Panel discussion: What are the challenges for Taiwanese startups today?

On November 13, members from Taiwan’s tech community gathered at the HP Horizons Startups Summit to discuss Taiwan’s startup ecosystem with HP executives and VCs from abroad.

The conference marked a concerted effort on behalf of all parties to engage in an earnest dialogue concerning the island’s startup scene, addressing challenges as directly and constructively as possible.

Discussions of Taiwan and its startup potential tend to be rife with unnecessary sentiment. As with many parts of Asia, parties are quick to point to the usual obstacles – lack of domestic internet-minded VCs, lack of government support, societal issues, etc. Yet Taiwan has also inherited two complicating factors.

First, its hardware legacy has been both a blessing and a curse, providing plenty of technical know-how, though little of the nimble, quick-footed instincts that startups are known for. Second, the island’s existential crisis can lead some to be unduly bearish toward its economic future.

Here’s an abbreviated transcript of the panel discussion:

Tyrone Lee (moderator and Taipei-based analyst at VC firm Artis Ventures): Let’s go around and get some introductions from everyone here.

TK Chen: My first startup was a P2P lending platform, which was a total failure, because according to bank laws, I cannot do the online P2P lending thing without violating the law. Then we decided to pivot to a totally different project, which was a social shopping list. It’s a mimic of Pinterest in Taiwan. Then we soon found out that copying from what was out there doesn’t really work in a place like Taiwan, because the way that people buy things and use the internet here is totally different from elsewhere. So then we started SweetShot, which is a photo app that helps people hide photos of their secret love affairs [laughter].

Jamie Lin: I’m founding partner at AppWorks Ventures here in Taiwan. We were one of the first accelerators in Asia, and if you count the overall number of startups that have graduated from our program, we’re probably the biggest outside of the US. We started in 2010 and have graduated over 150 startups, with a focus on consumer and mobile internet. The reason why we started it was because I lived in the US for six years before moving back to Taiwan. I realized that, as everyone was saying at the time, “software was eating the world,” but all Taiwan knew how to do was hardware, so I decided that I wanted to move back to Taiwan to do something about it. Later on, in the middle of last year, we were lucky enough to raise an $11 million dollar US fund to invest in our startups.

James Hill: I run business development at Cubie, which is a chat application that’s a bit like Line but better [laughter]. I’m originally from London, and i’ve been living in Taiwan for eight years. Before I worked at Cubie I worked at the Institute for Information Industry, which is a semi-autonomous NGO that was working on startups in Taiwan. There, I saw the potential in the Taiwanese ecosystem and I saw places where I could be of help. So I also do Startup Weekend and Startup Digest in Taiwan.

Allan Huong: I’ve been in Taiwan for the better part of half of my life [editor’s note: he’s in his twenties], I graduated from here, and I worked in the tech sector in Hsinchu for two years, and I also did two startups in my spare time. My first startups was a Threadless-model company where we crowdsourced designs for T-shirts. That failed, and then I did Drimmit, which was a social bucket list for dreams and things you want to do before you die. And that failed, and so I decided I needed a change, so I went to Draper University, a six-week program for learning entrepreneurship, and it was there where we came up for the idea with Loopd, which is a wearable device that lets you manage contact information in a conference and trade show setting. We’ve now been funded for a pre-seed investment by a firm in Silicon Valley.

Lee: There’s been a fair amount of suggestions about what the Taiwanese government can do to help the startup environment. Can you talk about your experiences dealing with fixed stock price rules, business incorporation, and rules for foreign labor in the technology sector?

Chen: I think my experience might be a little lucky, because around the beginning of last year Andrew Hyde, the founder of Startup Weekend, and Volker Heistermann started a program specifically for in Taiwanese startups. At the time we were lucky enough to be one of the accepted teams. So we didn’t really experience too much problems in having foreign investors come here. At the same time, I’ve heard that there are there are still a lot of regulations for foreign investors to invest in local startups. So we’ve decided to start another company in Delaware, so that the money can flow into the Delaware company, and our Taiwan company is 100 percent owned by the Delaware company. That’s the way we can avoid the regulations and really make investments happen.

Lin: As for business incorporation, it’s actually relatively easy to incorporate your company here. If you have about $3000 in capital, you can incorporate in Taiwan. It takes around three to seven days to do so, and you can run the process yourself or you can hire an accountant at the amazingly cheap rate of $200.