Mongolian Startups: Nomads Developing a Burgeoning Tech Economy
If you needed proof that startup culture is spreading to every corner of the globe, look no further than Ulaanbaatar, Mongolia. Sandwiched between Russia and China, this vast, sparsely populated country is one of few places left on earth where much of the population lives a nomadic lifestyle. The country is changing though, and fast.
In Mongolia, all road lead to Ulaanbaatar, the country's only city, home to 1.4 million of Mongolia's roughly 3 million people. It is growing so fast, in fact, that surrounding the city's Soviet-built urban core are miles of makeshift, temporary suburbs inhabited by previously nomadic people. They live off the grid, unconnected to the city's electric and water systems. Many simply set up their nomadic houses, called gers (Mongolian yurts) and, overnight, became city-dwellers.
In the city it's not uncommon to see luxury cars, suits and skateboarding hipsters in skinny jeans, but life changes quickly when you head out of Ulaanbaatar. Roads become potholed a few miles from downtown and most places are connected by little more than dirt trails. As such, all tech startup activity in Mongolia occurs inside the center of Ulaanbaatar's central business district.
The city is home to a diverse array of startup infrastructure. Startup Mongolia has been operating since 2011, offering programs that support startups. There are several coworking spaces that would not be out of place in San Francisco and New York, with more opening all the time. The city is also home to a chapter of Startup GRIND and there's even an Ulaanbaatar Startup Week.
The startup Generation
Today's startup ecosystem can be traced back to the Mongolian Revolution in 1990. After the fall of the Soviet-backed communist government, Mongolia held its first free and open elections and capitalism was adopted.
"In 1990 the revolution happened, and several years later people started to study abroad," Tanan Bat-Erdene, CEO and founder of HappyHome said. "That first generation came back and they are now the C level executives and on the management team of big companies. The next generation who studied abroad, the ones that are now turning 30 years old, they are the startup generation."
This group speaks English fluently and joined the workforce when the country's mining industry, long the country's dominant industry, was struggling as commodity prices dropped after the global financial crisis.
"If your business fails in 2-3 years, you can always get a good job," Bat-Erdene said. "In a lot of ways, starting a business is like getting an MBA. Big companies in Mongolia are starting to see the benefit of hiring people with entrepreneurial backgrounds. So, even if we fail, we're very sure we can land on a comfortable paying corporate job."
Culturally too, Mongolians seem uniquely predisposed to be entrepreneurial. Many people we spoke with noted the country's nomadic roots as contributing to the ease of adopting new technology and remaining nimble.
"The Mongolian people are very flexible - we're nomads. We follow the herd and the herd follows the grass," Bat-Erdene said. "So we're very adaptable, if something fails, we move on to something else."
The Nomads use smartphones
Even outside the city limits technology is changing people's lives. Large parts of Mongolia skipped wired internet connections, but satellite and cellular internet is increasingly available in even the most remote corners of the country. Gers will often have solar panels and nomads on horseback can be seen with a hunting eagle on one arm and a cellphone in the other.
In fact, in 2015 over 2.2 million Mongolians (73 percent) subscribed to a cellphone plan that included 3G service and, on average, used around 1 gigabyte of data a month. Of those, 1.9 million (63 percent) were using smartphones. With more than 91 percent of all internet data going through a 3G connection, the country's startups are app-heavy.
Mongolia is changing quickly, and technology being developed inside Ulaanbaatar is driving a lot of that change. The country's largest bank, Khan Bank, is using multiple technologies to bring mobile banking to the entire country, LendMN uses artificial intelligence to process small loans through a mobile device, and there's even an app billed as the 'Facebook for horse for herders'. Outside companies like London's What3Words are using the country as a proving ground as well, giving people who have never had an address a place on the map to call home.