Modeled after a hit reality TV show in the West, Dragons’ Chamber Taiwan provides a platform for foreigner-owned enterprises to test the feasibility of their business ideas by pitching them to experienced entrepreneurs. Participants – even those who are not successful – find the experience invaluable.
In the U.S. and some other countries, immigrants are significantly more likely than native-born citizens to create companies. In Taiwan, however, as Swedish businessman Elias Ek likes to point out, the reverse is true.
The reasons for Taiwan’s low level of foreign entrepreneurship are numerous. Many expatriates come to Taiwan to do a specific job, which could be anything from working as a caregiver to being the country manager for a multinational. And unless they marry a local, very few of them expect to put down permanent roots.
Those who are tempted to try their hand at business face a series of barriers. Even though the government now publishes relevant laws and much other useful information in both English and Chinese, understanding local regulations and systems can still be challenging. What is more, borrowing money and obtaining company credit cards remains exceptionally difficult for non-citizens due to ingrained policies and practices of local banking institutions that discriminate against foreigners.
Unleashing the entrepreneurial instincts of Taiwan’s foreign population (which last year fluctuated between 759,000 and 801,000) could help the country gain thousands of new businesses and a million jobs, Ek estimates.
Founder-CEO of Taipei-based B2B marketing firm Enspyre and author of a 2013 book, How to Start a Business in Taiwan, Ek has been organizing events for foreign entrepreneurs since 2005. He also devotes hundreds of hours each year to Dragons’ Chamber Taiwan, an annual pitch event for new businesses that was launched in 2016, after the Canadian Chamber of Commerce in Taiwan (CCCT) decided to create a signature event for small businesses.
Much of the initial work was done by Andrew Lunman, a Canadian restaurateur then based in Taipei, John Kellenberger, the American co-founder of English-as-a-second-language teacher-placement agency Reach to Teach Recruiting, and Kellenberger’s Canadian wife and business partner, Carrie.
All three were somewhat familiar with the Canadian Broadcasting Corporation TV show Dragons’ Den (the U.S. version is titled Shark Tank), in which entrepreneurs try to persuade a panel of business heavyweights to invest in their ideas. They thought expatriate-led startups might benefit from an opportunity to explain their plans to experienced “dragons.”
With support from the CCCT (which Carrie Kellenberger chaired from 2016 to 2018) and the Chinese-language Business Next magazine, the first Dragons’ Chamber was held in November 2016.
Since then, the chamber has reconvened each fall, listened to pitches, posed questions, and chosen winners. The dragons’ lineup has changed, and the number of businesses applying to join is trending upward, but one constant is the requirement that each participating team include at least one non-Taiwanese co-founder.
Unlike some other pitch events, Dragons’ Chamber is open to entrepreneurs in any industry. “There are some potential unicorns, but we don’t discriminate against businesses that – even if successful – aren’t likely to grow to a significant size,” says Ek. “Also, we focus on early-stage startups. If someone is looking for an investment of over NT$5 million [US$176,168], they’d probably be better off going elsewhere.”
Dragons’ Chamber differs from the TV show in that successful teams seldom leave having agreed to exchange equity for cash – although, Ek confirms, dragons have occasionally invested in startups that particularly impress them.
Until 2020, winners received small cash prizes. In 2021, those rated highly by the dragons were rewarded with business services donated by sponsors. These included phone-answering services from Ek’s company, hot-desk memberships at co-working spaces, sessions with accountants and brand consultants, and help with trademark applications.
The process of competing in the Dragons’ Chamber begins about three months before the final pitch event. Applications are sifted by a small team that in recent years has been led by Ek and Jessie Chou, CEO and co-founder of MUSA Trademark. (Through her company, Chou is also a sponsor; she has never served as a dragon but, Ek stresses, her contributions to the Dragons’ Chamber have been indispensable.)
For the 2021 process, 25 applications were received. A few were rejected straightaway because they had already raised a substantial amount of money. “They’re too far along. They don’t need us,” says Ek.
Thirteen startups were invited to audition. Each made a 10-minute presentation, after which detailed feedback was given. Another two rounds later, the field was whittled down to five finalists.
Ek says that very often, between the first audition and the big day, finalists’ pitches are not so much refined as redone from scratch. In his opinion, this opportunity to explain their plans and receive constructive criticism is the principal benefit that participants derive from Dragons’ Chamber. “Exposure is second most important,” he adds. “The prizes from the sponsors are useful, but I don’t think anyone takes part because of them.”
Ek stresses that neither he nor the others who give advice make any money from the process. “I want to help people like myself, because when I started my businesses, there was nobody I could ask when I had questions,” he says.
According to Ek, one of the issues facing foreign entrepreneurs in Taiwan is a lack of investment in their businesses by other foreigners. “The next step would be to set up an early-stage investment fund. Taiwan has angel-investment groups, but it’s hard for foreigners to access them,” he says. He is currently researching the legalities of how such a fund could be established.
Of the 25 businesses that took part in Dragons’ Chamber finals between 2016 and 2020, 15 are still going – a pretty good survival rate, says Ek. For a few finalists, Dragons’ Chamber has been a steppingstone on the way to being picked up by a major accelerator such as APPWorks or 500 Startups.
The finalists in last year’s event included Stride-360, which is developing home fitness equipment; 3 Square, which offers turnkey solutions for cloud kitchens; StartupInTaiwan.com, a guide for foreigners starting companies here; Flight Path Immigration, a consultancy for immigration to Canada; and MangaX Technology, a startup developing EdTech with a focus on students’ emotional wellbeing through AI and art.
As in previous years, each team had just seven minutes of presentation time and a brief Q&A session in which to win over the panelists. MangaX, which was founded in 2016, took first prize, with Flight Path coming in second. MangaX founders Joe Huang, from Taiwan, and American Genevieve Murphy say that winning Dragons’ Chamber gave the company “significant attention and credibility, which have been bringing us business opportunities.”
Since its Dragons’ Chamber triumph, MangaX has received grants totaling NT$2.8 million (US$98,660) from the Ministry of Economic Affairs’ Industrial Development Bureau and Buddhist Compassion Relief Tzu Chi Foundation’s 5th Vision Future Incubator program. The MangaX team has now grown to 10 people, and revenue growth is expected to increase by more than 200% in 2022, say Huang and Murphy.
“The feedback we received particularly helped us refine our sales strategies,” the founders say. “For a Taiwan-based company to enter the global market, international experience is required, and this is what makes Dragons’ Chamber important. All in all, it’s a great platform for foreign entrepreneurs in Taiwan, and we look forward to seeing it expand in the future.”
Flight Path founder Cassandra Brennan remembers the period from submitting her application to pitch day as “a whirlwind of advice and input from some highly successful entrepreneurs.” The Canadian immigration consultant says her most important piece of advice for participants is to consider the points of view of different stakeholders.
“The hardest part for me was learning how to speak to an investor as opposed to a client,” she says. “Innovation is a key factor in a successful venture and in this competition. It’s important to be open to change, and to develop a thick skin while staying true to your vision and business model. Exposure is the most important thing you can do for yourself and your company both before and after the event.”
After the competition, Stride-360 successfully applied for a grant of NT$1.8 million (US$63,230) from the Taipei City government to further develop its multiuse exercise equipment. “Dragons’ Chamber certainly helped us refine our message,” says company founder Joseph Prosnitz. “It was an opportunity to practice pitching and get advice from some awesome people.”
Jonathan Burke’s Arming Guild, a designer and vendor of equipment for historical fencing, placed second in the 2018 Chamber. It has since attracted a €50,000 investment from Fil Rouge Capital, a Croatia-based venture capital firm.
Burke, an Australian, describes his Dragons’ Chamber experience as “highly satisfactory… the panelists provided excellent guidance.” The process taught him what potential investors look for. “As an inventor and entrepreneur, I had a vision for my product and what I wanted it to achieve in its market, but there’s a huge difference between communicating with your target market and communicating with an investor,” he says.
Burke says that without Dragons’ Chamber, his business is unlikely to have reached its current stage. “The information and guidance they provided was so far beyond my personal knowledge and experience that I wouldn’t have even known to look for it, or where to find it,” he says. “It’s no exaggeration to say that my company’s entire success has been founded on my experiences in the Dragons’ Chamber process.”
KP Kitchen, a startup specializing in DIY baked goods mixes, did not win any prizes at the 2017 event, yet co-founder Karen Farley says she wholeheartedly encourages startups to take part in Dragons’ Chamber. “Entrepreneurs receive significant support in developing their pitches to focus on the core of what their business is and where they plan to take it,” she recalls. “This was really valuable to us, as it was the first time in two years that we’d examined our business so thoroughly. We made some key changes to how we operated and had a much clearer plan for expanding into other product areas and markets.”
Farley cautions those thinking of applying for Dragons’ Chamber that it is a significant commitment. “A few tears along the way are possible, but for us it was well worth the time and energy,” she says. “We benefited from invaluable advice, shared our vision with the business community, and made some key contacts. However, participation didn’t directly result in new business or investment.”
Since ceasing operations and returning to her native Canada in mid-2020, Farley has continued to mentor Taiwan-based foreign entrepreneurs in their own journeys. What these individuals really need is cash so they can put their plans into action, she says, even going so far as to suggest that the government consider offering financial support to all Dragons’ Chamber finalists.
“These investments wouldn’t just support participating businesses – they’d also go a long way in demonstrating that Taiwan is a startup destination open to foreign entrepreneurs.”