blog.yongfook.com

How to Build a Business by the Beach

September 04, 2014

From 2001 to 2011 my home was Japan.

From 2011 to 2013 my home was Singapore.

From 2013 onwards my home is everywhere and anywhere.

The kick up the ass

In August 2013 my lease was up on my home in Singapore. I had the choice of renewing, or finding another place to stay. By this time I was already working on my new "startup" although that's a very loose definition. I had registered a company in Singapore and was figuring out what to do with it, money coming in sporadically from a few different online sources, as well as some consulting.

August 2013 video of me in my old apartment, just before I left:

Every day my life was the same. I'd head downstairs to get lunch. I'd go to Starbucks or a cafe and do some work. Then I'd come back home, make dinner and sleep. Nothing struck me as wrong with this life, until my lease was due for renewal.

I took a step back…

You know what? This is crazy. I could be doing this work from anywhere. And the rent I pay for my apartment in Singapore? - I could live like a king on a beach in Thailand!

That was the kick up the ass that started what is now a year-long life on the road. No fixed home. All my old furniture etc is in a storage unit in an industrial complex in Singapore. One suitcase, over 20 different countries/cities, over 50 different hotels. Staying from 2 to 4 weeks in one place and then moving to another country. Having new experiences, making new friends.

And while all this was going on, working on a software business that now pays for this lifestyle - and is growing.

This blog post is a presentation I've been giving in a couple of different places, with some of my notes. The main purpose of this presentation is to hopefully get more young people thinking outside the norm a little bit - that there's an alternative life to going to work in an office every day, that it's possible to earn your own way independent of an employer, and that you can eventually build this up into something substantial, something that will far surpass a corporate salary.

And most importantly, having complete control over your independence, working from whatever location you see fit. It sounds way too awesome to be true, but I'm living proof that this can work, if you are determined.

What my life now looks like

This is how I spent the last 12 months:

And here's a rough list of the main places I've been:

As you can see it's a bit of a mix between beach, city and inland locations. It's also been a whole year and I've only really explored Thailand, Malaysia, Vietnam and a bit of Indonesia. The world is a big place.

I do all my hotel booking through Agoda, usually extremely last minute. One thing I love about this lifestyle is just packing up and leaving when you feel like it. I book one-way flights, and then book my hotels in 5-day blocks. That way, I can change to a different hotel in the same place to get a change of environment, or I can simply decide I've had enough of that city/country and pack up to go somewhere else.

Your mileage may vary, but my business is a social media software business (software as a service) and these things take time to get up to speed. It took 6 months of hustle to get the business to the point where it's now 100% sustaining my lifestyle, but in the grand scheme of life, that's actually a very short time.

You don't need to be rich

Just living this lifestyle for a couple of months, you entirely re-evaluate how much you need to live and have a fulfilling life. Yes, we all want to be rich, we all want to earn $100k a month lazing on a beach - and perhaps that's your ultimate digital nomad end goal and there's absolutely nothing wrong with that (that's the direction I want my business to go in too!). But to sustain a beach-going, nomadic lifestyle, you actually don't need anything anywhere near that.

Disclaimer: Don't get too fixated on this number. It's a benchmark, not a one-size-fits-all. For a single person, earning this amount of money by yourself means you can have the lifestyle described above. But if you have special circumstances (spouse, car payments, crippling foie gras habit), use your head.

The $2k USD a month number elicits two kinds of responses:

Young fresh grads might be horrified at the $2k USD number, especially since in Singapore that's often higher than an entry level monthly salary at a corporation. On the other hand, older execs who've maybe had a few senior roles (like my sort of age) will turn their nose up at the number - why would you work for such a low salary?

To the young folks - we'll talk about how you earn $2k a month a little later.

To the older folks - this lifestyle isn't about replacing your corporate salary right away. If it were possible to go from earning $10k a month at a corporation to immediately earning $10k a month by the beach doing your own thing, then everyone would be doing it! In the beginning, some sacrifice is necessary as you take a pay cut. But what you get in return is 100% freedom, while all your basic needs are covered (food, roof over your head, fulfillment in what you do). Oh and by the way, you're working from the fricking beach now.

In addition, both parties should view $2k as just a milestone that you eventually surpass:

For me, that milestone took about 6 months, to work my way up to a reliable $2k USD per month. And another 7 months later, I'm on my way to replacing my corporate salary. And by the way I'm working from the fricking beach now :)

$2k a month is what you need to sustain the lifestyle. But of course you're going to grow your business from there, and from that point onwards everything is gravy!

Revenue model brainstorming

Lets get practical.

There are certain businesses that suit this lifestyle, and others that do not.

First off, you will need to focus on businesses that are high profit. So when you're business model brainstorming, always think about costs:

High revenue and high running cost businesses just don't make sense for the digital nomad lifestyle - you need a business that can quickly scale to a level of profit that can completely sustain your life. And the key: with no outside funding. You've got to do this by yourself. Why? Try telling an investor that you're going to bugger off to work on a beach in Bali for a year on their money, and see how far that conversation goes…

Next, you'll need to think of "low touch" or "low maintenance" businesses. Reason being you want to enjoy your new independent life, not be tied down with conference calls with clients, for example. Selling digital goods online is an excellent example of a low touch business. Customers find you online, initiate and complete a transaction without your involvement. The best businesses are the ones that make money while you sleep.

B2B is more of a personal preference for me. I just think it's easier to sell B2B products and services, and you can draw on your industry domain experience to help you here.

Having a well defined target always helps. You need to be able to pinpoint one specific customer demographic that your initial product is aimed at. It makes marketing a hell of a lot easier.

So now that we've understood these basic rules, lets have a look at some stupid ideas for businesses to run as a digital nomad:

Note there's nothing wrong with these business models. They just aren't suitable for the digital nomad lifestyle. Consumer-oriented businesses generally steam along on venture capital, earning no revenue, until they are acquired. You can't do this as a digital nomad.

Physical businesses (such as ecommerce) generally require you to be in a fixed location and have some hand in the fulfillment of your products - sure you can outsource it all but what happens when something goes wrong at your fulfillment center and you're 800 miles away on a beach somewhere? You can't do this as a digital nomad.

Finally transactional-revenue businesses (e.g. earning a dollar on every sale made via your platform) have produced many startup successes but again, these are generally funded via venture capital and take time and bucketload of hustle to get to scale. This is impractical for a digital nomad lifestyle.

Lets look at some good ideas for businesses as a digital nomad:

These are all variations of the same thing really, but for different skill sets. They all fall under the mantra of "make once and sell many times". If you're a writer, you can write books and sell them. If you're handy with some front-end web design, you can make wordpress templates and sell them. If you're a full-stack engineer, you can make a software service and sell it.

Once you start thinking about actually selling things for money, it's remarkably simple to get to the mythical $2k per month in revenue:

This is all great in theory, but it's always best to see a real life example. Here's my story.

My story - from launch to $2k per month profit

After a number of failed MVPs in 2012/2013, I decided to go "Lean" with my next project:

This gave me enough validation that I was on the right track. At the time, nobody was focused on content-creation for social media (because it's a damn hard problem to solve!) - since then other companies such as Hootsuite and Buffer have dipped their toes in, but for Beatrix it was and always will be the core focus.

I packed up my life in Singapore and vowed to use my first month as a digital nomad productively. I spent 1 month in Koh Samui building the Beatrix MVP:

And then it was time to launch. Launching a new product or service is like conducting a symphony orchestra. So many different things to keep track of - but roughly speaking here's the important stuff I did:

…and from here on out I basically got into a routine of gathering feedback from customers, improving the app, and improving stuff like the onboarding process and lifecycle marketing. It took about 6 months to get to $2k per month:

Fast-forward to August 2014 (one year from launch):

I think SaaS is probably one of the more "high maintenance" forms of digital nomad business. I'm constantly improving the app and constantly marketing it. But since software and social media is what I love to do, I'm pretty happy doing it :) My time is also 100% flexible too. Some days I'll work all day on Beatrix from morning to night, other times I'll just take a day or two off.

Always be creating - a surprising extra income source

Quite by accident, I ended up writing a book earlier this year that has done better than expected. It was suggested to me by Guy Vincent, founder of crowd-funded publishing platform Publishizer:

Here's the successful campaign page link.

One thing that struck me is how remarkably similar launching a crowd-funding campaign is, to launching a new startup. It's got all the same ingredients: constant hustling, measurable metrics, multiple promotional channels, nailing your value prop and presentation etc.

It was such a good exercise that I now recommend all entrepreneurs to try crowd-funding something before launching a proper startup. It will give you a whole bunch of practical experience.

I wrote up my crowd-funding campaign in this "how I did it"-style blog post. If you're about to launch something like a crowd-funding campaign or new startup, it's worth a read as I go step-by-step into what I actually did to promote the campaign.

The result? Well apart from over $12k USD in preorders for the book, now even 6 months later…

That's a pretty nice extra chunk of "passive" income :)

I'm no expert on writing, but if I could give three basic tips to follow, it would be this (similar to the "good idea / bad idea" stuff above):

Total monthly income

So roughly speaking, over the last year I've gone from zero to:

Which translates to roughly $6000 Singapore dollars per month. Not quite my old corporate salary, but it's getting there. But for me, none of that is important anymore. The important stuff is that I'm working on something I love, I don't worry about money because my basic needs are more than covered, and…

I travel whenever I want. I work whenever I want. I don't work whenever I want. I get up late, I get up early. I learn bits and bobs of new languages. I make new friends from different countries. Every day is mine to shape as my own.

I honestly can't imagine working any other way.

And one day in the future, when Beatrix has grown and it's time for me to rent an office somewhere and bring in a small team - you can bet that this experience of traveling is going to shape the company culture for the better. In fact, I'm really looking forward to when that day finally comes.

Finally, to end on a delicious note…

The Top 10 Things I Ate While Traveling Around Asia

Anyone who follows my Instagram account will know that I'm all about the food. Here's the top 10 things I ate over the last year - this was an incredibly difficult list to put together! I had so many amazing things… but here goes…

…and the majestic…

Hope you enjoyed that post :) I don't blog so much these days, but I am very active on social media - particularly Instagram for photos and Facebook / Twitter for thoughts/opinions, so feel free to follow me on either of those platforms :)

If you'd rather share the Slideshare link, here it is:

Link to the presentation on Slideshare

Cheers and good luck with your startup and digital nomad life!