Tet in Vietnam

Hanoi is currently shut down; countless stores are closed, it’s hard to find a meal in town (in certain areas), and at times, the city almost feels as if it is under curfew. However, Hanoi is not the only city that is experiencing these conditions–across the entire country, Vietnamese are currently in the middle of celebrating Tet, which marks the transition from the Year of the Horse to the Year of the Goat. This year, the Tet holiday (Tet Nguyen Dan) is officially observed from February 15 to February 23, but the New Year’s Day is on February 19.

To foreigners, Tet is New Year’s, Christmas, and Thanksgiving all rolled into one extended holiday. It is based on the same lunar calendar that other Asian cultures, such as the Chinese, Korean, and Japanese, subscribe to. Indeed, it can be difficult to celebrate Tet as an expat or tourist unless there are existing familial or close friendly ties with people here. For Vietnamese, the holiday is a time to remember ancestors and a time to spend with young and old family members alike. During Tet, people look back on the old year and look forward to the new year. Overall, people wish each other health, happiness, and success; and hand out lucky money to children and old people. For many Vietnamese, Tet is the only vacation that they will have the entire year, which is the main reason why there are so many pilgrimages to respective hometowns (where they gather with the rest of the family to have meals together).

To historians (and some Americans), hearing the holiday’s name may remind them of the Tet Offensive, which took ARVN and American forces by surprise in 1968 during the Second Indochina War when, before going into battle, General Vo Nguyen Giap ordered the forces under his command to “Crack the Sky, Shake the Earth.” As with many national holidays, Vietnam’s flag is flown from almost every home and business, reflecting the deep nationalism and patriotism that permeates every facet of Vietnamese society. In this sense, tradition, national sovereignty, and history are all intertwined in the celebration of the Tet Nguyen Dan holiday in Vietnam.

Preparing for Tet

In the days leading up to New Year’s Eve (February 18) there are a number of preparations that must be carried out for every family. These duties range from cleaning to paying off debts to stocking up for food to celebrate the holiday during “hibernation.” There are a number of fairs that pop up throughout the country, which allow Vietnamese to shop for essentials and new items to bring in the new year. All kinds of rooms, transportation, and everything else travel-related is nearly fully booked weeks in advance. Even getting a taxi in the days before Tet becomes a challenge (and the experience reminded your author of trying to get a taxi in San Francisco before Uber and Lyft were available) and makes running simple errands take even longer than usual. Traditionally, a family must clean their home (and vehicles) and prepare Tet food—some of which can take hours to make (like banh chung). However, in recent years the widespread availability of Tet foods at local markets have allowed some families to transition away from preparing Tet foods themselves.

But really, preparation for Tet begins weeks before—perhaps even as far back as the western New Year. There’s a festive attitude and laid back mindset that seems to swallow Vietnam entirely; it is a distinct “post-Tet” and “pre-Tet” atmosphere that affects everything from meetings to schedules to business deals. As early as January people are already looking forward to Tet and many business activities will be pushed into next (lunar) year. Thus, the focus around this time before Tet is on end-of-the-year parties for workers, which begin shortly after a workday and continue late into the night (as allowed by local ordinances).

That’s not to say that Tet isn’t a busy time—it is, just from a personal orientation (and relationship—but that too can blur the line between personal and professional) rather than a professional orientation. Everyone is rushing around to wrap up last minute items and to get everything ready for Tet and the subsequent shutdown. Flowers are everywhere; in the north, orange kumquat trees are preferred, while in the south yellow flowers are associated with Tet. Interestingly enough, a week before the Tet holiday, the kitchen gods must be appeased (by releasing fish) so that a family will have a good report for the Jade Emperor; this year even US Ambassador Ted Osius and his family joined in the festivities to release fish into Hoan Kiem lake.

All over town, “Mung Dang, Mung Xuan” banners are seen in various shapes and forms; it means, “greet the party, greet the spring.” Here, spring is the first three months of the year, the first season of the year, and the new start as well as the start of prosperity for the new year. (During this time, prisoners who are eligible for good behavior are released so that they too can spend the new year with their families and to have a “new start.”)

Then, starting on the day before New Year’s Eve most shops close their doors for at least several days. There is an eerie sense of calm in usually busy areas of the city and the few motorbikes and cars on the road are sparkling clean. Daily trash pickup occur earlier than expected to accommodate the vigorous spring cleaning and the Tet fairs have all shut down, replaced by flower sellers. The first day of the new year is on the horizon.

Tet Arrives

The last meal of the year is one of the most important because it brings family, the ultimate glue of Vietnamese society, together: banh chung, the traditional Tet cake, is the most widely known Tet food but there are several other side dishes that are only prepared for Tet. If Hanoians don’t stay at home to bring in the new year with family then they go to Hoan Kiem lake (also known as Ho Guom) to see the fireworks. Another popular gathering point is My Dinh stadium, which was built several years ago as part of a sports initiative for the New Tu Liem District and where we celebrated the new year.

Vietnamese began assembling around My Dinh stadium early in the night so as midnight approached the area was full of motorbikes and cars. As the fireworks began shortly after midnight almost everyone took out their smartphones and began recording the illuminating display overhead. Those who weren’t transfixed by the fireworks were riding (at times, driving so fast that they appeared to fly) their motorcycles between the improvised lanes of spectators. Some riders honked loudly while others waved Vietnam’s flag behind them, procession style. About twenty minutes later, when the fireworks had ended, a mass exodus began and the entire area transformed into a frenzied parking lot. It is considered good luck and tradition to bring home a tree branch so several were on sale on the side of a few roads leading away from My Dinh stadium–there were also envelopes for lucky money as well as giant red balloons which had the traditional new year greeting, Chuc Mung Nam Moi (Happy New Year!), on them. Some children who were riding on the back of motorbikes wished those around them a “Happy New Year” as their parents looked on approvingly.

Superstitions dictate many activities in Vietnam so it is important to pay respect to spirits, especially ancestral ones. Some Vietnamese rush to the pagodas in the early hours of the new year in order to be the first to pay respect to ancestors, spirits, ghosts, and other otherworldly elements. For those who can wait until daylight, the pagoda is perhaps even more crowded than shortly after midnight. For us, we started the new year off with a bottle of Hanoi beer and then proceeded to go home to rest after a long and enlightening night.

The first official visitor of the new year at a house needs to be good (character, esteem, success, etc.) in order to bring the family good luck for the rest of the year. Tet is celebrated in a series of days: traditionally, the first day is for the father’s family, the second day is for the mother’s family and the third day is for teachers. Lucky money, “li xi,” is presented to older family members as a sign of respect—as well as to younger children (up to around 21, in some cases). $2 bills are given out to children (with particular attention paid to the serial numbers or other significant numbers) and all money must be in crisp, new condition. The numbers two, six, and eight are particularly auspicious numbers in Vietnam.

The Effects of Tet

Tet is a deeply family-oriented and nationwide experience. Any manager must be aware of the impact that Tet has on the country during the actual holiday but also for the schedules that it may impact. Business will mostly return to normal within 15 days after Tet but in reality the economic climate is affected for five or six weeks before and after Tet. For example, to some, it is considered bad luck to do real estate transactions in the first lunar month (until March 19). A few years ago, many stores and shops used to be closed. But now there are places that remain open for tourists and expats. Many workers look forward to the Tet bonus or “13th month salary” (and some workers even plan job changes around it) which can drive up the costs for a company–or negatively impact morale if the Tet bonus is not aligned with workers’ expectations.

Tet has its origins in the old agrarian society in Vietnam—it gave workers a chance to rest before doing hard work on the fields. However, as Vietnam has shifted to a service oriented economy, some have called to get rid of or shorten Tet because of productivity and other economic losses. Sometimes, there are some negative elements that are associated with the holiday season. For example, criminal activity can sometimes increase shortly before Tet as a result of people trying to pay off their debts. However, the real danger during Tet is the drunken driving and traffic accidents. One reason is lack of experience: people rent cars to drive to their hometowns and do not really have experience or skills to drive larger vehicles (since most of the time they are driving motorbikes).

However, good food, which is only cooked at this time of the year, can lift the spirits of everyone—-although if you are a foreigner, finding a meal can be a challenge with the exception of chains and larger retailers. But basically, it is the few days per year when everyone is nice to each other (or so we have been told by locals). Most expats leave during the holiday, but Tet in Vietnam is something that you should try to experience for yourself. The bottom is line is: do not underestimate Tet, its significance, or the impact it has on plans and travel—the impact on business here is real. But do not worry–soon, the hustle and bustle will be back, the deals and money will start flowing again, and things will be back to normal (for better or for worse).

We wish you and your family a happy, healthy, and prosperous Year of the Goat–Chuc Mung Nam Moi!

Vietnam 2014: Year in Review

Firsts and Notable Events

Tomorrow is the last day of the year in the Gregorian calendar but the Year of the Horse in the Vietnamese lunar calendar extends until mid February, 2015. Overall, 2014 marked many firsts for Vietnam: the first McDonald’s opened in Ho Chi Minh City shortly before Tet (the lunar new year). The first Rolls-Royce dealership opened in Hanoi in August, and the first mobile game out of Vietnam, Flappy Bird, went viral (and is now currently only officially available on Amazon Fire TV). Notably, Lotte Center Hanoi opened on September 2, Vietnam’s Independence Day, (after five years of construction) and Formation 8 sponsored a bi-city Hackathon, demonstrating that there is continued interest in the growing startup ecosystem in Vietnam from outside investors.

More recently on Christmas Day (December 25) Hanoi received a “gift” in the form of the new airport terminal that opened for its first flight but the terminal won’t be fully operational until December 31. The four-story, 139,000 square meter Terminal 2 has cost several hundred million dollars to build and it will accommodate a growing number of travelers to Vietnam. However, not all of 2014 happenings were rosy; the falling price of oil, anti-China protests in the middle of the year, and continued reports of Vietnam’s public debt increasing were some of the more worrisome developments during the past year.

Trade Impacts: Sanctions and Price Swings

In the last six months the price of oil has dropped by 40% and it’s certainly quite a different situation from this time of the year in 2007 as oil was about to break the $100 per barrel mark. Consumers in the west will certainly enjoy going to the gas stations once again and the increased disposable income will provide short term benefits for their economies. Similarly, the price of gas in Vietnam has been falling as well, as it is regulated by the Ministry of Finance and the Ministry of Industry and Trade. We will most likely see a cycle of global oil production slowing down, new oil projects put on hold, and then the price of oil skyrocketing back up, perhaps even before the end of next year.

For 2015, Vietnam’s GDP was projected to grow 6.2% if the price of oil had stayed at $100 per barrel and for every $1 the price of a barrel of oil loses, the State budget would lose VND 1-1.2 trillion (approximately $5.1 million). Oil export revenue makes up an estimated 10.2% of the total budget revenue which is  lower than in previous years. However, the budget revenue target is VND 911.1 trillion (over $42 billion) so the change in the price of oil still impacts the budget and will continue to as the price of oil continues to fluctuate.

At the same time, EU and US sanctions against Russia (and the Russian counter-sanctions) also provide an opportunity for Vietnam to increase its exports (in particular seafood and fruit) to Russian consumers, who will still demand or need products that were readily available to them earlier this year. The complicating factor for Vietnamese exporters will be the declining value of the Russian ruble, currently in free fall (and valued at approximately half of its worth at this time last year). Still, Vietnam and Russia recently concluded negotiations for the Customs Union agreement, which is expected to increase trade between the two countries to $10 billion by 2020.

Changing Skylines and Construction Interruptions

If you’ve been to Nguyen Hue street in Saigon’s District 1 recently then you know what a eyesore the metro construction project has been there (and in District 2). Earlier this year, the cost projections for the project were revised from $1.1 billion to a staggering $2.7 billion. On the opposite side of the country, the $1 billion metro project in Hanoi hasn’t progressed much since construction began in 2012. Completion dates for both projects keep getting pushed back as well—something that will most likely continue to happen before the current projected completion dates.

Now is construction season in Hanoi, mostly due to the cooler weather and attempts to finish projects before Tet so families can spend the holiday in their new homes. However, for the neighbors of such a construction project it can mean a significant decline in the quality of life for the duration of demolition and building. Construction can begin anywhere from 5:30 to 6:30 AM every day of the week and last until 6:30 PM with a break in the middle of the day for a lunch and siesta (usually one to two hours). At night, trucks delivering supplies for the next workday can arrive at 11:00 PM, 1:00 AM, and 3:00 AM due to lack of required permits to transport the goods during the day. For residential construction in narrow alleyways, workers can block nearby entrances, leave a mess, and contribute to the local noise and air pollution with jackhammers and gas-powered pulleys (in the last six months, your author has experienced three such projects). Surprisingly, many Vietnamese don’t seem to mind the noise and delays, unless they are traffic related.

For a changing city, cranes perched across a skyline are the sight of progress. But perhaps the costs of construction projects can also be measured in psychological effects due to the disruption in daily schedules. The noise of progress is far more intruding than the sight of progress and it has lasting impacts on future generations. Still, if not construction then other sonic interruptions such as public karaoke, horn honking, or motorcycle engine revving will emerge through the city soundscape. For sure, anyone who has visited Hanoi has learned to appreciate silence in this loud, chaotic, and flowing city.

Clear Winners

In 2014, Korea and Japan deepened their relationships with Vietnam on cultural, educational, and economic levels. Additionally, Vietnam established or renegotiated a number of bi-lateral trade agreements with states such as Lao PDR, Israel, Macedonia, and others.

Additionally, Samsung selected Vietnam as the location for a $3 billion manufacturing facility. It already has a $2 billion plant here so Samsung’s selection of Vietnam shows its faith that Vietnam’s business climate will continue to meet Samsung’s future production needs; this development continues the trend of manufacturing shifting away from China. Vietnam’s largest export value for 2014 is still cellphones and components—something that has remained unchanged since last year.

Furthermore, Mercedes-Benz Vietnam had the best first-half of the year ever since setting up in Vietnam— and one could make the case that it’s the unofficial vehicle brand of Hanoi given how seemingly ubiquitous the models are throughout the city. It will be interesting to see how the brand finishes out the year once the final numbers moved are tallied. To that extent, luxury brands here continued to do well, overall (though there are emerging signs that some Vietnamese may be living beyond their means).

Last but not least, the World Cup was a huge winner in 2014, no doubt causing the loss of serious amounts of productivity over the summer as Vietnamese workers stayed up until 5:00 AM or later to catch the games in Brazil. Not everyone was a winner though, as those who gambled away their fortunes or homes were left with low spirits. Still, the World Cup was a chance for Vietnamese families and friends to get together and share the communal experience of watching the nation’s undisputed favorite sport.

Undoubtedly, 2014 was many things for Vietnam (not all of it covered in this post), but it certainly wasn’t dull. We hope that you will continue to join us in 2015 as Vietnam and Southeast Asia continue to ascend. Happy New Year to you and yours wherever you are in the world!


Long Van Group

Long Van Group, founded in 1992, is comprised of four companies: Long Van NTV, Loval, ALV, and Hondalex. Through its portfolio companies based in Vietnam and the US, the family-owned group is perhaps best known for its aluminum product manufacturing—which is how it got its start. The other companies include a trading company in Ho Chi Minh City for the domestic market, a trading company in the US for the international market, and a joint-venture with Hondalex. Recently, we sat down with Thy Van Nguyen (Vanessa), whose official title is Operational Director but she is heavily involved with the strategic vision of the group as well as integral in implementing organizational change across the companies.

Ms. Nguyen was born in Ho Chi Minh City and moved to the US when she was 16. After being based in Seattle, Washington and attending university in the US, Ms. Nguyen moved back to Ho Chi Minh City about 18 months ago in order to focus on the family business. She currently spends about 80% of her time in Vietnam between Ho Chi Minh City and Binh Duong Province, where the manufacturing  activities of Long Van Group takes place. Currently, one of Ms. Nguyen’s major initiatives is the transformation of culture in her organization, something that she has successfully done in the domestic trading arm of the group.

Changing a Culture From Within

Ms. Nguyen is a big believer in getting the people doing a task or activity to understand the purpose of it. The people on the front lines are already the best people to do to the job so they will also be in the best position to improve the process. It’s only a matter of getting them used to speaking up and contributing regularly for the reward is improved efficiency and recognition by management and their peers.

That goal is sometimes easier said than done as older managers in a company have a more traditional mindset of top-down management style. Therefore, it’s necessary to first change the managers—either their attitudes or outright replace them (however, Ms. Nguyen didn’t have to fire anybody). If the managers had not bought into her vision at the onset then the project couldn’t have worked. Having the managers on board enabled the culture at the trading company to completely change within eight months but it took six months before she began to see the fruits of her labor. It also helped that Ms. Nguyen speaks Vietnamese in addition to English, and is the daughter of the company’s owner so she did have the power to initiate and implement change. However, despite these advantages it was still tricky for her to balance the right relationship with the workers due to some strong local cultural elements.

Part of the culture in Vietnam revolves around a fear of power which has roots in the royal history of Vietnam and continues in the form of wealth and political power today. Therefore, people in positions of power might need to be more informal, more cheery, and re-emphasize what resources are available to workers who need help, guidance, or any kind of assistance. People aren’t going to ask for help on their own or tell you what problems they have. Vietnamese culture is generally not expressive; a Vietnamese son or daughter can do 1,000 things right and not receive a single compliment. However, if s/he does one thing wrong then they will hear about it to no end. Thus, a lack of a negative response is a positive step. It’s important to praise workers because no one really says compliments from an authority position so it really impacts their subordinates.

It’s interesting to note that Ms. Nguyen was able to effectively change the culture because of gaps in old culture when other senior leaders were focusing on other business lines. Her changes came at the right time because the old system was not effective for expanding beyond the original 20-30 employees since it was largely based on gut feelings.

It may also be that everybody can see the problem at hand but no one wants to do much about it–Ms. Nguyen sought to change that. The interesting thing is that the workers want to hear different perspectives but not necessarily change the old ways of doing things. So even though everyone can point out the problem, no one can suggest a solution because it may be too risky to suggest a potential solution.

This challenge of self-confidence and expression has its origins in the educations system in Vietnam. The educational culture in Vietnam revolves around being told what to do; the teacher tells you the answer and that’s the answer–end of discussion. One way to overcome this element is by tapping into the fact that Vietnamese people love to look good; they want the story to be about them. They love the credit so give them that credit when appropriate. For example, present them with a situation and ask them to help. Then you can follow up with: “I listened to you and it worked.” In these moments you will see how proud the workers are and have just established a precedent. Perhaps the most effective way to connect with workers is to tell them stories, and then get them to be part of the stories. It can be as simple as presenting a scenario to workers and asking them, “if you had to make that decision then what would you do?” Indeed, not all changes are smooth and changing a culture is perhaps one of the toughest tasks to take on but by empowering workers it increases an organization’s operational efficiency overall.

Make no mistake: an organizational transformation is not without friction and conflict—especially when dealing with the “old guard.” Some people quit in the process, in part due to wanting to change the organization in a different way than Ms. Nguyen so they left. Changing the culture required that Ms. Nguyen trust that a real foundation was in place for the company to expand upon itself. To that end, she had to let go of some of the intensive focus she had on certain processes. These days Ms. Nguyen’s 62 workers at the trading company embrace and drive towards her and their vision of change.

Training and Developing Vietnamese Workers

Improvement is a continuous process at Long Van Group. Ms. Nguyen gives training courses once or twice a week for each division in her company in an effort to better prepare them for current and future work-related tasks. She strives to get different workers to select a unit each week based on a set list and give a presentation to the other workers. In her “guide-on-the-side” role, she asks questions and draws opinions from the workers and gives feedback at the end of each session.

During her training sessions, she will also share a story about a work experience, or conduct a workshop, or present a scenario. Then the workers will split into groups and talk about what each worker would have done in the scenario or what to do in the situation in the future.

Example: Your colleague sends an email to an organizational partner who you must coordinate with on a project. In the email, your colleague states that your company is not responsible for a specific portion of scope but that there are related issues that need to be addressed for the client’s benefit. The organizational partner’s vice director simply responds: “If the scope is not your responsibility, then your opinion does not matter.”

Ms. Nguyen will then question the workers on whether or not the logic of the vice director is wrong. Thus, the workers are solving problems with real experiences (the above example is actually used in training by Ms. Nguyen and was experienced by your author in Ho Chi Minh City last year) and are thinking about how to view situations more deeply.

This analysis is important because when responding to allegations some Vietnamese tend to lash out when things start to take a dive and they can take things personally even if they aren’t meant to be from your side. So it’s vital to be mindful of not only what you say (although that is important as well), but about how they feel (and taking care to let everyone save face).

Within Vietnam, southerners rely more on gut feelings whereas northerners are more logical. The southerners present themselves at face value; they want to prove to you that they care about you when they meet you. However, northerners want to compare status levels and act accordingly. Thus, foreigners might have a better time in Hanoi compared to “common people.” Northerners tend to think more before they talk so their use of words is better and more structured which presents them as being clever. Southerners speak more from the heart since they are generally more open and expressive. It’s important to be aware of your counterpart’s feelings because in Vietnam and in life, one can never do something big or grand without building a coalition.

Human Capital in the US and in Vietnam

In the US, people and workers are proactive while in Vietnam they are largely reactive. However, foreigners can learn a lot from Vietnamese people. But first, they must stop assuming and see things in limited possibilities. Ridiculous and downright crazy (from a western perspective) things could and will be possible because it may be the only option for moving forward in Vietnam.

The social structure is more set in the US due to the developed economy and Puritan work ethic. So in the US there is freedom to choose within set choices, i.e., the illusion of freedom because everything is already structured. Life is very predictable in the US so many people want to be proactive, they want to be ahead of the curve. Thus, Americans tend to assume a lot when planning.

On the other hand, Vietnamese are “proactive by being reactive:” they expect the plans to go awry so they bypass the planning stage and when things devolve they are better equipped to salvage the situation. Thus, Vietnamese prepare for certain situations but not for all situations. In that sense, they are able to make unreasonable (or even crazy) positions seem logical because they have developed these skills. They are very adept at framing an arena and taking up defensive and offensive positions and excel when things don’t go right, in part due to the messy social structure. It may be surprising to some that Vietnamese can be very practical because oftentimes there are no other options.

So, Vietnamese are really good at changing situation into their favor but they are also good at making crazy logic sound normal. Some people may believe that if they spot an issue and bring it up, then they will need take responsibility for it. People are afraid of responsibility because of the challenge of getting the task accomplished correctly. Vietnamese people like to look good so they don’t like to put their name on a project or idea in case it fails. But if it turns out good and then they take full credit. For Ms. Nguyen, a large part of the effort to change the organization is by marketing herself through self-branding because the perceptions of the workers will make or break any initiative.

Opportunities for Expats

To Ms. Nguyen, Vietnam is the perfect country to grow something big—but it’s a double-edged sword. Everything is based on relationships, which can be good or bad depending on the perspective. To be successful in Vietnam, one needs to be flexible and open-minded since many problems in Vietnam need to be solved in unorthodox manners. Structure beyond social doesn’t really exist, so if one relies on structure to move forward then s/he is in for a rude awakening (unless those connections are present). Above all, give Vietnam a chance but know where your limits are and what is the extent of your comfort zone for (operational and legal risks).

Expats shouldn’t assume anything in Vietnam and they will have to take on more responsibility to ensure that things stay on track and don’t fall apart. Things that are taken for granted in the west simply don’t exist in Vietnam. For example, the search results of Google, and Google VN are very different. Some people in Vietnam trust the US version more than the Vietnamese version. Also, Vietnamese websites generally don’t have a “how-to” section. For western websites, the product or service offered is described in depth and it is very clearly shown what it is and how it is done.

When explaining something in Vietnam, it has to be simple, clear, and consistently explained multiple times. Then, inverse questions need to be asked in order to triangulate what the actual response is for determining if the receiver understands or not. Communicating processes, requirements, or issues to locals can be timely and frustrating, even when explaining in the Vietnamese language. One way to get Vietnamese people to understand a process or information is through infographics—and in particular, youngsters will understand it better. They like the convenience aspect and the way the information is presented so they are more likely to understand it. If a member of the older generation doesn’t understand something, then s/he will just ask someone nearby or a close friend who will be put on the spot and could just blurt out something that sounds good but isn’t necessarily accurate. Thus, a crazy feedback loop begins where most of the information is wrong as the process continues. Besides, many Vietnamese don’t believe what they read. The older generations do, but the younger (those born in the 1990s and later) ones, no. Cute infographics can help explain things succinctly—and the cuter, the better; think anime characters.

In more general terms, most work fields don’t give newcomers to the country a chance. Connections are part of status which bypasses merit in many cases. It doesn’t matter if you are the best in your field, if you don’t have a good connection then no one will work with you. When arriving in Vietnam, get the connection first. Leverage being sent by a foreign company by learning about the country and forming bonds. Another option is to wait until you have the money to buy status here. In that sense, you don’t have to be the best person in your field—you can be average but still get a piece of the action through connections.

Drinking: Bad or Good for Business?

Still, business can be too much relationship-based; that is to say too reliant on gut feelings and feelings in general. Logic is largely used to make decisions in the US but in Vietnam they need to “feel it” in order to do something. These positive feelings are usually the result of some bonding over alcohol, either bia hoi, ruou, or some imported spirits.

Ms. Nguyen points out that her male employees never get drunk enough to be inappropriate at company functions. And for those who don’t drink any alcohol, while they can sponsor a “drinking nominee,” they could be at a disadvantage with their local counterparts by them not “truly” knowing the person when s/he is drunk. Thus, the best way to establish trust with Vietnamese counterparts is to drink alcohol with them—so if you get drunk easily then you must learn how to control yourself. Vietnamese truly believe that you will be yourself when you are drunk so in a way it’s like peering into your soul.

Everything you say or do shapes their perception about you, especially when drinking. The actual message, while important, is secondary since they are judging you via a gut feeling. It can be quite dangerous since Vietnamese may perceive an offense where there was none. When doing business, Vietnamese generally won’t trust you until you drink alcohol with them and they are able to see the “true you.”

How you are as a person when drunk may be the biggest indicator of doing a deal with Vietnamese. Their perception of you while imbibing will be the baseline for judging you. Once they see you drunk, then that’s how they will perceive you and they will hold onto this image of you until the next time you drink together. If you are a bad drunk, then beware.

The Next Step

Next up for Ms. Nguyen is changing the culture at the factory since it is a special case. The entire production was in the hands of two directors but the current result didn’t turn out so well so the focus is on getting workers to take more initiative and overcome fears of failure. Indeed, Long Van Group is at the forefront of providing high-quality products and driving organizational change in order to provide a better customer experience. Vietnam is becoming an even more prominent destination for outsourcing and manufacturing and as more projects are implemented here then the technical and management skills requirements will increase as well.

Today, China produces for much of the world but in recent years some factories have migrated to Vietnam, in part due to the fact that wages in China are higher than in Vietnam. However, prices of finished goods in Vietnam can be higher than in China because of other operational costs. The disadvantage that Vietnam has is that the workforce is less skilled than China’s and the economies of scale don’t exist on par with China. Quality control remains an issue in Vietnam as well.

As more foreign companies come to the Vietnamese market, the standards for local workers’ qualifications and skills will rise. A growing trend is for Vietnamese workers to take courses at private institutes to aid in their professional development, e.g., how to be a better manager or CEO. These courses are truly development on an individual level because people are there because they want to be better. For the students, Ms. Nguyen suggests that they seek to understand on a conceptual level and learn to connect everything.

“Learning how to connect things is the tool you need to work in the real world,” Ms. Nguyen advises.

Below, Ms. Nguyen shares some of her favorite quotes:

“Do or do not, there is no try.” –Master Yoda

“If you are a good leader, when your work is done, your aim fulfilled, your people will say, ‘We did this ourselves.’” –Abraham Lincoln

“You can listen like a blank wall or like a splendid auditorium where every sound comes back fuller and richer.” – Alice Duer Mill


Special thanks to Vanessa Nguyen of Long Van Group who shared her time with us and greatly contributed to this week’s post.

Vientiane, Lao PDR

In the 1960s Vientiane had the reputation of being the wildest city in Asia. Today, Laos–with Vientiane as its “sleepy” capital–is known as one of the most underdeveloped countries in the world. Usually, people know one of two facts about Laos: that it is land-locked or that it is the most heavily-bombed country, per-capita, in the world as a result of being a battleground for 20th century ideology. However, these quick facts don’t do the beautiful country and its warm and friendly people justice–and this basic knowledge barely scratches the surface of the complex history of Southeast Asia.

Laos shares a linked history with Vietnam but this relationship was further strengthened during French colonial times, and continued through the Second Indochina War. Even today, there are strong and deep ties between the two countries; for example, earlier this year Vietnam funded an upgrade to the Kaysone Phomvihane museum in Vientiane.

Similar to Vietnam, Lao PDR began to open its economy to the world in 1986 but maintained strict controls on its political apparatus. Despite the current political and economical situation, there is foreign investment here; a significant portion of new construction projects are implemented by either Vietnamese or Chinese companies depending on the size of the project. For existing construction, the electrical wiring indoors, while exposed, is run neatly, and the wiring in the streets are bundled together in an orderly fashion. In homes, switches and outlets are grouped together in junction boxes that are dispersed at chest level in various rooms. Anecdotally, the power might go out for a few hours once a month in the capital.

The most visible element of consumption by the upper class, luxury vehicles, are somewhat common throughout the capital and there are some nicely designed houses in a westernized sort of style dotted throughout Vientiane. The Toyota Hilux is the unofficial vehicle of Laos as it is ubiquitous throughout the capital. Furthermore, a significant number of vehicles are modified from their stock origins in some way–be it hood scoops, snake eyes, or chrome accents–so there is a growing tuner culture in Vientiane.

Unfortunately, rush hour traffic fills up portions of the city quickly and traffic jams can occur for no apparent reason, e.g., lack of a traffic collision or police checkpoint. When there isn’t heavy traffic, whirring diesel engines and turbo-chargers spooling up in SUVs are common sounds (and the drivers love to careen down roads meant to be driven on no higher than 30 or 40 KPH). Mercedes-Benz, Porsche, and other luxury vehicle brands have dealer presences in the capital; considering Lao PDR’s economic rankings, it can be surprising to see the Mercedes SLS in a showroom—and even more surprising to see it on the roads of Vientiane.

Vientiane Through Foreign and Local Eyes

Chiang Mai, Thailand and Vientiane, Lao PDR are two cities that are similar despite being in different countries; in terms of population, consumer preferences, and lifestyles they are very much aligned. Additionally, there is a strong Thai influence in regards to fashion, youth culture, news, and entertainment in Laos. The Lao PDR capital is literally across the river from northern Thailand, after all.

Even though many Thailand-based expats (farong in Thai) travel to Vientiane for visa-runs, it’s surprising that there isn’t a larger presence of foreign freelancers in Vientiane and in Laos in general. From a visa perspective, it can seem quite attractive for remote workers and there exists the support for foreign freelancers in Vientiane in the form of Toh Lao co-working space. For foreign full-time professionals, the options range from EMC to Sciaroni and Associates to DFDL (the last organization having been founded in Lao PDR). Of course, there are also some foreign banks such as VietinBank and Sacombank (Vietnamese banks) that have branches in Vientiane and there are also many foreign restaurants in the capital to represent small expat-operated businesses—Istanbul Restaurant, Soul Kitchen, and Jamil Zahid to name a few.

Many Non-Governmental Organizations (NGOs) have a large presence in Vientiane as well so there are expat support staff who regularly work with their local counterparts. In general, locals and foreigners who might meet and develop a romantic interest in each other can’t live together and sexual relations between them are forbidden–but marriage is always an option for those who find their soul mates in Lao PDR. A good way to meet people in the Vientiane business community is via weekly events such as the meetups put on by AmChamLao. In addition to the robust expat house party scene, there are the famous get-togethers at CCC bar in downtown Vientiane. Overall, Vientiane is a small place—there is a sense of a village mentality so reputation is important since “everyone knows everyone” in both the local and expat communities.

Outside of Vientiane and into the Countryside

The youth of Lao PDR’s high-society (Hi-So) in Vientiane can be found at Mark2 or Marina wearing trendy and/or revealing clothes and dancing the night away to western style arena house music from Thursday through Saturday nights. “After hours” almost always includes karaoke in some interesting but comfortable places for all sexes (since the culture is inclusive). Yet, these experiences are so far removed from the daily lives of the average Laotian.

Outside of Vientiane things quickly become poor besides a few cities like Luang Prabang, Pakse, and Suvannahkhet. Think unpaved roads, wooden huts, shoeless children, etc. However, throughout Lao PDR there exists a deeply respectful and hospitable culture with a strong beer drinking tradition; Lao people are perhaps the most laid back in Southeast Asia. The quintessential Lao experience is singing karaoke on a nearby river or body of water while drinking Beerlao. Social gatherings are important and women and men are not always separated at these events where people are sometimes sitting on the floor and are sharing food with one another. One unique aspect of Lao culture is the use of a single glass to drink beer in addition to a personal glass, which is passed around and shared among all the guests at an special event.

Other activities that Laotians enjoy include fishing, football (there already is a healthy representation of the up-to-date Germany World Cup jerseys), and petanque. Petanque in Laos is different than petanque in France (where it originated) and government ministries usually have a petanque court on site. Half the government ministries have their signs in French, and the other half in English (besides Lao)–the same goes for the road names in Vientiane.

The three most visible brands throughout Laos are Beeline, a telecommunications company; Beerlao, a product of Lao Brewing Company—a joint-venture between Carlsberg and Lao PDR; and Johnnie Walker, which is also popular in Thailand. Beerlao is on every restaurant sign as well as restaurant equipment such as standees and cash register desks—the result is a very large market share of beer consumption in Lao PDR.

A Future Focus

Officially, the Lao PDR government actively seeks investments in agriculture, hydropower, manufacturing, and tourism, according to its investment brochure. Organically, Laos experienced its first Startup Weekend ever in Vientiane in May of this year. Last week, Nana Souannavong, president of Snap International, and co-founder of Toh Lao co-working space, was gracious enough to explain to us the state of the startup ecosystem in Vientiane.

As Nana sees it, the biggest challenge ahead of the Vientiane startup community is getting people to understand what a startup is and getting people to be more entrepreneurial because they like the stability of public sector jobs. She shared with us that a generally strong curiosity among participants and a higher proportion of female entrepreneurs are the biggest strengths of the startup community in Vientiane. Those (aspiring) entrepreneurs who are passionate are the hardcore ones who stick through the multi-day events such as Startup Weekend–and they will be the ones to get the most out of the events. It gave her hope to see so many people show up to the first Startup Weekend because if no one showed up then she knew that the community wouldn’t be ready for another five years–the fact that people showed up was a huge victory for the Vientiane startup community. Nana also revealed that the winners of the May event are still working on the concept but as a side project since the team members already had a full-time focus before winning at the Startup Weekend.

While the official Lao PDR Small and Medium Enterprises (SME) office also supports startups, there will be many challenges on the way to creating and building a suitable environment for venture capital (VC) firms and angel investors to operate in—something does not exist although there are other forms of external investments. However, the legal framework does exist for foreign investors and founders in regards to equity but only outside of the retail industry. Nana’s advice to future entrepreneurs is to “think through what you are trying to do to understand the consequences.” Along those lines, her favorite quote is “life is an investment.” She should know since her company provides financial advice in money markets for local and foreign companies.

Startup Vientiane

At the Startup Weekend, there was a mix of tech and non-tech products and services being pitched but going forward there are no obvious areas for startups to form around. Y Combinator, perhaps the most prestigious startup accelerator, has a Request for Startups (RFS) feature on its website. While the list below is not a request for startups in the strictest sense, it does provide an external view on the opportunities in Vientiane and beyond after speaking to locals and longterm residents.

Opportunities for Startups:

-Targeting tourism (perhaps first via Triip.me and then expanding on original concepts specifically for Lao PDR)

-Creating accounting controls (perhaps in the form of mobile applications) for local and/or foreign SME in Lao PDR

-Products and/or services for the many NGOs in Lao PDR, e.g., tools to train local staff or tapping into external crowd funding

-Leveraging the growing consumer communities (for example, the car tuner culture) and collecting data points on them

-Helping expats to adjust to Laos by finding housing, goods, or services more easily (a better English->Lao dictionary, for example)

Perhaps when people think of Lao PDR in the future, a third fact might enter their consciousness: a growing startup hub centered around Vientiane. The people in Lao PDR have many things to offer the world–foremost among them is their hospitality and resilient attitude–this much is apparent upon crossing the border into Lao PDR. Another Startup Weekend is scheduled for later this year at Toh Lao co-working space–hopefully, the organizers will be able to build off the success of the last event and the participants will take even bigger risks to share their ideas with the community. It will be a long road indeed, but with community leaders like Nana, anything is possible.