Relocate to the Silicon Valley and on-the-move tech hubs in other countries to grow business, the chief operating officer of a major American tech media firm is telling Taiwanese startup founders.
Ned Desmond, chief operating officer of TechCrunch, offered that advice at a Business Next’s Meet event last month at Business Next’s headquarters in Taipei. Taiwan Startup Stadium, Asia America Multi-Technology Association and Oath Taiwan co-organized the event.
“Silicon Valley will be very strong for a long time to come,” Desmond said, referring to the cluster of California cities south of San Francisco, home to the likes of Apple and Intel.
“One of the main reasons is you have a super high intensity of all the ingredients to be successful as a founder,” he said. “There are hundreds, if not thousands, of serial founders who act as mentors, early-stage investors, and there are hundreds and hundreds of venture sources for money.”
About 80% of his audience came from tech startups, investment firms and other IT companies. Bernard Chan, founder of the Singaporean school for startups ALPHA Camp, moderated the discussion.
Tech hotspots in other countries should also draw startup founders as they look for ways to raise funds and expand international markets, Desmond said. He named China, Israel, Berlin, London, Paris and Stockholm in particular.
For instance, he said: “if you’re in security (software), you might not want to go to Silicon Valley but Tel Aviv, because a lot of investors who understand it are there.
“What’s changing is not that Silicon Valley is getting weaker, it’s just that a lot of places around the globe are getting very strong,” Desmond said.
He was responsible for 11-year-old tech-company database CrunchBase from April 2012 to September 2015, when it spun off from AOL/Verizon as a standalone company. That role sparked discussion at the panel event.
Desmond and colleagues turned CrunchBase’s former parent company TechCrunch into a source of news on tech startups after he reached the Silicon Valley in 1996. He had worked before as an Asia correspondent for Time magazine.
Asked at the event why relatively few Taiwanese startup list on CrunchBase, Desmond said that “perhaps it is evidence that critics say that the startup scene in Taiwan doesn’t think globally enough.”
Approximately 3,000 Taiwanese startups are listed now on CrunchBase compared to Singapore’s 11,639 registered startups and Hong Kong’s 7,806. No fee is required for startup companies to be registered on CrunchBase.
Desmond added that he often gets questions such as, “Why should we waste our time putting our data on CrunchBase?” and “Everybody in my neighborhood knows who I am, and all the investors (who) I know know who I am, so what’s the point?
“The point is if you want to be seen by the global startups, if you want venture partners and investors around the world to know who you are, you have to be on CrunchBase,” he said.
The speaker cautioned separately against funding for startups that do initial coin offerings (ICO), part of the crypto-currency phenomenon.
“My personal opinion is that the ICO world has become very polluted. There are good ICOs, probably, but there’s awful lot of bad activity,” he said. “So people are becoming more careful about how to get involved in ICOs.
“I think the crypto-apocalypse for TechCrunch would be that founders don’t want to get together with anybody anymore because they just raise money through ICOs,” Desmond added. “So you don’t have to meet investors. They stay working at their desk, publish their white paper, put up their website, sell their coins, raise a hundred and million dollars, and the inventors just disappear.”
TechCrunch Disrupt is going to take place in Berlin and San Francisco this year, Desmond added in his remarks to the panel. The TechCrunch Disrupt team of 55 people organizes shows to give founders and investors a more efficient, productive way to find each other.
“We will undoubtedly do an event in the future in Taipei. We also want to do a Disrupt outside of the States just in a handful of cities that have huge markets. For us, San Francisco is obviously a huge market,” he said.
Fellow Business Next Meet panelist Holly Harrington, general manager of Taiwan Startup Stadium, echoed some of Desmond’s advice for Taiwan startups. She runs a Taipei-based, government-funded incubator that aims to train Taiwanese startups for expansion overseas.
The stadium has taken Taiwanese startups to San Francisco and New York for TechCrunch’s Disrupt events in the past years.
Harrington suggested that Taiwanese founders look for other options as places to seek funds and expand markets such as the U.S. cities of Austin, Chicago, and Washington, D.C. Founders will have a better chance to leverage resources in these cities as they emerge as innovation hubs in the United States, she said.
“TSS started to spend a lot of time encouraging startups to explore other places in the U.S. because local governments all over the U.S. are putting more money into attracting startups,” Harrington said. “So if you want to go to Austin, Chicago, or Washington DC, it’s a little bit less competitive (compare to Silicon Valley).
“Taiwanese startups (in Taiwan) are like a big fish in a small pond, so going to big cities in the U.S. helps them learn how to compete,” she said. “Silicon Valley is a good place to get a more realistic starting point for Taiwanese startups.”
Foreign customers may not easily trust a brand when they can get similar products in their home countries, she said, so smaller Taiwanese companies must work harder to convince international markets that their brands top the competition.
Taiwan’s advantages in computer hardware manufacturing should not be ignored, said Ryan Kuo, president of CDIB Capital Innovation Accelerator in Taipei. Local startup founders have the knowhow and capacity to build products that integrate software and hardware, he added.
Taiwanese startups have a chance now to build on internet of things because of Taiwan’s strengths in ICT hardware, Kuo said. His accelerator gives startups ways to capitalize on the IoT trend and reach foreign markets, he added.