[00:00:00] Nick: I think life is about taking the best opportunities that come your way, and so, I did. And yeah, and that was six seven years ago now.
[00:00:09] You should have the confidence to just go and try to do something and see and if you [00:00:15] fail but probably if someone else has been able to do it then you’re able to do it. If you really believe you can make it work then you should go for it.
[00:00:23] Scott: Hi there and welcome to Made it in Thailand, the podcast where we learn how to thrive in Thailand from [00:00:30] top performers who have found success in the Kingdom. I’m your host, Scott Pressimone. Today I am speaking with Nick Bernhardt. Nick is the founder of a market research and intelligence company, Khayan Research, and he’s been living and working in Thailand for over [00:00:45] 12 years.
[00:00:46] One of the reasons I invited Nick onto the podcast is, given the nature of his business, he has a deep understanding of the Thai market. He has a lot of useful advice for individuals looking to start a business in Southeast Asia or those that [00:01:00] are expanding into the region. So without further ado, let’s jump into the interview.
[00:01:05] Nick, thank you so much for joining me on this episode of the Made it in Thailand podcast.
[00:01:12] Nick: Yeah, absolutely. Glad to be here.
[00:01:13] Scott: to get started [00:01:15] today, Nick, I love if you could give me a brief introduction, who you are and what you’re doing here in Thailand.
[00:01:21] Nick: Sure. My name is Nick Bernhardt. I have a market research field research business intelligence company. I’ve been here for [00:01:30] about 12 years.
[00:01:31] What originally brought you here to Thailand?
[00:01:34] I had just really wanted to move abroad after college. Experience the world, all of that young drive to go out and do something. And so one of the [00:01:45] things I really wanted to do was to learn another language. And I had this crazy idea in my head that it should be a hard language, because then I could prove to myself if I learn a really hard language, then I also could have learned French or Spanish or [00:02:00] something that wouldn’t have been so difficult. I looked for a number of other things. It ended up being between Thailand and Japan and Thailand was, you know, the place everybody goes to, to go on vacation.
[00:02:11] So I thought, why not just live somewhere you can, [00:02:15] instead of going on vacation. So it and it’s been a fantastic decision in the end. I have been able to go take weekend beach trips. It’s the dream.
[00:02:26] Scott: I think a lot of people know that Thai is a difficult language [00:02:30] to learn. But, I’m curious if you could expand on why it’s actually such a difficult language.
[00:02:36] Nick: I think mainly it’s a difficult language because when we’re having this conversation, we’re usually English speakers speaking about it. [00:02:45] So it’s very different than what we’re used to, but even though it’s got a lot of, say, Khmer and Sanskrit in there I can’t say I see a lot of, pure Indian friends [00:03:00] coming over and, really picking up the language very fast either.
[00:03:04] The tones, of course make things difficult.
[00:03:08] An easy example would be near and far, right? So near [00:03:15] is ใกล้ and far is ไกล. This is pretty much the same word. It’s just the difference of like tone in the vowel.
[00:03:21] I’d say that’s the trickiest part of it.
[00:03:24] Scott: But it’s still impressive that you came here with the challenge of learning a bit of the language.prior to this [00:03:30] discussion we were talking about what your level is.
[00:03:32] Yeah, so we were talking about fluency, and I think fluency is a very tricky subject. Very hard to define. I’ve heard many definitions. One was like the first time you dream in a language. [00:03:45] I dreamed maybe two years in, in Thai. I think that’s not really, a good indication. But you, end up in these situations where you have enough knowledge that you’re like, okay hey maybe I don’t know how to discuss [00:04:00] politics or something like this, but you know what?
[00:04:02] Nick: I’m fluent here. I’m fluent maybe in the restaurant. Something I think is the first, step. And for me this, still happens. And so it happened just two weeks ago. We had a project where the client was [00:04:15] Chinese and they only hired a Chinese to Thai translator, which was not clear to me when we took on the project.
[00:04:23] I thought that they would have an English to Chinese translator or something, but the Thai [00:04:30] translator didn’t speak English very well either. And the client didn’t speak English at all. And so I was just like, okay I’ll just roll with it. And we had, we worked with this client. They were in country for four days.
[00:04:43] We were running interviews with them. [00:04:45] And so for four days I just communicated with them, Thai being translated into Chinese. And at one point the translator complimented me and I, it was one of those moments where I was like, Oh I guess I’m not so bad after all. Yeah [00:05:00] it was fun. It was, a lot of fun.
[00:05:02] Scott: So when you were mentioning you’re doing that for a client.Can you explain what you do, what your business is, and also how you went about starting a business here in Thailand?
[00:05:13] Nick: Yeah, absolutely. [00:05:15] So my business has a couple sides to it. One of those is market research. So in particular, we do a lot of subcontracting for larger firms because you need client access.
[00:05:26] And I don’t have a full 10 person marketing team or [00:05:30] something to go out and to try to get business from P&G or Unilever or something. I focus on trying to get to know key people. And that tends to work best with a larger agency. And then they [00:05:45] subcontract out work to us. So we do a lot of work for those larger businesses in the end, but we’re just a small part of the process.
[00:05:54] So then the other side of the business is field research.
[00:05:57] And this comes in two forms. This [00:06:00] either comes in supplemental research to financial firms, generally hedge funds, maybe private equity funds. I’ve never worked with any angel investors, but it’s still the same thing. It’s a lot of due diligence. And [00:06:15] then a business intelligence side of things where it could be anything.
[00:06:24] It’s, very much like a private investigator sort of style of work [00:06:30] where you’re given a target and that target is generally a business, especially business to business, vendors. And then you go and you collect whatever information you need to. So for example, I had a [00:06:45] client who was doing, this would be classified as due diligence still, but the work itself required more, intelligence oriented work. So they wanted to do an M&A on a small [00:07:00] company. It was in the telco industry and we looked at a couple of different companies for them. And generally when you do this kind of work, you, you just find nothing. There’s a lot of box checking, especially for the larger companies. [00:07:15] They’re just trying to tick boxes, but sometimes you find things. It can be quite fun. So this one company, we tracked down their registered address and went to visit it, which you just do to do. You never really expect to find anything there.
[00:07:29] It turns out [00:07:30] that the registered address was actually the address of the owner of the company because they set it up. They have another company.And we found that there were three Bentleys there, and we had the license plates, and we looked this up, and we found out that the guy [00:07:45] was using the company to buy the Bentleys, and this company that wanted to buy them would then basically be paying for these inflated assets that weren’t even going to stick around in the company. And so that [00:08:00] was quite fun. I liked that one. A good example, maybe of, when things start to get into a grayer area.
[00:08:08] Scott: Wow. That is a very interesting story. Okay. And, but that also, let’s take a step back and how you actually started this [00:08:15] business because you mentioned that you came here originally for this challenge of learning a language, living in a place that people want to vacation and enjoying your life for a bit.
[00:08:25] But then now you’re talking about this venture. Had you always planned on starting a business or did this come [00:08:30] up organically?
[00:08:31] Nick: Yeah, no it was a, total surprise to me. And I’m glad you asked. So I had been working in sales before this. I’d done a number of things in Thailand. I’ve been here a while, like I said, 12 years. So this [00:08:45] was about two, two or three years in, I took a sales position for a textiles company. And when you’re in a sales role, you have to do a lot of marketing.
[00:08:57] When it’s a medium sized company, you do [00:09:00] even more of this kind of work and, you need to, figure things out. I brushed up on my market research skills during that period of time, which led to being able to offer these services later on. [00:09:15] But what actually happened was I had just been expanding my network as you do in a sales role.
[00:09:21] You just try to get to know as many people as you can and try and stay in touch with them. And soon people started just knowing me as a guy who’d been in Thailand for a little [00:09:30] while and I guess wasn’t a complete moron. And they started asking me things. First it was just Oh, Hey, what’s your opinion on this?
[00:09:37] And then I got a request one day to, Hey, there’s this, [00:09:45] little piece of the annual report that gets sent out. There’s this little piece of this report that is taken out of context.
[00:09:53] The translate doesn’t work very well. Do you know somebody? And so I remember I did it quite [00:10:00] quickly, which was what impressed him. I sent it back in 15 minutes or something, and I was like, oh yeah, no, the translate just jumbled up these two sentences, and it’s this and this is exactly what it’s talking about.
[00:10:12] This later actually became one of my interview tests for [00:10:15] staff, was if they could understand what the annual report was trying to say. That’s another topic, though. And so they’re like, Oh, wow. Oh, that’s very helpful. Thank you very much. A couple days later Hey, we have another question. Could you [00:10:30] maybe look at this?
[00:10:30] And then okay, I sent it to them. And then a week later, or two weeks later, I said, Hey we got another question, but this is going to take a little bit of time. Maybe, we can pay you for it. And I was working on commission at that point. So I said, Oh, yeah, sure. Why not? [00:10:45] Let’s, try this.
[00:10:47] And in this case, it was a, they wanted to find a book that was out of print and it sometimes luck just, you get really, lucky. It’s just sitting right [00:11:00] there for you. And so there was no way to, to find this book. It was all out of print. I called a couple of shops, not a chance, but I looked and I saw on the on the preview, Amazon preview, whatever, with the cover page where the [00:11:15] publisher was and the publisher was like 15 minutes away from me.
[00:11:18] So I was like, Hey let me just, go try. And I drove over to the publisher on my bike. And I walked up and just this this random [00:11:30] guy coming in, speaking Thai and being like, Hey, do you have this book here? Here’s a photo of it. And they rolled out the red carpet for me. They were like, wow, we’ll see.
[00:11:41] We’ll go back. We’ll check everything. And they came back about 10 minutes later and they were like, we [00:11:45] have that book. Not only do we have that book, we have the whole series. It ended up being like 40 books. So the guy called me, he asked for one book and I called him back the next day. I was like, Hey, I’ve got 40.
[00:11:58] Do you want them? [00:12:00] 40 different. Not, 40 of the same book, right? Like a full, series. And yeah, and that kept going. Eventually the sales job, I wasn’t going to get anything out of it. It, the company wasn’t growing. And [00:12:15] so I approached the guy, I said, Hey, listen, I have decided I can’t do this work selling like export manager for this textiles firm anymore.
[00:12:27] I’ve really enjoyed the work I’ve been doing for you. Why [00:12:30] don’t I come work for you? And this was my idea. And he goes, no, I don’t really want to do that, but I’ll tell you what, if you start your own company, we’ll be your first customer. It never occurred to me to do this. It never, like I just [00:12:45] fell in my lap and I thought, yeah that’s, a pretty good opportunity.
[00:12:49] I think life is about taking the best opportunities that come your way. And so I did, and then you get that point, you start, you have some business and yet you have still [00:13:00] free time and you start trying to develop your, business, do more marketing and, yeah, and that was six, seven years ago now.
[00:13:08] Scott: So you had never planned on becoming a business owner. That was never a dream of yours when you were a child or anything like that.
[00:13:14] Nick: [00:13:15] I suppose it was I definitely tried a couple of things as well, but. Yeah I, tried things. I had a, business, I wish I could turn my camera around right now. I have this, I [00:13:30] actually, I still can. I’m gonna do it. I have this painting here, right? Absolutely beautiful, incredibly detailed. Sorry for the shaky camera. So I sold these online for a period of time, and I made money on it.[00:13:45]
[00:13:45] Not a ton of money. But that was, I don’t know, 10 years ago or something. I found a guy who was doing these paintings and he found a quicker way to do it than the traditional method. [00:14:00] So I built a website and I tried to sell them on, but in the end it was too small of a, it was just too niche. And like I said, I made money, but I couldn’t live off of it.
[00:14:14] The [00:14:15] sales were too infrequent. So. But I think it’s worth trying anything. If you have an idea or if someone offers you something, if they say, Hey I have a need and here, why don’t you start a company [00:14:30] and I’ll pay for it. You should absolutely take that chance for anything. And with this painting, it took me, I don’t know, a day to build the website.
[00:14:42] I had no experience. I built it off of WordPress. [00:14:45] Just, try it out, just try things. And then another day to take the photos and another day to upload it. So it was about three days worth of work to get the thing set up and then you try and you make a [00:15:00] $5,000 sale, $7,000 sale, and you’re like, Oh, that’s cool.
[00:15:06] Scott: It sounds like you, you weren’t saying I want to make a business out of this at the time, but you had, it sounds like the courage or maybe the [00:15:15] drive to try new things. The fact that you had tried that with with the paintings and everything, and then now this new opportunity presented itself. That, also brings me to another interesting pattern there is that, There’s a lot of [00:15:30] people out there that will start a business because they want to create a business on a certain thing and they don’t necessarily have the market behind it.
[00:15:35] But I’m curious if you have any sort of philosophy around meeting the client where they are. And it was like, in this case, this company you were working [00:15:45] with had a need for you. They didn’t have any for you as an employee, but they had a need. And you were there and you could take the opportunity. And then you had a paying customer.
[00:15:53] So it sounds like you were driven by demand rather than trying to make your own demand. Is that fair to say?[00:16:00]
[00:16:00] Nick: That’s, absolutely accurate. Yeah.
[00:16:04] Scott:
[00:16:04] Nick: I would add that you mentioned a lot of people want to start a business and they don’t necessarily have the market for it I’m not trying to sell myself here, but there’s a reason that [00:16:15] my market research business exists. So many people I meet also have the Oh, I really want to start a business.
[00:16:23] Okay what are you going to do? I might do this. I’m like, okay, have you seen if there’s a market for that? And [00:16:30] the answer is so often, no. They haven’t contacted people. They haven’t looked around to see if there are competitors. And I think if you want serious market research done, you need help.
[00:16:41] But if you want to just do some basic stuff. [00:16:45] This, doing your own research is, fine and absolutely should be done and should be done before you fall in love with the idea of I’m going to be a business owner.
[00:16:56] Scott: Oh, I love that. And like you said, I dealt with the same thing [00:17:00] where there are people that seem to be in love with being an entrepreneur or seem to be in love with, I don’t know, making more money or having control over their, their day and their routine. And it seems like the client is almost a side note [00:17:15] and it’s I don’t know, in order to start a business, that’s profitable, I don’t think the client can be the side note. I think it has to be a pain that you’re actually resolving or potentially the pain isn’t already there. And I’m going to use the typical [00:17:30] example of the iPhone. Okay, fine. Maybe people didn’t know they needed the iPhone until the iPhone was created, but I would still argue that it all comes down to, are you solving a pain point?
[00:17:40] Are you actually solving a problem or are you trying to start a business because you just want to make money? And I just think that’s a little [00:17:45] too empty, right?
[00:17:46] Nick: Yeah like you were saying, it needs to be demand driven. You have to listen to your clients. And I also see this a lot of people who like, they really want to sell a thing, something they’re passionate about. I don’t know, maybe it’s yoga [00:18:00] mats and they’re like, I’m going to make the best new yoga mat or fitness equipment or something.
[00:18:04] And they never stopped to think yeah, but the guy that sells the cheaper crappy thing at Decathlon, which actually I love Decathlon, 9 times out of 10, more than that. [00:18:15] That’s all people want. It serves the needs. It doesn’t have to be this perfect, eco based mat that’s 10 inches thick and, inflatable, or I don’t know, all of these features that people add on [00:18:30] without speaking to the end user.
[00:18:33] And that’s so important too. You have to listen to the client because sometimes your business changes based on what the client says. My business has changed dramatically in the past six years. [00:18:45] I’ve had a total shift. The whole adding market research on as a subcontracting work. That was not ever a focus of mine. And now it’s become the main focus. [00:19:00] So if you don’t listen to your clients, if you don’t listen to the market even, sometimes sometimes clients leave, you’ll, you risk having the business die when it doesn’t need to. I think all businesses have a cycle, but, [00:19:15] yeah, you can kill it prematurely.
[00:19:19] Scott: This reminds me a bit when you mentioned the yoga mat. I think about the example of when you ask someone about traveling on an airline, you could say, what do you want out of your [00:19:30] airline? If you’re just doing preliminary market research, let’s just say, maybe I’m going to call this market research, but you’re asking a bunch of friends.
[00:19:35] What do they care about with the airline? Okay. I want leg room. I want this. I want that. I want this type of meal. They go through all this stuff. I think there’s sometimes a difference between that and getting the want [00:19:45] list. And then seeing how many people are then going to buy that flight or pay for that ticket.
[00:19:50] And so it’s interesting because then when people actually go and make the purchasing decision, they might actually sort the airline by the price and they’re actually not looking at the leg room and they’re not looking at [00:20:00] these other things and they’re picking the one that’s $500 and not $3,000. And it’s someone putting their money where their mouth is, right?
[00:20:06] And actually making that decision. And that makes me also think about the type of market research that you provide to clients. It [00:20:15] seems to be the market research where your clients are putting in their money, where their mouth is. You had mentioned that you worked for a hedge fund and this is a case where, or let’s say it’s mergers and acquisitions that you started with as well.
[00:20:27] It’s maybe we’re going to acquire [00:20:30] this company. I’m not just thinking I might want to, this will be fun to acquire this company. It’s because you want to make profit. It’s because you want it to be a good deal. And so they’re looking at actually spending real money. And so guess what? Now the [00:20:45] details matter. Now, it really matters because it’s like, you’re not just doing this for someone’s side project. You’re doing this because they’re making a decision, which is going to impact the finances of their business. And I’m curious for the people that don’t have a lot of [00:21:00] industry knowledge around market research, is this typical, the type of work that you do, where it’s this very detail oriented work for investments or for acquisitions of companies? Or is there another side to the market research [00:21:15] industry that is maybe a little bit less detail oriented or a little bit less deep?
[00:21:20] Nick: Yeah, that’s a big topic. If you’ll allow me, I may meander a little bit but it’s a very good topic. And very [00:21:30] important has a lot of very important things to think about. First, I want to say you said, at the very beginning I’m going to call this market research.
[00:21:37] And I want to point out that is, in fact, market research. It’s just a sample size of one. And [00:21:45] I’m, really a big supporter and people doing their own research and learning as much as they can on their own. The reason that my company gets hired to do larger projects is because we have the the ability to do it [00:22:00] efficiently. So for example, you start asking one person about what do you prefer on an airline and they tell you all about leg room and you say, oh, great, cool, and you put that into your little form and then you move on to the next person and all they talk about is food and oh, okay [00:22:15] and then you ask, what do you think about, what do you think about leg room?
[00:22:19] And they’re like I don’t care. I just care about the food. And then you go to the next person and they don’t care about either one of those things. And you end up with this big mess of data this big jumbled data set. It’s [00:22:30] really a nightmare to work with. So you, end up learning that you need to be a bit more structured and how you structure it is what we’re good at.
[00:22:43] But that is absolutely [00:22:45] market research and it is absolutely what needs to be done with everybody. And then you talked about the purchasing decision and that is another, stage of it. You know what people prefer and what people are willing to pay for. And you can do tests, especially [00:23:00] online.
[00:23:00] You can do tests for, running people through these, shopping cart pages and everything to see how many, clicks it takes to purchase and everything you can, do all of these things either [00:23:15] in person or online and they’re very important things that again, a lot of people starting out just think Oh, I’ll sort it out down the line I’ll just do, I’ll get it done first.
[00:23:27] And then that [00:23:30] in fact does, if you’re talking about clients buying, that is really, important when they are just checking boxes versus when they’re actually making a decision. And I think [00:23:45] this is the heart of the issue that you touched on. And this, I unfortunately, and I’m not even sure I should say this, but for the, pure market research work, a lot of our clients do more like box [00:24:00] checking stuff and a lot of even a lot of the M&A stuff It’s just box checking because it’s a guy working for a guy working for a guy in a corporate
[00:24:08] Then when you get to the point of say a small fund or it [00:24:15] doesn’t necessarily have to be a fund, but maybe a guy who runs his own business or a I talked with somebody who had a clinic in Phuket not that long ago And you can just you can tell that Listen, what [00:24:30] matters here is that we get results.
[00:24:32] It’s not Hey, can you do this focus group and can you meet this sample quota, where we’re going to get five people from this subset, five people, five people, five people, five people. And it’s much [00:24:45] nicer to work with these people because you can focus on the quality and you can listen to what the data is telling you as you’re pulling it in.
[00:24:51] So you can go in and you can say, all right, I want a representative sample, but I understand that, [00:25:00] my buyers of this product are going to be different than the general population of Thailand. So let’s see what happens. Let’s target a rough, roughly representative sample and then let’s see what information we learn and you start picking things up.[00:25:15]
[00:25:15] Maybe maybe you’re looking at pickup trucks, for example, and then you learn in going through and recruiting all of these pickup trucks because you yourself don’t buy pickup trucks that in fact, farmers will only buy one type of pickup truck. And that’s [00:25:30] because of the cargo capacity and all that matters to that farmer is the cargo capacity.
[00:25:35] Of course, the price of the pickup truck matters as well, but they’re not going to buy a higher priced pickup truck with less cargo space. And this [00:25:45] should sound really obvious. I hope it sounds really obvious because it’s the a perfect example, when you go into a project and you start thinking about how to do things, and you, just haven’t [00:26:00] considered some, options that then come up later.
[00:26:03] And you’re like, wow, that’s so obvious. Of course, that’s how things are. But the number of projects that get sent to me where that obvious step hasn’t been taken [00:26:15] is shocking. It’s hard. It’s hard to do. It’s hard to think through every process. Like with the airline seat example you think about what’s important to you first, and then you make the project based on that.
[00:26:29] But [00:26:30] there are a lot of people in this world with a lot of different opinions. But yeah, so I really prefer working for especially customers in the financial industry, but in general the, field research and business intelligence [00:26:45] side of my business is it has much more enjoyable projects because you can focus on the quality of the data and you can go back and change things once you, you have, you’ve learned something one week in. You can go and talk to the client and there’s a back and forth and hey, this [00:27:00] is what I learned and this is why this is what we suspect here.
[00:27:03] I think we should test this other hypothesis that we just came up with to see if something else will be learned by doing this. It’s, nice. It’s much nicer. Yes.[00:27:15]
[00:27:15] Scott: I think that’s just so important. And I understand that you might work with different types of clients that have different goals, but to your point, when the goal might be to find the truth then I assume that, and again, the truth can be, that can be a little bit [00:27:30] tough. Cause it’s what is the truth to one person?
[00:27:31] But still I, think there’s a level of if it’s a business owner, that’s saying, I want to sell a product and I want to make sure my business is profitable, then their end goal is to sell something of value that makes sense, [00:27:45] not just to tick a box or not just to come to the conclusion they already want.
[00:27:48] And I’d even say sometimes I’ve seen small businesses cause I work on more of the marketing side of things, but small businesses that sometimes just want to be told they’re right as opposed, to [00:28:00] finding out the truth. And so if they have a hypothesis, as you said I want, people to like this yoga mat, prove to me that people will like this yoga mat.
[00:28:08] I’d almost argue, you could find someone that will give you all the proof points as to why your yoga mats a great idea [00:28:15] as opposed to seeking out the truth. And maybe the truth isn’t what you want to hear. And maybe the yoga mat isn’t actually a good idea. It’s the question becomes, is it a client that wants have the box checked [00:28:30] to prove that they did their due diligence?
[00:28:32] Or is it someone that has some skin in the game and cares mostly about the success. And it’s a very different type of client, isn’t it?
[00:28:41] Nick: Yes. I think that [00:28:45] it takes a very mature person to come up with a hypothesis and then do research, like accepting that they might be wrong. And you can see it when people bring up the subject. [00:29:00] You, can tell that this person is ready to be told this is a bad idea. And I’m always in awe of this because I don’t even know if I can do that half the time.
[00:29:12] But I do think that this issue as well is [00:29:15] not just an issue of maturity or an issue of client type. It’s an issue of timeline. Once people start doing something, once they, have committed to an idea. And it starts way back. I think we were talking a bit before about you should do your research and not just [00:29:30] fall in love with the idea of having your own business.
[00:29:33] This is one of those reasons is people fall in love with the idea of having their own business first. And then they’re like whatever idea I come up with is going to be good. And then the first idea, maybe not the [00:29:45] first idea, but the first idea they commit to, they’re already convinced this is good and I’m in love with this idea.
[00:29:52] And then they start to develop it. They start to work on it. They put, hours and hours into this. They work [00:30:00] 16 hours a day building this website or something, or going out trying to find suppliers. And then they go and try to test the market. And at that point, you’ve put weeks, months [00:30:15] into this project.
[00:30:17] You’ve already emotionally invested yourself into this project. And many times your self worth, which is self worth and career is a whole nother subject. But they get all of [00:30:30] this work under their belt and then you try to tell them they’re wrong. And that is, this is not what people want to hear at all.
[00:30:40] And it’s not really a good way to get a client to come back to you. [00:30:45] But. I guess that’s why it’s important to have a stable business. You have to be willing to tell them like, Hey, listen I don’t, think this is good. If I think something’s really bad, I try to tell people before we take on a project.
[00:30:59] If I think they [00:31:00] really haven’t given a lot of attention to the idea, but
[00:31:05] so timing I think is important timing of when you do the research, however informal it is, even if it’s a sample size of one, it’s, it should be done first.[00:31:15]
[00:31:16] Scott: I couldn’t agree more. And I would say, again, coming from the marketing standpoint, when I, work as a fractional CMO. So when I come into a business, I’m really looking from the strategic standpoint of how can we make, how can we essentially have a successful company where [00:31:30] you have a high lifetime value of a client where, you know, people within the team are satisfied and we’re able to grow in a nice stable way.
[00:31:39] To your point, sometimes some people will come and be like, Oh, I’ve created a website. I’ve done all this stuff. I’ve figured it all out. Just launch [00:31:45] it or something. And it’s that’s actually not what I do. I need to make sure it’s based on some core foundation. And so in my case, I do some level of research and planning competitor research.
[00:31:53] However, to be honest, I’m not, I know I’m not going nearly as deeply as you are, and I would [00:32:00] say I would much appreciate a company or a, let’s say an entrepreneur in this, example, to work with you to flesh out their idea a little bit more, because if you’re coming with, as we talked about before, an idea that hasn’t been [00:32:15] tested at all, hasn’t even been researched, then they’re coming to me and I honestly will say, I can’t really work with you to your point because I can’t work with a client for six months or a year helping them develop their business if their idea hasn’t been fleshed out at all. [00:32:30] And so I think it’s so important to go through that research step, as you said, and do that first, maybe have an idea, maybe have a pain point, maybe do some of Google searches, right?
[00:32:39] Do the basic stuff. And maybe as we said, maybe that’s all that’s needed. But, I would argue if you are really [00:32:45] going to invest a lot of time and effort into something, don’t say, Oh I’ve, spent a hundred hours and $10,000 on some website and then try to find someone in the next step later on, it’s hold on.
[00:32:58] Then you’re getting into the sunk [00:33:00] cost fallacy and then you’re, saying
[00:33:02] Nick: Yes.
[00:33:02] Scott: to this and now you’re making probably pretty bad decisions. So I would encourage anyone that’s starting a business to do the basic research and if they have the funds and if they have the time, as you pointed out, [00:33:15] work with the pros on to, to make sure that you’re not going down the wrong path, or going down a path that’s less likely to be successful. And then you can talk about marketing it.
[00:33:26] Nick: Yeah, absolutely. Absolutely. I couldn’t say it better myself. [00:33:30] And you, you, said something in there too, which I think is really important to highlight. That’s you’ve invested so much time already. People need to remember that they don’t just spend money.
[00:33:44] They spend their [00:33:45] time and it’s very important to do both efficiently. That’s in the end why you hire someone to help you with anything, not just with market research, not just with marketing. But [00:34:00] for anything that you do, especially as a small business starting out, you should think, can this person do it more efficiently?
[00:34:07] Will I get more time back than I’m spending money on? And that’s, why businesses should [00:34:15] survive too, is because they’re more efficient than someone who’s maybe in house or, then their competitors. And yeah and I, think so many people just are like, Oh, I’ll bring in so much revenue that nothing else will matter.
[00:34:28] But efficiency [00:34:30] matters at every, level of the business.
[00:34:34] Scott: Absolutely. Now with the work that you do, I understand that now you’ve grown to the point that you do this work even outside of Thailand. So can you first kind of [00:34:45] share, with the areas that you serve and the type of market research you do in the different regions just so people have a scope idea.
[00:34:55] Nick: Yeah, absolutely. We what I’ve talked about so far in terms of the type of work we do is [00:35:00] true throughout the region. But we, our main markets are Thailand where we’re headquartered, Indonesia and the Philippines. So I have staff in Indonesia and the Philippines as well. But I have [00:35:15] like my team is centered here.
[00:35:17] We do everything here in Thailand. And then when it comes When you expand outside of your home market, I think it’s important to stay flexible. So one of [00:35:30] the strategies that I have, I have used to make sure that we’re able to serve clients, but we’re not but we’re still efficient. We’re not burdening ourselves with costs is we use freelancers in addition to [00:35:45] the core staff. So I have staff in, like I said, in Jakarta and in Manila, who know what they’re doing. Who are very good at what they’re doing. And then when we have a big project, we hire a couple freelancers and I keep track of them. I have a whole Excel spreadsheet of all of the freelancers that I’ve [00:36:00] used in the past.
[00:36:01] Some as far as Nigeria. Serbia, actually Mexico, even whole other side of the world, imagine that. So I’m a big fan of freelancers and they’re very, good for [00:36:15] preventing these heavy burdens, and, high overhead. So I found that to be fantastic and it also helped quite a lot to in, [00:36:30] in COVID.
[00:36:32] During COVID because then we were able to get more comfortable with it. Everybody was able to get more comfortable with it, to be honest. And take on more [00:36:45] projects farther away.
[00:36:47] Scott: Yeah, when I think about how that affects a client, as you said, you pointed out just the term overhead, and if you have a very high overhead, guess what, your fees are going to be incredibly high. And it sounds like that’s just a way that you’re efficiently, you’re able to do this [00:37:00] efficiently. But, I like the point that you said you have some core staff members.
[00:37:03] Because, if you were a fully freelance driven company with, no full time staff, I’d assume you wouldn’t be able to maintain clear processes and other things like this. And you wouldn’t really have those [00:37:15] systems in place. But, if you have some core staff members and then you’re building on top of them, then you have, the values of your company.
[00:37:22] You have the ways that you do things. You have the SOPs and everything like that. Is that fair to say?
[00:37:27] Nick: Yeah, that’s fair [00:37:30] to say, but I do think you can do most of that when you have freelancers. You’re just, there’s going to be time lost when you’re never going to get a good first draft that way. But also if you. It’s all about how often you have business in that area, [00:37:45] right? I’m not going to hire someone in the U.S. right now.
[00:37:47] The cost would be extremely high. And I have, I’ve never taken a project in the U.S. And, to tie into that though like [00:38:00] I was, we did a project a couple of weeks ago and they gave this project to us for Thailand and they said, Oh, also, do you have someone in the U. S.? And I just said no.
[00:38:14] [00:38:15] But some businesses will be like, yeah, we can do that. We’ll make it happen. We’ll figure it out later. Which if you can do that, you should if you really, believe you can make it work, then you should go for it. [00:38:30] But you have to know where your limits are. And in this case the U.S. is a much too expensive place to just go for it. But if you have a set of [00:38:45] freelancers that you use frequently because you keep getting business regularly, then you know it’s worth taking a jump. If they come to me every month and they ask if I have someone in the U. S., then, hey, I don’t know, maybe I’ll go to the U. S. and run my team here from there. [00:39:00] And then if that builds enough, then, you hire someone. And in a way that’s what happened in Thailand. We started with two in Thailand. And then grew to four in Thailand and then [00:39:15] one in Indonesia, one in the Philippines and all at the same time, while still bolstering our ranks with freelancers, whenever we had a large enough project, it’s also the nature of the work though, when you need to go out and collect a thousand responses for a survey. It’s a, [00:39:30] quick project in the end. You spend maybe two weeks to do that. It’s not how long the whole project lasts, but to collect, to to, collect the responses. Then you don’t have any work for those people. [00:39:45] Yeah. Yeah. It was my thoughts on that, suppose.
[00:39:51] Scott: Now, since you have done this work as you said, the region, and even a little bit outside of Southeast Asia, let’s say, [00:40:00] I think you’re in a very unique position to know a lot about the market and to know a lot about, again, how things are going in Thailand. I think this is a very interesting topic just cause living here for also, for me, it’s been about, or I [00:40:15] think 12, 12 or so years around the same time that you’ve been here.
[00:40:17] I’ve seen a lot of changes in Thailand. And since you’ve been doing this market research in Thailand for your other clients and you’ve been living here, of any sort of economic trends or changes that you’ve seen [00:40:30] during that time for the better or for the worse.
[00:40:33] Nick: Yeah, it’s definitely changed quite a bit. I can say that. We went through, the whole COVID troubles and [00:40:45] Thailand still has not recovered from that. It’s actually had one of the longest COVID recovery. So it’s, I don’t feel great sitting in this market right now. I feel very frustrated.
[00:40:59] But [00:41:00] I suppose that’s a short term change. You’d think that that, would recover, We don’t think that people’s tourism habits have dramatically changed. We think it’s just a matter of time a lot of the issue with the tourism [00:41:15] recovery in Thailand, which is talked about so much because it’s such a large portion of GDP.
[00:41:20] A lot of that has just been the, lag on Chinese tourists coming back. So these kinds of [00:41:30] things can improve, but I guess, the big thing for me, if I really take a big step back for everything and say what has changed the most since I’ve been here. It’s one of the reasons I moved here [00:41:45] was because, Asia was the hot place to be and Southeast Asia was getting all of this talk about okay, China is not going to be able to continue to be the world’s factory either for political reasons [00:42:00] or because of the rising costs of laborers in China, and so all of that business is going to shift to Southeast Asia.
[00:42:10] And that was the narrative for a long time is that Southeast Asia could pick up [00:42:15] a relatively small part of that business and end up with insane growth. And I think that’s changed now. I no longer really hear that. I hear, I know that the market’s in a bit of a down cycle. Now the financial markets in [00:42:30] Southeast Asia are in a bit of a downside cycle.
[00:42:31] There’s been a lot of, there’s been huge declines in foreign direct investment. So I, think there’s some negativity there, especially with my clients in, [00:42:45] financial work in the financial markets. The investors fund managers. But even taking that negativity to account, you see this kind of, I don’t want to call it shell shock, [00:43:00] but something where you see there’s like a realization that, okay, maybe this is not going to be as bad.
[00:43:05] As big as we thought it was maybe there’ll be something else. It’s not to say that Southeast Asia won’t be successful at something, but it doesn’t appear that it’s going to steal all of [00:43:15] that business. And in fact, what I think needs to happen and what has been talked about for years is upscaling, right?
[00:43:25] And so if we see Southeast Asia really stake a [00:43:30] claim with, we are the best at doing this thing. Which, okay, Thailand is the best at doing tourism, but you’d hope it’d be something with more economies of scale than tourism. So [00:43:45] I’m not sure if someone can turn that into a business idea or take it, take it how they will, but it’s the reality of it.
[00:43:55] I was reading a, an article last [00:44:00] month. It was something like in the first half of 2024, something like 2.5 billion us dollars. Has say flowed out, but is the, reduction in foreign direct investment has been 2. 5 billion, absolutely [00:44:15] insane. So that changes a lot of, how this area of the world works.
[00:44:28] But it still has [00:44:30] a really,
[00:44:33] I won’t say it has really good infrastructure, but it has a good business setup, especially I think in Thailand, but that’s also because I love Thailand, that’s why I live here. Where people can then start [00:44:45] focusing on, alright, we’re not going to steal, we’re going to create. We’re never really saying steal, but, try to create a new product, or a new industry, [00:45:00] necessarily brand new, but something new for Southeast Asia, that then it can become the best at, the region can become the best at.
[00:45:10] Scott: Actually you’d mentioned that tourism is a big area for Thailand and has always been. [00:45:15] And the point of when COVID happens, you have a, big impact to the tourism industry, which results in less money coming in. And I seen that the government’s trying, has tried to respond to that in multiple ways, like different visa types, right?
[00:45:27] So there was the Thailand Elite and Thailand Privileged Visas [00:45:30] trying to get wealthy individuals over to Thailand. More recently, the Destination Thailand Visa, DTV, was released and that seems to be an attempt to try to get more people that maybe don’t have large businesses, but are more freelancer [00:45:45] type or people that are working for international companies, potentially just to be able to easily work from Thailand for some period of time and make it easy for them to get a visa, come in, come out as they please really inexpensive.
[00:45:56] So you’re seeing this. And again, it just seems to be pulling the levers of [00:46:00] tourism, which I’d argue is a good idea. It’s great to have tourism go up if that’s always been a big part of the economy, but it sounds like you’re making the case for What if there was more than just tourism, right?
[00:46:10] What if what, else could Thailand do? Is that?
[00:46:12] Nick: Yeah, I don’t have any ideas [00:46:15]
[00:46:15] Scott: Yeah
[00:46:15] Nick: I am not shutting anything down. I do think that the world is still lacking a good place for remote workers, and I think that we are going to see more and more of them as we go forward. [00:46:30] As people, I think as people see more, they’ll ask for it more. So there was that big growth of remote work during COVID, which has then retracted a good bit.
[00:46:40] But it’s still around enough in a much higher percentage than it was [00:46:45] before. And I don’t, have any figures on that I think everyone can agree. And so as you see your friends going off to work in Bali or something or in Phuket, then maybe you go to your manager and start asking and [00:47:00] maybe the manager has 10 people asking him to do remote work and then maybe he goes to his manager and starts asking him so I think it will still grow.
[00:47:08] And I think that there, there are a lot of issues, especially with tax, [00:47:15] and business ownership that need to be worked out and need to be done better. So that could be something and it could, we’ve already got the, in Thailand, we already have the tourism infrastructure. So [00:47:30] then to adapt that to remote work, it’s probably closer than you’re going to get to anything else.
[00:47:40] But I don’t know. It could be anything Thailand has been. [00:47:45] Huge with computer parts. I think the I don’t, know if this is still the case, but certainly for a period of time, Thailand was the number one producer of external hard disk drives. [00:48:00] I don’t, and now that they’re on the way out.
[00:48:04] So Thailand needs to adapt right now to SSDs. And I don’t know if Thailand has taken over the main manufacturing role for SSDs. I imagine it’s a bit different. [00:48:15] The parts are quite different inside, right? So it, it could be something like that. I think the time for them to, take on integrated circuits, I know there’s a company that, that does it, HANA, [00:48:30] but I don’t see them building up a whole industry on it.
[00:48:38] And in places where that’s dominant a [00:48:45] dominant industry. You still have one person, right? You have TMSC in Taiwan and you have Samsung in Korea. If they’re going to support HANA to grow even more than, okay, why not? But, I don’t know how much that’s going to help the overall [00:49:00] economy.
[00:49:00] I think that they’d be better off going after other products. Yeah, those are my thoughts on it. Yeah,
[00:49:12] Scott: Yeah, one just closing thought on the tourism side of things, for people who aren’t familiar, when you mentioned [00:49:15] up a laptop or working remotely from Thailand Obviously the infrastructure is there in Thailand in terms of accommodations, there’s good condos, there’s great transportation and there’s also fast internet. [00:49:30] And I think you said that you have I have at least one employee in the Philippines, and we know that in some areas of the Philippines, the internet is not as great.
[00:49:36] I’m not sure about Bali but I, can say that Thailand is pretty amazing when it comes to internet, and you really need connectivity above all else, and in some of [00:49:45] these remote work situations, and I can only recommend enough if that boss is considering sending some of their employees and allowing them to work remotely, At least you’ll know that they’ll be connected.
[00:49:54] Now, granted, if it’s a U S company, be aware of the time difference. It’s pretty significant. But [00:50:00] but in terms of actually being able to get online and having a good video call Thailand’s pretty set up pretty nicely for that.
[00:50:06] Nick: This is a good point about the time difference. I’ve tried. I don’t work very well when I’m in the U.S. I try, but it’s a nightmare [00:50:15] trying to coordinate with staff because of the time difference. But Europe is much better. Working either, when I was in the textiles company, I had clients in Europe.
[00:50:28] And Europe was quite good. [00:50:30] Also the Middle East. Quite, quite fine. And being there for Asia is even better, than the U S because you just get everything done first thing in the morning and then everybody goes to bed by noon, like everybody in [00:50:45] Thailand goes to bed by noon and then you go for a hike or something.
[00:50:49] It’s really nice. Get an early start to the day. But yeah, it’s a bit, it’s a bit tricky with, think Indonesia is not [00:51:00] as bad. The Philippines, I generally only do things in Manila. In Indonesia I, haven’t done anything in, I haven’t needed to do anything in Bali, but I know that there’s a [00:51:15] huge digital nomad culture there.
[00:51:19] Have had to do stuff a bit further out, and I have had to do, I’ve been there and done projects that were a bit further out. It’s been [00:51:30] okay. It’s been fine. I haven’t noticed any serious problems. But yeah, I’d say Thailand is the best in the region with that. Manila I haven’t the Philippines I haven’t had to travel very far outside of Manila for anything.
[00:51:44] [00:51:45] Any, anything else that you’d be willing to share of trends that you’re seeing in Thailand?
[00:51:50] Okay. Yeah, so I can pull something up real quickly. We just did a survey in Thailand. [00:52:00] I’ll just open up the full report.
[00:52:03] So we just did a general survey in Thailand for the first half, and we want to start doing these this is the first one, but we want to be doing these twice a year, and start building up [00:52:15] a better database for this kind of basic information. And so I won’t go through this big overview or anything.
[00:52:22] If anybody has any questions about it, they’re free to contact me. We can sit down and have a coffee. I’ll share what we [00:52:30] found. But some interesting things about this. We’ve had a big issue with household debt. In fact, we just did a talk at the Foreign Correspondence Club on the household debt.
[00:52:42] It’s over 90 percent [00:52:45] now and so you can, it’s, I think it’s, good to look at what’s happening in people’s expenses. And so you see this red line that I have up here, it’s actually moved in this PDF, that’s a shame. [00:53:00] I’ll fix that later, but it, it should be correct in the original file and it shows that for the renters, anybody earning less than 15,000 baht is spending more than they make.[00:53:15]
[00:53:15] And granted I think that they’re underestimating their expenses as well. And then 15 to 20 thousand, people start to break even. And then people are start, are starting to do a little better when they get to 20 to [00:53:30] 25k. But if we go back up and look, In our sample which we do have, it was representative, I have data elsewhere in the document.
[00:53:43] But the mean [00:53:45] salary was under 24, and the median was under 20. A lot of these people are, grouped into these lower categories. This is not an even distribution all across these [00:54:00] income brackets. So a lot of people are really struggling. And then there’s a surprisingly large number of house owners in Thailand.
[00:54:12] And they’re spending the, when they pay. So we [00:54:15] actually had in our study quite a few owners, quite a large percentage. I think it was I think it was like two thirds were owners. And one third of them didn’t have mortgage payments because they had generally inherited the [00:54:30] house. This is the nice thing about doing your own research, or at least working with somebody who actually has people out in the field, is we don’t just ask the questions we then, when we start to see things that are a bit strange.
[00:54:44] We ask [00:54:45] more. Oh, so you own your own house and you’re, 26 years old and you don’t have mortgage payments? How do you do that? Actually, yeah, my mom gifted it to me. Oh okay, and then you find that with 10 people and you start to [00:55:00] see the pattern there. But yeah, anyways, the point is still, owners are paying a lot more than they can make and they don’t break even until they get above 30k.
[00:55:13] So I found [00:55:15] that quite interesting. And then another issue on debt here, about, we’ll fudge the numbers a little bit, about a third of the people have taken out loans in the past year. [00:55:30] And about a third of those people, 8 percent of the total did it through a credit card. So there’s a huge amount of credit card debt in Thailand.
[00:55:38] There has been for years and it still isn’t going away. These are mind you loans taken out in the past year. These are not loans from [00:55:45] COVID. And these are not, have I ever in my life? So that, that’s quite, concerning. And the, yeah, I think, so this is more relevant [00:56:00] to this section is about specific companies. This is more relevant to people working in the financial industry. HomePro performs really well. And that’s. A very hot name for brokers. So I don’t [00:56:15] think that this is going to appeal to the majority of your listeners, but it is interesting if you work in the financial industry.
[00:56:21] You can give me a, give me a shout and I’m happy to sit down, have a coffee with anybody and talk about how these surveys are run and [00:56:30] why the information is valuable. But yeah, as far as interesting things to share, there’s a shocking amount of debt in this country. And the government will have to do something about it.
[00:56:42] So people can expect [00:56:45] more drastic changes in the future. And I think they should.
[00:56:50] Scott: Yeah, I think it’s also, I’m only working off anecdotal evidence, but, I do remember I had a little bit of a shock when I first came to Thailand. I would number one to [00:57:00] say, Oh, it’s great. Oh my gosh, the transportation’s fantastic. But then I do remember one of the things I noticed was at the time I was traveling and I had an old Android phone, or maybe I had an iPhone at the time, like that was two generations old.
[00:57:09] And I noticed that everyone on the BTS was looking at their new iPhones. And I was thinking [00:57:15] I’m like what, is going on here? So that was very strange to me. And you see some of the nice cars and of course there are some people that are very wealthy and have some really nice cars here in Bangkok.
[00:57:23] So that’s another eyeopening thing. But yeah debt is, it’s always something that [00:57:30] it fills the gap of when things just don’t seem to make sense from an American coming to Thailand, originally, things just didn’t seem to make sense to me. And I think part of that was the household debt, and the fact that people more frequently [00:57:45] finance, rather than just saying, I’m going to finance a house, maybe they find it’s a car.
[00:57:47] And rather than just saying, I’m going to finance a car, they might finance a phone,
[00:57:51] and, or, let’s say a motorcycle.
[00:57:53] That’s another thing, right? Very common here. So there’s a lot of things that I think if you were looking at data or trying to [00:58:00] determine things without having some on the ground knowledge, as you have Nick, like there are just things that people wouldn’t really understand fully.
[00:58:06] There’s other just random things with household where it’s to say, yes, someone might be gifted a house, but also how many people live in a house? How often does a 20 something or [00:58:15] 30 something year old live with their parents? Still, there are just cultural differences in Thailand too. And again, I’m not saying that goes against any of your points about household debt at all.
[00:58:22] I’m just saying that’s an example of a nuance or a difference in culture that an outsider might not be aware [00:58:30] of. And then you can take those additional questions as layers of questionings layers of questions down because of your knowledge of Thailand and so, yeah.
[00:58:41] Nick: And we looked at that too. I exactly we looked at how many [00:58:45] people were in the household, how many kids you had, do you live with your parents. Yeah, that’s a, like you said, a cultural shift that I think is not immediately obvious to you when you move. But you’ve clearly, [00:59:00] been here long enough to pick up on these things.
[00:59:06] Scott: Yeah and I will say to just personal anecdotal stuff is that having a mortgage, right? So, I do have a mortgage with my wife here in [00:59:15] Thailand and I also had to experience the change of mortgage rates here, which is that they’re more they’re adjustable rate mortgages. You don’t have an option for a 30 year fixed rate mortgage like you would in the U. S., which I later on realized this is very rare to have a 30 year fixed rate [00:59:30] mortgage. But in any case, what happens here is you have your fixed rate It’s fixed in for two years plus a slight adjustment in the third year, but mostly fixed for three years. And then and then it goes back up to the market rate.
[00:59:43] I’m not sure exactly what that’s called. I don’t [00:59:45] recall, but it goes up quite a bit. So an example would be, I think my first mortgage rate was, 3. 5 percent and then after those three years, boom, it goes up to 7. 5%. And then you have to go back to, this is another thing that’s different is you go into the [01:00:00] bank and you say, Hey, I I want to get the lower rate again.
[01:00:03] And then you’re refinancing typically with the same you don’t necessarily have to change the bank you’re working with, but you have to refinance and then they’ll get it closer to this time refinancing, it was close to the [01:00:15] 3.5 percent again, but you just, every three years you have to go back in and say.
[01:00:19] Can I get the lower rate again? Can I get the lower rate again?
[01:00:21] Nick: Mm hmm.
[01:00:22] Scott: thing that I had the fear of Nick is that I can afford a 7 percent or if it goes up, I’m always building in buffer, but I’m always a little bit [01:00:30] fearful of people that have a lot of debt. If all of a sudden you can’t go in at that adjustment rate, mortgage and get a 3 percent again, and it is going to be a seven or 8%, right?
[01:00:40] How long can some of these families survive on an 8 percent interest rate on their mortgage [01:00:45] and other loans like let’s say for a motorcycle going up very high. So I’m always thinking like I’d assume the government has to keep things low because I’d imagine things getting really crazy if interest rates go up dramatically in Thailand.
[01:00:59] [01:01:00] So I’m not sure if you have any thoughts on that, but I think it would be a scary time if the government didn’t step in on those things.
[01:01:06] Nick: Yeah, no, and people, you’re saying, Oh, I just, I go back into the bank and I get the lower rate, but many people are scared to [01:01:15] go talk to the bank and they just see the rate increase. And they’re like, Oh, my adjustable kicked in. I’m, Oh man, now I’ve got to handle these huge increases. People just don’t know.
[01:01:25] So this is a huge problem. And, yeah, interest rates are I, [01:01:30] I’m not an economics guy. I have a very rudimentary understanding of macro economics, but I do know for a fact that Thailand cannot even so many countries cannot even really control their own [01:01:45] bank policies because they rely on the U S so this issue of foreign capital flowing out is also because the U S has been keeping the interest rates so high.
[01:01:54] People can just park their money there. And the S&P has been performing so well. [01:02:00] That’s insane. Actually I just looked this up not too long ago and I didn’t realize. So pre COVID. It was around 3300, the S&P 500. And now we’re around [01:02:15] 5500. So pre COVID, the peak pre COVID was 3300. So people were like, oh man, there’s this big dip in the market during COVID, but actually you could have bought it at the peak and you’d still be rolling in it right now.
[01:02:29] It’s [01:02:30] yeah, absolutely wild. And so then you’re seeing, Even money in Asia flowing out, like even domestic money in Asia, flowing out investors are now they have, more tools [01:02:45] to, to invest in the U S. And so then there’s money flowing into the U S as well. Not good for Southeast Asian markets but I do think at a certain point, the price becomes so cheap that of big guys [01:03:00] buy it and then it starts to shoot up and then everybody starts to on. So we just gotta ride through the down cycle. And I think those of us that are positioned in Asia, Asia comes back with, [01:03:15] as we were talking, Thailand might have new industries or skills for its population. And those of us that are positioned in Asia, if there’s a change in the narrative like this, and [01:03:30] I think it’s not a matter of if, but when.
[01:03:33] All of this money will become, be flowing into Southeast Asia and you want to be here and ready for it when that does happen.
[01:03:41] Scott: Yeah, that’s a great way to put it. I do remember reading “The World is Flat” [01:03:45] and Oh my gosh, everything’s going to Asia. And, that’s that time of the boom. And now it’s not this amazing opportunity. Instead it’s going back the other way, but chances are eventually Asia is going to be another hot area to invest in. You can front [01:04:00] run it or you can wait. Now, since we were talking about the U. S. stock market, there is something very interesting about your business. A lot of companies that start here individuals start a Thai business. They can start a business under the board of investment. And there’s also something called the [01:04:15] treaty of Amity and with the U.S. and I’m curious if you could explain a little bit more, I understand that’s the path that you went down with your business and if you could explain what that is and how you went about getting or going through that process.
[01:04:28] Nick: Yeah, [01:04:30] I had a client who was trying to pay me when I started my business. I wasn’t really concerned about this at least this administrative cost of setting things up. [01:04:45] What I was concerned about was having control over my business. I also had time because they were already paying me.
[01:04:53] I just had to make sure I didn’t screw myself with taxes or anything. So I, I decided to take [01:05:00] quite a bit of time to look into it and, I knew for a while before this, but then learned a lot more about the process while I was starting it. Americans, in particular, have the Treaty of Amity, which allows us to own, [01:05:15] they say 100%. You can’t actually own 100 percent because you need 3 shareholders. Technically you could be 3 Americans, but, anyways, we don’t have to do this 49% 51% nonsense. We can own the [01:05:30] business. And so I went around asking how to set this up. I wanted just some to talk to some people who had done it.
[01:05:40] And there was a, there was a business in my apartment [01:05:45] building, actually. They were just using the, one of the condo units as their registered office and whatnot. And working out of there too, so I went and knocked on the door and I asked the guy about it. I was like, Hey, are you American?
[01:05:57] Do you have this treaty of Amity thing? How did, you set it [01:06:00] up? Again, I was just looking for, some anecdotes on how this process roughly went. And he goes, you can’t do it yourself. I was like, Okay, I wasn’t [01:06:15] asking that. I wasn’t gonna do it myself, but you know what? I really don’t like your attitude.
[01:06:20] So I’m gonna go do it myself. So my first staff probably still hates me to this day for it, but I called her up the next day. We [01:06:30] sat down, whatever, and I was like, yes, this guy really pissed me off. We’re just going to register for everything ourselves, because you know what? I can read Thai. You’re Thai. We can handle Thai bureaucracy.
[01:06:42] It’s just paperwork. This is fine. And we went [01:06:45] through this long process of filling out all of the paperwork and getting all of the documentation. And we went and collected you can see in the background here, my, my company documents, we went and collected all of them ourselves. One of them is the foreign business [01:07:00] license.
[01:07:00] I think it’s that one on the far end. This one is our company registration document. I don’t remember that one. Anyways, it ended up being like, not that difficult. If I could go back in time, I definitely would get a law [01:07:15] firm to do it. I wouldn’t pay him a million baht, maybe like 50 to a hundred thousand is worthwhile for a treaty of Amity.
[01:07:23] Formation. The work permit actually is the hardest part and the most time [01:07:30] consuming and I still make my staff do this because I don’t like work permit companies. But yeah it’s, you know, this, attitude of there are these barriers, there are these insurmountable [01:07:45] barriers in my way has always bothered me and I think people should just go out and try to do the same and you’ll be surprised much you can get done if you just go and do it or learn it.
[01:07:58] I guess it’s tied also [01:08:00] to this fake it till you make it kind of thing. You should have the confidence to just go and try to do something and see, and if you fail, but probably if someone else has been able to do it then you’re able to do it. For anybody [01:08:15] listening, if you’re thinking about forming a treaty of amity company, Hey, I did it.
[01:08:19] You can think, ah, this guy did it and then go and do it. It’s not actually that hard, little time consuming took us, I think three to six months from end to [01:08:30] end, but, and now I don’t have to worry I can sell this treaty of Amity company later on. I don’t have to worry about any, tie ups with a 51 percent Thai business partner, of course, it’s [01:08:45] only available to Americans, but I think, I think other nationalities also shouldn’t worry so much about the company structure.
[01:08:56] They should just get out and try to make it happen. [01:09:00] Yeah,
[01:09:01] Scott: I love that mentality because there is an excuse, it reminds me of the excuse that happens with Thai. Oh, Thai is such a difficult language. Okay, just do it. And it sounds like you started your time in Thailand with that mentality and now running a business, it seems like you [01:09:15] operate that a very similar way.
[01:09:17] So that’s, very interesting. One, one quick follow up question was you mentioned that the work permits were the tough part. What made that a tough part to deal with?
[01:09:27] Nick: so we went in there [01:09:30] at the very first time and we were doing everything by the book because we were doing it ourselves. We wanted to really make sure everything was perfect. So we had an office, a fairly nice office.
[01:09:44] Good [01:09:45] size. I don’t know about 60 square meters or something. And there were like three of us at that point. And so one of the requirements is you take photos in the office with your staff and blah, blah, blah, blah. So we did this and then we go into [01:10:00] submit the paperwork and the guy is Oh no, it’s not, your photos are not good.
[01:10:06] These are not no, And we were like, Oh, what’s wrong? He’s let me show you. So here we are in this, photos of us with this, like clearly all [01:10:15] beaming, smiling, all clearly employees. With a, very genuine company sign, very genuine offices, clearly a legitimate business. And he’s telling us it’s not good enough.
[01:10:26] And for his example, he then takes out this, he [01:10:30] put slams a folder on the table and flips it open and the first guy is this dude sitting behind a table in a, like a 12 square meter box that is [01:10:45] clear. There’s nothing on the desk and there’s four random Thais standing behind him and it’s very clearly not a legitimate business or this is not his office.
[01:10:57] These are not his employees. It is so [01:11:00] obviously clear. I think in one of the photos, one of the people switched and he was like pointing through, we were looking at this this is the example. This is what you’re showing us is what we have to do. And it’s, but they’re trying Checking boxes, right? So [01:11:15] yeah, we had to go back and redo all the photos and then we show up and there was something else wrong.
[01:11:19] They never tell you everything’s wrong at the same time. It’s just the immigration officers are just, they have their boxes that they need checked and they don’t care about anything else. [01:11:30] Yep,
[01:11:31] Scott: Yeah, that’s I think that story is not super unique. I’ve heard similar things, and I’d say after going through the permanent residency application process myself, it’s just funny when you mention the pictures, because it’s a very similar story [01:11:45] when you’re applying for permanent residency, the exact pictures that you need to have taken and the exact angle, and I had to laugh a bit when you said, We were smiling and it’s no.
[01:11:52] I know that much from permanent residency. Do not smile. The angles important, whether or not you’re making eye contact with [01:12:00] the camera or not as important to all these, things are just important to be aware of, but you got through it. And I think that’s really the story here is that it’s there are always going to be some barriers in the way, but as long as you say all right, I’m going to go back and take another photo.[01:12:15]
[01:12:15] Then you’ll get it done and it’ll eventually work.
[01:12:19] Nick: And that’s it. You’ll get it done. Eventually it will work. Just keep going.
[01:12:23] Scott: Yeah. So I want to wind this down. You’ve been incredibly generous with your time. So thank you so much for that. I [01:12:30] wanted to quickly touch on your community involvement because I understand that you’re a part of some clubs here and I think that is really important for me to understand the importance of that here in Thailand is it’s being involved, finding communities of people that you can learn from, things like that.
[01:12:44] So are there anything [01:12:45] that you’d like to share on that side of things of what you do here in Thailand outside of business?
[01:12:49] Nick: Yeah, absolutely. First of all, we met through Asia Pillars, which is an excellent organization. Contact Alex. He’s a great guy. [01:13:00] Yeah. And then I am also a treasurer and on the board of the Foreign Correspondence Club, of Thailand. And there’s it’s a press club for those that don’t know.
[01:13:12] And, there are, there’s a network of press clubs throughout the [01:13:15] world, so it’s really nice. It’s also really nice. I I went to Munich one time and I, sat down with a guy who, edited a newspaper. Why? Because I was on the board of the correspondence club in Thailand. I don’t even think I would have had to be on the board.
[01:13:29] I could [01:13:30] have just messaged to the guy. So that’s quite nice. And in Thailand in particular, we focus on, political, economic, and social events. And I am the one pushing the economic [01:13:45] events. So I think that people should absolutely come if they find, any part of this conversation, interesting, really, they’ll find those events really interesting.
[01:13:54] We did one on the planned increase of the minimum wage, which, [01:14:00] it was promised to be huge and then was scaled back and then delayed and, but it’s up on YouTube. If you want to look, go to the FF FCCthai.com. You can look up all of the past [01:14:15] events. And then we did one on household debt, which we talked about during this interview as well.
[01:14:21] And that was very interesting. We had some very interesting people up there. And we’ll do another [01:14:30] one soon. I think we’ll do it on the automotive industry because that’s been traditionally one of Thailand’s largest exports and it’s changing especially with the coming of EVs. So we hope to do that in late September.
[01:14:41] But we have events all the time. You can email info at [01:14:45] FCCthai.com and get a list of the events. That’s how I got involved to begin with. It’s, I just subscribed to their weekly newsletter and then you see an event you like and you show up and meet interesting people. You learn about a new subject.
[01:14:56] And of course you can message me for any of that. [01:15:00] Yeah, I’d say those are the the biggest things in terms of community.
[01:15:07] Scott: Yeah, and I’d just like to highlight some of those points that you made there is that there’s communities for different things. And I think there’s a lot of hey, talk with other [01:15:15] foreigners. There’s a lot of, hey, talk with other businesses. I think some people might not know some of those communities that are a little bit more, again about economics, about politics and things like that.
[01:15:25] It’s if you’re not attending those, you might be missing out on a really important part because, especially if [01:15:30] you’re thinking about starting a business here, or if you already are running a business here, it’s going to be important to read beyond the news headlines and to actually understand a little bit more how the market operates here. And my, you might want to go outside of just the regular networking events and going to [01:15:45] some of these more specialized areas. I know I wasn’t aware of the foreign correspondence club, but based off everything you share with me, I think it sounds really interesting.
[01:15:51] So I’d encourage others to challenge themselves and go into some areas like that. But yeah, thank you so much. For your time, Nick, I think it’s been really [01:16:00] valuable for me, hopefully for the audience as well. Now what’s the best way to get in touch with you directly or to learn more about your business?
[01:16:09] Yeah, so my website’s probably the best. It’s khayanresearch.com [01:16:15] K-H-A-Y-A-N research, R-E-S-E-A-R-C-H.com. And of course, Scott, you have my email. Anybody can get in touch with you and get my information that way. Perfect. I’ll definitely include all of those links that we’ve [01:16:30] discussed in the show notes but it’s been great, Nick, thank you so much for the time today.
[01:16:33] Nick: Thank you, Scott. I appreciate the interview. It’s been a, it’s been a lot of fun.
[01:16:37] Well, I hope you enjoyed the episode. A huge thanks to Nick Bernhardt for sharing his expertise with us today. If you’d like [01:16:45] to connect with Nick and learn about his work, be sure to check out khayanresearch.com. I’ll also include links to both his website and to the Foreign Correspondents Club of Thailand in the show notes.
[01:16:56] Scott: Now, if you got value out of this episode, please like, share and subscribe. And [01:17:00] if you’re feeling really generous, leave a review on your favorite podcast platform. I hope you learned something and I’ll catch you on the next one.
[01:17:06] [01:17:15]
