Taiwan's Internet Economy Fights to Find Talent

Tseng Chien-lin turned down an offer from the Taiwan offices of Yahoo to take a job with a barely known Internet startup involved in the design of a social application centered on dining out.His older brother had suggested that Tseng be safe and go with the big name. Most Taiwanese would opt for the massive, well-known tech firms in order to earn more money and reduce risk that their employer might not survive in the long term.Shaky Internet startups may be fine for Silicon Valley, where employees will take a chance on them in the hopes of getting in early on what may become a big success. But in Taiwan, where schools and parents urge playing it safe for cultural and economic reasons, Tseng's decision to join the 15-person staff of Genie Capital made him something of a rebel.The rebel found a match. Genie Capital's three American-influenced partners urge open debate among engineers, allow scribbling on the walls and keep two dogs in the wide open work space on the 17th floor of a Taipei office tower. This is a stark contrast to the Taiwan norm: cubicles, no debate, no scribbling, no dogs."At a larger company the job duties break down very specifically, so there's less of a challenge," said Tseng, 26, a graduate of the island's top-ranked National Taiwan University."I think here it's very open. You can see what others are doing and say what you want," said Tseng, who goes to work in a ragged shirt emblazoned with racy words. "I'm not saying I'll be here several years, but I want to stick around to see results."Taiwan's Internet startups are few, small and tough, believing that persistence will reward them. But they struggle to find people such as Tseng: qualified engineers willing to take career risks such as speaking out on the job and living with uncertainty about where the startup is going."Because so much manufacturing is here, Taiwan needs software to go with the hardware," said Jamie Lin, founding partner of the year-old incubator and venture capital firm appWorks Ventures in Taipei. "We'll probably stumble a little bit. There's going to be a latency until the talent realizes there are opportunities."Today the Internet economy lacks the government research and funding that supports Taiwan's hardware industry, which leads Taiwan's more than US$400 billion economy. Some officials don't know what the Internet economy is. But they concede that the best talent goes to the biggest, best-known firms.A series of major IPOs would draw that talent's attention to online business. E-commerce in Taiwan is already worth US$10 billion, with advertising estimated at $300 million last year, Lin said. Any public listing by Facebook or LinkedIn, both known in Taiwan, would particularly captivate Taiwan's 2.58 million college-level students, he speculated."The first (startup) to be on par with something from New York or Silicon Valley will be hugely successful," said Genie Capital partner Jimmy Chen.

For now, it's a lonely group of pioneers willing to go against their fears and family pressure to work, accepting monthly salaries that average just NT$35,000 (US$1,190), slightly lower than what the big firms pay. They also must ignore worries that the venture capital might run out even as the industry grows in value by about 20 percent annually in Taiwan.Tseng's co-worker, software engineer Alan Chen, also 26, joined the startup after working for higher pay at Taiwan-based smartphone maker HTC. He left there because his duties were too specific and "everyone there was cold.""I get on with people here," said Chen, who impressed Genie Capital in part because he had shown his rebel credentials: he bummed around Australia with no agenda for several months instead of heading straight into a job. "But a lot of college students would choose HTC because the salaries are higher."Employees who last in the startups will be those who like inventing something from scratch and who thrive in a cubicle-free workplace where debate is required, Genie Capital's partners say.

The risks will eventually be rewarded, said Chiang Wei-ling, president of National Central University, a Taiwan institution where more than half the 8,060 students pursue degrees linked to engineering. China is gradually absorbing Taiwan's prized manufacturing, he said, while domestic Internet use stands to grow as activities such as mass purchasing gain favor among the Taiwanese."Even 15-year-olds in Taiwan use the Internet, and not long ago I met someone whose 9-year-old was using it," Chiang said.

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