by Joshua Flannery | Manager, Student Entrepreneur Development & Co-founder at FounderLab
Asia isn’t short of cities, states, and countries claiming to be the new startup capital, and with the recent announcement of the new Pangyo Startup Campus, Korea has as much right to this claim as any other.
Before you go on to read about a few of my personal learnings, you should know the best part of this post is right at the very bottom – a tool kit for those interested in the startup ecosystem in Korea. Before we get to that though, there are a few stories I’d like to share.
In a previous post on Starting up in Japan, I referred to an edtech venture I set up in Osaka called StudyLink株式会社. It was during my time running this venture that I gained some exposure to business in Korea, thanks to the business trips to Seoul I took every three months or so over a three year period (I had to leave the country every three months as per visa requirements at the time). It was an opportunistic attempt to form partnerships and scale what we were doing in Japan across the broader North East Asian market.
I learnt some valuable lessons about doing business in Korea, a few of which I will touch on below.
Our Australian mother company, Learning Information Systems t/a StudyLink, was experiencing a demand from university and college clients for an offering that supported student marketing and recruitment efforts in Korea, so I set about looking for a Korean equivalent to Yahoo! Asia that we had a successful partnership with (Yahoo! Asia Education was actually a white labelled version of our search and apply online education course finder portal).
Getting to the truth of the matter, I never succeeded in finding such a partnership in Korea but during the process of failing I learned some important lessons on the topic of “localisation”.
One of our naive assumptions at the time, assumptions which were a linchpin in our market entry strategy, was that simply translating content into Korean language and having Korean speakers on the support team was enough to be accepted as a platform used by mainstream Korean customers. How I wished I knew about design thinking methodology back then!
While the actual need to invest in product redesign for the new market is an obvious one in retrospect, this wasn’t the biggest gap we needed to close in our offering to attract local partners and customers. It was how we measured and reported “success”.
Metrics aren’t universal
The biggest issue for us was the way we were (or weren’t) perceived in the Korean market. In Singapore, like Australia, we had positioned ourselves as a digital offering with metrics and reporting around ‘unique users’, ‘enquiries generated’ and ‘click through rates’ which was on par with general (Western) website best practice at the time.
In Korea however, we were being compared and contrasted with other offline businesses in our vertical – student marketing and recruitment – which meant our web metrics were almost worthless in comparison the student recruitment agent services like IDP Education, IAE Global or Uhak Station.
These companies who met potential customers face to face added a plethora of value add services (including assistance with complicated student visa applications), measured by one core metric: how many actual students they sent to their partner universities and each one was worth thousands of dollars – even in the short term. If we were going to be serious about Korea we just needed to have taken a step back and adjusted our model to leverage what we had with how the market worked. Sadly this isn’t something we had resources for.
Agents vs exclusive reps
Another big lesson for us was how to approach working with in-country sales representatives. We had a good understanding of what we needed in a local sales rep: someone who could communicate well, someone with an understanding of the market landscape, and someone already connected to the sector.
We wanted someone permanently in-country for sales and marketing so worked with the Austrade offices in Seoul to identify a trustworthy sales person with relevant experience and interest in becoming our presence in Korea. I have to admit, the guy they found for us was a good fit. He’d done similar work for an early Australian e-learning platform, was connected with the local education players, and had great English. We signed an MoU, had a great kick-off meeting and generally agreed on the strategy and approach to enter the market.
We did make a mistake though. We never thrashed out expectations on both sides around the specific topic of face-to-face catch ups and training. Foolish assumptions of how often we would physically meet were made on both sides. It turned out that he assumed monthly or at least bimonthly but my budget for travel to Korea was more along the lines of one visit per quarter to begin with and that would gradually become less frequent with time.
Like Japan and much of Asia, business in Korea demands face to face relationship building, regardless of the irony when you are introducing essentially an online communication platform into the market. This is especially true at the beginning of such an important business relationship. This is important for trust building just as much as anything else.
After six months the relationship fell away and at some point he stopped answering my calls and emails. As I learned later on, partnerships with agents and other sales or marketing partners demand face time and the amount of effort you put in on that side almost always influences the success of your partnership.
Faster adoption of education technology
More of an observation than a lesson learned was that the Koreans were far ahead in terms of using online portals and services in certain niche areas, including some education technology companies that I met during my visits. A couple that come to mind include Apply114, a portal that was focused on university entrance examination preparation but also connected students with partner universities via a smart application form.
A similar company, UWAY, had a database of 500,000 high school students looking to study at university and appeared to have agreements with every university in Korea. They were dynamic, exciting businesses operating a scale I hadn’t seen in Australia.
Coming back to the point of this post, I’d like to encourage more Australian entrepreneurs to consider Korea as a market to scale into or at least consider so I am linking in below a unique document for those with an eye on Korea, or even simple curiosity into the Korean startup scene. This was put together by the amazing Catherine Kim, a UNSW student quickly becoming the go to person for all things startup between Korean and Australia. I hope you enjoy this and find it as useful as we have.