In terms of roles that an accelerator plays in the entrepreneurial ecosystem, Ms. May Yang, COO of Garage+, believes that in the case of Silicon Valley, the emergence of the entrepreneurial ecosystem is closely related to talents, capital, and government policies. Meanwhile, for developing countries, accelerators would play more significant roles in the entrepreneurial ecosystem.
Do corporates see startups as investment targets, or do they view their involvements as merely "partnerships"?
Ms. Yang pointed out that this is often determined by the organization of a corporate. For instance, some companies comprise a corporate venture capital (CVC) department that is dedicated to understanding investment targets related to the developments of their parent companies, while other companies which are more focused on business partnerships in the current stage, often collaborate with startups to co-develop products, and engage in technological cooperations and information exchange. In these cases, subsequent investment opportunities will only emerge when the startups' technological development becomes closely integrated with the companies.
Nevertheless, corporates have become more proactive in evaluating startups nowadays, whether they are contemplating investment ideas or simply technological partnerships. Ms. Yang pointed out that, in terms of Garage+'s corporate partnerships, they are mostly focused on three aspects in the startup scene: first of all, they are mostly focused on software startups in the vertically integrated industry; in particular, artificial intelligence (AI) and data analytics and applications. Secondly, they are interested in software and hardware integration. Corporations can use innovative technologies and solutions to solve existing problems and optimize existing processes to create value. And finally, they are also interested in areas related to digital medical care and healthcare.
Each year, Garage+ selects 30 startups from Taiwan and overseas respectively. Different departments from major corporates, such as CVC, research institutions, new business divisions, and Office of Chief Technology Officer (OCTO), will meet with these startups based on their diverse needs. Ms. Yang pointed out that most corporates are mainly looking for business partnerships, and some of their particular interests include: cutting-edge technologies such as artificial intelligence, quantum computer, batteries and etc. A company is most likely searching for the next cutting-edge technology that will help its core business to undergo a robust growth over the next five to ten years when it looks to collaborate with a startup. Therefore, many Taiwanese companies are very interested in the performance of innovative projects from startups from both home and abroad.
When discussing the expansion of Taiwanese startups overseas, Ms. Yang indicated that if a startup team is from a smaller country such as Taiwan, Singapore or Israel rather than a country with a gigantic market such as the United States, China, Southeast Asia, or Europe, it definitely has to collaborate with an international company or organization if it hopes to scale its business in the global market. This would help the startup to expand its business while standing on the shoulders of a giant.
The first key to a startup's international development is "knowing where your customers are." The second is to "know where the market with the most potential and best conditions to grow is," followed by "finding a good pathfinder and partner." Ms. Yang indicated that pathfinders for international development of a startup have access to local startups, accelerators, venture capitalists, or corporates. Startups can only truly understand local markets via these networks.
Garage+ is committed to leading foreign startups to entering the Taiwanese market. On one hand, this means bringing foreign resources to Taiwan and connecting technological experience of foreign startups to existing industrial strengths of Taiwan. On the other hand, it also helps to create more opportunities to connect with the international community through localization of foreign startups.
Compared with the startup teams overseas, although Taiwanese startups are equipped with technological advantages, there is room for improvement when it comes to operations, marketing and executions. These areas make them less capable at addressing issues related to international expansion. Therefore, inviting international startups to interact with the local industries in Taiwan can facilitate collaborations. The Taiwanese teams can learn more about the international market, whether through joint R&D or business partnerships, or by providing solutions to foreign customers via collaborating with foreign startups.
Ms. Yang believes that Taiwanese startups need to be equipped with resources from the international venture capital community if they want to expand globally. In this regard, Garage+ can also introduce new paragons for the Taiwanese entrepreneurs to learn from and work with by recruiting international startups. In particular, the Taiwanese teams can learn more about how international teams engage in marketing, fundraising, and forming exit strategies, including accepting potential corporate M&A deals. These are all the things that the Taiwanese teams can pick up.
Readers can download " 2022 Taiwan Startup Ecosystem Survey" jointly conducted by PwC Taiwan, TIER and DIGITIMES: https://www.pwc.tw/en/publications/taiwan-startup-ecosystem-survey.html