Interview with Go2Joy : 3 Crucial Lessons on Building the Largest Hotel Booking Platform in Vietnam

In this interview, we feature Simon Byun, the CEO of Vietnam's No.1 hotel booking service, Go2Joy. Go2Joy is Vietnam's largest hourly hotel booking service, catering to the needs of the young generation.

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Mr. Byun, as a South Korean startup founder, started his journey by gaining local experience while working as a resident employee in Vietnam before founding his company. After starting his own business, it was challenging to develop an in-house service while relying on outsourced development. 

He made a resolute decision to stop outsourcing and focus solely on in-house service development and operation. This led to the creation of the current Go2Joy, which now holds the top position in Vietnam's hotel booking sector. 

Starting from zero without a local talent pool and growing into an organization of 60 people. Discover the story of CEO Simon Byun right now!

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Reasons for Not Considering the B2B Model in Vietnam

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Q. What were you doing before starting your own business?

After graduating from university, I worked at a trading company before moving to SK Telecom in South Korea. While I enjoyed working at the trading company, I believed that the future was in information and communications, so it was fortunate for me to switch to SK Telecom as an experienced hire rather than a newbie.

In a trading company, most employees work independently, almost like running their own business. In contrast, SK Telecom has an organized structure with various departments operating within a system. Much of what I do now is based on the experiences I had at SK Telecom.

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Q. Looking back, what from that time has been helpful in your current business?

The first thing is that I had the experience of working in Vietnam thanks to the company I belonged to. Many people come to do business here without ever having lived in Vietnam. Compared to that, the experience of working in Vietnam at the company's expense was significant.

Next, it's the experience of working with Vietnamese people. I learned about the challenges and nuances of working with them, and what to be careful about when communicating. More importantly, during that time, I developed a strong determination to do business in Vietnam.

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Q. Did you continue as a resident employee in Vietnam?

I didn’t go to Vietnam as a resident employee initially. I originally handled domestic marketing, promotions, public relations, and managed dealerships in South Korea. I leveraged my previous experience with Vietnamese trade at the trading company to appeal for the position. (Before SKT, I worked in Vietnam around my 6th or 7th year of career.)

After coming back from Vietnam, I returned to the head office but continued preparing for business in Vietnam. I decided I needed new experiences to do business in Vietnam, so I moved to the content business division. At that time, SK Telecom was actively providing content services like comics and TV dramas via mobile phones. The foundational business planning skills for my current business were learned through these steps.

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Q. Did you stay with SK Telecom until you started your own business?

I was looking for an opportunity to return to Vietnam while preparing for my business. One way to return was by defining a business item and heading out with it. Another way was to get an opportunity to work in Vietnam and then eventually start a business there. I preferred the latter approach and was exploring options when I decided to change jobs.

The company I joined was RealNetworks, which was well-known for its RealPlayer media player back in the day. Their Asia-Pacific headquarters was in Korea, with a subsidiary in Vietnam. The business was active in Vietnam, and the head of the Asia-Pacific headquarters was a former colleague from SK Telecom. This connection helped me secure the position of branch manager in Vietnam.

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Q. How was it doing business in Vietnam at that time?

The company was providing solutions to local telecom operators in Vietnam. I was heavily involved in technical sales, meeting with many clients. Through this B2B experience, I painfully realized that doing B2B business in Vietnam was incredibly challenging.

Success relied heavily on connections (guanxi) and rebates. At that time, our biggest competitors were Chinese companies. They had already spent a long time building relationships with Vietnamese telecom operators, supplying them with telecom equipment, and had a strong hold on the market.

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Q. As a foreign company, dealing with rebates must have been difficult. How was it?

Officially, the company did not acknowledge rebates. It was up to the local branch manager to find a way to navigate these issues. 

The competition was fierce, but the biggest problem was that the process of resolving issues in Vietnam was different from that in Korea. In Korea, you would identify key individuals and build relationships to resolve issues, whereas in Vietnam, it was more of a networked culture.

You might negotiate with a person in charge and feel optimistic, but when it came to actual paperwork, it took a long time. After getting confirmation from one person, you needed approvals from other departments, which could take about two months. If one department raised an objection, you would have to start over. Every single staff member wanted to have their say.

Experiencing this in B2B made me realize that B2B in Vietnam is incredibly difficult, especially for startups. The financial aspects requiring unofficial investments and the long time needed to build relationships didn’t seem to fit well.

My current business experiences also made me aim to avoid B2B as much as possible and focus on finding business items in the B2C sector.

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Q. How long did you work at RealNetworks?

I was in Vietnam for about two years. Since it takes time to establish a business in Vietnam, the US headquarters decided to close the Vietnam operations and assigned me to manage a newly acquired subsidiary in Australia, so I moved to Australia.

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Q. Australia wasn’t part of your original plan, was it?

Since my children were in high school and middle school, I had a lot to think about. I wasn’t yet ready to start a business in Vietnam, so I decided to move to Australia, thinking it would be good for my children to obtain permanent residency there. 

However, the Australian market didn't align with my preferences. The population is relatively small. The low population density leads to high logistics costs. In addition, being an English-speaking country, they don’t need to develop many services locally; they can simply use services developed in the US or UK with minimal customization. 

After a year, I realized it wasn’t the right fit for me, so I resigned and left the company.

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Starting an Outsourced Development Business Based in Vietnam

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Q. It must have been difficult to prepare for a startup while taking care of your children.

I sent my family to Vietnam first while I stayed in Korea for about 4-5 months to prepare. Since I had never worked with computer programming languages, I decided I needed to at least understand the terminology, so I attended a computer academy. I learned Java and C to get a basic understanding of what was being discussed.

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Q. When you started with outsourced development, did you already have some clients?

At that time, there were outsourcing platforms like Wishket and O2OJob. Additionally, I had a contact who was running an outsourcing business in Korea, so there were projects through that connection as well.

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Q. How did you go about building a team when you first arrived in Vietnam?

At first, I started without knowing much. I registered the business in 2012, found an office, and began hiring staff. 

Our first project came in January 2013. We advertised on local job sites like Saramin to find candidates. We reviewed resumes, conducted interviews, and hired accordingly. We started by developing around 30 apps, eventually expanding from app development to web and backend development. At one point, we had about eight developers.

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Q. As someone who is not a developer, how did you manage projects in the beginning?

When we received development plans in Korean from clients, I would translate them into English. The developers would then work from the English plans. 

One of the challenges was that Korean development plans were often quite loose. They would leave many details undefined, assuming that Korean developers could fill in the gaps on their own. However, this approach didn't work well in Vietnam. At that time, we had many junior developers who needed more precise instructions.

In outsourced development, there’s often no need for maintenance after delivery, so the code quality tends to be lower. Since we weren’t going to use the service ourselves, there was little incentive to invest time in creating a solid structure. If the plans and manuals were well-documented, the Vietnamese employees would follow them exactly. Without detailed documentation, they would just copy and paste to get the job done quickly.

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Q. I've heard that in Vietnam, detailed instructions are necessary, and assuming they will understand things the way Koreans do can be problematic.

In some ways, I think Vietnam adheres more to global standards. 

Outsourced development sector in Vietnam has been prevalent here for a long time, with many projects coming from Japan, Europe, and the US. These regions provide extensive development documentation, specifying everything in detail. In contrast, Korea tends to give rough guidelines like wireframes and expects a lot of autonomy, which doesn’t always align with the Vietnamese approach.

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Q. It seems like doing outsourced development would prevent you from focusing on your original goals.

We initially did outsourcing to make money, but it ended up consuming most of our time, leaving little for preparing our own business. We only managed to test a few ideas. For three years, I was involved in quality control, product documentation, and client communication, which took up too much time. Communicating with Korean clients and then translating everything into English added to the workload.

By January 2016, I realized that continuing with outsourcing would prevent us from achieving our goals. I approached acquaintances and told them that we were stopping outsourcing to launch a proper service and asked for investment. We received investments from two people and completely stopped outsourcing to focus on our development.

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Q. Was the idea for Go2Joy one of the services you developed in the early stages?

I excluded the gaming sector since I wasn't interested in it. Outside of gaming, there seemed to be two viable models in Vietnam. One was an advertising revenue model based on traffic. For instance, there was a music streaming app called "Zing MP3" that offered free services and made money by selling ads.

The other model was a commission-based one in the O2O (offline to online) sector. Among the options, motels appeared to be the easiest for finding a profitable model. I leaned more towards the O2O model than the traffic-based one. Ride-sharing was already dominated by Grab and Uber in Vietnam. I once considered the real estate market, but there were already several Vietnamese companies with extensive databases, making it hard for us to compete.

Looking for untapped areas, I discovered opportunities in hospital reservations, cleaning services, and hotels. 

Hospitals were too B2B-oriented; breaking into the Vietnamese hospital market would require building relationships through gifts and hospitality, which seemed to be a long way. Cleaning services posed another challenge: maintaining consistent quality. Some cleaners might do an excellent job, while others might do a poor one, and we would be responsible for that inconsistency.

The hotel market, however, seemed promising and manageable. So, we decided to pursue that direction, which eventually led to the development of Go2Joy.

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Becoming Vietnam's Leading Hotel Booking Platform

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Q. In the early stages of the service, you needed to collect hotel data from various local sources. How did you gather hotels and users?

We directly met with hotel owners, explained that we were developing an app, and pitched the idea that bookings would come through it. We also used web crawling to gather hotel data to populate our database, as this business model requires sufficient information. To attract customers, we created a Facebook page and started running ads to build our user base.

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Q. How was your initial team composed?

In the beginning, it was just five of us, including the CTO and me. Once the development was somewhat stable, we hired a full-time marketing person. After that, we brought in a sales representative, bringing our team to about eight or nine people.

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Q. How did the service grow? Did the metrics improve gradually?

We launched the service at the end of March 2017. Originally, we aimed to launch before Christmas 2016, but we found some logic issues that needed fixing, delaying the launch to March. 

At first, there were many days without any bookings. The growth was so gradual that it was worrisome. We were running promotions at our own expense, offering discount coupons and providing cheaper rates than direct hotel bookings.

However, we realized that Vietnamese users were hesitant to trust new services. This skepticism wasn't due to a naturally suspicious nature but rather because many previous services had scammed people. 

For instance, people had experiences where they ordered an iPhone online and received a brick instead. This lack of trust led to a preference for cash on delivery, where customers would only pay after receiving and checking the product. It took a long time for this system to gain acceptance because even then, the person delivering the goods could run off with the money.

Due to the low trust in the commercial infrastructure, people were wary of new services and preferred to wait until others had tried and trusted them. This cultural context made our growth slower back then.

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Q. If the results were lower than expected, it must have been discouraging. Where did you see opportunities?

Although the service grew slowly, we noticed that the repurchase rate was quite high. We invited repeat customers for a focus group interview at a coffee shop, offering coupons as an incentive. During the interviews, they mentioned that they appreciated the transparency and convenience of the service.

For convenience, being able to see and book rooms in advance was a huge advantage. Customers no longer had to go from hotel to hotel if rooms were unavailable; they could book ahead with our service. Additionally, knowing the exact price before arriving at the hotel provided clarity.

Many hotel staff at 1-2 star hotels in Vietnam are often temporary workers without career ambitions in the hotel industry. There were common issues like upselling standard rooms at deluxe prices or charging an extra hour if a guest exceeded the reserved time by just 15 minutes. Each hotel had different, often opaque, rules, which frustrated customers. 

Our service eliminated these uncertainties, making the experience more transparent and reliable. We realized our service had value. In early 2020, our repurchase rate was around 46%. It’s now over 62%. This growth indicates that once customers use our service, they continue to use it, but getting them to try it for the first time is challenging.

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Q. Is acquiring new customers difficult?

We managed to attract new customers, but converting them into buyers was tough. Even with accumulating reviews, many customers still harbored doubts.

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Q. In the early stages, did the high repurchase rate give you confidence?

Rather than confidence, it gave us a sense of value. It reassured us that our service wasn’t meaningless in the market. We thought:

“Let’s keep going. If we can increase the number of people who recognize our value, we can succeed.”

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Q. Was the turning point in your growth curve during the COVID-19 pandemic?

As our user base increased, so did the number of bookings. In 2019, we secured a pre-Series A investment of about 2.8 billion KRW (approximately 2.4 million USD), which allowed us to increase our marketing budget. 

However, right after we received the investment, the COVID-19 pandemic hit. Fortunately, since our service targets local residents, we continued to grow and set new records every month despite the pandemic.

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Q. Did the lockdowns have any impact?

Of course, there was an impact since no one could leave their homes. However, as soon as the lockdowns were lifted, our service metrics quickly recovered and even grew faster than before.

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Challenges Faced After Achieving Industry Leadership in Vietnam

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Q. Your organization must have grown in line with your success. How many employees did you have after the lockdowns?

At our peak, we had grown to 100 employees. As the organization expanded and new people joined, the challenges and headaches increased critically. I spent a lot of time in one-on-one meetings, talking so much that my throat hurt, and I had to persuade team members constantly. It was a tough period, but it was also a time of maturity for me.

Last year, we underwent a restructuring, and now we have 61 employees. Given the challenging investment environment, we had no choice but to reduce our cash burn. In hindsight, this process was about trimming the fat and becoming leaner. Our metrics have not suffered as a result.

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Q. You mentioned the restructuring process matter-of-factly, but it must have been difficult. How was it for you?

Each department had grown quite large. I instructed the team leaders to reduce salaries by 33% across all departments. The team leaders then decided on the restructuring plan, including which positions to cut, and conducted meetings with their team members with support from HR.

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Q. Did the team leaders and members accept the process?

Transparency was crucial. We explained the situation clearly: 

"This is the current state of the company’s finances. If we continue like this, we will face these problems, so we have to make adjustments." 

We shared our future plans, including how we would meet our targets and move forward. I set an example by not taking a salary myself, and the team leaders also agreed to a 30% salary cut to build trust.

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Q. Even with an understanding of the company’s difficulties, a reduction in salary can be significant for individuals. How did you handle this?

We deliberated a lot on this matter. We considered whether to maintain salaries and reduce the number of employees further, up to 50%. Reducing staff by 50% would significantly impact operations and shake the morale of the remaining team members. 

In the end, we decided that it was better to keep more people employed with reduced salaries rather than let go of a larger number of employees.

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Q. Can you describe the process of deciding on and implementing the restructuring?

The candidates for restructuring were selected based on lists provided by departmental team leaders, which HR then reviewed. In some cases, highly-paid employees were let go and replaced through new hires.

During periods of growth, there's a push to scale quickly, and teams often feel the need for more staff. It’s difficult to say 'no' in such situations. We continued hiring as the workload increased, but when we didn't see the expected performance improvements, doubts began to arise. At that time, we were in the middle of fundraising, and when some of the negotiations fell through, we had to make quick decisions.

Fortunately, I think we timed our decisions well. Not long after our restructuring, there were reports of other global companies withdrawing from Vietnam, and numerous other companies conducting layoffs. Therefore, the young people in Vietnam were already aware that the situation was challenging. The employment landscape had changed; previously, it was easy for people to quit a job they disliked and find another quickly. However, as other companies also began reducing their hiring and freezing salaries, the job market tightened.

This context in the job market meant that there wasn't critical unrest among our team members. Of course, some employees really loved our company and wanted to stay, but unfortunately, layoffs were inevitable.

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Q. Are the current team leaders who are middle managers the same employees who started with you, or do they include later hires with more experience?

The team is now mixed.

Our lead developer, who oversees all development, joined this project in 2016 and has been with me for eight years. He started as a junior iOS developer and has grown into a key member of the development department, learning Android development, backend, and Java along the way. He's interested in startups. Although he could earn more elsewhere, he values the learning experience as the organization grows. We've shared the challenges of the business and grown together. Our sales director in Hanoi has been with us for five years.

I believe it's about the relationships between people. These are smart individuals who could get better offers elsewhere, but they've chosen to stay because of the trust and faith built over the years, and a shared belief in our future.

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Q. What do you focus on when hiring new employees?

In an economy growing at around 8% annually, there's a lot of foreign capital and numerous job opportunities. As a result, there's a strong temptation for employees to frequently change jobs for higher salaries. I worry that frequently changing jobs can result in a lack of depth, so I generally don't favor candidates with such histories. I always ask about their reasons for frequent job changes because, in my experience, such candidates are more likely to change jobs again.

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Q. Do you have any specific strategies or techniques for managing your team?

Honestly, that's an area where I feel I have room for improvement. 

I'm not particularly adept at taking care of both Vietnamese and Korean team members meticulously. Instead, I focus on being consistent and keeping my promises. I don't make careless promises, and I always follow through on what I say, which has built trust over time. However, I've missed out on fostering closer relationships with some team members due to this approach.

Having spent a long time in a large corporation, I was used to not being too concerned about hiring and maintaining a talent pool. In big companies, if someone leaves, it's not a big issue as someone else can fill the gap. But in a startup, losing one person can cause significant disruptions. It took me a while to adjust to this reality and to manage the emotional well-being of my team more effectively.

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Q. If you were to give advice to someone starting a small business or a startup in Vietnam, what would it be?

I've learned from experience that managing the growth of team members is faster and more efficient. 

At first, I couldn't always see past their shortcomings, which led to me being quite critical. For example, if a deliverable was only 10% of what I expected, I would be very strict, which made it hard for team members. As a result, I failed to nurture some potentially great talents.

I would now focus more on the emotional well-being of the team, maximizing their strengths while working together to improve any weaknesses.

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Q. What is the most challenging aspect of your work at the moment?

The most pressing challenge is securing additional funding to get through this difficult period. The second challenge has been managing employees, which has been especially tough recently. As the team grows, the number of issues that need resolving increases, and I've realized that I need to be more hands-on in addressing these issues. For instance, I recently had dinner with our sales director to discuss how to foster further growth and how I could support them better.

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Q. It sounds like the growth of your managers is crucial.

Absolutely. One of my personal KPIs is the growth of key members. In the past, if a team member wasn’t performing well, I would try to hire someone above them to fill the gaps, but that wasn't always successful. Now, I spend more time talking with core team members and focusing on their growth, understanding that the company's fast growth is tied to their development.

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Q. Do you prioritize internal growth over external hires?

Internal growth is a priority, but we can't entirely avoid external hires. Previously, we used headhunters, reviewed resumes, and conducted several interviews, but this often led to cultural mismatches. Now, we’re actively trying to align new hires with our organizational culture and clearly communicate their roles.

I'm also expanding my network within the industry. Although we might not be hiring immediately, having conversations over coffee helps build a talent pool. This way, if someone seems like a good fit, or if they know someone who might be, we can take our time to find the right person. We could even test the waters by working on a side project together.

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Q. Finding the right person for the right position seems like a hard task.

Indeed. We're currently looking for a CTO. As we expand our web capabilities and enter the Thai market, we need someone who can carefully plan the system architecture and handle customization effectively. Given past hiring mistakes, we are taking our time with this process.

Finding the right person for each role is crucial and one of my key responsibilities as a leader. We need to hire talented individuals, ensure they integrate well, and help them perform at their best. Right now, we're looking for people in CTO and product positions.

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Q. Given that most of your employees are Vietnamese, with some Korean staff, how do you manage and cultivate your organizational culture?

In the past, it was a challenge, but now we are making strides. For team leaders, I present our IR (Investor Relations) materials, explaining our business plans, growth directions, and vision. Sharing these comprehensive plans helps everyone understand where we are headed.

Initially, I struggled with how to share the company's direction with all employees. Now, our COO and I regularly discuss company culture. We hold town hall meetings quarterly or bi-annually with all employees and monthly meetings with team leaders. We plan to increase these internal campaigns and share more regularly with the entire team.

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Q. What kind of talents or characteristics do you look for in Go2Joy employees?

I prefer dreamers. In Vietnam, startups aren't as prevalent yet, and the brightest minds often prefer large corporations or foreign companies like Facebook and Google. Pragmatic types often don't fit well with a startup. I look for people who enjoy pursuing their dreams and find excitement in that journey.

We don’t just see ourselves as a hotel booking service; we believe we’re revolutionizing the entire motel industry in Vietnam. It’s rewarding to see the industry changing because of our efforts. Those who find satisfaction in this vision are the ones who stay and grow with us.

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Three Insights from CEO Simon Byun

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1. The Quagmire of Outsourced Development

In the early stages of a business, many entrepreneurs turn to outsourced development to generate operating funds. This can lead to a situation where more focus is placed on outsourcing rather than the original business idea. Simon Simon Byunfaced similar challenges, but he made a resolute decision to focus solely on developing an in-house service. Without this firm decision, Go2Joy might not exist today.

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2. Finding Market Gaps

How can one approach finding a business idea while minimizing risks? There are various ways to identify business ideas in the Vietnamese market. Simon Simon Byunchose to select the market first rather than focusing on a specific business idea. While reviewing potential ideas, including Go2Joy, he looked for gaps within the B2C market that could be explored through traffic-based advertising models or platform commission models.

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3. Hiring Talent is Just the Beginning

The role of a leader is crucial in bringing in the right people for the necessary positions at each stage of organizational growth. Simon Simon Byunalso experienced numerous trials and errors in this process. He emphasizes that helping new hires achieve results is just as important as hiring them. After recruiting talent, it's vital to ensure they integrate well with the existing team, provide the necessary support for project success, and maintain regular communication and monitoring.

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Written by NEVER SLEEP (Link)

Original Post : https://maily.so/neversleep/posts/5cdbf7c1 ‍