17 April 2018 | The story of Nem Zone and mentor Do Thu Giang is come from KisStartup – a mentoring program partner of SwissEP. KisStartup is also Hanoi chapter of SME Mentoring, another partner of SwissEP in Ho Chi Minh city. This story typically proves the value of long-term mentorship that helps two women entrepreneurs get out of distress, rebuild business after crash, and keep pursuing a dream of running a healthy Vietnamese fastfood restaurant chain. This also witnesses the women mentor ‘fell in love’ with the passion of the entrepreneurs then she and her husband became the ‘fool’ angel investors.
We first met Nem Zone in a preparation session for pitching to angel investor in Autumn 2015. The women founder of Nem Zone did not come to the event for pitching her business. At that time, operation of Nem Zone was closed. She came to learn about how to revive the business. When she explained why she attended the preparation session, people knew that she indeed was healing her entrepreneurial spirit. Challenges, even failure, were not possible to prevent her from being onward.
Thai Ha (born 1982) and Hai Ha (born 1982) were banking and financial professionals when they started thinking about a spring-roll (“nem” in Vietnamese) restaurant. Both two women entrepreneurs were well educated. Thai Ha had tried several businesses before the idea of healthy spring-roll restaurant arrived. While the number of foreign fast food brands kept increasing in Vietnam, Thai Ha asked herself about the traditional spring-roll. Both Vietnamese and foreign visitors love spring-rolls.
There are, however, two challenges that prevent the favorite food from being popular fast-food. First, frying spring-roll consumes lot of oils which is not good for health. Second, which is even more challenging, spring-roll tastes well when it is just finished and still hot. Since it takes time to prepare the spring-roll – which are made from pork, bean sprout, vermicelli, opinion, mushroom, egg, kohlrabi, carrot and covered by rice paper – restaurants often fry spring-rolls hours before customers arrive. When they get orders, restaurants do re-warm which results in much less delicious spring-rolls.
The first Nem Gion Restaurant was opened nearby St. Joseph’s Cathedral (Nha Tho) – the most tourist-crowded place in Hanoi after Thai Ha found a way to produce traditional spring-roll with longer shelf-life while reserving its tastes and persuaded a friend to make investment. The business went so well. In addition to the good product of delicious spring-rolls, the two founders’ understanding about Western cultures and ability to communicate with foreign visitors were competitive weapons.
Customers loved Nem Gion (the previous name of Nem Zone) so much that one restaurant was not enough. Nem Gion expanded to the second restaurant. Then some people asked the founders for opening franchised restaurants. Why not? They agreed and planned for a spectacular expansion. At peak, there were 10 Nem Gion restaurants in Hanoi. Unfortunately, business performance of the chain turned out way different from the founders’ plan. It even came to the worst scenario. Quality of services and food was out of control. Balance sheet were a disaster. The two had to close their business finally.
The two women entrepreneurs returned to be paid professionals. They however could not stop thinking about their own business. Entrepreneurial spirit induced Thai Ha to keep attending startup events including the pitching session and, more critical, the mentorship orientation and matching by KisStartup.
“Thai Ha was first introduced to KisStartup in late 2015,” said Nguyen Dang Tuan Minh – founder of KisStartup, a mentoring program in partnership with SwissEP. She had no business at that time thus Thai Ha did not join the first mentoring batch. She however kept attending the KisStartup event. “It was a challenging time to Thai Ha,” said Tuan Minh. “She could not find peace without her spring-roll business. Her parents prevented her from leaving her job at the bank to re-open the restaurant. They worried about her.” Guiding, more precisely commanding, children to follow a sustainable career and low-risk life is a cultural issue of Vietnamese parents.
Thai Ha met Mrs. Do Thu Giang in a mentoring event hosted by KisStartup in early 2016. Thu Giang was a pioneer mentor who joined KisStartup’s network as soon as it was founded in 2015. Thu Giang had spent nearly 20 years in several foreign commercial banks in Vietnam before starting a green business with her husband. “Thu Giang is our committed mentor,” Tuan Minh smiled happily. “Her mindset matches perfectly our program’s value.”
Thu Giang herself gained a lot of benefits from her mentor long time ago. She therefore very much appreciates the value of mentorship and is willing to offer her mentorship to the next generation of entrepreneurs. “Being a mentor gives me a chance to contribute to a better entrepreneurship ecosystem, and it is a lot of fun,” Thu Giang winked.
Thai Ha and her team impressed Thu Giang with their burning desire to make the Vietnamese traditional spring-roll an innovative and healthy product. In their first mentoring sessions, Thu Giang learned that Thai Ha and her cofounder were in the middle of nowhere. The founders were not fully recovered after the business collapse and could not find a way to follow their dream.
In this situation, Thu Giang focused on listening to the founder’s story about a collapsed business with a product that the mentor had never tried and even never seen. Thu Giang also made lots of questions about why the business had been successful then failed. By telling their story and responding to the questions, the founders listed out themselves the causes of success – i.e., a new product that attracts office workers and foreigners with reasonable price and convenient location, and the reasons for collapse – i.e., hot expansion without capability of quality control, wrong location, wrong people, lack of knowledge about franchising, and the most terrible was loss of customer loyalty. It is noteworthy to emphasize what mentor Thu Giang highlighted, “the founders withdrew the causes and lessons by themselves and for their own. We just went through the process together.”
KisStartup mentoring program requests the mentor and the founders to meet at least once a month. Thu Giang and the women entrepreneurs, however, met every week, even several times in a week, at the beginning of the mentorship. Thu Giang’s husband Tuan Anh – a veteran businessman – was asked to join the coffee talks then also became a voluntary mentor.
The couple mentors were getting more interested about Nem Gion when the two founders explained them the idea about making spring-roll without frying. The women entrepreneurs were desperately willing to turn the idea into a restaurant and ultimately a chain of healthy Vietnamese fastfood. The mentors asked the founders to collect data on performance of the collapsed Nem Gion. Together, the four analyzed the business of Nem Gion including revenue streams, profit & loss, cash flows, and return of investment in order to understand further the previous business. Based on such understanding, the mentors guided the women entrepreneurs prepare business plan for a revival.
The couple mentors started considering about re-opening of Nem Gion a serious investment when the founders showed them the revival plan. The founders were financially exhausted when closing Nem Gion. And they put a lot of energy, perhaps hope and love, on the plan. “They got investment from friends and supports from family, then they should get the fools on board,” Thu Giang laughed. Indeed, the mentors fell in love with the passionate entrepreneurs.
With an undisclosed amount of investment, the women entrepreneurs quitted their jobs and launched of Nem Zone Restaurant in the downtown of Hanoi on 26 October 2016. Mentor, now investor, Tuan Anh renamed the restaurant so that foreigners could pronounce it easily.
The mentors, who are also investors, certainly play a critical role of the rebirth of Nem Zone. Mentorship and investment, however, do not guarantee success of the business. There is always uncertainty on the entrepreneurial journey. Four months after the opening, the two women entrepreneurs gave the investors a happy news: they were both expecting to have babies. Hai Ha – the cofounders who was in charge of marketing and business development – had to leave the business. Thai Ha – who invented the new way of making spring-roll – was keen on moving forward. After 18 months of operation, Thai Ha is now looking after her 6-month baby and running 9-employee Nem Zone Restaurant at 30 Hang Voi Str., Hanoi. With an average monthly revenue of US$4000, Nem Zone passes break-even and offers 4 full time jobs. Of 9 employees of Nem Zone, there are 8 females and two deaf.
While experiencing the development of Nem Zone, the mentors acknowledge that relationship between them and the entrepreneurs has changed since the investment deal. They are still mentors but their questions and advice to the entrepreneur can be affected by economic motivation. In light of this, the mentors encourage Nem Zone to reach out to ‘outside’ mentors. Looking back to story of Nem Zone, Thu Giang laughed loudly, “so far it is truly an exciting experience.. and we all do not know the destination of the journey.”