The Thailand Tech Startup Association has made its official debut in order to build a strong community of tech entrepreneurs in Thailand.
The group, representing Thailand’s front-line of tech startup entrepreneurs, announced the establishment of the “Business Association for the Promotion of New Technology Entrepreneurs”—which was given the official English name “Thailand Tech Startup Association”—in order to help develop new entrepreneurs in the technology field and build a stable community.
The Thailand Tech Startup Association was officially launched on May 23, 2014 by a meeting of ten of the top tech startup entrepreneurs in Thailand with three stated objectives:
- Unite the tech startups in Thailand with a strong community.
- Drive the improvement of the quality in the startup community to link and coordinate with all groups of entrepreneurs, media, investors, and government.
- Accelerate: Help the development of new entrepreneurs in the tech sector build growth up to a universal standard.
Tech startups have a central role in this age of the creative economy. Aside from creative thinking, technology is the force that propels business in the modern age. With a different business model, the market expands and causes more changes to society. Today, the tech startups in Thailand are growing and attracting attention in the region. Therefore an association of tech entrepreneurs helps to share changes in knowledge and form connections with various institutions. This will cause a big jump in the development of the industry. It’s not necessary to be a Silicon Valley to strengthen the entrepreneurs and software developers of Thailand in order to take advantage of opportunities in the Southeast Asian region.
Here is how the Thailand Tech Startup Association plans to carry out their three main objectives:
Unite startup company founders by coming together to join hands and cooperate in forming a unified community. The principal activities consist of building a database, inviting startup company founders to join together, launching a platform for new projects, and building activities that create opportunities for a group of startup companies to work together and form a solid network.
Become a mouthpiece, a leader, and find ways to get around obstacles to growth of the startup community. Bring together and coordinate with all groups of entrepreneurs, media, and investors of the public and private sectors. The principal activities are research into the startup ecosystem in Thailand, being an agent for the startup community both inside and outside Thailand, proposing methods and strategies, launching a new framework to benefit tech startups, helping within the startup community, and coordinating an alliance with government and private agencies in order for integrated growth of the startup community.
Aid the development of new entrepreneurs in the technology field and entrepreneurship up to an international level. The principal activities are supporting the scale and amount of accelerators and business incubators for technology startup entrepreneurs in Thailand, promoting the growth of a community of angel investors, supporting a set of quality schools and centers for teaching coding and design, and training to improve the quality of entrepreneurs in the design field.
For more information, you can contact the Thailand Tech Startup Association at: [email protected]
Academics in Thailand are hoping to establish a fund to help finance small and medium-sized enterprises (SME) in Thailand to the tune of 1 billion baht. The proposed fund is intended to help local companies secure investment in time for the opening of the Asean Economic Community (AEC), which will take place next year.
The fund would like;y be supported by a combined effort of government and the private sector. It is thought that it would help Thai manufacturers to expand their operations internationally.
The call for the new fund was made by the University of the Thai Chamber of Commerce’s Center for International Trade Studies, which recently completed a study to determine the readiness of Thailand’s SMEs to integrate with the AEC. Out of the more than half a million SMEs surveyed, 63 percent said they may not be ready for the start of the AEC on December 31, 2015. According to the center’s director, Mr. Aat Pisanwanich, “These operators need more time, about two and a half more years or by the end of 2016, for AEC integration.”
While larger companies mostly believed that they will b ready in time, many SMEs lacked information on how the AEC would affect their business operations. The lack of preparation—due to the failure of the government to properly educate SMEs on the full impact that AEC is expected to have—could force some to go out of business soon after the changes come into effect. Notably, many SMEs are involved in labor-intensive areas such as textiles, auto parts manufacturing, and various agricultural endeavors, which could be strongly affected by a shift in the manual labor market.
Thailand and Malaysia are a pair of emerging Asian “Tiger Cub” economies that each have their own system for encouraging foreign investment. To attract foreigners to set up businesses in each country, we have the Thailand Board of Investment (BOI) promotion one one side and the Malaysia Labuan Company on the other. Each of these types of company setup has it’s own specific advantages, so if you’re thinking about moving to Southeast Asia and starting up a company, it’s good to compare these two setups—along with the other advantages and disadvantages of living and working in each country.
First off—the basics. What exactly is a Thailand BOI promoted company and a Malaysia Lauban Company?
Thailand BOI Promoted Company
The Thailand BOI has authority to promote companies that it deems will be beneficial to the country by allowing special privileges and tax benefits that normal Thai companies don’t get. These include a Corporate Tax holiday for up to 8 years, elimination of VAT duties on import of machinery, and giving exceptions to restrictions on foreign ownership. The BOI is promoting heavily in the manufacturing and high tech sectors, especially where there can be displayed a transfer of technology to Thai people and employment of Thai workers in these areas. The new chairman of the BOI has also indicated that projects applying for BOI promotion should be green and not damaging to the environment.
Getting a BOI company set up requires going through several steps that could take between 2-6 months. You’ll need to have a minimum of three company shareholders with a minimum capitalization of one million baht. However, only 25 percent of this needs to paid initially, with the rest required to be shown within the first three years of operation. You will also most likely need to apply for and obtain a Foreign Business License particularly if a foreigner is a majority shareholder. The benefits are you’ll be able to obtain visas and work permits for foreign employees and shareholders, and the BOI has authority to grant exceptions to the 4:1 Thai to foreigner employee ratio that is required for obtaining work permits in regular Thai companies.
With a Thai BOI promoted company, you can enjoy operating tax free during the crucial startup phase of your company while based in a country with relatively low overhead and payroll costs. For example, you can find local software developers straight out of university for under $500 per month, and even those with 5+ years of experience are available to hire for $1000 per month. Rent for office space will be much less than it would be in the US or other developed countries. Also, you can extend your runway greatly by paying yourself a much smaller salary than you’d need to live on in a western country. Most people could live quite comfortably on $1000 a month in a city like Chiang Mai while still enjoying a good life—eating fresh tropical fruit everyday, going out to enjoy movies, having drinks with friends, getting massages, great coffee, trips to the beach using cheap local flights, etc.
Malaysia Lauban Company
The island of Lauban is a federal territory just 8 km off the shore of Borneo in Eastern Malaysia. Under the Labuan Companies Act of 1990, residents and non-residents of Malaysia alike are permitted to establish Labuan companies. These companies are intended to bring in foreign capital and turn Labuan into a major offshore financial center in the region. One of the key features of a Labuan company is that they must conduct business a currency other than Malaysian Ringgit. One of the main benefits of a Lauban company is a low Corporate Tax on net profits of either 3 percent with an annual audit or a flat RM20,000 annually with no required audit. A Lauban company is also quick to set up and requires virtually no capitalization. A single individual can act as both the director and single shareholder, and there is a minimum of just one share required, with no restriction on share price. This means that a Labuan company can be established with just $1 of paid up capital. There is also a minimum registration fee of RM1500 that needs to be paid, but the registration process is relatively simple and can be completed in about a week.
A Lauban company is not required to maintain a physical office, which makes it an ideal company setup for e-commerce and consulting businesses. This company setup is also well-suited for import and export businesses, for which no trade licenses are required. Labuan companies are exempt from VAT and Sales and Service Tax, and there is no Withholding Tax for interest and dividends. Those with a Labuan company are able to apply for a 2-year, renewable business visa that allows them to reside in Labuan or anywhere else in Malaysia.
Comparison of Thai BOI and Labuan Companies
|Thailand BOI Company||Malaysia Labuan Company|
|Capitalization||1 million baht minimum, with 25% initially paid up||1$ minimum|
|Ownership||Up to 100% foreign ownership possible with approval from BOI||100% foreign owned allowed|
|Shareholders and Director||Minimum of 3 shareholders and 1 Director who can also be one of the shareholders||Minimum 1 shareholder and 1 Director, can be the same individual|
|Invoice Currency||Any||Any except for Malaysian Ringgit|
|Business Visa||Shareholders and employees eligible for renewable 1-year visa||Renewable 2-year visa for up to 5 foreign employees|
|Company Setup Time||2-6 months for company set up and BOI approval||1-2 weeks|
The Labuan company is quicker to get set up and requires minimal paid capitalization, while the Thailand BOI company has the advantages of a 0% Corporate Tax rate and the possibility of hiring a larger number of Foreign employees. One also has to consider the potential advantages and disadvantages of basing yourself and your business in either Thailand or Malaysia. Thailand has an advantage in overall lower overhead costs, employee salaries, and cost of living expenses. Malaysia has slightly better infrastructure and a larger portion of the population with good English ability.
If you work to live and not live to work, then you may enjoy being in Thailand more. It would be hard to disagree that it is the more fun-loving and laid back of the two countries. Thailand is one of the biggest international tourist destinations for good reason. It has excellent beaches, fantastic food, charming people, and an interesting Buddhist culture. Malaysia is predominantly Muslim, so alcohol is heavily taxed and the local people don’t party as hard as the Thais do. While it is true that Malaysia also has some beautiful beaches of its own, you may find the number of tourists wearing burkas outnumber those in bikinis. One thing Malaysia does have is plenty of great Indian food thanks to the sizable minority of the population of South Indian descent.
If community and finding a crowd of like-minded people is important to you, then this could also influence where you decide to establish a new business from. Both Kuala Lumpur and Bangkok have large expat communities, but you’ll probably find a larger number of western entrepreneurs calling Thailand their home.
The first meeting of Thailand’s new Board of Investment (BOI) was held on Wednesday, June 18. After taking over control of the country in a military coup, Gen. Prayuth Chan-ocha assumed chairmanship of the new 18-member board. The old BOI had accumulated a backlog of projects awaiting approval. Mirroring the quick action it has taken in other areas of governance since coming to power, the military jumpstarted administration of the new BOI by approving new projects worth 120 billion baht, or approximately US$3.7 billion.
This comes after the junta successfully distributed—in a matter of weeks—nearly 90 billion baht in overdue payments to about a million rice farmers who had failed to receive any compensation for many months from the previous government when the funds from a controversial rice-pledging scheme were mismanaged and mysteriously dried up.
The biggest winner in the announcement from the BOI was Toyota Motor Corp, which is planning to spend 51.5 billion baht to expand its production of pickup trucks and parts.
The projects winning approval were mostly industrial in nature. Some of the other projects receiving approval included:
- A tire production plant in Rayong by LLIT receiving 9 billion baht of investment
- A glass bottle production plant in Saraburi worth 1.9 billion baht
- A plant for producing laminated steel plates in Rayong receiving investments of 10 billion baht.
- A ceramics plant in Saraburi with an investment of 1.7 billion baht
- Cold storage projects by CPF in Nakhon Ratchasima, Chachoengsao and Samut Sakhon totalling around 2.7 billion baht.
- A new auto plant built as a joint venture of China’s SAIC Motor and Thailand’s CP Group worth 9.2 billion baht
- A data center by Luxemburg’s Supernap International for a 6.9 billion baht investment
The project approvals are a welcome shot in the arm to the Thai economy after approval for BOI projects had reached a backlog under the previous government of former Prime Minister Yingluck Shinawatra.
The good news for investors is that this is just the beginning for the newly revamped Thailand BOI, which plans to continue to support both domestic and foreign investment in the country.
General Prayuth listed four principals that he thinks investors should be mindful of:
- Research work by Thais and a transfer of technology to Thai people should be encouraged.
- Thailand’s raw materials should be used more for adding value to products for both domestic consumption and export.
- Projects applying for BOI investment support need to have made some effort to reduce their energy consumption, including making use of alternative energy sources.
- The manufacturing processes used in the proposed projects must not be destructive to the environment, and any large-scale projects need to have a full environmental impact study pass evaluation.
The announcement of the newly approved projects is encouraging for the future of investment in Thailand. Applications for BOI projects had dropped by 42% during the first five months of 2014 while the political deadlock brought uncertainty and slowed progress down to a halt. But with the military government keen to get the economy moving again, we can expect to see more action being taken by the BOI in the coming months.
In Thailand’s western neighbor Myanmar, only 10 percent of the population currently owns a mobile phone. Nevertheless, Qatar based telecom Ooredoo sees this not as an obstacle but rather as an area ripe for incredible growth in the coming years. In order to fulfill this vision, it is launching the Ideabox Startup Incubation Program through Ooredoo Myanmar.
The goal of the incubator program is to identify startup companies in Myanmar that will be able to benefit and take advantage of the new 3G network that Ooredoo is introducing to this Southeast Asian nation. The incubation and acceleration program will offer a 4-6 month period of mentoring and guidance, along with office space and much needed startup capital. The amount of capital available for companies is $100,000, which will help a handful of young entrepreneurs in Myanmar focus all their energy into delivering the best product or service they can, instead of spending all their time chasing funding.
The companies to be chosen will need to be ambitious, since IdeaBox is interested in those who plan to scale quickly using increased mobile penetration—with a goal of $100 million valuations in sight.
Ooredoo is currently evaluating the applicants and the winning companies will be announced on June 27.
In the 2004 letter to the shareholders of Berkshire Hathaway, Warren Buffet made the comment that we should strive to “be fearful when others are greedy and greedy only when others are fearful.” If that advice resenates with you, it might be a good time to start a company in Thailand.
Thailand has recently had another coup d’état and according to an article from Reuters, investment is down 42%.
The total value of investment applications fell 42 percent to 308 billion baht ($9.5 billion) in the first five months of this year from a year earlier, Udom Wongviwatchai, the BOI’s secretary-general, said in a statement.
A new BOI board is in development and, as of yet, no one knows if things will become easier or more difficult in the future. But an unnamed sourced has told us the new BOI will no longer approve projects by zone. This means BOI approved companies will receive similar benefits regardless of physical office location. Before different districts would get different tax breaks or other incintives.
If you are interested in how the Thailand Board of Investment works, check out our page explaining the details, and then get in touch.
I gave a presentation based on my experience fundraising in Southeast Asia. If you are looking to raise funds for your company in Asia – check out Horizon.VC
The presentation above details how to structure a company in Thailand with a foreign headquarters and raise capital in Southeast Asia. This presentation shows the use of a BOI company (Board of Investment approved company in Thailand) with a HQ in Singapore or Hong Kong. Also discussed are options for venture capital in the region.
If you are looking to raise funds in Thailand, it may help if you have a BOI Company. This presentation explains the proper use of a BOI company. Also see this infographic for more information on BOI Companies in Thailand – and the use of a BOI company with an Offshore company.
Other articles that may be relevant:
- Monk’s Hill Ventures Launches with a New $80 Million Fund for Southeast Asian Startups
- Dzung Nguyen of CyberAgent Ventures on What Type of Thailand Startups are Worth Investing In
- Singapore’s National Research Foundation Selects 6 Venture Funds for $120 Million Early Stage Investments
- CyberAgent Ventures, Inc. Establishes New Office in Thailand
- Expara CEO Douglas Abrams on Early-Stage Venture Funding in Southeast Asia
- Eddy Lee of Fenox Venture Capital Brings Silicon Valley Experience to Southeast Asian Startups
- Page365 Facebook e-Commerce Assistant gets Seed Funding from Galaxy Ventures
- Thailand Game Operator Receives Venture Funding
- Why Singapore VC John Johan Kim Thinks the Future is in Bitcoin
- VenueHub Looking for New Partners in Asia
- Thailand’s Top Bitcoin Exchange Gets Green Light to Resume Operation
- Emerging Technology – Interview with Semyon Dukach Angel Investor
- Reebonz of Singapore Gets $40 Million Investment Led by MediaCorp
- Emerging Technology – Interview with Bruce Miller, Angel Investor
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Singapore based Monk’s Hill Ventures announced their launch with news of a $80 million fund to focus on investing in early stage startups in Southeast Asia. The venture capital firm is brand new, but composed of highly experienced partners Peng T. Ong, Kuo-Yi Lim and Stefan Jung, along with Thomas Clayton as a special advisor. Peng T. Ong is best known for founding Match.com, and he was also the founder and CEO of Interwoven. Kuo-Yi Lim was the CEO of Infocomm Investments, a $200 million Singapore based startup fund. Stefan Jung is known for founding the e-commerce companies Zalora and Lazada. Thomas Clayton also brings experience starting up a number of tech companies in Silicon Valley.
Monk’s Hill was recently announced as one of six VC firms to receive matching funds from Singapore’s National Research Foundation (NRF). Under the program, each of the six firms is eligible to receive S$10 million in matching funds from the NRF to be used for funding early stage local tech companies.
In their press release, partner Peng T. Ong explained how Monk’s Hill Venture’s entrepreneurial experience will help fill a gap in the current startup ecosystem.
There are clearly two big gaps in the market. One is the much talked-about Series A funding gap. However, the more significant one that we see is the lack of seasoned entrepreneurs, with deep operating experience, as investors—people who can roll up their sleeves and really help entrepreneurs. This is what separates the best VCs from the rest.
The Monk’s Hill partners intend to use their significant experience to help entrepreneurs build companies that can scale globally. With their extensive networks in Asia and North America, they also plan to assist new startups to get additional funding, attract customers, and acquire the best talent. Partner Kuo-Yi Lim elaborated on this idea further:
We also want to set the bar for how venture is done in Asia, by bringing the best practices we have personally experienced through working with top VCs ourselves—a straightforward and transparent process which treats entrepreneurs as partners.
Monk’s Hill Ventures will place their focus in two primary areas. The first is on early stage, Series A, and Series B technology based startups with a geographical focus on Southeast Asia. Their second area of focus will be growth rounds of funding for mainly Silicon Valley based companies that are looking to expand their operations into Asia. They are starting off with two offices—one in Singapore, and another in Jakarta, Indonesia. With a population of 240 million, Indonesia is a market that has incredible potential for growth in the coming years. Special advisor Tom Clayton commented on the excitement and potential of the region with these words:
In just the past three years, there has been a rapid emergence of new entrepreneurs and great startups across Southeast Asia with vibrant ecosystems forming, from Singapore and Jakarta to Bangkok and Manila.
YogaTrail was founded in 2012 by a husband-wife team who just happen to both be named Alex. They are joined by German partner Sven Ernst, Managing Director of Buzzwoo!, which has operations in Thailand under the BOI company setup. They’ve seen steady growth in their user base since launching last year, and will turn a profit beginning this month. Last week, I had the pleasure to meet with all three of the company founders and got to ask them about what it’s like running a startup business in Chiang Mai, along with their future plans for YogaTrail.
Tell us a little bit about YogaTrail, how it works, and what it does differently or better than other competing platforms.
Alex K: It’s a yoga directory—kind of like how TripAdvisor is a directory for hotels—where we have yoga teachers, studios, and yoga retreats and teacher training centers. It’s different from other platforms like Yelp or TripAdvisor because it’s all about yoga and just yoga. We also have reviews like these other websites, but we ask certain questions from people who leave reviews that are unique to yoga and are important for people who do yoga. The diversity of yoga is huge. We have certain questions in our reviews like “Is this more spiritual or exercise oriented?” So we paint the personality of the teachers or the studios, and for now that’s what distinguishes us.
Sven: Also we have more features that distinguish us—like you can promote and publish events, which is something that you can’t do with these other platforms. Besides the whole review process, there are other facets, like you are specifically able to search for yoga styles, beginner, advanced… On Yelp you can only search for “yoga in Chiang Mai” for example, and that’s about it. But with our platform if you want to go deeper and make your search more specific, that’s possible.
Alex K: For yoga teachers in particular, typically a teacher will work at several yoga studios. And they’re generally not allowed to tell the students in their class that they can also be found at another studio. And so on our website, a yoga teacher can associate themself with different studios, and you can see on a map that the teacher can be found here, here, and over there. So that’s very useful for people who generally like to take their classes from a particular teacher or perhaps two or three teachers.
Alex J: So maybe to summarize, we’ve thought about the whole experience from the point of view of the person who wants to find yoga things—not restaurants and hotels and whatever else you can find on Yelp, but only yoga. So the whole platform is designed to be useful just for that subset of people who are looking for yoga.
How long has YogaTrail been live, and what kind of growth and active user numbers have you seen?
Sven: Basically we launched in March of last year, and it was invite-only until August. We currently have 25,000 users of the platform with 60,000 profiles. Profiles include studio listings, teacher listings, events, teacher trainings, retreats, and member profiles. And we currently grow by about 20 percent per month—that’s the growth of the member rate. And we’ve started pulling in money since about four months ago. Our business model is based on freemium, so you can create a listing for free, but you can pay to upgrade your profile and get certain premium features. We are right at breaking even…so almost self-sustainable.
Alex K: This month is the month.
Sven: Basically, we’ve doubled our monthly revenue for the past four months. Of course it will be hard to maintain that level of growth. But it’s going well, I think.
Why did you decide to create YogaTrail, and why did your chose Chiang Mai to base yourself in?
Alex J: We decided to create YogaTrail because of personal experience trying to find yoga and find something specific…
Alex K: Because we spent a year traveling…
Alex J: And even when we weren’t traveling, when you’re in one place and you want to find information without spending half an hour on Google every time—so we thought, OK this needs to be done. An authority site on yoga needs to happen, because there are a lot of yogis, there are a lot of yoga providers, and there are a lot of people every year who are more interested in starting yoga. So that’s how we chose the project.
And there was nothing really like that before?
Alex J: Very dysfunctional.
Alex K: There’s a lot trying this kind of thing, but they…suck. Most of them restrict themselves to one geographic region. Our biggest competitor I guess is yogafinder.com, they’ve been around a long time. But if you look at that site, you get a little paragraph to describe yourself as a yoga provider, that’s it.
And the Chiang Mai part…Alex and I were expecting to stay here a week. That was two and a half years ago. On the third day we went to look for an apartment, and we haven’t left. The city is great on so many levels.
What are the pros and cons of starting up a business in Thailand?
Alex K: The pros is it’s very cheap, there are a lot of startup type people—people who want to be digital nomads. But the cons are that they’re small in number compared to the people trying to do startups in Silicon Valley or the East Coast.
Sven: I’ve been here for ten years, so I can compare how it was five or six years ago. And there’s more of an ecosystem now, but it’s still very much small scale, it’s still fragmented.
Alex J: But at the same time, we get lifestyle perks being here that we couldn’t get anywhere else, that allow us to work and spend a lot of time working on our project. You don’t have to do your laundry or go shopping—all these small things that make life extremely easy. You can work, not spend much money, and still have an extremely enjoyable lifestyle.
Alex K: We wouldn’t have been able to do YogaTrail if we weren’t here. We had some savings and bootstrapped for two years. That would’ve lasted two months where we were coming from in Boston. And like Alex said, when you wake up you can work—we don’t cook, we don’t clean, all these things that you often have to do in the West…you have to drive to work for an hour. We don’t even get any mail where we are.
Alex J: Everyday life is just a lot easier.
Alex K: But part of the con is part of the ecosystem is not here. The investors are not here. There are some in Bangkok, and Southeast Asia is becoming an interesting place, but it’s been mostly in Singapore and Hong Kong.
You recently applied to take part in the Y-Combinator accelerator program, and you made the initial cut to give a pitch in person, but were not selected in the end. Can you tell us a little bit about what that process was like?
Alex K: It was 25 hours on airplanes and in airports for me to fly out there. And their interviews are ten minutes long. They ask the questions, and you hope to get across the key points you want them to get, and then later that day they decide if you’re in or out.
In my opinion, I don’t fit the profile of the Stanford graduate American kid who has a big idea and a network of people in Silicon Valley. For whatever reason, they said ‘no’. And the feedback we received as part of their decision wasn’t terribly satisfactory. But it was a great experience because they paid up to $1500 for the flight. And I was able to meet Dave McClure of 500 Startups the following day.
Sven: We actually thought we had a pretty good chance because many of the companies who go and pitch there don’t have a product at all. Sometimes they don’t even have an idea. They go there, and they have an idea, but then they say ‘Your idea sucks—we like you guys, but you need a new idea.’ So they’ll spend the first few weeks just getting an idea. Or for a usual case, many just have a semi-working prototype. But in our case, we have a working product, we have some traction. For them the founders are important. It’s important to see that the people can work together. And we’ve proven that we can work together for two years now.
Alex J: But at the same time, only one of us was there. We couldn’t afford to fly all of us out there. So Sven and I were on Skype, but the connection wasn’t good, and we weren’t able to interact very much. So if it’s a matter of going there in person for them to get an impression of your team—then maybe we blew it because only one of us was there.
One of the main reasons that Y-Combinator gave for rejecting your proposal was that they thought you wouldn’t be able to beat out Yelp in search results. So how do you go about building your user base without much help from Google or from SEO?
Alex K: We wouldn’t mind help from Google, and we are working on SEO strategies. But the majority of our user growth is from invites. Users are being invited by other users on the site. That’s a really good strategy for us and we want to improve that.
Alex J: There are other ways besides SEO to get people to the site, and there’s one viral loop that has been working very well to get people in.
Alex K: For yoga instructors, we list the ones with reviews higher. So there is a natural incentive to get your students signed up to the site to review you. As a yoga instructor, you’re also incentivised to associate with your yoga studios on the site because you show up more, you show up at more places on the map.
Alex J: Our site is more about the yoga teachers, not just the studios. And if your a teacher you can’t create your own listing on Yelp. You have to have a physical address. So they’re still under-served. They would have to build their own website to have people find them. The idea behind the product is very different. Yes, Yelp has reviews and YogaTrail has reviews, but they’re different concepts.
What about social media?
Alex J: As the site was being built, Alex and I tried to build as big a social media presence as we could to build brand awareness. So we have over 100,000 people on Facebook, 30,000 on Pinterest, and 30,000 on Twitter. At the beginning social media was a bigger driver of traffic. But now the reach on Facebook is ridiculously small.
Sven: You can post cute pictures of cats doing yoga, but what does that do? How does it help your business?
Alex J: We have to think about more creative ways to funnel people from social media to the site.
If you could get investor funding, how would you use it to improve your business?
Alex K: We have a lot of development that we would like to get done. We have one feature in particular, which is a schedules feature. It allows yoga teachers and studios to list their classes. It completes everything that a teacher needs to have an online presence. And we’d love to accelerate by outsourcing development and at least hiring one more full-time developer.
(As of the time of writing, YogaTrail is currently looking for a hot shot Drupal Developer to come join them in Chiang Mai. If interested, contact here.)
Sven: I think marketing in general too. Besides hiring developers, it wouldn’t hurt to have a marketing person, maybe based in the States, because it’s not as easy for us to reach providers from here.
Alex J: There are a lot of maintenance tasks—admin duties, newsletters, that end up taking an enormous amount of time.
What future plans do you have for the company?
Alex K: We want to grow like crazy. We want to be the place that—if you’re a yoga provider—you have to be on. Just like if you’re a hotel you have to be on TripAdvisor, it’s a no-brainer. We want to be the place where people find their yoga. We’re thinking about booking engines and a market place.
Sven: So you could book your yoga retreat or buy a class pass.
Alex, you have a background in nuclear physics. How much of a transition was it to move to Southeast Asia and start up a company out here?
Alex K: Actually that’s an interesting question because it wasn’t that big of a transition. I went from being a scientist in academia to a scientist who did a startup and raised money for a private fusion effort, to then doing another startup in the yoga space. I was definitely turned on to the idea of starting your own company and doing your own thing before YogaTrail. Once you start that, you can’t go back to working at a crappy job, sitting at a desk and doing what you’re told.
Since the two of you both have the same first name, does that ever cause confusion?
Alex K: No. Presumably if I talk about ‘Alex’ people don’t think I’m schizophrenic and talking about myself.
And you still have different last names, right?
Alex K: Yes. I was thinking we should start telling people that instead of making our last names the same when we got married we made our first names the same.
What advice can you give to other couples who might be thinking about going into business together?
Alex and Alex (laughing): Don’t do it!
Alex J: It’s not always easy, because we have very different ways of working. He’s a scientist and I was an editor before. So the whole way of communicating is extremely different. For me it’s more about being friendly, and for him it’s more about just doing the thing.
Alex K: Before we did YogaTrail, we were married five years and never had an argument, ever. But since we’re working together, we’re both the boss or co-founders. And we’ve had arguments at least once a week. And because you’re married you don’t have a certain wall between you that other co-workers have. So in my case, there are times when I’ll allow myself to say something that I’d never say to someone I only know professionally. It’s tricky to have a professional relationship and be married at the same time.
Have you had any memorable interactions with people in the yoga community?
Alex K: We’re lucky to be in the yoga space because they’re all very nice in general.
Alex J: It’s the cliche that people who do yoga are more mindful, but they actually are.
Alex K: There’s lots and lots of memorable interaction because the diversity of people who do yoga is crazy. You get esoteric types who want to go and find themselves in an Ashram in India. And you get lawyer/executive types who do yoga just for some fitness during their lunch hour. And everything in-between.
Withlocals is a new marketplace for travelers to connect with local people in Asian countries to get a more genuine and unique travel experience. They currently have listings in 7 countries: Thailand, Malaysia, Singapore, Indonesia, Nepal, Sri Lanka, and Vietnam. Users can chose to book with local residents in three areas: Eat Withlocals, Tours Withlocals, and Activities Withlocals. Eat Withlocals features a large number of “home restaurants” where visitors can taste authentic local cuisine in a regular family home setting. The list of Tours and Activities includes everything from watching the sunrise from on top of a volcano to classes on making silver jewelry. Withlocals is backed by the Greenhouse Group business accelerator and is based in the Netherlands. I recently had a chance to ask co-founder Marijn Maas a few questions about the company:
How did you first get the idea for Withlocals and decide to go ahead with turning it into a business?
Two ideas came together. My brother Willem Maas, co-founder, could be called a true travel guru. He has traveled to many places all over the world and has especially fallen in love with South East Asia. His many authentic travel experiences inspired him to create the concept of Withlocals. On the other hand, the idea for Eat Withlocals came up in Sri Lanka during my honeymoon trip. After my wife and I had dinner day after day in high-end restaurants, we by coincidence experienced a home dinner with local Sri Lankan people. It was so amazing, listening to each other’s stories, experiencing their way of living while eating the best food of our entire trip. I thought, wouldn’t it be great if all travelers could have an experience like this? We love the sharing economy and wanted to give travelers and locals in Asia the opportunity to connect with one another.
What’s unique about Withlocals that hasn’t been done by anyone else up until now?
- Withlocals is the first to introduce the Home dining category across Asia.
- Withlocals is the only “one stop” local experience website, offering a total local experience for travelers from Home-dining to tours to activities with locals.
- We strongly believe the success of an online marketplace is all about having traffic. Many people who have had beautiful ideas in the home restaurant and tour category didn’t make it because of the lack of traffic, thus demand. Being part of a group of 170 online geeks, online marketing is our specialty.
What kind of support does Withlocals enjoy by inclusion in the Greenhouse Group of companies?
Being part of a group of 170 online geeks, working for customers like Vodafone, Microsoft and Mars, online marketing is our group’s specialty. So we get a lot of support in that area to further roll out our platform. Furthermore, Greenhouse Group supports us on various other areas, such as growth strategy, Finance and Legal challenges. Next to the ‘official’ support, we get an amazing amount of support from individuals throughout the whole group, willing to help us out with our beautiful concept.
What kind of response has the platform gotten so far from locals and travelers who have used it?
Withlocals has been received very well and we already have quite a lot of traction. Within 1 month after announcing our idea, over 10,000 potential hosts across Asia applied to be part. Our website has over 150K visitors a month, and we have about 68K fans on Facebook. Regarding the numbers of bookings we are even ahead of schedule and the most important part was the validation of our service.
Since our launch in December such beautiful things are happening. Travelers meet local people and create memorable stories together. We even have a 100% customer satisfaction and amazing reviews. Our customers love it! Most of the guests are travelers visiting the local hosts. But for Eat Withlocals we also see an internal market. So a citizen of a certain city chooses instead of eating in a traditional restaurant again to have dinner with a family in the same city. We didn’t expect that to happen so often. But we think it is great—it’s a new way of dining out and meeting new people! So Thai people, come and register as a host or join Withlocals as a guest 🙂
What recruiting methods are you using to get local cooks, tour guides, and artisans on board?
We use several different recruiting methods. We received a huge amount of media attention, from which a natural flow of new sign-ups comes in. From a paid campaigning perspective, we run several targeted campaigns to approach potential local hosts. Next to that, we have a local ambassador network throughout Asia, consisting of Withlocals representatives who also recruit local hosts for us.
Where there any challenges (legal, technical, or practical) to getting set up working with locals in so many different countries?
The biggest challenge is time—keeping up with the pace the market is developing at, and new competitors appearing in the same or similar business.
In the short term, we have to validate and fine-tune our business model. In the medium term, we are aiming to create 10,000 new locally hosted home dining spots through Asia. The first challenge we see is, as being a marketplace, to keep demand and supply in balance. So not having lots of supply and no demand, or the other way around. The other challenge we see is to keep up the quality and authenticity of the experiences offered on our marketplace during our expansion phase. Our ambassador network and elaborate review system play an important role in this.
Were there any setbacks that you didn’t expect, or anything you would have done differently with the launch phase?
We believe in the principles of “the lean start up”. So we will learn along the way. And during our development stage many changes are already made based on input of hosts and our “fans”. For example, we didn’t expect so many enthusiastic Asian hosts to register on our website in our Alpha stage. Now we are on a run rate of 10,000 potential Asian hosts applying. Our processes, resources, and systems were not calculated for these kind of numbers, so we had to adjust them really fast.
What plans for expansion, if any, do you currently have? And what are the future expectations you have in place?
Our first goal is to open 10,000 new locally hosted home dining spots throughout the Asian region. Right now we’re active in 7 Asian countries and are about to expand to 5 more later this year. On a longer time period, we’re aiming to expand outside Southeast Asia and open-up in more continents and countries.