For sustainable startup development

According to surveys, up to 90% of startups fail. In most industries, the average failure rate in the first year is 10%; from the second to the fifth year, the failure rate is up to 70%. These telling numbers are raising the question of how to increase the "survival" rate of startups.

According to many startups, the difficulties they face are accessing land for production, especially for small and medium enterprises (SMEs); followed by problems with administrative procedures, access to credit capital and capital for research and development. In addition, the lack of high-quality human resources is also an obstacle in the first years of "starting a business". Not to mention, domestic enterprises also face fierce competition from foreign enterprises.

Startup products displayed at the Dak Lak Innovation and Startup Festival 2024.

According to the World Bank (WB) Review Report in Vietnam in 2024, up to 69% of surveyed enterprises said they had difficulty accessing finance during the development process. According to this report, 37% of enterprises had difficulty finding employees with sufficient management and leadership skills. Regarding administrative procedures, the WB in Vietnam said that compared to other countries in the Pacific region, the cost of establishing a startup in Vietnam is relatively low, contributing to the high rate of enterprises entering the market, but the number of procedures is greater, with a longer implementation time as well as the very complicated process of applying for sub-licenses, with unclear legal frameworks.

Mr. Tran Thieu Nha, Permanent Vice President of the Dak Lak Province Young Entrepreneurs Association, Director of Phu Nhuan Jewelry Joint Stock Company (PNJ) Tay Nguyen - South Central Coast Branch, said that the "death traps" for startups are products that are only good for the founder, not good for the market, and businesses create products first and then look for customers. In addition to the problem of lack of capital, most startups do not know how to manage cash flow. They often "burn" all their money on office investment, marketing... without real cash flow.

In addition, some startups lack a mindset for the non-local market and only focus on a few relationships in the province, not taking into account the national and international markets. Not to mention, the staff of startups lacks management experience. In addition, startups today do not have a support ecosystem, lack mentors, lack investors, and lack connections with universities and large enterprises.

Po Lang Production and Trading Company Limited successfully started with cosmetics from avocado.

"Startups do not fail because of the product but because of the lack of system, lack of connection and weak management. Therefore, to be successful, we must build a real ecosystem, including creating a local startup fund to solve the problem of capital, establishing an "incubator" center to quickly test products, and providing legal, marketing and financial support for startups. At the same time, each startup must have a mentor and most importantly, it is necessary to train a team of staff with management skills, capital raising and product development" - Permanent Vice President of the Dak Lak Province Young Entrepreneurs Association

Recognizing the difficulties of enterprises, the Politburo issued Resolution No. 57-NQ/TW on breakthroughs in science, technology, innovation and national digital transformation (Resolution 57) and Resolution No. 68-NQ/TW on private economic development (Resolution 68) - considered as the "compass" for the young entrepreneur community. In the coming time, the National Project on Innovative Startups will specify these orientations, creating a legal corridor, financial mechanism and cooperation environment to bring ideas from the laboratory to the market, towards the goal of Vietnam becoming an innovative nation by 2045.

In order to remove the “bottleneck” of production space for enterprises, right from the time of drafting Resolution 68, the Government requested attention to the issue of reserving and dividing land funds for SMEs and innovative startups because they cannot access large planned land areas. This spirit is also clearly guided in Resolution 198 of the National Assembly on a number of special mechanisms and policies for private economic development.

According to the Department of Private Enterprise and Collective Economy Development (Ministry of Finance), for industrial parks that have been filled, it is not possible to request land allocation. However, for areas under construction or with vacant land, reserving a portion of the area for SMEs is mandatory. The Ministry of Finance is coordinating with the Ministry of Agriculture and Environment to draft a policy to support 30% of land rent for SMEs and innovative startups when entering planning areas. The support capital will be taken from the local budget.

From the experience of a successful startup, the Director of Ede Cafe Y Pot Nie Company Limited shared that startups need to have a genuine startup story, a distinct product, clear goals and a convincing plan. Prepare your knowledge thoroughly and make a thorough plan on branding, marketing, product segmentation, market, customers, long-term financial planning... Instead of just focusing on a name and advertising, learn how to manage risks and problem-solving skills.

Damaca Nguyen Phuong Joint Stock Company is one of the successful start-up businesses in Dak Lak.

According to many other successful startups, when starting a business, startups should know how to share risks and attract capital through calling for investment. Because when there are more suitable investors, startups will be less burdened with financial pressure, as well as have more ideas or solutions to the problems encountered. In addition, startups should also start lean, build good projects and business models, research the market thoroughly to sell products that have a market and meet the right target customers.

Ms. Luong Thi Thuy Anh, Director of Daklak Innovation Hub (DIH) said: After the startup idea competitions, despite winning high prizes, meaningful products, and great social impact, many startups just stop there due to lack of experience and guidance. Therefore, for startup ideas to develop sustainably, it is necessary to have guidance from the "big guys", leading enterprises in the industry. At the same time, it is necessary to organize more programs to support the startup ecosystem in the coming time.

Source: https://baodaklak.vn/kinh-te/202508/de-startup-phat-trien-ben-vung-b870d54/