More and more Koreans want to be an entrepreneur in Korea as COVID-19 has forced many companies to let people go. It is now harder than ever to find a job in Korea but there has also been a rise in many Koreans looking to start their own startup. The Korean government is also supporting entrepreneurship because they understand that having new successful companies is the key to creating jobs.
In Korea, the dream was for decades was to work for one of the big conglomerates like Samsung or Hyundai. Times have changed and more young Koreans are looking to go into business on their own. Starting your own startup in Korea can be very difficult. We did a whole article on starting a business in Korea. It will give you a step-by-step guide on what you need to consider before doing business in Korea.
This article will focus more on entrepreneurship in Korea in general. We have interviewed over 100 Korean startups to give the best advice for up-and-coming entrepreneurs looking to start their own companies.
So how do you become an entrepreneur in Korea?
Well, the basic outline is simple.
- Think of an idea.
- Write a business plan.
- Raise money.
- Hire staff.
- Market your product or service.
However, let us go deeper into it. Starting a startup is tough wherever you are. Once you have a good idea you need to make sure you come up with a plan and execute that idea. Ideas are worthless unless you actually DO something with that idea. Universities in Korea hold startup idea competitions and workshops all year round, however, most never follow through with their idea. For the few that do, there are many government programs in Korea that support early-stage startups. Once you have a great idea, the execution of that idea will be key. Execution is the driver of the idea and starting a startup in Korea will help you learn the skills to execute your ideas. This early-stage experience is vital even if your company fails. The lessons you will learn from starting your own business are more valuable than years of costly higher education.
Register your Company in Korea
It does not take a lot of money or time to register your company in Korea. The part that will cost you the most will probably be towards accounting and filing your taxes in Korea. Registration can be applied in 20 days from the start date of your business, with the necessary papers, in the civil service area of the national tax service. These tax office branches are located all across Korea. You need to apply in the jurisdiction in the area of your business address. The process of business registration can start before the start of business, but you need to apply in person.
So I know what you are thinking. I don’t even have a business address. Thankfully in Korea, you can use your home address, or better yet, there are tons of free office spaces provided for startups! A good suggestion is to apply for as many startup programs as possible. From our research, most startups applied to at least 3 programs before getting accepted into one. Finding office space for free is not very difficult.
Perfecting your deck for Investors in Korea
Of course, when creating your investor deck it is important that you create a deck in Korean as well. Most Investors in Korea are not fluent in English. Most Korean decks are very wordy and are loaded with graphs and figures. This is why it is important to have different decks for different investors. Of course, this will mean you will need a basic idea of who your investor is. This is why forming business relationships is extremely important in Korea. Once you get to the point of actually pitching in front of a Korean investor, you probably have already formed some kind of bond with that investor. Or they were recommended to you by someone in your network.
In Korea having good business relationships are essential to help move your business forward. One of the best ways to form these relationships is through drinking. Many business deals are conducted through a couple of rounds of soju. Koreans love to have fun and after they are in a more relaxed setting they tend to let their guard down. Escaping the harsh working environment in Korea and just enjoying each other’s company is essential for good business relationships. With the rise of technology, most meetings are done online, but in Korea, it is done over dinner and drinks.
Hiring the right team
Once you have gotten some funding either from an angel, VC, or even the government, you will need to hire staff. Most Korean companies have a system where all decisions are made at the top and workers wait for those decisions to be handed down. Korean workers have a reputation for being very hardworking, however, because of the way the hierarchical structures are set up in Korea, getting things done takes a lot of time. Startups in Korea need to have a more streamlined approach.
One thing good about Korea is that there are many entrepreneurial meetups and events happening in Seoul every single week. Even during COVID, Korea has done a great job of constantly holding online virtual events at least a few times a month. There are a lot more online events than offline events these days due to COIVD. However, online events are still a great place to find the right talent for your company. Many are like-minded entrepreneurs from various backgrounds that have the same passion and drive. We recommend finding at least ONE Korean because the paperwork involved in running a Korean company will be a huge headache.
Who is your target market?
If you want to succeed in Korea’s marketplace you need to clearly define your target market. This way will be able to focus your attention on marketing to your customers. Then you will need to do some research and the best way to do this is to watch as many advertisements from Korean companies that sell a similar product or service as you do. Marketing in Korea is different than marketing out west. The more experience you have in how Korean companies market to customers, the more you will come to understand and recognize what works and what does not work. This will greatly improve your own marketing strategies.
Social media advertising is huge in Korea. Focus your attention on Facebook, Naver blogs, Instagram, Twitter, Youtube, and Korea’s top messaging app Kakao. It is vital to use these platforms to grow your business. While Facebook and Instagram are used well in Korea for digital marketing, Twitter, on the other hand, is underutilized. Korean characters take up much less space which means Koreans can say a lot with a 140 character limit. In addition, it is important for any entrepreneur to really start to understand Kakao. Kakao is a really good way to get your brand or product out there in the Korean market. Facebook ads in Korea will not be as effective and organic reach through these ads is no longer effective. As for Naver, we did a whole article on how to rank high on Naver Blog so check it out.
As for LinkedIn it is not commonly used in Korea. However, because of the boom in cryptocurrency, many Korean entrepreneurs in the Blockchain space have opened up LinkedIn accounts within the last 4 years.
Is Entrepreneurship really for you?
However, it takes a certain person to become an entrepreneur in Korea. Entrepreneurship is very new in Korea compared to the United States. Koreans tend to have more of a followers mentality than a leadership mentality. To be an entrepreneur you need to break that and start thinking outside the box. Find a problem and then become an expert about that problem and finally, find a solution. The more original and creative your idea, the greater the chance of success.
However, here is the problem. Most of the ideas have already been thought of. The biggest problems in the world have already been fixed. In Korea, most of the big corporations are working around the clock to solve problems and they have the resources and the manpower to fix the problem first. For example, an entrepreneur can’t compete with Samsung when it comes to smartphones, the same goes for Hyundai with automobiles. However, with every new technology created…problems will arise.
Coming up with an Innovative idea
So how do can you come up with a great idea? This is actually quite simple. Just live out your day and find out what problems arise that get you frustrated throughout the day. Have you ever asked yourself “I wish they had a…..for this.” or “Why don’t they just…..” All these are possible new business ideas. In addition, try to socialize outside of your normal circles. Try new experiences and get a new perspective that will help surface new ideas and maybe even a new way of thinking.
If you are a foreigner living in Korea, you have a lot to bring to the table since Korea might not have the solution you are used to in your home country. This is why a lot of the top Korean entrepreneurs are Korean Americans or those that studied in the States. The great ideas in America are brought to Korea 2-3 years later, usually by those that have lived in America. So the key is having the right insight into what makes Koreans unhappy the most. Find that problem then find the solution. This will give you a greater chance to become a successful entrepreneur in Korea.
