Young entrepreneurs looking to enter Asia can choose from a list of welcoming countries. Leaders based in four of those markets made their cases in April.
Startup scene veterans from Thailand, Hong Kong, Japan and Taiwan showed April 18 at the Taipei event “Battle of the Ecosystems” to speak for their home markets – as well as caution founders about potential obstacles.
The venue for the event held by Taiwan Startup Stadium, a government-backed organisation that coaches Taiwanese startups, left standing room only as young entrepreneurs packed in to get insights on how each startup ecosystem works.
Japan in market of its own
Japan offers startups a solid regulatory environment, technically skilled workers and a laboratory for blockchain-based technology, said Joseph Huang, a venture partner with Japan-based Infinity Ventures.
With offices in Tokyo, Beijing and Taipei, Infinity Ventures is an investment fund that helps internet startups focused on Asian markets.
In Japan, however, business people must get used to ambiguous maybes and other indirect communication, Huang said. Business development can be slow, too, especially when it comes to getting go-aheads from partners, he cautioned.
A contract in Japan can take six to 12 months for completion, he added, but Japanese partners are “extremely efficient” once they’re on board.
Despite Japan’s reputation for inventing new technology, the country’s consumers are typically late adopters of new trends, Huang said. Yet when consumers back a new trend, he said, it can really take off. The domestic market is big enough that startups based there need not expand abroad.
“I think this time lag means foreigners are well placed to introduce new products and services to the Japanese market, if they can get the timing right,” he said.
Huang cautioned that Japanese language ability is required as no entrepreneurs will thrive there without it.
Infinity Ventures, founded in 2009, looks mainly for content marketing startups. Candidates for funding also work with digital imaging, gaming and entertainment.
Thailand: Practice positive energy
Amarit Charoenphan, co-founder of Techsauce Media, a tech and business news outlet, and HUBBA, one of Thailand’s biggest co-working spaces, called the Southeast Asian country a “fun gateway” to burgeoning Southeast Asia.
Thailand attracts startups largely for marketing and e-commerce.
Charoenphan talked up Thailand’s those sectors and its draw for design companies. But the ambiguities common in Japan occur in Thailand, too, the co-founder said. A yes can even mean no, he said.
It’s important to exchange “positive energy” between partners and investors and build trust, Charoenphan said.
Charoenphan described Southeast Asia’s affordability and lifestyle as perfect for young entrepreneurs who need to keep burn rates low. Funding is available from the corporate venture capital sector in Thailand when startups want to expand.
“While regulation in Thailand can be clunky,” Charoenphan said, “there is a willingness to make things smoother.”
Hong Kong as a link to China and a lot of other places
Hong Kong may draw startups for its ease of doing business, links to other parts of the world and entryway into mainland China, said Alex Chan, co-director of startup accelerator The Mills Fabrica. This firm, also a venture capital fund, focuses on startups that try new fashion production methods, e-commerce, and high-tech fabrics.
Hong Kong is otherwise known for business opportunities in financial technology and mini-storage.
“From day one, Hong Kong has always been a bridging market,” Chan said. The territory’s position as a regional hub gives companies there better reach to markets and funding, he added.
“Our strength comes from our connectivity across the region, so if we can recruit Taiwanese talent, it is to our benefit too,” said Chan, whose firm is based in Hong Kong.
Against competition from other parts of Asia, Hong Kong may be able to gain an edge by expanding its textile industry – a former growth driver that has waned in recent years due to the outsourcing of manufacturing.
Today the sector employees almost three per cent of the total labour force in Hong Kong and represents roughly two per cent of exports. Chang says expanding innovation in e-commerce, fabric research and new production and distribution models can give the local sector new life.
The Mills Fabrica looks for startups that try new fashion production methods, e-commerce and high-tech fabrics.
Asked to share an insider tip, Chan said Hong Kong investors prefer companies that set up as a British Virgin Islands offshore corporation as the jurisdiction has virtually no taxation.
Taiwan — for entrepreneurs who want quality of life
Government support is giving Taiwan a lift as a cradle for startups, said Holly Harrington, co-founder and general manager of the Taiwan Startup Stadium.
She talked up Taiwan’s tech-savvy talent and described what she calls quality of life. Many young Taiwanese have returned after years of working abroad, she said. But Taiwan-based startups must consider expanding offshore due to the markets small size, Harrington said.
“Ultimately Taiwan is a bridging ecosystem,” she says. “So we encourage our members in Startup Stadium to focus on expanding outward.”
Harrington points to a decrease in the number of startups active in China in recent years. More young firms are now looking toward the Japan, Southeast Asia, and the United States, she said. Differences between the two sides in online platform usage and internet regulations explain the decrease, she said.
The little-known Taiwanese founders behind some of Silicon Valley’s biggest startups give young entrepreneurs still in Taiwan extra access to funding and mentoring, Harrington said. Many VC firms, accelerators, and consultants from other parts of the world feel good about Taiwan, she added.
“When people hear you’re from Taiwan, they really want to help you,” she said.
Startups based in Taiwan may need to adjust to the local stratospheric use of Facebook, she said. Harrington coaches young local entrepreneurs heading abroad to diversify their own social media usage.
Taiwan is seen as an ideal spot for internet-of-things startups.
She also warns newcomers that Taiwanese may be late with e-mail replies and ignore missed phone calls. Taiwan’s process for getting entrepreneur visas could be improved, she said.
“Once people discover the potential here, they keep coming back for more,” Harrington said.
The article Where Does a Startup Start in Asia? Taiwan, Hong Kong, Japan and Thailand All Say Here first appeared on Business Next.