Tue, 07 Jul 2015

From: http://www.cnbc.com/id/102810561

By Aza Wee Sile
Instead of unwinding in the tropical paradise of Bali, entrepreneurs are opting to plug into the island's emerging tech startup scene because of a thriving startup ecosystem, low overheads and, of course, the allure of the beautiful surroundings.

"With the rapid shift in remote working and entrepreneurial hubs popping up all over, [Bali] has quickly become quite a fascinating place for startups," said Andrea Loubier, CEO of Mailbird, a Bali-based email client startup told CNBC in an email interview.

After completing her college education in the U.S., Loubier worked for several years before taking the plunge to seek out opportunities in Asia.

It was in Bali that Loubier met Michael Bodekaer, founder of Livit, an Indonesian-based tech startup ecosystem. He invited her onboard to launch Mailbird, a Windows email client program, which was her first experience of building a tech company from the ground up.

Infrastructure, coworking spaces and startup ecosystems

The IT infrastructure in Bali has grown rapidly over the last three years, with more Internet Service Providers (ISPs) and fiber optic networks.

"There are also many coworking and entrepreneurial initiatives in place to encourage the growth of tech startups," said Loubier.

For example, Livit collaborates with fledgling entrepreneurs and startups, providing them with mentors, specialist resources, growth acceleration and a space to work in one of Livit's six villas in Southeastern Bali.

Another successful startup is Labster, a Bali-based tech science education company that generates scenarios with 3D animations to visualize life sciences and help students virtually go through their lab exercises.

Livit's ecosystem is unique because it functions as a coworking, co-living incubator program. Every need is taken care of, allowing participants to focus solely on their projects. Think of it as a work-and-play retreat with expert guidance on hand for the whole startup team.

Many other coworking spaces in Bali also aim to create a conducive environment for tech startups to thrive, by actively promoting entrepreneurship, business networking and seminars through weekly events and conferences.

One of the island's first coworking spaces, Hubud, hosted Startup Weekend Bali, an intensive 54-hour event aimed at generating strong business ideas and carrying on through with business development plans.

Work space or holiday retreat?

With over 250 members, Hubud is one of the largest coworking communities in the town of Ubud, known as the cultural heart of Bali.

Looking at Hubud's building façade, it could easily be mistaken for a holiday villa. The 'office' is an expansive, rustic villa with open-concept work spaces overlooking a rice fields. There are meeting rooms, an organic café, a swimming pool and reliable internet connections.

This coworking space claims to help workers boost productivity with a great work-life balance, through "sessions of intense focus and creativity, with sessions of deep relaxation and adventure," according to its website.

"I have never been as productive anywhere else," said Peter Wall, founder of Hubud, to CNBC. "There is an incredible creative energy here – everyone, it seems, is making something or creating something and that is contagious."

It is easy to be productive in Bali because help is readily available "whether it is launching a business or help with domestic chores at home," said Wall.

Wall's commute to the office is "a two-minute scooter drive through a forest filled with monkeys," a fraction of travel times in other places, as well as an exotic experience, he said.

Lower overheads and costs of living

Low business overheads and living expenses are other attractive features of Bali's startup environment.

The cost of living in a coworking space in Ubud is about $1,060, while to attain the same quality of living and working in, say, West Palm Beach, Florida, would cost $2,533, according to Nomadlist.com, a data aggregator for the cost of living in different cities around the world.

"Bali allows you to work [on your business] while bootstrapping but still living like a king," said Kristina Viderø, managing director of Livit, to CNBC in an email interview.

With tourism one Bali's main economic drivers, the tourism infrastructure is well developed, from world-class hotels, restaurants and spas, to organic cafes, volcano trekking and yoga retreats. This makes Bali not only a great holiday destination, but also a great place for foreigners to live, work and launch businesses.

Strategic position

As an island province of Indonesia, Bali is in a good strategic position to attract IT talent, entrepreneurs and investments from Jakarta or Bandung, which have more mature IT infrastructure and investing communities. The greater Indonesian market also presents growth potential for Bali-based tech startups to tap into, or the location could be used as a launch pad to access the rest of Asia.

Bali might be an ideal haven in which to come up with new innovations but if the startups want to scale up, there are also limitations to overcome.

"They need to maintain and attract more IT resources to Bali, set up good business connections in other Indonesia cities and internationally, provide competitive customer service and support from their location," Yanna Dharmasthira, research director at Gartner, told CNBC in an email interview.

"Bali is somewhat remote in nature, compared to other cities, and the travelling expenses in and out of Bali should also be considered," she said.

"The island of gods" still has some way to go before claiming the title of Asia's Silicon Valley, but it is nonetheless a great middle ground for digital entrepreneurs to work in a beautiful, non-urban environment and still be close to modern comforts and small luxuries.