As Taiwan strives to vitalize its startup ecosystem, a group of Taiwanese-American entrepreneurs have come up with an idea to share what they’ve learned from Silicon Valley with the community -- by starting their own company in Taiwan.
Known as the Taiwan Mafia, all of them have successfully exited from their startups in Silicon Valley via acquisition in the 2000s, including like Steve Chen (co-founder of Youtube) and Kai Huang (founder of RedOctane). With such experience in the global center for innovation, they turned their attention to Taiwan and have been mentoring local founders over the past few years.
Jameson Hsu, who sold Mochi Media to Shanda Games for $80M a decade ago, is a Taiwan Mafia member. He says the idea of starting a Taiwanese company is about “creating something to become a role model” for people to believe a startup success is possible in Taiwan.
By doing so, they attempt to bring a new way of doing business to Taiwan and plant the seeds of success, similar to how Toyota introduced its lean manufacturing system to the US and later emerged to be the world’s largest automaker, Hsu tells Business Next in an interview.
“There’s a lot of good resources that are under-utilized,” Hsu points out. “If we can find a way to get good people, teach them how to work in this manner, they can grow and teach other people, and then hopefully, this can grow into something bigger than just a company.”
Now, Hsu is in the midst of hiring local talent for his new startup, Kinetik Athlete. While he has worked with a team of Taiwanese engineers in the early days at Mochi Media, he says he is still learning to manage his team.
Instead of assigning the team to do maintenance work as he did before, he stresses that the new team in Taiwan will be working on the core product.
After all, nobody learns how to play golf by simply spending an hour with Tiger Woods, he says. They have to build something with their own hands to learn from the process.
Face the customers
Kinetik Athlete is Jameson Hsu’s fifth startup. Taking a software-first approach, he aims to build a fitness studio where customers can enjoy working out in a group better than in regular gyms that use third-party software to manage members and fitness classes.
“In most gyms, you have to find the equipment, wait for people, and get on it,” Hsu explains. “We don’t have any of that.” Instead, the experience it offers is more like that of a yoga class.
Based in San Francisco, Hsu had planned to open a studio a few months ago before the pandemic forced gyms, restaurants, and other businesses to shut down across the US. The team, located in Taiwan, would build the software for the US market.
Now, having relocated to Taipei, he decided he’d like to lead his Taiwanese team and see if the product he wants to build also works for the local audience.
The startup started off as an unusual one. While most fitness companies like Peloton rely on Taiwan to manufacture and assemble their equipments, Kinetik Athlete looks to hire local engineers to develop the software that serves the end customer.
“Taiwan makes so many products for other countries, but how come there isn’t a direct to consumer product that is known around the world?” Hsu asks. The reason, he believes, is the lack of attention to marketing and design among Taiwanese businesses.
“My hope if that we can get this to work, and when people hear the name, they’ll think this came from Taiwan,” Hsu says.
Take a risk
While focusing on making the company successful, Jameson Hsu also sees the significance of creating a risk-taking culture, on which Silicon Valley entrepreneurs thrive. For example, it’s not uncommon for them to take a paycheck cut in exchange for equity, which means nothing unless the company succeeds.
In Taiwan, however, such culture might not exist. Most employees aren’t willing to take a lower salary for equity, and companies don’t encourage them to take a risk, either. There’s no point in doing so when success stories are scarce, Hsu says. “It’s like chicken and egg problem.”
To solve the conundrum, he believes the company has to take the risk to be the few who give away equity as a means to find the talent who believes in its vision.
“You want everyone to believe the company so much that it’s their own, not just a place where I get my paycheck and I do work and I go home,” Hsu explains. “You want people to care about it that it’s their own, and they think about it when they go home and are on weekends.”
In this sense, they’re not only employees but also teammates who are on the same page as founders about how much they should all work hard to make the company successful and maybe one day change the world.
The shift in mindset ignites passion for their work. “If you get those people together, you can start something magical because everyone is so driven,” Hsu says.
More broadly, encouraging employees to take a risk entails creating a community where everyone believes that “we are all in this together” and “we all lose if others in the team lose.”
This is why, despite being a founder, Hsu believes he doesn't deserve all the reward if his company succeeds. “At the end of the day, I’m one person and there are maybe 50 people in my company who do more work collectively than I do,” he says. “If I don’t give equity, I’m taking advantage of them.”
Along with other Taiwan Mafia members, Hsu says he will use mafia.tw to find the right people -- who dare to take a risk and want to have an impact on the world -- for their new venture.
“Even if it fails, they learn from the experience and make sure they don’t make the mistakes we make,” he concludes. Perhaps, another important lesson these entrepreneurs-to-be will learn during the time with the Mafia is to be comfortable with failure as their counterparts in Silicon Valley.