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On Opportunities in Moldova

Posted by on in Stories From The Field
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So at long last I'm back. It's been a while and frankly I've probably missed the rather cathardic outlet of this blog more than I knew. For the last 4 months or so I've been pretty much totally focused on the business and this has yielded two rather significant obstacles to anyone who seeks to keep an account such as this website. Firstly, I've been extremely busy. Running a restaurant in it's first year is not only about all of your hours being taken up by work but also living the the constant knowledge that you never accomplish more than 20% of your work in a given day and that tomorrow will add more and more. There is a certain guilt that accompanies this, once known, that drives you to progressively eliminate your hobbies (obviously not good for mental health). The second obstacle to my continued updates to this site is a little more cynical. Frankly, we've begun to get numb to things. Circumstances that used to invoke outrage in me began to invoke only sputtering laughter and then nothing. I took a nice vacation and I'm back in laughter mode which is where I intend to stay. The outrage is still there but hidden beneath a veil of abysmally low expectations that is a staple of doing business in Moldova. 

So on that dismal note I will launch into a topic that I think is going to paint a picture of doing business here (and as such exhibits an amount of frustration) but with a focus on how things could be. Specifically how much opportunity there is here for anyone who wants to work hard and try. When I originally began to draft this entry a few months ago I titled it "Working with suppliers (or: Coca Cola we expected better of you)." Hilariously (in retrospect) I held off because I didn't want to call Coke out by name. I have since lost that inhibition (and you shall see why).   

 

 

b2ap3_thumbnail_batmanNoFs.gifsays it all... 

 

Without further ado, here are a few reasons that Moldova is full of opportunities for anyone who wants to snatch them...

 

Part 1: Most "Businesses" refuse to do "Business"

Alternatly this section could be titled....

b2ap3_thumbnail_Shut-up-and-take-my-money.jpg

the practice of making one's living by engaging in commerce

                                             - Definition of Business from Google

 

This simple formula does not work very well in Moldova. I won't tire you all with a lot of analysis and I'll just launch into a few examples - draw your own conclusions. 

Story 1: "The Case of the Picnic Tables"

This is an old story but simple and illustrative. About 3 weeks before we first held a soft opening event (so mid May 2015) we went out to Yardsale Moldova (cool monthly-ish event bringing together artisans, cafes, artists and more in a county fair-in-a-city setting). Smokehouse made a bit of a debut there and sold our BBQ under our name for the first time. 

b2ap3_thumbnail_11120589_1104687166211851_5076852026452575759_n.jpg

those paying special attention will note the Virginia flag proudly displayed ;)

Two days before this event we went on a purchasing spree to equip the food tent. One of our main needs were small standing tables so that customers could buy some food and have somewhere to enjoy it with their friends. A store in Atrium mall had just the tables we needed for 500 lei and we decided to buy them. Matt and Vlad went to but them and this was the conversation. 

Vlad: Hello, we would like to buy 2 of these tables.

Clerk: Nope, we can't sell those today. 

Vlad: Why not? We were in here yesterday and you convinced us to buy them then!

Clerk: but now it is broken. 

Vlad: No it isn't?! and even if it was I still want to buy it!

Clerk: I'm sorry, but I can't sell this to you. Have a nice day. 

(editor's note... the "have a nice day" was added by me) 

So what happened? Vlad calls me and lets me know that we have no tables suddenly and I build 2 small round-top tables out of scrap wood. Total cost 50 lei ($2.50) + 5 hours. We used the tables and got through the day and comically enough they are still in the restaurant now. 

 

Result: we wanted to spend 1000 lei on tables and spent zero. Also we never went back to that store (they have since closed)

 

Story 2: "On Kitchen Equipment"

At this point Matt (who built out the kitchen) could write a book on this silliness. I'll keep this to a short anecdote. 
 
Dina Cociuc and MGM are two companies that basically hold a a monopoly on the commercial kitchen equipment market in Moldova. The main reason for this is that they can negotiate the minefield of customs and import regulations (read "corruption") to bring you items in from Europe. We desired to buy an oven as one of our first kitchen purchases. Here's how it went...
 
Matt: "hello, could you please tell me how much the oven number such-and-such on your website costs?” 
DINA: “let us send you an expert to talk about your needs.” 
Matt: “why? I just need a price for the oven” 
DINA: “can we come over this afternoon to talk?” 
Matt: "uuuuh, I guess? I mean I just want the oven"
DINE: "We are on our way!"
 
Then they show up to talk things over… 3 weeks later unannounced (we called many times in between and then bought an oven from someone else). When they arrived it was with 5 people - 3 salespeople, 1 director and 1 “Michelin 5 star chef.” They started bustling about making a list of TONS of kitchen equipment they wanted to sell us (much of which had been ordered already from other sources) and only pricing it as 1 large bundle. The chef was adamant that we had no right to ask for specific pieces of equipment because HE was an important chef and would tell me what I wanted. In fact, when we explained that much of what he was talking about including in our "bundle kitchen" was not relevant to our business at all he became indignant and informed us that we had no right to tell *him* what we needed because he was a *chef*. Eventually we threw them the fuck out of the restaurant. 

 

Result: we hacked together a kitchen from other small suppliers and bought almost nothing from Dina Cociuc - which was more than we wanted to. 

 

Story 3: "The Nacho Chips Problem"

We buy 30+ kg of nacho chips every week. This is a lot of money for someone who sells nacho chips. If you find such a person call me. 

 

b2ap3_thumbnail_smokehousenNumber.gif

seriously... I will buy all the chips

The problem is that selling chips to us is "hard" and no one seems to want to do it. Originally we cleaned out Metro every few days until they just stopped carrying chips entirely. One employee even told me (in exasperation) that they stopped putting them on the shelves because I buy them all. When they finished we moved to the more expensive № 1 Supermarket where, after cleaning out every one of their 5 locations in the city every 2 days for 3 weeks they also started giving me the same response. My response? "Then tell me who I can talk to so that I can buy them directly or have them set aside." Metro obliged and harmony in chip deliveries was maintained for 3 months... until they stopped carrying them entirely. № 1 is still playing what must be the most elaborate game of phone tag in the history of rejecting money with us. If they are to be believed they must have had a full staff turnover every 2 days... for the last 3 months. 

Result: My customers are frequently frustrated with me for not having chips. I am left with money unspent. Clerks are blissfully happy not to see me brining that money to them. 

 

Conclusion from these stories? Most companies we deal with leave money on the table EVERY DAY. 

b2ap3_thumbnail_200_s.gif

sometimes we just don't have enough hands... 

 

Part 2: Customer Service Doesn't Exist

Customers can be difficult. They have lots of their own ideas about your product and very very often have complaints. I've heard them all - from ideas about the music we should play to fundamental misunderstandings of the product ("I came here for American BBQ and I you have is Pulled Pork!! I'm SOOO MAD!!") to legitimate and embarrassing cases where me or my team falls short. The role of a restaurant owner in any of these cases is to apologize and try harder in the future. I understand this and so does my team. Comically though the people we get the most vitriol and anger from aren't customers with high expectations but suppliers with a bone to pick. We are yelled at more times in any given month from our suppliers (aka the people who take my money and call me their "client") than all the customer problems we've had since opening. 

The best example of this is our meat supplier. I won't name them explicitly but anyone in the city can figure it out. Our first 3 months with them were a nightmare... and it continues to date. We would order ribs and they would deliver them cut down the middle (aka the bone cut in the middle / a rack of ribs 1 inch or so wide). They regularly delivered the pork shoulder (Boston Butt) chopped into little pieces. One time, they didn't deliver (one time - ha!) and when we called to see why they were late we were informed that the driver was on vacation for 2 weeks so we wouldn't be getting any deliveries. 

 

b2ap3_thumbnail_32ca6ea0_hA5501DE7.jpg

I love Joe vs. The Volcano incidentally... great film

 

We sent 50% of our meat back for about 2 months. Now we weren't just being passive aggressive or yelling at them on the phone. We went to their butcher shop and instructed them - twice - on how to carve meat. No avail. Ultimately we were informed that the sales manager really wanted to help us but the guys in the butchery department found our requirement of consistency "difficult."

Another good example is one of our good suppliers - a tortilla maker. They are a small business and deliver for us a few times a week. Their product is good and they are responsive to our needs. I like them. Then I talked to our head chef and she says that every time she orders from them the woman is rude and yells at her. She tries to bully us into buying more. Every. Single. Order. 

Is that not insane?

 

Part 3: Incentives are Wrong

Did I mention Coke before? I think I did...

Let me clarify one thing before I go into this story. I love Coca Cola. Not just the product but the brand and the company. I went to school in Atlanta Georgia and have pictures of how the view out my dorm window freshmen year was dominated by the World Headquarters of Coke. We had the only Pizza Hut in America that served Coke instead of Pepsi. In Atlanta Coke is held in enough esteem that one could wonder if there might be a special book in the bible dedicated solely to this syropy sweet American invention. In case it is unclear I want to stress that this I did not hold any preconceived prejudice against Coke before trying to buy their product. 

So how does that go? buying Coke as a restaurant in Chisinau? The first call was not promising...

Vlad (calling the coke supplier number): "hello, my name is Vlad and I have this cool new restaurant called Smokehouse Opening soon. I wanna buy Coke and serve it there so that people will be happy!" 

Coke Rep 1: "where are you located?"

Vlad: "In the center on Stefan Cel Mare"

Coke Rep 1: "not my district - call Coke Rep 2 # (hangs up)"

Vlad (calling the Coke Rep 2): "hello, my name is Vlad and I have this cool new restaurant called Smokehouse Opening soon. I wanna buy Coke and serve it there so that people will be happy!" 

Coke Rep 2: "I haven't worked for Coke for over 2 years (hangs up)"

Vlad (calling Coke Rep 1): "hey again - that was a wrong number you gave me"

Coke Rep 1: "Don't care (hangs up - never answered our calls again)"

 

I won't go through just how hard it was to find someone to answer the phone but suffice to say it involved reaching out to the American Chamber of Commerce and getting a number for their Moldovan corporate office. When we did get an answer, and finally get a contact person we hounded them for a week to get them to send us a contract so we could start paying them. When they did it was this:

b2ap3_thumbnail_coke.jpgyes... that is a poorly taken photo of a paper... they wanted us
to print this and sent it to them by currier stamped. 

No comment on that. The next hurdle for us was getting a fridge / cups / swag (coke light-up signs etc - remember I am a true-believer in this company and it's American status). Those calls are dead ends mostly but they promise us a fridge. Weeks come and go and finally it comes. We requested a small fridge to fit in our bar. They brought us...b2ap3_thumbnail_IMG_20150619_112717.jpg

sorry.. my photography skills suffer when I'm laughing too hard

Obviously this is meant for a grocery store. They were very unhappy with me when I told them to get it the hell out of my restaurant but we sure as hell didn't need an open face air conditioner sucking up all our electricity. 

 

What does any of this have to do with incentives you ask? Maybe they're just kinda dumb? (fact). Well here is the icing on the cake of this story. 

 

About 2 months ago I became aware of the fact that the Director General of Coca Cola Moldova would be coming to Smokehouse for a meeting. My initial instinct was to go have a talk with him about his company's abysmal customer service. I talked myself off of this cliff (after all he would be my customer for a change) until something hilarious happened. The day before his reserved meeting 3 directors of Moldova Coca Cola came in. I was not there and they brushed off my partner Vlad and started pointing around and deciding where to position things. Where would the branded fridge go? what about the light-up signs? Two in the house one on the building front. What about the branded glasses? delivery inbound. Vlad asked them if he could help them? They brushed him off, and treated him with immense disrespect. They were from Coke. Titan of Titans. Who was he? They clearly informed him that their president would be here the next day and they expected him to comply with their decorating scheme. He threw them out of the restaurant with prejudice. 

b2ap3_thumbnail_godfather_respect.jpg

this changes the game a bit

 

So when the President / General Manager of Coke Moldova came in I talked to him. I'm not sure if he had any idea what a shitty establishment he runs but I explained it to him. In detail. More than I have time for here.

Not sure if Karma is a thing but Coca Cola pulled out of Moldova a week later and under Ukrainian management things are better. 

Conclusions:

Ok David, what are you trying to say here? (other than that you have a personal a abiding anger with Coke). What I'm trying to point out is how this episode highlights an improper incentive structure in Moldovan business. The employees we dealt with from Coke were not driven to provide customer service. They were not driven to sell product. They were not driven to represent the brand. They were driven by a fear of their bosses. That fear manifests itself in a need to create facades that impress. Fake images. Images that say "everything is cool here." That say "we totally we are all working so hard for the cause that everywhere YOU go you see it." Images that are a projection of a fake reality meant to make the boss feel good. 

As a side note anyone in the international donor community or in international development here probably understands exactly what I'm saying. 

Any shrewd reader will also notice this in the story about nacho chips above. 

...aaaand any fan of history will recognize a Potemkin Village. I digress...

Ok, I want to make one thing clear here. I am not attacking Moldovan work ethic or work culture. At all. I have 25 employees and they work very hard and very smart. I'm attacking Moldovan management. Absent management. Managers that respond to flattery and believe that because they have a title they get to work less than anyone else. This is a norm here in many ways (see You Have Two Cows...). Management here, in general, is detached from the primary driver of business decision making. Profit. 

 

Part 4: All Industries are Weak - Hence, Opportunity

I have a few suppliers that are amazing. Good people but more importantly good businesses. They value me as a customer and I value the relationship with them. They are respectful, never late and they never promise things they can't deliver. Some of these suppliers charge more than their competition. I buy from them because I know that their competition delivers product when they feel like it with ambivalence. These guys deliver as promised with humility. To name a few names here...

Litra Brewery (Chisinau) - fine craft beer delivered with a smile. The small business touch means that you get to hear about new products right from the brewers mouth with all the excitement that ought to accompany a new beer.

Beermaster Brewery (Balti) - Beermaster makes production rather than craft beer but they have some great brews. They challenge the hegemony of the Chisinau-Vitanta brand and they do it by having a good product, being proud of it, and taking great care of their customers. 

Elvis Brewery (Puhoi) - No not that Elvis. The name is actually an acronym forged from the names of the first brewer's children and while it's a little confusing it perfectly embodies the family nature of this business. Stas, the current manager and brewer, is bringing some bold and experimental brews to his small rural brewery and is sure to deliver them with an infection smile and slap on the back. 

Leonard Caffe (coffee supplier) - Vlad Talambuta is the hardest working man in coffee. He sells coffee and rents machines to offices and restaurants and is deeply passionate about his business. Before we opened Vlad and Matt spend an afternoon testing out different custom blends of beans until we had the "Smokehouse Blend" custom made to taste like American style large cup coffee. One time Vlad got hit by a car and still staggered into Smokehouse to resolve a business question and get a shot of Espresso (seriously). 

Fruitbox - fresh fruits and veggies, delivered to your door with personality. Sergei embodies a fresh fruits and veggies delivery service. He has an immaculately pointed mustache and drives a VW Microbus (which has broken down at the restaurant on at least 1 occasion). Every day he brings us choice fresh fruits and veggies and never disappoints. I've also run into him in the most random places around the city as he seeks out various customer needs - want dragonfruit? Sergei is your man. What about some rate Amazonian root plant? If it can be found in, or brought to, Moldova he will do it. 

Dulce Plai - honey with a good cause. Dulce Plai is a Social Enterprise from Ungeni that makes artisanal honey at the highest caliber in a variety of styles. They value their clients and any conversation with their team makes you feel like a valued and important customer. Now they even have a website for ordering but you can rely on a team member to bring it to you anywhere in Chisinau. 

 

Why am I talking about these guys? To highlight the power of small business. All of these businesses are small. They are customer oriented and they know that having a good product isn't enough. Good coffee, or beer or onions don't get me to talk about these companies with a smile on my face. It's the relationship I have with them and the service I get. This is a business community. This is an entrepreneurial ecosystem. 

In Moldova there isn't much of this. The Opportunity I vaunted in the title of this post should be clear. There could be many many more businesses like this. The big players are all replaceable and consumers such as me would LOVE to replace them. I would LOVE to find a new supplier of meats, dry goods, etc etc etc. 

I'm not sure if you would construe any of this as optimistic but I honestly believe it is. I believe in the opportunity in Moldova and I believe that with a strong small business ecosystem we can all flourish together. So why not join us?

 

0
(Site Admin, Entrepreneur, Contributor)
David is a native of the great Commonwealth of Virginia and lived there through high school in Fairfax County. After high school he pursued a degree in Electrical Engineering from the Georgia Institute of Technology in Atlanta Georgia. During his studies his traveled to Singapore for a semester and gained a respect and love for traveling and immersing in different cultures. After graduation David joined the United States Peace Corps and was posted first in Kazakhstan as an English Teacher and later in Moldova as a Community and Organizational Development Consultant.

When not working on his startup David can be found maintaining various web based side projects (check out: salutmoldova.org) and working on his 1986 Lada Жигули 2101 named Надя (Nadia).

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