Linking Taiwan to Silicon Valley: The Taiwan Innovation Entrepreneurship Center

When we walk into the offices of the Taiwan Innovation Entrepreneurship Center (TIEC), located near San Francisco International Airport, we see several young people clustered near a conference table, talking enthusiastically about their respective startups in a mixture of Chinese and English. 

Taiwan’s Bay Area accelerator, the Taiwan Innovation Entrepreneurship Center, is helping Taiwanese startup teams get on track.

A hub for startups

All of them are from Taiwan, most are recent graduates pursuing advanced degrees in the United States, and a few work for emerging Taiwanese companies hoping to strike it big in the US. Natalie Chen, TIEC’s chief marketing officer, offers background while serving refreshments. “Most of the people here are company founders and CEOs, and share the entrepreneurial spirit,” says Chen. “The busier they are, the greater their accomplishments.”

Larry Wang, TIEC’s chief executive officer, is hosting the discussion and has advice for everyone with a question. Alex Shih, a former president of the North America Taiwanese Engineering & Science Association (NATEA), is also here to share his experience of founding his own successful business.

Understanding why the Bay Area is the epicenter of startup development requires a glance at Silicon Valley’s history.

Most of Silicon Valley’s best-known corporations are involved in some way with either semiconductor manufacturing or the computer industry.

Though battered by the bursting of the dot-com bubble in 2000, Silicon Valley continued to move forward, creating value through innovations in areas such as mobile technology, artificial intelligence, big data, and cloud computing. Household names like Google, Apple, Facebook, eBay and Tesla, and newer upstarts such as Airbnb, Uber and Twitter, are all headquartered in the area, providing a deep well of tech talent and experience. Given that the Bay Area also attracts more than 50% of the world’s venture capital and is home to innumerable angel investors and seed accelerators, it is only natural that startups from all over the world would congregate here as well.

Chu Cheng-tao gave up a highly paid job to found his own company. He says that even if it ultimately fails, the experience of starting a business in the Bay Area has been great.

Linking up with Silicon Valley

TIEC’s Larry Wang is himself a former Silicon Valley engineer and successful entrepreneur. He says that the Bay Area provides startups with a wealth of information, and they come from around world to pick up what they can. “Everyone in the Bay Area understands competitive environments and changing markets. The regulatory environment, which includes tax incentives for angel investors and business-friendly labor laws, also encourages new business formation. If you ask around the universities in the area, you’ll find that most graduates want to start their own companies, which makes for a very different atmosphere than that in Taiwan.”

The Hsin­chu Science Park was founded in order to draw technological talent back from Silicon Valley to develop Taiwan’s own tech industry. But the international market has changed in the decades since then, and with those changes the number of Taiwanese engineers in Silicon Valley and the larger Bay Area has declined sharply. Wang says that the entrepreneurial spirit of Taiwan’s “big five” tech leaders (the founders of Fox­conn Technology, Asus, Quanta Computer, Com­pal Electronics, and BenQ) created huge numbers of jobs for Taiwan. He worries about the lack of that spirit in present-day Taiwan.

Alex Shih recalls the large numbers of Taiwanese who went abroad to pursue advanced studies in the 1990s. With nothing to their names but a suitcase full of clothes, they had little choice but to start their own businesses. He says that the biggest cultural difference between Taiwan and the US is that most Taiwanese parents hope their kids will go to work for a major corporation, rather than striking out on their own.

TIEC’s occasional conferences are underwritten by the Ministry of Science and Technology and organized by the Industrial Development Bureau.

Joining the ecosystem

The entrepreneurs at the TIEC gathering include someone familiar to Taiwan Panorama readers: Chu ­Cheng-tao. We interviewed Chu in Silicon Valley in 2006, shortly after he had graduated from Stanford and gone to work at Google as a highly paid engineer. He later went on to work at Linkedin, Square and Codecademy before deciding to start his own company in 2014. That company, which is still in stealth mode, will provide employers with a digital platform for testing software engineers, using big data analytics to help employers make hiring decisions.  

Chu notes that many of the local venture capitalists and accelerators helping startups learn the ropes are world class, and that many of the investors are themselves also entrepreneurs. He says that if you’re not yourself a giant, you have to take advantage of opportunities to stand on the shoulders of giants.

Bruce Chen, founder and CEO of consumer-to-consumer (C2C) loan platform Installments, also made time in his busy schedule to attend the TIEC conference. Chen founded Installments in 2014, raised US$1.9 million in seed capital in 2015, and was the only Taiwanese entrepreneur selected to participate in Google’s 2016 Startup Grind global conference. Chen adds that his company is also on the verge of a new capital injection.

Bay Area startups have access to world-class accelerators like IndieBio, the world’s first accelerator focused on synthetic biology.

Boosting tech development

Installments is a transnational venture: it has operated in Silicon Valley since its founding, but also has an R&D division in Taiwan. Chen says that Silicon Valley has changed since he arrived in 2000. Then, 90% of the ethnically Chinese engineers were Taiwanese. Now, he says, 99% are mainland Chinese. “The best way we can help Taiwanese businesses compete globally is to run our businesses well.”

Chen recommends that those hoping to break into the American market first spend at least six months stateside.

Wang mentions two other transnational startup groups that have already secured orders in the US. ­MoBagel, established in Taiwan in 2010, analyzes data from the smart home appliance industry to help manufacturers understand how customers are using their devices. When the company had difficulty finding a market in Taiwan, it decided to develop its business in the US. The investors and customers it has found there have enabled it to add personnel to its Taiwan-based technology team. The other startup, Nerd Skincare, uses a similar model: manufacturing customized acne prevention products in Taiwan for the global market.

“The team is all in Taiwan, but the only way to have a world-class product is to compete in the global market.” Wang says that entrepreneurship takes more than just innovation: you also have to act quickly, be pro­active, and, most importantly, be steeped in the mechanics of operating in a highly competitive environment.

Charlie Yeh’s Bay Area startup has received funding from SOSV and guidance from IndieBio. He says that facing new challenges every day is just part of being a Bay Area entrepreneur.

Fostering alliances

Shih adds, “Innovating and starting a business are two different things. The latter has many aspects—legal, financial, accounting—that require study. The training provided by accelerators is essential.”

Charlie Yeh, who last year earned a PhD from the University of California, Berkeley, takes us to the offices of his startup, ­mFluiDx. He founded the company in October 2015, and received US$250,000 in first-round funding from venture capitalist SOSV in March 2016. At the advice of IndieBio, a well known accelerator specializing in synthetic biology startups, he moved the company’s offices to an SOSV coworking space in the Bay Area. IndieBio provides his team with daily training on everything from business models to product testing. “The startup experience I’m getting here is invaluable,” says Yeh. “It’s like an intensive MBA program.”

mFluiDx is studying the use of microfluidic chips to test for DNA viruses and already holds four patents. Its technology shrinks large testing equipment that used to cost US$50,000‡100,000 into a palm-sized device, shortens testing times for Zika, dengue and other viruses, and greatly reduces testing costs.

SOSV’s coworking space is currently home to 14 biology-related startups like mFluiDx, and provides its companies with free use of a lab. The 31-year-old Yeh says, “The entrepreneurs here are so young that I count as old. Almost everyone started their businesses right after completing a degree, and several are still in university. The accelerator’s training has been very stringent.”

Aggregating innovators

Startups that have been groomed by accelerators are more attractive to investors. The incredible number of accelerators and investment companies within driving distance of the Bay Area means that startup teams have endless opportunities to demo and pitch their companies. Yeh rehearsed for months before participating in a large-scale demo for nearly 1,000 people on July 14. He says that each day offers new challenges.

Israel, Japan, Korea, mainland China, and Singapore all currently have startup support teams in Silicon Valley. Though Taiwan’s TIEC office has only been in the Valley for a short time, it has already developed a kind of centripetal force of its own. It fosters that by welcoming even teams that haven’t yet been selected for direct support to drop by the office and trade ideas.

Stanford University president John Hennessy has said that 15 years ago all you needed to start a business and make money was a good piece of tech, but nowadays you have to ask, “Who can fund it?” The business model has become as important as the tech.

In the modern era, starting a business can win one the keys to the world. By having TIEC plant its flag in Silicon Valley, the government is seeking to help Taiwanese young people find their way, uncover new technologies, and get Taiwanese manufacturing back up to speed.