Why It is the Perfect Time to Start a Startup in Korea

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.  All you need is an idea and a drive to make your dreams a reality.  In certain cases being unknown and lacking in funds is seen by investors as a good thing…let me explain.

What are Korean Investors looking for?

An investor in Korea wants to find that diamond in the rough.  A startup that no one knows about but them.  Most might not think it but Koreans, in general, like to gamble.  There is a reason why the Korean government has outlawed gambling in Casinos for its citizens.  Korean’s desire to gamble is also what drove the Korean cryptocurrency craze back in 2017. Their passion for gambling can be found in investing as well.  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.  Instead of investing 500 million won into one company, most Korean investors would rather invest in 10 companies for 50 million won each.  This is why early-stage (seed funding) is easy compared to the later stages.

When Should You Start a Startup in Korea?

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 thanks mainly to their interest in Blockchain and cryptocurrency.

The Korean government has funds that support startups and are continuing their efforts to support new and innovative tech startup companies in Korea. South Korean President Moon has promised to cut through red tape and provide financial incentives for young entrepreneurs, promising to support small and mid-sized businesses, which also encompasses startups.

Korean President Moon

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?  Keeping in mind that automation is on the rise. 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?  Renting out your room to strangers??  Get out of here….

Why Start a Startup in Korea?

Korean Night Life

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 markets such as Southeast Asia and beyond.  The market evolves over time, what the market looks like now will be completely different in 10 years.  So there is a 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 Funding in Korea easy?

Again it depends on your project.  Korean investors love the new hot craze.  2018 was all about blockchain and cryptocurrency.  Many projects early on got funding very easily.  The blockchain space has died down a lot and it is though to know what 2019 will bring.   Korean investors are craving for the next big South Korean Unicorn.  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.

Seoul is now the prime location to start a startup in Korea

Next Rise 2019 wrapped up with much excitement.  Seoul Mayor Park Won-soon said during his opening speech that the Seoul city government would nurture 10,000 workers to prepare for the 4th Industrial Revolution.  He aims to combat the unemployment crisis that is sure to come to Seoul through startups.  They plan on operating an Innovation Academy starting in November.

The Seoul Startup Support Center will help with the unemployment issue in Korea.  Seoul will double the number of spaces for tech startups by 2022.  Currently, there are 1,000 of these spaces.  An extra 1,000 will be available to foreign businesses.  This means that any entrepreneur whether you are foreign or Korean can join the Seoul Startup Membership where they will be able to receive customized support from specialized organizations.

Seoul has also cooperated with the justice ministry to introduce a startup visa fast track program for young foreign entrepreneurs looking to start a startup in Seoul.  They will also work with these young entrepreneurs to find affordable housing in Seoul which can be expensive.