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

First, before we even talk about why it is the perfect time to start a startup in Korea. We first need to answer why we start a startup in the first place. Startups are unique in that when you start, you are on an equal playing field with other new businesses. You don’t have to be young and straight out of grad school anyone can start a startup. All you need is an idea and a drive to make your dreams a reality. In some instances, 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. Korea’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 instead invest in 10 companies for 50 million won each. This is why early-stage (seed funding) is easier than the later stages in Korea. How do you find these angel investors in Korea? It is all about networking and knowing the right people.

There is a lot of material online to teach you how to bootstrap your startup. However, little information can be found on how to do it in South Korea. However, the process is the same, except most angel investors, are not fluent in Korean. Therefore it is crucial to have a Korean partner when raising funds from angel investors in Korea. So the question becomes, what kind of startup would get Korean angel investors interested? If they feel the startup can gain some traction with other investors looking for businesses that can take off post-COVID…it doesn’t matter if the startup is generating money…as long as they can gain traction among investors, initial seed funding will be easy.

When Should You Start a Startup in Korea?

Don’t start a startup unless you have an idea or solution to an existing problem. Granted, ideas can change, and the execution of the concept is way more important than the idea itself, but you need an idea first to start the startup. In Korea, the timing is right because of the increase in the desire of investors to jump back into the startup market. Remember their interest levels when it came to Blockchain and cryptocurrency. Investors in Korea are always looking for the next big tech trend. The trend now is businesses that can survive post-COVID. Delivery services, biotech companies, and digital content are the next hot trends. So focus on these sectors first.

The Korean government has funds supporting startups and is continuing its efforts to support new and innovative tech startup companies in Korea. South Korean Resident Yoon has promised to cut through red tape and provide financial incentives for young entrepreneurs, promising to support small and mid-sized businesses, including startups. This will be taken into overdrive as Korea slowly looks to recover from COVID. They are actively pushing government contracts to return money to small businesses in Korea.

How do you know if your 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. Video chatting, gig work, and medical innovation are issues brought up by COVID. Long-term thinking in startups is underrated but crucial because you are trying to build a lasting company. Remember, it takes many, many years to make 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 care about, love, and, most importantly, something YOU can use. That is the perfect way of understanding your customers because you ARE the customer. It would be a waste and defeats the purpose of starting a startup 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?

So why South 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 global markets such as Southeast Asia and beyond. The market evolves, and what the market looks like now will be completely different in 10 years. So there is a huge risk in 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 growing market, and that is what you should be looking for.