#startupstep2

by David Currie

October 16, 2014

Entrepreneurs from Korea have often lacked the success of their American counterparts, but that could change very quickly. The nation is filled with what Jay Eum, co-founder and managing director of TransLink Capital, called “the most tenacious people.” He argued that conditions are set for startups to quickly prosper, both domestically and abroad.

Joining Mr. Eum at the 15th  Annual World Knowledge Forum in Seoul, Korea, were Jason Portnoy, founding partner of Subtraction Capital, and Dave McClure, founding partner of 500 Startups. The group discussed how entrepreneurs can succeed globally and in the Korean market.

The panel discussed how government regulations and culture have had a damaging effect on the entrepreneurial spirit in Korea.

“Bankruptcy laws made it harder [for entrepreneurs] to take risks,” Mr. Portnoy noted. “There needs to be more tolerance for failure.”

Mr. McClure agreed that the competitiveness of Korean culture is working against them.

“It is hard for Koreans to make mistakes knowing that others are always watching them. They are worried about taking risks and failing,” he said.

But the nature of competition within Korea is not without its benefits. The competitiveness in the education system has enabled many young Koreans to speak English fluently.

“This skill is necessary for an entrepreneur when going global,” mentioned Mr. Eum.

While the spirit of entrepreneurship may be lacking, the spirit of feeding off the success of others is alive and well.

“If they can do it, why not me?” said Mr. Portnoy, attempting to illustrate the attitude of Korean entrepreneurs. But he offered caution to this, saying that some startups fail because they cannot all achieve the same results.

“Trying to copy others and do the same is a massive waste of time,” he added.

While this theme of replicating others leaves something to be desired, Korea has quickly become a market that is tech-savvy and educated.

“If you build a company or product that can be quickly adopted by this country, you could grow very quickly,” Mr. Eum pointed out.

Mr. Eum also emphasized the necessity for understanding one’s own domestic market before moving abroad.

“If you can’t win in your home market, there is no chance you will win abroad. Once you dominate Korean domestically, you can come out to the rest of the world and win,” he explained.

The panelists made it clear that achieving this success is no easy task, but rather a long and difficult journey that few survive. Mr. McClure and Mr. Eum agreed that it is necessary for a business to understand the needs of the market, and knowing how to best fill those needs will result in a successful venture.

“The best way to do this is to make a small amount of progress, consistently,” Mr. Portnoy reasoned. Contributing to this, Mr. Eum said there is a need to focus on one’s own venture and not be distracted by competition.

“Without doing this, your venture will not be a success,” said Mr. Eum.

Speaking from experience, Mr. Eum clarified that venture capitalists focus much more on a company’s strategy than their finances and other operations.

“Venture capitalists look to fill gaps in their technology and product road maps and find companies that they can work with to get into new business areas that they are moving into,” he said.

Korean startups have been dramatically unsuccessful in the United States compared to neighboring countries in Southeast Asia. They should build off of the success of past Korean companies that have entered these Asian markets, as they will be much more successful, Mr. Eum asserted. It is after this point of expansion that entrepreneurs should look to the United States for further growth opportunities.