Despite the recent political turbulence, Bangkok is attracting entrepreneurs from across Asia and around the world
Bangkok may not seem like the most obvious place to start a business. In the past decade alone, there have been two coups, seven prime ministers, a deadly flood, power outages and regular protests. And yet many entrepreneurs are flocking to the capital – not just for its late night curries and thumping nightclubs but as a place to start businesses and set up a south-east Asian basecamp. Entrepreneurs who have been working and living in the city for years are largely unfazed and have learned to just get on with things.
This upsurge in startup activity is most evident at the city’s packed-out events, such as Startup Week Bangkok, which offers five days of free events, and Startup Thailand, an extravaganza hosted by the Science and Technology Ministry. There’s also plethora of more informal networking events that bring people together for drinks. Travis Bennett, founder of Studio Digita, the digital agency, has been based in Bangkok since 2009 and has seen the number of events and networking events swell relatively recently. “Five years ago, Bangkok’s startup scene was in its infancy,” he says. “It’s slowly been gaining momentum. While in the past I struggled to find events to attend, now there are so many that I struggle to make it to even a fraction of them.”
And given that Bangkok is such a sprawling city with no real centre, startup activity isn’t concentrated in one spot like it is in London’s Tech City or Silicon Valley. Instead, you’ll find budding entrepreneurs and freelancers embracing the gig economy dotted around the city’s co-working spaces and cafes, sharing ideas and making connections.
That said, if you’re hopping off the plane and want to get a sense of the startup scene, make a beeline for the Sathorn district, especially Sukhumvit Road, Bennett recommends. And once you spend a bit of time in the city, it starts to feel much smaller. “The expat and startup community is actually quite close knit,” Bennett adds. “If you spend enough time here you’ll get to know a huge number of people.”
Besides its events calendar, the presence of co-working spaces is another good indication of a thriving startup community – and there are plenty in Bangkok. At HUBBA – one of the first in the city – and hipster-friendly Growth City & Co, a diverse mix of expats and locals can be seen peering at their MacBooks and lunching together on communal tables. Nithipont Thaiyanurak, founder of WashBox24, the laundry locker service, is a regular. “We’re part of a community of startups and we’ll often meet at HUBBA to exchange ideas,” he says. “It’s just the place to meet like-minded people.”
The fact that co-working spaces are popping up is not a huge surprise. In fact, it’s just the modern day equivalent of Thais setting up passion projects and small-scale businesses from their kitchen table or pitching up on the roadside to sell homemade snacks. Thais have a get-up-and-go attitude and a long tradition of starting their own ventures. But the upsurge in startups is fairly recent, according to Thaiyanurak. “Things have really started to pick up in the last couple of years,” he says. “A couple of things came together at the same time.”
First, the cost of starting up is lower than in neighbouring cities like Singapore and Hong Kong, as is the cost of living – many expats and entrepreneurs live in comfortable condos. While demand for office space is hotting up, new developments are being built and cheap rentals are still up for grabs. Labour is affordable and the transport network is more developed than in up-and-coming hotspots like Laos and Vietnam while still being reasonably priced.
According to CBRE, the consulting firm, Bangkok ranks 109th among 126 in a league table looking at which cities are the most costly to do business in. Bangkok appeals because it’s got the right balance between being relatively affordable while also being developed enough to cater to the business community.
There are also plenty of smartphone-carrying, e-commerce-using urbanites for whom shopping online and on mobile is second nature. This is a country where 50% of all online purchases are done via mobile devices and smartphone penetration is predicted to reach 90% by 2018. Hop on any train or visit one of the city’s sprawling shopping malls and one thing becomes clear: young people love their devices.
They communicate on them, shop on them and, of course, take copious numbers of selfies on them. “It feels like everyone here has a smartphone, which means they’re connected and always online,” Bennet says. The fact Thais are highly engaged on social media also makes it possible for startups to build an audience quickly. “Everyone’s on Facebook and one of our malls has been named the most Instagrammed place in the world,” he says. “This is contributing to a thriving digital ecosystem.”
Bennett puts the growth spurt in e-commerce businesses down to the arrival of Rocket Internet, the German startup accelerator, which entered the scene with Lazada and Zalora. “Rocket’s entry into Thailand changed everything, “ he says. Soon after the two e-commerce platforms took off, Thais were embracing online shopping and new entrants started flooding the market, often with a local twist. But there’s still plenty of room, especially for companies that have come about to serve the needs of an increasingly affluent yet time poor population, such as Ginja, the food delivery business, and Wishbeer, the online craft beer ordering service.
And once they’ve built up an audience in Thailand, the city’s prime geographical location means entrepreneurs in Bangkok aren’t limited to the domestic market. They also have access to booming economies throughout Asia like Vietnam, Laos and Cambodia, where the middle classes are growing in numbers and purchasing power. Additionally, that flow of people and ideas goes both ways, creating a melting pot of cultures, skill sets and ideas. “Bangkok offers something different because you have people from so many different walks of life,” Thaiyanurak says. “When we were first starting up in Asia, we looked at Bangkok, Singapore and Jakarta. But we ended up choosing Bangkok because it has a good mix of people and a blend of suburban and city life.”
Bangkok’s ability to look outwards is also helping many startups overcome the fact that raising finance within Thailand can be difficult. Although the city isn’t exactly awash with angel investors, there are plenty of venture capitalists based nearby in Japan, Hong Kong and Singapore. Throwing more funding into the pot, Thai banks have established their own fintech units and there’s lots of support from the likes of TechGrind Incubator, an incubator for tech startups, and MSeed, Thailand’s first gaming accelerator, which mentors gaming startups and helps them get in front of international funders.
But beyond its networking events, finance injections and smartphone-savvy shoppers, Bangkok is also favoured for its ability to offer entrepreneurs and workers a healthier work-life balance, not to mention the option to take weekend breaks in Ko Samui, Phuket or other Asian countries. “The great thing about Thailand is you’re never far from a stunning beach,” says Bart Medici, startup advisor and founder of Bangkok Entrepreneurs, the meetup group. “I love going to the beach at the weekends; it’s so easy to reach from the city. Bangkok can offer a great work-life balance.” And while the proximity of sandy beaches might not seem like the most obvious factor when it comes to judging a city’s startup-friendliness, it does help attract a diverse talent pool.
However, starting up in Asia’s second biggest city isn’t without its challenges. The red tape can be off-putting, especially for a foreigner looking to start up in the capital. But with the right local advisor, it doesn’t need to be an issue. “There are lots of laws and regulations about foreigners doing business here,” Bennett advises. “You either need to let the Thai partner have control or create a board of investment company. Most governmental processes are in Thai, so you’ll need a local agent or law firm to help you navigate.”
The government, for its part, has made supporting startups a key part of its agenda.And while not everyone feels they’ve seen the benefit yet, its commitment to improving public transport and making high-speed internet a reality for more people throughout Thailand will make it easier for businesses across the country to come together. It is also supporting startup events, offering tax breaks and taking an outward-looking approach, having just teamed up with Japan to encourage startups in both nations to cooperate.
Whether the government can take credit or not, something’s clearly going right. There are plenty of companies setting up in the capital that are proving its entrepreneurial credentials. Just look up on the city’s rooftops, where EnerGaia, the startup founded by Saumil Shah, is turning otherwise unusable spaces into urban farms with the aim of providing people with fresh, sustainable produce. “I came to Bangkok nine years ago and wanted to test my idea around growing microalgae in closed tanks to make biofuel,” he says. “The low barrier costs helped me start up on a modest budget.” EnerGaia is one of the capital’s success stories. And no doubt there will be plenty more to come.