South Korea’s startup culture has been gaining more attention as of late. According to Korea’s Small and Medium Business Administration, the number of startups in the country soared to roughly 30,000 as of January this year, up from a mere 2,000 some 16 years ago. And among that group, 63 have risen to No. 1 in terms of market share in their respective industries.
But in spite of that growth and the government’s ongoing support for building a “creative economy,” one that favors and encourages young entrepreneurship, Korea’s startup culture is not as advantageous or conducive as it might seem. While many have the impression the country’s startup landscape is teeming with opportunity, there are some who remain skeptical of its true offerings.
One such entrepreneur is Jae Lee, founder and CEO of Movable Ads, a mobile advertising application that empowers sports fans from all over the world to engage and cheer on their favorite teams or players in real time. The company has offices in Texas and Seoul, and has already begun to expand into the European market with a another branch in Germany.
“The landscape is not as favorable for startups as many might think,” says Lee, who feels Korea still has a long way to go in educating entrepreneurs of the stark realities that come with starting one’s own business. “A true startup culture is a movement, something Korea is lacking.”
An MBA graduate with a degree in computer engineering, Jae spent years working at some of Korea’s largest conglomerates before venturing out on his own to pursue greater ambitions. The pairing of his technical expertise as a software engineer with his love of sports — something he attributes largely to his childhood spent growing up in Columbus, Ohio — seemed a logical fit.
The move proved no easy feat, though, bringing with it a great deal of resistance. But this was something Lee counted on, the need to fail and persevere if one wished to succeed.
“The startup mentality in Korea is applying the same principles as conglomerates, being plagued by fear and accepting failure when it comes, as it is simply par for the course for those passionate enough to follow what they really believe in,” notes Lee. “That drive is lacking in Korean startup culture nowadays — failure is inevitable in most cases. Korean often remain disillusioned, or take the easy route to avoid such calamity. This is just not the way to go.”
For all of Korea’s perceived development, the country still lags behind much of the developed world in terms of true startup success. Korean conglomerates have a tendency to focus on recruiting engineers with innovative ideas from either suppliers or rival companies, an approach that stifles ambition and curtails entrepreneurial spirit.
“If you’re not willing to go outside the parameters set by conglomerates, that safety net of success, there’s no point venturing out on your own,” Lee assures.
“Many young entrepreneurs seem to be jumping on the bandwagon, approaching the startup game for the wrong reasons, without any clear strategy in mind,” Lee notes. “If you’re not hungry enough, if you’re not ready to startup a new company, then it’s better to jump ship.”
President Park Geun-hye has vowed to cut through red tap and provide financial incentive for entrepreneurs, earmarking $92 billion to support small and mid-sized businesses, which also encompasses startups.
But getting startups off the ground is one thing, turning them into sustainable businesses is another. It seems only a matter of time before such inflated expectations burst, if entrepreneurs don’t keep at it for the right reasons.
Another obstacle for many entrepreneurs is the apparent lack of corporate culture that actively embraces M&A deals, which, in turn, rewards founders with attractive valuations. According to Go Young-ha, chairman of The Korean Business Angels Association, the government remains slow at harnessing the potential of younger entrepreneurs, many of whom are still under the spell of larger conglomerates that hold a monopoly on the country’s tech industries.
Naver, Korea’s most successful startup, and a beacon of inspiration for budding entrepreneurs, broke through the dotcom crash unscathed, and is set to open a startup accelerator this year in “Teheran Valley,” Seoul’s answer to Silicon Valley. The area will also house a government-led tech startup campus and the third Google campus in the world.
But in a country where career paths are mostly dictated by the honor of joining the ranks of the industry’s largest organizations that do little to leverage creative thought, it remains to be seen if free-thinking individuals will have the courage to pursue their dreams of running their own businesses. Early startups can be a risky investment, but the innovation that stems from their existence will be Korea’s true driver of growth, and define its economy for decades to come.
Gregory Curley is a freelance writer and founder of GBC Media Group, a global integrated marketing communications company based in South Korea.
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