2016

[KC101] The Ballad of Kickstarts – Together We Can Make Better Startup Nations

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Daejeon ─ The number of startups is showing how much a country’s economy is dynamic. From the beginning of 21st century, millions of idea-based companies newly born and gone at Silicon Valley. Venture capitalist and angel investors supported those business models.

During last decade, the world had faced huge financial shocks (9-11 and Lehman Bros Subprime Mortgage explosion) twice. Nevertheless, both shockwaves came from US. Many people might claim that dynamicity is one of various key factors to rebuild US economy. For sure, it has contributed to GDP without a doubt. In 2015, 8 of top 10 annual earnings marked in the United States were ICT-based companies including MS, Google and Apple. The others are Nike and Coca-cola.

 googleevilGoogle Carlifornia Headquater ⓒ Tumblr

As is tradition of the venture industry, Initial Public Offering (IPO) or Merger and Acquisition (M&A), sellout was a tool to retrieve their investment for a long. We called “Exit” for this pattern. But Unicorns – billions of dollar or more evaluated ICT companies, but established past 10 years – are different. After 2015, Airbnb, Uber kind of these unicorns don’t have to put their company on stock market.

chartoftheday_3743_billion_dollar_startups_n.jpgUnicorns ⓒ Statista
  1. To keep investor relations, they should complete financial statement, observe commercial law and so many strict restrictions against big business.
  2. Stock market is very vulnerable in these days. Although your company didn’t have any fundamental problem, your stock value is going down when total market index headed to bottom. Moreover, the Facebook or Twitter, Alibaba were on controversy whether overestimated or not. Their stock value reached the peak at the release point, since then most of internet-based companies recovered its value. Conservative investors have already experienced dotcom bubble in early 2000s. We are not sure that social media and mobile application created visible economic value.
  3. Private Equity Fund or Venture Capital didn’t find any suitable investment. If you put money into your banking account in some countries, you should pay rates in condition of negative interest rate. Whilst remaining low key interest, cheap cashes inflow into stock market and real estate. Someone acquired it is another risky bubble. Furthermore, portfolio investment to developing countries also looks alike glimpse. Once it erupted, perfect storm splashed all over the world. Instead, many investors focused on unicorns. Its share is not able to sell yet, but when they hold unveil share, annual dividends are still attractive to tempt venture capitalists.
screen-shot-2014-02-11-at-10-37-18-am.pngTesla factory, Nevada ⓒ Business Insider

Nowadays startups changed the game. If you think for a second, we have been faced the challenge of change: I already posted about RESHORING last time, which actually happened in developed countries. Tesla Motors is an example what exactly goes on. Until Tesla is going to NYSE, people believed Detroit-style manufacturing is passed away million years ago in US. American cars weren’t had good quality as much neither German brand nor Toyota. They are not competitive comparing to Hyundai/KIA, Mazda or Subaru.

Tesla Motors brought back their manufacturing industries to territory their own. Tesla itself is nothing new, no rocket science, but electric vehicle is able to be made by complication of completely sophisticated computer technologies. Now Nevada state is famous not only by Las Vegas, but also Tesla factory.

ICT is the game changer for the industry 4.0 revolution, but unfortunately this may be the reason why many governors believed their protectionism could be worked. Change the topic. Industry 4.0 does matter. Social media or big data, ICT itself is not much valuable as we thought. It is meaningful when information and telecommunication technology converged with traditional industry.

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Jeonbuk Creative Economy Innovation Centre ⓒ Hyundai Motors

Canada and South Korea tried to be a startup nation, because we had been suffering with the limit of traditional industry by the new normal economy – Upside down; Canada had a trouble with reliance on oil price, and disadvantage of import and export industry Korea had.

On the other hand, State of Israel, where I visited on July, doesn’t have any specialized manufacturer. Small enterprises shook the global market with a brilliant idea, but to become a top class industrial leader they must have manufacturing infrastructure too. In case of Israel, their economy absolutely relied on ICT industry, and this is why they envy Canada or Republic of Korea.

Vancouver is one of startup blooming cities. For web developers, Vancouver can be a paradise to kickstart their workplace because of its circumstance and beautiful ocean view, incidentally, no. It’s not. Skyrocketing rents and heavy taxes are inadequate to startup. But here is good news for potential entrepreneurs in Metro Vancouver.

Microsoft launched their software development laboratory and startup incubator centre (MS Canada Excellence Centre) at Nordstrom, Downtown Vancouver on 17th June, 2016. It boosts startup businesses and offers job opportunities for Vancouverites. Talented Canadian doesn’t need to go California to open their business. MCEC ignited the startup boom in Canada. – Just stepped into startup war.

imagePM Justin Tredeau visited MECE ⓒ CBC

Meanwhile, Korea is also tried to facilitate its startup ecosystem to find the pathway to future. Korea has Pangyo Techno Valley, TIPS programme (@Gangnam, yes that Gangnam), Creative Economy Innovation Centre in 18 provinces and metropolis and so on. You can put Wi-Fi AP, glass board to write brainstorming ideas onto the building. But truth that I learnt is creative things comes not from copycat Hackathon, but from entrepreneurship, mindset and environment.

TIPS TOWN at Yeoksam, Gangnam district ⓒ KISED (Korea institute of startup and entrepreneurship development)

Some fast-following countries also are chasing us. China already firmly had manufacturing infrastructure, less expensive workforce and factories to make all products on the Earth. Nowadays, young Chinese entrepreneurs refused to success family business from their parents, but want to startup on their own. Alibaba just cut the tape. They are familiar with computer science and internet device. India was an outsourcing partner for US ICT companies, historically Hindi has many mathematicians and their second language is English. PM Narendra Modi promoted India as most business-friendly country in the world. They already have well-trained programmers, too. So it is a piece of cake to be on the list of startup nations. All things had been prepared. The only thing left for this countries is just pulling a trigger.

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Where do I lose you? Oh, How about we put developers from both nations? Canadian developers and Korean manufacturers, this is an ideal collaboration for the Industry 4.0.

Cross-border technology transfer and commercialization is a part of routine nowadays. VCs are willing to pay for positive startup prospects. Government and public institutions are giving financial aid to innovative SMEs and startup companies by tax but without fee. Global scale MNCs Samsung, LG and Hyundai Motors readied to open their wallet for idea if it is valuable wherever you are. When we shared the value, the value will become bigger and more impact.

 20160804_2569279_1470219618_99_20160803192205Powtoon at Rothschild Blvd, Tel Aviv. State of Israel ⓒ MK Business newspaper

In conclusion, economic partnership between Korea and Canada offered you brand new business opportunities. This is the series finale of Kaycee 101. I had visited many places and meet many people in both countries whilst I wrote articles. If you were listened to my postings, chance is upon you. Do you have an idea? Grab it. Take this chance, or face challenge of change? You need to make a choice by yourself. I hope these notes could be a guide for your business itinerary. <完>

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Ryu, Sungyoung

                     Researcher ( http://www.tipa.or.kr )
@ Technology & Information Promotion Agency

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