Ever since the government introduced the “HeadStart Taiwan” project to help establish Taiwan’s startup ecosystem in 2013, Taiwan has witnessed a surge in all kinds of activities related to startups and entrepreneurship. Despite these efforts and an ecosystem that’s gradually developing, Taiwan hasn’t seen much breakout success in the startup sector.
According to the National Development Council, four things are lacking in Taiwan’s startup ecosystem: access to seed stage funding, the right connection and market resources, a legal system that’s startup friendly and the conditions to attract enough foreign talents. While the government has tried to tackle these problems through the Asia Silicon Valley Development Plan, how effective can the initiative be remains unclear. As startups in Taiwan continue to focus primarily on getting their foot in Silicon Valley, not too many startups have looked beyond Silicon Valley for business opportunities.
To help entrepreneurs in Taiwan gain more insights about the startup landscape in the United States, Formosan Enterprise Institute invited three experienced startup mentors, Lee Lin from RentHop, Jennifer Lin from Lair East Labs, and Arthur Tu from Elemental Path, to share some valuable tips and experiences with Taiwanese entrepreneurs.
Don’t Let Failure Deny You the Chance to Learn
According to RentHop’s cofounder Lee Lin, people are often told not to do startups due to the common belief that startups have a low chance of success. The thought of being considered a failure by family and friends often sends a chilling effect to wannabe entrepreneurs. The ego problems extended from the fear of not meeting familial expectations can cause some Taiwanese entrepreneurs to give up their startup dreams.
“You just worry about what your friends might think of you because they are all getting good jobs at big companies,” said Lin. “Your parents also don’t get to brag to all uncles and aunts about how you are doing better than other cousins.”
Lin believes that starting their own startups can actually help young entrepreneurs build up their skills and accumulate valuable experiences rapidly. To him, entrepreneurs can receive mentorship through multiple ways and failure can even help them learn so much more than working at big companies.
“If you fail, you would have learned so much more,” said Lin. “And you will have so much more interesting things to share with future employers if you decide startup is not for you.”
While Lin acknowledges that startup life is extremely stressful, he thinks that one way for entrepreneurs to manage stress effectively is to not be afraid of asking for help.
“Don’t be afraid to ask for help because nobody knows all the answers,” said Lin. “When things get really bad, just don’t crawl off and hide.”
Aim Beyond the Taiwanese Market from Day 1
Based on his experiences mentoring Taiwanese startups in the past few years, Arthur Tu points out that there is a gap between Taiwanese entrepreneurs and Taiwanese venture capitalists. While many taiwanese entrepreneurs may find it hard to raise funds in Taiwan, Tu estimates that there are currently about $300 million USD worth of funding stuck with Taiwanese venture capitalists. The reason why these money are not used to invest in Taiwanese startups is because their business models and growth curves don’t match with Taiwanese venture capitalists’ expectations.
“In order for Taiwanese startups to meet Taiwanese venture capitalists’ expectations, they need to aim for bigger markets like New York, Beijing or Shanghai from day 1,” said Tu. “Once the startups succeed in large markets, the cost for them to expand to smaller markets would be much lower. However, for young entrepreneurs, they often won’t think so far ahead since finding ways to keep their startups alive can already take a lot out of them.”
Be Different and Strategic
With countless startups emerging on the market each year, Lin suggests that the key for startups to earn press coverage is to think about what makes them stand out. Additionally, startup founders should know what is trending right now, and share data or information that is relevant.
“If you can offer something interesting to reporters, then they definitely will want to report it,” said Lin. “Nobody wants to write a story just because you are announcing that you are doing a startup.”
And while securing funding is the priority for all startup founders, Lin and Tu both emphasize that entrepreneurs should only accept the funding if their business models align well with the investors’ focus and expertise. In other words, startups should only take investors’ money if they think they can benefit from the investors.
“They say dumb money is actually very bad for you,” said Lin. “If you take money from an investor that’s not going to help you in any other way except to give you the money, it will be very painful for you.”
As building a startup will require one to be fearless yet strategic, entrepreneurs in Taiwan will need to learn about readjusting their mindsets in order to establish business models that are both transplantable and sustainable in the long run.
