Wallace's theory of evolution is remarkably similar to Darwin's. Perhaps this is because it was formulated in the same sort of way: observing the variations of species on adjacent islands. Wallace even visited the Galapagos as well, and took notice of the finches as Darwin did. The bulk of his work, though, was done in the Malay Archipelago, a group of islands in Southeast Asia that includes Singapore, Lombok, Borneo, and Bali, among many others. He spent eight years there collecting bug specimens, and it wasn't easy work, either. The locals were unfriendly and liked to steal his alcoholic preserving solution, arrack. Perilous tiger traps were everywhere, as were tigers themselves.
Wallace was intrigued by the variations between local butterfly species, which varied slightly between islands. It was during his time on Boreo that he formulated his Sarawak Theory: that species were all related like branches on a tree, and that new species arose from old species. This was inspired both by his time in the Malay islands and by the finches in the Galapagos. Wallace had noticed the force of dispersion for some time beforehand, or the fact that species can only "disperse" over so large an area; eventually they're blocked by rivers or mountains or oceans, and a different species occupies the other side. Basically, Wallace had figured out the phylogenetic tree of life all on his own. .
Following the release of his Sarawak Theory, which went largely under recognized, Wallace was especially struck by the fact that though Bali was quite close to where he was previously studying, Lombok, all of the species, even birds, were completely different. He was completely perplexed as to why this would be, and wondered if maybe there was some sort of invisible divider. This was when he discovered what is now known as the "Wallace Line," which divides Archipelago. On either side, species are completely unlike those on the other.