A Silicon Valley entrepreneur talks about how he gets down to business in Taiwan
By David Schainker
Part I of our series on entrepreneurship in Taiwan sits us down with John Fan of Pic Collage. Pic Collage is a Top 10 Photo App for iPad, iPhone and Android in the U.S., Japan and many other countries. Launched in the summer of 2011, Pic Collage has been downloaded over 15 million times. The app lets you quickly arrange your photos into collages, and be creative with frames, cutouts, filters, borders, stickers and text. You can find them online at http://pic-collage.com
Many people in Taiwan are often shocked to find out that the app was “made in Taiwan.”
LCB: What gives? Why is it so surprising for Taiwanese users to find out Pic Collage is a local startup?
Pic Collage: Unlike most Taiwan-built mobile applications, Pic Collage has been able to find broad appeal in countries such as the U.S. and Japan. Also, the user interface is more Western and not typical of Taiwanese apps.
How did Pic Collage wind up in Taiwan?
Although we started the company in Mountain View, California, we decided to set up our main office here in Taiwan for both personal and business reasons. Growing up outside of Taiwan, we wanted to have the opportunity to live in Taiwan to be closer to friends and family. We also found that Taiwan is a great location to operate at lower cost and build up a talented team of developers, designers and operations staff.
Would you like people to know Pic Collage as a Taiwanese household name? Why or why not? What does it take to become a household name in Taiwan?
Our primary markets are in the US and Japan, but we would also like Pic Collage to be widely used in Taiwan. To market our app better in Taiwan, we have chosen a Chinese name for the app (拼貼趣), and we have set up a Chinese language fan page (http://www.appshooting.com.tw/news_info.php?nid=688 and https://www.facebook.com/piccollage.zh).
There are many elements to building a product that becomes a household name: a well-engineered product, a good marketing strategy, a strong user community, network effects (so that as more people use the app, the experience gets better for everyone), and a whole lot of luck.
Let’s back up a bit. What startups have you worked at previously? Were any of them Taiwanese? If so, what was it like working for them?
I’ve worked for two wireless startups in the U.S., one of which was acquired by Qualcomm. While I’ve never worked for a Taiwanese company before, one of our co-founders worked for a venture-backed hardware startup based in Taiwan with a CEO from China and found that the management style to be top-down and difficult to deal with.
In the AIT panel, Professor Chiang mentioned Taiwan’s education system currently does not prepare university students well to face “real world challenges.” Do you find this is the case with recruiting Taiwanese talent? If so, how does Pic Collage recruit young Taiwanese to work in a startup like yours?
Compared to the US, the education system in Taiwan puts less emphasis on creativity and teamwork. In our experience, however, we’ve found numerous talented students from Taiwanese universities who have taken initiative through school clubs, internships and their own “hack” projects to take on new challenges and develop work-related skills.
We’ve been fortunate to find very good interns from NTU (台大), NCTU (交大) and NCKU (成大) through referrals and extensive interviewing of candidates found on PTT (a popular bulletin board system in Taiwan). We’ve been able to attract them to join us by offering the opportunity to take on real responsibilities, enjoy various perks, learn from experienced mentors and also improve their English ability.
Do you use a more western or Taiwanese approach to working with your employees? Why?
Our team has a “silicon valley” approach to management – we have flexible hours and policies, and encourage people to raise their own ideas and be creative. We encourage collaboration and idea-sharing, and try to avoid boring meetings and unneeded processes. We also have monthly hack events where everyone works on whatever they like!
When you have young Taiwanese employees that aren’t used to “Western startup culture,” how do you handle it? Is this even an issue?
The key is to select people who fit in with the company culture. As part of our interview process, we give the candidate exercises to do that simulate a real work situation. For developers, this means that we do “pair programming” to let the candidate program with our senior developers so that we can see how they can co-work with each other, and evaluate the candidate’s technical skill. In addition, for all candidates, we evaluate their communication skills (both verbal and written) and their ability to interact with the team.
How does the company overcome the “failing is bad” aspect of Chinese culture in the unstable environment of a startup?
We had one candidate who decided not to join because of family pressure to find a more “stable” job at a large company. While startups can be risky, I believe that a career at a large company is actually no longer as stable as it once seemed. Rather than focus on the size of the company, it’s better for young people to choose a job where they can work with talented colleagues, learn new skills, take on real challenges and build something for a global market.
Our company offers such opportunities to our team members. In addition, we are lucky to have received funding (over USD $2 million) by leading Silicon Valley investors, which reduces the risk of joining our company.
Do you have Taiwanese investors? Why or why not?
No, we do not have any Taiwan-based investors. We preferred to raise money from Silicon Valley investors who could provide more relevant advice for building a product targeting the US market. In addition, they place emphasis on our long-term success rather than asking us to target short-term monetization.
Advantages and Disadvantages of Taiwanese investors?
Advantages: Taiwanese investors might be able to help us with finding local partners and dealing with legal and regulatory issues in Taiwan or China. (But since our target markets are in U.S. and Japan, this is not as relevant for us.)
Disadvantages: Most Taiwanese investors have more experience investing in hardware companies, and as a result, may not provide valuable advice for software startups. Moreover, they often require sophisticated financial projections and business plans to show revenue growth in the near future. These expectations for revenue are difficult to meet for early stage startups.
Advantages and Disadvantages of being based in Taiwan?
Advantages: The talent is strong, the costs are low, and the food is good! Taiwan has good engineering schools and many electronics companies, so there is a large pool of developers to select from. Also, the startup community here is fairly active and supportive.
Disadvantages: It’s not easy to find software developers and designers who have the right sort of backgrounds for building mobile apps targeting a global market, so they need some training to get them up to speed. Also, it’s hard to hire foreigners in Taiwan due to visa regulations.
How easy is it for you to hire foreign talent?
It’s difficult for startups to hire non-Taiwan citizens due to the need for an Alien Registration Certificate (ARC), which is the visa that allows foreigners to stay in Taiwan. A company needs to meet certain revenues in the previous year in order to set up or extend ARCs for employees. These revenue thresholds are difficult for most startups to meet.
Do you find any differences in talent between young foreign employees and young local employees? If so, what are they, and what challenges are associated with them?
We have one part-time employee from Europe who asks lots of questions in order to understand the reasons for why we do certain things. By contrast, Taiwanese employees work hard but tend to be focused on the work they’ve been assigned. We have tried to encourage them to ask questions and learn to make the right decisions by themselves.
What is the recommended path to hire talented foreigners as a startup in Taiwan?
For a local Taiwanese team that’s interested in targeting English-speaking markets, it’s very useful to bring on non-Taiwanese talent onto your team. One way is to meet people through networking events or through recommendations from other startups. Alternately, you can try searching on LinkedIn. One first step, however, is to make sure that the company revenues meet the numbers required to get the ARC for a foreign employee in Taiwan.
What about the recommended path to finding talented locals?
For finding local developers and designers, we’ve found PTT (a local bulletin board system) and conferences as a good way to meet people. It takes time, however, to meet people and get them interested, so you need to be patient and invest time and energy in building up relationships.
Any plans to go to mainland China? Why or why not?
No, not yet. For a creative product such as Pic Collage, we need a small team of developers and designers working together closely, so it would be difficult to split our team into two locations. In addition, there are particular challenges with development in China due to internet restrictions and cultural differences, which make it less likely to find the right sort of product-minded developers who can target the U.S. and Japan.
Would you hire mainland Chinese coders? Why or why not?
We are open to hiring people from anywhere as long as they have great technical skills and fit well with our team. In the foreseeable future, however, we would not want to open up a development office in China, and there might be a visa challenge to bring the mainland Chinese coders to Taiwan.
Are there any “lessons learned” you wish to pass onto future entrepreneurs entering Taiwan?
Do not build a product that only targets the Taiwan market. From the beginning, you should have an international strategy, targeting one or more large markets around the world (e.g. U.S., Europe, Japan, China).
There you have it. Pic Collage mentions many critical ideas to take into the “Greater Chinese” market with you. In no particular order:
- Have an international strategy to target the global market.
- Recruiting through local job boards works. PTT is a niche community, and gives you access to specialized people.
- You can definitely hire talented people right out of school.
- Watch out for visa challenges if you’re hiring foreigners. Taiwan even has revenue requirements for your organization if you want to hire foreigners!
- Taiwan is a good place to hire locals. They’re smart, cheap, and there is delicious food for everyone!
- However, specialized workers might be harder to find. But you can definitely train new recruits.
- Have a well-defined company culture and find employees who are a good fit.
- Startups here are considered risky, and you might run into cultural issues with some employees. Don’t be surprised if someone won’t work for you because their family thinks it’s risky.
- Taiwanese investors are savvy with regulatory issues, and know the hardware startup model well. However, they don’t have a deep understanding of software startups, especially if your startup doesn’t have financial projections.
Thanks for your time and very useful answers, Pic Collage! The next part of our series on entrepreneurship in Taiwan will be talking about Taiwan’s education system as seen through the eyes of Dr. Cheng at National Taiwan University during his part of the AIT panel on entrepreneurship. Trust us, it’s not going to be pretty…
David Schainker is an entrepreneur whose business is based in Taipei, Taiwan. He specializes in Web and Mobile applications, as well as Energy Storage Consulting. He moved to Asia to independently learn Chinese and collaborate with local businesses.