Post: #1

http://www.inc.com/jake-cusack-and-matth...earth.html

I think for most people being a successful entrepreneur is the ultimate dream. In my opinion, anything else and you are just a wage slave. The problem is without a good fucking idea, your entrepreneurial ambitions remain...a dream.

For the last year or two, I have had the strongest desire to head off to a frontier market: learn the language, the culture, make connections and scout the area for opportunities. The last couple couple months I have been seriously prepping for this venture and my resolve is firm. I have no allusions about this being easy. It will be hard, perhaps dangerous and as always there is a risk of complete failure. Why would I(or anyone) want to do this?

In the West, you have everything working against you. The markets are already developed. The taxes/regulations/cost of living are high. The workforce is full of highly educated smart guys just like you. How do you beat them? Move. There are vast unscathed lands for an adventurous business-savvy self-starter. I am talking about countries where the average person has never owned a TV or toaster, countries where the services and goods you take for granted simply aren't there. You don't need a Newtonian idea in these places, there is low hanging fruit on the trees. Whats the catch? No one wants to live in fucking Dushanbe. No one knows where it is. You will encounter corruption, poverty, discrimination and a very different way of doing business. If you don't have balls of steel and your not willing to spend a 1-2 years soaking up local intel, you will probably get burned or end up in trench. Just remember, high risk/barriers to entry=profit.

On a final note, I am not speaking from experience, I haven't done this yet. That said, I think it is a 100% viable and the opportunities are undeniable. I see a lot of young guys accepting a life of mediocrity in the U.S and Europe, trying in vain to climb a non-existent corporate ladder. If you have the guts, intellectual resolve, and are willing to endure hardship this may be for you.

Post: #2

Great paragraphs. Not exactly moving into Africa, I'm considering a market in South America to create my next big project. I think what you say about going to a developing market - is something pretty much underestimated. Good luck.

Patience, persistence and perspiration make an unbeatable combination for success.

Napoleon Hill

Post: #3

Where you planning to move in to?

Post: #4

(07-07-2013 05:32 PM)Eastbound Wrote:  I am talking about countries where the average person has never owned a TV or toaster, countries where the services and goods you take for granted simply aren't there. You don't need a Newtonian idea in these places, there is low hanging fruit on the trees. Whats the catch? No one wants to live in fucking Dushanbe. No one knows where it is. You will encounter corruption, poverty, discrimination and a very different way of doing business.

I agree with you almost entirely, but what's stopping other people as smart as ingenious as you from going to these places is not just a little bit of corruption and poverty, it's because the whole system is usually completely messed up and different from your experience and is most likely either primitive or violent or oppressive or ultra corrupt or offers no physical or legal safety, or everything at the same time.

It's extremely hard to succeed if you go as a foreigner and don't know much about the place/environment. I'm not saying it can't be done, some have succeeded so why not you as well, but be advised that if it was easy everyone would've been there already.

I think despite the cons you mentioned there is still opportunity in the west, not much, but some. With that being said I've been interested for awhile both in Brazil and Angola, since I speak the language. South America would definitely be my first choice, Africa a distant second.

Post: #5

Staros: Big difference between developing and frontier, Angola being the latter. Every other guy wants to set up a surf shop in Brazil. Its when you are willing to go where others aren't, that real money can be made.

Chinadawg: Ha, so I can see you on the plane? I will only say its a country is the CIS/Central Asia. Frankly, the whole area is a boom-town, several of the worlds fastest growing economies and most people just ignore it.

Teutatis: Good points, man. I know it wont be easy. The first year on the ground will just be market research. I want to be able to speak the language and literally know every damn thing about the country. I want to know their history, how they think, what they value, etc...This is all stuff that can be learned. Local connections are crucial, preferably with people in power. That said, there are tremendous advantages to being foreign. I will be one of a tiny percentage of Western educated English speaking people in the country. This background will enable me to see whats 'missing' and where value can be found.

Post: #6

-

You'll enjoy these books, OP:

http://www.amazon.com/Riches-Among-Ruins...B005IUYMJC

http://www.amazon.com/Street-Smarts-Adve...jim+rogers

http://www.amazon.com/Adventure-Capitali...jim+rogers

http://www.amazon.com/Investment-Biker-A...jim+rogers

Post: #7

(07-08-2013 05:23 AM)Eastbound Wrote:  Chinadawg: Ha, so I can see you on the plane? I will only say its a country is the CIS/Central Asia. Frankly, the whole area is a boom-town, several of the worlds fastest growing economies and most people just ignore it.

No, I've chosen a market already. But given this forum is about sharing ideas and information with each other I think you could be a bit more specific.

Post: #8

YMG: Thanks for the links. I like Jim Rogers a lot, he has definitely influenced my outlook. However, he made his money in fortunate period of time where wall-street was booming. There is nothing to emulate. I am looking for role models that started from scratch in a developing country and became wildly successful. There aren't that many who have done this but enough for me to believe its possible.

Post: #9

The "Riches Among The Ruins" book gave me some great ideas. Even though his specific products no longer have the wide profit margins, you can apply his business model and principles to various other world wide enterprises..

Post: #10

(07-08-2013 08:53 AM)Eastbound Wrote:  YMG: Thanks for the links. I like Jim Rogers a lot, he has definitely influenced my outlook. However, he made his money in fortunate period of time where wall-street was booming. There is nothing to emulate. I am looking for role models that started from scratch in a developing country and became wildly successful. There aren't that many who have done this but enough for me to believe its possible.

You should read those books because he discusses things like the economy and how countries have changed over time. He's set two world records for traveling the world on a motorcycle and then again in a small mercedes benz.

He doesn't just tell you where to throw your cash and equities. He talks about opportunities and risks in a range of contexts in emerging markets everywhere.

Post: #11

(07-09-2013 01:59 AM)youngmobileglobal Wrote:  

(07-08-2013 08:53 AM)Eastbound Wrote:  YMG: Thanks for the links. I like Jim Rogers a lot, he has definitely influenced my outlook. However, he made his money in fortunate period of time where wall-street was booming. There is nothing to emulate. I am looking for role models that started from scratch in a developing country and became wildly successful. There aren't that many who have done this but enough for me to believe its possible.

You should read those books because he discusses things like the economy and how countries have changed over time. He's set two world records for traveling the world on a motorcycle and then again in a small mercedes benz.

He doesn't just tell you where to throw your cash and equities. He talks about opportunities and risks in a range of contexts in emerging markets everywhere.

Will definitely read then. Another guy you might find interesting, YMG, is William Heinecke. He hasn't written a book unfortunately but here is a recent article about him.

http://dealbook.nytimes.com/2013/07/04/w...g-success/

Post: #12

On topic - http://www.vice.com/Fringes/cowboy-capitalists-part-1

off topic.
http://www.vice.com/Fringes/portrait-of-...n-oligarch

Post: #13

(07-09-2013 07:00 AM)WestIndianArchie Wrote:  On topic - http://www.vice.com/Fringes/cowboy-capitalists-part-1

off topic.
http://www.vice.com/Fringes/portrait-of-...n-oligarch

I really respect the guys making a go out of it in Africa. No language barrier for the most part, but getting anything done there seems to be a real pain in the ass.

Post: #14

By the way, Luanda, Angola's capital, is the second most expensive city in the world, right behind Oslo.

Post: #15

It all sounds fascinating behind a keyboard...and it is, but when you go to these places (especially the more volatile environments) be prepared to a) lose everything you brought along to invest b) face situations that could turn out deadly. It can be exciting no doubt. I for one know two investors from Russia who went to Africa (diamonds) with big dreams and about a million in cash/funds to invest. Both lost everything and are happy they got out alive. And for every oligarch you see in that Vice video, you can find 99 buried ones in that same forest he owns. But hey, if you do make it, ROI will beat anything possible in NA at the moment..

Post: #16

(07-10-2013 05:28 AM)Eastbound Wrote:  

(07-09-2013 07:00 AM)WestIndianArchie Wrote:  On topic - http://www.vice.com/Fringes/cowboy-capitalists-part-1

off topic.
http://www.vice.com/Fringes/portrait-of-...n-oligarch

I really respect the guys making a go out of it in Africa. No language barrier for the most part, but getting anything done there seems to be a real pain in the ass.

How much money did they make on that trip? Somehow I don't think its all that much.

2000km is 1600miles. About 3 days by truck in the US and will cost maybe $4000 for the trip (depending on where its actually going to). 20%, broker, 40% diesel, the rest to the trucking company. So trucking company gets about $1600for 3 days of work.

They were on the road for what 2 months?

The truck they used would get them shot on sight in the States, much less fined and taken off the road. They had to use bananas as a makeshift grease, any truckstop in the middle of nowhere Dakota could change out the diff oil no problem and they work 24/7. While you sip at a starbucks and not have fuel siphoned out of your tanks.

I don't really see why you would bother.

+1 on the multiples of bodies in that forest. Notice he keeps boars too.....

Post: #17

(07-12-2013 12:34 AM)cafedelmar Wrote:  It all sounds fascinating behind a keyboard...and it is, but when you go to these places (especially the more volatile environments) be prepared to a) lose everything you brought along to invest b) face situations that could turn out deadly. It can be exciting no doubt. I for one know two investors from Russia who went to Africa (diamonds) with big dreams and about a million in cash/funds to invest. Both lost everything and are happy they got out alive. And for every oligarch you see in that Vice video, you can find 99 buried ones in that same forest he owns. But hey, if you do make it, ROI will beat anything possible in NA at the moment..

Exactly.

I was working in Angola for a year and ran two different businesses while i was there. Were there opportunities to make money? Lots. Was it a nightmare? Hell yes. Be prepared for the worse: Lazy workers, liars, guys that smile with you but are preparing to rob you behind your back, corrupt government, fucked up fiscal services that are trying to make money for everything. Depending on the nature of your business and how successful it becomes, don't be surprised if they decide to close down your business just for the sake of it. You won't be able to take holidays because you never know what could happen to your business while you gone. Unhelpful customer services everywhere you go and the majority of time they don't even understand their job roles. Be also prepared for constant electricity power cuts, lack of water at your place, slow internet connection, expensive phone cards, expensive food and if you want cheaper options the food won't be so clean (10 dollars is the cheapest meal you will find). Average women acting like 9s and your competition is lots of young local guys driving expensive cars who are kissing these local women asses all the time. Nosy neighbours, local guys cockblocking you and hating on you because you are fucking their women, local guys getting emotional because you don't tell them whats up (bitch i dont know you, why am i going to say whats up to you? And i am actually the type to become popular everywhere I go) You want to fuck a lot there, you need to look rich. Guys that call DR women golddiggers, try go there and you will see the definition of golddiggers.

Once you are there, you will feel that your quality of life is so low that you need to be really strong to stay there for a long time. I met many arabs who were running successful businesses there but they come from similar environments and also had stronger connections over there (the arabs been there since early 90s) so it wasn't that difficult for them to adapt. The english and americans that i met there are all working in high paying jobs, never met one who was actually running a business there. Looking to go there? Good luck because you will need it. I lost a lot of money but i am also glad that i left.

Post: #18

Pitt: Sorry to hear about your bad experience. Africa isn't everyone's cup of tea, it certainly isn't mine. I don't like the heat and I don't like places where I stick out like sore thumb. Imo, there are other frontier markets that are less volatile.

Post: #19

Trying one's luck in frontier markets is nearly suicidal. The risks are enormous.

I firmly believe that the best way to play the frontier markets roulette is to diversify. This is what some investment funds focused on frontier markets do: they pool the savings of, say, 10,000 people, and supposing that each person invested a total of $100,000, we are talking about a total of 1 billion USD. Then, they invest in 10 different countries, say, 100 megabucks per country. Within each country, they may invest in 10,000 different businesses (such as real estate), which would be $10,000 per business. What does this mean? It means that each investor has $1 invested in each business of a portfolio of 100,000 businesses.

If a civil war erupts in country X, each investor loses at most $10,000, which is 10% of their investment. Moreover, civil war in country X should be completely decoupled from the political situation in country Y, which means that frontier markets should be less correlated than, say, the American and European markets. Compare this to investing $100,000 in country X and losing it all when a civil war erupts.

It is easy to romanticize extreme risk-taking, but one should take into account the eternal survivorship bias. Rich people almost never do extreme risk-taking, since they have enough cashish to afford to derisk themselves as much as possible.

Post: #20

Icarus: The Western U.S was a frontier not so long ago. Very little government, lawlessness was rampant,high murder rate, etc...Many people did very well for themselves. High profits rarely exist in a low risk environment. Investing is all fine and dandy if you have money to invest, I don't. But even if I did, I would want to be on the ground to see where/what my money is going into. Honestly, I find this stigma/fear about going to frontier markets to be perplexing. You could get hit by a car tomorrow. Or get robbed and stabbed. The latter I felt more likely to happen to me in Detroit or Miami than Honduras. I digress, it means more opportunities for me...

Post: #21

(07-12-2013 09:25 AM)Eastbound Wrote:  Icarus: The Western U.S was a frontier not so long ago. Very little government, lawlessness was rampant,high murder rate, etc...Many people did very well for themselves.

And many people ended up six feet under at a tender age, too.

Shall we take a look at this September 2010 list of frontier markets [pdf] compiled by the FTSE? It includes both Estonia and Nigeria!!! Estonia is almost Scandinavia, and Nigeria is a 3rd world shithole.

Some people have done well in emerging markets by trying to replicate what worked in the U.S. in other countries. Does Russia have anything resembling Amazon.com? Can people buy cosmetics or pharmaceuticals online in Brazil? E-commerce is old news in the U.S., but there are still opportunities in some parts of the world. An interesting example is Pavel Durov, the founder of VKontakte, who became a millionaire by copying Facebook.

(07-12-2013 09:25 AM)Eastbound Wrote:  High profits rarely exist in a low risk environment. Investing is all fine and dandy if you have money to invest, I don't.

If you don't have money to invest, how do you plan on becoming an entrepreneur? You need at least $10,000, and that is the minimum investment at some hedge funds.

Post: #22

Although his rebuttal was a bit harsh, I tend to agree with everything Icarus said.

Post: #23

(07-12-2013 09:45 AM)Icarus Wrote:  And many people ended up six feet under at a tender age, too.

One way or another you will end up six feet under. Spending your time worrying about it is unproductive.

Quote:Shall we take a look at this September 2010 list of frontier markets [pdf] compiled by the FTSE? It includes both Estonia and Nigeria!!! Estonia is almost Scandinavia, and Nigeria is a 3rd world shithole.

That classification list is simply absurd. It would be a stretch to call Estonia developing, little yet frontier. What is your point?

Quote:Some people have done well in emerging markets by trying to replicate what worked in the U.S. in other countries. Does Russia have anything resembling Amazon.com? Can people buy cosmetics or pharmaceuticals online in Brazil? E-commerce is old news in the U.S., but there are still opportunities in some parts of the world. An interesting example is Pavel Durov, the founder of VKontakte, who became a millionaire by copying Facebook.

My entire first post was about the idea of copying western business models in frontier markets. That is the nature of the opportunities there and why I am so interested. I actually cant see what we are arguing about...

Quote:If you don't have money to invest, how do you plan on becoming an entrepreneur? You need at least $10,000, and that is the minimum investment at some hedge funds.

Really? First of all, the returns on $10,000 or even $100,000 are not going to set you up for life. A successful business can. Secondly, there is a reason why capital markets exist. Investors and institutions provide money to entrepreneurs so they can profit off their creativity and hard work. Finance 101. Very very few entrepreneurs launch their ventures using their own money.

Post: #24

(07-12-2013 01:25 PM)Eastbound Wrote:  My entire first post was about the idea of copying western business models in frontier markets. That is the nature of the opportunities there and why I am so interested. I actually cant see what were arguing about...

The whole point is that one should choose very, very carefully which frontier market to go to. The ideal is to find a country where there is:

1. peace.
2. social stability.
3. rule of law.
4. strong, functional institutions.
   

Which excludes virtually all of Africa and a great deal of Latin America. Moreover, it would be nice if the country in question has a reputation inferior to its reality (prestige is hard to build, and sometimes countries' realities improve faster than their reputations), so that there may be a sort of "arbitrage" to be exploited. I think this leaves mostly Eastern Europe. Southern Europe may be a possibility, too.

(07-12-2013 01:25 PM)Eastbound Wrote:  Investors and institutions provide money to entrepreneurs so they can profit off their creativity and hard work. Finance 101. Very very few entrepreneurs launch their ventures using their own money.

Sure. But finding investors may not be as easy as you wish it were. Investors are conservative, and tend to care about things like academic pedigree, credibility, prestige, track record, etc. Have you worked at a place like McKinsey or Goldman Sachs? It helps.

In any case, best of luck.

Post: #25

Hell, if you have to check all those boxes Icarus, no point leaving the West. This isn't a good gig for the cautious risk-averse types. The guys who do well in these arenas probably have a bit of a loose screw. Southern Europe and most of eastern Europe are under no definition frontier markets. I think you are looking for arcadia, mate. Stable, easy-to-do-business countries aren't bustling with the opportunities we have been talking about. It all comes down to what you want? I like the grit and energetic vibe that comes with living in an emerging economy but its definitely not for everyone.