Korea is a country traditionally tied up in confusion societal order with a fierce preservation of tradition and status quo. Yet with this backdrop for tradition, Korea has obtained the highest levels of Internet access and lighting speed connections with intent now to upgrade to an unprecedented next-generation 5G wireless service that will be able to download full-length movies in one second.
While the older generation listen to calming folk song and joyfully dance with arms flailing, the new generation quickly adapt to new and hip fashion, media and products. Of the 50 million population in Korea, more than 78% use smart phones. The smart phone usage rate for the age group of 18-24 is a staggering 97% rate. These early adopters look for the next 대박 (amazing!) items that particularly appeal to the younger generation.
A truly great entrepreneur needs the smarts, vision and unwavering determination plus a little luck to turn a dream into reality. Many passive observers view entrepreneurship as a sexy option now with Twitter’s IPO and a Facebook movie that hyped entrepreneurship as something the cool (geeky) kids do. But when you get down to it, building a company from the ground up requires huge amount of self-belief, determination and hard work to build a sustainable business, normally in a situation of perpetual uncertainty.
As an Angel investor, one of my biggest thrills in participating in the startup ecosystem is
meeting passionate, determined and innovation-driven founders. In fact, this influence led me to ponder why I was in a safe working environment instead of pushing to build my dream. Unfortunately in a recent survey, 80-90% of Korean parents, who heavily influence career path and provide bulk of the financial support for their children, disapprove of entrepreneurship for their children's career.
Story of One Entrepreneur
I recently had the chance to interview a startup, ScatterLab and Textat's CEO Kim JongYoun (JY), who is just beginning to pivot in a surprisingly mature and eye opening way. Textat is an analytical mobile application that aims to dissect and analyze communication from two of Asia’s top SNS platforms, KakaoTalk and Line. As a college student, young JY Kim was curious about how a particular girl felt about him and he believed that using data around his electronic (messaging) contact with her, he would be able to pick up signals in a more scientific way than through face-to-face communication. Starting from this simple premise, he worked on building an algorithm that analyzes user messaging data to better understand how the other party feels. The initial targets were shy and uncertain young teens who wanted to know if their potential sweetheart had mutual feelings of affection.
This pet project that started in a college dorm room started to pick up momentum. Almost by chance, the upstart team was able to attract a government grant at a time when the team was deciding if they should go the safe route and apply for parent pleasing but uncreative careers at one of the international Korean conglomerates, the chaebols. Spurred by the government’s financial support and with highly positive word of mouth spreading through SNS, Textat began building a following. That piqued many younger users into downloading and using the service, along with a range of premium features, which helped the company to achieve a positive balance sheet relatively quickly, though JY says that his entire team bootstraps and takes typically small startup salaries.
For many Korean entrepreneurs when the time comes to expand globally, there are two
common roads. The first is the safer but still challenging expansion into Japan. Japan and Korea’s history and culture have mixed for many centuries. Although there is some historical bitterness between the neighbors from Japan's annexation of Korea, most Koreans have a respectful view of Japan and both countries share a great deal of cultural affinity. This makes Japan the first and obvious choice for entrepreneurs who want to expand globally. The other option is the daunting and extremely competitive larger markets in the U.S. or China. While the rewards of this route may seem more compelling, the barriers to entry are often too great for smaller Korean businesses as the challenges of culture and language often thwart success.
The big question for the founders and investors of Textat was, what is next for them? Will the hobby-become-business be able grow into something more influential, something that could become a truly global service? The interest from incubators, angels and VCs, locally and abroad, continued to grow. Last year, the team was invited by a US-based accelerator to move to Silicon Valley to expand their vision. However, the company decided cautiously the best move would be to continue the momentum here in Korea and grow in Asia with an eye towards Japan. Wisely, Textat started communicating with other more mature and experienced Korean mobile app developers that have branches in Japan to ease the move there. More and more startup companies are deciding the global move can be enhanced by going it together, sharing expenses and knowledge while using the networks around them.
Textat’s Vision and Future
As Textat continues to improve its algorithm for better deciphering of text messages and
enhances the user experience, CEO JY’s next iteration will be to turn the service into something more meaningful and more impactful. New ideas for the service came from studying the data they collected and realizing the need for more than just a snapshot of the current relationship. Beyond that, couples want to understand the bigger picture of their relationships, which are complex, constantly evolving, and need care and attention to maintain. Human beings are social creatures and will always crave attention. Currently, all relationships are under subtle attack by our celebrity culture that permeates the modern perception of relationships and life. With all the insecurities we face from our sub-conscience to the unrelenting media portraying an unrealistic view of beauty, along with high divorce rate and dissatisfaction in relationships, there is no better time than now to help couples manage and improve their relationships. Textat’s vision is to use data to help couples enjoy a more fulfilling relationship and a happier life.
When Textat incorporated, there was very little ‘ecosystem assistance’, other than government grants that were better intended for hardware startups than software services that can be built lean. Now, Korean startups are utilizing the network while working together to expand into new markets. With all the startup craze that is happening around the world, the startup revolution is undeniably influencing Korea at an exponential rate bolstered by external organizations and local government policies. In fact, many VCs, locally and from around the world, are scouring the country for new technologies and entrepreneurs that have global vision and ideas. As Textat CEO, JongYoun Kim said, “there is no better time in Korea's history than now to make an impact and be an entrepreneur.”