Why I’m Beginning To Re-Think South America For Nomadic Entrepreneurs

I’ve traveled a bit through South America the past two years, but am re-considering it in light of a few general realizations.

1. Internet is too slow / unreliable for serious internet entrepreneurs.

The last time I was in the USA, I went to a co-working space where the internet was 6.0 Mbps download / 3.0 Mbps upload. Now, this is not the speeds of the new Google fiber in Kansas City, but it was faster than I had ever had before. I could load pages and queue up videos and podcasts in a blink, rather than in a few seconds.

So, because of the fact I basically live from my laptop, the importance of fast, no… very fast internet has really dawned on me.

There is a huge difference between a few seconds and a blink. Consider the 3 extra seconds for pages to load, because I have to load hundreds, if not thousands of pages, per day. If you do the math, over a 5-6 day workweek, you are looking at an extra 6-7 hours you would save with very fast internet.

I am so sick of trudging through the ‘arbitrage’ places like Ecuador, Peru, and Paraguay where the internet is unreliable and/or too slow. Sure, some places might give you 1.5 down / 1 up and you might get a clear Skype call, but that is generally the exception and not the norm.

There are faster internet speeds, if you 1) pay extra to have it installed or 2) go to the more expensive countries like Chile.

If you pay extra, that means you have to get it set up in your apartment, and that can take awhile, subject to the Latin-America ‘mañana’ timetable. You could be waiting a week, two weeks, or more. Plus, you’re only staying a few months at a time, and the owner probably doesn’t want to switch just for you. Plus, it many places it’s cost-prohibitive and you will essentially be paying double your rent.

If you can already afford a good standard of living in the more expensive countries, then congrats, you’ve already made it. You’re not really a bootstrapper any more, so none of this matters. I’d tell you to go to Brazil… But I’ll tell you that I know a number of non-bootstrappers who have had issues with finding good internet, even in Rio de Janeiro.

So the basic idea is that the internet is just too slow and unreliable in many places over here. There are some co-working spaces popping up which address this problem, but from what I hear, I would get more speed reliably over in various parts of southeast Asia and Europe.

2. Potential low-productivity environments.

Minimizing costs are not the only consideration when you choose a place to go to build your business from your laptop. Instead of thinking of costs, you should think of value and whether or not you enjoy where you’re living.

Having said that, there are places in the world where there are too many distractions for your average Joe to get things done. Particularly if you are an undisciplined person, you would not be wise to more there because of all the distractions. (Rio de Janeiro, I’m looking at you!)

Sure, if you are disciplined like a soldier to do work when you need to, I imagine you can still do it. But the reality is that if you are not that disciplined, there are just too many distractions in many places down here… The scenery is too gorgeous, there are trips to take every weekend, there’s always a party tonight, your local friends are always inviting you out, and that cute Latina keeps giving you the eye.

Plus, there is a whole language or two to learn in your spare time.

All of this is a really good part of life in South America. It’s one of the reasons I will come back even if I have to leave. The life is just great down here, in Medellin and in other places.

But all this comes at a cost if you aren’t disciplined. If you’re not careful, you will not put enough effort into your business. Instead, you will get up, check your email, go study Spanish, then go to salsa classes, go to the gym, go meet a girl for coffee, go to dinner, and then go out for the night…

… every… single… day.

This added to the less-than-optimal internet speeds, and you’re looking at a low productivity environment.

If you are in the initial building phase of your business, where you are working to establish steady cash flows, it’d be wiser to put yourself in a high-productivity environment to get things going.

Later on, after you have your established income streams and you can afford a different kind of life, you can spend 5 nights a week partying in Buenos Aires.

… but not before.

3. There aren’t the internet-entrepreneur clusters like in other parts of the world.

Since the low-cost places in South America don’t have the best internet (among other things), there really hasn’t developed a multi-point community in the region that you can hop over to in order to continue the dream, do a visa run, or meet face-to-face with like-minded people who are trying to build a business from their laptop.

There are exactly zero other internet entrepreneur hotspots within a $200 plane flight of Colombia, where you can network and share life with people who are trying to do the same thing you are.

While many internet entrepreneurs seem to be drifting towards Medellin, it seems pretty quiet in the rest of the country.

In Southeast Asia, by contrast, there are a number of spots within a $200 plane flight where you can meet a number of people similar to what you are doing: Bangkok, Chiang Mai, Saigon, The Philippines, Indonesia… all of these locations are geo-arbitrage hostpots where internet entrepreneurs congregate.

There are also various spots in the less-expensive parts of Europe, where you can get insanely fast internet (Prague). Plus, you can get around Europe pretty easily.

4. There are very few inter-country low cost airlines.

On that note, I remember just the other day I was talking to a Colombian who wanted to visit Honduras, but was discouraged because the cheapest flight from Colombia to Honduras was about $700.

He wanted to fly to Miami via Spirit airlines, and then from Miami to Honduras because it was cheaper. But he couldn’t do this because the United States government makes transit visas as hard to get as tourist visas… And they cost an additional $130.

But even if you’re from the USA or Europe, inter-country flights are not cheap. Colombia to Peru will cost you $400. Colombia to Chile, $600. Colombia to southern Brazil, $700-800. Flights from the major cities of Colombia (Medellin, Bogota, Cartagena) to the neighboring country of Panama, start at $450.

I myself have taken a bus through roughly half the continent, and I can tell you it’s not pleasant. It’s one reason why I am more likely to take the plane these days.

But even though I’m inclined to take the plane, I’m not willing to shell out $400-$500 on a regular basis to hop countries. I’m just not to that point financially. Now, if you are at that point, great… but if you’re a bootstrapper, you’re very aware all those dollars could be put back into your business.

So, just to review South America…

Apart from Medellin, Colombia in the north… consider:

There’s nobody in Venezuela or the Guayanas. (Holler back if you are! 🙂 )

Ecuador leaves a lot to be desired. Even though cheap, it’s known more for older or retired expats than young entrepreneurs. It lacks a lot of development, the internet is poor, and thievery is high.

Peru (the next country south) has one major city where things could develop (Lima), but it’s not quite attracting attention yet as it’s a little removed from other cities. It’s a $400 from Colombia, and another $400 to any other major city in South America. The food is great, though… I’d love to see Lima develop into a hub, if it weren’t so cloudy every day.

Bolivia and Paraguay are basically the poorest countries in the continent. Don’t go there expecting good development or fast internet, much less a community of internet entrepreneurs. Sure it’s cheap, the internet is like watching snails in molasses.

After that, you’re down to the expensive hubs– Chile, Argentina, Uruguay, Brazil— where you really can’t expect to live well on $1000/mo, unless you are a spartan. Buenos Aires, for example, has historically been a hub for expats and entrepreneurs, but right now you’d have to live a pretty disciplined existence to flatline your costs there. Plus there’s the inflation of the currency that causes everyone a headache.

And Brazil, of course, is a wonderful country, and I have much more of it to explore… but it should be obvious to anyone that you don’t go to Brazil looking to minimize your monthly burn.

So What Am I Saying?

If you have significant capital and/or want to seek funding for a legit startup, your considerations are different than your average bootstrapper… consider heading to Chile.

But there are significant reasons why if you are a younger guy with a laptop, $10k, and a dream of being a nomadic entrepreneur, South America might not be the best place to make it happen.

  • Erinc

    Ryan, I cannot agree with you more. For the reasons you’ve listed above, I’m planning on moving to Thailand or Philippines sometime this year.

    • Probably a good move, Erinc… who knows, I might be behind you!

  • Christoph

    Is internet really that slow in Colombia? In Mexico I felt like it was generally pretty decent at my place, granted I was living with 2 “nerds”, so that may have been emphasized. I am considering going to Medellin for a few months in October and would have to be able to get on Skype every now and then for like half an hour without interruptions. Is this really unrealistic or doable? Video quality is not that big of an issue fwiw.

    • If you settle down in a big city like Bogotá or Medellin, you can find faster internet and get it hooked up to your apartment. For example, I get 6-8 Mbps download speeds in my apartment right now. But in general (if you travel around the country, are staying in hostels, working from cafes, etc) you’ll find the speeds are not more than 2-3 Mbps down, 1 Mbps up. This may be good enough for Skype, but too slow for me.

    • If you settle down in a big city like Bogotá or Medellin, you can find faster internet and get it hooked up to your apartment. For example, I get 6-8 Mbps download speeds in my apartment right now. But in general (if you travel around the country, are staying in hostels, working from cafes, etc) you’ll find the speeds are not more than 2-3 Mbps down, 1 Mbps up. This may be good enough for Skype, but too slow for me.

  • I found this out the hard way… in 12 days, back to Asia I go. I came to South America after spending much time in South East Asia and pretty much wanted to go right back to SE Asia! I have been in SA for 1.5 months now and seen Colombia, Ecuador and Peru. My budget doesn’t afford me the chance to go to Argentina or Brazil yet. I mean, if I have to pay Western prices for things I would rather stay in the west. Back to Chiang Mai I go. Ryan, are you coming? The girls aren’t as good… but then again I felt like the girls in Medellin are not my type either. 🙂

    • Haha, Timmy! I might end up in SE Asia soon. Where are you headed?

  • Josh

    Its the sad truth. I really wish it wasn’t this way because I have such a strong affinity for latin cultures. I’m afraid of whats going to happen when I go to Asia and experience fast internet and a vibrant digital nomad community.

    • Yeah, maybe… but I emphasize the word ‘nomadic.’ If you eventually decide to settle down in one place, a good bit of this won’t apply. I certainly don’t plan to be nomadic forever.

  • Buses? Planes? Nah bro, I upgraded to motorcycle and have never gone back. Get yourself a motorcycle for 2,500,000 COP and shred through the winding mountainous roads like a stud.

    • Haha, not a bad idea! 🙂

  • Man these are all interesting reads.

    I’m a Drupal developer and have been plotting to get back to SA since 2006 and I can say cash flow is sweet.

    My favorite place is Argentina and now that I have opportunities to work remotely and cash flow to pick up and go their politics make it for the time being a poor prospect for launching a travel site. Just my luck lol

    Luckily I can trade time for American dollars or equity in a start up as long as I have some internet. I do recall is Argentina having crazy fast internet, back in 2004/5! But I really only encountered those speeds at the internet cafes.

    • Yeah, I’d say Argentina has lost a lot of its status as a favored expat destination (even though many people still love it), but maybe things will change once they cycle through these terrible government policies and come out the other side.

  • I have been reading your blog for the half hour and I wanted to say thanks. It’s really great! I have lived in Mexico and Argentina but have very little experience anywhere else. I am not yet an “online entrepreneur” but I’m working on a project currently. I have two separate jobs teaching online English and Spanish for a small college in the states. I have been eyeing Colombia and Florianopolis, Brazil for some time now. Income will be at about 1,800 per month. Do you have any general suggestions / recommendations for me? I’d appreciate any info you could throw my way. Mil gracias hombre 😀

    • Hey Levi – Thanks for reading! Colombia will definitely offer a lower cost of living than Brazil, but $1800 is probably enough to get by in Floripa if you want to… The winter (May-Nov) there is not that great as so many people leave the island (prices are lower though), and the summer (Dec-Apr) the prices for everything go up when everyone returns.
      If you already know Spanish, Colombia is a great place to hang around! 🙂

  • I just did an informal Facebook poll of expats living in Guayaquil, Cuenca, and Quito (all Ecuador) to see what their internet speeds look like. I asked for screen shots of their speedtest.net result page and I asked what speed they were actually paying for.

    Some results were abysmal, less than 1 MBPS download. This was mostly from people in Guayaquil who were paying for the cheapest plan their provider offered.

    But, in Cuenca some people were consistently getting 11-14 MBPS down, even though they were paying for 7 MBPS. It’s still not quite as fast as my FIOS at home, but totally fast enough to get work done. There are also plans to build a “technology city” in EC to attract IT types. It’s being built right now as far as I can tell.

    I totally appreciate this point of view, though. I’m not sure that I trust people who say the internet is “good enough” when they don’t cite actual speeds (this mostly comes from retiree blogs). All I can assume is that they are retirees who only need to check their email and who don’t watch streaming videos. I’m a completely different demographic than most people expatriate to EC (as you said in this post). I’m not retiring, but want to have a location independent place to work. Seems like it might be possible, but not necessarily easy.

    • Great research Kat, definitely agree! One thing about Ecuador is that even if some people are getting those good speeds, they have to get it all hooked up to their house or place of business, and this can be a real hassle (inconvenient terms + not exactly 1st world service)… But I am hoping more co-working spaces pop up acrosss South Am so that I can just swoop into town and have good speeds to count on.

  • Daniel

    Hi Ryan. Great post. Im from Chile and most of the information that you share is true.
    I work from home too.

    From my research Chiang Mai is a nice city to start on SE Asia.
    The only problem is on the Visa Run, every 3 months back to cambodia again and i hate laptops i work only with Desktop Machine, more powerful.

    Imagine making visa runs every 3 months with my desktop baby!