Shooting themselves in the foot
Continuing Chang’s questions: where are the leading Korean VCs and why there aren’t more successful Korean start-ups?
1. There should be more clever Korean VCs around
I read about Tea Hea Nahm of Storm Ventures a couple of years ago. Since then, nothing. He would, indeed, be a valuable asset who could join ranks as a blogger.
2. There should be a venture role-model
The start-ups that I’ve come across, all seem to share a common goal which is aiming for the quickest route to short-term success while eyeing the IPO as the exit plan. There simply is no other objective goals for long-term sustainable growth.
I agree NHN is the closest thing to a venture role model Korea has at the moment.
3. More Korean companies should brag about their product. In English.
Not only in English. Also in a context that is relevant or understandable to the rest of the world. Case in point, UCC vs UGC.
Ah, this reminds me of Bacchus-F, which had a sputtered expansion start and never realized its potential. Bacchus as you may already know is the God of Wine, but in Korea Bacchus-F has been a leading energy drink for decades. Bacchus, made by Dong-A Pharmaceutical, has held near-monopolistic market share as a vitamin supplement. That was until Vita 500 (비타 500) toppled it. Vita was superior because it could be purchased anywhere, whereas the caffeine-loaded Bacchus could only be found in pharmacies.
Back to my point, Dong-A had a great opportunity to capture the U.S. market, at least in marketing terms. They had a great, equitable name that was recognizeable (and pronounceable unlike many Korean products) to the North American market.
Dong-A shot themselves in the foot, not once but twice.
1) Focused only on the domestic market and not giving serious effort to stake out its territory early on during its N. American expansion.
2) They failed to strategically understand the N. American market. Namely, failure to forecast the lifestyle (ie, clubbing) trends that was taking hold at the time (1990s-early 2000s). A great window of opportunity was snatched away by the marketing machine Red Bull, which incidentally has the same ingredients. Dong-A finally rebranded its product with vivid, splashy graphics and descriptor “Energy Drink.” This comes too little, too late because they are falsely perceived as a copy-cat brand.
There is more. Daum could have been more recognizable if it had pursued in bragging about itself after the Lycos purchase. Kumho Tires is another. Not until the early-2000s, did it begin to do some relevant ads in car enthusiast magazines or PPLs.
One of these days, hopefully soon Korean start-ups will look abroad for sustained growth and initiate a serious effort to get the ball rolling.
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