Thomas Tol is the President of EyE-Q Asia Ltd. EyE-Q Asia is involved in the design and development of complete machines for the gaming and amusement industries. They specialize in the creation of cabinets, as well as electronic hardware and software. EyeE-Q Asia can provide both their own designs and customer-specific designs.
Company’s greatest business achievement: “Our customer base is our greatest achievement. Our customers are all in the large to very large category.”
On the book ‘Starting a Business in Taiwan’: “If I had to start again in Taiwan and this book existed, there would be no hesitation in my mind that I would study the book carefully and entirely to gain the knowledge needed to avoid any losses in time and money.”
On doing business in Taiwan: “When you have gained the knowledge and are used to the business environment, Taiwan is one of the world’s best countries to do business. People can be trusted and the quality levels are going up and up, so Taiwan is now ready for markets like Japan and Germany even though these countries require top quality products only.”
Thomas is in a rather unorthodox business. Nominally, he’s been a designer, manufacturer, and import-exporter. But the subject of his various business interests is rather interesting: gambling machines and parts (known as ‘slot machines’, or in Australia, simply referred to as ‘the pokies’).
Thomas’ Advice:
Thomas provides the following advice to budding foreign entrepreneurs in Taiwan:
1. Thoroughly research the legal system, laws, and regulations.
2. Do market research: make sure that the major components of your product can be sourced locally. (Finding materials from other places, even Asian countries like Korea, can be time-consuming, expensive and inefficient.)
3. Regarding the staff: the one who coordinates everything should be “your brother.” In other words, it should be someone who can read your mind! (Thomas comments that Taiwanese people may understand what you say, but they don’t necessarily understand what you want!)
4. Realize that the legal structures of corporations in Taiwan differ immensely from those in the U.S. or Europe. For example, the concept of CEO/President is nothing like the concept of “Fu Ze Ren負責人” in Taiwan.
5. Regarding exporting and importing, it is extremely useful to know the text codes related to your line of business. It would save you so much time and trouble if you read the governmental manual beforehand. In other words, be prepared!
Directorate General of Customs has a comprehensive text codes here. (CCC codes and description of goods)
6. In Europe, a handshake is more important than a piece of paper, ie. The written agreement / the contract. In the USA, it is all about the written agreement / the contract. Having spent time in the USA, Thomas came to Taiwan with the USA mindset. But this mindset doesn’t work in Taiwan. In Taiwan, you only do business with friends. The relationships tend to be completely open book. Thomas advises budding entrepreneurs to find out as much as possible about their suppliers / consumers, and to develop friendships.
7. Do not make the mistake of pushing the price down at the expense of quality. This is a problem in Taiwan as everybody is looking for an absolute bargain. But most Taiwanese fail to realize that whatever the price bracket, there will be a customer.
8. In Europe, Japan, and the USA, quality is important. People pay attention to details. This may not be the case in Taiwan. Hence, ensure that you ‘train’ your employees to pay attention to the details; in particular, the quality of the products.
Thomas’ Story:
Originally from the Netherlands, Thomas came to Taiwan in 1988, hoping to find a place to retire in Asia. Before he came to Taiwan, he had been in the gaming industry for years. After arriving in Taiwan, he was introduced to a troubled businessman who had a large number of gaming machines and parts on hand, but was unable to sell them in Taiwan. A law had just passed making gaming illegal in Taiwan. Thomas agreed to provide consulting services. He successfully sold ALL the equipment to European buyers within a short period of time. Later, Thomas teamed up with the Taiwanese businessman to design and manufacture more gaming machines. They sold the products in the USA, Europe, and Australia.
Thomas’ next foray into the gaming industry in Taiwan was when a Taiwanese businessman contacted to develop touch-screen gaming machines targeting the Asian market. The Q&A program used machines was to be translated into 13 different Asian languages, including Mandarin, Japanese, and Korean. Unfortunately, the Q&A program was incompatible with the machines. This problem proved insurmountable. Adding insult to injury, Thomas was sued by his Taiwanese partner. Thus began Thomas’ next ten years in court. Thomas’ Taiwanese partner continued to file lawsuits against Thomas and his wife, who served as a supervisor during their partnership. According to Thomas, a plaintiff in the Taiwanese legal system does not need to provide evidence to convict the defendant; rather, the defendant has to prove that he or she is innocent. The process was long and expensive, but Thomas and his lawyer managed to win every single suit until the high court finally rules that the Taiwanese partner was not to file any further law suits on the matter. Thomas said, “He told me he was going to sue me until I broke. He did keep his promise. But the outcome was quite the opposite.”
Soon after that, two businessmen found him and expressed their interest to work with him on inventing new gaming products. After six months of severe sleep deprivation, they came up with six new products and presented them at a gaming trade show in Taiwan. Their products received great feedback, and the team received the most innovative product award. It was not until then that one of the business partners threatened the other two to back off and drop their shares in the business deal or else he would harm their families. To their astonishment, it turned out that the man was a mafia boss! Having no choice but to walk out on his investment, the other business partner persuaded Thomas that they team up and develop their own products. Making sure that he had 100% ownership, Thomas and his partner worked together and came up with four new products, and the products were also very successful.
When it comes to gambling and gaming industry, you might think of opulent casinos. But Thomas didn’t do businesses with casinos. He had always been in the “street business,” selling his gaming machines to bars, amusement stores, and the like. Yet for the last three to four years the gaming industry encountered its biggest and most dreadful slump, and the street market almost died. With deteriorating economic condition, European countries imposed regulations limiting the amount of money a player can lose per hour. To deal with the downfall, Thomas sent people out to observe players to gain more insight into their preferences and their gaming habits. They concluded that the players like to make decisions. And of course, most players want to win. However, “addicted” players enjoy the adrenaline rush from losing. In addition, they found that the young generation is computer-savvy. With this data in mind, Thomas came up with a new machine and a new online poker game. It was highly-welcomed by the industry, including the big players in Macau. Thomas’ intention is that soon they will be holding bar-to-bar / casino-to-casino, city-to-city, and eventually, international competitions. Thomas’ new enterprise has only two employees: his wife and himself. Thomas is responsible for designing, marketing and selling the product, whilst his joint-venture partner company is responsible for manufacturing the product.
Thomas and Taiwanese Banks:
Thomas related an interesting story about how he and his wife were distrusted when they tried to open bank accounts in a local bank. “How is it possible that a two-people enterprise can create such disproportionate and astonishing revenues? And we were in the gaming industry! The bank must have thought that we were laundering money!” said Thomas jokingly. But now that Thomas has proven to be a client with credibility, he is greeted with smiles and tea whenever he walks into the bank.
Teaching the Taiwanese:
What makes him “strong” and irreplaceable in Taiwan, according to Thomas himself, is that he teaches. He has served as a consultant in varies business relationships and companies, and through his experiences, has developed a particular strategy to tackle the business environment in Taiwan and his Taiwanese business partners. Firstly, “if you make Chinese people feel good about themselves they’ll do whatever it takes to deliver a nicely finished product that can even exceed your expectation.” And he continued, “If you complain, ‘oh this is wrong’ or ‘why do you make that,’ Taiwanese people get discouraged, irritated, and annoyed, making it hard and unpleasant for future transactions.” Positive guidance and positive feedback is important. Thomas compliments Taiwanese workers for being good people and great designers, but he has the impression that they often “over think”. Hence, he stresses his role as a supervisor who needs to constantly remind his workers and communicate with them in order to produce the product that he desires.
Moreover, Thomas pointed out two disastrous tendencies in Taiwan’s business environment: (1) A tendency to reduce the price of a product under any circumstances at any costs; and, (2) A tendency to disregard or undervalue the importance of the quality of a product; both of which are deeply-rooted beliefs that Thomas has to fight against every single day. He continually reminds his business partners and staff that a product has to be reasonably priced, and that quality counts more than anything else. To elaborate, he explains that when the size of a market is fixed, and that one can’t possibly make the profit margin wider by lowering the price. Squeezing the price does not necessarily contribute to more profits. It in fact may create negative feedback that is bad for the business. Additionally, as mentioned above, many occasions Taiwanese employees may not pay great attention to the quality of a product. Thomas said that at the office of his manufacturer, there is a “Wall of What Cannot be Accepted”. That is, a list of all the conditions under which the product is of sufficient quality to be shipped abroad. Even with the aid of the Wall, he still finds that a significant quantity of the manufactured item not of sufficient quality to be shipped to the customer. He has repeated zealously that these are the attitudes that one has to overcome if one runs a business in Taiwan.
Website: www.eyeqasia.com.tw