Video Briefing

Nomad Capitalist: The Blue Ocean Strategy for Nomad Capitalists

Feb 8, 2019Video Briefing8:02Watch on YouTube

The blue ocean strategy can be applied globally by using tax planning, international hiring, and new foreign markets to reduce competition and improve margins. Instead of competing only inside one crowded domestic market, a business can create advantages by structuring, operating, and selling internationally.

The basic idea of blue ocean strategy is to avoid competing in a crowded “red ocean,” where many businesses fight for the same customers and margins decline. A better approach is to create a space where the business has less competition and can become the leading option in a more specific market.

For entrepreneurs operating globally, this can mean looking beyond product positioning and applying the same idea to tax, workforce, and customer markets.

Lower taxes can create a competitive advantage

Tax is one of the clearest ways a global business can create a blue ocean advantage.

A business operating from a high-tax country such as the United States, Australia, or the United Kingdom may lose a large share of profit to corporate tax or personal income tax. That money cannot be reinvested into growth.

By contrast, a business structured in a lower-tax jurisdiction may be able to keep more capital and use it for:

  • Buying more inventory
  • Expanding marketing
  • Running more pay-per-click campaigns
  • Hiring more people
  • Growing faster
  • Improving products or services

Examples mentioned include companies using jurisdictions such as Malta, Cyprus, or Hong Kong. A business paying 5% tax in Malta, for example, may have more cash available to reinvest than a competitor paying much higher tax in its home country.

The point is not that every jurisdiction is right for every business. The point is that legal tax reduction can become a competitive advantage when competitors are still operating only inside high-tax systems.

International hiring can reduce costs and expand capability

Another global blue ocean opportunity is workforce strategy.

Many businesses still hire only in their own city or country, even when the work can be done remotely. This can push them into a crowded and expensive labor market.

Hiring internationally can allow a business to access skilled workers in countries where wages are lower because the cost of living is lower. Examples include hiring in places such as Romania or Bangladesh.

One example involved a U.S. home service business hiring a worker in Bangladesh through a freelancing platform for $1.50 per hour to handle monotonous administrative work. That rate was described as good money for the worker at the time and gave the business a cost advantage over competitors who only hired locally.

This type of hiring can apply to:

  • Administration
  • Bookkeeping
  • Customer support
  • Marketing support
  • Research
  • Operations
  • Repetitive or process-driven work

The advantage is not only lower cost. International workers may also bring a different perspective and allow the business owner to build systems that competitors in the same local industry have not considered.

Selling into new countries can open less crowded markets

The largest missed opportunity may be revenue, not cost savings.

Many businesses focus almost entirely on selling into their home country, especially the United States or another familiar market. This can mean paying high advertising costs and competing against many other companies targeting the same customers.

Other markets may have:

  • Lower advertising costs
  • Less competition
  • Growing demand
  • Emerging middle classes
  • Customers willing to buy international products or services

Examples mentioned include Malaysia, Mexico, and Chile. These countries are not described as poor, yet advertising costs on platforms such as Facebook or YouTube may be a third or a quarter of the cost of targeting the United States.

A business may find that customers in countries like Chile want the same product or service, but fewer competitors are advertising to them.

This creates an opportunity to sell into markets that competitors ignore.

Niche positioning can work across borders

Blue ocean strategy also applies to choosing a specific customer segment.

Instead of being a general provider, a business can become the leading option for a narrow audience. One example mentioned is becoming the number one photographer for dentists, or otherwise serving a clearly defined niche.

The same logic can be applied globally. A business can identify a niche audience in one region, then sell the same specialized service into other countries where competition is lower.

A company may also find that its strongest market is not the one most competitors are chasing. In the second citizenship and dual nationality industry, most demand is described as coming from China and several other countries. The transcript notes that there is less focus on Americans and British clients seeking second passports for financial strategy, Plan B purposes, or other reasons. Serving that under-addressed Western audience is presented as an example of creating a blue ocean.

Three global levers for blue ocean strategy

A business can adapt blue ocean thinking globally through three main levers:

  • Tax: legally reduce the tax burden so more profit can be reinvested.
  • Talent: hire internationally instead of relying only on expensive local labor.
  • Markets: sell into countries where demand exists but competition and ad costs may be lower.

Used together, these levers can compound. A business may pay less tax, operate with lower costs, and reach new customers in markets that competitors overlook.

Practical caveats

Global strategy still requires proper planning. Lower-tax jurisdictions must be selected carefully. International hiring must fit the business model and quality standards. Selling into new markets requires understanding local customers, payment methods, language, trust, and delivery.

Not every country or structure will be suitable. A business should evaluate:

  • Where the company is incorporated
  • Where tax is owed
  • Where employees or contractors are located
  • Where customers are located
  • How advertising costs compare by country
  • Whether the product or service fits the market
  • Whether payment processing and delivery will work
  • Whether legal and tax compliance are properly handled

The practical lesson is that many entrepreneurs are competing too narrowly. They pay tax where they started, hire only where they live, and advertise only to the most crowded markets. A global blue ocean approach looks for overlooked advantages across jurisdictions, labor markets, and customer markets, then combines them into a more profitable and defensible business model.