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.