What would it take for Taiwan to be the next Silicon Valley?

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Re: What would it take for Taiwan to be the next Silicon Valley?

Postby PapaAzucar » 29 Apr 2012, 12:22

headhonchoII wrote:Generally they are not interested in taking the risk to try something totally new or untested.

Uh...you probably haven't been to the casinos in Macau.
Chinese or Taiwanese are the biggest gamblers/risk takers I have ever seen.
Tech startups are probably safer bets than the casino games.
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What would it take for Taiwan to be the next Silicon Valley?

Postby headhonchoII » 29 Apr 2012, 12:43

Don't underestimate cultural factors at work here. They really affect the way people think and go about doing business. You see them burning money twice a month and visiting temples and going to soothsayers for advice.

They mix and match Western business methods with their own ideas and ways of doing things. They can hold these conflicting ideas in their head with no bother at all.

Wealth preservation is also very important here. They are terrified of losing control of their businesses.
They won't take big risks that could cause that to happen. Most of them are not in business to do something amazing and exciting.

Of course these are existing wealth people. There are many people with an entrepreneurial bent here in Taiwan starting out every year on family loans and angel investor money and there are many many successful businesses, just not in the silicon valley mode.

Silicon valley might work well for software startups but does it work well or is it necessary for other types of industries , I'm not so sure.
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What would it take for Taiwan to be the next Silicon Valley?

Postby headhonchoII » 29 Apr 2012, 12:47

PapaAzucar wrote:
headhonchoII wrote:Generally they are not interested in taking the risk to try something totally new or untested.

Uh...you probably haven't been to the casinos in Macau.
Chinese or Taiwanese are the biggest gamblers/risk takers I have ever seen.
Tech startups are probably safer bets than the casino games.


I worked in Taiwanese startup and distribution companies for 7 years and also in research here.

They are gamblers yes and they are willing to invest if they think they can make big money but they won't wait years for pay out. They need to see the reward in front of them. They won't bet the house either.

The amount of lawsuits and criminal activity I have seen here would shock any VCs in the US. Double bookkeeping is standard, gangsters called in to intimidate debtors and other shareholders, outright technology theft, fake goods.

At the same time most of these companies made real quality products but the culture of non cooperation and backstabbing when money starts to be made has to be seen to be believed.

Talk to almost any Taiwanese , they will tell you the same story about how a former friend they invested with ripped them off. They just can't control themselves when money is on the table. This is the biggest problem, in fighting among families and among shareholders.

There is probably one other factor at work recently which is that investment in property has become favoured over investment in stocks and private companies. I saw this myself when I approached a wealthy individual I knew for investment in my web startup (that didn't get anywhere) and he just told me he bought 8 apartments in Sanxia and was not touching new companies or the 'internet' where he had got burned before.
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And I can still hear my old hound dog barkin' chasin' down a hoodoo there
Chasin' down a hoodoo there.
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Re: What would it take for Taiwan to be the next Silicon Valley?

Postby crimpster » 29 Apr 2012, 13:22

PapaAzucar wrote:Please suggest more if you can think of them.


I think you need a significant local market to test your idea. In the US you can launch and product or service and focus only on the local market to get it right before you take it internatioanl. Taiwanese companies have mixed opinions about whether they are in the same situation to do something similiar with China as their local market.
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What would it take for Taiwan to be the next Silicon Valley?

Postby headhonchoII » 29 Apr 2012, 13:33

22 million people is pretty significant to get the ball rolling. The problem is the cultural gap of rolling something that works in Taiwan out to the US or the UK.
You know the issues already maybe, dense, busy, noisy flashing screens, frenetic activity, buggy but stick things together with quick fixes, laxer rules on data management , poor multiple language support etc.

Even China and Taiwan can have minor cultural differences and the business environment in China is quite difficult to breakthrough for outside firms no matter what the industry. In terms of web firms the government has consistently stopped almost all foreign players getting a foothold. Weibo, Baidu, qq , ten cent, local ecommerce players. All local champions.

On the other hand In the food industry Taiwanese firms have been very successful in China as the Chinese government has been pretty hands off. What worked in Taiwan has worked well in China due to similar tastes and cultural references. But getting Taiwanese food companies to be successful in the West has an inherent barrier.
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And I can still hear my old hound dog barkin' chasin' down a hoodoo there
Chasin' down a hoodoo there.
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Re: What would it take for Taiwan to be the next Silicon Valley?

Postby PapaAzucar » 29 Apr 2012, 17:46

headhonchoII wrote:The amount of lawsuits and criminal activity I have seen here would shock any VCs in the US. Double bookkeeping is standard, gangsters called in to intimidate debtors and other shareholders, outright technology theft, fake goods.

At the same time most of these companies made real quality products but the culture of non cooperation and backstabbing when money starts to be made has to be seen to be believed.

Talk to almost any Taiwanese , they will tell you the same story about how a former friend they invested with ripped them off. They just can't control themselves when money is on the table. This is the biggest problem, in fighting among families and among shareholders.

There is probably one other factor at work recently which is that investment in property has become favoured over investment in stocks and private companies. I saw this myself when I approached a wealthy individual I knew for investment in my web startup (that didn't get anywhere) and he just told me he bought 8 apartments in Sanxia and was not touching new companies or the 'internet' where he had got burned before.

These are good insights, and are probably the reasons why outside VCs avoid Taiwan. Now that you mention these, I do remember hearing about the business corruption culture in Taiwan and China.

crimpster wrote:I think you need a significant local market to test your idea. In the US you can launch and product or service and focus only on the local market to get it right before you take it internatioanl. Taiwanese companies have mixed opinions about whether they are in the same situation to do something similiar with China as their local market.

Building to the Taiwan market is certainly different than building to the Western market. But the software skills should be the same, but the marketing techniques may be different.

headhonchoII wrote:22 million people is pretty significant to get the ball rolling. The problem is the cultural gap of rolling something that works in Taiwan out to the US or the UK.
You know the issues already maybe, dense, busy, noisy flashing screens, frenetic activity, buggy but stick things together with quick fixes, laxer rules on data management , poor multiple language support etc.

Even China and Taiwan can have minor cultural differences and the business environment in China is quite difficult to breakthrough for outside firms no matter what the industry. In terms of web firms the government has consistently stopped almost all foreign players getting a foothold. Weibo, Baidu, qq , ten cent, local ecommerce players. All local champions.

On the other hand In the food industry Taiwanese firms have been very successful in China as the Chinese government has been pretty hands off. What worked in Taiwan has worked well in China due to similar tastes and cultural references. But getting Taiwanese food companies to be successful in the West has an inherent barrier.

While no one denies the cultural barriers, I am thinking along the lines of the outsourcing model, where Western companies just contract their work to the Taiwanese or Chinese companies to build their products like how Apple contracts to Foxconn, or Western software companies contract to India's Infosys. The question becomes why is there less business corruption when Taiwan deals with the Western brands than if Taiwan brands deal with the Taiwan supply chains? Or is there less business corruption?
The corruption itself will scare off outside investors?
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