Economic and Innovation Developments in GSEA Should Be Tempting More Founders to Launch Startups in the Region by Leveraging Taiwan

Douglas Crets

January 1, 2020

This map tracks the quarterly economic and technological changes in a region that should be the dominant startup generating region throughout the next decade.

Douglas Crets, Communications Master
Douglas is the English Master in Communication. A passionate marketing strategist and content writer, he spent three years with Microsoft in Silicon Valley managing the global social media marketing strategy for BizSpark, Microsoft’s Azure and software program for entrepreneurs. Douglas has a deep love for technology, literature and travel. He holds a Masters in Fine Arts from Syracuse University and a Masters in Journalism from the University of Hong Kong. One day, he hopes to travel around the world for a year.

The latest Map of Greater Southeast Asia’s digital economies, which we develop at least once every quarter, is indicating to founders in Greater Southeast Asia that the rise of mobile broadband in economies where GDP growth is accelerating past 6 per cent is setting the stage for amazing improvisation in tech use and commercial problem-solving.

It may come as a surprise to some, but Taiwan can play a pivotal role in that innovation surge. I have written a few thoughts about this to show you what we mean.

As the supporter of the largest accelerator-born community in the region focused on tech founders, our team watches closely these developments. Our portfolio companies and the 1113 founders and 376 active startups of our Accelerator alumni network are living examples of the magnet that Taiwan has become for founders in this region.

Starting small, in a huge region called GSEA

We refer to this region as Greater Southeast Asia (GSEA), positioning it as ASEAN + Taiwan, inclusive of such territories as Hong Kong and Macau, and East Timor. The nomenclature is driven by our observation of consumption habits and statistical data, as you can see in the map below, which hangs in our accelerator space.

We include Taiwan in this grouping because its economic evolution has become something of a beacon for SEA founders who want to build beachheads around the region. Let’s start with a single statistic to understand why.

The total e-commerce economy market size in Taiwan is USD$42 billion. This is almost 66 per cent of the size of the entire GSEA combined.

Founders who emerge in GSEA and come to Taiwan to grow stronger

This unique attribute of Taiwan is a magnet. There is also a push factor in ASEAN nations. That mechanism is prompting SEA founders to seek out a tested, developed market for their ideas.

This movement is observable through growth statistics that suggest a plethora of pent up consumption demand driven by tech adoption and through example companies that have done it. Let’s start with the country data.

Five countries in GSEA show growth in GDP per capita of over 6 per cent, as of last year. They are Cambodia at 6.83 per cent; Laos at 6.72 per cent; Vietnam at 6.5 per cent; the Philippines at 6.47 per cent; Myanmar at 6.45 per cent. Indonesia and East Timor show growth of 5.2 per cent and 5 per cent, respectively.

In Vietnam, a country of 95 million people, many early-stage startups are rapidly developing — Sky Mavis; Axie Infinity; Triip.me (AW#18). Engineering talent that moved overseas and went to tough schools like Harvard have now come back and are starting new companies by the dozens.

In Indonesia, we have seen the growth of five unicorns, including Gojek and Bukalapak. In other areas, it’s not so straightforward.

Google recently released yearly results from a long-term study that looked at the potential for SEA’s growth.

Useful data by Google shows that GSEA presents great opportunities for smart founders who want to leverage a glut of software to reach populations that exist outside of the mainstream marketplaces — from *Google’s E-economy report, Swipe Up and to the Right*

Today, seven urban centres drive over 50 per cent of the internet economy in the countries depicted in GSEA. The “beyond metros,” or rural areas of a few SEA countries, account for 85 per cent of the population, but only 48 per cent of the Internet economy, as you can see from the picture below.

While use cases may exist for tech, and while consumer demand may be growing, it’s harder to really scale in some emerging markets without solid strategies and consistent talent.

Even though the creativity and innovation ideas are off the charts, many things like stagnant offline players, unavailability of engineering talent, government red tape and just pure infrastructure fragmentation stand in the way of “moving fast and breaking things,” so to speak.

SEA founders are coming to Taiwan is because they see a microcosm of development opportunities in Taiwan that they can take back to the rest of Asia, after getting focused here.

“Taiwan was a great gateway to Chinese-speaking countries [in SEA],” says Triip.me founder Hai Ho (AW#18). “There are [also] 200,000 and growing Vietnamese living in Taiwan. There are more daily direct flights between Taiwan and Vietnam, too. It is a good market.”

AppWorks startups are gaining momentum in Taiwan

Over 376 AppWorks startups have continued to scale and expand by staging in Taiwan through our Accelerator or by becoming one of the AppWorks portfolio companies. Over 1,113 founders in our network have helped the country become a focal point for this region’s growth.

These companies demonstrate just how nimbly a company locating in Taiwan can grow, figure out e-commerce strategies, and even acquire other companies and engineering teams while nurturing a huge market inside and outside of Taiwan.

Shopback (AW#13), the e-rebates payment platform founded by Henry Chan and Joel Leong in Singapore, came to Taiwan to scale up their e-commerce knowledge and market deployment.

Shopback has reported annualized sales figures of USD$500 million a year. It has operations in Singapore, Taiwan, Malaysia, Indonesia and the Philippines.

Some other investments include 91APP (Taiwan’s Shopify); Carousell, which has localised to Taiwan by building an office here (it’s also localised in several other ASEAN markets).

Taiwan is also the kind of place where you can build a company, or two, and IPO them, in a relatively quick time. For example, Jerry Kuo, one of the two siblings that started Kuobrothers, IPO’d in 2016. Jerry then IPO’d a second company that grew out of the original Kuobrothers Group, called MobiX, earlier this year.

There’s also M17, started by Singaporean Joseph Phua. M17 started as a dating app company called Paktor and was based in Singapore. Joseph merged that company with a Taiwanese company called 17 Media to form what is fast becoming a massive social entertainment company that focuses on live-streaming. A recent acquisition of competitor MeMe Live has brought M17’s live stream market share to over 60 per cent in SEA’s developed markets. That wasn’t the only M17 procurement, though.

M17 bought AppWorks Accelerator alum FBbuy, a company that developed an innovative way for people to buy items on Facebook. If someone simply typed in “+1,” in a comment, the scanning app would move the coveted item being discussed into a shopping cart. Joseph acquired that company and integrated it into a live-streaming commerce app called HandsUp.

Early-stage is also heading to Taiwan

There are also a number of early-stage companies with inherent exposure to SEA who have heeded the call to come to Taiwan.

At our upcoming Demo Day #19, over 65 per cent of the cohort will have originated or started their startup ideas in GSEA. Two female founders offer some examples.

Annie Zhang, from Hong Kong, will pitch Matters Lab as a decentralised platform for media and content sharing, which enables content providers to generate their own immutable content and get paid for it. They’ve generated about 25,000 customers in seven months.

Telepod founder Jin-Ni Gan, a Malaysian living in Singapore, will also pitch. At a recent mentor day, she showed off her miniEV startup already operating in seven markets in the region.

Telepod founder Jin-Ni Gan explains her product line and founder story to a room of Taiwan’s most successful entrepreneurs and corporate executives during Cohort #19’s Mentor Day, September 2019

Her last slide was a photo of kids without shoes walking down a dirt road that cut through what looked like smoke from a jungle fire at a rubber plantation.

“My childhood was similar to this one,” she said, and then ended her pitch with the message that tech and creativity have a strong potential to make this life better for billions of people.

That’s a story that is familiar to many founders here in Taiwan, and it’s one that will only scale rapidly in time. As the region grows, the probability that mission-driven founders who are intent on building fast-moving scalable startups will see that Taiwan is a launchpad for the regional market.

Another quick look at the GSEA market landscape should give founders, and investors, something to think about.

Out of the five countries mentioned earlier that have GDP growth north of 6 per cent, three of them — Cambodia, Laos, and East Timor — have mobile internet penetration rates under 40 per cent.

Myanmar, which has 21 million Internet users, only provides Internet to 36 per cent of its population. Nearly all of those users — 99.8 per cent — get their Internet through mobile phones.

In emerging market economies, a glut of software and tech availability is enabling founders to test use cases for new technology and consumer products. Often, these use cases employ leapfrog innovations that are further ahead than the traditional infrastructure or tech use cases in developed markets.

After spending six months in Taiwan, XFers (#18) teamed up with Zilliqa in Singapore to launch a stablecoin. The lack of avenues for remittances makes the mobile form factor an attractive device for gaining access to capital and tapping into new virtual banks and blockchain technologies. Going forward , data seems to indicate that this innovation in SE Asia driven by a connection to Taiwan will be more prevalent. And it will continue to shape fintech and more.

If you are a founder working on AI and / or Blockchain, you can stay updated on our Accelerator application process and news by visiting our AppWorks Accelerator page. Our next application process starts very soon.

The Warlord In the Park: How x-Googler Andy Cheng Used Constant Problem-Solving to Deliver Better Products to the Market and Grow His Startup

Douglas Crets

December 18, 2019

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Douglas Crets, Communications Master

Douglas is the English Master in Communication. A passionate marketing strategist and content writer, he spent three years with Microsoft in Silicon Valley managing the global social media marketing strategy for BizSpark, Microsoft’s Azure and software program for entrepreneurs. Douglas has a deep love for technology, literature and travel. He holds a Masters in Fine Arts from Syracuse University and a Masters in Journalism from the University of Hong Kong. One day, he hopes to travel around the world for a year.

First attempts at startup products usually fall short. This can be really frustrating, but early-stage founders don’t often realize that these false starts are real opportunities.

Why? When founders give this product to new users, they are trying to help a new customer fare better than those “normal” people who do things in what founders consider the “old way.”

Most people using a new feature or a product for the first time are used to doing business, or experiencing something in what they consider the normal way. They are not like the founder, who has dreamed up a vision of how things should be done. When a founder gives this new product to a potential customer, he or she is trying to do three things:

Sell the product!
Integrate this new vision into the customer’s reality.
Solve a problem that often a potential customer didn’t even know they had.

This new approach takes time to understand and appreciate. It’s almost like taking someone and plopping them down in a new culture, or in a different era somewhere far into the future. By giving these potential customers something very new, they will approach it with some skepticism, some doubt, and some reasons why it won’t work.

As a result, it’s inevitable that a first trial will end in incremental data and not much customer acquisition.

But this new confrontation with tech is a chance to seek feedback. This feedback creates a cycle of improvement. This is why founders who struggle with their own problem first usually have a better chance of finding product-market fit.

I will tell you a story about a founder who went through the AppWorks Accelerator and launched his own product successfully to demonstrate this point.

The park

It was a spring day in Taipei around the year 2011 and then-Googler Andy Cheng was looking for a house to buy. Married and with a young son, Andy wanted a property his family could grow into. A real estate agent showed him a house in a desirable neighborhood. A stretch of park just behind the house meant this was exactly what he was looking for.

Andy nearly made an offer. Then he found out that the park was slated for school construction. Rushing to close, the broker hid this from Andy. The seed of an idea was planted in Andy’s mind.

“I thought, ‘Man, what else have you not told me,’” says Andy, as he looked back at how he developed foundi (AppWorks #8), a real estate listing platform.

The first thought Andy had had when he set to work was not: How could he solve the problem of a culture of manipulation and secrecy that seemed endemic to real estate brokers?

He only sees that his startup could make an impact in that area in retrospect. Like many founders, Andy’s MVP alone didn’t help the real end user — at the time, house buyers — but it started a process that eventually got him there. And this is really important for early founders to understand.

A new product alone is never enough to create scale and customer growth. You have to do a whole lot of digging to get there.

How it all started

From Andy’s perspective, there were so many houses to choose from, so wouldn’t trust and honesty be the winning factor for an agent closing a contract?

Andy learned that relatively low-paid real estate agents live off of commission, and in doing so, they often worked in ferocious competition against each other, even in the same agencies. In contract bidding — even before negotiations — the potential future sale of a home often goes to the agent that creates the most perfect too good to be true contract. House sellers want a good return, so agents will find ways to make their pitch of the future contract as lucrative as possible.

It doesn’t matter if the price is true, or if it accurately reflects the true conditions of the house. It’s every man for himself.

It gets worse!

Since every agent is motivated by commission, agents who are first to find the listing will also try to hide the listing info from other agents, making it nearly impossible for other agents to pitch a contract.

This unethical weirdness became more than an engineering puzzle for Andy, who was quite proficient with software programming and maps. Previously, he had worked as one of Google’s first hires in Taiwan, managing a team of engineers in the maps division. Code and problem-solving are in his wheelhouse. “I always go to the computer to code, to figure things out,” he says. But to tackle this problem, he had to go beyond the screen.

He created an early version of foundi. House sellers and buyers would use that version to find information about listings. But they took this info back to agents and used it to try to haggle better deals. This put burdens on the buyers of houses, though; this was exactly the position Andy was in before and didn’t want.

The founder becomes the warlord

He booked meetings with influential agencies and set up face-to-face consultations. He discovered that real estate agents were typically not the best performers in school. They are also technology-averse. It explained a lot.

With the right technology, they wouldn’t have had to be dishonest to compete. By sitting down and walking through foundi features with early adopter agents, Andy finally got to a point where he was able to convince more of them to use the product.

Like an arms dealer selling his weapons to different cartels, Andy started to spread his tool to different agencies. Whereas previously agents in the same agencies would be pitted against each other, teams began to perform at a higher level. Other agencies saw agencies doing better, and wanted the same tool.

“I felt like I was a warlord,” Andy jokes.

Has he made the market more transparent? It’s hard to say this early in the game. But according to Andy, this counterintuitive outcome holds promise.

By taking away the old things that made agents competitive — their secrecy and manipulation — he has actually made real estate agents more competitive. Therein lies a fundamental concept of startup building, and the core reason why data drives product development. Early-stage founders might take note of this technique.

Now, Andy’s customers number about 12,000 agents of the total 40,000 in Taiwan, who rely on foundi to serve their customers better and in turn maximize their income. Andy takes a long-term approach to this door-to-door sales effort.

Creating new tech to solve real problems is really the experience of giving people new mental models to live a better life. If a founder has a good head on his shoulders, and is passionate about what he’s doing, he will eventually build something that people need, in a market people didn’t know could exist. No newly launched product can do this immediately. It’s always a process, and it involves founders stepping away from the computer and even leaving the building, to get it right.

Answers, and your product, exist in people’s heads and hearts, whether they know it or not. As a founder, you are quite simply the enabler that will help them experience that by delivering a tangible good that unlocks a mental model. Think of it as a game, with a constant state of going on side quests. Without those quests, you cannot complete the journey.

Why Hiring for an Early Stage Startup Is a Lot Like Dating — It’s All About the First Impression

Izza Lin

December 12, 2019

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If you want to bring quality staff onboard your startup, it helps to sell yourself in the most attractive way possible

Izza Lin, Recruiting Master

Izza is a Recruiting Master responsible for advising AppWorks Startups on all talent acquisition matters. Before joining AppWorks, she built a successful early career in headhunting firms such as Rising Management Consulting and Recruit Express, where she specialized in recruiting quality talents for internet and e-commerce companies, guiding hundreds of engineers, product managers, marketers and general managers to fulfill key positions for her clients. In between Rising and RE, she headed Southeast Asia Market for an e-commerce startup, USO HK, where she found her passion for helping small guys break the status quo. Izza received her B.A. in Economics from Washington State University and spent 5 years of her childhood in Myanmar and Cambodia. This diverse background has inextricably contributed to her love for traveling and “wine tasting”.

When founders are working hard during the early stages, most of their time is spent in building product, launching the product and raising capital.

Recruiting in today’s age is mostly an afterthought. However, in the bigger picture, when you’re building a startup that is meant to conquer a market in the long-run, finding talent is just as important as business development, product development, or acquiring customers, if not more.

Like the classic chicken-and-egg situation, savvy startup founders delay their hiring until they can afford it, yet, their business can’t afford to grow until their team has grown.

However, business growth can be extremely difficult unless you have the right team. Being stuck in this dilemma can be very frustrating.

At some point, founders need to get good at hiring for themselves. So, for beginners, I’d like to share a few pieces of advice to help conquer the recruiting hurdle easily.

It helps to use an analogy, so let’s use dating.

Just like dating, hiring is about searching for quality versus quantity and being able to convince that potential partner in the very first encounter. Whether you are looking for the ideal hire or the perfect match, this ability to attract people is key. Here is what you can do for your startup.

Company introduction and job description = dating profile

Let’s start by comparing the creation of a job description to how you might create your own dating profile. When you first register on a dating app, you tend to put the most appealing photos on your profile, along with a personal description, interests, and what you look for in a match.

Your hiring profile should look much the same. You want to share quality information that will trigger people’s interests.

Seduce your audience

“I am Asian, 5’3, love drinking wine.”

If this is my dating profile description, it is unlikely that anyone would swipe right. Unless I have a really hot profile photos.

The common mistake with many startups is that they use the lazy cookie-cutter three-line introductions.

For example:

VIVACIOUS is an AI-based dating app for iOS and Android. It was founded by a group of National Taiwan University Engineering graduates in 2019.

VIVACIOUS is a top 30 dating app on Google Play and Apple App store, and now has over 30,000 downloads.

So the question is, how do you expect to stand out if your description looks like a “copy and paste”?

It needs to be unique. A good profile should take potential hires on a journey, sharing values, mission and vision (VMV), and also helping them understand who you are as a founder.

Instead of a three-line description, I may write a profile description (like the one below), showing how the company is unique:

We are a group of National Taiwan University graduate engineers who saw a problem shared among our peers. Many people struggle to find a date due to the lack of opportunities in their busy schedules. Using AI, we have created a unique dating platform experience called VIVACIOUS to help bring people together on an intimate level and bridge that missing happiness. Just a few clicks away, you can begin an adventure to find your significant other.

As a Master of Human Resources, you will be leading our engineering and marketing team on a journey that will help many lonely hearts find the love they deserve.

For big corporations like Apple, Google, or Microsoft, their reputation needs no introduction. However, startups are much different, as most are relatively unknown. Your profile is an opportunity for you to attract potential hires, just like you would when using a dating app.

Knowing your position, market value and how to write a job description (JD)

If Keanu Reeves is my type, my dating profile should not just say, “looking for Keanu Reeves look-alike”. This is because looks are not everything, as a matching personality is just as important.

Let’s say Keanu’s looks is equivalent to a candidate’s skill qualification, personality is the determinant if one can work well within the company culture. If the potential hire has the looks “skill” but not the personality, be aware that they may not be an ideal candidate.

Be sure to elaborate when listing out a Keanu Reeves description, by combining both looks and personality. This way candidates can better understand if they will potentially be a fit for the position on your team.

When writing the job description, I would suggest listing bullet points, from most important (must have) to least important (nice to have/ prefer). Remember to keep it short and concise, without cluttering the page. Listing out too many points can work negatively by limiting your funnel. Always be aware of who your audience is and the market value of a position.

If the description is for a senior position, but the title and salary appear as a junior position, you are unlikely to attract the candidates you are after.

For example, the Human Resource position for “Vivacious” may appear as:

Vivacious is looking for an experienced HR Manager to join our growing team. The HR Manager will be heavily involved in operations execution and strategic planning.

This role will be responsible for the development of compensation & benefits, performance management, employee relations, talent development program, leave processing, training, and onboarding.

Requirements:

1.Ability in executing HR tasks with extreme efficiency and limited resources

2.Have experience designing, building and leading the implementation of strategic scalable HR initiatives

3.Adapts and thrives in a demanding, start-up, fast-paced environment

Good to have:

1. Minimum 5 years’ of HR experience

2.Experience with start-up companies is a plus

3.Payroll experience

Know where your target audience (TA) spends time

If my interest is drinking wine and I am looking for someone who would enjoy drinking wine with me, then attending a wine tasting event to look for a potential match would probably be an ideal place to start.

This is the same in hiring. When you are finding talent, you have to think about where your talent would spend their time.

Do they show up at certain events, work for certain companies, or have their own Facebook group… etc?

Start by looking in the right direction, and focus on those online and offline locations.

Know the competitor

Know your competition. Gather as much information about your competitors, such as their job posting content, company performance, company culture, strengths and weaknesses.

This information will be helpful when determining the strategic positioning of your startup to potential hires.

Have your pitch ready

Hiring moments can sometimes appear at the most unexpected times. You should always be ready to pitch your startup, otherwise, an opportunity with a talented candidate could be missed.

Be confident when giving your pitch, keep it short, concise, and most importantly, be persuasive.

Referrals are key

We focused on the points above first because they need to be fully understood prior to the most important step of them all — asking for referrals. Referrals are critical relationship keys that unlock doors and allow you access to more potential new hires.

Searching your existing circle of resources for suitable candidates should always be your first step. You can usually find what you are looking for when working through people you trust.

Often times, it is usually a faster and more cost-effective way to hire. Instead of relying only on job postings, career sites or recruiting services, focus on building a stronger network.

Conclusion

The hiring chicken-and-egg problem is frustrating but not impossible. It can take months to find the right candidate. So it is crucial that you have a plan and a strategy ready.

Start crafting your startup profile today, practice your pitch, and when the opportunity presents itself, you will be prepared to win the perfect candidates that will change the game for you.

【If you’re a startup currently or prospectively employing AI / IoT or Blockchain / Crypto, be sure to apply AppWorks Accelerator’s AI & Blockchain only batch.】

Photo by Tumisu courtesy of Pixabay