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Covid-19 brings wave of US tech entrepreneurs to Taiwan – Financial Times

When Jameson Hsu came to Taiwan from the San Francisco Bay Area in early 2020, he was fleeing Covid-19. “We thought we would stay a few weeks,” said Hsu, a serial tech entrepreneur from a Taiwanese-American family.

A year later, he is still in Taipei after founding a new company and becoming involved in mentoring and investment for local start-ups.

Hsu is part of a wave of American tech entrepreneurs that has hit Taiwan’s shores. From Steve Chen, co-founder of YouTube, to Susan Wu, an investor who was involved in the early stages of Twitter, dozens of global tech entrepreneurs are sheltering from the pandemic in the country. They are also trying to help Taiwan build the viable and dynamic start-up sector that has long eluded it.

“With all these folks — and successful people at that, entrepreneurs — back in Taiwan, why not put our collective power together and re-create here what we have done abroad?” said Hsu.

The founders mentor young Taiwanese entrepreneurs, work with start-up incubators, and advise the government on how to make Taiwan more open and dynamic. Some teach at universities, while others are scouring Taiwanese academic institutions for ideas and talent they can take abroad for new businesses.

It is a once in a lifetime opportunity for Taiwan. While it is home to Taiwan Semiconductor Manufacturing Corp (TSMC) and Foxconn, which are respectively the world’s largest contract chipmaker and contract electronics manufacturer, it has failed to create a big software-focused start-up sector — an industry that often offers higher returns.

Hundreds of start-ups have emerged in Taiwan over the past decade and government policies aimed at creating an ‘Asian Silicon Valley’ have helped.

“Initially there was a lot of interest in software work spun out of hardware, handset development, the things Taiwan is so strong in,” said Thomas Purtell, founder and chief executive of mobile gamer social network Omlet Arcade, who runs the company out of Taiwan. “Gradually there are more people who want to do other software work than firmware. So there is variety and I think it is really developing.”

Taiwan has no unicorns

The inflow of US tech veterans has been boosted by the Gold Card, a Taiwan government programme to attract foreign talent.

While there were no more than 600 Gold Card holders at the end of 2019, the government issued almost 1,300 last year. Of the total 2,243 Gold Card holders, 240 are from the tech industry.

“Just before Covid, the government was thinking about how to take these start-ups global, trying to bring people on roadshows in Silicon Valley,” said Jonathan Liao, director of the Taiwan Gold Card Office. “All of a sudden, you have all those people here. And it is pretty much the same people they would have taken our start-ups to meet over there.”

Taiwanese start-ups are learning from Silicon Valley entrepreneurs on how to take their business global. “I don’t know yet how to take our business into another market, another culture,” said Porsche Tsai, founder of Oak Mega, which offers software for customer relations management via social media. “Taiwan is a compact market, so it is ideal for starting a business because you can try many things in a short period of time. But it is not ideal for growing really big.”

Those who have moved from Silicon Valley are taking advantage of Taiwan’s lower costs. “Here, the salary for a software engineer is probably a quarter of what it is in the US,” said Sam Shih, a software programmer from the Bay Area. “So a lot of people just try something here which they would like to try in Los Angeles but would be a bit too risky financially there. Then when they have proof of concept, they can take it to investors and take it global.”

Taiwan’s lower costs allow Hsu to run his latest company, digital fitness start-up Kinetikathlete, without outside investors. But there are a lot of other hurdles.

He cautioned that although Taiwan had a wealth of tech talent, many young engineers lacked the entrepreneurial spirit needed in a Silicon Valley-style start-up culture.

Hsu also complained about rigid bureaucratic processes that made it difficult for foreigners to set up bank accounts, which resulted in his company registration taking six months.

Mai Bach, an American who has been an entrepreneur in Taiwan for eight years, is partnering with Wu, the venture capitalist, to set up Elevate, a platform aimed at connecting local tech talent with founders.

Another project under consideration is a stipend modelled after the Thiel Fellowship, which offers $100,000 to young people willing to drop out of education for two years to pursue a start-up idea.

However, start-ups are concerned that the wave of foreign tech talent could recede as quickly as it came. “We are all working against an invisible deadline,” added Bach. “Once vaccines become prevalent, most of the founders will leave. And we need to plant enough seeds before then to effect sustainable change.”