In the global cities of today, people, commodities, and ideas congregate in a furious fashion. It is amidst this context that entrepreneurs and mentors geared for success gather, creating a veritable cradle for the startup culture.
Places like Silicon Valley, LA, and Tel Aviv once seemed like faraway lands to those of us in Japan. Today, they have become hallowed grounds for global startups. One city drawing attention of late is none other than New York. According to the Startup Ecosystem Ranking by StartupCompass in 2015, New York is second after Silicon Valley.
For this installment, the editorial team at BRAIN PORTAL spoke with Alan Yu, who hails from Taiwan and leads Ghost Island Studio. Yu and his company are in the midst of the burgeoning startup ecosystem being played out in places like New York and San Francisco. The studio produces Toys to Life, a line of figurines based on famous athletes, and is developing the spinoff soccer game in that series, Striker Tactics.
We spoke with Yu to get an idea of the trends in the American startup industry and how entrepreneurship works there.
A culture fostering student entrepreneurs
Yu got his start in 2012. He wrote a thesis for The NYU Game Center at New York University (NYU) that would form the basis for Striker Tactics.
Yu: “When I graduated from NYU, the director in charge of our project told us the idea had potential, so we shouldn’t leave it at that. He gave us feedback to the effect that this could be fleshed out into a game. When I conveyed that to the current team members we have now, they were really taken with the idea and said it had potential, so they wanted to work on it with us. That’s how we got to the present.”
Aiming to start a company after college is not an idea limited to American students. Many students studying abroad also elect to find work in the open-ended American market. Given the fact that failing to find work would, for visa reasons, mean being forced to return to one’s country, it is not surprising that this should foment in people the drive to launch a company in the US and effectively create their own work.
The New York University Incubators is a program designed for these ambitious sorts. NYU Incubators has satellites on Varick Street, where Fintech and cybersecurity firms congregate, NYC ACRE (The New York City Accelerator for a Clean and Renewable Economy), which promotes green technology and renewable energy, and DUMBO, where hardware and mobile firms can be found. The program, in partnership with the city, started in 2009 and continues to attract global talent like Yu.
Yu: “NYU Incubators invites investors to events that coincide with when students graduate, giving them a choice to pick from ideas that interest them. This acts as the first fundraising experience for students like me, and you get direct support for realizing your idea. This is extremely encouraging for students.”
In this way, the city of New York is home to educational institutions offering programs to foster the growth of startups. Seeing this brick-and-mortar approach to the problem is enough to suggest a rich startup ecosystem in the city, but hardware alone does not an ecosystem make — only through the positive rolling out of this support towards economic benefits can programs of this nature sustain themselves, pumping healthy blood throughout the system, as it were. Turning to the program’s web site, we learn that the program has created employment opportunities for over 1,250 people and generated economic benefits of 350 USD. This quantitative data suggests in no uncertain terms the prideworthy way New York is leading the “innovation economy.”
A fundraising opportunity
After completing the NYU Incubators program, Yu returned to Taiwan to take part in TSS (Taiwan Startup Stadium). It was here that he succeeded in fundraising. He also took part in Tech in Asia in Tokyo and at the Founders Space accelerator program in San Francisco (selected among the ten best accelerators by none other than Forbes). After successfully raising funding there, he moved forward with his company, based out of San Francisco.
Taking part in these events and programs requires substantial funds to begin with, but Yu insists that the benefit of meeting investors is priceless.
Yu: “Not only do you get to meet with investors, but you can also talk to potential clients and customers, so these opportunities are crucial. One piece of feedback we got was that creators tend to become too engrossed with their own projects, treating them like their babies. In this way, participants at these events give you a new look on the subject and let you see it in different ways. Getting objective advice from others is very important, and you also get a chance to gauge the market.”
One major merit of a mature ecosystem is not only support for one’s enthusiastic ideas, but also objective, dispassionate feedback.
Asia and America compared: multiple offices
A major trend seen in startups of late is growth in second offices. This is partly owed to, of course, the international aspect of such companies, but also to the benefits seen from distributing the company to places beyond one’s own: namely, increasing points of contact with investors worldwide.
Yu’s Ghost Island is one such example. The main team is in San Francisco, while the CTO and another core group are in Taiwan, where they work to obtain subsidies from the government.
We asked Yu if he saw any differences in the Eastern and Western startup climates in terms of the question of multiple offices.
Yu: “When it comes down to it, the US is simply more open to new ideas. Young people have many opportunities to make their dreams a reality, and society as a whole supports the young generation being entrepreneurial and launching startups. Young people can try things that interest them, to their heart’s content. This is the fundamental culture in the US.
By contrast, Taiwan and Asia have an abiding faith in joining large corporations after graduation, something our readers will be familiar with, probably first-hand. Yu says that if he had attempted to launch a company in Taiwan instead of joining the workforce, he would have gotten a reactionary response about how he was in no position to launch a venture with no experience or money.
In the US, sharing ideas leads to positive comments like, “I know someone who can help you” or, “I’ll support you.” This stance is fundamentally reassuring to budding startups.
Yu: “One thing that stands out to me in San Francisco, where Founders Space is based, is the number of pitch events and get-togethers for entrepreneurs. This may sound like a joke, but the people you bump into at Starbucks here are either people pitching an idea or investors looking for one. We often bump into other teams, and some even do pitches at Starbucks. One unique aspect of the culture here is that startups are a part of everyday life.”
The San Francisco Bay Area is home to teams bent on success and funding from around the world flowing in to support that success. Yu says that after arriving in San Francisco, he met with entrepreneurs and mentors from South Korea, Eastern Europe, and England.
In this way, the US provides startups a chance to stand on a vast stage, but that stage also means there is fierce competition awaiting. Another difference lies in the way governments in Asian countries versus those in the US provide support to startups.
Yu: “Since there are still few startups in Taiwan, the government is almost like a babysitter, giving us deep support. By contrast, the US is open and gives opportunities to anyone, but the government does not provide much in the way of resources. Unless you can deliver performance, you have to leave the market. The competition is fierce. However, if you can scale your business amidst that climate, you can expect a huge return.”
In this way, Yu and others like him have gained deep support from their local governments while building hands-on expertise in the US, the cradle of startups. Amidst the trend for startups with satellite offices, this strategy is extremely suited to student entrepreneurs like Yu.
The startup ecosystem in Taiwan has been steadily growing for several years. Not only has it become the headquarters for incubators like AppWorks and Garage+, but global accelerators like 500 Startups and TechStars are also turning their eyes to the area.
While people in Japan often describe the country as being several decades behind Japan in terms of building a startup ecosystem, the real question should be: “What can we do to change that?”
What we on the BRAIN PORTAL editorial team learned anew through our interview with Yu was the real need for many more ambitious entrepreneurs from Japan to join the fray of the competitive startup space. The Japanese government is taking a top-down approach to remedying this, such as with its 2014 launch of programs to promote entrepreneurship in startups. However, the emergence of a mega-venture from Japan poised to take on the world may very well require budding entrepreneurs to travel the world and learn hands-on from the ripe startup ecosystem overseas.