Chosun staff writer, Kim Ki-cheon, juxtaposes the success of U.S. based startups with the difficulties faced by those in Korea, noting this about a recent list of the top 105 startups:
“The list was dominated by 91 U.S. companies, but there were four British startups, three from China, two each from Russia and Canada and one each from Luxembourg, France and Finland. No Korean companies were on the list. In other words, there is no company in Korea that could lead the IT era.”
(I’ll choose to ignore the fact that the list was assembled by a VC in Silicon Valley who probably doesn’t know much about the Korean startup scene. I mean, seriously, TicketMonster’s revenue was something like KRW 20 billion, giving them enough cash and cachet to buy the number two social commerce site in Korea, Daily Pick.)
Kim goes on to diagnose the issues he believes hold startups back, citing:
- Government red tape
- A lack of VCs
- Unfair trade practices by chaebol (대기업)
- The relatively small size of the Korean market
- And how it is “legally and socially difficult for a person to bounce back after a venture fails”
These are all good reasons, though I don’t fully buy into the market size argument. Here’s my real issue: Kim only mentions in passing the most important factor holding Korean startups back. It’s a matter of culture and social expectations.
Korean society puts substantial pressure on those living under it to succeed by following a proven model: Go to a top university, make connections, get a job at a big company, draw a decent paycheck and hope to not be given “honorary retirement” before reaching the executive level around the time you’re 50.
The people who would make the best entrepreneurs because of their abilities tend to take the safe path instead. And why shouldn’t they? It will give them a comfortable living, approval from parents and, most importantly, a good spouse. And this is where the title of this blog post comes into play. The pressure to make money is much higher for men than for women in Korea. (Whether or not it should be is a topic for another post or the comments section of this one.) While most marrying age women I know in Korea say that money is not the primary consideration in choosing a spouse, it often is a major consideration for their parents who want to ensure that their daughters are well cared for.
This is a significant disadvantage for a man whose financial future (at least his short term financial future) is unsure because he is trying to start a business rather than working at a big, stable company. (Check out this JoongAng daily article for more info on the cost of getting married.)
I am not saying that men are the only people who can be entrepreneurs. (Though they are the majority. See here and here.) I’m also not saying that people cannot, if they so choose, put off getting married until after their company is stable (or no longer exists). I’m not even saying that that parents of daughters are wrong to be so selective about potential mates for their daughters.
I believe that Korea’s strong social expectations put depress the number of people willing to risk becoming entrepreneurs.
Is there a remedy? How do we increase the chances of success for men and women who want to strike out on their own?
Well, former Prime Minister Chung’s proposal that conglomerates should share profits with suppliers is neither realistic nor economically advisable. Just as unworkable is telling young Koreans to forget what their parents want and what society expects and just start companies. Koreans respect their parents too much for that to happen.
What’s needed is gradual societal change. Entrepreneurs need to be seen not as irresponsible risk-takers but the future engines of Korea’s economy. How do we get there? First, the media needs to focus on the successes of entrepreneurs to get people excited about the idea of starting a new venture. These entrepreneurs also need to serve as mentors for people who come up with workable ideas and who have the guts to make them real. Incubators like Seoul Space need to provide an environment that brings veteran entrepreneurs together with funding and experience.
What are other solutions? How else can Korea encourage and nurture the women and men who will create the country’s future growth engines?