Talent search for young venture entrepreneurs

Korean-made audition shows like the format of Britain’s Got Talent or America Idol are bombarding in South Korean TV scenes. The first audition show launched in Korea that attracted huge media attention was “Superstar K” (2009). The show was aired on Mnet, a cable TV music channel and it successfully gained national interests. The cable channel’s success led other TV channels to produce programs with a similar format. More than 10 different audition programs are now running and few programs are already on their next sequels. Literally, if you switch between channels, at least once, you’re being exposed to a different audition show. Audition fever is at its heights right now and 1.93 million people from across the country have taken parts in the 3rd sequel of “Superstar K” scheduled to be televised later this year. The figure accounts for 4% of Korea’s total population. The contestants are varying in terms of their age, job, nationality, and etc. No matter how different they are, they share their passions and talents that somehow touch audience watching the show even if winning the audition and becoming superstar comes as their highest priorities. We are already up to with those folks who have potential to be Susan Boyle or Paul Potts of Korea who have overcome their impoverished background. Audition programs are serving as outlets for Koreans’ desire to become famous. Though, we get to see so many people in the show who turn up to compete at huge opportunity cost. Deluge of audition programs is now raising concerns about their side-effects.

Talent search shows are instigating false hope of an instant big win. South Korean entertainment companies are well-known for mass-productions of pop culture in Asia. Numerous young kids are seeking to be picked by top producers and add their names to the list of current celebrities. Yet the chances are very slim. According to a recent study, only 0.01% of the people preparing to get in celebrities business actually get a chance to make their debut. Because the chances of being on the TV look pretty decent, people see the arrival of audition shows as a way to come one step closer to their dream on the fair ground. The illusion is somehow exaggerated, though, through repeated “rags-to-riches” stories. Take example of Mr. Huh Gak, a 25-year-old repairman won the 2^nd sequel of “Superstar K”. The contrast between his powerful voice and his plain appearance amazed the public and he even beat his handsome rivals. Though he rocked the nation for a while, he is still on a bumpy road to succeed as a real musician. Winning an audition does not put you on a royal road to stardom instantly. He is still known as the winner of huge prize of KRW 200 million, a car, and a contract to release an album. Subsequent talent shows raised the reward up to KRW 500 million. Shows are under criticism for mass commercialism. Tempted by instant wins, people jump into vague dream sacrificing the meaningful achievements in their lives built up so far. On top of that, immature teens are now hopping on to the trend as well. They already are influenced by teenager stars. The audition shows may exacerbate the current situation that people are enormously influenced by celebrities.

Audition program is no longer a fresh twist compared with other TV programs. It even feels quite obsolete due to mass production of similar format of the shows and repetition. Aside from participants’ talents, producers and journalists tend to shed more light on the personal stories to differentiate the program and talents. Adding touching stories to the show and individual participant that can make people weep, and give audience “ah-“ moments is a great way to appeal to emotions of large crowds. Additionally, instant attention from the media and words of mouth of viewers can be obtained with those stories. This tactic somehow reveals and exaggerates contestants’ private life and it really kills pure purpose and charm of the reality shows. Power of story-telling is wearing out quickly and stories are deemed more or less the run of the mill. They all contain classic materials of “zero to hero” plot; born in a poor family, received no professional training to hone their skills, never gave up their dreams despite the hardships, and now I am here. Since this emotional touch does not count as importantly as before, producers often end up in over-dramatization. For example, Mr. Choi Sung-Bong, a contestant in “Korea’s Got Talent” triggered instant sensation but also criticism. Mr. Choi had such a dark history which contrasts his amazing voice singing Nella Fantasia. He said he had been living on his own since the age of 5 escaping from orphanage so at one point he had to sleep in public restrooms to find a shelter. He also mentioned that he did not receive any training to be a vocalist. Later, he was found out to be a graduate of an art high school and majored in vocal music. The show had to go through massive criticisms for distortion and made public apology.

“It is unfortunate that only the desire to become famous in entertainment business is strongly encouraged and gains nation-wide attention but not other noble pursuits.”

Audition fever in South Korea will not quickly disappear. Audition shows have so far achieved one of highest audience ratings in recent history. Millions of people out there are still looking for audition opportunities to be a star. However, the popularity will likely fade away as with the case of the rise and fall of former popular reality shows. Similar personal stories no longer guarantee media attention, either. Last but not least, the media are encouraging people to adore stardom blindly. It is unfortunate that only the desire to become famous in entertainment business is strongly encouraged and gains nation-wide attention but not other noble pursuits. What if there is a TV show for young entrepreneurs competing with each other with their passions and business idea? Politicians always talk about small and medium businesses are the backbone of the economy but they do not support for young talents who are working hard on their dreams at their early stage ventures. With flow of government and private funding to embrace more ventures and corporate’ needs for young talents who can make difference on their corners regardless their background or education, it is probably a good time to think of audition type of young talent shows for a future business leader. Challenge for building is encouraged but the business atmosphere is not mature yet to embrace people who fail and give those people who fail another chance. Who knows a televised program can bring a change to the status quo and offer better foundation to foster talented young venture-minds to come out of their garages?

(This article was developed with Steve J. Min, a staff writer.)

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Know What You Want

Entrepreneurship 101

Surprisingly enough, there are many young entrepreneurs who don’t know exactly what they want to achieve with their business. Great product idea, agile development skill, and abundant resources are all good only if you know what you want to do with them. Know following three items before you intake any venture project-

1. Target and core customer base
2. Problem you want to solve
3. Key components you have to deliver

In order to maintain high level of focus, “knowing what you want” is quite important to keep you moving forward. This is something that other people cannot easily help but you.

Korean Entrepreneurs: Lee Jae-Bum of KakaoTalk

KakaoTalk has been South Korea’s biggest smart phone app success story. KakaoTalk has already 18 million users worldwide as of July 2011. KakaoTalk is top download in the App Store and the most successful social network service across iPhone and Android platforms in Korea. Number of users is estimated 20 million by the end of this year. KakaoTalk’s success continues outside of Korea as well. KakaoTalk has approximately 1 million users overseas and this figure continues to grow by ten thousands users per day. KakaoTalk now handles over 300 million messages per day. The success led Google to choose KakaoTalk as one of top developers in the Android Market. Yahoo! and Skype are chosen neither top apps nor top developers yet. Mr. Lee Jae-Bum, CEO of KakaoTalk, is in charge of creating this remarkable product and fan-ship.

Jae-Bum has envisioned himself as a future owner of enterprise from his college days. He majored in industrial engineering at Seoul National University, which is the nation’s top university in Korea. He heard so many great stories about his alums at school becoming successful venture entrepreneurs. So, he also took his own venture by establishing an Internet company right after college with hope that he could join those successful entrepreneurs shoulder to shoulder. One day, his professor made introduction to Jae-Bum to work with Mr. Kim Bum-Soo, one of SNU alums and a very successful venture entrepreneur who founded Hangame, a leading online game company. Hangame was eventually merged with the NHN, a top Internet property in Korea with gross annual revenue over $1 billion. Jae-Bum’s challenge to dare to start a venture business from scratch somehow proved himself to Bum-Soo and other board members. So, Jae-Bum landed his job at KakaoTalk (previously known as IWI Lab) and he was eventually promoted to lead the business while Bum-Soo sat on the board as chairman.

Jae-Bum’s early work with KakaoTalk was not that brilliant. Few pet projects such as memo aggregation or personal ranking chart combined with social network features were in production but never really took off. There were already global power brands such as Facebook or Twitter dominant in the SNS market. In a popular business strategy term, web based SNS was already in the “red ocean” and competition was high. So, Jae-Bum turned his attention to the app market. The advent of smart phone and rapid growth in European and North American markets inspired him. Jae-Bum had expected that Korea would follow such a big wave of smart phone penetration soon. So, Jae-Bum made a decision to develop mass appealing smart phone app like a messenger for smart phone. Sending short message is not too expensive but mass market loves KakaoTalk that allows users to send short messages back and forth for free. Now, users on KakaoTalk can send messages as well as photos and other attachments like other popular PC-based messenger like MSN or Gtalk. Jae-Bum’s prediction for surging smart phone market really hits the bull’s eye. iPhone was finally introduced in Korea in late 2009 through Korea Telecom and SK Telecom quickly fired back with Android phones from Samsung, HTC, etc. App market has rapidly grown, too, as demand for smart phone usage has grown. KakaoTalk has become de facto messenger tool for smart phone users in Korea.

Jae-Bum has made few interesting points on his success that could be note-worthy to those folks who build their products in the smart phone universe. First, Jae-Bum emphasizes on “venture mind.” Without it, KakaoTalk wouldn’t be materialized. He values highly of those people with hearts for innovative ideas than lucrative business model. For instance, up until last year, the company didn’t turn any revenue from KakaoTalk. Team tried to design a more stable product and service first. Generating revenue was always second in the row just like Facebook did during its early days. Revenue-demanding culture often misses out this point even if that is what venture is all about. Second, KakaoTalk is also unusual in the sense that it has created a horizontal organization. Unlike other Korean companies, where top-down management is sort of cultural norm, Jae-Bum encourages active communication and debate among peers in order to keep the organization away from unnecessary bureaucracy. As an example, Jae-Bum has made office policy calling peers by their initials or nickname. In Korea’s typical office setting, it is not common practice. Though, this policy really helps and makes people to get friendly to each other even if there is 10~20 years of age gap between peers. Third, the company has done reorganization of internal team almost 40 times since its inception. It has contributed to KakaoTalk’s unhindered communication among different parts of the company and the team to collaborate. It has also made the company can better understand and react to fast-changing market needs and reflect them into the product development faster.

KakaoTalk plans to elevate its popular app to the next level becoming ‘social-hub’ for smart phone users. Commerce, culture, music, and game contents are likely to be added to its main property soon. Similar to Facebook, it is likely to embrace different services and contents and want to be total service platform for smart phone users. Few market observers estimate KakaoTalk will make $15~$20m in revenue this year. KakaoTalk’s revenue model is fairly weak as yet because it only makes money from mobile gift card sales from strategic partnership with Korea Telecom. Though, KakaoTalk already has huge user base and other revenue model should be easily deployed. With its recent angel funding of $4.5 million from those top tech entrepreneurs in Korea such as Mr. Kim Taek-Jin of NCSoft and Park Sung-Chan of Danal would add key components to accelerate its product development and sales growth. KakaoTalk has its own challenges such as Apple’s strict in-app purchase policy biting back large proportion of its revenue. KakaoTalk also faces battle with top mobile telecommunication companies in Korea because KakaoTalk seems to eat up potential revenue stream from short message (or SMS) that telecom companies could have earned if there was no such thing like KakaoTalk. KakaoTalk has successfully finished its baby steps to build a profound communication platform on the wave of smart phone. We look forward to seeing how Jae-Bum would turn this business to become a global franchise in the near future.

(This article was developed with Steve J. Min, a staff writer.)

Building a new venture is like rock climbing.

Entrepreneurship 101

 

Building a new venture is like rock climbing. Three lessons we learn from rock climbing:

1. You have to be physically ready to climb.

Preparing a plan and setting your goal is one way to make yourself ready physically and mentally.

2. You have to choose a good rope.

Your rope is lifeline. Never underestimate your budget to find a good gear when you climb the rock.

3. You have to know when to climb.

Going against horrible weather condition is such a bad idea. Never make your stamina burn too fast with imminent threat.

(Presented at the recent entrepreneurship workshop for early stage tech entrepreneurs)

Get real!

It has been almost two months since we made last post. As many of you know, I’ve slowed down my travel mainly because of a newly born baby in February. Though, there was a huge backlog of meeting schedules and prior commitments that I had to follow up. So, I took few trips in the past two months which constantly made me on the road again. Why am I traveling so much? It is part of our conviction: building strong Korea-US cross border ventures and also part of our VC business: building new relationship to make our new investment practice moving forward. It’s been productive. I’m glad to be back in Seoul even if it is in the middle of steamy hot summer and humid monsoon season here.

Even if we don’t live in the Age of Discovery, that only select people had an opportunity to explore around the world, traveling around the world often inspires me and gives abundant new idea and discovery. I get to see what people consume on the other side of planet. I get to see what people are thrilled with. Something can be small here but same thing can be big somewhere else.

Our planet gets smaller and more accessible through fast mass transportation system and social media on the net. Though, at the same time, there is a part that we cannot fully capture unless we go there and live in. I grab big idea from people at the conference venue or large corporate office in the big city like Manhattan. I often hear more interesting things from people who I meet and make a small chat in the transit or local book store.

Maybe it’s time to turn off your iPad or maybe few days off from your FaceBook or Twitter accounts. You may pack a little bag for 2-3 days load with a few books (not on Kindle) and just go somewhere. Life is beyond our words and our identities on the net. What if we are not consuming, but in fact, are consumed by those new technologies and we lose our touches on real life? Get real and talk to people who you’ve never talked before. You will be surprised how rewarding those humane contacts with people can be.