Private Sector: Your growth opportunities

2nd VEF Alumni ConferenceLe Hong Minh

CEO, VNG Corp

Popular career path if you graduate in…

• 1990-2000: Government sector (some more studies) Government sector or Private companies

• 2000-now: Foreign companies (some experience) Foreign companies or Private companies

• Private companies are not first choices• …but are often the destination

Private companies are still small…

% of GDP 2000 2001 2002 2003 2004 2005 2006 2007 2008

Government sector 38% 38% 38% 39% 39% 38% 37% 36% 36%

Private companies 7% 8% 8% 8% 9% 9% 9% 10% 11%

Foreign companies 13% 14% 14% 15% 15% 16% 17% 18% 18%

But growing very fast

2000 2001 2002 2003 2004 2005 2006 2007 20080

2

4

6

8

10

12

14

16

18

Government sector Private companies Foreign companies

Growth rate of 3 major sectors (%) 2000-2008 (Source GSO)

And offer exciting opportunities

• 2009-2017 red numbers are assumptions• Private companies in 2017 is nearly as significant as foreign

companies now (% GDP)• 5% point in GDP but 2.5x growth in size (@11.9% average

growth)• Different sectors can have faster opportunities (Hot ones are

Finance, Real Estate, Retail, Tech)

2000-2008 Average Growth (%)

2009-2017 Average

Growth (%)2008 % GDP

(%)2017 % GDP

(%)

VN GDP 7.50 7.0 Private 12.70 11.9 11 16Government 6.80 6.3 36 34Foreign 10.70 10.0 18 23

Example: Internet industry

2004 2009 2004-2009 Growth (x)

2010-2015 Growth (X) 2015

Internet users (M) 6.3 20.9 3.3 2

41.8

% population (%) 7.7% 24.5%

45% International

bandwidth (Gbps) 1.9 54 28.4 5

270

.VN websites ('000) 9 95 10.6 10

950 Internet industry revenue (B VND) 75 2500 33.3 10

25,000

Comparisons between the 3 sectors

Pros Cons

Government Job stabilityPotentially high incomePower & (fame)

Very low salaryBureaucracyLong & slow career pathNepotism

Foreign High salaryProfessionalismTraining & learning opportunities

Limited earning growthOften not the decision makerHigh pressure job

Private Medium to high salaryPotentially high income (stock ownership)Growth opportunities Change the world

Less professionalismLess training (but more growth through the job)More risks

Risks with Private companies

• If you starting one:– Capital & resources– Regulatory environment– Heavy competition– (Lack of quality people)

• If you working with one:– Pick the right company (long-term growth capabilities)– Pick the right environment (meritocracy, share of

success, strive for professionalism)

Change the world

• Building a company is the best way to change the world:– Align the interests of a lot of smart people– Build something that’s great and that serves people (to

receive value)

• You can’t do that – if you’re an individual, because it’s just you (and no

one to align)– if you’re a non-profit, because you have no resources

and you’re constantly ask for money instead of generating it and being self-sufficient

THANK YOU