I wrote a post not too long ago posing the question if ‘Taiwan was too small for start-ups?’. It was in response to observations of friends that said Taiwan is very strong in OEM and device manufacturing but lacks an energetic internet start-up atmosphere. But after doing a bit of searching, it turns out there are a few people in Taiwan trying to change that.
I recently interviewed Jamie Lin, Founding Partner of AppWorks Ventures, a Y-Combinator like start-up incubator founded in 2009 based in Taipei and focused on the Chinese Internet and mobile phone applications. They are early stage investors and offer support in the form of coaching, networking, assistance and resources. The in-take is 10-15 teams every 6 months. I think it is a great model that really benefits the entrepreneurs, the country and the economy.
In junior college, with some friends, Jamie tried working on a Dell like start-up which eventually failed. However, the failed e-commerce site transformed into an enterprise knowledge management software company called Intumit. The hard work paid off and Intumit started to work with top 100 corporate companies in Taiwan. In 2002, they opened a Shanghai office and in 2003 it started to make real money.
After learning business by doing it, Jamie undertook his MBA at NYU Stern in 2004. After graduating in 2006, he started a travel social network called sosauce.com based in New York which did alright but of course Facebook dominated. He then moved onto a social browser based 3D game company called Musegames which is now in positive cash flow. After seeing the allure of Asia as the next generation of hot entrepreneurs, Jamie returned to Taiwan and started blogging about it as Mr. Jamie (mrjamie.cc).
The birth of AppWorks
Jamie was inspired by Y-Combinator, a tech start-up incubator in the Silicon Valley that re-ignited the dot com era after the crash in 2000. “After the dot com crash in 2000, people stopped investing in start-ups, but when Y-Combinator started in 2005, they really changed that. I also wanted to do the same for the Taiwan entrepreneurship field.” Says Jamie.
Why the name AppWorks?
“App is a word the public associates with cool things such Apple iPhone and iPad. Apps are also something that users want and solve a problem. It is an attitude against software, which is looking at it from a hardware perspective. Mobile apps, Mac apps, web apps, TV apps come from the view of consumers rather than suppliers and deliver what they want – Apps that just work.” Says Jamie. He also seriously joked that if you sponsor something your name will be on top if it starts with ‘A’.
Jamie’s thoughts on Taiwan entrepreneurship
“After the 2000 dot com crash people got stuck in the web 1.0 stage. They were left-over start-ups trying to do everything in-house like Yahoo and the industry hasn’t moved on from that way of thinking. New start-ups must focus on doing one thing very well.
There is also no real eco-system in Taiwan; no one is really talking to anyone. I wanted to foster networking and communication amongst entrepreneurs and build a platform to foster co-operation within the internet industry.
Taiwan has such a strong OEM economy, with companies like HTC, Asus and MTK that pay well and offer aggressive stock options, therefore suck talent away. Actually Taiwanese are risk-takers, going back 20-30 years ago when big industrial companies were born. But now it is more sensible for people to go into these big companies which are safer and can be built to spec. But with internet companies, there are no specs – you have to pivot quickly and innovate. The mindset and DNA is different. For OEMs the barrier entry is patents but for internet start-ups, speed is the barrier entry.”
What Jamie looks for in start-ups
“I firstly look at what the problem they are trying to solve and what is the market size opportunity? I secondly look at the team. Do they have insights into the market with relevant experience? I prefer co-founding teams because I don’t want one person making all the decisions. It’s good to have different perspectives and feedback. I also look at their ability to execute and quickly iterate.”
Richi – an AppWorks incubated start-up
Richi is an online payment system that also converts different kinds of virtual currency into Richi money. It acts like a foreign exchange that provides liquidity to the market. Many websites and companies have different types of virtual currency from Facebook credits to credit card frequent flyer points. Many times, this virtual currency is unused but still valuable to someone. By converting different virtual currencies into Richi currency, people can easily make use of it. One example is using Richi money to buy things on Ebay.
Currently the Richi team is building the groundwork for partnerships and currency providers like banks, airlines, payment gateways.
How much does AppWorks invest and for how much equity?
“We typically invest between USD$20-$200k but usually USD$100k for no more than 20%. We actually shoot for less because it gives the founders more incentive to succeed. Our motto is to ‘not take a board seat’.”
The hot areas for Taiwan start-ups
“Generally anything that has been a proven model in the US. Taiwan is more similar to the US in the sense that people here have a relatively high disposable income and a similar culture. I also think if start-ups can add value to Taiwanese OEMs like HTC that would be an advantage.”
Advice for start-ups applying to AppWorks
- Do your homework – valuable entrepreneurs with insight, know what you’re talking about to convince us
- Be brave and give it a shot – try to change the world in this lifetime, think big, build something that makes people’s lives better
- Don’t be too caught up with the business model, it can change; people will pay if it solves a problem whether it be advertisers, customers or investors.
If you are a start-up based in Taiwan and believe AppWorks can you help you succeed, apply!
Applications for the next round close 28th March.