At first glance, the term “expat-preneur” appears to be a perplexing paradox. Expatriates around the world are typically associated with comfortable high-salaried positions, which is quite far-flung from the extraordinary risk that comes with entrepreneurial endeavours. It is quite a feat to uproot your entire family for a job opportunity in a foreign land, much less for a risky venture with uncertain returns.
However, quite surprisingly, expat-preneurs are fast becoming a significant community around the world.
In fact, the term itself comes not from social media parlance, but from academia – coined by Dr. Yvonne McNulty, a professor at the Singapore Institute of Management. The “expat-preneur” is briefly put, a “traditional expatriate with an entrepreneurial culture”.
The growth of this unique community begs the question: What motivates expatriates to become “expat-preneurs”? And what have led to their phenomenal success?
Check this out: Infographic: Rise Of Expat-preneur And Its Demographic
The motivations behind an expat-preneur
As contemporary counterparts to seafaring traders and travelling merchants in antiquity, expatriates who have taken the leap of faith parted ways with their motherland are likely to bear certain traits in common with an entrepreneur.
Risk-taking and the need for adventure, for example, are already inherent traits, and being in a foreign environment enables them to take on risks that are not available to them back in their home countries.
Where then, do expat-preneurs seek unprecedented opportunities?
While Central and South American countries like Mexico, Ecuador and Panama are favourable places to start a business due to the abundance of leisure opportunities and quality of living, Southeast Asian (SEA) nations such as Singapore and Thailand draw a significant share of expat-preneurs due to their business-friendliness.
SEA’s burgeoning rise as a relatively new market, its ideal geographic location, relatively safe environment, favourable tax and business conditions as well as growing public interest in entrepreneurship, all contribute to SEA’s popularity among expat-preneurs.
Singapore, especially, is a hotbed for expat-preneurs, with the strong business infrastructure in place, easy access to capital and also easy incorporation processes. Instead of waiting for opportunities to surface in their home countries, expat-preneurs go to where the opportunity is the strongest.
The struggle of localising from the outside
While personal reasons and needs might motivate expats to start their own businesses overseas, the success of expat-preneurs may vary due to a multiplicity of factors.
Expats can leverage on their position as a vantage point to observe and analyse market needs from the perspective of an outsider. The ability to survey the market for opportunities without being clouded by domestic “noise” enables expat-preneurs to identify and capitalise on business opportunities easily.
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However, whilst the outsider’s perspective provides a good vantage point, it may also become an impediment to progress.
In any business venture, localisation is imperative for success. No matter how compelling your idea is, if it does not resonate well with the locals, the likelihood of success is low. What works in one country may not work in another, especially for Asian markets where the business climate is vastly different from our Caucasian counterparts.
It may also prove to be a challenge for expatriates to navigate and negotiate business due to the cross-cultural differences. The conservative nature of Asians permeates the business world as well, and Asian businesses are observed to have a more familial nature, with partnerships forming from their own trusted networks.
Drawing our focus to the context of Southeast Asia, the success of expat-preneurs is highly dependent on whether they are able to bridge the cultural, linguistic and social divide between them and locals, as well as how developed the business infrastructure is in Southeast Asian countries.
With the exception of Singapore, there exists a significant language barrier for Western expatriates looking to start businesses in the region as well. While the region is witnessing the rise of an affluent middle class, the demands and wants differ according to country and expat-preneurs would do well to focus on these specific preferences.
As a region, SEA has little homogeneity – this motley group of nations includes highly urbanised countries such as Singapore, as well as less developed countries such as Laos, Cambodia and Myanmar.
Even on an intra-national scale, the demands of urban cities such as Bangkok and Kuala Lumpur differ greatly from the rural hinterland. However, it is the start-ups that are capable of identifying the needs or problems and capitalised on them while adequately tackling potential challenges that have found success in SEA.
Synthesising foreign opportunities with local ideas
MyDoc, a Singapore-based start-up which focuses on utilising technology to improve healthcare communication, offers a platform for medical professionals and patients to manage their medical services, reducing the administrative and logistical costs.
Co-founded by Dr. Vas Metupalle and Dr. Snahel Patel, MyDoc aims to keep things simple for healthcare providers and patients in response to Singapore’s rapidly ageing population.
Pawnhero, a Philippines-based online pawnshop co-founded by German expatriate David Margendorff provides Filipinos with a cheaper, safer and more convenient alternative to traditional pawnshops.
Recognising the high interest rates in brick-and-mortar pawnshops, as well as the need for short-term credit solutions, expat-preneur Margendorff saw the opportunity to create an easy solution for Filipinos to pawn their items on a quick and short-term basis.
In both cases, expat-preneurs have managed to identify local needs rather than differentiate themselves as foreigners. Furthermore, when expat-preneurs are able to synthesise their “out-sider’s vantage point” with connections made with locals, they will be able to obtain market in-formation and developments more easily, whilst building strong business relations in the long term.
Ultimately, expat-preneurs, driven by their appetite for risk and adventure, will venture to where opportunities are greatest. As business infrastructure and the ease of doing business pick up in SEA, it is certain the region will become a potential hotbed for expat-entrepreneurship.