Are you looking for a great place to launch your new tech venture? Or are you just curious about the dynamic hubs that have the tech world talking?
As part of our series on great cities for tech startups, we’re looking at the factors that make certain locations a hotbed of creative and business innovation — as well as some of the challenges these cities face. Bangkok, Thailand, is at the beginning of its arc toward being a powerful startup hub, but insiders believe it has what it takes.
The Bangkok startup scene has only begun to explode over the last year. It is not very diverse, nor is it very developed, but it has more promise than most startup ecosystems. There are more than 10 companies competing in the loyalty-app space and countless group-buying clones. As the ecosystem matures, chances are some of this energy will be channeled into other, less-tapped spaces.
The city is also the center of Southeast Asia’s second biggest economy (Thailand ranks second behind Indonesia), and the main reason Thailand is considered to be the most rapidly modernizing economy in the region. Plus, its tech infrastructure is maturing at an incredible pace. Internet and smartphone penetration is staggering: According to the Thai Ministry of Information and Communications, the number of Internet users in the country will reach 52 million by end of the year, which translates into nearly 75 percent penetration (penetration in the U.S. is 80 percent). Thailand also has 76 million mobile subscribers (odd because that’s more than its population). And finally, there are more than 18 million social media users in Bangkok alone. It's the Facebook capital of the world.
Bangkok is already a very well-established entrepreneurial society. Global Entrepreneurship Monitor (GEM) research confirmed that entrepreneurs constitute a large proportion of the adult workforce in the country. In 2005, for instance, Thailand had the highest Total Entrepreneurial Activity (TEA) index, with more than 20 percent of the adult population claiming to be engaged in some form of entrepreneurship. Even those who were not active entrepreneurs themselves expressed a positive attitude toward entrepreneurial activity, with 86 percent of people between the ages of 18 and 64 saying they would be willing to start a new business.
There is a caveat, though: “The type of entrepreneurship that Thai people are used to is the brick-and-mortar kind. They will need lots of support and mentorship in order to truly excel in the digital space,” says Efraim Pettersson Ivener, CEO and Founder of eKita, a global education technology platform based in Thailand (but incorporated out of Singapore) and his eighth startup. “But they are eager and willing to learn.”
Next, the talent is amazing, especially in the design department. “Pixar, Lucas Arts and Disney don’t set up massive 2D/3D animation studios here for nothing,” laughs Ivener. “Unfortunately, they aren’t quite as good on the programming side.” But that’s changing.
“The local universities based their tech curriculums on legacy companies that set up shop here a decade ago,” explains Ivener. “Companies like IBM, SAP and Reuters. They told the schools what to teach based on the type of workers they needed. To build new products, you have to retrain those employees.”
There are also some good university programs to help them get there, says Ivener. “Thammasat University has a great IMBA program, with a GSVC competition well connected with UC Berkeley and Stanford.”
Finally, Bangkok has an ultra-low cost of living (food, rent, transportation, etc.) and low operating costs (salaries, rent, etc.). In fact, the cost of living is 51 percent less than New York, according to expatistan.com.
Bangkok's startup success stories include: Builk, a construction-focused social network aimed at taking the construction industry into the digital era by linking engineers, companies and suppliers online; Ookbee, an e-book platform that owns 90 percent of the local market share and has successfully expanded to Vietnam, Singapore and Malaysia; and The Venture Catalyst Group, which has a company called Penta, which is aiming to make a new cloud platform for Smart TVs, VoiP, healthcare solutions and lots more.
It’s a difficult business environment. “I could go on forever about the bureaucracy issues we’ve faced,” admits Ivener. “Consequently, we incorporate all of our companies in Singapore to be safe and sound. We still have to set up some entity in Thailand to make sure things are legal, but we keep as little as possible here.” And they’re not alone.
Plus, there is no angel or venture capital (VC) funding. “There is lots of money here: rich families, people who'd like to be angels,” explains Amarit Charoenphan, startup entrepreneur, cofounder and co-CEO of HUBBA Coworking Space, Thailand's first co-working space for tech and creative startups. “But few understand tech investment. They are only familiar with dividends-based businesses, storefronts, manufacturing, real estate, etc.”
The truth is that all the funds for this region are in Singapore or Hong Kong, and a significant amount of that money is coming from Japan.
But despite the obstacles and challenges, the opportunities in Bangkok are so great that the city is drawing talented and ambitious tech entrepreneurs to the city.
Where else are entrepreneurs setting up shop around the world? Check out our features on:
For nearly two decades, New York-based writer and editor Chuck Tannert has covered everything from arts and leisure to fashion, fitness, politics and technology. His work has appeared in many print and online outlets, including CNET, Men’s Journal, Popular Mechanics, Popular Science, Wired and many more.