In a Q&A with Dr. Lewis Chen, we learn how Taiwan Tech Arena is growing the ecosystem by giving startups a voice

Taking the perspective of the overall tech ecosystem into mind, Taiwan can be considered an early adopter, particularly compared to other countries in Asia. In the 1980s to the 1990s, the nation was able to establish itself as a hardware manufacturing hub, and many of the big names in semiconductor and computer manufacturing have headquartered in Taiwan.

Today, hardware is still one of Taiwan’s key strengths, in terms of manufacturing in the technology sector. With recent developments in artificial intelligence, the internet-of-things, fintech, decentralised technologies, and other emerging trends, Taiwan seeks to maintain an advantage by nurturing its startup and technology ecosystem.

e27 recently sought insights from Dr. Lewis Chen, Managing Director at Taiwan Tech Arena, where he discussed the TTA’s vision and how it intends to accomplish its mission by championing Taiwan’s startup ecosystem in terms of resource management, talent, and representation. Below are edited excerpts of our interview.

What are the thrusts of Taiwan Tech Arena, and how do these relate to the state of the startup ecosystem in Taiwan and the rest of Asia?

First of all, I consider people here in Taiwan to be keen in starting up a business – mostly the younger generation. It is what you can call an innovation economy. Now before we start any discussion, consider that Taiwan has a lot of manufacturing power. Since the 1990s, we had been a leader in semiconductor manufacturing and development, as well as advanced manufacturing processes. Now, given these resources, the key is how to better contribute to the international ecosystem.

The main vision and motivation behind TTA is to establish Taiwan as a startup nation. Toward this goal, we have three major missions:

First is to engage Taiwan’s deep tech and science resources. The key is to effectively administer science and technology management in Taiwan. We have at least 13 science parks with 100 to 200 companies in each. Managing can involve helping startups access these companies as customers or investors. We have universities and R&D institutions like ITRI, and we have a big network of angel investors and seasoned entrepreneurs from established startups.

There is need to integrate these resources in order to support startups in Taiwan.

Second is to establish Taiwan as an international hub that fuses both local and global cultures together. Taipei is an international city, for one. We are in a good position to recruit both domestic and international talent – every year we systematically produce around 5,000 AI talents in the country.

An open environment encourages discussion and getting to know each other’s concepts, thus helping entrepreneurs adapt their solutions to each other’s markets.

The third mission – which is actually the original goal of TTA – is to leverage these resources in establishing partnerships with other stakeholders in the global startup ecosystem. In essence, we expect ourselves at TTA to be the voice of startups from Taiwan. At TTA, we engage a lot of international teams, and this helps us gain much-needed visibility in the global arena.

To this end, we are actively trying to inject government resources into recruiting international accelerators to have a presence in Taiwan through TTA. As an example, we have partnered with tier-1 international accelerators, including 500 Startups, Techstars, and SOSV-MOX, who recruit and mentor startup teams based on their own criteria. We also hold regular events – some co-hosted with these accelerators – wherein startups can network and get to know other teams.

We also go to trade shows, such as CES, and we also participate in communities hosted by other accelerators globally, including French Tech in Paris, CTA in Canada, Skytech in Berkeley, and Blk71 in Singapore, among others. The key is cooperating with strategic partners, in order to achieve our goals.

Since our launch in June 2018, we have supported teams by subsidising their soft launch in Silicon Valley to learn from the communities there and engage. TTA has supported at least 99 startups with government resources, with a fundraise size reaching $90 million. Fifty-five of these startups are already funded.

Taiwan is a powerhouse in hardware development. What are current trends that Taiwan’s startup ecosystem needs to leverage to keep this advantage?

I can see the age of AI and internet-of-things dominating. We actually have such technologies in our production lines, and we can see a big amount of talent and manufacturing resources being invested into these technologies.

TTA counts more than 500 manufacturing companies as partners – these include system integrators, production partners, and mass-production companies. Our advantage here is in hardware manufacturing prowess.

We are currently in the AIoT era (or Artificial Intelligence of Things), which brings together technologies like AI, IoT, VR, AR, and other sorts of immersive technologies. If you consider AR and VR, you tend to think of algorithms and content. The same goes with AI, IoT, and the cloud. But consider that even as you deliver content in the cloud, there are the underlying devices, without which the networks and algorithms will not run.

There is a good opportunity for us to establish the capability of AIoT devices in Taiwan, especially when you consider data collection and accumulation from sensors and devices in different locations like the production line. Other opportunities lie in how we can integrate hardware, systems, software, and applications – particularly in identifying problems and in directing resources toward finding solutions.

Is this why your highlight technologies at the recently-held CES in Las Vegas were mostly in AI, smart devices, immersive tech, healthtech, and green tech?

In 2018, we brought 32 teams to CES, of which four won the innovation award. This year, we brought 44 teams, eight of whom won the innovation award. In terms of the difference between these two delegations, I can say that this year’s startups mostly showcased how to use deep tech in solving real-world problems.

For example, one of the startups we sponsored utilised lasers in analyzing pH value and other chemical compositions in water in real-time. In the past, such tests required mixing in different chemical reagents, and this would require at least seven days before results can be read. With real-time applications, such a technology can be used for practical applications in fisheries, industrial use, and environmental management. It goes beyond that, however. With the data being collected, companies can now correlate how chemicals present in water can result in diseases in other places.

Once you have identified a problem, startups can use our strong capability in AI, manufacturing, software development, and hardware systems – all integrated to solve a problem.

You mentioned your involvement in industry events like CES. How important is institutional support (from government, accelerators, incubators) in contributing to the success of a startup?

TTA is an ecosystem. As an analogy, I can describe it very much like a shopping mall that features different stores and brands. Our partner accelerators are much like these different brands, which market their own products by their own rules and capabilities. In this analogy, the startups are the products that these accelerators carry.

TTA is focusing on the ecosystem play, wherein we try to support our partner accelerators in building upon vertical ecosystems. For instance, we count at least 100 companies as partners, and this includes investors and startups, as well as universities and R&D institutions. Accelerators can recruit teams and talent in order to mentor and educate them according to spec, with the aim of creating products and value for their end-customers.

What is the prevailing culture in the Taiwan startup community, and how does this affect performance, competitiveness, and cooperation?

In my observation, the startup culture here in Taiwan is very much different from that in the US, for example. It is common observation that founders in the US – take Steve Jobs for example – usually get started in entrepreneurship outside the confines of their university or undergrad studies.

In Taiwan, it is not the same. The family culture here is that young people are encouraged to finish their studies. After graduating, not everyone is a “tiger” yet. People get immersed in industry for a few years. And if they have good entrepreneurial DNA, that’s the time they get started with their business.

Many of the startups in Taiwan have founders that are around 30, 40 years of age. It is quite important to stress work experience here. Many of these startups address pain points from the founders’ previous companies and industries. The advantage here is that with their working experience and tech knowledge, looking for support and funding at seed stage will be less difficult.

The disadvantage is that with very particular and local pain points being addressed, there is sometimes difficulty in scaling up or finding channels to address bigger markets – after all, the international setting might have different needs.

This is why I always stress the need to make a product marketable: know the market size, identify selling channels, and address problems and not just pain points.

What are your thoughts on the recent trends in funding and fundraising for startups, particularly ICOs and tokenization?

When you look at reports in 2018, you will see that token-based crowdfunding has already decreased dramatically, compared with angel fund investment. Before that, everyone had money – it’s easy to invest in good ideas.

Now, you have to prove that your product is actually market-feasible and workable. Not only do you have to prove your tech, but you also have to prove your business and build your customer base. If you can prove that your prototype can get significant revenue, and that your innovation is real, I will invest in you.

ICOs can be easily linked to being a “bubble” and perhaps 80 to 90 percent of ICOs are traps. There are of course other barriers, including the supposedly borderless nature of ICOs, which can hurt authentication. If the tokens deal with the service part of the business, then that’s probably ok. But if tokens are considered as securities or currencies, then there needs to be involvement by financial regulators.

Now, Blockchain is a different thing altogether, and applied in industry, I can see that it has very significant economic impact especially in fintech, particularly in auditing, proof, smart contracts, and such applications. The problem is that it is difficult to see the implications in other industries.

However, I can see the value in how Blockchain can significantly impact the way businesses manage and keep track of data – for instance coupled with IoT in the manufacturing chain.

There is a need to discuss more on the “killer application” of Blockchain.

What is the future for TTA and Taiwan’s startup ecosystem?

Currently, TTA represents startups and does everything we can do to help them, including injecting startup resources, manufacturing power, contributing to pilot production and helping with fundraising. We also help with scaling up, but the challenge is in you have to discuss mass production, cost reduction, international expansion, logistics, distribution, etc.

Our vision is in scaling up Taiwan as a startup nation, and this involves gathering resources and improving visibility. We hope to carry startups from zero to valuations of $1 million, 10 million, 100 million, 1 billion and perhaps produce a startup Unicorn from Taiwan.

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