In the past several years, Southeast Asia has become a hub for wanderers, backpackers and digital nomads looking to build lifestyle businesses that allow them to maximize their incomes while minimizing the amount of time spent on said businesses. It’s a worthy goal, and many of them are succeeding at it. But it’s also an attractive region for expats to bootstrap scalable startups.
“I think it’s easier to bootstrap in Asia than any place in the world,” said Sam Marks, an entrepreneur and angel investor. Marks has invested in Glints, an up-and-coming startup run by three Singaporean entrepreneurs, and several other businesses founded in the region.
Marks saw Southeast Asia’s investment potential in 2009, when he first traveled through Asia.
Entrepreneur and angel investor Sam Marks seeks out ex-pat-run startups in Southeast Asia for... [+]
“I realized that the local Internet technologies seemed like they were stuck back in the 90s,” Marks said. But it was clear that industries such as e-commerce would one day explode here.
“You could just kind of see the future,” he said. “You knew this was all going to emerge in Asia, it just wasn’t there yet." That’s why he is particularly keen to support businesses founded by expatriates who have the knowledge and foresight to create products for Southeast Asia’s rapidly digitizing markets.
“When you have the experience of growing up in North America or Europe, you come to Asia and you see what’s going to happen,” Marks said. Expat entrepreneurs have the “huge benefit of expertise and knowledge” when it comes to creating online products and services, although any offering must be tailored to local markets.
But it’s not just the market opportunities that draw entrepreneurs from around the globe to places like Singapore, Thailand and Vietnam. It’s the amount of accessible, affordable resources that allows them to bootstrap their businesses more comfortably than they could in Western countries.
Mobility and diversity
“Two of the great things about living in Southeast Asia are mobility and diversity,” said Leanne Beesley, founder of Coworker.com. “You can get anywhere with an easy and cheap AirAsia flight. As a bootstrapping founder, this enables you to choose your location based on your needs at the time.”
Beesley launched Coworker.com in 2015 after she and Marks shared a frustrating experience in Hong Kong. They struggled to find good intel on coworking hubs where they could connect with local startups.
“We wasted so much time on
“It made no sense to us that in the era of online booking for everything, nothing substantial existed for the coworking community,” she said.
Leanne Beesley founded Coworker.com after realizing there was no central resource for finding and... [+]
The Coworker.com team is now distributed across the globe, in Malaysia, Indonesia, India, Bolivia, Canada, France and Australia. Beesley spends most of her time in Thailand but recently relocated to Singapore for several months in order to grow the company.
“Chiang Mai is great when you're first getting started. It's very cheap, has amazing coffee shops, great food and a bustling digital nomad community,” Beesley said. “But because most [expat entrepreneurs there] are solopreneurs or working on lifestyle businesses, I reached a point where I felt like I needed to move to a bigger tech hub to get inspired by people growing bigger companies.”
The three months she spent in Singapore were like “rocket fuel” for the business. While working out of The Hub coworking space there, Coworker.com’s user growth rate increased to 1,460%. The site hit 3,900 member reviews and now boasts a listing of 2,000 coworking spaces across 98 countries.
Beesley noted that the nomadic lifestyle makes it easy to change environments as necessary: “When cash is super tight or I just want to get my head down and focus on executing a strategy with zero distractions, Chiang Mai is perfect,” she said.
“When I feel like I need to start thinking bigger and get out of my comfort zone, Singapore or Hong Kong are perfect. When I want to be surrounded by hustling entrepreneurs in a similar position to me and balance work with a great social life, Saigon is perfect. When I feel stifled by the ‘digital nomad’ label and want plug myself into a local startup community, Kuala Lumpur is perfect—and much cheaper than Singapore. By living out of a suitcase, I’m able to always place myself in the optimal environment.”
Building the inevitable in Asia
Like Beesley, Neyma Jahan and his co-founders launched their business, SmartMat, while living in Asia. SmartMat centers around a smart yoga mat that provides feedback and instruction based on users’ movements.
“As an entrepreneur, I always ask myself, ‘Is this inevitable?’” Jahan said when asked about the company’s origins. “I can’t think of a future where your equipment doesn’t train you.”
The SmartMat concept allowed him to combine two of his interests in one forward-thinking product.
“I have a love and passion of yoga and machine learning,” Jahan said. “It just made sense. This is going to be a thing, so why don’t we build it?”
The SmartMat is still in the development stage, but the final product will come equipped with sensors that connect via Bluetooth to users’ mobile devices. They’ll be able to play a yoga class on their smartphones or tablets, and the mat will provide feedback based on where they are placing their hands and feet.
“We’re trying to recreate, though AI, a yoga teacher,” Jahan said.
Jahan currently splits his time between Los Angeles and Asia. He and his cofounders initially registered SmartMat in Hong Kong in 2014. Jahan had already registered a software company there, and he and his co-founders were accustomed to working in Asian markets. Hong Kong also offers attractive tax incentives for foreign companies. But after a successful Indiegogo campaign that earned $100,000 in support on its first day (it’s now at nearly $400,000 in pledges), Jahan and his co-founders decided to register in the U.S. a year later so that they could pursue a wider range of venture capital opportunities. The company is now preparing for a round of Series A funding.
The initial run of SmartMats will be produced in Europe, but Jahan said the company will move production to China after that. Competitive manufacturing costs and readily available resources make the move to China a no-brainer. Jahan said he and his co-founders ran the numbers on manufacturing all over the world, and China made the most business sense.
He noted Southeast Asia’s other cost benefits as well. For early stage startups, the ability to live inexpensively and devote their time exclusively to the company is invaluable. Entrepreneurs in North America and Europe often hold down day jobs and build their startups in their spare time.
“It’s hard to be an entrepreneur in an environment where you’re constantly struggling for food, shelter, and comfort,” Jahan said. Rather than work 40 hours a week at a job to make ends meet, “you can put those 40 hours into innovation.”
The cost of hiring developers and designers is also significantly less than in places like the Bay Area, thanks to lower living expenses and going market rates. Jahan estimated that hiring a development team at full salaries plus benefits, not to mention renting office space, in Los Angeles could cost $1 million a year. That’s not including other business expenditures or hires. He declined to say how much SmartMat paid their initial team of developers, who worked out of Asia, but he said that costs were much lower than they would be in the West. SmartMat currently works with a development team out of Europe.
Entrepreneurship can’t be taught
The low cost of living in places like Chiang Mai can be a boon to new startups, or it can be an albatross around their necks. Without the urgency of needing to pay the bills, entrepreneurs can become complacent.
“Literally everyone who lives here falls into it at some point,” Marks said of Chiang Mai. To combat that, he recommends spending time in Hong Kong or Singapore to reinvigorate the desire for growth and success.
“A lot of companies here have too small of a vision or they’re not ambitious enough,” he said. As an investor, “You have to try to vet the companies well.”
But the entrepreneurial hustle can’t be taught. Jahan said many people land in Southeast Asia seduced by Tim Ferriss’ “The Four-Hour Week” and the belief that they’ll become internet millionaires overnight.
“That book gave an entire generation a different paradigm” for how they could live, Jahan said. It liberated many people from the idea that they had to work a 9-5 for the next 40 years, no matter how much they desired flexibility, travel and independence. But many of the people who chased the four-hour work week dream didn’t realize the amount of work that goes into earning that lifestyle.
“At their core, they didn’t really want [to build a company],” Jahan said. “They got dazzled by a star in the sky.”
Ultimately, much of the hard work falls on the shoulders of the entrepreneurs behind these startups, rather than outsourced teams.
“The more skills you learn yourself, the better strategies you’ll be able to develop and the better you’ll be able to brief your team members in the future,” Beesley said.
Jahan offered similar advice. “The most success I’ve had is when I’ve done the $5 an hour work myself. As a CEO, as a visionary, sometimes things need to get done and you have to do them yourself.”
