Stuart McDonald is the founder and publisher of the popular online travel guide to South East Asia – Travelfish.org. Recently they have made the switch from selling downloadable ebooks to iPhone applications and in their own words: “This app doesn’t supplement a guidebook, but replaces it.” Some application developers have become millionaires overnight with the success of their applications.

For people who don’t own an iPhone or maybe even a smart phone, can you tell us what an application actually is?

An application is a program that runs on your phone. In our case the apps are similar to electronic books in that you can swipe from page to page to get information, look at photos and so on.

Previously on your site Travelfish you were selling downloadable ebooks, what made you take the decision to switch to iPhone applications?

There’s a lot we can do with iPhone apps that we can’t with PDF guides. For example the app contains hundreds of high resolution photos to show Bali at its best, interactive maps to help you find your way around and reams of text to keep you informed. The end product is far more useful than a PDF book.

How difficult is it to get an application approved by Apple?

As long as the programming is solid, it is just a waiting game. The Bali app took about a week for Apple to approve.

With the success of the iPhone and stories of developers becoming millionaires from selling their apps, the iPhone has apparently become a competitive marketplace. Is marketing your application any different from what you would normally do to promote an online business?

It is an extremely competitive market and with considerable downwards pressure on prices unless you’re willing to do a lot of loss leading, there is limited scope to “market” apps in the traditional manner. Obviously we push the app through Travelfish.org, Twitter and Facebook but other than that the only marketing has been through chasing traditional press for coverage. The Jakarta Globe ran a story on the Bali app at the start of the week for example.

If someone has an idea for an app but has no idea about programming, can they still get their app developed?

Yes, but they will need to work with a developer. The coding is quite complex and I’d describe it, at least for now, as a specialised field. One can either work with a developer to build something from scratch or there are some template-style apps that people can populate with their own information with little programming knowledge required — quality can be quite variable in this regard though.

In a previous newsletter, I talked about the success authors are having publishing for the Kindle. Do you have any plans to perhaps create your guides for the Kindle?

We’re talking about it — I need to buy a Kindle first!

Can you give any tips or advice for anyone thinking about developing an iPhone app?

Two things. Keep your expectations under control. The vast majority of apps in the store probably sell less than one copy a day. Gaming is one area where there is a serious amount of money being made, but that is now often cornered by bigger players. For some though, apps can be a reasonable income stream as a part of a larger business.

Don’t underestimate the time it takes to put the app together. We thought it would take 6 weeks to build our first app, when it fact it took six months.

Can you please tell us a little bit about your application you created for Bali? Is it just for tourists or is it useful for expats also?

The Bali app is primarily a travel guide. It covers over 20 destinations on the island, from the popular destinations like Kuta and Ubud through to lesser known spots like Munduk, Medewi, Pemuteran and Nusa Ceningan. It includes reviews of over 300 guesthouses and hotels, 150 places to eat and dozens of activities and attractions. There’s interactive maps, a photo gallery and also a detailed introductory section covering history, culture and so on.

It is primarily aimed at visitors to Bali, but would also be of considerable use to expats living in Bali who are looking for guidence on weekend breaks and so on.

How can people download your Bali travel app?

It’s available in the iTunes Appstore and you need an iPhone to be able to use it. Regularly selling for US$8, it is currently on sale at $0.99 till next Monday.

You can read more about it here http://itunes.apple.com/au/app/bali/id450179078?mt=8

In my guide to starting a business in Bali, all of the people I talked to had been successful in their businesses. Some of them did have problems along the way, but all of them now eventually “made it” and have comfortable lives in Bali. While I don’t think people reading the stories would get the impression that it is all plain sailing running a business in Bali, I didn’t have the chance to interview someone, whose business was not quite a success and some people might even call it a failure.

I had an email from Leanne who replied to one of my email newsletters telling me about the problems she was having with her business. You often hear about business success stories, but rarely do you hear about the failures. I think it takes a huge amount of ‘guts’ to open up to people and discuss their problems, so others might be able to benefit.

Actually I think Leanne’s idea for her business is a good one and probably with some investment capital and good people, I still think it has potential. It does highlight the point I always to make to aspiring entrepreneurs, the idea is just one thing and perhaps the easiest part in starting a business, success or failure is all in the execution.

Anyway I congratulate Leanne on trying, she is still in the 1 per cent of people who don’t just dream about something, but actually give it a go. If you enjoyed reading this email, please feel free to forward it to your friends.

Anyway, here is the interview:

When did you first come to Bali and what made you interested in Bali?

I first started traveling to Bali in 1993 and would come with friends or by myself. I came here as I loved the culture and back then it was really cheap and could afford to stay in the best places for 2 weeks and have total relax from from busy life back in Australia.

What gave you the idea to start your business and what is it that you are actually doing?

I moved here in June of 2008 and purchased a tour company with another Australian friend. Some friends became pregnant and also my business partner and I started to make a few sample products of Maternity Clothes after they complained there was nothing available in Bali for western women. The response was positive so I created a small collection of around 12 pieces to start. Only t-shirts and tank tops to start, with plans to soon grow.

What kind of market research did you do before starting your business? Did you create a business plan?

When I would be sitting having a coffee around Bali If I saw a pregnant western women I would approach them and start to ask questions. If they were living in Bali I would ask were they got their maternity clothes from and what kind of designs they were interested in. It took over 12 months to source the info and to design the samples that would become my Brand “Baby Belly Indo“.

I had a budget on what I wanted to spend on manufacturing and started small. I had a small stall at the Seminyak weekend markets. Although the sales were small I got a lot of response from Jakarta and Australians. I also started to sell on Ebay and most customers where from Australia,Italy and Singapore and Expats living and working around Bali and Jakarta.

How did you go about setting up your company?

I had a girl working for me at my home and asked if she would like to start helping with marketing. Eventually I asked her if she would go on the business as the Indonesian Signature. She agreed and all went well, she also became pregnant and became the model of Baby Belly Indo Brand. My tour company was done through a notaris so I trusted him to do the documents for the CV. I had already sold my share in the tour company, so this was put towards the start up costs of the CV and to open a small shop in Kerobokan.

You said you wished you had better advice before starting your business, what kind of advice did you get when you were starting out and who did you get it from? Did you get any professional or legal advice?

The notaris in Seminyak told me what I needed to do and I trusted him that he knew what he was talking about. I needed two signatures on the CV so her husband who was also working for me doing the photos and marketing, became the second signature. I had resignation letters done by both of them as I thought this would protect me if they decided to pull out or become a problem. I was told I would just need to keep the original resignation letter, have them sign it and keep it safe and hand in at the time I needed.

Little did I know that they could blackmail you to get their names of the contract. I know now I should have also had a lawyer to look over the papers to better protect me and the business. But at the time I totally trusted the 2 signatures on the account.

It sounds like you had problems with you business partner. How did you first know your partner? What skills did they bring to the business? What problems did you have with the relationship?

The girl was to run the office and help set up the shop. She was attending university in Denpasar part time doing an economics degree. She also did the marketing online, photos of the products. Her husband was a photographer and graphic designer. He did all product shots and editing. He also was to help with marketing my brand to the larger chain stores in Bali. Matahari for example. Apparently they had a meeting with Mataharri, I did not attend. Big Mistake.

I was told Matahari needed 24 pieces per size per colour to put into the store and see how sales went over a 3 month period. So I decided on 6-8 designs to trial and started production to cover Matahari and also the new shop in Kerobokan. My staff had told me it was all good and I had to produce the product then meet with Matahari to show that I could supply the product. $30,000US dollars later production finished, someone from Matahari was meant to come to the shop to view the designs and stock I wanted in their Kuta store. It was all going well everything was set and finished and then my staff informed me that Matahari had pulled out.( I later after closing the shop in Kerobokan went to Matahari and spoke to a representative there and she ask the man in charge of stock control and no one had heard of my Brand Baby Belly Indo nor had they ever remembered having a meeting with my staff. I had photos of both and showed the staff and no-one could recall the meeting. So one big mistake was not attending these meetings.

So I tried Sogo but they didn’t have room for the stock. So I had so much stock and didn’t know what to do with it. Then all the problems started with my staff and being robbed, the money was running out. I tried the Australian market but the response from stores was that it was cheaper to buy from China. I only used top quality fabric and it was important for me to produce all in Bali.

I was advised to sack all my staff as they had a feeling all the problems I had with being robbed and I also had problems with immigration had to do with them.

There are some people who are successful with their business in Bali and others who have lost everything, what do you think are some of the factors that help to become successful?

Always have a lawyer to look over and advise on all contracts done by a notaris. Never have staff on the contract rather if you need an Indonesian on the business have someone that has nothing to do with the business and not related or married. Also have a separate agreement that they sign at the lawyers, that they cannot blackmail you for money.

Were you able to find retail outlets in Australia who would buy your product?

I have not really done a lot in Australia but when I get a request for catalog and wholesale pricing they all say to expensive. I have since looked into producing in China and this is a much cheaper option for me. I still have around $15,000US dollars in stock sitting at my house that I am selling very slowly. Actually, I only added 70% on for wholesale but this still proved too expensive for the Australian market. I have since closed the online store as I am leaving Bali and moving back to Australia on the 4th of May. The stock will remain here in Bali and I will try to sell at a big discount to stores in WA.

I have also donated to many families around Bali. If I see someone pregnant I ask if they want some maternity clothes and I just give them away, and I have also donated products to Yayasan Bali Street Kids.

Are you still hoping to continue your business even if you return to Australia?

Well I will try, I will have to get a part time job and on days off go around to markets. I have also taken a few other designs on as their agent for WA, in the hope of earning some money. If I find stores in Australia to retail my product I will have to produce a much cheaper product and may have to buy from China, but for now I just want to get rid of the stock I already have on hand. I have a good quality product, and it would be a shame to have to source my designs in China. But to survive I will do what I have to do as I still believe it will work.

What advice would you give to someone thinking of starting their own clothing manufacturing business in Bali?

Before producing anything look at the cost and source form other countries as Bali/Indonesia is getting way to expensive and I think for my designs I can produce them in Australia for around the same cost.

If someone reading this who would like to get involved in your business, how might they be able to help and how best might they be able to get in contact with you?

If anyone has a store and would like to stock some items on consignment then I am happy to provide the stock. I have stock in two stores in Seminyak already and some of my designs are Maxi so you don’t have to be pregnant. I even wear some of the clothes.

My website is still on the web at www.babybellyindo.com or contact via email at info@babybellyindo.com I am also selling the website, brand and stock, if anyone is interested. I still have to come back and forth from Australia to Bali when I have money to pack up the rest of my stuff and ship to Australia as I have my house until October this year.

Thanks to Leanne for sharing her story. What do you think were the problems of her business? Higher than expected costs, staff, marketing? Leave your thoughts in the comments.

I love hearing about business success stories, especially of course those that are related to Bali. This story in particular caught my attention. A Canadian entrepreneur visited Bali and saw the fantastic wood carvings and immediately came up with the idea of using Balinese master wood carvers to build guitars. Here is an interview I did with the founder of the company Blueberry Guitars, Danny Fonfeder.

Can please start by telling me when you first came to Bali and what made you decide to visit?

I first visited Bali in the late 1990′s – I run a Canadian school supply and stationery company that requires me to travel to Taiwan, Hong Kong and China from Canada on a regular basis to source items and visit factories , and one of my friends recommend that I visit Bali as a side trip.

I fell in love with Bali immediately and always tried to take a few days to visit whenever I was in Asia. I was particularly impressed with all the handmade wood carvings and also silver carvings that I saw and I noticed how rare it is to see handmade works of art at such reasonable prices in a world where everything is mass produced.

Can you tell me what gave you the idea to use Balinese wood carvers for your guitars?

I have always loved to play guitar since I got one for my birthday when I was 13 years old, so wherever I travelled for business, I always brought my guitar. On one trip to Bali in 2005, I accidentally left my guitar in my hotel in Hong Kong, so when I got to Bali, I asked my Taxi driver to take me to a music store to buy a guitar that I could play while on vacation. My Balinese taxi driver was having trouble locating a music store, but he finally found a store that had very inexpensive Chinese guitars and I bought one for about $18.00 USD. When I tried to strum it in the taxi, the sound was terrible, and at the same time I looked out the window and saw a few Balinese wood carving shops with their traditional wood carvings in front of the shop. In a matter of seconds, the entire business plan came to me – I would create a company to build the most beautiful guitars in the world utilizing the skill of the Balinese wood carving artists and name it after my youngest daughter, Talia Blueberry. I asked the taxi driver to take me to the most skilled wood carving shop in Bali, and the driver took me to the gallery of Wayan Tuges daughter and son in law.

I introduced myself, showed them the Chinese guitar, and asked them if they would be interested in a joint venture where they would build guitars and I would sell them. They must have thought I was crazy, but they took me to visit their father, master carver Wayan Tuges and he was very interested in the idea. Note that this was in 2005, shortly after the Bali terrorist bombings, hotel vacancies were at 5% occupancy, there were NO tourists and the Balinese economy was really hurting, so any idea would probably have been interesting.

How was Wayan able to make the transition from carving traditional Balinese art to carving wood for guitars?

When I met Wayan, he had never even touched a guitar, but he was eager to learn. We took a saw and cut open the Chinese guitar I had bought earlier that day and we took a look at the construction and different woods. Wayan told me that there was nothing about the guitar that he did not think he could reconstruct, and I asked him to build me two replicas of that first guitar, but to put as many ornate Balinese carvings on the body as possible. I also wanted him to try to make an Electric guitar, so I went to a souvenir shop, bought a refrigerator magnet in the shape of an electric guitar and gave it to Wayan and told him to build something ornate in that shape, but the same size as the acoustic guitar. I gave Wayan a few hundred USA dollars and told him I would return in a few months. I returned a few months later and Wayan had build two bodies of acoustic guitars and one body of an electric guitar – they were very rough, heavy and of course would never play music, but the potential became very clear. I went back to Canada and found a master Luthier from Vermont named George Morris, who runs a highly respected guitar building school in USA called Vermont Instruments.

I asked George if he would be interested in going to Bali and teaching traditional Balinese wood carvers to build guitars. George had been to Bali with his wife Pipa (an artist) in the 1990s, he understood what I had in mind and he agreed. George took a total of about 12 months over a 2 year period to teach Wayan and his three sons to build guitars. I did invest substantially in machinery and equipment from USA and there was a long and painful learning curve if about 2 years before our guitars were “state of the art” and comparable to the best handmade guitars in the world. George was amazed at how quickly Wayan and his sons learned the craft, how quickly the workshop was built and how determined everyone was to make this project work.

Do you think there are similar opportunities in other areas for entrepreneurs to mix eastern and western ideas and skills?

I think that there are many opportunities for entrepreneurs to partner with Balinese artists and craftsmen. Just as an example, look at the link below. We are making hand made guitar stands and selling them quite well to our guitar customers:

http://cgi.ebay.com/Blueberry-Handmade-Wood-Acoustic-Guitar-Stand-Floral-/120658969347?pt=Guitar_Accessories&hash=item1c17d5c303

Other immediate ideas related to musical instruments could be handmade guitar straps,musicians stools, piano benches, pianos, violins etc. Each of these ideas could utilize Balinese artists to come up with something very special and sellable.

Just as I was able to find a niche for musical instruments, I am sure that similar niches could be found by others in hundreds of other areas ex: eyeglasses, wristwatches, automobile accessories, etc, etc, etc,

The world is so used to mass produced junk from China and the opportunity for an individual to own something unique and handmade is very rare in 2011. The Eastern/Western concept of functional art at a reasonable price is something that will always be valued by people all over the world, and is something that is possible in very few places outside of Bali.

Did you have any problems with the Indonesian government in starting your business and how did overcome them? For example importing wood into Indonesia.

The Indonesian government never caused us any difficulty. I leave all red tape to Wayan Tuges who is well established and connected in Bali, we have 47 people working at our workshop and dependent on our success. Everyone in Bali that we have worked with at all levels have been helpful and encouraging. At first we did bring wood in from Canada and Australia, but there were very high duties and taxes, so I suggested that Wayan to start sourcing Balinese and Indonesian woods and he was able to find the most beautiful woods, many of which had never been used on guitars before.

As I am sure you are aware, you can have the greatest product in the world, but if no-one knows about it, you won’t make many sales. How did you go about marketing your guitars and what did you find to be the most successful?

For the marketing, at first we began attending musical instrument trade shows, looking for customers with music stores. We took beautiful photos of our guitars and placed them in Acoustic guitar magazines – they really caused a commotion in the very conservative acoustic guitar market, because no one had ever tried to carve on guitars the way that we had, and many people were very skeptical about how the guitars would sound and how they would last and if there was a market for us. Fortunately, George Morris and Wayan Tugues got it right, and our guitars sounded as good or better than any hand made guitar in the world, We initially had no success selling to music stores, and out of desperation, we started selling them direct to musicians on eBay actions. there was a lot of positive word of mouth and positive reviews on internet websites and the word got out relatively quickly – you can see some customer reviews from the links below. Today we get over 10,000 visitors to our eBay store each month.

Musicians reviews.

eBay feedback

You can also read a lot about the beginning of Blueberry guitars at the following links – these were newsletters originally written in 2008 when we were just starting and it details the trials we went through in our early days.

July 2008 Newsletter

October 2008 Newsletter

Thank you for the interview and I would like to wish you all the success in the future with your business.

Danny is looking to expand his operations in Bali and is looking for potential partners or investors in the business. You can contact him through his website: Blueberry Guitars.

One thing which I would like to feature on this blog are foreigners and locals running successful businesses in Bali. I think many people visit Bali for a holiday, fall in love with the place and then dream about starting a business there.

BusinessWeek featured CraftNetwork in their “America’s Most Promising Social Entrepreneurs”. Unfortunately, when I checked their website, it says it is down for maintenance.

Here is what BusinessWeek had to say about CraftNetwork:

Christopher Benz founded CraftNetwork in 2007 to connect artisan producers in the developing world with wholesale and retail customers in wealthy nations. By employing local artisans in marginalized communities under a unified brand, CraftNetwork helps them meet quality standards and respond to market demands, boosting their employment and sales. To date, the 26-employee company has exported goods from 1,355 artisans in 124 villages in three countries, and Benz hopes to continue to expand CraftNetwork’s reach. The 26-employee firm brought in $419,000 in revenue in 2008, and Benz projects it will hit $672,000 this year.