In Silicon Valley, you can throw a penny and hit an entrepreneur with one, if not two or three startups under their belt. In Taiwan, that hasn’t necessarily been the case. Known globally for their excellent manufacturing, Taiwan is looking to become a major player in the startup game, which positions the country in the enviable position of being able to provide a complete end-to-end product. More and more companies in Taiwan are getting funded, joining incubators, and learning the ins-and-outs of global enterprise.
Helping facilitate this major boom is Taiwan Startup Stadium, a startup cluster in Taiwan focused on coaching Taiwanese startups to go global. Located in downtown Taipei, the strategic hub is focused on teaching startups about marketing, international fundraising, and TSS has even launched a global accelerator to help startups get into Y Combinator and 500 Startups.
I spoke to Anita Huang, captain and CEO of Taiwan Startup Stadium, about how TSS is shifting the entrepreneurial landscape in Taiwan.
How do you take a bunch of startups globally?
At home we still do a lot of training, all on Go Global knowledge and know-how. We also build our networks globally. For example, we now work with the top 15 accelerators in the world and refer high-quality teams for their batches. We also work with landing partners and entrepreneurial exchange programs with different hubs in the world, focusing on the U.S. market, Southeast Asia market, and Japan, which are the top three destinations for our startups from Taiwan.
What would you say are the challenges facing Taiwanese companies coming to America?
Number one, our mantra is pretty much, "Go global or die," since the Taiwan market is quite limited, geographically and economically. Taiwanese companies need to really work on bigger solutions and go for bigger market, otherwise business and valuations stay small. Taiwan actually has very strong engineering culture, so most of them would have built the product in Taiwan. The challenge lies mainly in going to market: distribution channel development, partnership development, sales, and marketing, etcetera. That's the area that we come in, either with training or with networking, to support their growth.
Are there some cultural challenges that you see?
The number one cultural challenge is risk taking. The Chinese culture is usually a lot more conservative to calculated risk. We've been telling everybody, "Go ahead. You will be surprised how much you would get if you are open to ask for help," especially for younger entrepreneurs. I'm pretty much a hustler for the ecosystem, and even I was totally surprised by how much help we've been provided by asking.
I tell entrepreneurs to be really thick-skinned, which has not traditionally been so acceptable in our culture. That's pretty much the step one. You really have to put yourself out there and be bold. You have nothing to lose.
How did this trip come about, to the Bay Area?
Actually, this is our second trip to the Bay Area. Our organization was established a little bit over a year ago, funded and supported by Taiwan’s National Development Council. However, our team all came from the industry. I worked at Yahoo, Google, and other industry companies for a number of years. Our organization is helping to soothe the urge and the anxiety that Taiwan is becoming invisible in the software, internet-driven economy. That's why we've been working a lot with the younger generation from our entrepreneurial society. Taiwan’s manufacturing history is notable, but we want to show the world that we have high quality and internet savvy entrepreneurs from our market.
Do you think those Taiwanese startups need to move here, or need to meet some founders here in order to be successful here?
The early models that we've been seeing require co-founders to fly a lot, mostly for partner development, market development, and marketing. However, the core R&D teams, the development teams, were still largely based in Taiwan. There are material reasons for staying in Taiwan, because hiring a developer here is probably five times more expensive. Plus, the efficiency, the communication, is easier when the core development team can sit together in Taiwan. Whereas the outbound, the market and the business side, will need co-founders flying over.
What's the investing scene like in Taiwan?
There were some experts and advisors analyzing our ecosystem and found the local investors were really the most broken piece. Most of them -- because they've been investing in more traditional businesses -- don't know how to do valuations based on traffic numbers, user numbers, or customer numbers. They base valuations on fixed assets, how many orders you've got. So, we've been working largely with regional investors who are more Internet-savvy. Those from southeast Asia, Hong Kong, even Japan.
What I've been observing, just in the past year, is the local investors have been following deals and syndicating deals, which is a good sign, meaning they're getting it. Also with the government investment program that’s happening, there were planned to be over 400 million US dollars being given to different top-notch investors and the accelerators working with them for investing in Taiwanese startups. All this has been happening in the past 12 months, which will change the investment dynamic, as well as the ecosystem visibly in the coming two years.
Why come to America, rather than go to China?
Through interviewing and meeting startups in Taiwan, we learned that 250 startups have some sort of plan to go global. We always ask them, what are the top markets you're aiming after? To my personal surprise, the U.S. ranks number one. Startups are a global movement right now, and Silicon Valley is pretty much the headquarters of the world. In addition, more people obtained an advanced education in the U.S. that they feel a closer affinity to the U.S. market. Followed by that is the Southeast Asia market, which is geographically closer to Taiwan and Japan. China, surprisingly, ranked after that.
I have a theory behind that. I personally lived and worked in China for five years. In the past decade or two, there are quite a bunch of Internet startups who built their base in Taiwan and tried to migrate into China with very little success. Most of them were failures, so there is a big fear factor toward China. In addition, when you have no money, when you have to bootstrap, most of our founders use Google SEO. We use Facebook marketing to try to promote the product or service. None of this works in China. Meaning, if founders have those skills, they can start with 50 or 60% in the U.S. or other markets, but in China, they just have to start from ground zero. This makes it practically impossible. There are teams that have good leverage and entry into the Chinese market, but they are few and far between.
