With a team of just fifteen people, Duong Do, founder and CEO of Toong, is overseeing the company’s rapid expansion that has witnessed Toong extend beyond its hometown of Hanoi into Danang and Ho Chi Minh City. As Vietnam’s “first professional large-scale coworking space,” Toong has been able to attract investors such as Indochina Capital and Openasia.
So, with their concept and ambitious business plan what’s next for Toong? To find out, we sat down for a chat with Duong at Toong’s headquarters in Hanoi to learn more about his team’s philosophy of mixing traditional concepts of communal living with modern urban office design.
Toong is one of a handful of startups which have gained traction by starting in Hanoi. How did your story begin here in the Vietnamese capital?
Back in 2015, we opened our doors with a 750-square-meter space on Trang Thi in downtown Hanoi. At the time, it was by far one of the largest coworking spaces in Vietnam. There were a few others with spaces at around 100 to 200 square meters, but with an area that small the line between coffee shop and coworking space becomes very blurred. So, in a way, that helped us to standout from the competition providing a chance to further develop our ecosystem.
The launch of our Trang Thi location also marked the beginning of a new model for coworking spaces in Vietnam. I found the location through an internet search that led me to that historic French villa in downtown Hanoi where we took over the third and fourth floors. Our team was able to transform the space into a really attractive working environment. The first two floors are a restaurant and the building didn’t have an elevator. So nobody wanted to start a business on the upper levels which would require staff and clients to walk up several flights of stairs. Most people predicted that we’d be bankrupt within three to six months. But we went with our gut and took a risk. Fortunately for us, it worked out and marked the beginning of our subsequent growth.
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Why start Toong in Hanoi instead of Ho Chi Minh City?
I live in Hanoi, so opening here was a natural first step. However, I will say that we would have been more successful if I had started Toong in Ho Chi Minh City. In just five weeks, our Toong Oxygen location reached maximum occupancy. In Hanoi, it took us six months to reach 85% occupancy. Personally, I think there seems to be more demand in Ho Chi Minh City because the Saigonese are more open to new ideas and seem to adapt to change quite well.
What sort of community is Toong attracting?
Toong isn’t out to create a homogeneous community. We believe in bringing communities together in our spaces that come from technology, media, networking and retail backgrounds. We want to start conversations that lead to the disruption of traditional workplace practices.
Generally speaking, more Vietnamese are beginning to value the community aspect of work and we want to make that available on an even larger scale. Our goal is to welcome people into our contemporary space, and for them to feel that it’s a totally new and original experience but also one that could only be available in Vietnam.
In fact, most of our clients are Vietnamese, but the demographic changes depending on the location. At Trang Thi, next to Hoan Kiem Lake in downtown Hanoi, 50% of our members are foreigners. Our To Ngoc Van (Hanoi) and An Phu (Ho Chi Minh City) locations also see a fair amount of international freelancers and digital nomads.
At our site in Hoang Dao Thuy (Hanoi) there are more groups and communities rather than individual members. This area is known as the “small and medium-sized enterprise (SME) village” as there is a diverse range of startups and corporations moving into this space. There’s also a number of multinational companies that have just set up shop in Vietnam and have chosen to base themselves at that location.
Toong has received funding from the likes of Indochina Capital and Openasia. How did your vision help to attract these investors?
First, we aim to produce high-quality but cost-effective coworking spaces in Vietnam. We are able to save companies up to 60% of the costs they would incur fitting out and working from a traditional office. Second, at Toong, we proudly celebrate the new style of working that we are enabling—one that is highly collaborative and innovative. And lastly, we want to connect traditional Vietnamese lifestyles with a contemporary urban experience. It’s not only about working in our space, but also engaging in local culture.
In addition to designing our own spaces, we organize events and support organizations that engage with our vision. Like us, our investors also want to elevate the quality of Vietnam’s professional landscape. For example, if you see the profile of Indochina Capital, they have made investments in brands and facilities like the Hyatt Regency Danang, The Nam Hai in Hoi An and the Six Senses Resort Con Dao all of which fit our mold very well.
Which large companies are you connecting with?
Some of our larger partners often want to temporarily relocate their teams to one of our spaces—and many do so on a regular basis. It could be for an innovation week or even for an entire month, but the idea is that working out of a different space from time to time gives way to creative collaboration and more effective ideation. They like to shake things up a little bit, and it’s not uncommon to see partners like Adayroi, Deloitte, Cushman and Wakefield, setting up shop here.
What’s the future of Vietnamese real estate? Global coworking companies like WeWork have a certain vision, but what is Toong’s?
At our core, we’re a real-estate service provider that aims to change the way people work in Vietnam. From my point of view, over the next two to three years, Hanoi, Ho Chi Minh City and Danang will see the development of real estate service concepts that will bring new value to the Vietnamese customer base. Presently, even with the development of new buildings and high rises, Vietnam is still not providing unique real estate opportunities to the community. Moving into the future, I think there will be a new wave of coworking spaces in Vietnam that can provide alternative platforms similar to ours.
As for other coworking companies, we don’t see them as competitors. Rather, they are helping us to measure our own success. Hopefully, we can motivate other operators to launch their own innovative spaces, adding to a larger ecosystem. Together we can better educate the population and thus pave the way for a larger market. For ourselves, we want to stay ahead of the game and utilize our spaces in unprecedented ways. We don’t dedicate much time looking at what other coworking space operators are doing.
What sort of new initiatives can we look forward to from Toong?
We’ve created our own unique business model but we want to become more flexible. One of our goals is to greatly expand—to become five to seven times larger. The idea is to establish a firm presence across the entire country within the next few years. As part of that process we have a new flagship location opening in January 2018 in District 3 of Ho Chi Minh City.
Right now we are just focused on doing our best—improving our services and diversifying our spaces. If we bring value, then the opportunities will find us. And once that happens we’ll have the power to do anything we want.
If you weren’t in the coworking space business, what career would you be pursuing?
I used to dream of becoming a politician. But as it turns out, I’m having fun with marketing and branding. Through my experience with Toong, I’ve learned that I love creating concepts that integrate local heritage with emerging urban lifestyles. We don’t know our own potential quite yet, and that’s actually a beautiful position to be in.