In the ASVDA Startup Ecosystem in InnoVEX 2019, “Connecting the Dots” was the title for a panel discussion featuring Professor Jeff Karp of Harvard University; Mr. Masashi Sato, Senior Manager of Nomura Research Institute; Mr. Dave Ng, Head of Southeast Asia, Eight Roads Ventures, and Dr. Laurent Le Guyader, Board Member of la French Tech Taiwan. The panel was moderated by Mr. David Weng, CEO of Taiwania Capital.
Capitalizing on Differences
Mr. Weng started the panel by introducing Taiwania Capital which is a government sponsored VC with a goal to bring technology & talent; as well as to be able to create an ecosystem with Taiwan’s industries as well as developing emerging technologies through investments both local and global. He laid out the main idea of the panel: connecting global partnership ecosystem. Mr. Weng also served as the Chief Investment Officer of Asian Silicon Valley Development Agency (ASVDA) whose main goal is to connect Taiwan with the global ecosystem.
Professor Jeff Karp came from an academic background and in his experience; many of the innovations in Boston came from the academia. Innovation in many ways start in the academics then spread outwards to the society. As one of the oldest cities in the US, Boston has a high density of academic institutions and hospitals. However, Boston still experience inefficiencies in terms of connecting people together and globally. One of the ways to fuel innovation is to connect academic centers globally; enable sharing of students, funding entrepreneur students, and exposing them to the culture of innovation. As organizations, they should consider what are the strengths in specific areas of the world that can be leveraged and where academia can have a stronger role in.
Mr. Sato stated that Japanese large enterprises are always looking for good partners globally. They are historically very inward thinking and prefer to invest or partner with the local startups; but they are still interested in global startups. Some challenges that still exist are: hesitance to communicate and bureaucratic process. Many Japanese enterprises are hesitant to talk with foreign players due to language barriers; but this mutual interaction is vital for mutual growth. In addition, the big companies can have a rather inefficient decision making process so international players who want to enter or cooperate with Japanese companies will need to be more familiar with their tendencies.
Mr. le Guyader stated that France is now experiencing a boom of digital startups and an increase of VCs and companies; creating a balanced entrepreneurial ecosystem. However, there is now a shift to deep tech which is focused in academia and research centers. French companies focus on startups early and are relatively close to startups. The enterprises want to engage with startups, but sometimes they are not clear on how to utilize the innovations and technologies.
For Southeast Asia (SEA), Mr. Ng stated that there are more exchanges between Taiwan and SEA. Some VCs and accelerators also indicated that they want to increase their collaboration with SEA organizations. In addition, there are also Taiwanese founders that want to enter SEA. These exchanges are more than necessary to access the 650 million people market of SEA; this is also a good way to expand Taiwan’s industries. For a long time, Taiwan has maintained its strengths in manufacturing and hardware industries; but it’s time for Taiwanese players to invest in new areas such as software, internet, AI, and more. There are a lot of talents in the new areas, but they will need more support. Mr. Ng believed Taiwan giants can do more to start building their new direction.
Foster the Ecosystem and Connect it Globally
Mr. le Guyader said that France has been innovating for a long while, but lacks entrepreneurship tools or mindsets to launch companies in the market. It has changed drastically with the formation of La French Tech; a government initiative with a few programs to help young entrepreneurs start a company with a few incentives: seed money, series A investment, and more. La French Tech is also a way to federate the French local ecosystem as cities can apply to be part of La French Tech and work together to gain access to the programs and incentives; as well as export the startups globally. So far La French Tech has worked very well because there is a continuous dialogue between the participating startups and the government and it continuously evolves to fit the needs of the participants.
According to Professor Karp, having innovators and groups that are expanding science, researchers, and advancing breakthroughs are key to fostering the ecosystem. After the US passed the Bayh-Dole Act, academic innovators are more rewarded with royalties. This framework is needed to promote innovation from the academics. Essentially, incentivizing innovators with government support with the right infrastructure is critical. Often there are barriers between the innovators and businesses; which is why there is a need to facilitate the communication and make it easy for the innovators to be able to take the technologies and advance forward. In addition, a success case is also needed that can be a goal or role models for aspiring innovators.
Mr. Sato stated that policy, technology, market, culture, people, and finance are all aspects that are important in addition to government support for the ecosystem to thrive. Many startups from the academic field are experts in innovating and innovative technology, but they will need financing and a welcoming market. These innovators need to open their mind to the market as well and from there work proactively with VCs, CVCs, other investors, and mentors.
Mr. Ng reminded the audience that different ecosystems have different characteristics and nuances. Many countries in SEA in the past tried to recreate Silicon Valley’s success by copying their early models; an approach which ultimately failed. The current cycle of SEA’s digital ecosystem is showing results; but its main contributors are 2 factors: bottom-up interests and top-down push. Bottom-up interests come from grassroots entrepreneurs and founder who are interested in technology or innovation. Top-down push involves government programs that are modified after their failed attempt at copying Silicon Valley. This can include supporting VC funds, startup-friendly policies, etc.
Leverage Available Resources
Governmental incentives and grants are always helpful for founders. According to Mr. le Guyader, this is one of the offerings of France. La French Tech also has many successful companies that now serve as mentors in the program so startups can get a myriad of resources including incentives, grants, talents, university resources, and preferential visa treatment; while also arriving at a good landing point for the European market.
For Mr. Sato, one of the most important local resources that startups can leverage in Japan is undeniably the corporates. Currently they are already funding startups, but the resource they can provide is not limited to just money, but also data, mentorship, etc. Government & universities are also actively promoting the founding of startups and many founders have already created promising seed stage startups. The problem that needs to be overcome is leaping over the valley of death; to move the startups forward to later stages and make them more lucrative. To solve this problem, Mr. Sato believes more experience from proof of concepts is necessary.
The US is strong in a variety of fields and have diverse resources to leverage, Professor Karp stated. Many US companies are externalizing various aspects of their translational process; essentially giving more opportunities for startups to enter into a partnership with them. At the same time he advised countries to think what they are good at and think about how they can incentivize the rest of the world to utilize those strengths and make a cornerstone of innovation.
For startups who want to enter the SEA market, Mr. Ng suggested they consider the path of their growth and potential success. In certain countries, having a domestic market alone might not be enough to survive and a global expansion strategy must be embraced. In general, entrepreneurs still need to go through the thought process and understand whether a global or local strategy must be emphasized before finding partners. The key is that the partner must be interested in the company and the product.
Through this panel discussion, the key messages from the panelists are as follows:
Laurent le Guyader: Taiwan and France has great synergies and complement each other. Taiwan’s manufacturing strengths will definitely complement France that focuses on AI, IoT, and Tech for Good.
Masashi Sato: In Asia, many countries are eager to make their own ecosystems, but many are not yet connected. The Japanese government is interested in expanding their ecosystem Asia-wide through cross-regional platform for all industries.
Jeff Karp: to properly connect ecosystems, relationships and networks are important. Facilitated movement between countries will also improve the internal ecosystem because people can exchange information and learn more easily.
Dave Ng: SEA is a large market that Taiwan entrepreneurs should explore and consider. Innovators should always consider creating products that work beyond their local markets but for the global market.
To watch the full forum session, visit our YouTube channel here.