We have researched in past editions how you can break into the New York City tech startup scene or Vancouver’s.
We’re now turning our eyes on Asia, in one of the Dragons.
South Korea, a developing country not so long ago, is at the forefront of all technological innovations, from electronics, manufacturing, computing, video games, as well as general pop culture.
Chaebols, Korea’s global conglomerates, symbolize this success, with Samsung, Huyndai or LG built to generate hundreds of trillions of wons. What about tech startups? Is the idea of gathering a small team of engineers to work on a world-class product a folly in South Korea? We’re talking to Nathan Millard (@Nathan_Mill), global director of beSUCCESS and beLAUNCH to investigate.
Editor’s note : thanks to Peter Davison who’ve helped make this project happen.
NewTech (@heri) : Hi Nathan. Can you present yourself? What motivates a British person to settle in Korea?
Nathan Millard : I arrived in 2003, fresh out of college and wanting to see Asia. I taught English in Korea for a couple of years before heading back to do a masters in London. To cut a long story short I then eventually made my way back to Korea, via China. In between I had also started a recruiting business with a friend (failed within 6 months), and turned my father’s fledgling Yurt Company around into a profitable, sustainable and stable business (that was my first brush with entrepreneurship)
Back in Korea I met an old friend who had just set up beSUCCESS. A few months later I joined.
Our ambition is to help Korean startups go global. There’s some cool tech and great guys here, but many really have no idea how to go global, and also lack the networks and global perspective that someone like me can bring.
Another reason I’m in Korea is because of my lovely Korean wife :)
NewTech : You are directing multiple initiatives. Can you tell us what each one does, and what’s the ultimate ambition?
Nathan Millard : On the media side, we run a tech startup blog in English (betech.asia) and Korean (besuccess.com). The Korean blog inspires and educates Korean startups and shares global startup news with Koreans. The English blog tells the rest of the world what’s hapennning in Korean entrepreneurship.
We also run two annual events: beLAUNCH in Seoul and beGLOBAL in Silicon Valley. beLAUNCH is Korea’s biggest festival of tech entrepreneurship. beGLOBAL aims to connect startups and investors from East and West in the heartland of global tech.
As stated, my global networks (VCs, Accelerators, Media, Startups) are proving very useful for Korean startups looking to expand overseas (this article is an example of that).
NewTech : Korea is seen as a major player in technology, but mainly because of the large multinationals such as Samsung or LG. What’s the place for pure web & mobile startups? How do they fit?
Simple answer: Until very recently the Korean economy had no place for the little guy, but that is changing.
Samsung commands somewhere between 20% - 30% of Korean GDP - that’s a dangerous situation. Startups can have a major impact on the stability of the economy going forward and the government is pushing this.
chebols are still very uncertain about how / if they should engage with startups and the way in which they work is totally focused towards big business competition rather than collaboration, but they are learning.
10 years from now the Korean economy will either be much more balanced, it simply has to be or will die as quickly as is rose.
NewTech : What are the top startups in Korea? and what makes them so hot?
Coupang: 4 years old. Achieved a $1Bn valuation and $100M cash injection from Sequoia. That’s HOT! They are the Amazon of Korea and it’s exciting to consider their next move. Will they tackle overseas markets?
Memebox: First startup from Korea to go through Y Combinator. CEO is on fire and runs a very tight / successful ship. US is their first market outside Korea and rumour has it they are on course to bill $100Min revenue in their first 12 months overseas. They are beauty subscription commerce.
VCNC: Now up to around 7M downloads and 6M users in around 3 yeaars. Gaining good traction outside Korea, with offices in Japan, Singapore, Thailand. Raised around $4M and continue to impress. Not out of the woods yet and need to monetize better, but certainly one to watch. They are the biggest social network for couples in the world.
Kairos Watches have made $1M in pre-sales of their hybrid analogue-smart watch, simply through their website (IE they have not croudsourced). Very sexy design coupled with superb performance. Created by crack team of engineers, watch makers and business people. Parts come from Switzerland, Japan, China, USA, Korea - certianly one to watch.
Cloudike: Cloud storage tht can actually turn a profit. Drop box and the like are really struggling to monetize. Cloudike goes straight for MSPs and OEMs, rather than end users, with their white label cloud storage solution. They have raised funding and have signed up several global clients, including Russia’s second largest MSP and turkey’s largest OEM. They are leaving Drop Box to struggle in the west, while they take over developing markets. The team developed this service in LG Electronics and spun-off when internal funding was cut. They are on the verge of great success.
Kakao: Not really a startup anymore and was founded with $100M of private finance, but still a good Korea tech story: 0 - 150M users in around 5 years.
NewTech : For tech entrepreneurs settling in Korea, what do you recommend new tech entrepreneurs in terms of events and resources?
Events in Seoul for startups: beLAUNCH (annual), Seoul Tech Society (monthly), Drink entrepreneurs (monthly), Startup Grind (monthly), First Thursdays (monthly), Go Venture Forum (monthy, only Korean), G-Star (annual, gaming), Business Network Korea (1 every 2 months)
Resources: betech.asia, Nathan Millard, D Camp (open co-working space), Maru 180 (open co-working space), Seoul Global Centre, BusinessKorea.com
NewTech : Thanks. More specifically, let’s say I have a profitable startup in North America and want to open an office in Korea to get more business. What do you recommend?
I think I covered a lot of this in my previous answers. To add though, Korea is a market with a lot of potential. There are seven, billion dollar tech companies that have emerged from Korea in the last 10 years. All have built their revenue almost entirely around monetizing their home nation. This clearly demonstrates that tech companies can do well. However, those 7 companies have all struggled outside Korea. And similarly, overseas companies often struggle to do well here. You need to really understand Korea’s unique characteristics, like the fact that Google (around 15% market share) comes third place in online search, after local players Naver and Daum.
Similarly Samsung and LG utterly dominate the smartphone market, squeezing Apple to a distant 15% market share. Koreans are very tech-savvy and expect excellent service. If you don’t deliver that, you will lose. Facebook, twitter, Linkedin, Foursquare, etc, etc all have a reasonable presence in Korea now, but it’s taken years of hard work and none are clearly dominant (for example, Kakao Talk’s ‘kakao Story’ is still much bigger than facebook).
NewTech : Insightful. There are other cases of young newcomers in Korea, who want to bootstrap a tech startup in Korea, starting with little to no funding. How would you recommend to start out? Are there any structures that would support ?
Starting a company in your own country is tough, starting it in a foreign country will be tougher. Korea is beginning to embrace entrepreneurship, but there are many hurdles to overcome, and while the government is pouring money into Korean startups, there isn’t a huge pool of cash for foreigner-owned businesses. Additionally, it would be tough to raise capital from Korean VCs as a foreigner without a strong track record.
There are a number of support services for foreign entrepreneurs, and one of the best is social communities. Get connected to other foreigners here and you will quickly learn what’s on offer.
NewTech : Thanks Nathan! For those interested in Korean startups, beGlobal 2014 is a Global Tech conference organized by the team behind Korea’s top startup conference (beLaunch). The US Version will connect entrepreneurs and investors from East & West to discuss global tech themes and highlight opportunities for crosss-border business.
Date : Friday Sep 12, 2014
Venue : InterContinental Mark Hopkins Hotel in Nob Hill SF
30% off tickets for MTL NewTech members