The South Korean economy is Asia’s 4th largest and the world’s 11th largest. With global brands like Samsung, Hyundai and LG, and IT companies like Naver and Kakao, Korea appears to be a start-up paradise. But what are some of the challenges it is facing; and what can Serbian start-ups learn from Korea?
Jungwook Lim is the face of Korean start-ups. As the managing director of Startup Alliance Korea and a member of the Korean President’s Board for the 4th Industrial Revolution, he works every day to brings entrepreneurs, media companies, major corporations, governments and other stakeholders together to foster a better ecosystem for the innovative companies of tomorrow.
Fluent in Korean, English and Japanese, he helps Korean start-ups grow and go global, bringing to the table his perspective of Silicon Valley and the Japanese IT industry, along with his extensive network in the global start-up scene.
How important is it to have good communication and cooperation between different stakeholders in order to foster a good start-up ecosystem? How does Startup Alliance Korea do that?
– I actually don’t think everybody understands how start-ups work and what it takes to grow good start-ups. Most of the time, reporters don’t really understand how start-ups work, and neither do government officials, big corporations and so on…But if you go to Silicon Valley, everybody knows how start-ups work. The ecosystem is actually optimised there, so everybody shares knowledge and experiences.
I think it is essential to provide opportunity and interconnect everyone, and that is what we do at Startup Alliance Korea. By organising so many events and meetups to let people connect to each other, we are trying to connect entrepreneurs and start-ups with media, big corporations and the government…So, basically, we’re trying to be a bridge with the start-up world.
Helping start-ups grow and go global by connecting people and building up the start-up ecosystem must be an exciting job. What are your favourite aspects of your work, and what would you note among the challenging parts?
– I think the most interesting part is that I’m always surrounded by really passionate people who want to change the world, who are willing to try and learn something new and who always want to connect and share ideas. In this way, I always grow and have the opportunity to learn and meet new people, as well as sharing with others the things I learn. That is what I’m really excited about.
When it comes to challenges, there are still so many people out there who are not very interested in start-ups; who think it’s just a bunch of people who want to raise a lot of money and just spend it with the low motto, so they misunderstood what’s actually going on. I’m trying to change this perception of start-ups, and sometimes it can be a bit challenging to change people.
You have worked and gained vast expertise in both the Silicon Valley IT industry and in Korea. What are some of the main differences and similarities between the start-up ecosystems of Korea and Silicon Valley?
– Silicon Valley is a place that is really optimised for developing innovative small companies into big companies. Similarities with Korea are that there are a lot of tech-savvy people here as well, and we also have very good IT companies, like Samsung, Naver and Kakao, and many good gaming companies.
On the surface, it seems that Korea has a really good start-up ecosystem, just like Silicon Valley, but if you go deeper, Silicon Valley has much deeper ecosystems with all stakeholders – like investors, media, schools, lawyers, accountants etc. – knowing how to support entrepreneurs and start-ups, so that’s really different.
The influence and the existence of the government is a lot stronger in Korea than in Silicon Valley, where you’re almost unable to feel the government, everything is private, kind of grassroots, and there is also less bureaucracy.
As you’ve mentioned, Korea is home to global brands like Samsung, Hyundai, LG and Posco. What’s the relationship like between these global companies and new start-ups? Is it more competitive or is there room for collaboration, with everyone having something to gain and learn from each other?
– A lot of Korean people actually blame big companies for being family-controlled and greedy, as well as for playing unfairly towards smaller companies. The government has been pushing the big companies to do something about this, and they launched Centres for Creative Economy and Innovation hand in hand with the government, in order to help start-ups. However, this was at a superficial level.
The attitude has changed in the last two years, and now major companies are becoming more serious about working with startups. This is important because the world is changing so fast and Korean companies have to compete with other global companies.
For example, Samsung has to compete with Apple, and that’s why they’re serious about innovation and making investments. They have their own innovation centre, with offices around the world investing in start-ups, and they made their own creative labs programme within the company…They are a huge company, so they didn’t like “some small ideas”, but their attitude is changing and they now encourage their employees who have ideas to incubate them within the company, form a team, work on their idea for around a year, then spin-off and go independent, with Samsung making a small investment and keeping less than 30% of shares in the company.
LG is doing something similar, while Hyundai Motors are increasing their venture investments as well. I think that’s quite a change and I hope we will see more of that.
Samsung is a huge company, so they didn’t like “some small ideas”, but their attitude is changing and they now encourage their employees who have ideas to incubate them within the company…LG is doing something similar, while Hyundai Motors are increasing their venture investments as well
Start-up campuses are also on the rise in Korea. One of them is Maru 180, a six-storey building where entrepreneurs can interact, exchange knowledge and experience, as well as accessing mentors, accelerators and investors. What are some of the main advantages of having this kind of infrastructure?
– I think it’s very important. Maru 180 was started by the Hyundai Foundation. The daughter of Hyundai’s founder visited Google Campus London about five years ago and noticed that it works as a hub for Tech City London, where they have events and startups, and where investors stay under the same roof. There are now several such start-up centres in Korea, and this helps people meet each other very often.
At Maru 180 there are three or four well-known early-stage VC investors, and they bring companies for their portfolio into the building. There’s also a big event venue there, with lots of events happening and bringing people together…The existence of these centres is very important. I think there are similar places in Serbia as well, but there’s a difference in scale.
The future is definitely bright for start-ups and innovative companies, but it is also challenging – with start-ups having to navigate a rapidly and radically changing environment. What are some of the ways that start-ups can be future-proofed and start-up communities can be made more resilient?
– The rapidly changing landscape, challenges, fierce competition and so on are the destiny of start-ups. They are taking great risks and don’t know what’s going to happen even after the investments.
It is very important to have some guts, to endure and never give up, to work hard, listen to the people and the feedback, improve the product over time, have constantly good relations with investors, hit the milestones and receive the next funding.
Understanding the formula for growth and having a good, sustainable relationship with investors and customers is essential to the survival of start-ups.
If you had to choose only one or two pieces of advice for building a successful start-up ecosystem, what would be your main advice for start-up founders in Serbia; and what would you advise the government?
– There is no single solution, but it’s a mutual effort. It seems that the Serbian government doesn’t know that much about start-ups. I don’t think money solves everything – it’s just a starting point. There’s a whole art to growing start-ups. You need to see all the aspects of an ecosystem and try to make it more independent from the government, try not to make too many regulations and laws that can actually limit start-up growth.
Serbia also needs to be more connected with the world. I check TechMeme.com every day, and when I searched for Serbia I couldn’t find anything. Serbia is still almost invisible to the outside startup world. You have to let the world know about you, to become famous in a way, and then the talent will follow.
Serbia also needs to be more connected with the world. I check TechMeme.com every day, and when I searched for Serbia I couldn’t find anything. Serbia is still almost invisible to the outside start-up world
My impression is that there is a lot of talent for outsourcing, but they aren’t actually solving some problem or having a product, they are just earning their salary. I believe there are people who are really passionate about something and have ideas that they want to build upon, but they need to secure some money to start.
It is also important to go global for bigger markets. Ideas are the same everywhere – I saw similar start-ups in Singapore, the U.S., Europe, everywhere…For example, you could have a start-up in Korea worth two to three million dollars, while some similar start-up in China that does almost the same thing and was launched at a similar time could be worth 100 to 200 million dollars, because they are targeting a bigger market, are more ambitious and received more funding.
Could you mention some of the Korean start-ups whose progress we should monitor in 2018?
– There are quite a few. HyperConnect, which provides a video-chatting app, is popular in the Middle East, where it is growing like crazy, with revenues of around 200 million dollars, while in Korea almost nobody knows about it.
There is also an interesting education tech company providing learning platforms specifically for Korean people because we are obsessed with passing some government exams and specific tests. Like with Netflix, you pay a flat fee every month, for example, ten or twelve dollars, and have unlimited access to different classes. They are now doing English classes as well, expanding to other areas of learning and making good money. They have around 1,200 employees and even acquired a U.S. company, to try to replicate this success there as well.
There are also some interesting FinTech companies. For instance, Toss, which is a money transfer app that lets you send money using your phone number. They have about 10 or 11 million downloads in Korea, with several million active daily users, and this is why they are also able to cross-sell money loan programs and even sell Bitcoin on their platform. It is also interesting that there are a lot of banks and financial institutions partnering with Toss.
Moving forward, a challenge for Korean start-ups is going global, but in order to go really global, they need to get larger investments exceeding 100 million dollars. This is hard due to the limitations of the Korean market, so they need to be more exposed to foreign investors in Japan, Singapore, Hong Kong and so on.