A brief history:
After the 2000 dot-com bubble, Taiwan—like the rest of the world—experienced a waning interest in the tech start-up industry. Despite the lingering effects of the bubble, successful start-ups like Wretch (acquired by Yahoo Taiwan) and iPeen managed to emerge, quickly gaining traction with Taiwanese Internet users. By 2008, the tech industry was back in full force: Tai Chi Chuan, founder of Richtor and co-founder of TechOrange, states that “there were nearly two or three competing start-ups for a single service at that time.” Just as the sector appeared ready to take off, the 2008 financial crisis once more crippled the Taiwanese tech start-up industry, scaring away potential investors and stagnating the growth of new businesses.
Now in 2011, start-ups in Taiwan are surging back with the global popularity of Android, iOS, experimental forms of social networking, and cloud-computing services. Coupled with a renewed interest among talented students who are focused on software development, today’s start-up industry in Taiwan looks as healthy and promising as ever.
Based on its history and current positioning, I believe that Taiwan is relevant, and will continue to be so, in today’s global tech discussions for three major reasons:
1. As mentioned before, there is an excellent recruiting base for young and promising talent. In the past decades, Taiwan has been dominated by OEM-manufacturers like Asus, Acer, and HTC; as a result, students have always tended to gravitate towards the study of hardware.
Today, however, these talented engineers are switching their interests (and even their majors) in expectations of joining the growing and exciting software industry. This is good news for all Taiwanese start-ups. As the motto goes for start-ups, it’s all about “people, people, people.” Start-ups in Taiwan will have no problem finding competent and innovative talent.
2. It’s clear that everyone is interested in China’s start-up industry and rightfully so: the country is home to more than a billion consumers. In the tech industry, Taiwan plays a particularly interesting role as several Taiwanese start-ups are aiming to include China’s massive market within their business models. Additionally, Japanese investors are looking to Taiwan as the acting intermediary to reach China’s consumers. In order to get a better sense of the direction that the Chinese tech industry will go, it is crucial to pay close attention to the development of Taiwan’s interconnected role with China.
3. The venture capital atmosphere is just beginning to take form in Taiwan. The Taiwanese start-up industry has never before enjoyed the benefits of venture capital firms and start-up incubators, unlike the United States which has become familiar with seed-stage startup funding firms like the well-known Y-Combinator and TechStars program.
Now, Taiwanese venture capital firms— such as AppWorks Venture, Genie Capital, and Creative Workshop— show encouraging indicators of the industry’s future. Many of these firms, led by founders with outside experience in Silicon Valley and New York, promise funding and guidance to start-ups. Furthermore, the recent emergence of these ventures capital firms provides concrete evidence of a Taiwanese industry that is brimming with innovation and excitement.
Young and talented engineers coupled with experienced wisdom for a relatively new market can be a dangerous combination that could very well produce some industry-disruptive companies for consumers around the globe.
A few years down the line, don’t say I didn’t warn you.
Stay tuned to hear the latest buzz about Taiwanese start-ups, the nuances that differentiates the Taiwanese tech industry from the others, and more!