From partnership to Investment: Systex helps startups expand into international market

Ambrose Huang, DIGITIMES, Taipei 0

Vice President of Systex, Richard Tang

Known for being a leader in Taiwan's information service industry, Systex Corporation has been reinforcing its efforts to incubate Taiwanese startups since 2018. It has also actively expanded its software ecosystem. Each year, its AI+ Generator Program (AGP) would select eight startups in cloud computing, artificial intelligence (AI), Internet of Things (IoT), information security, retail technology and marketing technology (MarTech). Systex would help them expand their business scale at home and abroad by matchmaking them with Systex's thirty thousand enterprise clients, as well as other ecosystem partners to form partnerships.

In general, when large enterprises search for new technologies, new products or new directions, they would opt for either internal or external innovation. In terms of these two strategies, Mr. Richard Tang, Vice President of Systex, indicated that at Systex, both strategies are utilized synchronously and in complement of each other.

Compared with using in-house research and development (R&D) to maintain control of the latest technologies, time to market (TTM) is a much more important factor to Systex. By working with startups using external innovative models, an enterprise can save up to two to three years of R&D time, thereby accelerating its TTM while also preventing competitors from taking over the market share during the development process.

When choosing a startup to partner with, Mr. Tang pointed out that the first and foremost factors that enterprises value are its methods for solving problems and pain points, and whether the startup has accurately targeted the pain points. Secondly, enterprises will also explore whether the technological skills and business models of the startup can be scaled in the international market. The potential for scalability refers to whether its products can be standardized and go global, rather than being something that are merely project-based. In particular, Systex pays much attention to whether a product or service has marketing feasibility in Taiwan and the Greater China region. Thirdly, the sustainability of the products and team is also very important, as this provides the most basic guarantee to customers.

Mr. Tang added that branding is an issue for Taiwanese startups. If a startup positions itself as a "Silicon Valley-based company," its credibility in the software industry is often elevated. This is the harsh reality. An additional challenge facing the Taiwanese teams in their global expansion effort, is whether these teams have enough technological competencies to create "localized" product designs for different markets during the software development stage.

In order to assist Taiwanese startups to enter the international market, Systex has also provided points of contact and potential channels in the market. Mr. Tang pointed out that, to an entrepreneur, the most difficult part of international expansion is reaching out to local enterprises, and incidentally the value of Systex lies in its vast client base throughout the world. To any startup, the opportunity to receive guidance on increasing the business potential and international perspective of its products or services, and being introduced to local customers for proof of concept (PoC), would be a great starting point for international expansions.

Mr. Tang wished to appeal to the government that, from a long-term perspective, on top of leading startups to attend exhibitions overseas, the government should also encourage schools to nurture more international talents, including encouraging more overseas Chinese students and international students to study and work in Taiwan. Startups should also be given more incentives to recruit them after they graduate, so that when they return to their respective home countries, they could potentially become local partners to Taiwanese enterprises. They will be able to maximize the strengths of Taiwanese enterprises and accelerate the international developments of Taiwanese startups.

Mr. Tang commented that the government needs to take bolder moves in encouraging startup developments. Just like how Mr. Yun-Suan Sun and Mr. Kwoh-Ting Li developed the science parks in the past, entrepreneurs also need larger venues to create interactions and exchange ideas. International enterprises should be invited to station in these venues and talents should be recruited. Once the number of enterprises has reached a certain level, there will be plenty of people. The convergence of start-up mentors, successful entrepreneurs, coaching teams, aspiring entrepreneurs, and international brands will then underpin the development of entrepreneurship in Taiwan.

Over the past decades, the Taiwanese government has dedicated all its efforts to facilitate the development of the manufacturing sector, including the provisions of water, electricity and optimizations. Nevertheless, the Taiwan economy has relied on these science parks for 40 years. What is next for Taiwan? Mr. Tang believes that one of the most important goals over the next 40 years will be to nurture entrepreneurship in the Taiwanese software industry by encouraging Taiwanese youths to expand globally, as well as welcoming international talents to come to the Taiwanese market.

Readers can download " 2022 Taiwan Startup Ecosystem Survey" jointly conducted by PwC Taiwan, TIER and DIGITIMES: