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Keeping Informed About Vietnam

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Back in June 2014, this blog was created with the goal to publish a post per week on a topic of interest relating to Vietnam and/or Southeast Asia.

Since then, the blog has largely focused on information, trends, and events relating to technology, business, and culture in Vietnam and Southeast Asia.

It’s been a great and challenging experience to write this blog—and it would not have been possible without countless feedback, people who were willing to sit down and explain what they saw as the potential for opportunity in the region, and finding exciting and interesting topics to cover. That meant finding people who are doing exciting things in the community—whether it is creating or building or shaping a project, company, or building.

52 posts was the original target—and this goal was reached in 13 months; this post is currently number 55. Ultimately, this blog serves as a resource: 50,000-70,000 words that have attempted to capture Vietnam (from a Hanoian perspective and with the contrast of having lived in Ho Chi Minh City) in the past year.

So what’s next?

At this point, we are looking for someone with the following profile:

-A foreigner who has been in Vietnam for 10+ years;

-Who has operated as an entrepreneur, country manager, or director of an organization that is interested in technology, startups, or trade (or complementary fields);

-Who is interested in contributing 20%-30% more content to the current selection of 54 posts (each post is 1,000+ words);

-And is open to publishing the entire body of work as a book (an editor in Boston has agreed to review the project).

Please contact info@gktagroup.com for more details.

A New Direction

Vietnam is rapidly changing; moving forward, the format of this blog is going to change as well.

Articles from other publications will be shared on the blog instead of publishing original content every week. Depending on the frequency, content will be updated every month or two.

In the meantime, it can be difficult to understand what goes on in Vietnam from a foreign perspective so below are some other resources to keep current and understand better Vietnam’s emerging role in the world in the 21st century (if even a little bit more).

General News

Vietnam News

Tuoi Tre News

Thanh Nien News

Vietnam +

Communist Party of Vietnam Online Newspaper

Voice of Vietnam

Twitter

Business News

Saigon Times Weekly

Vietnam Investment Review

Vietnam Economic News

CNBC

Tech/Startup News

e27

Tech In Asia

CNET

From a Regional and International Perspective

The Diplomat

The Economist

NY Times

Additional Resources

Of course, this lit is non-exhaustive. There are many more resources to tap into. Books, blogs, podcasts, etc. (And we are also available for a quick chat or email: admin@gktagroup.com.)

Stay tuned!

Vietnam and Finland partner to build startups across Vietnam

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Finland and Vietnam—what do these two countries have in common? At first glance, perhaps not much. Vietnam has a population of 90+ million and Finland’s population doesn’t even break the six million mark. Finland’s GDP per capita is almost $50,000 while Vietnam’s is approximately $2,000. And Helsinki is considered one of the most future-oriented governments in the world while Hanoi is known for its traditional elements; after all, it’s an over-1000-year-old city. So it might come as a surprise to learn that Finland’s Ministry for Foreign Affairs and Vietnam’s Ministry of Science and Technology have joined forces to foster innovation, support initiatives, and develop entrepreneurs via the Innovation Partnership Programme (IPP).

The IPP essentially supports the growth of the Vietnamese ecosystem; its role is to initiate and facilitate new activities, connections, and collaboration that can lead to the creation of sustainable ecosystem structures on the national level with regional integration and strong international linkages. Part of this effort includes a training course, an Innovation Accelerator, and events to bring the community–as well as potential partners and sponsors–into the fold.

Currently, 12 Vietnamese Innovation Champions are in the middle of a two-month “Training of Trainers” (ToT) program where they are learning lean startup methodologies, new ways to minimize risk, and how to develop ideas into products and services (and eventually sustainable businesses). Hailing from a variety of backgrounds in the public and private sectors, and with a median age of 35, these working professionals are led in sessions, workshops, and classwork by top international practitioners from startup hubs in Europe and the United States. Outside of the facilitated HATCH! space in Hanoi’s Ba Dinh District, the Innovation Champions have conducted fieldwork where they interview prospective customers, pen blog posts to share their perspectives, and connect with aspiring entrepreneurs in the community. They have already begun advising local startups in order to put what they have learned into practice—something they will continue to do in August once the training is over.

One major portion of fieldwork is the customer conversation, which drives the iterative model for a product or service that is being developed; some of the terms and tools used include “business model canvases” and “value propositions.” Entrepreneurship is a process and mindset—asking the right questions of the right people is key to developing solid products and services. But, sometimes, it needs to be taught and localized in order to become part of a local ecosystem.

Trainer Nick Norena of San Francisco is, by his own account, not only an entrepreneur but also an educator and coach, focusing his life on finding the most effective and engaging ways to teach entrepreneurship and innovation. Currently, he is focusing on Vietnam.

“Being here in Vietnam, I am eager to learn about a country and culture that is quite new to me,” said Norena. “Most importantly, I am incredibly humbled to work with the Trainees enrolled in this ToT program.

“The Trainees we work with are incredibly accomplished academics and professionals, and they bring valuable perspective to the classroom and fieldwork each week. This is crucial because one of their main goals and is to translate and adapt the materials and topics we cover to accurately fit the needs of the local startup ecosystem. I am encouraged every day by the team I’ve become a part of, and excited to see what the future of the Vietnamese startup ecosystem holds,” he said.

Innovation Champion Lan Phan, Deputy Director of NATEC–an organ of Vietnam’s Ministry of Science and Technology (MOST)–of Hanoi shares a similar excitement toward the future of the Vietnamese entrepreneurship ecosystem:

“It is great because I can learn the most updated knowledge in the startup world–the Lean startup movement,” said Phan. “And, having it taught by the experts and practitioners coming from Silicon Valley makes it even much better experience. Their sharing of real startup stories and the hands-on exercises that we have to take in class absolutely help us internalize the training principles much faster.

“Being one of the IPP trainees,” she said, “also means that I can develop a close relationship with other like-minded trainees, whose goals are not only to excel in their own careers but to give back and contribute to building this ecosystem a better place for startups to grow. Overall, I have so far been benefited greatly from this training course and would love to share my knowledge with others so that the impact of the course would be multiplied.”

The curriculum that Norena and the other trainers are developing—which is aimed at teaching academics and professionals in Vietnam the skills, techniques, and mindset required to successfully coach and mentor startups—is expected to be used in Vietnamese and perhaps even regional universities as a way to extend the impact of the first cycle of the Training of Trainers program and Innovation Accelerator. The IPP seeks to support and build the capacity of local key players in taking ownership of developing the ecosystem. Thus, this curriculum is a foundational resource for new and aspiring entrepreneurs in Vietnam and beyond.

So, what’s next? The entire program moved to Ho Chi Minh City last week (July 15) and will be based out of Hoa Sen University. Once the Training of Trainers program is completed, a six-month Innovation Accelerator led by the Innovation Champions will begin in both Hanoi and Ho Chi Minh City. The Innovation Champions will guide approximately 20 high-growth and innovative startups, as well as four system developers, to success.

The startups have an initial Demo Day on October 31 and a final Demo Day in January before the call for new startups is opened up again. Before the first Demo Day, the IPP is looking for mentors (e.g., guest speakers) to support the IPP Innovation Accelerator as well as future partners to help pilot and scale the curriculum (open source, practical, and comprehensive innovation and entrepreneurship-pioneered—which does not yet exist in Vietnam) to universities and other training organizations customized to fit the needs of their respective stakeholders.

By design, the Innovation Champions will be the foundation of the future, driving the ecosystem forward even beyond the Innovation Accelerator. Hopefully, by the time Tet (Lunar New Year) rolls around in February 2016, we will start to see some of these selected projects emerge from the Innovation Accelerator ready to expand in Vietnam, into the region, or elsewhere. Also, we can expect that next year’s ToT Part 2 will feature even closer collaboration with university and training organizational staff.

Even farther down the road, Trainer Dan Toma of Germany projects even more success as a result of the program.

“Looking at the speed of their progress [Innovation Champions], I am highly confident that they will have a huge impact in the Vietnamese ecosystem once the training [is] over,” said Toma. “I’m looking forward to having a coffee in a nice restaurant somewhere in Europe in about three or five years from now, reading about the first Vietnamese company being successful on the international market, hoping that one of the Innovation Champions helped build that story directly.”

Three to five years out is a long time but, perhaps, Dan will be proven right. After all, the best way to predict the future is by helping to create it.

A version of this article first appeared in Tech In Asia.

Final Conference of the REMON Project–July 2 in Hanoi, Vietnam. Credit: Duc Duy Nguyen

The REMON Project

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On July 2 and 3, the Final Conference of the Vietnamese-German Research Project Real Time Monitoring of Urban Transport—Solutions for Traffic Management and Urban Development in Hanoi (REMON) was held in Hanoi. During the conference, project representatives outlined their plans for going forward and listened to the concerns of the attendees, which ranged from data privacy to the methodology of the proposed actions.

Traffic in Vietnam can conjure up images of motorbikes, bicycles, buses, and luxury vehicles all vying to occupy the limited space on the road, especially in major cities. Already during rush hour, parts of Hanoi and Ho Chi Minh City are near impassable. Few experiences could be worse than being caught at a red light in Ho Chi Minh City during the rainy season, and surrounded by the drone and exhaust of a few hundred motorbikes in front and behind. (Your author has experienced this firsthand.)

And up in Hanoi, the afternoon rush hour can turn into a “Battle Royal” where buses are operated as if they were cars, cars as if they were motorbikes, and motorbikes as if there were regulations for operating a motorbike. The Vietnamese dream is to own a car—to show off success to others, to protect from the elements, and to travel comfortably.

Last year, the first Rolls-Royce Motor Cars showroom in Vietnam opened up in Hanoi. However, as we explained during coverage of the Yamaha Town Hanoi showroom, the car will never fully replace the motorbike in Vietnam, and Hanoi itself is a Motorcycle Dependent City (MDC). Still, Vietnam experiences 10% new vehicles on the road each year and congestion will only increase as more people become successful as a result of the economy. In fact, there are even events called “car washes” where an entire company will go out to celebrate the purchase of a car by one of its employees–arguably, one of the nicer effects of an increasing number of vehicles on the road, but not without short and long-term effects on the city, its people, and the environment.

So in the last three years, a team of Vietnamese and German researches has looked at this increasing traffic issue in Hanoi. The REMON Project is funded by the German Federal Ministry of Education and Research and the Ministry of Science and Technology, Vietnam and has been ongoing since May 2012 (and will run until October 2015).

According to a handout at the event, the REMON project has several key objectives:

  1. “reduction of air pollutants and emissions;”
  2. “reduction of energy consumption in the urban transport sector in Hanoi, Vietnam;”
  3. “establish a real-time traffic information system in Hanoi, which helps to increase the efficiency of Hanoi’s transport system;”
  4. reduce environmental impacts of traffic, in particular traffic jams, traffic-induced emissions and energy consumption.”

The REMON project wants to track and detect traffic conditions in real time via two methods; Floating Car Data (FCD) and Floating Phone Data (FPD) which is essentially GPS data from onboard units in vehicles but also the smartphones of the vehicle drivers as well.

The REMON project hopes to use the raw data for several applications ranging from “informing road users of the current traffic situation on each street to controlling and managing traffic as well as long-term transport and urban planning efforts and measure to solve traffic problems.”

Thus, the focus is on short-term traffic information as well as long-term transport management approaches and urban planning solutions. In other words, “the REMON project is a well-adapted, demand-oriented, collaborative research and development project between German and Vietnamese partners. It aims at establishing a traffic information system and using it for achieving an integrated urban and transport development of Hanoi.”

Ridesharing and Electric Vehicles in the Future

Uber arrived in Vietnam in June, 2014 in Ho Chi Minh City and in October in Hanoi. GrabTaxi also arrived last year in Vietnam. These services help optimize the flow of people across cities but they also have the potential to reduce future vehicles on the road considering the tough parking situation in Hanoi. For sure, once the metro comes online, it will provide a viable alternative for navigating around Hanoi (and Ho Chi Minh City).

On the other hand, electric vehicles such as bicycles, are usually associated with young people or students. At the high-end range, if Tesla Motors were to enter Vietnam it could change the perception of electric vehicles in this market. However, entering an Asian market where consumers want to have instant gratification and want to save “face” and requires developing infrastructure can be quite challenging as seen with Tesla Motors’ progress into China.

There are definitely opportunities to partner with residential and commercial developers in Vietnam to offer Powerwall (see a full Powerwall 2 review) and other devices in the portfolio that could benefit residents, customers, and others who are interested in living a high-tech, stylish, and green life. For example, establishing VIP charge/parking spots at malls, and premium parking in residential developments are some options for building a suitable brand image for Tesla Motors. Successful Vietnamese want others to acknowledge their success and want to be seen in exclusive situations so it may take some time for a mindset or attitude shift, especially from the nouveau riche, who will only increase in numbers in the future.

One thing is certain: the focus and results of the REMON project will affect all Hanoians as the impact of traffic is demonstrated in more relatable terms such as quantifiable lost productivity due to waiting in traffic (or even access to the real-time data via a mobile application as the project hopes to achieve). Along those lines, solutions for traffic challenges could emerge from a variety of areas–not only the private sector or from researchers, but also from the public via crowdsourcing campaigns. Indeed, there were many vocal and concerned commentators at the event in the audience who did not have a shortage of opinions on what should be done moving forward. In the meantime, the continued promotion of basic standards of courtesy on the roads with an emphasis on safety, utilizing signals, and respecting traffic laws can go a long way toward improving the commuting, driving, and riding experiences in cities such as Hanoi; after all, innovation and technology can help to fill in the gaps.

If you would like to know more information or would like to view the material presented then you can find it here.

First Mekong Entrepreneurship EcoSystem Summit

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From June 11-13, entrepreneurs, ecosystem builders, and explorers from Cambodia, Laos, Myanmar, Thailand, and Vietnam came to Ho Chi Minh City, Vietnam to connect, build bridges, and compete for $20,000 to fund their initiatives during the first Mekong Entrepreneurship Ecosystem Summit, organized by the Centre of Business Studies and Assistance (BSA) and DHVP research as part of the TIGERS@Mekong public-private alliance.

TIGERS@Mekong (Technology Innovation Generation and Entrepreneurship Resources) is a consortium of country and region-specific partners. As found on the TIGERS@Mekong site:

“The U.S. Department of State launched the Mekong Technology Innovation Generation and Entrepreneurship Resources (TIGERS@Mekong) as a flagship project under the Connect Mekong framework at the East Asia Summit in 2012.”

Of the participant countries from the Lower Mekong, they are at different stages of market development and interest despite encompassing more than 230 million people in the region. The two shining stars, Thailand and Vietnam, currently have a lot of interest from venture capitalists and have almost 160 million people between them. Vietnam also has a lot of interest from foreign investors as the TPP is expected to pass soon. Laos and Cambodia are still largely developing and share approximately 22 million people between them; Cambodia, and especially Laos, have a lot of room to grow. And Myanmar (population north of 50 million), although “open for business” since 2011, has largely elicited a “wait-and-see” approach from foreign investors and their representative offices. There are elections later this year, so perhaps things will be different after. Already in the region, there is the Mekong Business Challenge, which has entered its 10th year so there is already some sort of dialogue in place and deepening it will only positively impact the region and its inhabitant.

So while it was good to bring the countries together, it’s also necessary to recognize that each country has its own strengths and weaknesses, and market opportunities. Thus, a tour through each country (perhaps a two-week Bootcamp to cover a topic) in a graduated fashion would allow participants to learn new skills, but also learn more about the countries in the region, and also establish a wider network. Myanmar, Laos, Cambodia, Vietnam, and Thailand could be a suitable 10-week path in the form of topics such as Ideation, Market Research, Concept Refinement, Prototyping, and Pivoting (if/when necessary).

The Pitches

Below, are some of the top 10 pitches for new initiatives which were presented at the summit (in their entirety, as described by those who pitched).

“LAUNCH PAD

The main reason of failure of tech startups in the region is the serious lack of VISION and KNOWLEDGE about the market, players and customers. And the 2nd main reason is, once they have built first versions of products or services, they don’t have a proper way to LAUNCH and TEST their business.

With these 2 reasons, I believe that we must build a LAUNCH Platform for all tech startups in the region to:

  1. join, see and learn what other tech startups are doing in the region (Eye-Open). This helps them a better VISION what should do.
  2. Test their products before launching, get feedbacks from peers. And
  3. Find partners from other countries for EXPANSION when they grow

 

CROWD FACTORY

CrowdFactory consists of three main parts: CrowdPitch, CrowdCoach and CrowdData.

CrowdPitch is an event that helps startups have a chance to practice their pitching to a live audience. There are multiple events every year (depending on each local landscape) and each event has 4 startups that pitch. Audience pays for a ticket to attend and 75% of their ticket money goes straight to their favorite startup. That means it’s an offline crowdfunding event. CrowdCoach is CrowdPitch’s sister event. The number one winner of CrowdPitch gets to attend CrowdCoach, where for two hours, the startup gets to interact directly with four mentors, who give private and in-depth feedback to the startup. All of this is supported by CrowdData, as the local organizers collect new startups and mentors, they slowly collect data on the ecosystem, supporting the cycle of events under CrowdFactory.

 

Mekong Startup Training for Trainer

The program trains startups on necessary skills needed such as sales and marketing skills, users experience, digital marketing, tech skills and so on. In order to complete the program, the group of trainees need to train other startups. For those outstanding ones, will be going to train startups in other countries.

By doing this, startups in each country will meet and they will then share the business and investment information of their own country and build there networks.

This program will help ensure the wellbeing and to strengthen the networks of our Mekong region startups ecosystems.

 

Mekong Startup Weekcamp

The IDEA behind his concept is about

–        – engagement between potential Tech-Startups and Business Start-ups to share of their skills and expertise each other.

–        – networking among key players in local and regional

al The event will take 4 day long at National Event and basically the following activities will include and can adapt as per local needs.

–        Selection Process to Potential Entrepreneurs (Potential Tech and Business Start-ups) to enter Training Session

Activities are:

–        National Start-up Weekcamp Training (2 days)

–        Industry Experts /Founders’ Talk – Experiential Sharing  (1 day) “Regional Founders or Experts will be invited” (1 day)

–        IDEA Showcase and Feedback from Regional Founders/ Experts and award ceremony at Networking Night (1 day)

Along with IDEA Showcase, local Business and Start-ups booths will be exhibited by regional Start-ups  (to meet with the regional accelerators/investors from the country and from the region)

We can adapt the activities as per local needs and can leverage this concept to local and regional areas.

 

Coenlight 

Coenlight is an innovative educational platform for effective skills-based learning and with the mission to create an edu-lab that incubates intellectual potential. This platform is a grassroots initiative tailored to the Cambodian and ASEAN context. We are driven by a strong social mission to revolutionize Cambodia’s and ASEAN’s education ecosystem based on our unique strengths. At Coenlight, we believe that any passionate skilled individual can develop into an extraordinary instructor. We seek to challenge the existing paradigm that becoming a teacher is a static threshold to pass over and uphold that learning is a life-long process.

Our Model:

1) Train individuals to translate their skills into innovative courses.

2) Match passionate instructors with motivated students.

3) Build an ecosystem that fosters critical thinking, skill building, and mentorship.

4) Empower the most talented students to “pay their learning forward” by becoming Coenlight instructors.

 

Wicked Problems Worth Working On…

Many times we get stuck into thinking about market size and we filter out everything except our customers (whoever we think they might be).  However, Southeast Asia has a number of major challenges common to almost everyone in the region: disparity between rich and poor, gaps in the education system, rural poor, corruption, energy, water issues…  These are major challenges which are bigger than any single country, and they represent big opportunities for impact entrepreneurs and impact investors who can craft the right solutions.

If we could only put together a list of the Wicked Problems, clearly defined, focused, and yet still significant, we could encourage players in the ecosystem to galvanize around one or more of them, to run themed boot camps, provide seed grants, compete in themed business plan competitions, and encourage funding from industry players.

This project asks for initial funding to help find a methodology to develop this list of Wicked Problems.  Tapping into the expertise and connections of government agencies like USAid and other aid organizations there must be people (academics? NGOs? or…?) who have developed a suitable methodology that could be used to seek out, define, and get support for a good list of Wicked Problems for Southeast Asia.  How do we find out what has already been done, what can be borrowed or co-opted for our purposes, and how could we implement it?

 

CrowdHelping

We want to build an online platform that transforms the way small scale local social entrepreneurs get access to funds, by crowdsourcing bureaucratic grant proposal writing to volunteers.

Picture a small scale social entrepreneur operating in rural Myanmar. She has intimate local knowledge, she know what kinds of ventures will have the most positive impact on her community, she is already bootstrapping her idea to build a social enterprise. All she needs is access to a small grant to push her idea to the next level.

Now picture a charitable organisation, an impact investor, or an aid agency sitting in an office in Yangon. They have money that they want to give away to people exactly like our social entrepreneur.

What stands between them? Bureaucracy.

Our social entrepreneur only speaks her regional language, she cannot write a 4 page proposal, she doesn’t understand the forms she has to fill out to qualify for grants. However, she does have a smartphone.

. How does it work?

  1. Social entrepreneurs simply shoot a short video of themselves pitching their idea in their local language, posts it on their profile on our platform
  2. A network of seasoned mentors who have close connections with local NGOs and social enterprises will vet the ideas that social entrepreneurs post, in order to create trust.
  3. Volunteers who have successfully applied for grants and know how to write proposals to apply for grants will browse the pitches of social entrepreneurs posted on the platform. Through the mentors vetting process, the volunteers will know which of the pitches are made by trustworthy entrepreneurs.
  4. Once the volunteer sees a pitch she likes, she will help fill out forms, write proposals and help submit them to organisations that can give out small grants

We want to replace bureaucracy with a trust network. It’s AirBnB for access to grants.”

Going Forward

The winners were Agri-Tigers, Mekong’s Next Top Mentor, and Crowdpitch but it would be great if the organizers could host all the pitch decks online for interested parties to view and perhaps develop. Across the board, technology and entrepreneurial leaders want to inspire venture building, boost the entrepreneurial capabilities of young people, and garner a stronger entrepreneurial spirit overall. In part, it will require a mindset shift, a way of not only thinking differently, but acting differently as well.

Last weekend’s event in Ho Chi Minh City was an opportunity for those on the frontline of building and shaping ecosystems to share ideas, failures, and successes with each other—and also garner support for new initiatives. In all, it was good step toward connecting key individuals and organizations in the region in a cohesive fashion and will hopefully lay down the groundwork for increased communication and cooperation in the region.

 

Knowmads Hanoi

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Knowmads Hanoi began in November, 2013 as Team 1, comprised of 15 students from France, Vietnam, Bolivia, and the Netherlands. Not even two years later, the program is about to start its fourth batch of entrepreneurs on Saturday, June 20 until Sunday, August 2 (every Saturday and Sunday for seven weekends).

The program is the product of collaboration between Center for Sustainable Development Studies Vietnam (CSDS) and Knowmads Business School Amsterdam (which started in February, 2010); it asks $350 for local participants and $550 for international participants to join a team of approximately 15-20 people.

As found on the Knowmads Hanoi website:

“After 3 successful programs, we have created a community of students, staff and trainers. We know that there are many people out there who are entrepreneurial, creative, curious, brave, involved and who want to take action.”

The curriculum has a very emphasized entrepreneurial focus, even while dispelling the notion that money should be the singular focus for success. Yet, it still wants people who can make and impact so the Knowmads Hanoi program specifically seeks individuals who are:

“-Between 20-35 years old

-Curious, creative and entrepreneurial

-Brave, involved and ready to take action

-English speaking”

In some developing parts of the world, the generational gap is widening (traditional vs. modern lifestyles) so programs like Knowmads Hanoi are essential to complementing the conventional education model (not just in Vietnam but worldwide since Knowmads Hanoi has sister organizations in Berlin and Sevilla). Thus, the program helps participants tap into their inner-entrepreneur and provides them the framework to make their ideas become a reality.

Some of the benefits of joining the Knowmads Hanoi program include:

“ • Get real life experience through working on your personal projects and/or partner-project

•Broaden your international network of  trainers and Knowmads alumni

•Have a clear(er) understanding of who you really are and what you are capable of.

•Have a dream or even started working on realizing one, whether it is a business, a job or a long term project.

•Have a clear(er) picture of your interest in this world and how to create your part in it.

•Have had training in and worked with topics like business design, marketing, personal development, sustainability, entrepreneurship, social innovation and creativity.”

Last month, we sat in on a Team 4 Info session where program coordinator Guus Wink, trainer Christian Sextl, and trainer Mercedes Carenzo led prospective Team 4 participants through an exercise to give them a taste of Knowmads Hanoi life.

There was also a mix of Team 3 alumni at the event who helped drive the evening during the group sessions. Speaking to your author, they shared that the Knowmads Hanoi program had been a transformative event in their lives; some had made friendships that were as important as friendships from high school and/or university.

During the exercise, the three groups had their members share with each other what they would do if money were not a consideration at all; the examples ranged from photography to videography. Afterwards, the participants went through a brainstorming session where the other members contributed ideas to help each other reach their respective goals. At the end of the information session, Guus Wink challenged each member to do one action item that same night, or by latest at 9:30 AM the following morning.

As one participant from that night shared:

“I needed to get inspired and motivated to get myself going again and that’s exactly what I got that night! Inspired by the young Vietnamese participants of the event who were really interested in each others story and dreams and were very eager to contribute to that dream in terms of suggestions, ideas and contacts. Inspired by the organisers of the event who came up with a very dynamic, creative and effective programme for Team 4. And inspired by all the opportunities which arose only by attending one information event.”

So the program builds confidence in its participants, it inspires creative thinking and promotes collaboration—all valuable skills for life in the 21st century. Guus, trainer, facilitator, and founder of Knowmads Hanoi was kind enough to answer a few of our questions about the origin of Knowmads Hanoi, and what might be in store for its future.

From the previous three Knowmads Hanoi teams, have any tech-related companies/projects emerged?

Guus Wink (GW): No tech related projects but here’s a look at some of the projects students have started.

Could you tell us more about how you first started?

GW: I tried to start a weekend program in HCM, but to be honest I didn’t have the time nor the network to make it happen. Valuable lessons learned though. After I had moved to China I received a message from a guy who works for CSDS, a local NGO in Hanoi. He had met some people from Knowmads Amsterdam at the Youth Initiative Forum (YIP) in Sweden, and they had told him about my story. So CSDS asked me if I had any plans to come to Hanoi. My girlfriend and I were looking for the next destination after China and we were up for going back to Vietnam, as we had enjoyed the country a lot.

You will be returning to the Netherlands after the conclusion of the Team 4 program, right? What will happen to Knowmads Hanoi after you leave?

GW: Yes, I will travel back to the Netherlands by train from the middle or the end of August, a few weeks after finishing Team 4. I am looking forward to being on the road and in the train for 2 months to reflect upon my time in Asia and to think about my next steps back in Europe. In the Netherlands I might work for Knowmads in Amsterdam and I am curious to see what else will come on my path. It will be related to education and/or social work, in the direction of the transition I feel the world is in.
Christian and Mercedes will be in Hanoi for another few months, and we hope someone from the Knowmads network will come to Hanoi to continue our work. In the ideal scenario, Knowmads Hanoi will continue running independent programs in Hanoi, as well as trainings at universities and organizations. In the case Knowmads Hanoi will stop, we hope our stories will be an inspiration for people in Hanoi to build their own educational programs. We are working on a short film to share our story and to inspire people in Hanoi and the rest of the world.

You’ve worked a lot with young people in Hanoi—what are some trends/themes that you have noticed?

GW: Young people in Hanoi have the keys in their pocket for a bright future. In my opinion it is all about ‘being able to respond’, taking responsibility for yourself.
Young people are challenged because of the fast changing globalizing world they live in, while dealing with expectations from the generation above them. I feel they have to take the time to decide what they think about the world they live in. What are the choices they want to make in their lives. If they are able to take this responsibility, then I think they can build great companies and organizations.

What is your proudest achievement of working with Knowmads Hanoi?

GW: Above all creating the space for almost 60 Changemakers to develop themselves personally as well as professionally. It is fantastic to see all individual learning journeys, and to see the energy and the confidence growing during the process.

Besides this starting up Knowmads Hanoi Team 1 from scratch in only 2 months, designing the program, connecting with many trainers, creating promo material, our website and events, and finally being able to start with a great team of 15 students from 4 different countries.

What will you miss the most about Vietnam?

GW: I will miss the buzzing energy. Since I moved to Vietnam I have been impressed by the energy in this country. The country is so young and everyone seems to be determined to build a better future.

Do you have any advice for people who want to set up a program and make a positive impact like you did? Any advice for locals or foreigners who want to become entrepreneurs in Vietnam? 

GW: Connect and meet with as many interesting people as possible. Share ideas, co-create, and keep developing your story and your dream, and keep shouting out this story online and offline. Don’t wait for miracles to happen, work hard, and learn by doing. Above all, be real and authentic.

Thanks to Guus Wink, Christian Sextl, and Mercedes Carenzo for sharing their time with us.

 

(L-R) Adam Schlosser, Director, U.S. Chamber of Commerce; Pham Hong Quat, Director General, National Agency for Technology Entrepreneurship and Commercialization Development, MOST; Arn Vogels, Vietnam Country Manager and Indochina Chief Rep, MasterCard; Kriengkrai Bhuvanij, Government and Regulatory Affairs Executive, IBM; Jack Lambert, Economic Officer, U.S. Embassy – Hanoi.

Building Vietnam’s Innovation Economy

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On May 12, 2015, representatives from Google, Uber, 21st Century Fox, Cisco Systems and other multi-national corporations (MNCs) came together to discuss digital trade and cross-border data flows in Vietnam’s capital city of Hanoi. The event was organized by the American Chamber of Commerce Vietnam, the Vietnam Chamber of Commerce and Industry (VCCI), and the US Chamber of Commerce. Of course, the Trans-Pacific Partnership (TPP) was front and center throughout the daylong event but there were also a series of interesting topics throughout the panel sessions, some of which were named “Building Blocks for Innovation” and “Best Practices for Promoting the Economy and Protecting Consumers.” During these panels, company representatives spoke about attitudes and policies toward operating in Vietnam.

For example, Google’s Country Lead for Public Policy and Government Affairs, Alex Long, shared some insight into the Vietnamese market: there is 300% more language learning content that is consumed on YouTube in Vietnam compared to the average rate globally, showing the strong desire that Vietnamese have for Google’s services. Google has 13 data centers around the world including one in nearby Singapore. Thus, its interests are global so Google seeks to maintain a virtuous cycle where there is more demand for online services, more innovation in online services, more investment in online services, and therefore more online services in general. (In short, Google loves content–both in terms of volume and quality.)

On a local level, activating this “virtuous cycle” can work in a few ways:

  1. Policy advocacy (through events and working with public sector partners)
  2. Pilots—increasing access (Project Loon, for example.)
  3. Peering/caching (allowing locally and regularly-accessed content to be consumed more efficiently)

However, sometimes basic training needs to be put in place to get users to the point where they can use digital tools effectively. So in 2014 Google worked with organizations like Vietnam E-commerce and Information Technology Agency (VECITA) and VCCI to conduct trainings for 500 small businesses in Vietnam. Ultimately, the goal is to get Vietnamese companies to expand abroad so digital marketing is a way for Vietnamese companies to do that without setting up an overseas office. For example, one tool that Vietnamese companies can use is Google’s Global Market Finder.

One example of a Vietnamese company that went beyond Vietnam (and was present at the event) is Topica Edtech Group, which was founded in 2007 and is now operating in three countries: The Philippines and Thailand (besides Vietnam). The company will launch into the Indonesian market in September 2015 and will be exploring cloud computing solutions within the next six months. Nguyen Khoi, a product director at the company revealed that the first step for Topica was to train people how to use computers even before educating them through their service–again highlighting the need for basic training. Mr. Khoi also shared that he thought the perception of online education in Vietnam was changing and thus Topica Edtech Group may be one of the first in a new wave of Vietnamese startups to expand abroad as a result of positive interest in the field.

At the other end of the company spectrum, Uber Vietnam’s General Manager, Dang Viet Dung had some great advice for startup teams: “Make sure your product is kicking ass.”

He told the audience to “focus on your product first” and ask some basic questions:

  1. Is it good?
  2. Is it intuitive (especially for B2C)

“Often entrepreneurs believe that they need funding—no, get the product right.”

Mr. Dung said to focus on the following steps on the way to success:

  1. Invest in a product
  2. Find a mentor—open up your network, have allies

Mr. Dung also shared information about the recent cable breaks in Vietnam: Normally, the ETA in Hanoi is four minutes and 12 seconds. That means that the time from when a user orders an Uber vehicle to when it pulls up in front of him/her is, on average, four minutes and twelve seconds.

However, the ETA delta goes up during cable breaks which results in the Uber user experience being diluted. Mr. Dung also shared that Uber has had more than 25,000 failed credit card sign ups in Vietnam—the highest in Southeast Asia. Commenting further on recent reports about controversial Uber activities in Ho Chi Minh City, Mr. Dung said the incidents in Ho Chi Minh City related to “paper versus digital” contractual misunderstanding. Mr. Dung also pointed out that Uber is pioneering transparency since all payments are digital so they can be tracked; so instead of skirting tax responsibilities, as some have suggested, Uber is actually helping to increase the tax base.

So, according to Mr. Dung, Uber:

  1. Allows governments to trace transactions
  2. Allows the tax base to get bigger

In relation to Uber, Vietnam will continue to be a growing market and Uber will continue to make the service more affordable. However, the service will stay cash-free so as to not dilute the customer experience. [Update 08/2015: Uber will now be accepting cash payments by end of the year.] Uber is currently available in over 310 cities in 60 countries in the world but when Dung joined Uber in September 2014, Uber was in “just” 180 cities and 32 countries. For Mr. Dung, Uber introduces dynamic quality, feedback, safety—all while optimizing supply (vehicles) and demand (riders). He pointed to the average utilization rate of a private car, 5%; for a taxi, 25%; but for an Uber car it can be between 60% and 80%. Thus, Uber helps reduce traffic, an issue in Hanoi and other cities.

During Mr. Dung’s panel, he said that Vietnam has “one of the biggest startup scenes in Southeast Asia.” There certainly has been a lot of interest in startups in Vietnam since late 2013, from both the private and public sectors. Phan Hong Quat, Director General of the National Agency for Technology Entrepreneurship and Commercialization Development (NATEC), under the Ministry of Science and Technology (MOST), spoke a bit about the origin and mission of NATEC, which was formed four years ago.

NATEC is supporting SME in difficult fields and is working to simplify the process for investment certificate with the Ministry of Home Affairs. The challenge that NATEC is finding a solution to is how to encourage investors to come in and support the developing industry; one initiative that the MOST pioneered is Vietnam Silicon Valley (VSB).

Modeled after Y-Combinator (YC), a seed fund in the US, VSB seeks to replicate a model that is accepted and successful in the US. VSB provides seed money to startups in exchange for up to 10% equity. Last October VSB had its inaugural Demo Day. Through its network of mentors, it seeks to help to close the gap in the startup communities in Ho Chi Minh City, Hanoi and growing scene in Danang–especially for outsourcing companies which rely on reliable and open technologies.

[NATEC was the main organizer for TechFest Vietnam, a three-day festival which was held last weekend from May 15 to May 17; the main purpose of the event was to foster international connections for startups in Vietnam. We’ll be doing a follow up to the event soon.]

On the topic of reliable and open technologies, MasterCard’s Indochina Chief Representative and Vietnam Country Manager, Arn Vogel, stated that technology allows better customer service—whether it’s e-commerce or payment facilitation and Vietnamese companies need to be able to talk to the world, especially in order to verify payments. In terms of payments, we are transitioning from 16 digits to tokenization—and verification is crucial; a company can only do that if the transaction is on its network or has access to it. Mobile payments are on the way in Vietnam; there are 130 mobile phone subscribers per 100 people and the internet is ubiquitous. However, facing different data protection laws, MasterCard and others can’t offer hosted services–which affects consumers because they can’t use their credit cards. Mr. Vogel stated that there are about 20 payment facilitators operating in Vietnam and they can all play a role to work together to change the payments landscape.

Overall, one of the key takeaways of the event was that digital tools are not just for information technology (IT) companies but for all potential fields, i.e., all successful businesses use the internet. Cross-border data flows are not just important for IT access but are necessary to use the best technology available. A major point driven by more than one speaker during the event was that the “Digital Economy” is actually the general economy and that any attempts to restrict the flow of data would impede the flow of trade as well.

Adam Schlosser, Director of U.S. Chamber of Commerce, stated that the TPP helps companies of all sizes but Vietnam stands to gain the most out of the trade agreement. According to some estimates, as Mr. Schlosser stated,  it could provide the Vietnamese economy a $46 billion boost by 2025. It would also favorably affect tariffs, market caps, and digital products and services to help facilitate free trade across borders. Jack Lambert, Economic Officer at the US Embassy in Hanoi, reiterated that with the TPP, the biggest opportunities of growth and jobs are for Vietnamese SME but they can’t compete unless they have access to the world and data.

During opening remarks, Vice-Chair of the American Chamber of Commerce, Virginia Foote, noted that the digital economy and global transformation is well underway. And more than a few speakers touched upon how Information and Communications Technology (ICT) has driven the Vietnamese economy in the last 20 years and will continue to have a greater effect in the next 20 years. And nations like South Korea, Israel, Sweden, and others can help to show Vietnam new models and tools in order to create its own digital economy with its own “Vietnamese” style. (One of Vietnam’s strengths is that it has a young population that loves working with technology, so it should be leveraged.)

Above all, the event provided key insight into how multi-national corporations and other entities in the public sector view the future in Vietnam. Throughout Vietnam, there are more than 16,000 foreign companies operating across a variety of industries. Through collaboration, local and international partners in Vietnam can work together to create an ecosystem innovation can flourish; one that is full of promising and fast-growing companies or in other words, building Vietnam’s innovation economy.

Note: If you’d like to know more information about the event, including key leadership opinions stated at the event, then sign up for our newsletter.

Feedback Loops

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If you’ve ever been traveling through Vietnam, then one aspect that is noticeably different between the north and the south is the customer service. For example, when ordering a bottle of beer at a restaurant, the server will usually open it for customers in the south—while in the north, the server might not even bring a bottle opener with the bottle. A few weeks ago, over dinner with some Saigonese friends in Hanoi, the discussion touched upon the better customer service in the south. Not even two minutes later, the waitress (politely) informed us that she felt she was walking around our table too much so we should consolidate our future requests for her convenience. On another occasion, at a cafe/restaurant frequented by tourists in Hanoi’s Hoan Kiem district, your author requested ice water; the waitress brought over cold water sans ice. After inquiring about the lack of ice in the glass, the waitress cheerfully responded, “I think the water is cold enough for you.”

Among the major reasons why customer service (among other things) does not change is simply that customers are used to bad service (they don’t know better), they don’t complain to someone who can do something about it (a manager or owner), they don’t want to complain (for fear of causing trouble for the worker), or they assume it will be futile to complain. This issue consistently rears its ugly head (for tourists, but also for locals) with taxi drivers who know “special” ways to get to the destination, pretend to get lost, or simply don’t know how to get to the destination. Usually, these drivers are from the countryside who flock to big cities after a holiday. Sometimes, taxi drivers will acknowledge where a fare wants to go and will then proceed to “phone a friend” for guidance (and sometimes more than once). At other times, drivers may try to take advantage of the confusion over the local currency by returning less change to a customer than required. Or a driver might not even want to drive to a particular destination if it is “too close” or won’t provide for a “high-enough” fare. (Before Tet in Hanoi, your author experienced some taxi drivers bypassing the meter and establishing “on-demand” pricing.)

However, with the arrival of sharing economy services in Vietnam such as Uber, GrabTaxi, EasyTaxi, they introduce more accountability, systems efficiencies, and feedback loops to allow service enhancements in the future. Or, as Uber Vietnam put it recently, “less congestion, more job opportunities, safer transportation, transparency, accountability and affordability for riders.” Could a similar impact be made in Vietnamese companies via new and innovative technologies (such as mobile apps)? If so, how would progress be measured?

Set Ways

For a team-building session at a major Vietnamese corporation, the management team watches a new TED talk every Monday. The company’s managing director shares some thoughts on the presentation and then opens it up to the rest of the office; almost always, the response is silence. Why?

After discussion with some foreigners who have experience working with Vietnamese—as well as Vietnamese, there may be a variety of reasons for the lack of engagement:

1. Afraid of giving the wrong answer and losing face;

2. Afraid of not giving the “right” answer and being embarrassed by his/her superior;

3. Afraid of giving the correct answer and looking “too” good in front of colleagues (thus painting a bullseye on his/her back); and

4. Not knowing the answer.

This scene presents a sort of “crisis of confidence.” Often, loyalty is valued over competency, making the critical resource of talent in even greater short of supply. And despite money being the ultimate objective for many Vietnamese workers, even bonus systems can sometimes fail. For example, in one Vietnamese company, the underdog team achieved a bonus (approximately $15 for hitting 120% of their target goal) which upset the atmosphere in the office since other units were expecting to win the cash bonus.

Whether it’s a rating system, or a new way to train workers, or standard training, many plans are tough to fully implement in Vietnam. For example, even a new trainer in a reputable gym requires six months before s/he is “good” and a year before s/he can handle any disruption. Long before then, competitors are offering “sweet” packages because the trainer has had a “brand experience.” The same goes for some of Vietnam’s own cafe/restaurant brands; this phenomenon isn’t new—ask any aspiring software developer in Vietnam, especially in the gaming industry. Training and retaining quality employees can be hard (especially when some Vietnamese companies want experienced workers for low pay), but the alternative is keeping the status quo.

Focused Efforts

The greater issue beyond motivating individual employees is that organizations need to establish a baseline pulse to gauge progress in six, 12, 18, 24 months. For example, what KPIs will be used? What will be your targets? How to increase the self-confidence of the workers? How to smartly increase pay to be on par with market rates (and inflation)?

Timeline: What’s the priority? How to identify current employees with the right mindset/attitude? What do you do first?

There can be a variety of initiatives:

  • Hiring process—establish an independent panel/screening to be selective—improving the way to hire
  • HR reorganization/operations—converging departments into a holistic unit
  • Branding/PR—attracting quality talent, connecting with consumers
  • Training programs—preparing the workforce for advancement in the company (meritocracy); promoting a culture of career advancement; and english tutoring components for managers
  • Intrapreneurship/empowerment of workers—expanding into new businesses and retaining the best talent
  • Welfare—raising morale, giving workers more than monetary reasons to stay

Unfortunately, some Vietnamese companies would prefer “quick fixes” which they would like to use within a three month timeline or sooner. Thus, even if core members of a leaderboard recognize that there is a deep cultural issue, they may not be able to do anything because of on-boarding policies and the need to close ranks (even if they describe some of the talent as “terrible.”)

More often than not, companies here can move too slowly, but on the other side of the spectrum they move too fast without thinking (but believe they are on the cutting edge). An example of this is retooling restaurants weeks before opening and consolidating marketing teams across different subsidiaries into a single unit–and then dismissing half the staff.

Creating a New Culture

The challenge is in the implementation, always. True transformation is never really an option unless it comes from the top and has buy-in at all levels, which is rarely the case. Why? Because Vietnamese companies are already very thrifty, there are set alliances in place, and any international hires on staff have usually been unable to implement recommendations that anyone has put forth to enact change.

Then, what should be done? There are a few options:

1. Organizational change

2. Physical building transformation (if necessary)

3. Team-building

Competition is increasing in ASEAN and around the world; what role will Vietnam and its people take on in the global economy in this century? It’s up to the Vietnamese to decide but for sure it will require a combination of innovation, commitment, and investment in areas even as simple as:

  • Empowering workers
  • Eliminating obfuscation
  • Enacting small cultural changes
  • Eradicating fear-based management

But perhaps most important of all is to establish feedback loops, which allows us to gauge goal realization (or lack thereof) in organizations (and in society). Ultimately, feedback loops allow what works to take off, and what is ineffective to be passed over by management.

Forty Years Later

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This week we are at the end of a six-day holiday: Hung Vuong Day (Hung Vuong, i.e., “Hung King” is to celebrate the history and lineage of Vietnamese kings.) on April 28; Reunification Day (also called Victory Day or Liberation Day in Vietnam) on April 30; and International Worker’s Day on May 1, also known as “May Day.” It’s the first big holiday break since the Tet holiday (Lunar New Year, a nine-day holiday) back in February. (Originally, the current holiday vacation was requested to be eight days, but only six days were granted.) Signage proclaiming and celebrating these three special days are all over Hanoi, citizens have their flags out in front of their homes, and nationalist songs are broadcast on public address systems in the streets. During significant year anniversaries (30th, 35th, 40th, etc.) parades are held in Ho Chi Minh City to celebrate the north “releasing” the south and the veterans that led the way.

In general, the atmosphere in Vietnam is quieter between Christmas and the Lunar New Year (one-to-two months). Things pick up between the Lunar New Year and this current holiday, but slow down again as we enter this break—in effect, another “reset.” The last day before the holiday, April 27, was the deadline to push through agreements before the exodus to places like Ha Long Bay, Co To, and Cat Ba islands.

As with Tet, many workers return to their home provinces and the streets in major cities become a bit quieter with less traffic (and less honking but not less dangerous, unfortunately). However, some work still goes on: directly and anecdotally, some construction workers on residential projects, service workers in cafes and bars, and factory workers in Bac Ninh all maintained their posts. The next big holiday is in September when Vietnam celebrates its Independence day on September 2. Thus, there are four solid months where business can proceed, unimpeded by long stretches of holiday. At the same time, Ho Chi Minh City’s rainy season begins, which can slow down travel around town due to flooding, and the weather in Hanoi heats up considerably (also slowing down the pace of things) since the city experiences proper seasons without snow.

This year is the 40th anniversary of Reunification Day, when North Vietnamese forces (NVA) captured Saigon and the Second Indochina War ended. In the US, April 30, 1975 is largely viewed as the final day of a tragic chapter in American foreign policy in Vietnam. For the more than one million Viet-Kieu (and their children) in the US, every April brings renewed memories of hardship, sacrifice, loss—and perseverance in a new land. There is no doubt that the war was a dark period for relations between the two governments at great expense of its peoples, some of which continues today. However, more than 40 years after Operation Frequent Wind, Vietnamese attitudes toward the US and capitalism may raise a few eyebrows.

New Attitudes

According to Pew Research, 76% of Vietnamese expressed a favorable opinion of the US during a 2014 poll. Almost nine-in-ten young people (as well as more educated people) were fond of the US. Of those who lived through the Second Indochina War (the Vietnam War as it is called in the US), six-in-ten over the age of 50 held a favorable view of the US. Perhaps the most surprising figure from the poll was that 95% of Vietnamese respondents believe “that people are better off in a free market economy, even if some people are rich and some are poor.” That’s not a typo; ninety-five percent of Vietnamese believe that people are better off in a free market economy (perhaps because the poll respondents picture themselves as the rich ones).

In fact, it’s not uncommon to hear from successful Vietnamese (with direct or close relations to VVIPs) that “making money is not bad… as long as you don’t hurt anybody.” Now, for those who have not spent much time in Vietnam, it may be surprising that there are so many “pro-American” attitudes in a one-party state, especially in the capital.

But spend some time working with Saigonese and doing business with Hanoians and the Pew Research results aren’t that hard to believe at all. For one, Vietnamese love and voraciously consume American culture. Furious 7, Avengers: Age of Ultron, Jurassic World, and Terminator Genisys are all films that have been screened or will be screened in Vietnam. Along with KPOP, Vietnamese youth listen to a variety of American music artists such as Taylor Swift, Bruno Mars, Maroon 5, and Katy Perry. American flag backpacks (as a fashion statement) are an occasional sight in the streets of Ho Chi Minh City (formerly and still known as Saigon). Last autumn in Hanoi there was even a American-style prom organized and American-style wedding requests aren’t that uncommon. (In fact there is even an American ordained minister who has performed a ceremonial wedding in Hanoi.)

In terms of American products, the Apple iPhone 6 is perhaps the most desired phone in Vietnam. Getting a gold iPhone 6 Plus is even better. Workers will spend two, three, or more months of their salaries just to have it and show off that they are able to afford one. Silicon Valley is the envy of many Vietnamese entrepreneurs in the tech industry. Even the Ministry of Science and Technology (MOST) initiated a Vietnam Silicon Valley program in 2013. And later this month the National Agency for Technology Entrepreneurship and Commercialization Development (NATEC), a division of MOST, is the main organizer for TechFest Vietnam, a three-day festival which will be held from May 15-17 at Vietnam National University in Hanoi.

And if you were to directly engage and question Vietnamese about the American War (as they know/learn about it), they would most likely respond with “No problem, it was not me and you who were fighting each other.” With two-thirds of Vietnam’s 90 million population being under the age of 30, that is not a surprising response at all. Other Vietnamese have described the US to your author as a “big and strong country,” a “rich country,” and even as “number one” in casual discussions over beer or coffee. (Of course, there are ideologues and “politically correct” apparatchiks to encounter as well.)

One Direction

But it’s not just people-to-people ties that are being forged; there are ever-growing official ties between the two countries as well. Coincidentally, this year is also the 20th anniversary of normal relations between the US and Vietnam. Looking forward, the US intends to be Vietnams’s largest trading partner (having traded $35 billion in total goods last year, the US is already Vietnam’s largest export market), and the TPP will only reinforce the relationship between the two countries even more. However, the intertwined paths of these two countries started long ago, and came to a salient point shortly after the end of the Second World War.

Thirty years before the Fall of Saigon in 1975, Ho Chi Minh stood in Ba Dinh square in Hanoi and read the Declaration of Independence of the Democratic Republic of Vietnam; it contained a familiar passage: “All men are created equal. They are endowed by their Creator with certain inalienable rights, among these are Life, Liberty, and the pursuit of Happiness.” “Uncle Ho,” as he also known, has another particularly famous saying that Americans might identify with: “Nothing is more precious than Independence and Liberty.” The American Founding Fathers would almost certainly agree with that sentiment.

Forty years later, Vietnam has transitioned from a war-torn economy to a manufacturing center and serves as an integral part of the global supply chain. Beginning with Doi Moi (“Renovation”) in 1986, the Vietnamese economy has become increasingly integrated with the world economy. There have been and will be other significant milestones as well: the US embargo against Vietnam ended in 1994, Vietnam ascended into the WTO in 2007, the TPP will most likely be implemented this year, and by 2018 all tariffs will be reduced to zero as part of ASEAN integration in the region–not to mention a host of other trade promotion vehicles that Vietnam is involved in at various stages. To some, the changes in Vietnam since 40 or even 20 years ago may be surprising, but as someone who heads a department in a ministry recently stated, “the world is changing so we too must change with the world.”

Michelle Phan and Vietnam

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“I am first a creator, but my ongoing objective is to leverage my personal success, to help mentor new and existing talent, and further help them achieve their goals.” —Michelle Phan

Michelle Phan is many things; an entrepreneur, a Vietnamese-American, a role model, a success story, and a phenomenon. Coming from humble beginnings, in 2007 she was rejected by Lancome for a makeup artist position because she had no prior sales experience. Instead, Phan turned to blogging and after two readers requested that she make a video tutorial, she obliged and a week later the video had 40,000 views. Today, Phan’s legacy so far is defined by $120 million in annual sales and 100 employees with brands like ipsy (offering a monthly makeup subscription) and her ICON Network (formerly “FAWN” or For All Women Network). Above all, Michelle Phan seems like she hasn’t reached her peak; just recently she was compared to and proclaimed as the next Oprah—all at the age of 27.

While Phan certainly hasn’t shied away from her roots, she also hasn’t seemed ready to take a plunge into business ventures in Vietnam. Phan’s first scheduled time in Vietnam was in November, 2010 (though she was not able to make it) and by her own account, the last (and first) time she visited Vietnam was in August, 2012. Recently, she celebrated her birthday in Japan, where she seems to prefer spending her time in Asia. However, she might be currently missing out on some very big opportunities in Vietnam.

[Update: Michelle Phan appeared at an event in Ho Chi Minh City on May 12, 2015.]

Investing in Vietnam would allow Phan to tap into one of the fastest growing markets (annual growth between 5 and 6 percent) in the world where Phan has clear and demonstrated cultural and heritage ties. Vietnam is part of the group dubbed “New Wealth Builders” which will outnumber mature markets after 2020. Already, the number of super rich (defined by having net worths over $30 million) in Vietnam has increased to over 100 in 2013 from only 34 in 2003. In short, many people are becoming successful as a result of the growing economy here and the growing middle class is continuously demanding newer and higher-quality products, fueled by their increased purchasing power.

Foray into Vietnam

Exactly how Phan should enter the market here is debatable. Vietnam is a complex market—each region (north, south, central, etc.) has its own quirks and consumer styles. However, there are over 90 million people, almost two-thirds of which are under the age of 40 and about a million babies are born here every year. The common area and interest is in two parts: foreign products are preferred in Vietnam, and young Vietnamese are already familiar with “vlogs” or video blogging—something that Phan pioneered in the US.

More importantly, Phan could be a role model for the country’s youth, especially its girls. In local advertising, White, Korean, or Japanese women are mainly present in ads—bombarding the youth with carefully crafted forms of “acceptable” beauty. But in Phan, young and impressionable Vietnamese women can see something else: themselves, i.e., someone who looks like them, who is successful, and who overcame a variety of challenges that they can directly relate to (gambling and/or absent father figure, sharing sleeping surfaces with siblings, financial troubles, rejection, etc.).

Phan’s makeup tutorials and other media can ultimately inspire and build confidence in young women. And in Vietnam that confidence can take several forms—both in the ability to do something (or try something new) but also to ask clarifying questions without the fear of looking foolish in front of colleagues (a significant problem in workplaces). And it can also provide something that money can’t buy: hope.

Cultural Trends

Even though KPOP, Korean soap operas, and other aspects of Korean culture have huge influence in today’s Vietnam, many young Vietnamese love American cultural products. American flag-themed fabrics can be seen in the streets of Ho Chi Minh City along with “Je t’aime Paris” apparel. Things are more toned down up north but in general, blonde-haired and blue-eyed people are often seen as the archetype of beauty and they are consistently showered with compliments when traversing the city streets in Vietnam.

For many Vietnamese, having white skin is one of their ultimate desires (meanwhile countless White people are trying to become a darker color via tanning—both naturally and artificially). There are entire product lines that are dedicated to skin whitening creams and bleaching lotions—a very different approach to beauty care than some westerners might be used to. In the streets, female motorbike drivers will go to great lengths by covering their entire bodies in order to prevent even a single ray of sunlight from reaching their skin (even in the blistering summer heat). There just aren’t many Vietnamese (role) models who are able to balance their local roots with international expectations (with the exception of some niche Viet Kieu singers) and transcend cultural boundaries.

Again, Phan is different; she is American and Vietnamese and she can help to bridge the cultural and understanding gap between people in both countries—imagine her appearing in a travel blog while going through Vietnam. It would help put Vietnam on the map for her legions of fans (whom she refers to as “Dreamers”). Right now the interest between the two countries is in one direction: toward the US for study (more than 16,000 Vietnamese students are currently studying in the US).

Additionally, Michelle, with her model/foreigner boyfriend would be a surefire hit in Vietnam. Husband and wife/DJ duo Matt (of Poreotics) “Dumbo” and Tessa Nguyen are an example of a cross-cultural couple who has found success in Vietnam (mostly based in Ho Chi Minh City). (They spin regularly at Ace Club in Ho Chi Minh City.)

A Rising Brand

As profiled in Forbes’ 30 Under 30 recently, “She’s also got a line of makeup at L’Oréal, a music venture that promotes artists on social media and a deal with reality-TV giant Endemol for an online lifestyle channel. ‘I feel like this is just the beginning,’ she says.” Indeed, Michelle Pham is just getting started: imagine the brand and licensing opportunities when she gets married, has a baby, and her firstborn goes to school for the first time, etc.

Her “name and fame” would allow her to take smart risks in Vietnam to extend her brand. In the future, the Icon Network could be the roadmap for young Vietnamese: lifestyle, personal interest, comedy, and other advice all intersecting together in unison. Some adventurous Vietnamese YouTubers have started to push boundaries here in cyberspace like An Nguy, DamTV, and Mie Nguyen, but a unifying platform (like Icon Network) does not yet exist.

(What’s the alternative? The most famous private television channel in Vietnam is scaling back its programming and some new experiments like Can Ho So 69 have been tried but have proven to be too risqué for mass consumption.)

Thus, Phan could make an impact here and leverage the Vietnamese diaspora in France, Australia, Eastern Europe, and so on. In other words, first establish a brand in Vietnam and then expand outward again, tapping into those existing networks between Vietnamese and Viet Kieu. An alternative is to form a following then expand into other areas such as fashion— and Vietnam already a has robust textiles and manufacturing industries. Michelle Phan already disrupted the cosmetics industry–what’s next for her?

Into Vietnam

Ipsy (or something like it) in Vietnam can find the right niche (via clever experimentation since most e-commerce here is COD). If not, then Birchbox, Loot Crate, Barkbox, or any other monthly subscription service (most likely after proving it can be done in China) will be the first to break into this and other emerging markets (already Bethany Mota has visited India, a one billion plus consumer market). That’s not to say that Michelle Phan hasn’t attempted to connect more deeply with Vietnam. Em, “a reflection of Me” is Phan’s attempt to mate her culture and her personal brand. “Em” meaning “she” or “her” in Vietnamese (and other things, depending on the  context); but there’s no need to stop there—keep going until something beautiful happens.

So how exactly to build up in Vietnam?

  • Start small: aptly translate YouTube videos for Vietnamese or release special videos for the Vietnamese market (which means videos 30 seconds to one minute in length—any longer and there’s not enough patience/attention span);
  • Make more regular visits to Vietnam (and bring your boyfriend);
  • Expand the Icon Network into Asia, especially Vietnam. There are a number of successful YouTube VJs here but you can also hand-select and cultivate suitable talent;
  • Good quality and affordable makeup is hard to find in Vietnam; explore localization options for ipsy;
  • Develop service learning, social enterprise, or impact investing opportunities—the dollar goes much further in Asia and being a good citizen is good marketing; and
  • Mentor new and existing talent in Vietnam; there’s a lot of talent here. Young Vietnamese people are in the middle of changing times between tradition and modernity and feel like their generation is unlike any other. Start with the 2014 Graduate of the Year.
LED accent lights.

Vietbuild Hanoi 2015

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Today is the last day of the 2015 Vietbuild Home International Exhibition, a place to showcase new products, new technologies, and to check out new trends in the Vietnamese construction industry. The fair, held from March 25-29, is located at the Giang Vo Exhibition Center in Hanoi’s Ba Dinh district (184 Giang Vo, to be precise). More than 1,000 booths were spread over five areas to represent over 400 local, international, and joint-venture companies.

We stopped by the exhibition twice over the course of the four day event to get a feel for both the direction of the construction industry and for current customer expectations in Vietnam. At times, the exhibition felt more like a nightclub with the loud Vinahouse music playing as well as the “PG” (promotions girls).  Some of the larger and more popular booths were set up by companies like Eurowindow, Viglacera, and Austdoor. In addition to products, several real estate developments were on display such as V-Green City Pho Noi and Cam An – Hoi An. Furthermore, there were some crowded safety booths, which is good considering the generally lax attitude toward safety on many construction sites; we’re glad to see that safety considerations are becoming a higher priority.

Overall, there was a strong showing of reputable foreign products such as Stanley Tools and DeWalt; as well as products from South Korea, Germany, China, and others at the fair. For smart home options, there were several companies, including brands from Portugal and the Czech Republic. However, there were also a portion of products that would have a hard time finding traction in the west. Eastern and western tastes can be very different, i.e., what is considered “good design,” “fashionable,” or “stylish” in one part of the world would be seen as falling flat in another. Vietnamese (and Asian, to an extent) preferences, in general, tend to gravitate toward ornate, flashy, or imposing furniture, art, and, design (or frugality for items that very few people will see). For example, we witnessed plenty of oversized wooden furniture at the exhibition, as well as showers with multi-colored and changing LED lighting installed in the unit itself; a “karaoke shower,” if you will.

As we continued to walk around, at one point we caught a glimpse of 18th century aristocracy via a local company’s booth representing the Renaissance brand. The closest product to the other side of the spectrum was a “futuristic” nano spray which could render an item waterproof if appropriately applied—product demonstrators were using hair dryers, light bulbs, and other appliances that had been coated with the spray under water in a fish tank. According to the salesman, a can sells for approximately $50 and a coating will last between one and three years. While certainly a useful technology, the spray has the high potential to be misapplied, misunderstood, or misused–especially when using electrical products under water.

One section that caught our eye was the CNC machining and laser engraving area where small Buddha statues and other traditional-looking pieces of art were being crafted in front of us. It was interesting to see the numerous companies that are operating in this space, and even more curious that they were choosing to (re)produce traditional art pieces instead of contemporary ones. Tourists beware: that “old wood carving” (you’ll buy thinking that an old grandfather in a remote village somewhere spent years carving) could have actually been made by a computer-controlled machine the day before.

Vietnamese Homes and Expectations

The basic shape of Vietnamese homes (also known as “tube houses”) is credited to older tax codes resulting in the standard shape of ~3 stories tall by 5 meters by 13 meters deep (15ft wide, 40ft long). Many Vietnamese homes have a retail business (with fewer numbers having a business office) on the ground floor. Some newer houses can still use these dimensions as an archetype, but for those who can afford it, bigger is always better—especially in Asia.

Still, space is at a premium, especially with two, three, or more generations under the same roof (traditional Vietnamese children don’t move out until they marry and the eldest child must care for his/her parents). Additionally, taste, like art, is highly subjective; what looks or sounds “good” to one person may not to another. However, if you want to sell in a particular market then you need to understand the local culture and sell things the local consumers want. At the same time, you can also risk damaging or diluting your brand image just to make a quick sale. Thus, educating consumers about your product or service—and continuing to drive a consistent message—is the best way to establish your brand as a market leader in the long term. However, it can and will be capital and time intensive.

For example, new homeowners don’t care that the unit they are being handed over is dirty (e.g., paint spots on the floor and all over the baseboard), has shoddy installation (e.g., door trim not flush with the walls), and generally represents poor craftsmanship (e.g., gaps, crooked lights, and cheap materials). Why? Because once they take possession of the unit, they invest additional millions or billions (VND) to renovate the (sometimes) brand new unit.

(And why should trade workers and their managers care if clients don’t demand higher standards? These low standards only work as long as the requirements are low—they definitely aren’t suitable for smart homes.)

In apartment buildings, this renovation can mean that even the original front door is replaced with some drab steel cover and, of course, bars are added to the windows for security purposes. However, this isn’t the norm in much more expensive serviced residences. Yet, when we visited Lotte Center Hanoi last year about a month before it opened, the most technologically advanced equipment in a serviced unit was a motion sensor near the front door to turn a single light on/off upon entering/exiting. We covered the opportunity in this space in last week’s post.

Last week, we went to a brand new apartment to check out a recently finished two bedroom unit in the center of Hanoi; overall, the space was poorly utilized. For example, the “master” bedroom had a tiny balcony but no bathroom. The other bedroom had its own bathroom but there was a two square meter hole in the wall (near the ceiling) leading outside. The original door on the unit was for a flimsy deck door so there was little privacy. The other residents on that floor had all replaced their doors with a heavy wood door with a gray metal security gate to cover it (from different vendors). And, of course, security bars could be seen in front of the windows—an after market addition. Ultimately, it was hard to tell whether it was a hallway in a new apartment building or in a new prison.

Current and New Opportunities

Home security remains a huge opportunity in the Vietnamese market. As mentioned, Vietnamese homes usually have barred windows as well as shudders. There is at least one heavy-duty gate on the front door and if there is another then it’s a different style (metal gate or metal roller). Any walls might have barbed wire or broken glass perched on top and some deck spaces will be fully enclosed with metal bars. This security conscious approach to their homes is partly the result of a cash-bashed society, but it’s also because Vietnamese consumers tend to follow the pack: “if my neighbor does it, then I must also do it or do it even better.” Think of it like a hyper “Keeping up with the Jones’” mentality.

Companies like Dropcam provide the perfect option for Vietnamese consumers, who can check up on their homes while they are away or can be alerted when there is unauthorized movement. Beyond security, other smart home products could be successful in Vietnam as well including Philips Hue and the Sonos line up. But how can consumers want something they don’t know about?

Events like Vietbuild remain a great opportunity for demonstrating products—and in markets like Vietnam’s where educating consumers about a nascent industry is required, there is no substitute for seeing how a product works (instead of hearing about it). This is a country where the majority of e-commerce payments are handled COD once a consumer has had the ability to check out the product in front of his/her house before paying the delivery driver. Seeing is believing when it comes to new technology, and especially in Vietnam where consumers are suspicious about product quality as it still has room for improvement.

The next Vietbuild expo will be held in Danang from April 22-April 26.