What you need to know
A debate between the advantages of Taiwan, Hong Kong, Thailand and Japan has Taiwan come out looking alright.
Countries traditionally known for their manufacturing, Taiwan and Thailand have made conscious pushes to get into the global startup fray in recent years, each touting the potential for growth and support in their respective entrepreneurial scenes.
But for the young founder with a head full of dreams and a slim wallet looking to settle down in a community, which country offers the best prospects? Taiwan Startup Stadium (TSS), a government-backed startup coaching network that aims to bring Taiwan's startup ecosystem to the world and helped the companies under its wing attract almost US$50 million in funding last year, hosted a debate on April 19 to compare the merits of Taiwan, Thailand, Japan and Hong Kong.
The true southbound
Thailand, according to this Techsauce report, had fewer than 100 funded tech startups as of the end of 2017, leaving plenty of room to grow in the newly-industrialized country. As per-capita income continues to rise, however, startups are beginning to receive more attention.
Amarit Charoenphan, co-founder and chief connection officer of Techsauce Thailand, told the crowd in Taipei, "Yes, the laws are clunky, but there are ways to hack it – but don't do anything illegal – and make it smoother." He said the perils of negotiating in Thailand could prove a boon for businesses looking to expand in the region – Thailand is a way to prove "that you can operate in crazy-ass markets in Southeast Asia." That is the path forged by one of Thailand's most successful startups, Omise, which has so far raised US$45 million across a mixture of venture capital investments and a US$25 million initial coin offering (ICO). The payment management platform has so far expanded from Thailand to Singapore, Japan and Indonesia.
Indeed, Charoenphan comments regarding making it in the cut and thrust cultural and economic badlands of Southeast Asia hints at the expected future expansion of the startup scene in countries like Indonesia, which the Techsauce described as "the next China." Indonesia as a nation attracts scant attention in the global press, but it is endowed with the world's fourth-largest population, a steadily-growing economy, is the world's fifth-largest producer of greenhouse gasses and boasts a public that is quickly discovering the internet. Global digital market research company eMarketer estimated that in 2017, just over a third of Indonesia's 261 million people had internet access, hinting at the potential for explosive growth as the country pursues much-needed improvements of digital and logistical infrastructure.
Despite the Thai junta's reputation for corruption (41 percent of Thais reported paying a bribe in 2017), the country itself is no slouch. Charoenphan said that the nation of 66 million people had little competition in many sectors, and that startup costs are low. In Thailand, he said, startups could grow to be the "tallest of the dwarfs."
The close-knit island
Taiwan, on the other hand, could be seen as the smallest of the industrial giants, one trying hard to shift away from its traditional strengths towards a more lucrative tech startup industry. Despite government promises to foster the country's first unicorn within two years, the government is aware that billion-dollar companies are most likely to emerge from a robust and healthy ecosystem, hence the importance attached to the work of Asia Silicon Valley and partner organizations like TSS itself.
Holly Harrington, general manager at TSS, said that Taiwan has "a certain tenacity and ability to build businesses overseas," adding that Taiwan's contribution to global business was often hidden – people often didn't realize that Taiwanese technology or intellectual property was behind many successful businesses.
Taiwan, Harrington said, has a more laid-back and personal business ecosystem, which they have to change when going to other countries: "When Taiwanese [startups] go abroad, we have to tell them to use LinkedIn or Twitter, I don't necessarily want people to add me on Facebook."
The close-knit high-trust society might be Taiwan's biggest advantage: "People are so eager to help Taiwan and are so proud of it" she said, adding, "I’m jealous ... because we [Americans] aren’t proud of ourselves sometimes. You don't understand until you come to Taiwan – It’s just a good place to be."
As opposed to those in Thailand who may be looking close to home for expansion in Southeast Asia, half of Taiwan's startups overwhelmingly target the U.S., with Japan the next most sought over next step, according to TSS data.
The startup path in Taiwan isn't exactly paved with gold, however – the search for funding her has been variously described as "disappointing" with a "high failure rate" and that startups "need to be doing better" to get in on venture capital (VC) money. Indeed, the event had a palpable shortage of hands when the hosts asked if there were any representatives of VCs in the room.
The capitalist paragons
Also at the event were defenders of Hong Kong and Japan's startup ecosystems: Alexander Chan, co-director of The Mills Fabrica in Hong Kong and Joseph Huang, a partner at Infinity Venture Partners in Japan.
Chan described Hong Kong paradoxically; while the country is an incredibly efficient place to do business and has great access to China, the risk-adverse society and high cost of living pose some challenges to doing business. "Even I live in a tiny box," said Chan.
Hong Kong's openness was contrasted to the challenges of working in Japan, where Huang said "people were willing to pay," but it could be hard to make connections due to language and cultural barriers. Japan could also be slow to adopt new trends – this is a country that still embraces the flip phone and fax machine. Support for the startup scene has been improving in recent years, Huang said, and that Japan is “extremely efficient once they say yes.”
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Editor: David Green