Bootstrapping in South East Asia
There are thousands of startup founders who have ditched their belongings, families and the west to move east to leverage geo arbitrage — during in which I believe, is the best time in history to do so.
This trend and movement is growing exponentially. Lower over head costs, better work/lifestyle balance, access to more talent who want to work remotely and great opportunities to learn, network and travel are just some of the reasons entrepreneurs are moving to South East Asia to bootstrap their startups.
Having done this for close to a decade now, I wanted to share why I continue to live in S.E Asia, share what I have learned so far bootstrapping several startups here, and most importantly; let entrepreneurs know what they are potentially missing out on.
South East Asia is a huge place (according to Google, 4.5 million km²), and it’s not equal. Singapore is one of the most expensive countries in Asia, let alone South East Asia, and simply cannot be compared to the craziness and the cost of living, pace etc. in say Thailand or Vietnam.
I want to focus on biggest hubs for bootstrapped startups right now, which include Thailand (Bangkok, the Southern islands and Chiang Mai), Vietnam (Saigon and Hanoi) and Bali in Indonesia.
These hubs are not only cost efficient to live in, but also have concentrated groups of entrepreneurs thanks largely due to the co-working spaces that have grown and fostered the entrepreneurship community’s in each location over the past few years.
If you are new to S.E Asia and are considering venturing out here to test bootstrapping a startup here, I can’t think of a better itinerary than to include Vietnam, Thailand and Bali to find out what works best for you.
Flights between the 3 countries cost next to nothing and all offer amazing work/living lifestyles, yet offer totally different vibes, experiences and pace.
So here goes; my reasons why you should consider bootstrapping in South East Asia are as follows:
Most bootstrapped founders in South East Asia don’t have an “exit strategy”, like most startups in the valley and in other major startup hubs do.
Most entrepreneurs I’ve encountered here have no desire in raising financing, giving up control and/or building a large company with offices, board meetings and staff.
In fact, it’s the exact opposite. Most entrepreneurs here want to solve problems and have a great work/life balance that can be managed from anyone.
It’s all about freedom — freedom to work where we want, with who we want, how we want, and when we want.
Please read the above again. And again.
To me, this is the essence to a great life. You loose this when you take venture funding (try calling your investor up and telling them your going to tour around Laos on a motorbike for a month. ha!).
This is what’s great about South East Asia - there are hundreds, if not thousands of entrepreneurs who get this and value work/life balance and freedom over anything else.
Cost Of Living
Bootstrapping a startup is hard, so why make it any harder when you can increase your run rate by 10x by moving out to S.E Asia?
You read that right. You can buy yourself 10 months of living costs for the price of one month in the Valley or in London.
Here are some examples:
Delicious local street food in Thailand will cost just $1-$3 per meal.
A coffee in boutique coffee shop with their own roasting machine, and fast wifi, will set you back no more than $2
Apartments can start as low as $300-$500 per month with air-con, especially outside the major cities.
A bag of laundry washed and pressed will set you back a couple of bucks. I haven’t done any laundry for a decade now.
While the low end of the spectrum is appealing for many, S.E Asia gets super interesting when you’ve got some paying users at your startup and can level up in comfort:
You can rent a beautiful villa for a month in Bali with your own private pool for just $430 each, if split between 3 c0-founders.
Help out at an Elephant camp in Chiang Mai for a week costing less than a few hundred bucks.
Dine at the world’s 13th best restaurant in Bangkok for less than what 2 steaks would cost you in London.
Enjoy a weekend photographing Hanoi, Laos or many other beautiful destinations in the region for just $15-20/night.
A little goes a long way in S.E Asia due to lower staffing costs. Not only do you save costs and get a lot more for your buck, most importantly; you are able to buy time for much less than what your time is worth focusing on customers or code.
Kick-Ass Co-Working Spaces
While I personally like to work in solitude, for those who need a bit of noise and a community of like minded entrepreneurs around them while they work, co-working spaces in the region are popping up almost as fast as new Starbuck branches.
Some are so beautiful, you may find it hard to leave. Here are some of my favourites:
Hubud in Bali — Rates start at $50 per month.
The Hive in Bangkok — Rates start at $100 per month.
PunSpace in Chiang Mai — Rates start at $110 per month
Ease Of Doing Business
For many nationalities, there are some great benefits to incorporating your new startup in Asia if you plan to base yourself outside of your home country.
Hong Kong is a great example. Incorporating a company in Hong Kong will cost you just over a thousand bucks. The process is super simple and takes a day, and the bank manager and a Paypal representative will meet you to help you open your accounts.
There’s also tax advantages. Depending on your nationality, you may find you are not liable to pay income tax if you are located outside of your home country for longer than x days per year.
Take the U.K for example; if you are located outside of the U.K for longer than 270 days per year, you warrant special tax privileges (aka no tax).
Further more, if you incorporate in Hong Kong and do not conduct any business in Hong Kong, your revenue, assets etc. are tax free. That’s right — 0% captial gains tax, 0% dividends tax and 0% foreign-source income tax.
If you want to learn more re; incorporating in Hong Kong and tax advantages, I wrote a handy Offshore Handbook you might find interesting.
Access To Great Talent
Access to local talent has always been a big pull for entrepreneurs bootstrapping in S.E Asia. You can hire rockstar coders for around $1,000 in Vietnam, and great English speaking content writers and personal assistants in the Philippines for around $500 per month.
Along with local talent, I’m also noticing a really interesting and dynamic trend with bootstrapped startups in the region recruiting western talent for a fraction of what it would cost of hiring the same talent in their home country.
Why? A combination of the lifestyle choice, and the fact their dollar goes so much further here. This is why Buffer pays their staff different salary ranges based on location.
In Thailand, thousands of western educated English teachers take home $1,000 per month. They live very comfortably on this salary. It’s the lifestyle that’s more appealing to them over the dollar signs. The same is true for many coders, designers etc.
Here’s a made up example:
A professional in London takes in $4,000 per month. After rent ($1,500), food ($1,000), travel ($300) and office space incurred by the startup ($1,000), the professional is left with $1,300 to play with. The total cost for the startup is $5,000 (salary and office space)
Let’s base the same situation in S.E Asia. A professional based in S.E Asia takes in $3,000 per month. After rent ($600), food ($400), travel ($50) and office space incurred by the startup ($100), the professional is left with $1,950 to play with. The total cost for the startup is $4,100 (salary and office space).
This is just a generalisation, but I hope you see where I’m going with this.
The Option To Travel
Nowhere in the world (as far as I know) has a better low-cost airline network than South East Asia.
No matter where you are located, you are pretty much guaranteed of being only a $20-$100 flight away from some of the world’s best beaches, restaurants and nature reserves.
Here are some of my favourite spots in the region to travel and visit:
Hanoi — Beautiful French architecture, amazing coffee, excellent food.
Bagan — Beautiful temples. Amazing people.
Barclay — One of my favourite beaches in S.E Asia.
Cha-Am — 2 hours drive from Bangkok with heaps of local fishing villages and seafood.
Jimbaran — My go-to-spot in S.E Asia for fresh seafood and sunsets on the beach.
Don Det — A small beautiful island in the Mekong river with just one hotel.
Ubon Ratchathani — Where I’ve spent most of the past year or two. It’s authentic Thailand with zero tourists.
And a little further afield:
Fukuoka — Just like Tokyo, yet half the size and half the price.
Jiuzhaigon National Park — The most impressive national park I’ve ever visited.
It’s not all cocktails and sunsets. Here are some of the reasons why bootstrapping your startup in S.E Asia may not be for you:
You want to build a startup the Silicon Valley way
If the idea of raising rounds of fund-raising in the hope your “exit strategy” will turn fruitful, S.E Asia is not for you. Valuations in the region are tiny and terms are aggressive compared to the major startup hubs elsewhere.
You have a family
I’ve met many expats who have up-routed their family to Asia, but I’ve yet to meet someone who has moved out here with their family to bootstrap their own business.
Bootstrapping is hard enough, I don’t know why anyone would want to add language barriers, schools and bored spouses on top.
Navigating sometimes complex visa issues from country to country, and in some cases office to office, is time consuming.
Thailand is a great example of how messed up some of the visa situations are. You can’t obtain a tourist visa inside the country. Thai embassies located in the region do not operate on the same rules, so you might be able to get a 3 month visa in Malaysia while Singapore will only give you one month. On top of this, if you enter Thailand via land, they will stamp you in for 15 days or 30 days, depending on your nationality.
This can be a blessing, and a real pain in the butt – and interesting enough, often at the same time!
It takes time to work out the quirkiness, and while your learning, you really do need to leave your negative and stress at home – as this will get you nowhere here. But that is also a blessing; being located here teaches you not to sweat the small stuff.
The Asian way of doing things takes a bit of getting used to, and is not for everyone, but you’ll only know if you spend enough time here to learn for yourself.
It’s not all travel
Many traveling entrepreneurs would agree with me, if you want to stay focused and productive on your startup, slow travel is the way to go. One month here, two months there.
I once told a friend 5 years ago “you can sustain a business while traveling, but it’s very hard to grow one”. I still believe this to be true today.
The Asian domestic market represents so much growth and opportunity right now, especially in the mobile, fin-tech and social space. I focused on startups building products/services for the international market here, but if you want me to write about opportunties locally, feel free to reach out to me on Twitter.
How’s the internet?
This all depends on a number of factors such as location, IP, how many are connected etc. But in general, everywhere on the main land (wherever that may be) will be sufficient to handle most tasks running a startup.
Internet connectivity get’s seriously sketchy when you head out to the islands, and this does include Bali — even though it’s as developed as it is.
Unless your going off the beaten path, you won’t have any issue finding English speakers in the main cities. Hotels, restaurants, spas etc. will almost never present a problem communication.
While many expats in the region don’t bother learning the local language, I think it’s paramount, especially if you plan to stay in one location for longer than a month.
I wrote a full post on how I learned to speak Thai, if your interested.
How much do I need?
The more you have, the more fun you’ll have.
While you can certainly get by on $1,000/month, you’ll have a lot more fun on $2,000-$10,000 per month, which I’m guessing is the same rule anywhere.
My regrets as a 46 year old (banker), and advice to others at a crossroad.
A person with a 1 hour commute has to earn 40% more to be as satisfied with life.
Hashtag Nomads — A huge community of location independent entrepreneurs discussing relevant topics in a Slack account.
1 Year as a Digital Nomad — How to build a business by the beach, written by Jon Yongfook.
Offshore Handbook — My book covering incorporating offshore, internationalization etc.
Bali / Indonesia
Being a digital nomad in Bali, written by Richard Hamel.
Work-life haven: why entrepreneurs and digital nomads are settling in Bali.
What I learnt bootstrapping my startup from Thailand for six months, by Pieter Levels.
Bootstrapping Your Startup In Bangkok, by Michael Park.
Bootstrapping in Saigon. One of the best reports I’ve come across on bootstrapping focused on one location in S.E Asia, written by Jon Myers.
Why I am living in Saigon, written by David Hehenberger.
Cafes in Hanoi for writers and digital nomads, by James at Nomadic Notes.
Saigon vs. Chiang Mai, by Johnny FD.
Bangkok vs. Saigon, by Rashad Pharaon.
How Tokyo is Different to Silicon Valley, by Jason Winder.
Doing business in Japan, by Patrick McKenzie
If you made it this far, thanks for reading. Feel free to ask any follow up questions on Twitter @MyEggNoodles.