Taking Startups Global: Taiwanese Software Can No Longer Hitch a Ride on the Hardware Supply Chain

A few thoughts on taking startups global: Taiwanese companies that reach a substantial scale tend to be companies that can do business worldwide. Let us set aside the legends of Taiwan’s older generation of business owners traveling the world to negotiate deals with a battered suitcase and broken English. Consider the structure of supply chains in semiconductors and electronics. At the downstream end of the electronics supply chain, brands such as HP, Dell, Acer, and Asus have global operations. If you secure a position anywhere along that very long chain—perhaps in copper-clad laminates, active or passive components, or materials—your products can naturally reach the world through the chain. You may not need much international expansion of your own, because your customers and the end customers they serve take your products with them. The same applies to apparel, footwear, bicycles, and other industries. Your internationalization—selling products worldwide—can be achieved through your end customers’ global presence. --- So why are we concerned about the global reach of startups and the software industry? Early Taiwanese software products could hitch a ride on the industry structure of the time. Taiwan was the computer kingdom: Taiwanese manufacturers made nine out of every ten computers. Software bundled with each computer shipped could thereby achieve a degree of global reach. Fast-forward: phones have largely replaced computers, but Taiwanese manufacturers are not as closely connected to today’s leading phone brands. Even Apple has been gradually building out a China-based “red supply chain.” Software is no longer simply bundled with every phone shipped; consumers can download it through the cloud and various app stores. In today’s software and internet supply chains, Taiwanese startups cannot become international merely by securing a position in the chain, as they once could in electronics. They have to find their own strategies and methods for internationalization. Otherwise, we return to the opening issue: serving Taiwan alone means too small a market and too low a ceiling. My personal hope is that several globally active Taiwanese software companies can grow into the role once played by Acer, Asus, Giant, and Merida, bringing more small Taiwanese software startups into international markets through collaboration and integration.