First before we even talk about why people should start a startup in Korea. We first need to answer the question of why start a startup in the first place. Startups are unique in that when you start you are on an equal playing field with everyone else. You don’t have to be young and straight out of grad school, basically anyone can start a startup. In certain cases being unknown and lacking in funds is seen by investors as a good thing…let me explain. An investor wants to find that diamond in the rough. Their goal is to invest in 10 unknowns in hopes one becomes big. As long as those unknowns are cheap it is worth the risk.
When should you start a startup?
Don’t start a startup unless you first have an idea or solution to an existing problem. Granted ideas can change and the execution of the idea is way more important than the idea itself but you need an idea to first start the startup. In Korea the timing is right because of the increase in the desire of investors to jump back in the startup market.
The Korean government have funds that support startups and are continuing their efforts to support new and innovative tech startup companies in Korea. South Korean President Park Geun-hye has promised to cut through red tape and provide financial incentives for young entrepreneurs, promising $92 billion to support small and mid-sized businesses, which also encompasses startups. Also Naver, Korea’s most successful startup, and goal for many young Korean budding entrepreneurs, is set to open a startup accelerator this year in “Teheran Valley,” which is Seoul’s version of Silicon Valley. The area will also house a government-led tech startup campus and the third Google campus in the world.
How do you know if the idea is any good?
Simple. Does the idea solve a problem? If so will it solve it for the next 10 plus years? Long term thinking in startups is very underrated but crucial because you are trying to build a lasting company. Remember it takes many many years to build a great startup. Don’t expect big results in the first few years. This is a grind and payoffs might not happen until the next decade. Also make sure that the idea is something you really care about, love, and most importantly something YOU can use. That is the perfect way of understanding your customers because you yourself ARE the customer. It would be a waste and defeats the purpose of starting a startup that you are not passionate about or don’t need. The best ideas are usually the ones that sound crazy. This means that no one is probably working on your idea and probably no one will think twice about stealing it. An app that makes regular drivers into taxi drivers?? Sounds crazy right?
Why start a startup in Korea?
Target a small market and expand from there. There is no reason to think big right from the start. The startup will be more successful if you focus on the small picture before you tackle the big picture. That is why many startups first test their product or service in Korea before expanding out into the global market. The market evolves over time, what the market looks like now will be completely different in 10 years. So there is huge risk going global right from the start. Start small and expand from there. Korea might be considered a small market compared to the US or China but it is a fast and expanding market and that is what you should be looking for.
Is getting investments in Korea easy?
Yes. Korean investors are craving for the next big South Korean Unicorn (seen below via Strong Ventures). They are even willing to invest in imperfect startups just for the chance to hit it big. Korea is becoming more globalized than ever. Young entrepreneurs are learning English and getting experience abroad and Korean investors are taking notice. The growth does not seem like it will stop anytime soon. That is why in 10 years the possibilities in Korea are endless.