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There are thousands of startup founders who have ditched their belongings, families and the west to move east to leverage geo arbitrage — and right now, 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 Southeast 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.
Southeast Asia is a huge place (according to Google, 4.5 million square kilometers), and it’s not equal. Singapore is one of the most expensive countries in Asia, let alone Southeast 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 Southeast 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 three 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 Southeast Asia are as follows:
Most bootstrapped founders in Southeast 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 lose this when you take venture funding. (Try calling your investor up and telling them you’re going to tour around Laos on a motorbike for a month. Ha!)
This is what’s great about Southeast 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 Southeast 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 US$1-US$3 per meal.
- A coffee in boutique coffee shop with their own roasting machine, and fast wifi, will set you back no more than US$2
- Apartments can start as low as US$300-US$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, Southeast 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 US$430 each, if split between 3 co-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 two steaks would cost you in London.
Enjoy a weekend photographing Hanoi, Laos or many other beautiful destinations in the region for just USUS$15-20 per night.
A little goes a long way in Southeast 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 favorites:
Hubud in Bali — Rates start at US$50 per month.
The Hive in Bangkok — Rates start at US$100 per month.
PunSpace in Chiang Mai — Rates start at US$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 UK for example; if you are located outside of the UK for longer than 90 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 — zero percent capital gains tax, zero percent dividends tax and zero percent foreign-source income tax.
If you want to learn more about 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 Southeast Asia. You can hire rockstar coders for around US$1,000 in Vietnam, and great English speaking content writers and personal assistants in the Philippines for around US$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 US$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 US$4,000 per month. After rent (US$1,500), food (US$1,000), travel (US$300) and office space incurred by the startup (US$1,000), the professional is left with US$1,300 to play with. The total cost for the startup is US$5,000 (salary and office space)
Let’s base the same situation in Southeast Asia. A professional based in Southeast Asia takes in US$3,000 per month. After rent (US$600), food (US$400), travel (US$50) and office space incurred by the startup (US$100), the professional is left with US$1,950 to play with. The total cost for the startup is US$4,100 (salary and office space).
This is just a generalization, but I hope you see where I’m going with this.
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Advice from a digital nomad: bootstrapping in Southeast Asia