The best time to join an accelerator is when a startup team has created a functional product, and the role of an accelerator is to help startup teams make that product even better, according to Edgar Chiu, co-founder and managing partner at SparkLabs Taipei.
Startup teams with groundbreaking growth usually possess the following characteristics. First, they focus on solving difficult market problems. Second, they use unique key technologies, related skills, and industry experience to address market problems. Third, they have carried market feasibility studies for verified products and have received positive feedback from customers. Lastly, they have a growth mindset and are open to diverse opinions.
As long as the core of the team is comprised of members with related experience, together with external advisors and consultants, they should be able to handle any problems that may arise during the startup journey.
Breakthrough the entrepreneurial ceiling by not fearing failure
Compared to startups in other countries, startup teams in Taiwan have exceptional technical and software R&D capabilities. However, they lack market connection, business model, international marketing and financial management thinking. Culture contributes to business value. International startups exchange money for time, but Taiwan startups exchange time for money. When Taiwan-based startups receive the capital they choose to save. On the other hand, international startups will burn it for growth and carry out a new round of fundraising when a new wave of growth is achieved.
Time, speed, and fault tolerance space are the most valuable assets for entrepreneurs. In international startup circles so-called "acceleration" emphasizes getting results faster, regardless of success or failure. It emphasizes getting feedback as quickly as possible, even in the face of failure, and getting to the crux of the problem, quickly making improvements, and then trying again.
On the other hand, startups in Taiwan focus on the perfect debut. They spend an ample amount of time on product packaging, focusing more on appearance instead of user experience and resolving pain points, leaving room for competitors to enter the market.
Startup teams in Taiwan have the technical knowledge, but their lack of imagination when it comes to new business models and market expansion will limit their growth.
In contrast, because they had a domestic market that is large enough, startup company Cliff used their business model to start innovating. After quickly expanding its market and gaining users, it used user data analysis to develop technology and entry thresholds to earn revenue and expand to more markets and fields. The US startup lastly grew rapidly and quickly became an international enterprise.
The local market in Taiwan is small, which makes it difficult to nurture unicorns by serving the Taiwan market alone. Therefore, for Taiwanese startups to grow, attract top-quality professional talent, and strive for further growth and opportunities, they must have the ambition to go global at the outset of their operations.
Taiwan should do more to attract international attention
Taiwan has a shortage of international accelerators with experienced and knowledgeable entrepreneurs willing to invest early in Taiwan-based startups and have international resources and good relationships.
There is a gap in understanding between startup teams and investors in Taiwan and no common language. Taiwan should pay more attention to the incubation and cultivation of startups in their early stages. It should sow more seeds of hope, actively nurture startups, support startup teams, and attract international venture capital to increase follow-up backing. Startups that successfully grow bring mutual benefits to alliances, attract partnerships with large companies, even invest in mergers and acquisitions. This allows the resources and corporate innovation of Taiwan-based startups to snowball and expand into more territories.
Accelerators are the lubricant between venture capital, big companies, and startups. With their assistance, startup teams can create better products, connect with more business opportunities, sell on the international market, accurately use English in proposals and fundraising presentations, prepare for fundraising, and connect with investors. All of this increases the chances for startup teams to get venture capital and attract attention from international businesses.
Additionally, Taiwan-based startups must learn to respect and understand the culture of every country and region so that they can succeed locally. The unknown is not scary; it is losing the curiosity to keep learning that is scary.
Digital transformation offers new opportunities for startups
Many industries still rely on paper records and human intervention. Startups should pay close attention to those industries that have yet to digitize. All innovation stems from dissatisfaction with the status quo and challenging the gray areas of social norms. It is because new innovations can solve user problems and make life better that it has become a potential growth industry.
In recent years, startups have had success applying the Internet of Things (IoT) and AI to general technologies. Nowadays, there are also many opportunities for digital transformation in agriculture, medical care, environment, food and beverage, manufacturing, logistics, and fitness. Finding services that can utilize data to make decisions and more applications for what is behind the data is where the next startup business opportunity lies.
As the world undergoes a rapid digital transformation, Taiwan-based startups have advantages in software applications and services for information security, B2B, blockchain and 5G communications.
TSMC is currently a sort of protector for Taiwan. But for Taiwan to maintain a long-term competitive edge, it must pay more attention to tapping into new business opportunities and propping up fledgling startup companies.
Although the government of Taiwan has invested a lot of resources into startups in recent years, it must support startups with more flexible and open policies. KPIs should be converted from MOU signings, photo check-ins, and mentoring techniques into actual industry benefits and continuous investments for startup growth. Encouraging corporate startup engagement and cooperating with, investing in, and even acquiring startups will continuously drive innovation for enterprises.
Promoting overall digital transformation and changing the startup ecosystem in Taiwan will require equal participation and assistance from all parties involved. Furthermore, as Taiwan hopes to raise its competitiveness in the next decade, startups are sure to play a critical role in this journey.
Edgar Chiu, co-founder and managing partner at SparkLabs Taipei
(Editor's note: Readers can download "2021 Taiwan Startup Ecosystem Survey" jointly conducted by PwC Taiwan, TIER and DIGITIMES: https://www.pwc.tw/en/publications/taiwan-startup-ecosystem-survey.html)