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Friday, 4 January 2008

Where to Start Your Lifestyle Company

Filed under: Life & The Universe — Jan @ 18:34

Do you have to move to a 3rd world country before you can start a lifestyle company? That’s what I was asked when describing my own business as a lifestyle company. In the first part of my answer, I explained that differences in people’s expenditures in different countries are much more a reflection of different living standards, rather than the same life costing less.

Today I’ll discuss whether or not only cheapskates can have lifestyle companies. Just Great Software began as my hobby in 1996 and my full-time business in January 2000, in my native Belgium. Belgium offers a high standard of living, high prices, and high taxes. In November 2002, I moved to Thailand, and took my business with it. Since it all ran on the Internet, it was simply a matter of packing my laptop (and more paperwork than I care to remember). Some things, like eating out at a restaurant, got cheaper. Other things, like buying a computer, got more expensive. We lived upcountry. Buying a high-end PC involved flying to Bangkok.

Having lived in two very different countries, I can tell you that you can have a lifestyle company anywhere. Which place is the best place to live all depends on your personal view of the ideal lifestyle. I have heard stories of college-educated westerners who moved to rural Thailand to take up farming, living just a notch above the subsistence level. If such a life makes you happy, it doesn’t get more lifestyle than that. Remember that “lifestyle company” means to run a business that allows you to enjoy life the way you want to, as opposed to running the rat race chasing money.

But at the same time, starting a lifestyle company doesn’t mean you have to be totally detached from money. I coined the name “Just Great Software” because I wanted to focus on building the best products I could, rather than obsessing with quarterly figures. But I don’t give them away for free. It’s only fair that I get paid if I do a good job.

I firmly believe that people who run an honest business that focuses on product/service quality and customer satisfaction, and that provides customers with a genuine benefit, money follows automatically. People just can’t keep a secret. If you bake the best pies in town, pie-lovers in your region will soon find their way. But you will need to have the courage, and money, to buy the best ingredients right from the start. And the dedication to bake them fresh every morning. You’ll never make it to Wal-Marts shelves with that strategy. You’re too expensive. But that’s exactly why the pie-lovers will find you.

So, should you move to a cheap place to open your bakery? I don’t think so. Places are cheap for a reason. People in expensive places are far more likely to have the disposable income for your pies. Poor people don’t value their time, and will haggle endlessly.

You definitely need to consider the state of the local economy where you consider to start your business. If you live in a cheap place, you will have more low-cost choices available for your own lifestyle. But you’ll likely need those. Bootstrapping in an expensive place may be more difficult/expensive, but the potential rewards are likely greater. In the end, the happiest choice is to simply live in a place that makes you comfortable and happy to be who you are. Then find something that you enjoy to do, and that somehow improves people’s lives, i.e. something people will eventually be willing to pay for. As your skill improves and word spreads, the laws of supply and demand will shift in your favor, and you’ll be forced to charge a fair price to make sure you don’t get more customers than you can handle.

So what about online businesses? Live in a cheap place, and sell all over the world, preferably into expensive places. It may sound like a get-rich-quick scheme, but it really isn’t. If your business really sells to the whole world, you’re also competing with the whole world. And some of your competitors are going to be based in an even cheaper place. And some will take the opportunity to undercut your prices. I don’t recommend that you make a business plan that requires you to live cheaply forever, unless living cheap (or should I say: simply) is what makes you happy.

Competing on price online doesn’t pay when your second-cheapest. The cheapest one is only a click away. You don’t want to know how low the competition will go. Can you imagine that workers from Burma and Laos migrate to Thailand because of it’s high wages? We’re talking $150 to $200/month for unskilled labor here. It’s quite normal, actually. Just like workers from Mexico come to the US.

I certainly didn’t move to Thailand in order to save money. And I didn’t. Both my expenses and my quality of life (given my personal preferences) are higher now. Our own lifestyle choices are the reason why I moved to Thailand instead of my wife moving to Belgium. Many other couples make the opposite choice, with the same result (given their personal preferences). Knowing what makes you happy, what keeps the wheels in your mind and body turning, that’s the key to a successful lifestyle company. If you get your priorities wrong, no amount of money or discount coupons will save you.

So how much do I make? While that’s a very normal question in Thailand, it’s a big no-no in Belgium. So I won’t say. But I will say I could live pretty much anywhere and afford my family the local standard of living. Getting a 9-to-5 programming job in Silicon Valley would likely be a pay cut for me. So yes, I truly believe that if you focus on your own quality of life and the contribution your job or business makes to others, money will follow. And you can do it wherever you live. Just don’t get greedy, or allow others to make you greedy. Then you end up running the rat race, or overseeing a big office full of treadmills.

3 Comments

  1. These last several posts have been really excellent. Your perspective on cost of living is unique in my reading on the subject, but clearly spot on correct. I am inspired by your success since the days when I first got a copy of EditPad and sent you a postcard in exchange. Keep up the good work!

    Comment by Andrew — Saturday, 5 January 2008 @ 1:20

  2. Nice Post Jan.
    This remind me the discussion we had during the European Software Conference in Cologne, in Nov 2007 :-)
    (In case you do not remind me, I was one of the 2 French guys you had dinner with)

    I wish you a terrific new year 2008!

    Best Regards from France,
    Tarek

    Comment by Tarek Demiati — Monday, 7 January 2008 @ 8:33

  3. Who could forget such a handsome guy? :-)

    Comment by Jan — Monday, 7 January 2008 @ 16:32

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