that works too. That’s a very simple module that we can activate anytime. As with the overseas Vietnamese students, we tackle them by word of mouths. So far, we have identified a number of key Vietnamese student networks in the US and the UK. But again, it depends largely on “viral effect” – one person sign up, love it and spread it to others. We have great faith in our product and are working hard to constantly improve the system. So yes, we plan to use a combination of word-of-mouth and traditional outreach strategies.
Khoa Pham: So that’s the user acquisition strategy. As you would agree with me, authenticity used to be important for Facebook during the first days. How does authenticity play in faceViet’s overall strategy?
Thanh Le: Same question everybody asked me. While we are developing faceViet based on Facebook structure, faceViet is tailor made to our Vietnamese users. There is no Facebook in Vietnam, and most of Vietnamese students never used Facebook before, so authenticity wouldn’t be an issue.
Khoa Pham: You mentioned that the primary target audience will be college and high school students abroad, as well as in Hanoi and Ho Chi Minh City, at least for now. How do you plan to attract each segment?
Thanh Le: We are working with a few savvy, well-connected students at a big school in the US to find ways to get the words out to other users. In Hanoi, we will tackle schools such as: Hanoi Amsterdam, Chuyen Ngoai Ngu, Tran Phu etc.. and other big high schools. For colleges, we focus on ĐH Bach Khoa, Kinh Te and Tong Hop, again big schools. Same strategy with Ho Chi Minh City. Of course the implementation is more complex, but that’s the basic grasp.
Khoa Pham: It seems like you focus on the top, big schools first.
Thanh Le: We believe that once all the big schools get hooked, others follow suit in a kind of snowball effect.
Khoa Pham: Just briefly, how is the infrastructure built?
Thanh Le: Mainly Php and MySql. We also had to build it piece by piece because it would be too risky to outsource everything into one place. Different places built some specific components, and then our major coders in San Francisco and Vietnam put and test everything together.
Khoa Pham: How is it like working remotely?
Thanh Le: It is tough to coordinate work and maintain communication in three or four different time zones. No less challenging is the cultural differences. We are fortunate to have two experienced project managers in Vietnam and in San Francisco.
Khoa Pham: I assume the outsourcing part was just at the beginning. Otherwise, it can be concern for ongoing development.
Thanh Le: Yeah, it is moving in house now, no more outsourcing. When it comes to the final stage, outsourcing is too risky.
Khoa Pham: This process reminds me of Digg.
Thanh Le: Yeah, we did research on the outsourcing issue. As a matter of fact, two of the co-founders did a lot outsourcing for their previous ventures.
Khoa Pham: Just one last question, and also a feedback, about the product. As I tried to play around with faceViet, I realized it can be a bit overwhelming for first-time users.
Thanh Le: Yes, I realized that from my beta users’ feedback. Thanks for the confirmation. I agree that the learning curve might be steep. As of we are speaking right now, instructions are being put online for new users.
Our current statistic is that, 7 out of 10 people who create faceViet account would spend around 7 minutes to complete one profile, with learning curve taken into consideration. Now when new users sign up, we have one default profile, Hue, to be everybody’s friend and help them with any question.
Khoa Pham: Besides online instructions, one helpful way is to email users like once every three days or so to educate them on important features. For example: “How can faceViet help you announce events?”
Thanh Le: A very good suggestion. Thanks, I will pass that on to the development team.
Khoa Pham: Who are the direct/indirect competitors of faceViet?
Thanh Le: I would say everybody else. Yobanbe has the teenagers. Cyvee built a good Linkedin. Mash! is gaining tons of users every day – it’s Yahoo, after all. I will not drop any names off the table but we are ready for a fair fight. What sets us apart is our solid focus on the high school and college student networks.
Khoa Pham: Here’s the fun part. What can you say about your business model?
Thanh Le: We will try out a couple of options. Our primary source of income will come from the homepage where you see all the news feeds. Companies will have the option to create their own story-like ads, and we will show it on user’s news feed. When they check what their friends are up to, they will also look at the ads. Many people are still using traditional ads like banners and pictures, which I think are not very effective. I believe there’s more efficiency we can bring to the advertising space.
Khoa Pham: Can you elaborate a bit on that?
Thanh Le: The ads will be created as a short story, so it looks like an actual feed. Most importantly, the ads selection and allocation will base on what information users have on their profile. For example, you put ‘Lam Truong’ in your Music section, then you might likely see a story ad related to Lam Truong-related stuffs – new CDs, concerts, etc. All ads are relevant and helpful.
Khoa Pham: I really like the concept.
Thanh Le: I’m glad that you do. Besides simple advertising model — selling banner and text ads, faceViet also permits sponsored groups in which a marketer can build communities within the site. faceViet have power beyond ad revenue to act as a customer relationship management (CRM) tool for companies selling products or services. There’s a lot of focus on advertising and banner ads and the amount of traffic. But it’s important to look beyond traditional forms of web adverting to see the real potential — which is leveraging the connectivity of the sites and using them to form communities around products, media or services to really be in contact with your users.
Khoa Pham: Just to clarify, besides the ads on news feed, will there be banner ads at all?
Thanh Le: Yes, BUT only if they are relevant. For example, companies can put ads based on our network selection. If FPT wants to recruit a lot of computer science students, we will broadcast FPT banner to DH Bach Khoa and DH Khoa hoc Tu nhien networks. Be it a banner ads or a story ads, the algorithm strives to make it as relevant and helpful as possible.
Khoa Pham: One last question, how is the business financed right now and what’s your financing plan?
Thanh Le: I can tell you that faceViet is a self-funded start-up with no debt. We may seek additional money to prepare for all-out coming.
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