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Outsourcing: Josh Lieberman, Co-Founder of KMS Technology, Atlanta and Ho Chi Minh City (Part 5)

Posted on Friday, Jul 27th 2012

Sramana Mitra: What is the entrepreneurial landscape in Vietnam like?

Josh Lieberman: It’s pretty interesting. For example, there’s a company by the name of VinaGame. I think the market cap is extraordinarily large, hundreds of billions of dollars. And there are other companies. From an entrepreneurial standpoint, a lot of the entrepreneurial energy is focused back into the country. It’s not focused outward, outside of the country, if you know what I mean.

SM: That’s fine. I’m not necessarily asking about outsourcing entrepreneurship. You know, we’re seeing a lot of regions around the world, like Brazil. There’s an entrepreneur community that’s developed in Sao Paolo. There are entrepreneurial communities in Chile and Malaysia. The question is more along those lines. Are we seeing these groundswells of young entrepreneurs starting to get excited about starting their own businesses, and groups of entrepreneurs starting to develop in Vietnam?

JL: Absolutely, yes. There are lots of startups happening in Vietnam, many of which fail, some of which are successful. For example, there’s a company called Klamr with a guy by the name of Bryan Pelz. He’s originally from the Bay Area, but he was one of the early folks in VinaGame. He’s founded this company, Klamr, and it’s a social mobile product. He’s moved with his wife to Vietnam, and he’s building up that product over there.

I mentioned earlier that we are planning on spinning off product companies as well. We’ve spun one off called QA Symphony, which is an ISV. That product line, that company, essentially, resides in Vietnam. Everything from product management to development to QA to some of our marketing is being done over there.

SM: If you were to provide some directional guidance to entrepreneurs in Vietnam, where would you point them? What kinds of businesses, what kinds of outsourcing opportunities, and what kinds of business opportunities would you point them toward?

JL: The first thing I would say is Vietnam has a population of 80 million. It’s a much larger country than anyone would imagine. There’s a tremendous amount of opportunity in the country. I would say that you can just go and look at what’s being done in the Valley in the United States and look at the trends that are happening there and take many of those concepts, particularly in the mobile space, and just apply them within the country. There are nuances in Vietnam, as there are in any country. You can’t just take something that works in the United States, transfer it to Vietnam, and think it’s going to be successful. There’s a large opportunity for entrepreneurs to study what’s happening in the United States, or in India for that matter, and put together teams and rapidly and aggressively build products to address similar challenges in country.

In terms of Vietnamese entrepreneurs trying to go out and try to do something like what we’re doing in the United States, it’s a difficult thing to do. A lot of large offshoring firms have looked at Vietnam in the past. Wipro has looked around Vietnam in the past. IBM has had a small presence there for many years. What most or all of these companies have concluded is that there just aren’t enough people there for the scale to be worth their while.

For Wipro to come in and open up a 500-person center, Vietnam’s just not big enough to warrant that headache. In addition to that, we’ve been there for 12 years. We understand it. Culturally, it is different from India or Eastern Europe or whatever. I believe that whether it be Vietnam or Slovakia or whatever country it may be, you have to understand what’s important to people and culturally, how things work. On the flip side, you have to understand what’s important to your target market and then align those things. It’s not as easy as people think.

SM: Anything else you want to add?

JL: Yes. We’ve done some innovative things in the QA space with QA Symphony. We’re looking to disrupt the QA space. We think it’s broken. We think it’s been ignored, and there’s a better way to do QA software. According to IDC, 80% of the testing done today is still done manually. Yet if you look at all of the innovation that’s done in the QA space, none of it is focused on the manual tester. All of it is around automation. Our first product, qTrace, which is available today, reinvents how a manual tester can document the defects that they find. It has been measured by clients of ours who said it increased their efficiency by 70% on defect documentation.

SM: How much revenue does QA Symphony earn?

JL: Very little. We spent a year building the products and launched in January 2012. To be honest with you, it’s been a learning process for us. We’ve gone from running a service business to running a product business. We thought we were smart. A lot of services company owners try to build product companies because they do something cool for a client. We tried to segregate things, set them up as different legal entities. My partner Vu resigned from KMS to run QA Symphony. We have a separate team for that. But it’s taken us a while to figure out how to gain traction in the market. We’re getting it now. We just sold our first 1,000-license deal to a U.S.-based professional services company. The company bought 1,000 licenses of qTrace, our first product. We’re about to announce partnerships with VersionOne and a couple other companies.  I feel like we’re at the tipping point for doing the right things for that company to take off.

The second product, after qTrace, is a QA management solution, analogous to the HP quality center. But it sits in the cloud, and it’s a tenth of the price. It’ll be $20 per user per month and very easy to use.

SM: Great. Thank you, Josh, for talking to me.

JL: Thank you. It has been a pleasure.

This segment is part 5 in the series : Outsourcing: Josh Lieberman, Co-Founder of KMS Technology, Atlanta and Ho Chi Minh City
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