A strange pattern we noticed in how traditional Taiwanese founders invests
I was talking to a friend recently about something we both noticed: a lot of traditional business owners in Taiwan, like people who run companies in textiles, cement, food, and so on, are surprisingly active investors. But here’s the strange part: they tend to invest in companies outside their industries, and often outside Taiwan altogether. For some reason, Japan and Canada seem to be common destinations.
That feels irrational. In Silicon Valley, the prevailing logic is the opposite: invest in what you know. If you're in a sector, back the next generation of companies in that space. You can help them grow, plug them into your network, maybe even acquire them down the road. That kind of vertical integration is often a win-win.
But if we zoom out and consider the nature of the industries involved. Most of these Taiwanese founders come from traditional manufacturing sectors, where supply chains are fragile and built on long-standing relationships and trust. Unlike software, there’s no standard playbook for integration. Every factory has its own machinery, logistics quirks, and embedded ways of working. In that kind of environment, investing in a “peer” isn’t a strategic partnership, it’s helping a future competitor. Worse, there’s often no easy way to build synergy.
Strategy isn’t something you can copy-paste. The stuff that works in Silicon Valley works there for a reason. The same moves can fall flat elsewhere. This kind of misalignment isn’t limited to private investment decisions. Governments fall into the same trap. Look at Japan’s Rapidus project, a state-backed effort to build 2nm semiconductor fabs to compete with TSMC. On paper, the ambition looks great. In practice, it ignores the context that made TSMC possible in the first place: decades of public-private alignment, deep local talent pools, a supplier ecosystem that took years to build, and a culture of high-trust collaboration across companies. You just can’t just throw money at a complex, interdependent system and expect the same result. Context matters. Environment matters. History matters.
We often talk about talent, capital, and timing. But “environment” quietly shapes what’s possible. Some places are just better suited for certain kinds of bets. And understanding that might be the most underrated edge there is.
