If Adam Smith were alive today Vietnam would be for him what the Galapagos were for Darwin.

The ideas of specialization and exchange of labor are completely pervasive here. Tiny businesses pour out of every nook and alley. People set up 3 stool restaurants on the sidewalk. Most barber shops are just a mirror hung from a tree and a chair, and you can even pay to have your ears cleaned while you drink your beer at the park by someone carrying what looks like a lock pick set of tiny ear-goop-scoopers.

You can even buy Buddha off the back of a motorbike.

Having studied business for the last 5 years I can’t help be be incredibly curious about how much money each of these businesses make, why each person ended up selling their particular product or service, and how they compete with each other.

So I asked a local Vietnamese friend of mine to come out for the afternoon with me and help me to interview some of these street entrepreneurs. I asked them how long they have been selling their product, why they chose that product, how much money they make per day, what their prices and profit margins are, and how business has been lately.

I converted the currency at rate of 17,000 Vietnamese Dong per US Dollar. I also adjusted their daily income based on US purchasing power using Purchasing Power Parity rate of 2.6 from the IMF (PPP adjusted GDP divided by Nominal GDP). You can ignore this if your not into economics, it’s just to give you a better idea of of how much stuff you could actually buy with that amount of money in Vietnam. Although keep in mind that food can be especially cheap in Vietnam so even $2 a day is enough to feed one person if you’re buying ingredients at local markets and cooking them at home in family portions.

We first spoke with 3 bike or basket style street vendors on my street.

Tin Stuff Seller: has two shoulder baskets filled with pots and teapots made of tin

• Time selling tin stuff: 10 years
• Why tin stuff: She likes it and they make it near her town, although she buys it from a reseller not directly from the maker.
• Daily net income: $1.75 US or $4.50 in purchasing power, although she complained that some days she makes as little as $0.47/$1.22ppp.
• Cost, Price, Profit for a tin pot: $1.18, $1.29, $0.11
• Business lately: Difficult. She says it’s very easy for people to buy this stuff from many stores in town.

Sandal Seller: has a rolling cart filled with colorful pairs of plastic sandals

• Time selling sandals: 5-6 years
• Why sandals: The sandal factory is in her village so everyone from there sells sandals.
• Daily net income: $2.64 US, or  $6.88 in purchasing power.
• Cost, Price, Profit: $0.52, $0.61, $0.09
• Business lately: hasn’t been good, she had only sold 4 pairs so far that day. (at about 1pm)

Giant Rice Cracker Seller: two big plastic bags of stacks of tortilla like rice crackers

• Time selling giant rice crackers: 2 years
• Why giant rice crackers: Normally she works on a farm, but this is the off season and she has lots of free time. She also buys them from a reseller.
• Daily net income: $1.50 / $3.80ppp.
• Cost, Price, Profit: $0.18, $0.29, $0.11
• Business lately, slow because the weather has been hot, people buy more when it’s cold.

Next I went to the pho (Vietnamese rice noodle soup) place next door to me.

• Time selling pho: 15 years for the woman and her husband who currently run the place, and her parents ran it for 20 years before that. 35 total.
• Why sell pho: family tradition
• Net Income (whole business): $60 per day, $1,800 per month
• Employee pay: $76 per month / $200ppp (x 8 employees)
• Rent: $600 per month
• Owner Profit: $564 per month /$1,468ppp
• Business lately: good

Finally we headed over to the more touristy old quarter of town and interviewed a few microbusinesses there.

Alley shop: sells drinks, cigarettes, and handicrafts

• Time running the alley shop: Her mother has been running it for 10 years, she’s just watching over it for the day while her mom is out.
• Daily net income: $5 /$12ppp
• Free rent because they live in the building down the alley. She buys most of her stuff off of other vendors and her husband makes the carved stone handicrafts.
• Most of her customers are Vietnamese but she gets a lot of tourists too.
• Water Bottle Cost, Price, Profit: $0.20, $0.35, $0.15
• Business lately: fine

Tea and Beer guy: has a little stoop set up at the entrance to a small alley (declined having his photo taken)

• How Long: 20 years, since his retirement
• Daily net income: $3 /$7.65ppp
• Why: he’s retired and likes sitting out on the street and selling tea to his neighbors. He used to be a general accountant for the Hanoi Energy Ministry.
• He makes most of his money from tea, which he sells for about $0.18 and is practically free for him to make.
• He also sells packs of cigarettes; cost, price, profit: $0.55, $0.60, $0.05
• Business Lately: Good, he has a lot of regular daily customers.

Paintings Shop: a small gallery that sells reproduction and custom paintings, mostly to tourists

• How Long: Current owners have been running the shop for one year, they bought it from the previous owners along with the entire building. They live above the shop.
• Why Paintings: There are a lot of other painting shops on the street, it’s a good tourist area, and it already was a painting shop. They took a 6 month training course from an experienced ‘master’ painter before they started.
• Business Net Income: $1000 monthly
• Salary per painter: $60 monthly /$152ppp
• They sell about 6 paintings a week for $30-50 depending on size and difficulty, their costs are negligible.

Shoe Repair Guy: sits on a stool on the corner in front of his house fixing shoes

• How long: He’s been doing this for the five years since he’s retired.
• Why shoe repair: he lives on the end of a street of shoe stores and there are other shoe repair guys also set up here. He also explained that he used to work as a welder which was very hard and dangerous, he finds shoe repair very peaceful comparatively.
• Daily net income: $9 /$22.50ppp
• His costs are negligible but the initial investment for his tools and grinder was about $60.
• He gets about 10-15 customers per day that pay between $0.50 and $5.00 depending on the kind of repair.

I’ve made a few realizations about these businesses: They survive in part because an incredible capacity for idleness. A lot of these people live in their families’ home and really exist in a world without bills and other overhead expenses that need to be supported by a full time job. If it’s not their role to support a family they can really afford to just bring in a little bit of money once in a while.

They also don’t directly compete with each other on price, quality, or the variety or novelty  of their goods and services. They don’t even compete geographically. You can find long streets of nothing but stores that all sell identical brown shoes (or light bulbs, or mannequins). They rely on social networks and loyalty for their marketing. People buy from vendors that they have family or social connections to, and they stay very loyal to one vendor. Everyone has their particular guy for everything.

Originally I was disappointed that the Muhammad Yunnus model of micro-finance hadn’t caught on here in Vietnam. Now I realize that it already exists here and it always has. They just don’t need any smarty-pants outside economists to come here and set up a financial structure for making small loans to individual and family ventures. Vietnamese already do this very efficiently within their family and social networks.

Culturally and sociologically this is a fantastic part of the urban world. Everyone knows everyone else on their block. Hugely complex and intertwining social networks keep order in the city. And people who would otherwise be left out of the economy get to participate, especially the elderly.

I think the US could benefit a lot if people could run businesses out of their homes, especially in poor dense urban environments. I imagine you might not have as much violence on the streets if they were filled with grandmothers selling soup and people repairing bicycles and kids running around buying eggs from their neighbors.

On the other hand none of these businesses probably pay taxes, follow any particular health code or minimum wage, or are legally liable. This works here though because they are socially liable to their families and neighborhoods. I’m not sure if it would in the US.

In a previous post I talked about my quest to get a proper suit. I decided to take the time and get a suit custom tailored.

Unfortunately the tailor I wanted was unavailable, so I thought I would get another cheaper suit made of a lighter material to hold me over and to wear on hot days.

Then silliness struck; once I had just been fitted for interim suit my first choice tailor became available after all. So I ended up getting two suits made simultaneously for me by two different tailors.

I didn’t tell them about each other.

Nguyen was the first tailor. He and his wife run a small tailor shop that I found listed on an expat info website I use (the New Hanoian). I had it made out of a lightweight grey cotton acrylic kind of fabric that I chose from the fabrics he had in the store. I also emailed him some photos of the style of suit I prefer.

Linh was the tailor that came highly recommended to me.  She has a side company that makes cleverly branded, high end, natural, handmade soaps in small batches for export to fancy hotels in the US and Europe.

Linh first met me to talk about what kind of suit I wanted: two button, single vented, and slim fitting, with narrow notched lapels and the jacket cut high. Two days later we went together to the fabric market to pick out the fabric for the suit. I chose a black wool and cotton blend, and a blue paisley for the lining.

Here’s how they turned out:

The black suit on the left came out really well. It feels heavy and warm, and is the right combination of soft and firm. It fits well and it’s cut how I wanted. Combined fabric and tailoring cost $250.

The Grey suit on right came out ok. It fits fine, though the jacket is a bit longer than I wanted, and the fabric feels a bit stiff and thin. It also feels a but frumpy, almost like wearing a suit that’s a prop in a play. It is still tailor made, so it’s serviceable. It only cost $85.

What I didn’t realize is that this whole business confrence scene that I’ve been hanging around doesn’t really exist near the holidays. Now I have to wait for the first good opportunity to try them out. Also I need a tie.

I went to another conference last week. This one was my favorite so far. It was hosted by the Vietnam Green Building Council on the topic of Green Building in Vietnam. They brought in some really good speakers from Singapore and India. I learned a lot about the cost/benefit of different levels of green building and a lot about the real specifics of the planning and building process. There was also really interesting discussion about the role of green building certification and even some analysis of developer incentive. There was even a really detailed lecture on exactly how air conditioners work and how to make them more efficient.

What also made it good was the crowd. Everybody there was either a serious industry expert, an active member of a relevant NGO, or a representative of a company somehow involved in green building. Again there were awesome real time translation headphones and great free food.

There was also this wonderfully unnecessary powerpoint slide:

I met a few really interesting people, including a partner from a Venture Capital firm that was starting a clean tech fund. That was very exciting for me as it’s a perfect match for my background. I pitched to a couple of clean tech VCs when I was working for Nitride Solutions and really learned a lot about the venture capital process from my technology entrepreneurship program at UCSB. I emailed him my resume. He responded today that they’ve filled up all the positions for their clean tech fund. I emailed back making the case to make a spot for me, even if only as intern or research assistant or something else entry-level. I don’t have high hopes though.

I am starting to feel conflicted. So far I have been very picky about who I actually send my resume to. For starters I don’t want to get a reputation in the small business community here as being the guy who sends everyone his resume. More importantly though is the first job I take here is really going to set the tone for my whole career. I would much rather start out in venture capital, or micro-financing, carbon credit trading  or something else interesting like the wine importing company I applied to.  I’m afraid to do something bland might really stick with me and put me down a boring career path.

Next time I look for a job I don’t want to have on my resume that I spent the last two years exporting low grade galvanized steel because that will make to make the case for doing something cool even harder. At this point I’m still a blank canvas.

On the other hand I’ve been here over a month now and I haven’t made any real progress in finding an actual job or project. I’m starting to get tempted to just go the traditional route and spam my resume to every company I find.

Doing that would call into question my most basic assumption of what I’m doing here: the idea that if you can put yourself out there in the business world, actively network, and make an effort to impress people you meet, you can get on the inside track to a good job several rungs up the career ladder from what you would get just responding to employment ads.

Perhaps it is still a good idea, but I’m just not very good at it. Maybe I don’t make a good first impression. There is always that evil little demon that lives in our heads that causes us to talk to most about what we know the least about. At the time we think we are cleverly implying a greater underlying knowledge but in reality we probably just come off looking like idiots. Maybe mentioning that I’m looking for work so early when I meet people is a turn off.

I could blame it on the economic crisis, but I think that’s a cheap excuse. Sure companies are cutting costs, but life still goes on. Besides, I haven’t met anyone else out here trying to do what I’m doing, so there really only needs to be one opening somewhere for what I’m doing to work.

Oh well. I’ll keep at it for now. If nothing comes up by mid janurary I’ll have to change strategy.

I saw a post on the NewHanoian the other day looking for models for a shoot of new tours by a tourism company. In exchange for modeling you get a free tour. It sounded cool so I called the guy in charge and told him I’d like to participate.

He was doing a bunch of different tours, unfortunately I could only make it to one heading out to a traditional pottery village outside of Hanoi.

The van had to wait for me to catch up from investment outlook lecture thing I had attended that morning. There were three of us “models” and three people from the tourism company. The other two models were a really nice guy from San Diego who was studying in Vietnam and a girl I was actually already friends with who’s working here as a German teacher.

We all went into a little pottery workshop they knew and they carefully positioned me in front of a ovoid lump of clay on a makeshift pottery wheel. I proceeded to mangle the lump into something like an  misshapen oversized ashtray while they took some pictures. I think it became apparent pretty early on that I wasn’t a very good model for this task. They figured out instead to take the San Diego guy and put him in front of an already made vase and just have him pretend like he was putting the finishing touches on it. Later we went back to Hanoi to eat some street food back and take photos of that.

I had my camera with me and figured I could help out by taking a few pictures. I got a couple of decent ones. I also had a flash with me which I lent to the photographer as the pottery studio was somewhat dark. Later in the evening we used my camera for the street food shots as it had a low light advantage. Normally I wouldn’t butt in when a professional photographer is working but they were just using their head sales guy as an interim photographer and he appreciated the help.

The next day I ran into the head tour company guy at a coffee shop near my place. We talked for a while and I told him to give me a call if he ever wants a photographer. He gave me a call the next day and said he needed a photographer for a shoot involving a couple going to the flower market and buying flowers, and then sitting by the lake together with the flowers. So we called up the german girl again, and found a new guy from Colorado to join us, and went off early Monday morning to the lake and the flower market.

The tour company guy had written out these very detailed descriptions and diagrams of the exact shots he wanted. He basically wanted a lovely couple, romantically buying daisies from a bike vendor and then sitting by the lake on a bench holding the daisies with the girl resting her head on the guys shoulder. Plus a lot of holding hands and gazing lovingly into each others eyes. It was all for a honeymooner tour of some sort.

The shoot didn’t go so well. The models were awkward in general and extremely uncomfortable acting like a couple. The age gap is pretty obvious. I know as a photographer a big part of my job is supposed to be making people feel good in front of the camera but I can only do so much (and I’ve never been good at it anyway).

Also these imagined scenes weren’t working out in reality. We weren’t on the right side of the lake to get a bench with a silhouette of a tree next to it and a view of the pagoda. The foreground was very dark and it was tough to get it exposed and still be able to see the pagoda. Once we got to the flower market they weren’t selling daisies. Then the only bike vendor we could find had a huge bucket of big green plants strapped permanently to her bike making it really hard to compose the scene.

On top of all that I forgot to bring my portrait lens to Vietnam so I had to shoot everything in wide angel which really wasn’t appropriate for the lake shots. Ideally I would have had a telephoto lens so I could compress the distance between the subjects and the pagoda, and some sort of a wireless flash and bouncer to correct for the lighting.

I’m not even getting paid for this. The hope was that if I do a good job that he can hire me for bigger projects and recommend me to friends in the industry. I would say I did an ok job.

The dream is that eventually I could get paid well to go on tours as a photographer. I think I still need some more experience and certainly some more equipment before I reach that level. This is a start at least.

I wouldn’t be able to do what I’m doing here in Hanoi 10 years ago. The internet is really what’s made it possible for me. I’ve learned about these business conferences I’ve been going to from local Vietnam business news and organization websites, like the website for the US chamber of commerce in Hanoi. There are also Hanoi groups on both Facebook.com and CouchSurfing.com. I’ve met up with people from both sites, expats and local Vietnamese, and made some friends.

Most helpful though has been a site called the New Hanoian (http://newhanoian.com). This is a local expat information site. People go on this site and exchange reviews and advice about how to do and where to get almost everything.

The site has a fantastic built in google map feature with all the local streets manually added in, so that when you look up any business or event it shows you the location. This sounds normal enough, but in Hanoi this is a big deal as streets are tiny and winding and the names change every two  blocks.  Because of how useful the site is, and how helpful and nice its’ community is, it has become very popular for planning and promoting events. It’s great for me because the people and organizations that plan the events have profiles on the site it’s very easy to get in contact with the afterward. Plus the site has internal groups that plan their own events. There’s a photographers BBQ coming up that I’m pretty excited about.

I tried to start a website like this back in my freshman year of college. It was supposed to have reviews of local music venues, listings of local music events, and a message board for people to talk and plan things out together. I imagined that this site would foster a really interesting online community that would spill over into real life and actually facilitate the independent music scene in Santa Barbara.

It was a very short lived project. I never really got around to reviewing all the venues. When I tried to get my friends to talk to each other on the message board I ran into a chicken and egg problem. With a blank message board people didn’t know what to post. There weren’t any conversations going on to show what the message board was for. Also, there was no real incentive to go back and check up on your post and read responses on such a sparsely trafficked website.Worse still was that I wasn’t even part of the music scene in Santa Barbara, neither were my friends. I just wanted to make a website and feel important.

In the end the real thing that killed the site was simply that people just didn’t need it. There wasn’t much of a live music scene in town. Most people just went to dance clubs, bars and house parties. What small music scene there was got by just fine promoting on myspace, facebook, and putting up fliers at coffee shops.

After a month I shut the thing down. I felt pretty silly about it for a while. In retrospect it was a great learning experience. Since then I’ve literally had over a dozen friends and acquaintances ask me for guidance and advice on very similar projects. They includes a local surfing site, a local bar/club site, a local coupon site, a local employer review site, a site to help people find particular items of clothing out of magazines, a myspace for babies, and a computer game like interface that you use to go about your daily life by listing your various goals and accomplishments.

My spiel usually goes like this: It’s a cute idea but you should give it up because a quick Google search will show you that there’s already 5 websites trying to do exactly what you’re doing. If that doesn’t phase them I go on to explain that the first big problem is creating a site that has enough actually content and usefulness from day 1 to attract the initial group of users.  Furthermore, those first users are really going to set the whole tone of the site for the rest of it’s existence so they need to be carefully nurtured.

Plus it’s really very difficult to get users. The era of “surfing the web” are over. Most people now have about 6 websites or so that they check every day, and asking them to add another one to their routine is really asking a lot. Especially when you take into consideration that you’re now competing not just with websites similar to your own, but also with all other the millions of helpful and entertaining sites that the user could spend their internet browsing time on. You actually need to relentlessly promote your site to keep it in peoples mind.

A bunch of sites have sprung up trying to the ‘craigslist’ of my university, or of the UC system, or of colleges in general. The only one that’s stuck at my school is called ULoop. They spent the last two years consistently putting flyers everywhere, taking out ads in the school paper and on facebook, plus promoting and sponsoring other peoples events and organizing a few of their own. Even after all that the site is basically just a few people asking each other for chemistry textbooks or a room for rent, and it has no real revenue model as far as I can tell.

So even if your site does take off it’s really hard to get it to actually make any money to justify all the time you have to pour into it. Most people think that they’re fine with that and are happy to do it as a hobby, but it really starts to feel like a job after a while. It’s hard to justify an unpaid job that consists mostly of sitting in front of your computer for hours every dealing with annoyed and confused users or website errors.

Of course all of these warnings also assume that the person has the competence to design, build, maintain, and most importantly scale the website in the first place.

All of this advice had to do with different reasons why these sites fail. What I hadn’t really thought about is why some succeed. I guess I had always assumed that they just sort of were in the right place at the right time and got lucky.

Thinking about the New Hanoian though I realize that the key is that people have to genuinely need your site. The New Hanoian works because if you’re living in Vietnam, and you’re not from Vietnam, doing most day to day stuff is very difficult. People really need this information just to get through their week. If you think about it all other successful web2.0 social community websites give the users something they really need.

I’ve had a few chances to meet the and talk to the guys running the New Hanoian and they’re genuienly very nice. More importantly though is they are very active in the community here, they know everyone and they really know about all the businesses and orginizations that use the site.

Anyone planning on starting a community web2.0 social networking whatever website should really study the New Hanoian.

Bonus business idea: having a group of writers paid to act as message board posters in the early days of a new online community. Call it Social Seed or something. Contract based on # of users and # of posts per day. Some users also in charge of monitoring post quality.

Lately I’ve been networking full time, going out to these business conferences and other social events, meeting people that I think might help lead me to an interesting job or other promising opportunities.

It’s been a learning experience. At first I was talking to a lot of people at these business conferences who really weren’t my peers in any way.  They were all older than me, and usually worked very high up in big organizations, banks, trade groups, government ministries, embassy’s and NGOs. I had some interesting, if a bit awkward, conversations with these folks during these events. But they would never respond if I wrote them an email trying to follow up.

Recently I’ve been going to different sorts of social gatherings, and a lot more charity fundraisers and events. Charity events are a big deal here because so many people work in NGOs, and it’s very important to expats to stay involved. I’ve been recognizing and getting to better know people I’ve already met, instead of always starting fresh. Most importantly still is that I’m really starting to meet some more people closer to my age, background, and situation. This week I’ve met some other recent graduates getting into economics and finance, a few younger professionals that are also looking for projects to work on or their next job, and some guys from San Fransisco working doing environmental research.

The first lesson I’ve learned is that business conferences and lectures aren’t very hospitable to social outsiders.

Most of the time is spent listening to a presenter. Before and after the event people tend to greet and say goodbye to those they already know, although it’s not too hard to sneak in an introduction and a handshake here and there. The real trick is in which table you sit at to eat. The instinct is to try and sit with people who look important. What happens though is that they engage mostly in conversation amongst themselves about issues that really are none of your business. It’s a lot better to sit with people who look like they’re also somewhat new or out of place simply because they’re a lot easier to talk to.

The second lesson I’ve learned is that if you can find it’s be a lot better to network within your own peer group.

It’s more fun. You have a lot more in common so there’s more to talk about and more opportunity to make friends. That commonality also makes them a lot more likely to identify with your job search and not mind helping you out. Of course the down side is that unlike hanging out with executives they can’t actually give you a job.  Still, they can ask their employers if they’re hiring and recommend you or if they get an offer to do something they can pass it on to you.

The third lesson I’ve learned is that you can’t just talk to someone about business for five minutes, trade cards, email them to follow up, and expect a response.

You really have to hang around in the same circles and meet people a few times before they really can be bothered to deal with you. Worse, if you did email them and they didn’t respond it makes it awkward next time you meet.

This last one is more of an observation than a lesson: a good personality trait for networking is a genuine annoyance at having to eat by yourself. I push myself to meet a lot of people largely because I really just hate sitting alone and silently starting at my food for 20 minutes every night.

Not much direct progress yet though. I sent my resume to a really interesting wine importing company / restaurant group. If they find a place for me in their orginization I’m hoping that I can tap some of my friends back home who have wine industry connections as a resource. I’ve also met a few guys that are interesting in exporting furniture, and some other guys that also have experience in that market. It’s not really the kind of exciting cutting edge industry I would prefer. Still, a lot of people say it’s a good opportunity here and it could lead to interesting things. It’s also a good time for that sort of project, some WTO rules benifiting vietnamese exports are about to kick in and vietnam is about to finish it’s first deep water international shipping port.

I continue to meet a lot of teachers that say they could get me a great job teaching, and I’m still keeping that as my backup plan. Though I did design a few flyers for tutoring advanced business english. I have no idea what the market for that looks like.

Another piece of advice I keep getting is that I should really have my own apartment and motorbike. I don’t think I’ll take those steps until I have found some good work here though. I want to be able to easily pick up and move if I hear about something promising to do elsewhere.