Taiwan’s Software Startups Need a Process of Branching Out

Here is how I see it. Taiwan’s digital and software startups are missing a process of branching out. In the United States, PayPal, for example, has given rise to many startups, including through investment. Fully expanded, the PayPal family tree could encompass thousands of companies and dozens or hundreds of unicorns. In Taiwan’s hardware industry, Acer branched into major groups such as BenQ, Wistron, and ASUS. Relationships among the Kinpo–Compal group, Quanta, and Inventec can also be traced. Their market capitalizations are substantial, as are the numbers of companies branching from them. ITRI has likewise given rise to many companies listed on Taiwan’s stock exchanges. No Taiwanese software company currently has that influence. The most influential and successful remains Trend Micro, founded back in 1988. Yet even after more than thirty years, it has not generated a vast cluster of listed companies. 91APP and Appier have been listed for only four or five years and have not yet produced enough surrounding startups—whether founded by former employees, repeat entrepreneurs among their partners, or investment networks. To develop its startup ecosystem, Taiwan needs companies such as PayPal and Palantir, or an accelerator such as YC, that evolve and replicate into many new startups. Alternatively, it needs something like the hardware industry, where Acer gave rise to several large groups with substantial market capitalizations, which then generated many more startups.