The ups and downs of crowdfunding in Vietnam
Despite popular belief, crowdfunding is not a modern financial model. In 1850 Auguste Comte created a scheme to issue notes for the public support of his further work as a philosopher. The Premiere Circulaire Annuelle adressée par l’auteur du Systeme de Philosophie Positive was published on March 14, 1850 and several of these notes, blank and with sums have survived. However, there is no doubt that the rise of sites such as Kickstarter, Indiegogo and Gofundme has brought this alternative financing option to the 21st century and a far wider audience. Since 2009, hundreds of thousands of projects have found investors through crowdfunding and the number will only continue to increase.
But what is crowdfunding? It’s a way to raise money, awareness and support for a project from the people around you and in return they receive benefits. However, despite its popularity internationally, crowdfunding is underused in Vietnam and the reason for this is the failure of the first Vietnamese crowdfunding platform. Founded in 2013, IG9 (a shortened form of ‘ignite’), was hailed as the vanguard of the modern crowdfunding model and a robust startup in Vietnam. It had a strong team at its core as well as the backing of an entire community of young, tech-savvy Vietnamese entrepreneurs. It was featured in many local media outlets and even received international attention. Despite signs of success, the company was hit with accusations of mishandling of funds and a general lack of responsibility to its followers and supporters. Its business and credibility started to dwindle and in less than a year after launching IG9 quietly faded into obscurity.
Since IG9, a handful of crowdfunding platforms, including Fund Start and Charity Map, have launched but none has achieved commercial successes until this year.
A Case of Cultivated Success
Before 2016, Comicola was a name known only amongst comic book fans but earlier this year, it pivoted into the limelight when Long Than Tuong, its signature comic book series, achieved international acclaim as the runner-up in the 9th International Manga Award. Long Than Tuong, an ongoing series with three volumes published so far, is Comicola’s biggest commercial crowdfunding success. Its third volume raised USD5,000 within just three days of the project’s debut on the company’s crowdfunding website. It is not the only success the company has achieved, Comicola has published more than ten comic series through crowdfunding and it is the only company in Saigon where comic book artists can publish their work through crowdfunding.
Hoang Anh Tuan, co-founder of Comicola, believes his team has figured out the keys – community, commercial viability and a harmonious startup ecosystem – to crowdfunding success in Vietnam. “The community is extra important in the crowdfunding model. They are the investors and the customers. They are the ones who decide which contents get published and consumed. They are the ones who decide which projects succeed and which projects fail. Because of those reasons, community management is of vital importance. The community manager needs to maintain a great deal of interaction with the community. He or she needs to listen to the community and ensures its growth. A weak community means less funding and consequently fewer projects. The thing that heralded IG9’s end was its failing of its Facebook community. They had thousands of people following them but they didn’t really do anything for these people aside from posting a few links to press coverage. For weeks before their closure, there were no updates on their page and people’s questions on Facebook were left unanswered for months.”
Commercial viability, according to Tuan, means high value and responsibility towards a project’s supporters and investors. “We study the concept of perks on Indiegogo and Kickstarters. Everybody wants value. Everybody wants bang for their buck. So we vet each project carefully for viability and value. We make sure that we give back to our crowds a bigger value than what they give us.”
The last component – a harmonious startup ecosystem – is important to survive and develop. “So far, every project we ran was a success. But between success and long-term survival and growth, there is still a gap. We study the cases of our American friends and behind every success of theirs is a vibrant ecology of startup businesses and entrepreneurs. They work together to survive, grow and thrive. This is no longer the business world of our fathers where it’s every man for himself. We need to work together. Vietnam right now lacks that kind of harmonious ecology. Crowdfunding may ensure an initial investment, but each project must find other sources of income to build upon their prior success. This is the last component and the one we are slowly working torwards. We aim to connect with more young and new businesses like us and create more opportunities and values.”
A Case of Sheer Luck
Unlike Comicola and its cultivated successes, the story of the Green Bamboo Shelter charity fund project is one of luck. One of the oldest charity groups operating out of Saigon, Green Bamboo runs various programs aimed at assisting homeless children. Earlier this year, one of those programs, the Social Progressional Integration project (SPI), was at risk of cancellation because of financial reasons.
“Our biggest donor, the Danish government, recently dropped funding for the SPI due to paperwork complications,” explains Aneesa Kara, an officer of the Green Bamboo Shelter and the person behind its first charity crowdfund attempt. “The SPI is a program created to help homeless teenagers in Saigon. These kids aren’t your spoilt runaways. They are kids from rural areas who move to Saigon in search of jobs. Because of their age and usually their lack of paperwork, they are open to exploitation and abuse. The SPI is a yearlong program that shelters them, helps them with legal paperwork as well as equips them with the vocational skills that higher paying jobs require. We have maintained this program for years, but this year, because of a complication of paperwork, we lost the majority of our funding and were forced to look for operation money elsewhere.”
After months of painfully slow and low-yield fundraising campaigning, Aneesa, on a whim and with low expectations, decided to create a crowdfunding project for the SPI program on Generosity.org, a charity-only branch of Indiegogo. Much to Aneesa’s surprise, her project managed to raise USD5,000 in 23 days, half the funding of a year of SPI operation and an amount that normally would require at least four months of traditional campaigning with donors and partners. “I couldn’t believe it at first,” says Aneesa.”I spent maybe two hours creating and uploading that project and in return we got donations from everywhere around the world. A man in India, none of us at the Green Bamboo Shelter knows him, donated thousands of dollars to us with no expectations of returns or rewards.”
Reflecting on her unexpected success where many other Vietnamese crowdfunding projects have failed, Aneesa says it may be a matter of time and trust. “The crowdfunding platform is a new concept for a lot of people. Up until half a year ago, I had never even heard of Indiegogo. You can’t support what you don’t know, and naturally you can’t trust your credit card details to people or organizations you don’t know either. But nowadays in Vietnam, people are getting more used to online transactions. It can be that three years ago was just too soon for crowdfunding to take off in Vietnam.”
She also believes scope may be a factor in deciding a project’s success or failure. “We didn’t expect it but we got our money from many people outside of Vietnam. That’s when we realized that even when our shelter is based in Vietnam and helps only Vietnamese children we don’t have to limit ourselves to Vietnamese or Vietnam-based donors. People naturally want to help or to be a part of something. Distance or a difference in nationality is not an issue. You just have to make it easy for them to reach out. And isn’t that what technology does best? Connect people?”
In the near future, Aneesa and Green Bamboo shelter plan to expand their online presences and crowdfunding to create a stable source of funds for their many charity projects.