Flytech Technology began investing in the StarFab startup accelerator in 2019. The company has two main goals when investing in startups. First, remembering how much societal support Flytech received over the last 40 years, they hope to give back by helping and mentoring startups. Additionally, through the process of investing in startups, Flytech also hopes to introduce new ideas to employees and foster more innovative thinking within the company.
Thanks to the assistance of the experienced professional accelerator team at StarFab, Flytech has engaged with more than 60 startups in the past two years.
Gaining a better understanding of startup needs
Startups in Taiwan have good technical capabilities but lack business strategies and marketing capabilities. Startups need more mature business strategies to help them avoid a "try everything" approach that does not take into account their limited resources and results in nothing getting done well.
Flytech often holds small meetings when working with startups, inviting startup team leaders to discuss their ideas. During these meetings, Flytech's chairman, general manager and management team offer opinions from different perspectives to help startup teams build more focused and mature business models and philosophies.
Marketing is critical to a startup's fundraising ability. While a startup may not be lacking the funds to make samples in their early stages, mass production requires a significant amount of funds. If there is no clear market, raising funds will be difficult. Flytech can bring startups into its existing operating framework and bring them closer to the market, which can help with future fundraising.
Flytech has completed its investment in one startup, is in talks with another, and is working with another five or six.
Flytech also hopes that investing in and working with startups will introduce its employees to new ideas and help them better connect with customers. Flytech wants to talk about more than their hardware structure; they want to better understand the needs of the market. As such, the value of startups on Flytech's future transformation has been made more apparent as a result of their frequent collaboration.
Flytech determined to engage in non-hardware business
Over the last 37 years, Flytech has profited from the industry's golden era and has been engaged in the design and manufacture of hardware. However, the state of the global economy and industry development is rapidly changing.
To cope with increasing competition in the point of sales (POS) industry, Flytech is planning to transform its business. Flytech will expand from traditional POS to other product lines. Among them, non-POS products will reshape POS business opportunities, while non-PC products will expand into non-traditional PC applications, such as vehicle control and battery control. The purpose of these strategic adjustments is to help Flytech enter its next stage as a non-hardware products business, which includes software and platform services.
As all hardware sellers are dealing with the recent raw materials and container shortages, the emergence of these problems has strengthened Flytech's determination to move forward and expand into the non-hardware product business.
Flytech has developed its own management platform called inefi, as well as reinvested in smart application software developed by AI company Berry AI. These moves put Flytech squarely into the non-hardware business. The inefi platform helps customers remotely monitor POS operations and reduces the costs associated with sending workers out for maintenance. The Berry AI software uses security cameras and image recognition to help quick-service restaurants (QSR) improve service quality by providing information on customer orders, wait times and requests.
Both the inefi platform and Berry AI software can be extended to other applications. They also add an additional layer of service to customers and provide them with more comprehensive solutions. These products have created many new field application solutions that go far beyond the original business abilities of Flytech. With assistance from startups, Flytech will be able to provide customers with more complete solutions and expand their overall operational value.
Expanding application fields leads to more startup cooperation
Overseas markets feel out of reach for startups in Taiwan. Flytech invites suitable startups to enter the application fields developed during its transformation process. This allows Flytech to provide customers with more complete services, while also helping startups get closer to markets. Startups do not need to re-explore market and customer relationships when working with Flytech, which saves startups a lot of time during the last stretch when entering the market.
Since the original vertical market integration software services offered by Flytech were expanded to other application fields during the transformation process, the company moved toward the stage of high integration of software and hardware in 2021.
Flytech has already sold more than 1 million POS systems globally. They estimate that 30-40% of customers can be persuaded to use the inefi platform, which will help them verify the platform. In the future, Flytech will continue to develop compatible hardware and platform functions, as well as continue to improve the visibility of the platform.
Flytech looks for win-wins with startups
The goal of venture capital (VC) investment in startups is to make a profit, but for Flytech, working with and investing in startups is a process. The goal is to help startups find partnerships and business models that can be replicated and expanded, creating a win-win for both parties. Flytech also hopes that working with startups will open up Flytech to new ideas and help them better understand end-user requirements. Flytech is inspired when its talks to startups, which also inspires them to make changes to its internal organizational structure.
Flytech's strategic matrix is no longer only about hardware sales but about being a total solution provider to fulfill all customer requirements. When selecting startups to work with, one thing Flytech considers is how the startup can help them and whether or not they can fill a gap in the matrix. Flytech also considers how it can help the startup. If there is a business opportunity Flytech has not thought of but a startup has, Flytech hopes to work on it with the startup on their platform. Ultimately, for Flytech, the true key to success is integrating resources so that both parties can benefit.
Flytech chairman Thomas Lam (center), president Jerry Shyu (left) and president CH Chuo (right)
Photo: DIGITIMES
(Editor's note: Readers can download "2021 Taiwan Startup Ecosystem Survey" jointly conducted by PwC Taiwan, TIER and DIGITIMES: https://www.pwc.tw/en/publications/taiwan-startup-ecosystem-survey.html)
