The owner of Vietnam's first private company after doi moi says entrepreneurs need to know their society in and out politically and historically not just economically
Nguyen Tran Bat, chairman and general director of Invest Consult Group.
Nguyen Tran Bat says the best business decision he ever made had little to do with business.
As Vietnam struggled with the effects of a viscous US-led international embargo, and the difficulties of a centrally-planned economy in the late 1980s, he agreed to serve as American photojournalist Nevada Wier's guide through Vietnam. She paid him US$500 and then published his thoughts and comments on Vietnam in her book "The Land of Nine Dragons" in 1992.
The book was an attempt to understand a country that was still sealed off from much of the world and isolated by the West, even as it begun economic reforms to move from a socialist-based to market-based economy. Bat's salary as a guide was poor compared to the $4,000 the state's Tourism Department was charging for similar tours at the time, yet it paid what Bat called "double profit."
Not only did he get his fee, but he got free advertising published around the world, with Wier's book extolling his virtues and distributing his analysis of his country.
"It was the strangest ad purchase I made in my 25 years as an entrepreneur after doi moi," says Bat.
Literally meaning "renovation" or "new change" and often interpreted as "reform", doi moi was launched in 1986 as the government's campaign to transform its state-controlled economy into a free market with private businesses.
"Just think how much it would have cost for my ads to appear in major international newspapers and especially in the first book published abroad about Vietnam since doi moi began," says Bat.
Bat, 65, is known for founding the first private company in Vietnam after the reform program began. He is now chair and general director of the company, InvestConsult Group, which he founded in 1989 to offer legal consulting to local and foreign investors in Vietnam.
Between two worlds
The story behind the story is that Wier, a New Mexico-based photographer couldn't buy the Tourism Department's services because Vietnam was under US trade sanctions that prohibited a US citizen from spending more than $100 per day.
The US introduced trade sanctions against north Vietnam in 1964 and extended them to the whole country in 1975. President Bill Clinton announced the formal end of the embargo against Vietnam in 1994, nearly two decades after the Vietnam War ended in 1975, and the two countries then officially established diplomatic relations, paving the way for a free trade agreement.
For Bat, the country's reliance on aid from its allies was also difficult to control during the economic malaise Vietnam suffered after the war and before doi moi.
North Vietnam relied on international communist aid during the war and the reunified country continued to depend on foreign support for years after the war ended.
"It was really difficult and could have lead to a chaos without careful actions," says Bat. "It was lucky that Vietnamese leaders didn't allow a chaos by launching an open policy."
But in many ways, the maladies of the embargo and the opportunities its end provided gave Bat the opening he needed to launch his own business.
In the late 80's, before the impacts of doi moi could be fully felt and before the international community opened its closed doors to Vietnam, several limitations of the old state-subsidy model remained and Bat said many Vietnamese people knew nothing about international trade and free markets, while westerners also knew nothing about Vietnam's communism.
"The two communities would surely need an interpreter," he said. "I set up the company to play the role of middleman for cooperation between the two communities who knew nothing about each other."
So Bat established his company in 1989, before the rest.
"I woke up," he said. "In fact I had started studied the market economy principles on my own since 1979"¦ I decided to set up a company operating solely on developing Vietnam's international relations," he said.
According to Bat, an entrepreneur should overcome the challenges of any system.
"I have never trusted a system," he said. "It's wrong to say that entrepreneurs should believe in a system. Entrepreneurs should be confident in their own ability to overcome any obstructions of a system."
He added that an entrepreneur should be concerned about the system's negative impacts on their business and should separate their professional life from their instinctive concerns for things like their family and personal life.
Once his company was up and running, Bat was invited to give a talk on foreign trade at Nghe An Party School but he was scolded by an audience member for talking too much about politics and not enough about business.
"He said he came to hear how to run a business from a successful entrepreneur but I only spoke about politics and that he would have not come had he known that," explains Bat. "I told him he was confirming that I am a successful entrepreneur because a successful entrepreneur should know about politics."
"The [political] system impacts the economy and businessmen should understand this in order to improve the political institution," he said.
Go for it
A true business person needs pure enthusiasm and no hesitation, according to Bat.
"A friend who is a university professor told me he was preparing to run a business. After several years, he met me and talked about his preparations again. I told him that launching an enterprise was just like rock climbing. He had all the equipment like shoes, rope and hooks, but the only thing was that he hadn't started climbing," he said.
"The rest like additional equipment, more capital and experience, can be obtained along way," he added.
For Bat, a good entrepreneur should be a mature planner and smart when evaluating his or her own experiences. The entrepreneur should not be "short-sighted" by concerning themselves with status or proving themselves with unnecessary spending.
Asked whether the unique opportunities afforded to Bat by the place and time in which he began his business as the first private firm during doi moi were no longer available to new entrepreneurs in Vietnam's saturated markets, Bat said there was plenty of room still left for entrepreneurship, perhaps more than ever.
"Observing life from a flat surface, we will see that the market is crowded and cramped. But if you look from another dimension, the space is vast," he said.
However, Bat says that it's the small and medium sized businesses providing real services people need that will make Vietnam grow stronger, not the mega-corporations and economic institutions currently blamed for much of the global economic crisis that Vietnam and the world are still suffering from.
"The two sectors that have occupied the vast space open for business are finance and banking. These days they abuse their knowledge," he says. "No government, president or state can understand all of their tricks. I warned against this five years ago."