Think outside the city: Start-ups in Hong Kong should look to Taiwan to become regional players, says Google executive
Founders need to seek broader horizons from the get-go or risk losing out on future funding or getting swallowed up by established players
Founders of start-ups in Hong Kong should be more ambitious and think of broader horizons when launching companies if they want to scale up their businesses in the years to come, a senior executive at Google said this week.
Entrepreneurs in the so-called Asia's World City should adopt a “multi-city strategy” when forming their business plans or risk getting stuck in one small market, said Lee-feng Chien, the internet search giant’s managing director of its operations in Taiwan.
A typical challenge for any start-up is how to scale up its business. If it is unable to do this, it may either struggle to secure further funding and expand its customer base, or soon find itself an acquisition target of bigger regional or global rivals.
“International venture capital funds have been showing more interest in the Southeast Asian region in recent years as they see a lot of opportunities here, especially in the mobile app business,” said Chien, who joined Google about a decade ago when it was just another Silicon Valley start-up with only a few thousand employees.
“Mainland China has been too hot for a long time in terms of investments in start-ups,” he said.
“Start-ups in both Hong Kong and Taiwan should think beyond [their] home market and have [their] own ‘go-to market’ expansion strategy, for example, to expand into Singapore, Bangkok or Seoul,” he added.
“Then the business becomes a multi-city regional business, rather than just a local start-up.”
Whereas start-ups in Hong Kong tend to be business-oriented, many in Taiwan are more technology-driven given the country’s advantages in hardware, and many of their founders come from engineering backgrounds for example in sectors related to semiconductors, he said.
One potentially lucrative avenue would be to expand into each other’s markets, he said.
“Hong Kong has about 7 million population, [so] perhaps you will call it a small market,” he said.
“But if you combine Taiwan and Hong Kong together, it’s a 30-million population market.”
According to Google Play, Android’s app store, if Hong Kong and Taiwan were lumped together, the combined market would rank No.3 for mobile games in a global context.
Many developers of mobile games in Hong Kong have already expanded into Taiwan and vice-versa, thus giving them a greater chance of becoming regional players, said Chien.
From the perspective of venture capitalists, a start-up immediately gets a higher valuation by expanding into more cities, he added.
“Then you can see a lot of new acquisition opportunities to grow yourself even bigger.”
Chien said even Google deliberately retains the spirit of a start-up to stay innovative and efficient.
“When I joined Google, there were only 1,000 to 2,000 employees. Now we have more than 50,000 staff, but still try to [keep that spirit].” he said.
“It may feel like there are many different groups of start-ups inside Google, and we want to work with other start-ups to learn from each other.”
In Hong Kong, Google has launched its EYE program to support the fast growth of local start-ups in partnership with the Centre for Entrepreneurship at the Chinese University of Hong Kong.
This week, the 10 highest-performing start-ups to join the programme convened in Taipei to receive training from experts.
Google has also recently been working with about 40 local employers in Hong Kong to launch a training programme called “Google Ignite”. The goal is to help at least 80 new graduates find a job at either a big firm or a promising start-up.