Raising money
Lin’s next step was to put himself in the limelight, making media appearances aimed at raising interest in Internet entrepreneurship. Investors soon began taking notice, and in 2012 he began raising capital from outside sources. appWorks started its formal operations later in the same year, managing a NT$320 million venture capital fund for Cathay Financial Holdings, Phison Electronics, the United Daily News Group, and Fasttran Moving.
appWorks is currently invested in 16 companies, four or five of which are already profitable, including game portal PubGame, restaurant reservation service EZTable, and advertising platform Tagto. appWorks typically invests a few million NT dollars in its targets, and has invested a total of NT$130 million to date.
The company employs a model in which it provides entrepreneurs with guidance, gets a priority option on investing in teams it incubates, and finds investors for its entrepreneurs, thus providing investors with the opportunity to buy into promising prospects. The model, which sets multiple parties to work achieving a particular vision, has attracted large numbers of ambitious young people eager to get into the incubator.
appWorks received a total of more than 600 applications for the six incubation sessions it has run to date. Its acceptance rate averages 25–30%.
People over ideas
What do the teams the incubator adds to its roster bring to the table? Unique ideas? New business models?
“We choose people, not ideas,” says Lin, who looks for three traits when interviewing prospective teams.
The first is determination. “I think my old boss looked down on me, and I want to show him.” “My relationship with my father isn’t good. He’s not proud of me.” Lin says that statements like this, which might cost an applicant in a typical job interview, show determination, which is a plus when starting a company. He explains that it usually takes a startup at least three years to get off the ground and typically only people of iron will can stand the grind.
The second attribute is the ability to execute, which is necessary to produce the product you’re aiming for, bring on board the partners you need, and hire the talent you want. The third is understanding the ins and outs of a particular industry in a way that other people don’t, which helps you stand out from the crowd.
The company’s venture capital side is entirely different from its incubator. Its focus is on increasing the rate of return on its investments. “To that side of the business, success means earning big money on a given percentage of our venture investments.”
Opening doors for yourself
The entrance to appWorks’ office is adorned with something blogging entrepreneur and best-selling author Seth Godin (Purple Cow) once wrote: “Don’t blame the system or the teacher or the parent that didn’t open the door. Have the guts to open the door yourself.”
Lin firmly believes that conviction is a force that we internalize, and that constant exposure to sayings that exhort or remind us of something can stiffen our resolve. So appWorks appeals to ambitious young people with sayings like “Entrepreneurship needn’t be lonely,” “Capital can be injected when you need it most,” and “Investment isn’t a trade, it’s a relationship.”
Lin argues that since consumers are a black box, entrepreneurs should avoid both excessive excitement and excessive pessimism. In his view, Internet entrepreneurship should aim to change the world, to make it a better place. That, he says, is what gives your life value and meaning.