After decades in California, Steve Chen, the multimillionaire co-founder of YouTube, has returned to his birthplace of Taiwan with plans to harvest the island’s untapped tech talent by forging connections with Silicon Valley.
Chen is putting together a project to support Taiwanese people to hatch mega-companies he says could grow quickly with Silicon Valley’s relationships, capital and know-how.
He plans to launch the project, possibly in the form of a start-up incubator, in the second quarter of 2024 and train three to five start-up teams every eight weeks. If successful, this platform could confirm statements from government officials and economists who have said Taiwan needs more outside exposure to grow.
“Some of these people are going to come back to Taiwan and the number of Taiwanese going to the US is going to grow,” Chen said. “Hopefully we spawn a cycle that goes up and up.
“The dream is they’d all be unicorns,” Chen added, using an industry term for an unlisted start-up valued at more than US$1 billion.
Taiwan has enough talent to form several big tech firms, Chen said, despite a rising number of job vacancies on the island that has spun out bleeding-edge computer, phone, and server hardware for the world.
But people with the requisite knowledge often lack the international exposure or foreign connections that are useful for building a business that can grow outside Taiwan, Chen said.
After long decline, Taiwan rides AI demand wave to double-digit export growth
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“It’s not an easy place to start a Silicon Valley mega company,” he said. “Most of Taiwan’s 23 million people don’t have enough external exposure.”
Chen co-founded YouTube with former PayPal colleagues Chad Hurley and Jawed Karim in 2005. Chen and Hurley sold YouTube to Google in 2006 for US$1.65 billion. He became an entrepreneur-in-residence at Google Ventures from 2014 to 2018 and moved back to Taiwan the following year.
The 45-year-old Taipei dweller spends most of his time mixing with members of Taiwan’s “gold card” programme, an immigration scheme to get foreign talent onto the island for at least three years. As of November, 6,570 people had earned residency and work permits through this route.
The “batting average” for those start-up teams would be rate of acceptance into a Silicon Valley accelerator, Chen said. Accelerators help start-ups grow through mentoring and education aimed at raising money and launching products.
He has found 40 or 50 gold-card expatriates who may be able to “foster some ideas” and pair up with Taiwanese engineers to start businesses. This method of matching would serve as substitute for the “coffee shop” culture that is omnipresent in Silicon Valley but absent in Taiwan, Chen said.
National Development Council head Kung Ming-hsin said in 2022 that Taiwan would try to attract 400,000 foreign workers over the subsequent decade, as the island’s falling birth rate saps the number of available locals.
David Chang, Crossroads
The number of open jobs in Taiwan had grown from 555,000 in early 2020 to just over 1 million in December 2023, and on average one local applicant applied for every two positions, according to data from the Taipei-based 104 Job Bank.
But Chen has found that Taiwan’s “engineering resources” are far greater than in Silicon Valley, and the salaries just a fraction of what comparable firms offer in the US. Every dollar of fundraising “goes much further in Taiwan”, he added.
The government of Singapore already helps domestic tech firms connect with Silicon Valley, and South Korean start-ups have long visited the California tech cluster to raise money.
Taiwan’s smaller home-grown firms often fail to expand abroad because they have no access to foreign funding sources or have not developed clear ideas about what clients want internationally, analysts said.
“It’s cool technology, but they lack a global market sense,” said David Chang, the general secretary of Crossroads, a non-profit organisation that promotes Taiwan’s global footprint. “I think the overall issue we’ve observed at our end is a lack of ability among Taiwanese founders.”
Camila Saenz, a 28-year-old Guatemalan national who originally came to Taiwan to study, set up an internet platform four years ago to match 110 mobile language tutors with students. She has thought of expanding the platform, called Tuteemi, to Japan and South Korea but said most of her start-up “mentors” in Taiwan offer advice that is too locally focused.
In Silicon Valley, she said, “everyone is very well connected” and it’s possible to run into heads of major international tech firms. “When it comes to start-ups and funding, Taiwan could always use more.”
Getting started in Taiwan can be tough, Chen acknowledged, compared to places such as Singapore and Dubai.
“Taiwan in the global ecosystem I think has more disadvantages than advantages in some ways, but it’s still difficult to find a place where you can find such great resources and engineers,” he said.