The sentiment in Taiwan today between governments, industry players and entrepreneurs is to recreate Silicon Valley in Taiwan. While we've come along way over the past few years, we are still a stretch off, and here's how we think we need to improve the ecosystem.
The Taiwan startup scene has burst to life with newly infused energy in the form of strong government funding and support. The ecosystem has since seen all sorts of government programs, alongside public and private accelerator programs.
That being said, we are still a long way from creating a vibrant ecosystem for startups with a full range of funding options to support startups from Zero to IPO.
Here's why.
Conservative Funding Climate
Despite accelerators sprouting up across the island, which has provided good platforms for teams to take the plunge from 0 to 1, subsequent follow on funding is still relatively sparse in between. Taiwan is home to many Tech and Finance giants, with well funded Evergreen funds, however, most funds prefer to invest after the "chasm of death" or in later stage deals.
Void in the Chasm of Death
The Chasm of Death is one of the most challenging phases of a startup, trying to take their game to the next level with a pre-revenue product. Many companies fail to match their product to real world market needs, or are unable to design a viable and scalable business model.
While the rise of Pre-Seed funds and accelerators have jolted the startup pool, most programs are not designed or structured to hand hold the startups past the chasm of death.
Without a long term, committed bridge to propel startups out of the chasm both financially and operationally, we will continue to find it hard to incubate unicorns on the island.
Lack of Growth Hacking Regionally
There is an abundance of strong technologies developed in Taiwan. But most startups are focused solely on the technology itself, but weak in productization of the technologies and in the marketing & distribution of their products in Taiwan regionally, resulting in high mortality rates in the chasm of death after prototyping. And given Taiwan itself has a small domestic market, access to regional markets are all the more critical to drive sufficient traction for the startups.
With so many moving parts in a fledgling startup to manage for entrepreneurs, financing support alone may not suffice. Operational expertise and guidance along with financing will be critical to ensure higher conversions towards successful scalable businesses.
Filling the Void
At Hive Ventures, we believe the recipe for success for higher conversion rates and forging a stronger startup ecosystem would be to invest early, and to work shoulder to shoulder with the startups to cross the chasm of death with a team of dedicated veterans who will support the companies throughout their lifecycle from Zero to IPO.