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Industry watch: The keys to innovation and entrepreneurship

Colley Hwang, DIGITIMES, Taipei 0

Acer founder Stan Shih. Credit: DIGITIMES

Acer founder Stan Shih, who has been in the IT industry for 50 years, has been my role model since I was young. When I got older, I started my business, and his experience had become my valuable entrepreneurial references. A while ago, I received Shih's newly released book "The Keys to Innovation and Entrepreneurship." I quickly finished reading it and tried to identify and come up with some industrial paradigms and insights. From the perspective of an entrepreneur, I am delighted to share my entrepreneurial experiences and thoughts.

Different from many Taiwanese manufacturers who have been dedicated to mass production, Acer has long adhered to brand marketing since its inception in 1976. In many occasions during industrial transitions, "Re-shape Acer" is a concept often invoked. And the experience of business spin-off after the millennium is a paradigm for Taiwan's industrial development. Will the brand value and business model that Stan Shih defined at the inception be changed because of changes in time of change and characteristics of successors?

Everyone has his or her way of running business. The business model of the hardware business is easy to copy, and the barrier to entry is relatively low. The business model of the software business is not easy to copy since only two or three players can survive, and the value of the brand varies from time to time and from place to place. Brand strategies for B2C and B2B are not the same, and we must define the brand value from two dimensions: "brand awareness" and "value added," says Shih. If the interaction between the two is positive, then it can bring a multiplier effect, or else, it is necessary to consider redefinition or organizational restructuring. Take IBM's PCs for example. If the PC business fails to bring positive value, selling the brand can be the best way to go, and I think this also applies to NEC's situation.

From the inception of his business, Shih hopes to build a company with a system of values retaining the founder's mind and soul. He never feels enervated whenever he talks about Acer. In the 1990s, Shih proposed the concept of the "smile curve" which complemented Acer's business philosophy and kept pace with the times. If I talked with Shih about the smile curve again, I believe he would redefine his view with an "evolving" smile curve.

In the early 1980s, Acer entered the PC market by introducing the brand "Micro Professor." To tap the education market, Shih set up "Third Wave" targeting PC-related content business with publications such as "The Gardener of Microprocessors." The PC market grew rapidly under the support of Microsoft's Windows software and Intel's microprocessors since 1985. Anticipating enormous future business opportunities, many of Acer's employees left to start their own businesses. Elitegroup, Asustek and other computer companies were all established by engineers who left the Acer Group.

Over the years, I have never heard Shih speak ill of other companies, but instead he has been running the Acer brand with its original vision. It takes long-term and in-depth deployment to run a brand, and thus Acer is still among the world's top-5 PC brands. From Acer's expansion to game consoles, smart healthcare, cyber security and other different fields, I have witnessed the sustainable system of values of enterprises.

Colley Hwang, president of DIGITIMES Asia, is a tech industry analyst with more than three decades of experience under his belt. He has written several books about the trends and developments of the tech industry, including Asian Edge: On the Frontline of the ICT World published in 2019, and Disconnected ICT Supply Chain: New Power Plays Unfolding published in 2020.
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