The Relentless Entrepreneur: 3 Years of Unpaid Start-up Life, Living in a Warehouse

Magix Packaging Solutions JSC (Magix) has recently been awarded the I-Star 2024 Award by Ho Chi Minh City in the Innovative Enterprise category.

Starting from Scratch

After winning the I-Star 2024 Award, Do Huu Tan (born in 1989), Chairman and CEO of Magix, invited me to the company’s warehouse in District 12, Ho Chi Minh City. While many were busy with the year-end rush of orders, Tan was no different from his employees, even though Magix is valued at about 70 billion VND and he holds more than 65% of the company’s shares.

Tan assessed that the current and future situations will be very challenging. Therefore, he must be prepared to overcome difficulties instead of enjoying the fruits of his labor.

Tan is an electronic and telecommunications engineer, a graduate of Ho Chi Minh City University of Technology. He has participated in many student startup competitions and won awards, but most of these were just startup ideas.

Tan’s first idea was to design an online storage box that could be assembled into a clothes hanger. This idea intrigued many people, but it could not be commercialized.

After graduating, Tan worked for a German technology company while pursuing a master’s degree in business administration in his spare time. He also pursued his passion for designing packaging with criteria such as reducing production costs, shortening packaging time, enhancing product safety, reducing the risk of damage, and facilitating recycling.

Tan used his designs as “gift boxes” to pitch to online retailers and e-commerce platforms. Surprisingly, they contacted him not to purchase his designs but to place new orders according to their requirements.

“For example, a company specializing in T-shirt sales ordered a combo box for family T-shirts, which could also be used as a family photo frame. An e-commerce platform selling books ordered packaging that could be turned into bookcases or optimized packaging. Not only did these new designs add functionality, but they also reduced costs by 10%, sped up packaging by 15%, and saved on filling materials…” Tan recalled.

A turning point came when Tan posted some of his improved box designs on his Facebook page and received a message from a tech industry leader. This person invited Tan to work on a project for an e-commerce platform as an expert in packaging optimization, offering a higher salary than his current job. He accepted the offer to challenge himself in the field he was passionate about.

Difficulties arose when the company halted the project before Tan’s probationary period ended. Losing his job also meant losing his income, and his attempts to find a new job were unsuccessful. Additionally, he had lent his savings of 70 million VND to a friend who didn’t repay him… As a result, Tan endured a challenging year, living frugally to complete his graduate studies.

In July 2016, after obtaining his master’s degree, Tan, along with Le Hong Duc, founded Magix. They then rented a warehouse to start selling improved boxes online. Tan lived in the warehouse to save on rent.

In March 2017, Magix was officially established. Even as Magix grew, Tan continued to live in the warehouse and went without a salary, channeling all his energy and resources into investing in the company. It wasn’t until 2019, when the business became more stable, that he started drawing a salary, starting at just 10 million VND per month.

Investing in Internal Strength

Tan believes that in today’s e-commerce landscape, continuous expansion is necessary; otherwise, one risks falling behind or even losing market share, leading to project termination.

Initially, Magix sold packaging solutions customized to the needs of enterprises, along with accompanying products. While this approach yielded higher profits than the market average, the company faced price competition as more traditional packaging enterprises entered the e-commerce market, willing to incur losses in pursuit of opportunities.

To remain competitive, Magix leveraged its strength in designing new types of packaging for e-commerce while also developing packaging for traditional commerce. In 2024, Magix focused on product development and expanding its range of packaging solutions, including environmentally friendly food packaging. The company achieved gross revenue of approximately 70-80 billion VND per year, with an average profit margin of about 4%-5%.

Thanks to its stable growth potential and transparent finances, Magix has attracted investment capital and received favorable loan terms from banks. From his experience, Tan observes that entrepreneurship is a path that outsiders憧e into and insiders憧 to leave due to its harsh nature. Founders must have sufficient passion to persevere with their projects for an extended period before achieving stability and profitability.

“Countless projects fail because founders lack perseverance, don’t invest in internal strength, and don’t adapt to the needs of their customers. Magix, on the other hand, aims to become Vietnam’s largest retailer of packaging materials, with 70% of its products being manufacturable, the rest being outsourced or traded; and over 50% of its products being environmentally friendly,” Tan expects.