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Why Korea Will Become The Next Silicon Valley

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South Korea will become the next Silicon Valley. In four chronological layers that span several decades of development, Korea has fostered six key variables that feed off each other to create this viable startup atmosphere. These layers are:

  • Layer One: Educational Attainment (Historic)
  • Layer Two: Internet Connectivity + Hyper-Consumerism (90’s and 2000’s)
  • Layer Three: Government Involvement + Changing Korean Mindset (2o1o’s)
  • Layer Four: Migration of Younger Koreans (2010’s)

Internet Connectivity as a Foundation for Growth

Chances are if you have talked to anyone from Korea, one of the first things you will hear about is the unparalleled WiFi speed.

Just how quick is this Wifi?

Well, as you can see by this and this, it is the fastest in the world. Not only this but the connection is so spread out that on the metro most people stream TV shows or baseball games while commuting to and from work.

In many American metros, you’ll be luckily to get cell service — being able to live stream a baseball game is something out of the Twilight Zone

Internet, and the dispersion of connectivity, is the cornerstone of building a technologically advanced city. Unlike in other parts of Asia, Korea is not forced to develop technology around any Internet impediment. Rather, this connectedness pushes technological developments to the next level. The citizens of Korea have been spoiled by these Internet speeds and expect their technology to take full advantage of them. This means that, not only do developers have the technological means to create the next great application, but they have a people ready to adopt it immediately.

When is comes to Internet in Asia, Korea is King. (Source: Trak.in)

Why a Lifetime of Studying is Good for Startups

You’re born. You live. You die.

That’s how most people lives go — expect in Korea it is slightly different.

You’re born. You study. You live. You study some more. You die. Then you probably study some more in the afterlife.

The Korean educational system is one of the most intense in the world. Outside of class, Korean students study an average of eight hours a day. From an early age, children are expected to be learning from the early hours of the morning to the dead of night at cram schools (“hagwon”).

There are around 100,000 cram schools in Korea and over 3/4th of students attend at least one of them

Education is drilled into you in preparation for the Suneung — the test that decides where you go to college (think SAT but more deterministic of your future). Students study for thousands of hours for this 9-hour exam which is only offered once a year.

Suneung is a huge deal for the entire family. Families cheer as students march towards the test. No pressure, right?

So, what does this mean? It means Koreans understand the meaning of perseverance. Having the ability to study monotonous material for years and years teaches you how to push through your current struggles for a greater goal.

Ask anyone who has started their own startup and one of the most important things they will tell you is that you must be dedicated to your work and be willing to roll with the punches and face any hardship that may arise. What better people to take up this mantle that those who have been studying at 110% for years with societal pressure placed squarely on their shoulders to succeed.

If you have been waking up at dawn your entire life to study all day, persevering through the ups and downs of startup life is virtually second nature to you by now

Let’s Bring It All Together Now

Looping back to the introductory blog post, I set out trying to prove that South Korea is a ticking time bomb of startup growth that will put it on par with Silicon Valley in five to ten years. The variables at play are:

  1. Government Backing
  2. Migration of Younger Koreans
  3. Evolution of the Korean Mindset
  4. Hyper-Consumerism
  5. Technological Dispersion
  6. Nationwide Educational Attainment

I’ve shown how each of these power the startup scene separately but now I want to show how they work together. To do this, I’ve broken it down into four layers based on their chronological development in Korea.

First Layer: Educational Attainment (Historic)

Hagwon Life

Striving for high levels of educational attainment and the unrelenting effort this requires has been in Korea for decades in its current form, and centuries in the historic ‘gwa-goh’ system. This long cultural history begets a people that understand persevering and pushing through the hard times for a long-term goal. In order to be successful at a startup, you must be able to withstand the lowest of the lows. If the people of a startup ecosystem give up after they hit a few hard spots then the startup ecosystem itself will surely falter and cease to exist.

This perseverance, when looked at in isolation, does not guarantee anything. If you lack the proper technical infrastructure for development or have no demand for what you are creating then this is a non-starter.

Second Layer: Internet Connectivity + Hyper-Consumerism (90’s and 2000’s)

Korea’s fast Internet pre-dated the age of the startup and what it does for the budding startup scene is provide entrepreneurs a large canvas on which to create their technological works of art.

That being said, there would be no incentive to become an entrepreneur and leverage this technical backend without a pool of ready consumers.

This is where Korea’s hyper-consumerism comes into play.

The extreme sense of consumerism and accompanying peer pressure provide a demand function with a massive “X” variable upon which entrepreneurs can test out and distribute their product.

A metro with strong Wifi and long commutes adds another way for Koreans to consistently consume new technology.

Despite these first two layers, we are still lacking all the necessary pieces to create an environment in which creativity and startup growth can explode. At this point in Korea’s history, people still did not want to start their own company. Little funding was available for their ideas and the societal structure rewarded and reinforced the Samsung Mindset (i.e. get a stable job at Samsung and stay there your entire professional career).

What alleviated this was an influx of government involvement which informed and was informed by an evolution of the Korean mindset.

Third Layer: Government Involvement + Changing Korean Mindset (2010’s)

Government involvement came about a few years ago in the form of the Creative Economy. This gave additional means of support to then-current entrepreneurs while providing incentive for future ones to start their own companies. It helped take away some risk of becoming an entrepreneur by providing financial capital, co-working spaces, mentorship opportunities, etc.

President Park and the Creative Economy

Occurring alongside this was a steady dispersion of the idea that maybe the Samsung Mindset was not the best career path. Maybe there were other options — such as starting your own company — that would prove more fruitful. While this idea had been around for decades (not everyone bought into working for Samsung), it had not really picked up any steam until recently. This movement provided much needed human capital into the startup scene to go alongside the financial capital of the government.

That being said, there’s still a major issue with all of this. The corporate culture at Samsung and other international conglomerates encourages a specific way of thinking and tackling problems. In order for a startup to take off, it needs a bevy of new and innovative ways of looking at problems and planning for the future. This is where the migration of younger Koreans comes into play.

Fourth Layer: Migration of Younger Koreans (2010’s)

The return of native Koreans as well as movement of Korean-Americans into the startup ecosystem is a new phenomena that is helping provide a new outlook on management and strategy.

Coming to Korea, they are bringing with them different ways of tackling business problems as well as different views on company culture. Having people who have experienced different cultures migrate into a specific location is what helped drive Silicon Valley to greatness and can do the same for Korea.

MangoPlate, the Korean Yelp, is one of the many companies to benefit from this migration.

Why the Five to Ten Year Window?

So why did I give the five to ten year window? Well, all of these six variables are just now starting to work in unison and it takes some time before they can start to produce at their full potential.

When you combine all six of these points together you get an environment in which the necessary pieces for exponential startup growth — of which the world has not seen since Silicon Valley — are readily apparent. All that is needed is a spark to catapult Korea from an afterthought to the first thought when it comes to startups and innovation.

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About the Author

This article was written by Alex Gershon. Alex works as the global liaison for Send Anywhere, a venture-backed file sharing startup. Alex is responsible locating and nurturing global business partnerships for the startup’s API as well as optimizing all outbound material to guarantee the highest ROI and customer acquisition rates. Additionally, Alex has experience in Marketing for various Silicon Valley startups including one that was acquired (OpenDNS, 2015) in which his role varied from email marketing, to third party vendor management, to the project head on various efforts aimed at jumpstarting sales Reach Alex

Entrepreneurship

Women on Top in Tech – Daphne Ng, CEO of JEDTrade

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(Women on Top in Tech is a series about Women Founders, CEOs, and Leaders in technology. It aims to amplify and bring to the fore diversity in leadership in technology.)

Daphne Ng is the CEO of JEDTrade, a blockchain technology company focused on trade, supply chain, and financial inclusion projects in ASEAN. She is also the Scretary-General at ACCESS and Exco. of Singapore Fintech Association

What makes you do what you do?
I was introduced to blockchain technology in 2016 after I left my corporate banking career after 10 years. It was my mentor who first got me interested in this technology, which I then went on to delve further into, on its potential applications in the lending and trade finance space – domains where I came from.

How did you rise in the industry you are in?
Being in the space for 2 years and actively involved in the ecosystem, I was able to bring on the projects, network and a good degree of thought leadership in this vertical. Early on in the startup journey, our team faced many challenges. And to me, the key to rising above failures are two essential factors – resilience and support. While resilience is innate, I received a lot of help be it in terms of connections or advice. ‘Nobody succeeds without help’ rings very true for me.

Why did you take on this role/start this startup especially since this is perhaps a stretch or challenge for you (or viewed as one since you are not the usual leadership demographics)?
From the start, I focused on my domain expertise in trade finance and the application construct of how blockchain and DLT can be applied to these use cases. Also, my strategy from the start was to build a technology company made up of 80% tech and engineers, which is also our key competitive advantage today. At the end of the day, deliverables are about strategy and execution, which includes building and leading an ‘A’ team.

Do you have a mentor that you look up to in your industries or did you look for one or how did that work?
I have many mentors, which includes our company advisors (all of whom are well-known in this industry) and mostly informal mentors I meet via my connections, and on various occasions and circumstances. Creating opportunities also means putting myself in the right place, at the right time. And in my case, these were mostly organic and genuine friendships formed from the initial connection.

How did you make a match if you and how did you end up being mentored by him?
To me, a match in values is very important. It also takes humility to ask for help and be willing to listen to advice, which is important in order for mentorships to be successful – be it formal or informal.

Now as a leader how do you spot, develop, keep, grow and support your talent?
I love this question! I am passionate about building strong teams and helping my people grow. I abide by the 3Rs when identifying talents: resourcefulness, resilience and right values. And then I invest in the ‘potential’ and this means giving them room to lead, make decisions and take risks.

Do you consciously or unconsciously support diversity and why?
My support of diverse talents, skillsets and characters can be seen in the make-up of our core team – all helming specific roles and each bringing their own value to the table. We need the sum of all parts to build a great company.

What is your take on what it takes to be a great leader in your industry and as a general rule of thumb?
Great leaders emerge in times of failures and challenges, never abandoning the team, and always putting the team’s interests before her own. And I consciously live by these mottos every day.

Advice for others?
My advice to other entrepreneurs: be resolute and dare to be different. If you are going to follow others, then you will end up on the same path as them. No right or wrong; but I would rather chart my own path. This June, we are officially launching our blockchain project, Jupiter Chain (www.jupiterchain.tech), which have garnered much interest in the industry, even before we made it public. We believe this project is the epitome of marrying innovation with practical implementation, and we want to be the first to truly operationalize blockchain for our ecosystem projects in this region.


If you’d like to get in touch with Daphne Ng, please feel free to reach out to her on LinkedIn: https://www.linkedin.com/in/daphne-ng-%E9%BB%84%E7%91%9E%E7%8E%B2/

To learn more about JEDTrade, please click here.

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Callum Connects

Jace Koh, Founder of U Ventures

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Jace Koh believes cash flow is the lifeblood of your business. Understanding it will enhance your ability to run and manage your business.

What’s your story?
My name is Jace Koh and I am the Founder of U Ventures. I’ve always been inclined towards investment and entrepreneurship. I’ve played a hand in starting businesses across these industries – professional services, cloud integration, software and music. I believe that succeeding in business is tough, but that’s what makes the rewards even sweeter.

What excites you most about your industry?
Everything excites me. These are my beliefs:

  • Why is accounting important?
    The accounting department is the heart. Cash flow is like blood stream, it pumps blood to various parts of the body like cash flow is pumped to various departments and/or functions in a business. It is vital to the life and death of the business.
  • Is accounting boring?
    Accountants are artists too. They paint the numbers the way they want them to be.
  • What makes a good accountant?
    A good accountant can tell you a story about the business by looking at the numbers.
  • Why is budgeting and projection important?
    Accountants are like fortune tellers, they can predict the numbers and if you wish to understand your business and make informed decisions, feel free to speak to our friendly consultants to secure a meeting.

What’s your connection to Asia?
I was born and raised in Singapore, and here’s where I want to be.

Favourite city in Asia for business and why?
Singapore is my favourite city. We have great legal systems in place, good security and people with integrity. Most importantly, we have a government that fosters a good environment for doing business. I recently went for a cultural exchange programme in Hong Kong to learn more about their startups. I found out that the Hong Kong government generally only supports local business owners in terms of grants. They’ve recently been more lenient and changed the eligibility to include all businesses that have at least 50% local shareholding. But comparing that to Singapore, the government only requires a 30% local shareholding to obtain government support. In the early days of starting a business, all the support you can get is precious. It’s great that we have a government that understands that.

What’s the best piece of advice you ever received?
The best time ever to plant a tree was 10 years ago as the tree would have grown so big to provide you with shelter and all. When is the next best time to plant a tree? It is today. Because in 10 years time, the tree would have grown big enough to provide you shelter and all.

Who inspires you?
Jack Ma. His journey to success is one of the most inspiring as it proves that with determination and great foresight, even the poorest can turn their lives around. I personally relate to his story a lot, and this is my favourite quote from him, “If you don’t give up, you still have a chance. Giving up is the greatest failure.”

What have you just learnt recently that blew you away?
I’ve faced multiple rejections throughout my business journey, and recently came across a fact on Jack Ma about how he was once rejected for 32 different jobs. It resonated very deeply and taught me the importance of tenacity, especially during tough times.

If you had your time again, what would you do differently?
Nothing. I live a life with no regrets. Everything I do, regardless of whether it is right or wrong, happy or sad, and regardless of outcome, it’s a lesson with something to take away.

How do you unwind?
I love to pamper myself through retail therapy and going for spas. I also make a conscious effort to take time off work to have a break outside to unwind as well as to uncloud my mind. This moment of reflection from time to time helps me see more clearly on how I can improve myself.

Favourite Asian destination for relaxation? Why?
Taiwan! Good food with no language barriers and the people are great!

Everyone in business should read this book:
I don’t really read books. Mostly, I learn from my daily life and interactions with hundreds of other business owners. To me, people tell the most interesting stories.

Shameless plug for your business:
We’re not just corporate secretaries, we’re “business doctors.”
U Ventures is a Xero certified advisory firm that goes beyond traditional accounting services to provide solutions for your business. You can reach us on our website: http://uventures.com.sg/

How can people connect with you?
Converse to connect. You can reach me via email at [email protected] or alternatively, on LinkedIn here: https://www.linkedin.com/in/jacekoh/

This interview is part of the ‘Callum Connect’ series of more than 500 interviews

Callum Laing is an entrepreneur and investor based in Singapore. He has previously started,
built and sold half a dozen businesses and is now a Partner at Unity-Group Private Equity and Co-Founder of The Marketing Group PLC. He is the author two best selling books ‘Progressive Partnerships’ and ‘Agglomerate’.

Connect with Callum here:
twitter.com/laingcallum
linkedin.com/in/callumlaing
Download free copies of his books here: www.callumlaing.com

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