Taiwanese startups lack proper marketing, exposure to the Silicon Valley and an appetite for business risk, experts here said after a global survey pointed to shortfalls.
Business Next reporters reached out to the experts for insight following the release of the Global Startup Ecosystems Report 2018, an analysis of more than 60 startup ecosystems in 24 countries.
The sum of the startup and exit values of new firms in Taipei comes to $580 million, the survey found. That’s less than the global median of $4.1 billion, Hong Kong’s $2.2 billion and New York City’s $71 billion. The number of startups in Taipei ranks between 150 to 350, as compared to a global average of 1700. Hong Kong placed at 450 to 850.
Silicon Valley exposure
Chien Chih-yu, Taiwanese venture capitalist with Silicon Valley-based AME Cloud Ventures, said last month that Taiwanese entrepreneurs must pay special attention to investment trends in his part of the United States. A lot of Taiwan’s startups use high tech, which is the sector that anchors Silicon Valley.
“Don’t just keep your head down and do everything on your own,” Chien said, as cited in an April 18 commentary by Business Next editor James Huang. “If you don’t know what the mainstream investors are looking for, for example, what the hottest topics are, or the latest trends in investing, it’ll be difficult to stay relevant.”
Taiwan needs mostly to send more people for longer periods to the Silicon Valley to observe the tech scene closely and make connections, Chien said. Today, he said, Taiwanese founders normally send just one or two project coordinators for short stays.
Marketing and business skills
Taiwan is good at developing core technologies, another expert said, but it takes good marketing and business operation skills to sell that technology overseas.
“The emerging technologies and innovations require a different approach to develop because of (the) unique market,” said Jordan Wen, professor with the Graduate Institute of Technology, Innovation & Intellectual Property Management at National Chengchi University in Taipei.
“Taiwanese startups can no longer rely solely on technologies to enter the market,” Wen told the Business Next editor in an interview. “They have to take operation skills along and consider the means of business strategies before the can finally break into global markets.”
Taiwanese startups that recruit foreign talent to Taiwan should further consider how those employees eventually fit in, Wen added.
“For instance, Taiwanese would converse in Mandarin during meetings and work discussions,” he said. “What is the design that we can create for international talents in hopes of lowering the frustration of blending into Taiwanese culture? What are the educational options for their children? How can we help their spouses quickly adapt to the society?”
Taiwan’s legislative Yuan passed the Act for the Recruitment and Employment of Foreign Professionals in October to let foreigners interested extend visas for work in Taiwan.
Taiwan faces challenges growing its startup ecosystem because many top talents graduating from prestigious universities such as National Taiwan University would rather enter big corporations than work for high-risk startup companies, cultural commentator Chia-chun Chang said.
Younger graduates are keener on meeting their parent’s expectations, including pursuit of careers that provide stability.
“The education system of Taiwan’s entire country, from elementary schools, middle schools to higher education, has stressed too much on unquestioned obedience, getting credits and marks, and focused too little on creativity, self-exploration, and experimentation,” Chang told Business Next. “The system has to change in order to nurture and prepare the next generation of creative leaders in Taiwan.”
The survey released in April amalgamated the voices of more than 10,000 startup founders as well as data from startup database Crunchbase and data company Orb Intelligence. The results are geared to inform public and private decision makers about how to build vibrant startup ecosystems.
Note: Business Next helped the survey organizer Startup Genome, a U.S.-based organization that researches startup ecosystems. The Taipei-based media group acted as a representative of Taiwanese startup ecosystem and contributed to the survey during the second half of 2017.