Lao IT Dev: A success story of some Lao IT entrepreneurs

Laos isn't well known for it's IT industry, and although the National University educates a lot of IT students, most end up as hardware sellers or sysadmins. Entrepreneurship isn't widely seen here, and receiving international awards is really rare. But there are exceptions, and Outhai Saioudom (Os) one. He is the Manager of a company Lao IT Dev, a startup he founded together with some friends two years ago. While they studied IT they started a forum called Laozaa, which became very popular very fast. "It was just a forum about technology. People asked questions about computers and IT, and we and others answered them", Os describes the early days.

After graduation, the group decided to go more professional. Instead  of answering questions in a forum, they collected the most relevant topics and published the first Lao IT magazine for IT and Electronics, called E-Corner Magazine. It is still the flagship of Lao IT dev. On Thursday they received the Asean ICT award in the Digital Content section. On Thursday, 15/11/2012 Os and the co-founders Thanongsack Souksavat, Virasack Viravong, and Air Chanthalavong went to Cebu, Philippines to receive the award.

The e-corner Magazine became fast the number one source for people interested in anything related to IT. From the beginning it had a professional lay-out, 4 color printing for a lot of pages and topics from installing hardware to game reviews. Soon the company started the e-corner weekly news, a IT update that went on air on Lao Start TV last year. And last but not least the even made it into the radio.

While there is still not much revenue coming in from the media activities, Os counts it as successful public relations. "Most people know us from Laozaa or E-Corner. They know our skills, and that's why they hire us." Lao IT Dev develops websites and software, in particular android apps. mainly for a local market. The client list ranges from the Ministry of forest to car dealers like chevrolet.

7 people are working now in the office of Lao IT Dev, with Os taking care of the daily operations. The new daddy who married his wife last year is getting more busy these days. "We build the website and database for 108jobs.la and recently developed an android app that shows you the current screenings at the ITECC cinema", he says.

Beside this, Os is also very active in the open source community, in particular for the Content Management System Joomla. "We made the translation for Joomla 2.5, so Lao people can use it", he explains. They also conduct workshops introducing the use of these free open source solutions. Since companies and government agencies in countries like Laos have only limited fundings, open source is a important basis for IT. Os also want to work more with Ubuntu and do some translations. "But we need funding for that, because there are not so many users in Laos right now who can do that." His experience is that if people start their computer experience with Windows, they stay with it. "But if they start with Linux, they stay with the open source solution", Os says.

His company is just at the beginning. "We are starters, others have more experience. But we are technology experts, and we understand mobile technology. We hope to be in the top five in 5 years from now."

Winning the ASEAN ICT award might be a step closer to this ambitious goal.

Laos slightly better in doing business, but still bad

Just saw the new index for the ease of doing business. Laos made it 3 ranks up, but it is still bad. Improvement came mainly from the parameter of starting a business (but ask myself if this is meant for a 100% FDI?) and trading across borders. Rank for protecting investors is 185, and in all other fields Laos actually dropped.

Of course the relevant organs will praise the jump. If you are interested in starting a business, better have a closer look at the data here. This site gives also some good information about the processes of doing business here. What you need to know is that this tables just mention the official data. For example, even if you can go to court in a dispute, it doesn't mean this court has the same standards as in other countries. Also, the tax department can be quite creative in what kind of taxes apply to you, and expect a lot of expenses for lawyers.

If you take a look at the contributors you will see that these are the most competent ones you can find here: http://www.doingbusiness.org/contributors/doing-business/lao-pdr

Does Laos need a Big C (or any other) supermarket?

On the Lao FAB list (members only) is an interesting discussion about weather Laos needs a Big C supermarket or not. While some people say it is good because it establish a supply chain management, jobs, taxes and a distribution channel for local producers, others argue that it brings profit for Thai companies, and they will be the ones who supply the markets.

Someone else pointed out that supermarkets will kill the small shops and markets.

First of all, Seven Eleven proves that there is a market for small shops if they are part of a chain that can compete with its purchasing power. Laos is far from developing it's own supermarket chain, for several reasons (mainly lack of investors and no benefits like tax exception). For the suppliers, supermarkets buy usually as close as possible if the price is compatible. If they can save money (and tax) with Lao eggs, they would buy Lao eggs - if the quantity and quality is guaranteed. But this might be an issue.

In general, I think foreigners should be careful to deny Lao people any development. I haven"t seen a better model than regulated capitalism and open markets right know, and as far as I know the system in East Germany failed. So, it is nice dream to have a country of happy people and small shops, but reality is different. Lao people want to participate in consumption, as they do every week when they go to Thailand. Just some cannot afford that. But should they denied having access to local supermarkets then?

What makes a good business environment?

It seems there is a lack of knowledge in some Asian countries about what needs to be done to attract and keep investors. The "keep" part is the most important, since emerging economies always attract in the beginning a type of businesses who are looking for a fast and short term opportunity (and profit). They jump into the market, get the profit and move forward.
For a sustainable development there are some key factors.

1. Transparent laws
Laws need to be enforced equally for everyone. If a law is only applied to a certain type of businesses or a certain group of people, it will be considered unfair and a major obstacle for attracting investments.

2. Tax reduction, not increase
If you want attract businesses and investors, the tax issue is probably the biggest. Companies don't like taxes while governments rely on them as their main income. So there needs to be a balance, but in early economic development stages it is recommended to keep taxes for companies as low as possible.

3. Zero corruption
There is still no proof that corruption does anything good to a economy. It needs to be cleared in all levels of governance and businesses. That also leads then to

4. Market rules
If there is no justice for businesses, they will be scared away. In case of business disputes there needs to be a transparent judicial system to oversee them, based on laws.

5. First come, first serve leads the wrong way
It is not true (if ever told) that the first investor is the best because he is bringing money for sure. As we see in many cases in south east Asia, it is often wrong - they fail in the planning stage. So governments should be carefully analyzing investment proposal for the long term impact for the economy as well as for environment and social impacts.

Laos Business MEetings - how to import to Laos

Peter Evens the mastermind behind Gecko Wines, talked recently about how to import goods to Laos, and what the challenges are. I recorded the talk and published it in my Podcast From Asia With Love...
Enjoy listening

http://wanhoff.com/?p=179