Wretch Chien, principal of AME Cloud Venture, was himself an entrepreneur when he founded a community website Wretch.cc in Taiwan. Since then his career has taken several turns, taking him from Taiwan to Silicon Valley: he joined Yahoo Taiwan after his website was acquired by Yahoo; he later traveled to Silicon Valley to work for Yahoo US; and then he left the company to study at Stanford University where he obtained an MBA. Chien is now a venture capitalist.With his experience working in Taiwan and Silicon Valley, Chien recently shared with Digitimes his views about the steps Taiwan should take to promote entrepreneurship in the era of knowledge economy.He believes Taiwan's success should not rely on a game of guessing the next star industries and Taiwan's innovation should not be forcibly connected with its existing cutting edges in hardware. What Taiwan needs to focus on is to incubate internationalized talent and encourage its people to think the unimaginable in order for them to create values.Talent incubation is the basis to tap into the knowledge economyCommenting on the recent entrepreneurship hype in Taiwan, Chien said the country has missed out on the Internet era's golden 30 years, while its competitors including South Korea, Israel and Singapore - all of which were originally on the same level as Taiwan - have all made achievements in digital innovations with clear leads over Taiwan.To catch up with the competitors and solve Taiwan's internal problems - such as low salary levels and slow industrial transformations - the Taiwan government has been actively encouraging its young people to start entrepreneurship and has even provided advice as to what areas they could tagret.However, despite the government's aggressiveness, entrepreuners have rarely addressed some of the fundamental questions: whether they truly want to have a business of their own; whether they are suitable for doing entrepreneurship; and whether Taiwan's economic conditions can support entrepreneurship.It is a completely different story in Silicon Valley, which Taiwan has been eagerly trying to re-connect with and learn from, Chien said. It does not have government assistance identifying their targets, and all people and companies there have an equal chance of achieving success no matter what types of industry or field they wish to get into, as long as they have profound understanding of their target areas and have been working on providing solutions to problems that have not yet been solved.For these companies, the best of them would succeed when the time comes. In the past 60 years, companies that have been said to be the pioneers of their sectors, such as Fairchild, Intel, Apple, Hewlett-Packard (HP), Cisco, Yahoo, Google, Facebook, Uber and Airbnb, all have followed a similar path to success, cultivating in their specific areas for many years and waiting for their moments to comeOf these renowned enterprises, over half of their founders are not from the US and are even speaking their native languages at home, showing Silicon Valley's effort of incubating internationalized talent.Take Stanford University for example. Up to 30% of those studying there are international students, meaning that every student at Stanford has a chance to meet other students from different cultural backgrounds. Such a cultural diversity requires students to improve their communications and management skills - assets that they will need when founding their own companies later. And their connections back at school can serve as a bridge in their network for recruiting talent into their companies.Many believe that Taiwan should create new economic values by using its existing advantages and leveraging its hardware expertise - a direction many entrepreneurs have been ecouraged to head towards. But Chien personally does not fully agree to such a path. He believes in the era of knowledge economy the creation of values is not necessarily based on continuity.Taiwan should try to think outside the box and develop emerging and unimaginable applications, but the key driver for such innovation is internationalized talent, which is what Taiwan lacks the most, he said. Instead of placing large amount of resources trying to create a next-generation industry, the government should broaden its view and try to build Taiwan into a center of talent exchange in Asia, attracting international students with potential to study in Taiwan and send Taiwan's top students to study abroad.Use imagination to identify entrepreneurship targets outside the boxAME Cloud Ventures, where Chien works at, currently focuses primarily on early-stage venture capital cases. He noted that the firm's investments in early-stage startups are decided completely by personal factors concerning business founders, especially their capabilities of presenting business concepts and targets, telling good stories and having good communication skills to convice venture capitalists they are can work together.AME considers itself a learning-type of venture capital and makes investments based on its interests at specific times to identify opportunities. For example, the understanding of how a robot system works allowed AME to recognize the potential of the minimally invasive surgery robot market. It then became interested in medical care-related subjects and turned aggressive in explore the opportunities from artificial intelligence (AI) doctor applications.As for what startups need to be aware of when seeking assistance from venture capital, Chien noted that startup founders must be clear about their targets and directions in order to know where they can get funding. Venture capital is not the only source of assistance. Company CEO and COO that the founders hire or government funding could also provide startups with needed support.Chien pointed out that venture capital may not be a good choice for some startups, as venture capital tends to demand high profit sharing because of the risks they face. Entrepreneurship cases which promise high growth potential and profitability but offer little information about the ways of achieving the goals - except for presentations and briefings - usually have limited resources of support due to the risks involved. But such cases are more suitable targets for venture capital.He added that entrepreneurs should not start out with the primary goal of attracting venture capital. If the founders have identified the right areas of development,the right investors would come knocking on their doors.Chien believes that Taiwan should learn to accept the fact there is a variety of innovation, and not to force a connection between Taiwan's existing strength and innovation. People who decide to have a go at entrepreneurship should not limit their imagination or limit their targets to those deemd suitable for Taiwan. They should think clearly first whether they have actually located the problems that have not yet been solved, and whether they are able to resolve them.If the answer is yes, the startup founders should find the right teams to create the products and carefully work out strategic plans to expand the companies' profitability and market scale.(Editor's note: This is part of a series of interviews focusing on the problems and opportunities that Taiwan-based startups face. The interviewees are venture capitalists and angel investors from Silicon Valley and Taiwan.)Wretch Chien, principal at AME Cloud VenturesPhoto: Joseph Tsai, Digitimes, May 2018

Currently the CTO of Taiwan's Asia Silicon Valley Development Agency (ASVDA), TC Wu had spent 35 years working in the bona fide Silicon Valley's semiconductor industry. He retired from Atmel, a semiconductor design and manufacturing company he had founded, after it was acquired by Microchip in 2016. But then he showed his commitment to assisting Taiwan's entrepreneurship and innovation development by joining the non-profit Silicon Valley Taiwan (SVT) Angels organization while still in Silicon Valley. He later returned to Taiwan and accepted the job at ASVDA.Wu believes startups need to deeply understand its core targets and try to create their own unique values in the form of world-class products in order to be successful.Values from the trade-off the key determination for angel investorsAfter leaving Atmel, where he had worked for 31 years, Wu actively participated in SVT Angels' activities, getting involed in many investment and mentoring cases. Wu said his evaluations of the projects looked at the traits of these startups' founders and teams, the newly founded companies' potentials in the market, and their niche advantages in the competition.Wu had gained rich experience during his career in Silicon Valley with the company he founded having gone public, acquired other firms and eventually acquired by Microchip. He hopes to pass down his experience to Taiwan's startups to help them grow.Thanks to his long work as an angel investor, Wu is confident about his capability of being able to quickly identify the nature of a startup's products or services. Most entrepreneurship cases - except for those whose products have never been seen before - belong to the "trade-off" type, which is more of an improvement than an innovation, according to Wu. Simply put, the product developers have sacrificed a certain part of the old things in the products in exchange for some other benefits or efficiency. And he has to determine whether the trade-offs are of any value.An entrepreneurship team's quality is another key evaluation factor for Wu, who disclosed that he has seen many Taiwan-based startups lacking real passion for entrepreneurship. Some of them only wanted to apply for government subsidies and some organized a team purely for participation in an innovation competition. Such teams usually do not have any idea about the difficulties they may face running entrepreneurship.An ideal startup should have clear ideas of what products it wants to do and what issues its products can address, so as to make sure its business direction is in line with the worldwide trends. With the goal decided, it needs to determine how to materialize the products, what kind of team to organize and how to gradually integrate the resources for market expansion - these combine to form clear strategic guidelines for the team to follow, Wu explained.Unfortunately, many Taiwan's entrepreneurship teams lack such a comprehensive understanding of their work, said Wu. Some Taiwan researchers design their chips as if building a car with all basic components such as tires, a body, and a driving wheel. But the chips still lack market potential, because if the chips are only equipped with the basic components and do not have any innovative or special features, they lack an obvious trade-off value.If a chip features a special power-saving design that consumes 1.5W or less for a doing a job that other similar-grade competitions need at least 5W to do, then the chip can be called a world-class product, possessing a niche in the market.Successful entrepreneurship depends on right subject, talent and directionFor new product R&D, startups in fact have a much higher chance of success than large enterprises, noted Wu. The key difference lies in their employees. Although startups are much smaller in scale compared to large enterprises, they would put everything they have into the development of new products, with their best teams giving all-out efforts, working 24-7.On the other hand, large enterprises often invest the majority of their resources in to core businesses and only assign minor teams to develop new projects, which means innovation has far less chance of happening at large enterprises, giving startups and small-to-medium enterprises an advantage.That does not mean startups do not have similar problems that need to be solved. If their products encounter problems, the startups usually need to shift some of their best personnel from the "A" or "A+" teams to handle customer services, which would distract their concentration from R&D. Entrepreneurship must always be prepared to handle such a crisis immediately, Wu said.Wu was motivated to join ASVDA by his desire to help startups find angel investors and and improve their efficiency. ASVDA is able to quickly arrange suitable angel investors to connect with specific entrepreneurship cases for them to provide assistance and investments, Wu added.Compared to Silicon Valley's startups, which may burn up to US$1-2 million for their initial operation, those in Taiwan require far less in funding, and a NT$10 million (US$326,800) investment is able to support their operation for two years, while their demand for profit sharing is also significantly lower. However, funding is not the only factor influencing the development of a startup, and the key to success still depends on whether the startup is able to find the right target, talent and direction.Wu also noted that the Taiwan government has allocated many resources looking to assist Taiwan startups' operation. But Wu believes using government resources has its drawback. Although government funding is able to quickly ease a startup's financial shortage, the need to work out a proposal to secure government support means the startup needs to shift some of its attention to non-operating matters, which may obstruct the startup from pushing forward fully.To have a niche in the market, the startups must have R&D faster than others, products with strong values in terms of trade-off, and the capability of doing what others so far have not yet been able to.(Editor's note: This is part of a series of interviews focusing on the problems and opportunities that Taiwan-based startups face. The interviewees are venture capitalists and angel investors from Silicon Valley and Taiwan.)TC Wu, CTO of Asia Silicon Valley Development AgencyPhoto: Joseph Tsai, Digitimes, May 2018

Chairman of Acorn Campus Taiwan Wu-Fu Chen, with a record of having founded 13 companies within a 15-year period and having all of them either acquired or listed, clearly showed his passion and enthusiasm for entrepreneurship during a recent interview by Digitimes. And he gave an in-depth analysis based on his experience on what would be the best industries for Taiwan to invest its resources in for entrepreneurship and made some suggestions to Taiwan's young-generation entrepreneurs and its government.Medical technologies and drones are the best entrepreneurial areas for TaiwanChen said that providing financial support for entrepreneurs is only a small part of the work for angel investors, whose true value lies in their help to find potential clients and partners, seek management talent, look for more funding and give suggestions and strategic advices. While in Silicon Valley, Chen assisted a group of international students from China to establish an entrepreneurship team called Innolight. The team's main products were optical communication modules that were originally designed to be used during component testing.Chen later recommended the team to Google's datacenter business unit which needed such a module for in-house assembly of the tech giant's equipment. Because of Google's strong demand for the module, the entrepreneurship team eventually received investments from Google, and its annual revenues have now reached US$1 billion.Chen also made many investments in companies in the medical care sector, including Eureka Therapeutics, a biotech pharmaceutical firm devoted to research of T-cell cancer treatment. Via its technical platform, users are able to create immune cells combining with antibody to kill cancer cells.Another case Chen invested in was Crown Bioscience International, a contract research organization (CRO). CROs' services are a rather important part of the pharmaceutical industry's ecosystem, helping accelerate new medicines' development. The company went public on Taiwan's over-the-counter (OTC) market after Chen suggested the team come to Taiwan for IPO.The company did not perform well in Taiwan, whose political climate at the time was not friendly toward the biotechnology industry and the company was later acquired by a Japan-based firm, he said.Despite the failures to link up the two companies with Taiwan investors, Chen still believes medical technology and digital medical care are the two application fields that Taiwan's entrepreneurs should seriously consider. Taiwan's entrepreneurs should gear up efforts developing Internet of Things (IoT) and artificial intelligence (AI) technologies. The high standards of Taiwan's medical care services, and its advanced micro-electromechanical technologies give the country a competitive edge in medical care equipment R&D with constructive collaboration between doctors and engineers.Chen said the development of medical care equipment sees almost no limits, with new applications such as optical examination and image analysis keep emerging.Drones are another promising sector for Taiwan. In addition to entertainment, the flying machines are a hardware platform that can be applied in both commercial and industrial fields. Since drones for the two fields require support from precision machinery - a business Taiwan is strong at - investing in drone businesses should be a good target for Taiwan's entrepreneurs.The government and startups should be preparedChen encouraged entrepreneurs that want to begin their own businesses to be prepared both mentally and practically. Entrepreneurs should be mentally prepared for any unexpected problems, devoted to what they want to do, and look for suitable mentors for assistance.Chen pointed out that for entrepreneurship, changes are the only "constant." If entrepreneurs are mentally prepared for any accidents and anomalies, they will be able to resolve the problems more calmly. Entrepreneurs should learn to treat frustration as a learning experience instead of a failure, Chen added.Furthermore, entrepreneurship work is unlike regular jobs, and entrepreneurs need to obtain their families' support in order to overcome difficulties. Finding mentors can raise entrepreneurs' confident, helping them achieve a sense of approval. Mentors can also act as counselors, sharing their experience and ideas with entrepreneurs to inspire new thoughts.As for the practical preparation, finding a manager with experience in business operation is necessary for an entrepreneurship team as the person is the bridge among investors, the board, the management team, employees and clients, and this person needs to have an understanding on how each of them is related to others.Most importantly, the manager needs to be able to view things from a market perspective and have an eye for worldwide markets. Most of Taiwan's entrepreneurship teams are technology-oriented, conducting their R&D without considering matters on the market side or how they can make their products more user friendly. Many of Taiwan startups' products only see demand from friendly users, and the product developers tend to respond to criticism by putting the blame on users' failure to operate their products properly.A manager should not consider products that satisfy solely demand from the Taiwan market, Chen said. When a product is being designed, the manager should begin considering how it can be marketed globally."The world is running fast and if Taiwan does not pick up its pace, it will be surpassed really soon," Chen noted. Speed is the key for Taiwan's success and to improve Taiwan industries' worldwide competitiveness, its government must be keenly encouraging strategic investments, providing support to early-stage entrepreneurship cases, which have higher risks of failure.The Taiwan government, Chen said, should also ease its regulations - a move it must make, judging from the two Silicon Valley-born projects he had tried to promote in Taiwan, but to no avail due to the government's slow decision-making process and response.If the government is interested in building a medical technology industry, it should also improve related clinical trial standards, adjust regulations, and invest resources to upgrade the Taiwan Food and Drug Administration's (TFDA) abilities in conducting audition and certification.(Editor's note: This is part of a series of interviews focusing on the problems and opportunities that Taiwan-based startups face. The interviewees are venture capitalists and angel investors from Silicon Valley and Taiwan.)Wu-Fu Chen, chairman of Acorn Campus TaiwanPhoto: Joseph Tsai, Digitimes, May 2018

David Weng, CEO of national-level investment firm Taiwania Capital, worked in Silicon Valley for as long as 37 years with 20 years of them spent in the venture capital industry. He participated in over 80 investment cases and is a well-known angel investor in Silicon Valley.After returning to Taiwan, Weng initially worked as CIO at Asia Silicon Valley Development Agency and later became CEO at Taiwania Capital. He noted that Taiwan has solid strength in engineering and information and communication technology (ICT). And if Silicon Valley's angel investment culture can find a place in Taiwan, allowing existing business operators to pass down their experiences to younger-generation startup founders, the next wave of industry transformation and innovation development will definitely rejuvenate Taiwan's industry.Connecting Taiwan ICT and engineering strengths with Silicon Valley's originalityAs an ex-software engineering director at Cisco Systems, most of Weng's investment targets in the past were companies that developed network, software and network security-related applications and a majority of them were angel or early-stage venture capital (VC) investment cases.Angel investments are mainly projects with only initial ideas and concepts, and investors are mainly evaluating them based on their possibilities. They usually do not yet have a fully-structured development plan and the budgets needed for the investments are also relatively smaller. However, at this stage of investment, investors bear a lot higher risks with a success rate of less than 10%, according to Weng.The next stage is VC investments. Having reached this stage, a startup should already have a basic structure and investors would apply stricter rules and procedures to evaluate the regulatory licenses the company has obtained, its financial structure, competitors and market competitiveness. Taiwania Capital's business model is focusing more on VC investments.In one of Weng's previous investment cases, Netscreen, a developer of hardware firewall that was later acquired by Juniper Networks, was one of the most memorable for him. The three founders of Netscreen all worked in renowned IT companies such as Cisco and Intel at the time, but were willing to give up their high salaries and leave their comfort zone to step into the entrepreneurship, something not many people dare to do, Weng said.His investment in Protego Networks was another similar case. The firm's founder left Cisco to start the company and solved a major problem that most IT companies at the time had trouble with. After angle investors' assistance, the firm was acquired by Cisco 3-4 years later.Finding the right targets and resolving major problems that the market is facing are the keys to raising the chance of success in entrepreneurship, Weng said. At the same time, startups also need to have complete understanding of Taiwan industries' development directions. Currently, Taiwania Capital is focusing its investments on areas including Internet of Things (IoT), smart manufacturing, artificial intelligence (AI), software design and network security. Medical equipment for biotechnologies and digital medical care are also key directions for Taiwan in the next five years.Since ICT is a key strength of Taiwan, combining AI with IoT and applying AI to every industry and business will provide huge development potential for Taiwan. AI can also be applied to the medical care industry. Taiwan boasts one of the best medical care services in the world, and enlisting AI to improve Taiwan's current medical services can also be a key development direction.On the other hand, despite Taiwan's advantages in ICT, a lack of originality and market sensitivity is Taiwan's biggest weakness; but originality and market sensitivity are the strengths of Silicon Valley. Connecting and communicating with Silicon Valley's entrepreneurial market or even forming a team between the entrepreneurs of the two places, will be a good entrepreneurial model that Taiwan's startup founders can consider.Letting talent from Silicon Valley handle R&D and design, and team members in Asia handle engineering and process the plan - this will be the best combination for entrepreneurship, Weng noted.As for how large-size enterprise can spur innovation developments and startups' rapid growths, Weng suggests big firms consider establishing corporate ventures to identify innovative technologies. Citing Cisco as an example, he pointed out that in addition to its internal R&D team and R&D cooperation with partners, the networking solution provider also placed US$2 billion to establish a corporate venture to acquire companies with new technologies.Instead of relying on internal R&D teams to create every single piece of technology, such a method provides great benefits to the development of the ecosystem. The investment model can be seen quite often in Silicon Valley.Creating the angel investor culture in TaiwanHaving participated in over 80 investment cases, Weng believes the process of evaluating entrepreneurs is an important step for angel investments, which have no clear information of the startups' development plans, and investors are basically deciding whether to trust the entrepreneurs.It is a must for the investors to find out more about the entrepreneurs' previous working experience and performance, and to check their credibility. Entrepreneurs' personality traits including whether they are good at communication, passionate about the entrepreneurship and open-minded, are what Weng values highly.Whether the members of an entrepreneurship team can complement each other is also a key factor. Weng believes an entrepreneurship team with at least three people is a better target for him, which he considers a proof that the entrepreneurs can work with others. And he believes a one-man entrepreneurship has a higher chance of failure.Having acted as an angel investor for many startups, Weng said he enjoys more the satisfaction from the achievements of helping startups to grow, than the return of his investments. Weng is also happy to pass down his experiences and connections to younger-generation entrepreneurs, extending help when they have difficulties.Weng believes Silicon Valley's angel investor culture is a key to the success of the global tech hub. He has been keenly urging Taiwan's IT enterprises to play the role of angel investors, pass down their expertise to Taiwan's startups, help Taiwan develop an angel investor culture, and make entrepreneurship more popular. For Weng, being an angel investor is not only a job, but an attitude of life.(Editor's note: This is part of a series of interviews focusing on the problems and opportunities that Taiwan-based startups face. The interviewees are venture capitalists and angel investors from Silicon Valley and Taiwan.)David Weng, CEO of Taiwania CapitalPhoto: Joseph Tsai, Digitimes, May 2018

Having worked as vice president and CTO of Hewlett-Packard's (HP) Personal Systems Group and Computing Systems Organization for over 20 years in Silicon Valley, Ed Yang, currently a partner of ID Ventures America and a mentor of many young entrepreneurs, has been keen to contribute to the entrepreneurial industry.He believes Taiwan has many leading edges in technology development, and transforming innovative technologies into applications and solutions for use in Taiwan's existing industries will be a good direction for Taiwan's entrepreneurship market.New trends, new thinkingDuring the past 20 years, Taiwan's IT supply chain has built a firm manufacturing business foundation by providing OEM/ODM services to Wintel. Although the gross margins from the business have been low with slim profits, the experience gained from the cooperation with upstream players such as Microsoft and Intel is precious. Not only has it sharpened the Taiwan supply chain's manufacturing skills to reach the level of the current Made-in-Taiwan quality, many of Taiwan makers' operational abilities including cost control, production efficiency and flexibility have also been significantly enhanced, allowing them to quickly respond to first-tier vendors' design changes.However, in the ever-changing world, Taiwan makers now face strong chellanges from competitors, and they can no longer rely solely on their capability of cutting costs. If the makers do not make some adjustments to their OEM/ODM-oriented business models, the past success may become an obstacle to Taiwan's industrial transformations, Yang said.According to Yang, since Taiwan's IT enterprises have mostly focused on the downstream manufacturing side of businesses, only their US clients know about what customers need, dictating product positioning. For Taiwan makers, it has been difficult to understand customers' needs and the latest market trends. With fewer and fewer students in Taiwan willing to study abroad, Taiwan's enterprises will also have difficulty finding talent that has working experience at first-tier international companies.This has already become a major problem for Taiwan's industries, as enterprises will need to recruit workers who can think and act in response to international market trends and customer demand, and who can conduct in-depth analyses of the company's business strategy from an international perspective. Focusing only on finding or getting better product specifications will cause an enterprises to end up becoming a follower of others.Enterprises also need to think clearly about what their core strengths and values are and use their limited resources to accentuate their such strengths and values. Enterprises do not need to be able to cover all areas, but needs to focus on creating differentiations and find partners who can complement their business. Finding good partners is a very important process for a company and picking first-tier companies is a must; however, prior to that, the enterprises will first need to grow its competitiveness and show the vision of their future development to attract first-tier companies.As for the directions of Taiwan's entrepreneurial market, Yang believes Taiwan should begin from where it is strong at, maybe choosing one of its traditional industries: Twian should first understand it thoroughly and then create solutions with new technologies to open up opportunities. For examples, Yang noted, Taiwan's agriculture can be enhanced by Internet of Things (IoT) or artificial intelligence (AI) technologies and applications, while the textile industry can innovate through adoption of new materials such as nylon fiber for heat- and fire-resistance applications or smart clothing, which has now become a popular topic.Key personality traits for entrepreneursIn his experience working in the venture capital industry, Yang has seen numerous cases of success and failure, and he believes passion, humbleness and flexibility are three major personality traits for an entrepreneur, and these are what he mainly looks for when interacting with business starters.Passion is about whether entrepreneurs have belief in what they do and whether they are keen to realize the belief. Yang has seen many entrepreneurs willingly taking out loans to pay employees' salaries, showing how determined they were about fulfilling their goals.When beginning an entrepreneurship, the entrepreneur is often being criticized and challenged by people around him or her. Some entrepreneurs are rather stubborn about their ideas, but during the process of launching products or services, there are usually many places that require adjustments. If the entrepreneurs can be humble and flexible, but remain unwavering towards the key direction, it can help reduce the chance of failure.Yang also stressed that many entrepreneurs have technology backgrounds, but once their products have been released to the market and their businesses have grown to a certain level, the companies need to begin considering adopting an operation model of a formal enterprise. They may need to make decisions in terms of marketing, product positioning and other business matters, rather than just the technical side of the product. If the entrepreneurs have not been trained for handling business, cooperating venture capitalists would usually suggest recruiting a professional manager as the companies' CEOs with the entrepreneurs shifting to the role of CTO.Many technology people tend to believe that they can accomplish all by themselves, but the most important thing about operating a business is to invest the limited resources into the right markets and places, Yang said.Beside the personality traits, the ability of telling a good story is also a necessary skill for an entrepreneur. With entrepreneurships during the early stage usually filled with uncertainties, whether an entrepreneur is capable of convincing investors to spend money and time working with him or her is a key to success.Another key factor for an entrepreneur to keep his/her company competitive is to maintain a entrepreneurship team of diverse backgrounds. If a team is filled with members with similar backgrounds and characteristics, despite the convenience in communication between the members, it would be difficulty for such a team to achieve a breakthrough. Silicon Valley has been known for its diversification, with talent from various places including India, Israel, the Middle East, Eastern Europe, China and Taiwan gathering together and brainstorming.In the past, Taiwan relied on the PC industry to boost its economy. But the definition of PC needs to be upgraded from personal computer to personal computing, as the former now sees limited growth and technology breakthrough, and the latter includes some of the latest applications including IoT devices and smartphones.Seeking new business opportunities from the Internet side or the things side of the IoT business and trying to think outside of the box will surely start generating new ideas for Taiwan's entrepreneurs.(Editor's note: This is part of a series of interviews focusing on the problems and opportunities that Taiwan-based startups face. The interviewees are venture capitalists and angel investors from Silicon Valley and Taiwan.)Ed Yang, partner of ID Ventures AmericaPhoto: Joseph Tsai, Digitimes, May 2018

Thanks to his 20 years of work in Silicon Valley, Gary Wang, a professor of the Creativity & Entrepreneurship Program at National Taiwan University (NTU), co-founder and chairman of Pergolas Medical Technology and ex-senior executive at 3Com (the creator company of Ethernet that was acquired later by Hewlett-Packard (HP) in 2010) has a rich experience as an entrepreneur and investor.During his career at 3Com, he started a total of three internal entrepreneurships including H3C Technologies, a joint venture between 3Com and Huawei. In addition to network communication technologies, he also has a PhD in biotechnology. He has been observing Taiwan's entrepreneurial market for many years and is currently giving lectures to Taiwan's students at NTU about innovation development and entrepreneurship.Taiwan's entrepreneurship"The main problem that Taiwan is currently facing is that there are not many good projects that can help enhance Taiwan's competitive edge. If the situation continues, Taiwan's worldwide competitiveness will only be weakened," pointed out Wang, noting this has been the biggest concern for him regarding the future of Taiwan's innovation development.He noted that there are three factors behind the difficulties of Taiwan's current entrepreneurial market.First of all, Taiwan's innovation development has not had any major progress for nearly 20 years since 1998. Wang said that 20 years ago, the top-3 enterprises worldwide were Intel, Cisco and Hewlett-Packard (HP) - all hardware manufacturers. But these top-tier companies' revenues today are not much higher than those recorded 20 years ago. Similarly, Taiwan's hardware manufacturers have been doing their best to enhance their production technologies in the past few years, but are also seeing limited revenue growth as the hardware industry has already hit maturity.On the contrary, the software industry has been breaking its record in terms of revenues, and companies including Airbnb, Uber and Dropbox have been included by CNBC in its list of Worldwide Top-50 Disrupter.Since 1998, Taiwan's mainstream industry has always been hardware OEM/ODM services and because of their major success in the business, these first-tier manufacturing service providers have not been aggressive about business transformation. Although some Taiwan-based panel or IT manufacturers have begun crossing into the manufacturing and sales of medical care equipment and products such as contact lens, such a move is merely eyeing the product lines' high margins instead of an investment in innovation development.Second, Taiwan is seriously behind in the development of the latest technologies. "No matter what industry Taiwan wants to push into, without big data's support, there is no game for Taiwan," Wang said.A foreign medical care product provider had already collected data as much as 10 bytes to the18th power times 160 by 2013 and in 2011 worldwide web dataflow was only 500 times 10 bytes to the 18th power, showing how international first-tier companies have been aggressively preparing for innovation development.At the same time, Taiwan's development of the latest technologies also lag far behind that of the companies in Silicon Valley.There have been many new areas of development that companies in Silicon Valley have been investing in. Artificial intelligence (AI) has been one of the key technologies that Taiwan IT companies have been planning to cross into; however, not many of them are aware of the bias-free AI development.AI is basically trained through human behavior, and data that trainers feed the system with could potentially contain some bias from the content providers, which may relatively give out unjustified results. Creating a bias-free AI system has been a key development direction for several Silicon Valley AI developers.An encryption that is uncrackable even by quantum computing is a new area that some Silicon Valley startups have already begun developing. The technology is a new encryption standard that is designed to be uncrackable even when quantum computing becomes standardized.The combination of Internet of Things (IoT) device with the blockchain technology is a project that a Silicon Valley-based company has been developing currently. The company is looking to come up with an IoT device featuring only the size of a grain of salt and its integrated blockchain technology will be able to provide services to the users of the device that weighs much less.For biotechnology, companies in the US are also not lagging behind. 23andMe, a startup that focuses on DNA technologies, is developing a new solution called Crispr-Cas9, which is able to eliminate or correct the DNA of living organisms. If a user is found to have a DNA that could potentially cause cancer, the technology is able fix the DNA to prevent the disease from happening.Companies such as IBM and Google are gearing up development of quantum bit (qubit) technology for quantum computing-related applications. Once they resolve the technology's high error rates, quantum computing will be able to process tasks that traditional computers were not able to accomplish. For startups in Silicon Valley, researching programming languages of quantum computing is a major trend.Third, Taiwanese have little confidence in their capability of starting a business, seriously lacking the spirt of entrepreneurship. According to Global Entrepreneurship Monitor's (GEM) observation on worldwide entrepreneurship 2017/2018, although 71% of Taiwanese aged 18-64 years agreed that entrepreneurship provides good value to the society, when asked whether they had the capabilities of entrepreneurs, Taiwan ranked second from the bottom and was fifth from the bottom in terms of entrepreneurship spirit based on Taiwan's current entrepreneurial activities.For the millennials, which are currently the key working forces of Taiwan, the figures showed how they lack confidence in running entrepreneurships.Demand from the baby boom generation is a business opportunity for TaiwanAnother issue Taiwan is facing now is the succession problem of Taiwan's small-to-medium enterprises (SMEs), Wang pointed out. SMEs currently account for 97% of Taiwan's overall number of enterprises and most of those thta have operated for over 10 years are already earning profits stably. Of the SMEs, about 30% of the operators are baby boomers that are almost at their retirement age, but only less than 15% of them are able to find a successor to pass down their duties smoothly.This problem will worsen in the next 15 years and this may dramatically influence Taiwan's economy. As to the solution to the problem, in addition to traditional entrepreneurship, Wang suggests that Taiwan's younger generation should enter enterprises to work for a few years and then start an internal entrepreneurship, as adding new ideas to existing businesses is also a method of innovation development.Wang also believes Taiwan's National Health Insurance is a killer of Taiwan's innovation development. Because of its convenience, around 90% of the insurance's expenses are used on acute care, such as surgeries and outpatient services, and only a limited amount of the resources are invested in preventive or follow-up care.Such a division of resources has greatly limited the development of Taiwan's related medical care equipment industries as most users would not consider purchasing the equipment without subsidies from the insurance.Wang noted that when Taiwan's younger generation is planning to start an entrepreneurship, it is not necessary to target a business opportunity that can cover worldwide markets to begin with. The aging population has grown to become a problem for Taiwan, but it is also an opportunity. Resolving the many issues facing the aging population actually is a billion dollar business. An ability to satisfy demand from the retired baby boom generation means controlling the market formed by one of the largest consumer groups.(Editor's note: This is part of a series of interviews focusing on the problems and opportunities that Taiwan-based startups face. The interviewees are venture capitalists and angel investors from Silicon Valley and Taiwan.)Gary Wang, Creativity & Entrepreneurship Program professor at NTU and chairman of Pergolas Medical TechnologyPhoto: Joseph Tsai, Digitimes, June 2018