13 Years In Vietnam: This Is How You Work With Vietnamese | Giovanni Zangani | EP 390

Key Concepts

• Macro vs. Micro Investing: The distinction between using macro-economic narratives (young population, GDP growth) to raise capital versus using micro-level operational engagement to generate actual returns.
• Operational Private Equity: An investment approach focused on post-investment support, process standardization, and hands-on business building rather than just financial oversight.
• Relationship-Based Investing: The necessity of building deep, trust-based connections with local founders, often involving non-traditional business settings (dinners, office visits).
• Family Business Dynamics: The importance of succession planning, professionalizing management, and navigating the influence of family members (specifically the role of the spouse in financial oversight).
• "Roll Up Your Sleeves" Mentality: The requirement for investors to perform practical, "un-fancy" tasks—such as legal compliance, IP registration, and supply chain optimization—to earn the trust of local entrepreneurs.

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1. Main Topics and Key Points

Giovanni Zangani, founder of Maestro Partners, argues that while Vietnam’s macro-economic story is excellent for fundraising, the real profit lies in the "micro"—the quiet, family-run businesses that lack polished pitch decks or English-speaking founders.

• The Mismatch: Many foreign investors fail because they focus on marketing and fundraising rather than the "post-investment" phase. They often treat operational support as a secondary priority, whereas Zangani views it as the primary driver of value.
• The "Time" Factor: Success in Vietnam requires significant time investment to coach entrepreneurs who are creative and driven but often lack formal corporate structure or experience working with institutional investors.

2. Real-World Application: The Sassin Case Study

Zangani highlights his investment in Sassin, an F&B company, as a prime example of his methodology:

• Growth: The company grew from 6 stores to 90 stores under his partnership.
• Thesis: During COVID-19, he identified that the product had high repeat consumption and strong demand, even though the brand lacked a "slick" image or fancy locations.
• Strategy: Instead of a traditional buyout, he positioned himself as a strategic partner who provided operational support (standardizing SOPs, supply chain, and export strategy) in exchange for a larger stake, while allowing the founders to retain control.

3. Methodologies and Frameworks

• The "No-Direct-Challenge" Rule: To maintain the founder's authority and respect the local hierarchy, Zangani avoids challenging the founder directly on KPIs. Instead, he works through the operations or finance managers.
• The "Wife" Factor: In Vietnamese family businesses, the spouse is often the ultimate decision-maker regarding finances. Zangani emphasizes that any serious deal requires the spouse's involvement and trust.
• Standardization: Moving from "founder-led intuition" to "SOP-driven growth." This involves documenting the "secret sauce" of successful stores so that the model can be replicated at scale (e.g., 100+ locations).

4. Key Arguments and Perspectives

• Investors are not the Customer: Zangani warns that foreign investors often project their own tastes onto the market. He argues that if an investor personally loves a product, it might be a bad sign, as they represent a tiny fraction of the local demographic. He relies on young, local analysts to gauge true market demand.
• Advice is Cheap, Execution is Dear: He notes that Vietnamese founders are often skeptical of "consulting" or "strategy" advice. They value investors who perform tangible, practical work—like helping with audits, IP registration, or lowering food costs.

5. Notable Quotes

• "Macro makes you raise money, but to make money is all about micro." — Giovanni Zangani
• "The board meeting here is kind of the sum up of whatever has been decided in coffee and dinners." — Giovanni Zangani
• "If you want to really go in the Mekong Delta... you have to consider the example... Milano Coffee... 1,600 shops." — Zangani, highlighting the scale of non-obvious, mass-market businesses.

6. Synthesis and Conclusion

The core takeaway is that the most lucrative opportunities in Vietnam are hidden within unpolished, family-run enterprises. To succeed, foreign investors must move beyond the "conference circuit" and "pitch deck" culture. Success requires a long-term commitment to building trust, respecting local cultural hierarchies, and providing hands-on, practical operational support. By acting as a partner rather than a distant financier, investors can help these businesses transition from family-run operations to professionalized, scalable organizations.