TSS is excited to present the Startup Sofa, a new video blog interview series created for the Taiwan startup ecosystem! In this episode, our guest is Robert Neivert, Venture Partner at 500 Startups. A full transcript of the interview can also be found below:
TSS: What are some recent trends in Silicon Valley that Taiwan startups should pay attention to?
Robert Neivert: I think there are lots of trends but I also I'm not really a big person because you should pursue what you're really good at, what you have skills for which you have competitive advantage for. It may not be the most popular thing but that's okay because you're good at that. That will allow you to exceed or succeed.
Yes, there are trends but you should be careful about following it because it also means there's lots more competition there, there's lots more people there.
So yeah, AI is very popular right now, VR is very, very popular now. We're seeing a lot more to do with automation and a bunch of other stuff coming in.
There's a bunch of other trends but I wouldn't necessarily pursue those but if you have skills and you want to look for something what I'll say is look for a problem that you uniquely can solve you or your teams or others can really uniquely solve and have a competitive advantage for - go after that.
TSS: How are Taiwan startups different from US startups and what can they improve?
Robert Neivert: I think there's always a lot of differences between any given country. I think what I'd focus on in this case - international expansion is obviously more critical here because Taiwan's a more limited market.
It's also a little bit more tricky because it's an island. You actually have to physically go there, it's not as easy to expand as it would but I think what my talk to a lot of Taiwanese companies might be finish your testing here, don't get so quick to jump.
Try to do the testing here, make sure the product really works and then you understand it, then expand. So that's my first one.
The second one is good products does not make good companies. It's a component of it but you need a lot more so think about all the other facets whether it's your financial structure or your pricing structure your marketing, yourself - you need the full team.
It's not just the product it's the full solution and it's the full company if that makes sense. I think there's a lot of tendency to over focus on the product.
TSS: How can startups improve their communication with mentors, investors, etc.?
Robert Neivert: I think one of the hardest things for companies to do is to learn to be succinct and clear on what they do and how they do it and why they're better.
When I talk to a lot of companies they tend to take about five minutes to get to their point and by then I've pretty much decided already whether I'm gonna work with them or not. You need to be able to be very short and quick and only after people have decided they're interested, then go ahead and give them more detail.
For example, I met somebody today and the first thing he did was he shook my hand. He spent two or three minutes explaining about him and his background and I had no idea why that was relevant. I didn't know why I needed to know that.
He then spent several minutes explaining to me about a market which was you know I'm not gonna get too specific but again, I don't know why this is relevant. I'm not really sure what's going on here. At that point I have long since lost interest and I'm probably ready to leave. Then he finally says here's what my company is and what we do...
So be succinct, get to your point especially if you're talking with someone they should know why you're there and what you're talking about.
So oftentimes you might open up with much more things to say, "Hey we produce this product, here's why it's unique, here's why it's better. I see you've invested in a company that's reasonably close to this. Here's why I think we're a good fit for you."
I say getting to the point is fairly important. I do understand there are cultural norms. For example, if I were in Japan and opened with that sentence, that would be very rude.
I can't imagine how negative that would come off but I'm not, I'm in the US. Especially in VC in Venture and in Silicon Valley, in New York we're very much to the point because we get a lot of this.
So learn to tell your story of what's unique about what you do, what's unique about your company and why that person cares in a very short period of time - seconds - also known as elevator pitches.
TSS: What is startup “coach-ability” and why is it so important?
Robert Neivert: I think coachability is - think about the last time someone gave you info - was your first reaction to argue or to think about it and figure out hmmm do I need to do that? Maybe I should try for the latter.
You can spend a lot more time and think about the fact that every time you argue you've lost that moment. Even if the person is wrong, it doesn't matter.
You have to start seeing the world as a learning experience and not as something for you to win or disprove the other person. If you've protected your ego, you've failed to learn.
So coachability is when you're willing to sacrifice your ego to learn something new.
TSS: You’ve said many international startups fail when expanding to the US. Why is this?
Robert Neivert: It's a little bit tricky for me to be an expert in this because we bring them over and when we bring them through the seed program, we have a dramatically different effect than if they come over without that.
Coming over with the seed program, they have a much higher success rate. The reason they do is because they spent four months being able to experiment and test without taking a large risk, where they're being supported by us, so we support that risk taking. For that reason they have a fairly good success rate coming to the United States.
Without a seed program or without somebody supporting it, you have a very high failure rate because people assume things are the same, they assume products can be sold, they assume the markets are similar, they assume there's no competition just like their home market, they assume the payment systems are the same, they assume the laws are the same and they're not.
Things are very different between countries from a startup's point of view.
Yes there are products. People tell me all the time about globalization, one product all over the world and then you actually talk to the people who actually have to deal with those products and they're like "Oh that's not true."
Power systems are different, communication systems are different, communication protocols are different - plugs, table Heights, chairs...everything is different. There's a ton of deltas between countries so you have to adapt.
So my statement is a large number of companies fail because they assume that their experience is still going to be true for the receiving country and it's often times much more "delta-ed" than they expected.
TSS: You mentioned one international startup did extremely well when expanding to the US. Do you know why?
Robert Neivert: You know, I don't have enough details to answer that one. There are cases where our companies have done massively fast expansion without testing and done very well. It's just statistically challenging. It doesn't mean it can't happen, it just means it may not be the right choice to make early on.
Some examples of that I mean if you look at things like pokemon which went around globally fairly quickly. Did they test it globally? I don't think they did or I think they pretty much made an assumption that Pokemon GO had been around, that they had fairly good evidence to show it was going to be global, it was a fairly reasonable assumption but that's a big company.
They spent a lot of time building brand globally and testing that out before that was going to be true; for a startup it's pretty risky.
TSS: How can startup members improve their social skills for when pitching, meeting with investors, networking, etc.?
Robert Neivert: Practice makes perfect. So here's the thing of almost anything. If you get up, you spend the time and effort to do pitching or to do a little public speaking or talk about it, you get more comfortable with it.
Yes, there are a few exceptions. There are some people who just really struggle with it and they're not going to get better. For a majority of people just doing it just trying it out.
We used to send people to malls all the time have them walk around pitching ideas to random people. They were horribly scared and after they did it for a few days, they realized "Oh, this isn't so bad. Now I'm much more comfortable."
Sometimes, in this world you have to do what you're uncomfortable with to build a skill.
So my statement is go out and try it, do it for a little while. It doesn't mean you have to be an expert but at least get to know what it is.
TSS: Do you have some words of encouragement for Taiwan Startups?
Robert Neivert: I think probably the thing I'll offer is something I talk to a lot of startups about - it's never rational to do a startup, it's never rational, it never is.
You do it because it's something you want because of passion, because it's something you want to accomplish.
It's never rational except that it's not at that level and make sure you understand you've made that choice in that yeah you might fail but that's okay The failure rate is very, very high.
That doesn't mean you're a failure, it just means that that particular product time and sequence of events didn't work out.
So I think my biggest advice is don't assume the first one's gonna work, it probably won't.
It may not even be the third or fourth but there's an awfully large number of very big successful companies started by people who failed many, many times before they started that company.
Be okay with failure. I certainly am because I've certainly failed enough.
About Startup Sofa
The Startup Sofa is video blog interview series created to provide practical knowledge and valuable know-how to the Taiwan startup ecosystem. We've sat down with successful startup founders, industry experts, mentors, and guest speakers to have honest discussions on overseas sales & marketing, breaking into new markets, differences with Taiwan's startup ecosystem, and more! Please let us know what you think at firstname.lastname@example.org!