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Launching Startups Abroad: The Bangkok Advantage

by Kyle Blasco / January 22, 2014

We know Thailand for its sublime beaches, friendly people and tropical climate. And then there were entrepreneurs, ingenious concepts and the dawn of a technological boom.

Bangkok

Bangkok boasts plenty of inexpensive, world-class dining options, great public transport (affordable taxis included), a stimulating night-life (some complain about the amount of prostitutes—but hey, big city)life and the convenience to travel internationally to many places on a direct flight. These options are worthy enough to quench even the wildest adventurer’s thirst.

Asia offers a host of discount airlines that have cheap as dirt deals on flights to anywhere from Singapore to Tokyo. AirAsia offers special deals on flights to Chonqqing, Hong Kong, and Macau for less than $60. Bangkok is smack dab in the middle of the South East Asian region so it is especially cheap to explore places like Vietnam and Cambodia on a quick weekend getaway. A direct flight to one of the Seven Wonders of the World, Angkor Wat, will cost you around $190. If your thirst for adventure still isn’t quenched, catch an overnight bus to Chiang Mai for $15 or an hour long flight to Krabi for $40.

 

Major City Lowest Flight Cost Round Trip (BKK – City)
Tokyo $748
Singapore $112
Hong Kong $299

 

For years Bangkok and much of Southeast Asia was passed over by foreign investors. Entrepreneurs felt more compelled to look at other regions with more potential at reaching a valid target market. But with Internet penetration consistently increasing in Bangkok (and Thailand in general), this untapped potential gold mine of an operation-base could only stay quiet for so long. Some would say it’s already well past the whisper stage.

Internet penetration in Thailand has grown exponentially over the past few years, making it fertile ground for testing your product or service. In the last few years, Bangkok has invested in building up infrastructure to support its population of digitally native citizens. There are 30 million Internet users and Thailand is expected to reach 75% penetration soon. In December 2009, telecom providers launched a 3G network in Bangkok and its surrounding areas. Since then, Bangkok has quickly adopted the technology and now has 18 million social media users.

Bangkok has everything a start-up needs to germinate and gain a healthy grip on the market. Bangkok is economically attractive, increasingly venture capital friendly and has the right attitude to make the tech industry go Boom.

Foreign Money Goes a Long Way in Bangkok

It’s simple: start-ups require less funding when operating out of Bangkok versus somewhere in Europe or North America. Though Bangkok is much more expensive compared to the rest of Thailand, it still offers plenty of financial relief when compared to other spots around the globe. Due to the low cost of living, a small, bootstrapped startup with $100,000 capital can have more than a 3 year runway. A month of rent for a decently sized studio apartment will cost about $250 a month and a single meal bought on the street can cost as cheap as $1.50. In other start up hubs, like New York, you would be lucky to nab a tiny studio apartment for $2,000 a month and would be spending an average of $10 on daily grub. Basing your start up in Bangkok allows you to spend the majority of your money on growing your business instead of on cost of living.

What you get in New York for under $300/month

What you get in Bangkok for under $300/month

What you get in New York for under $500/month

What you get in Bangkok for under $500/month

Also, think about your employees. Will some be foreigners requiring relocation to Thailand? One can live extremely affordably when compared to the Western World. If you can’t live without your comforts, you can get all the amenities of your western-living in Bangkok, though you’ll most likely be throwing out the affordability advantage in doing so. Living in the center of downtown Bangkok will certainly rival other expensive urban locations around the world. However, the cost of living is considerably cheaper just outside the tourist and business centers. This is to be expected of any city with a population over 8.2 million.

The tech talent in Thailand is constantly evolving. Like anywhere else, quality engineers are hard to come by, but Thais see the benefit of garnering the skill set to actively participate in this emerging economy. More and more people are learning how to program so talent is fast becoming abundantly available. New co-working spaces, hack-a-thons, and meet-ups are popping up day to day, making it easy to find talent. Because the cost of living is so low, the salary level for engineers in Bangkok is three times lower than that of their Silicon Valley counterpart. A Silicon Valley project manager would demand a yearly salary of around $115,000 while a Bangkok based project manager of equal skills and experience garners a yearly salary of around $38,000. The difference can mean an extra year of operation and more time to explode in the market.

Job Title Avg. Salary - NYC Avg. Salary - SF Avg. Salary - BKK
Full Stack Developer $113,000/year $120,000/year $30,000/year
PHP Developer $100,000/year $107,000/year $29,000/year
Javascript Developer $107,000/year $114,000/year $28,000/year

The Attitude is Evolving

The wheel has been slowly spinning for a while now. Four years ago, there was little happening tech-wise in Southeast Asia. Today, Bangkok is a bubble progressively expanding in the start-up and venture-capital world. We are still at the early stages of growth, but isn’t that the exciting part?

Here is an infographic about the startup ecosystem in Thailand:

Take a look at these graphics from Seedstars World illustrating Bangkok as a city supplanting any tech inept version of its former self. Bangkok is the second biggest economy is Southeast Asia (behind Singapore) and the population is young, with 35 percent under the age of 24. Thailand is top 15 in the world among mobile app markets and boasts 18.5 million social media users. That’s saying something since around 69 percent of the population still live in rural areas, without the ease of quick Internet access and away from the evolving trends in big-city, tech culture.

The introduction of 3G has brought on a vibrant mobile start up scene. According to TechInAsia.com, Thailand will have an estimated 7.5 million Android phones by the end of 2013 and market share will be 68% on Android with 18% on iPhone/iOS. This means a host of mobile apps from games to finance and e-commerce are making a splash on the scene.

In a piece from The Next Web, Adrian Vanzyl, now co-founder of Ardent Capital touches on the advantages of setting up shop in Bangkok. Many think of Singapore as the center of Southeast Asia commerce, but Vanzyl states Singapore is not an emerging market—already enjoying a nice standard of living. This, and the fact that English is spoken everywhere in Singapore makes Bangkok a more attractive base to see if an idea has true traction without presenting the hurdles in lacking logistics and a penetrable market.

The Community is Ripe to Sow

Bangkok is home to many notable startups already and that number should only increase. The likes of dabbling investment firm, Ardent Capital and intriguing co-working spaces like HUBBA and Launchpad, are just a few places making splashes already. The idea of shared work spaces is not a new concept, but immensely important in the mutual benefit of creative, entrepreneurial spirits throughout a workplace. The days of the office environment resembling an endless scene of dull gray partitions and an isolation of mundane tasks is on the way out.

More co-working spaces will bring more collaboration from talented people and further the culture of creative development. The chance to get out of the home or that coffee shop where you’re stuck with your own thoughts is so important—for validating ideas, networking and just generally being around people whom inspire.

Hubba - 185 THB a day
Launchpad - 220 THB a day
Kliquedesk - Call +6687 933 1112
WorkBuddy - Call +662 662 3229
Glowfish - Call +662 120 9600
Pun Space - 199 THB a day
Merge Space - 100 THB a day

Thailand is also a highly literate place with an organized school system. There are almost too many universities to keep track of in Bangkok, certainly more than our mortal fingers can represent. People’s quality of living is improving as access to the web becomes more and more convenient in urban areas. Seamless amounts of information allow anyone more material to absorb, process, and contemplate. This undoubtedly will lead to better formed ideas and innovative conclusions.

In terms of language barriers, rural Thailand won’t offer a foreigner much diversity, but Bangkok can be exceptionally English-friendly. Many schools teach English starting from grade school. With the rising demand for a high level of English skills within the work force, many are flocking to private lessons to gain a better command of the language.  It won’t be people speaking perfect English with great accents, but the avenues of communication will be open, non-verbal cues work in times of desperation, too.

Would it Even Be Fun Without Challenges?

Luring talent to Southeast Asia can be an obstacle to overcome. While offering a fantastic cost of living and tropical climate (not to mention a massive city) many people won’t move their families or just aren’t willing to leave their familiar lives. This challenge wouldn’t be magnified if the Bangkok tech-culture had been in place for a while, but much of the local population just doesn’t have the mindset or experience to ignite a company to its fullest potential. This shouldn’t be as much of a challenge in the future.

Even if a candidate relocates, will they acclimate to the culture well? Will being in a foreign environment distract them from producing quality work? These are things that matter.

Thankfully, much of the engineering talent can be found locally. The demand for tech talent has boosted investment in training future generations of engineers, so Bangkok is well on track to fueling all start ups with highly skilled programmers.

And then one needs to be realistic of Bangkok as a large metropolis. There are crowds, traffic, pollution, vast amounts of concrete, not to mention all the foreigners frequenting on vacation—it’s important to constantly remind yourself that you are here to work and focus, not live a vacation lifestyle.

And then we come to the visas. Again, assuming some of your team will be comprised of non-locals, obtaining long-term stay in Thailand may prove to be difficult. There are a couple different ways you can work around the visa issue. If you’re coming with a US passport, the Thai government grants you a 30 day visa for free. Most other countries can easily arrange for a 30 to 60 day visa. From there, you can easily go for visa runs for only about 2,000 to 3,000 baht, which is around $60 to $90.

The culture in Southeast Asia has and still is to a large extent, geared toward multinational corporations. Much of the schooling (for example web programming), is geared toward those individuals finding jobs at corporations, not to deliver creative programming skills that a start-up really needs.

Despite the obvious attractions of working for a start-up—flexibility, creative environment, tangible sense of productivity and accomplishment—most start-ups usually can’t compete with the compensation packages awarded by multinational corporations. How many talented prospects are being lost in the cushy, deadline-distant, safe ranks of Corporate Asia?

A Dream of the Future

Challenges exist in every city in the world. Add start-up to that equation and the failure rate is daunting. But people don’t get into start-ups to fail or repeat the past, they’re offering something new, and work as hard as they can to see that idea or concept come to life. The foundation of the dream has started here in Bangkok, Thailand and it’s exciting to imagine what great harvests lay ahead in Bangkok’s evolving economic future.

For more information on launching a startup abroad check out this cool infographic: http://fundersandfounders.com/where-to-start-your-startup-best-value-destinations/

Update January 22nd
- Please note that Taskworld does not endorse nor condone the use of visa runs for working in Thailand. We highly recommend going through the proper channels and obtaining proper work visas if you are going to work in Thailand. It is a common practice among those working remotely and tourists to utilize visa runs, however it should not be part of your business model if you plan on basing your company in Bangkok. For more information on obtaining a work visa in Thailand please refer to here.

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