So you’ve got a million dollar idea—but not millions in funding. Extending the runway of your tech startup during the early stage could mean the difference between success and failure.
How can you reduce operating expenses in order to stay afloat long enough to produce a minimum viable product, build traction, and gain attention from additional investors? Iglu can help, and there are a couple ways in which we can support startups in Thailand.
Extend your runway by outsourcing product development
The largest expense for a new tech startup is usually employee salaries. When you outsource development you can not only reduce your staff costs, but there are many other indirect savings, as you’ll see in a moment.
First, let’s consider the direct savings on your monthly operating expenses by outsourcing product development rather than hiring full-time IT workers in-house. Let’s say that your product is a mobile app. Even if you’re only developing for one platform initially (iOS or Android), you still may need a few app developers working on it depending on the app’s complexity. In addition to this, your app will most likely require a backend to be built by another developer who specializes in that area. So you could easily have a staff of 3-5 full-time developers on your roster, and this doesn’t include the need for project-management, UI and graphics design, a support website, and testing.
Assuming that you’re in Europe, North America, Australia, or New Zealand, the salaries required to attract local programming talent to your team could be anywhere from USD$3000-9000+ per month per person. The average salary for an entry level iOS developer in the US is $76,654. That works out to $6,387 per month. If we used this as an average salary for your programming team, you’d be looking at about $19,000-32,000 each month to hire 3-5 in-house developers. Hiring a development team though Iglu would be significantly cheaper.
There are many indirect expenses that you’d lower or avoid altogether by outsourcing your programming team. The most obvious one is the cost of your office space. With an in-house team, you’d need to rent out a larger office to house everybody. But this is not the case when using a remote team. You’d also save on your electricity bill, all sorts of office supplies, coffee and other office refreshments, and computer hardware.
All things considered, it’s not difficult to see that you could easily double your runway by outsourcing your product development to a remote IT team.
Extend your runway by relocating to Thailand
The second major way that Iglu can help extend your runway is by relocating yourself or your team to Thailand through our Tech Startup Partnership Program. It’s no secret that the cost of living in Thailand is much less than in most Western countries. If you’re bootstrapping your business, relocation to an area with cheaper living costs is a no-brainer.
For example, in Chiang Mai USD$300-500 per month will be plenty to rent out a furnished condo in a building with its own swimming pool and fitness room. In many US cities you’d be lucky to find a room in a shared apartment in that range. Food is another area where you can save money. You can eat quite well spending just USD$3-5 per meal. Even something a little fancy like a sushi dinner for two can be under USD$30 (and that includes beers).
Depending on where you’re at, you might want to just relocate yourself—or you could even bring your tech startup team over to Thailand too. You will get a renewable 1-year business visa and work permit to legally live and work in Thailand as employees of Iglu. Tax residency in Thailand could greatly reduce your overall tax burden depending on your country of origin. Your staff might also be willing to agree to a lower salary knowing that their overall spending power is increased while living in a tropical paradise.
To buy the maximum amount of time for your startup to take off you can even combine strategies—relocate yourself to Thailand while outsourcing a development team here through Iglu. To learn more about how it works, visit Iglu’s Outsourcing and Relocation pages.