Innovative startup journey has never been ‘a piece of cake’ for entrepreneurs, even those in worldwide countries with developed economies. In Da Nang, although creative startups have yielded many fruitful achievements, it is necessary to develop strategic stages to accelerate the local startup scene in more sustainable manner, and also importantly, to help it catch up with other startup hubs in Southeast Asia.

Da Nang Business Incubator Chairman Vo Duy Khuong (right) visiting the innovative start-up space at Da Nang-based Viet Nam-Korea University of Information and Communication Technology

Before 2015, there had been almost no startup ecosystems in Da Nang as just a few little-known small startup clubs and a few competitions to seek business ideas. Also discouragingly, at that time, awareness of entrepreneurship and innovation amongst locals, especially of the young were still low. But up to now, Da Nang’s startup journey has made remarkable development strides at a fast pace.

DNES – Da Nang's first professional incubator

Over the past five years, with the high determination and strong efforts of Da Nang government, plus a positive change in the mindset of the whole community, especially the young, the city’s innovative startup scene has flourished impressively.

To get the ball rolling, October 2015 marked the inception of the Da Nang Startup Council (DSC) that creates a connection among most of the important elements in the startup ecosystem, namely incubators, universities, research institutes, enterprises, business associations, investors, functional local bodies and media agencies.

Incubation organisations appeared next, and typically, the establishment of DNES, Da Nang’s first professional incubator focusing on helping seed-stage startups take off the ground.

DNES is now one of the few startup incubators in Da Nang to have operated in a continuous and effective manner, and especially, it is the only effective incubator based on the public private partnership (PPP) model in Viet Nam.

Not only does DNES act as a place for business incubation and training, it also actively and proactively participates in building up the startup ecosystem with tasks in creating co-working spaces, organising startup events, cooperating with international partners and forming startup investment funds.

Over the past five years, DNES has developed a network of more than 40 domestic and foreign partners that are forward-thinking organizations so as to build lasting relationships with game-changing startups.

DNES has implemented incubation courses with the participation of more than 60 eligible startup projects. The selected startups are eligible for programmes focused on fundamentals such as product-market fit, go-to-market, HR/team and fundraising.

As for startup support infrastructure, two co-working spaces, namely DNC and SURF Space, that have helped startups gain access to operational infrastructure for a minimal fee, create new working relationships, take on challenges alongside other like-minded individuals, grasp business opportunities, and exchange experiences with those from various aspects.

A programme on fundraising experience organised by the Da Nang Business Incubator for the city's startup community

In addition to DNES, Da Nang has seen the birth of ‘the big boys’ in the local startup community such as Songhan Incubator, IoT Space and Ylinkee.

Also, some projects, including AntBuddy, Minh Hong, Noitob, Homecare and VR360 have won outstanding prizes at the national-level creative startup competitions. Others, such as Zody, Hekate and GonJoy, have also successfully raised investment capital.

Amongst startup events, SURF is the largest annual International Startup Conference and Exhibition in Central Viet Nam, consisting of Conference, Exhibition, Business, Investment Connection Programme, Startups Pitching Competition, Networking Night and many other connection activities.

In 2020, due to the global COVID-19 pandemic, SURF returned with a new face to stimulate and promote the spirit of entrepreneurship, seek business opportunities for entrepreneurs and in the region with key activities, such as Conferences, VR Exhibitions and excellent startup projects selected in Techfest 2020.

In terms of macro policies, the Da Nang administration has given the green light to the implementation of a project to building Da Nang into an innovative startup city by 2020, with a vision to 2030.

Raising the stature of the innovative startup ecosystem

Da Nang government has approved a project to develop human resources for startups in the city, with a focus on launching of training courses on creative entrepreneurship skills.

As for infrastructure for incubation, relevant local agencies have begun to mull over new measure, and the most prominent is the idea to establish a large-scale National Innovative Startup Support Center with many integrated features so as to attract as many elements needed for the startup as possible, and especially serve as a true common home for all Da Nang-based startups.

Capital attraction, especially seed funding, is very necessary for a young startup ecosystem like Da Nang’s. DNES’s investment arm Flying Fish Investment (FFI) has provided seed money to potential companies completing incubator programmes.

However, the city is now looking forwards to attracting more Venture capital funds are pooled investment funds that manage the money of investors who seek private equity stakes in startups and small- to medium-sized enterprises with strong growth potential. These investments are generally characterized as very high-risk/high-return opportunities.

In terms of macro policies, the municipal administration has given the green light to the implementation of a project to building Da Nang into an innovative startup city by 2020, with a vision towards 2030.

To successfully implement this landmark project, policies and mechanisms released by the national and municipal governments need to be more specific and feasible, thus creating a strong impetus to promote the development of the local innovative startup ecosystem.

By DR. VO DUY KHUONG – Translated by A.T