The ground is shifting beneath our very feet. Can you feel it?
For Millennials, and now Gen Z, fixed modes of work and play are being replaced by fluid ones.
Meet digital nomads — the millions of people who’ve turned away from the traditional office, opting to work and live remotely. They’re happily leveraging laptops, global wifi, and online collaboration tools to work from beaches, mountaintops, and cafes all over the world.
This past year, I’ve lived as a digital nomad and it’s been one of the best years of my life. Thank you Mexico, Thailand, and the USA! After experiencing this lifestyle first hand, I’m confident remote work will grow in popularity and the stats suggest the same:
68% of millenials prefer remote work options
27% of U.S. workers say they “might” become digital nomads in the next 2–3 years, and 11% say they plan to become digital nomads
Over 50% of Americans will work independently by 2027
Hello market opportunity!
For work, I advise startups all over the globe. I also dabble in startup investing and project based consulting work. For fun, I evaluate opportunities and dream up startup ideas. Some people do art; I make fake pitch decks.
Lately, I’ve been thinking about remote work and how entrepreneurs and investors can take advantage of this trend. Specifically we’ll look at startup opportunities related to:
1) Where digital nomads live and work (real estate)
2) How they work and run their businesses (software – feel free to skip ahead if this is more your jam)
1) The “Where” and “How” of Nomadic Living
As more millennials opt for nomadic living, they’ll need more reliable, affordable, and quality lodging options. For every glamorous story of sipping coconuts on the beach, there’s a wifi connectivity issue or disappointing sublet.
The good news is that there are serious arbitrage opportunities with inexpensive real estate & low cost labor in popular nomad countries.
Here are a handful of opportunities in the space:
- Aggregating medium-term rentals and sublets
- Creating a membership housing network
- Transforming low end hostels and motels
- Building digital nomad hotspots in the US
- Developing coworking spaces in amazing (and inexpensive) places
Let’s get into the deets!
Medium term rentals & curated sublets
Many millenials are opting to stay in beautiful locations for one to six months at a time. The top nomad spots include Bali, Chiang Mai, Berlin, and Prague.
Today, when digital nomads land in a new city, they join Facebook housing groups, call “for rent” sign phone numbers, and track down local “real estate” agents. Since there’s no easy review or booking system, they spend a few days cruising around on motorcycles finding a place to live.
As you can imagine, finding affordable medium-term housing is challenging. I’m not the only one who’s dreamt of an online marketplace with organized listings of respectable housing spots at local prices — a place to read the reviews and book a sublet or medium-term rental ahead of time.
What are the options today?
- You can book long-term stays on Airbnb, but you’ll often pay top dollar
- The usual vacation housing and hotel rental sites like Homeaway and Booking.com
- Craigslist sublets work in select places, like Mexico City
Membership living
Let’s take this one step further. Even if nomads manage to find a reasonable apartment or below-market Airbnb, having a home base doesn’t always appeal. After all, nomad is the keyword. Many of us like living out of a carry-on and owning practically nothing.
What if instead of paying for private apartments, people could get one membership to a network of housing options worldwide — shared spaces and individual units? Members could embrace their wanderlust worry-free with a trusty “key” to a network of housing.
Obviously, this model requires some operational chops… But it’s already picking up steam.
Who’s already doing this?
- Outsite offers short & medium-term co-living rentals in 17 cities
- Roam is a co-living network promising “comfort, community, productivity” in 14 cities and has raised $3.4M
Both Outsite and Roam are expanding quickly and interweave co-living with coworking globally.
High end hostels and affordable boutique hotels
For those past the backpacking phase, the word “hostel” might be a red flag. But what if we could capture hostels’ redeeming qualities (think: low prices, instant community, helpful resources) without the college vibes (think: bunk beds, binge drinking).
This best-of-both-worlds solution can be as simple as transforming old and underperforming hostels into well-designed, trendy, and affordable hotels. I think there’s opportunity to both buy and lease real estate — depending on the market and model.
Who’s already renovating old spaces?
- Selina recently raised $95M and is in over 20 major Central/South American cities. They’re like the WeWork of hotels. Their business model is long term lease to rent.
- Rodamon converts old hostels for a new generation of travelers (think Riad’s in Marrakech) and claims a highly profitable business model
Digital nomading in the US
Sometimes, the grass is greener in our own backyard. The US is packed with beautiful destinations, from Yellowstone and Lake Shasta in the West to Acadia and Congaree in the East.
In the past 2 weeks, I’ve wasted at least 10 hours looking for a 1 month cabin sublet in the US. Today, it’s almost impossible to find medium-term nature stays. I’m willing to bet boutique cabin life, equipped with wifi and other amenities, would be immensely popular. I don’t want to take video calls from a camping tent, but I’ll happily take calls from a nice wooden porch in a forest.
Who’s in the market?
- Loge just raised $4.5M to continue building unique lodging experiences for outdoor enthusiasts
- Shelter Social Club creates lodging experiences to bring people together in beautiful small cities like Santa Barbara and Ojai, California
- Cabin escapes was started by by two instagram influencers (cabinlove and forestbound) to find vacation cabin rentals
Notably, none of these are focused on digital nomads or have pricing that’s conducive to long term stays.
Destination coworking
Everyone knows that shared offices are on the rise, offering workspaces to startups, freelancers, and the self-employed. They provide a blend of community, flexibility, and comfort that can’t be met by fluorescent cubicles or hole-in-the-wall coffee shops.
Despite the growing number of coworking spaces, there’s still opportunity between the expensive big city behemoths like WeWork and cheap tropical spots with poor wifi. Trusted and affordable co-working spaces, off the beaten path, are a key piece of the digital nomad magic.
Where are cool coworking spots today?
- Dojo in Bali is 1 minute from the beach, super vibey, and always packed (unlimited coworking: $195 USD/mo)
- Hubud, also in Bali, has tons of events, workshops, and programs (unlimited coworking: $220/mo)
- At Beachhub in Thailand, you can work from a beachfront hammock, order a coconut, and take a conference call at the same time (unlimited coworking: $190/mo)
Notably, all these places offer co-living options, but their primary business is co-working.
2) The Nuts and Bolts of Remote Work
While the examples above focus primarily on real estate plays, there’s another category of opportunity in the “work infrastructure space.” Technology can enable more people to be self-employed and/or work remotely.
Here are a few opportunities that come to mind:
- Creating new marketplaces for contractors
- Developing a one stop shop for back-office tools
- Offering a freelancer benefits platform
High end contractor marketplaces
“The rise of the contract workforce” enables folks to deviate from the customary 9 to 5. But with it comes a unique set of challenges:
For the 74% of millennials interested in self-employment, the main problem is finding the right work. And for companies looking to hire, the #1 concern is finding the right talent. At the intersection of this Venn Diagram lies an opportunity to bridge the gap in this marketplace.
Ideally, there would be an on-demand marketplace to empower highly-skilled, trusted professionals to easily work for themselves (without having to settle for low-skill jobs like Lyft, Uber, Task Rabbit, etc…). People should be able to pop online and monetize their skills immediately. Similarly, companies should be able to hire the right person for any job, anytime.
Who’s already connecting freelancers with clients?
- Fiverr and Upwork are large-scale platforms with a reputation for low-skilled inexpensive labor (although they also have top talent)
- Working Not Working and Toptal are more exclusive, cream-of-the-crop freelance sites for “technical talent” (aka designers and engineers)
- There are job specific marketplaces, like Textbroker for writers and Paro.io for finance pros
One stop shop for the back office
Once freelancers find the right projects and clients, they still face a long list of worries:
Do I need an LLC? How do I file taxes? How do I draft contracts? What’s a respectable rate? How do I bill? How do I get paid on time? And so on and so forth…
The reality is: There’s no easy way for freelancers to manage all their back-office needs. Without the structure and safety net of an established company, they must rely on their network, cobble together services, or hire folks part-time.
Whether it’s scheduling, bookkeeping, or legal assistance, they’re clear needs.
Who’s already making headway?
- Bench.co is “America’s largest bookkeeping service for small businesses”
- Atrium provides and simplifies legal services for startups at reasonable prices
- Quickbooks is the leader in accounting software for small business
- Fin offers personal assistants powered by AI
While each of these apps is useful in its own right, there’s no simple one-stop shop for all back-office tasks.
Newly self-employed folks should be able to plug into a single platform and be ready to rock. After all, it’s 2018 and a lot of this can be automated or affordably outsourced.
Work benefits and perks platform for freelancers
Just by showing up at a traditional full-time job, your company typically handles all the essentials: from health insurance and wellness benefits to automated tax payments and retirement saving programs.
Unfortunately, for freelancers, there’s no single benefits platform with pre-negotiated discounted rates. If you’re self-employed, you’ll likely pay the full consumer price for all your benefits.
The community would greatly benefit from a single, affordable, comprehensive platform. Until then, covering all these bases will be quite the headache.
Who’s in this space?
- Stride Health helps independent workers find and buy health insurance
- There are a lot of financial startups catering to freelancers to help with everything from sending invoices to budgeting
- Facebook groups like Freelancing Females, sometimes negotiate discounts for group members
The Takeaway
As younger generations opt for a life outside of the traditional 9 to 5, market opportunities will continue to grow. The arbitrage opportunities we just discussed are natural product of remote work’s rise.
If you’re interested in any of these concepts, let me know. I may have a fake pitch deck for you 🙂
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Originally published at medium.com