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The five hottest start-up cities for entrepreneurs in Southeast Asia

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Dateline: Port Vila, Vanuatu

Yesterday, I was invited to a local “Who’s Who” gathering in order to meet one of the rising stars of Silicon Valley. Fifteen local business leaders got together to meet with a guy who has been making hundreds of investments around the world and is on a listening tour to find the next best places to invest in tech, agriculture, and real estate.

It validates what I’ve believed from the beginning: that the best and often only way to learn about the opportunities in a certain country is not from reading blogs or calling lawyers, but from on-the-ground intelligence in places like here in Vanuatu.

One of the most interesting things mentioned by our guest speaker was the idea that Silicon Valley is realizing the need to open up. For so long, the US tech scene has operated as an insular bubble and now appears to be interested in reaching out to the rest of the world for knowledge.

This only makes sense; for years, we’ve discussed the idea that companies would flock to other mini-Silicon Valleys around the world either out of necessity or when they realized that the costs of doing business in California were simply too high.

No place has a monopoly on good ideas, and it’s great to learn that Silicon Valley is catching on.

When I fly over Southeast Asia en route to Europe tomorrow, I will be flying over one of the highest probability regions for entrepreneurs and new business in the world. It’s been long said that the twenty-first century will belong to Asia, but Southeast Asia, in particular, holds some of the greatest promises in my opinion.

While the typical raison d’être of digital nomads in Southeast Asia is the cheap cost of living, I also believe that it is one of the easiest places in the world to start a business. While eastern Europe is a good place to live, hire, and run a location independent business, so too is Southeast Asia, only with larger domestic markets in many cases.

This is no secret; companies from Rocket Internet to Lazada have poured into Singapore, Malaysia, Thailand, and even more developing markets like Cambodia.

Today, some of these countries represent the hottest commodities in the tech space, from regional e-commerce to SAAS to fintech and more. You would be forgiven for not knowing which cities are the hottest start-up corridors because they are not always located in the capital.

A friend of mine who works at real estate firm Jones Lang Lasalle in China recently sent me a list of the top five “buzzing” start-up cities in Southeast Asia, and I wanted to share my ideas about them.

1. Penang, Malaysia

The list from JLL claims that strong government support and a great local accelerator have made Penang the hotspot for start-ups in Malaysia. As a big fan of Malaysia myself, I can see the appeal of setting up shop there, from a diverse workforce to a culture far more open to foreign business than Thailand.

Penang is the only majority Chinese state in Malaysia, which may make it feel more open for Chinese and Malaysian-Chinese entrepreneurs, as well as foreigners. The fact that it is increasingly as well-connected as big brother Kuala Lumpur doesn’t hurt, either.

I chatted with Jen and Ryan, bloggers at  Passion and Places who have spent some time in Penang on their travels throughout Southeast Asia. Here is what they had to say about the city:

”Though it can feel pricey coming from other parts of Southeast Asia, Penang is still a bargain compared to most places in the West. The island’s main city of Georgetown is known for its delicious, cheap food, and its prominent street art lends a creative vibe. Georgetown boasts several co-working spaces and plenty of coffee shops that double as workspaces for entrepreneurs. An easy train ride or short flight from Kuala Lumpur, Penang is accessible for anyone wanting to start up a physical business there or just work remotely from the island for a while.”

2. Da Nang, Vietnam

Hang out in foreign entrepreneurship or investment circles for five minutes and you’ll hear about Da Nang. As northern Vietnam has always been more bureaucratic and less business-friendly, and Ho Chi Minh City is largely saturated, Da Nang has been pointed to as the next big thing. Vietnam has a huge domestic market of 92 million people, among the largest in Asia, and its role in the region will likely only increase.

Major investment from some big players is driving the startup scene, as is a small incubator and a new innovation fair that aims to make Da Nang the “Innovation Hub by the Sea”. Even Apple has been alleged to be getting involved. Foreign investment in Vietnam has always seemed to be a long game, so I wouldn’t expect overnight success, but Da Nang is on a lot of peoples’ radars.

I asked Jeremy, a blogger at Think Travel Lift Grow, who has spent past few months in Da Nang to explain why he loved it so much:

”From my recent experience and the time spent there, I can say it’s an emerging tech hub by the sea with a certain charm to it! It’s got a huge young skilled population. It’s turning into a fertile ground for new innovations with international conferences (DevDay, Google dev) being held here, incubators opening up as well as international startups choosing Da Nang for expansion. The beautiful beaches plus the urban infrastructure is resulting in a growing digital nomad community as well.”

3. Bandung, Indonesia

You may have heard of Indonesia’s capital city of Jakarta, and you’ve no doubt heard of Bali. However, most people outside of Southeast Asia couldn’t point to Bandung on a map. In reality, it’s one of the regions most creative cities with a mayor intent on turning it into Southeast Asia’s answer to Silicon Valley. He will no doubt have a lot of competition, but for more artistic and creative ventures, Bandung is definitely a place to consider, with a young population and the full backing of local government.

Torsten Jacobi at Mighty Travels, an entrepreneur who has started ventures on 3 continents, has much praise for Bandung:

“The city has likely the best living quality of any major Indonesia city with many walkable, tree-lined streets and a temperate climate. Bandung scores high with its many coffee shops, creative food, and friendly locals. Bandung’s Internet speed is fast enough for most online ventures and for anyone who is more adventurous it might also be a great place to hire a local team.”

4. Bali, Indonesia

From its Hawaii-esque beaches to awe-inspiring rice fields in Ubud, Bali always seemed like more of a place to decompress for me. I imagine quick, three-hour flights from the urban jungle of my home in Kuala Lumpur to meditation and green juices delivered by monkeys. However, Ubud and Canggu, in particular, have become digital nomad hubs, and now some are calling the island “Silicon Bali”.

JLL admits that much of the growth in Bali has been driven by digital nomads or their direct offshoots, but the impact on Bali’s entrepreneur community is now well-formed, and it is possible that Ubud could rise from a cheap lifestyle haven for bootstrappers and into a mini-Silicon Valley in Indonesia.

Povilas Brand, founder of What’s Your Life Purpose,  chose Ubud, Bali as the place to be while working on growing his business:

”I’ve had an opportunity to travel and live in many different countries in the last 12 years, yet I’ve never seen a place like Bali. The entrepreneur community is absolutely phenomenal and you get inspiration every single day. People are very friendly, collaborative and love sharing their knowledge and helping others, which is extremely beneficial, especially for someone who’s just starting out.”

5. Chiang Mai, Thailand

Much like Bali, Chiang Mai has long been dominated by a flood of digital nomads starting everything from Amazon FBA stores to blogs to SAAS companies. Rightfully called “the capital city of digital nomads”, Chiang Mai has become a rite of passage for many seeking to live and work location independently.

That has not gone unnoticed, as everyone from Amazon to the BBC has hosted events in the town, and co-working spaces have cropped up all over the place to cater to the remote workers coming to town. My belief is that, past a certain point of critical mass, it would be hard to turn such a city into one with a thriving local tech scene, but that remains to be seen.

I have asked Christopher Dodd who created the Ultimate Chiang Mai Guide to share his input of the city’s startup scene upon his return from Thailand. Here’s what he had to say:

”Chiang Mai is by far, the most notable and popular nomad city. Why? There are many reasons but none more important than the incredibly low cost of living for such a beautiful and well-developed location. This is a double-edged sword as Chiang Mai tends to attract a younger, more budget-conscious, more transient crowd of individuals which can upset the long-term expats, most of which are much older retirees.

Chiang Mai is a very laid-back and incredibly convenient destination for location-independent knowledge workers and entrepreneurs. However, it can still improve in terms of its start-up scene. The easy-going nature of the city means that few people are working on projects with a major impact. Most are instead, working towards creating their own personal freedom through an easy to start and maintain ‘lifestyle business’.”

The fact is that work and business have been decentralized, and start-ups can now find a home almost anywhere in the world. The need to be in one centralized place will slowly come to an end. One of the most interesting trends in recent years has been the lifestyle start-up hub; there is no doubt that the success of idyllic places like Bali has been driven by the lifestyle benefits there in addition to the collaborative benefits that you’d find in San Francisco or New York.


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