Whenever he visits Seoul, Silicon Valley investor Eric Kim likes to watch people on the subway.
Goodwater Capital cofounder and managing partner Eric Kim (Goodwater Capital)
Just riding the train for hours and watching how people use their smartphones, whether they spend more time watching TV or on social networks, gives him an insight on user habits before they reach Silicon Valley.
Kim, who left Texas-based Maverick Capital to found Goodwater Capital last year, has been an early-stage investor and adviser to top Korean start-ups Kakao, Coupang and Memebox. As an entrepreneur in Seoul in the early 2000s, he watched Korean tech kick off ideas like front-facing cameras and social networks years before the West caught on.
Based on those experiences, he has learned that Korea continues to be a gauge for global trends, and maintaining a worldly perspective is becoming increasingly crucial for Silicon Valley, he said.
“Having a global perspective is really important, even if you’re investing locally in Silicon Valley,” he told The Korea Herald during a recent visit to Seoul. “Seoul, South Korea, being the crystal ball it is, has and will play an increasingly important role in that perspective for all investors, whether in the U.S., Asia or other parts of the world, due to the global nature of tech.”
The mobile app ecosystem has leveled the playing field, meaning start-ups the world over must eye markets both locally and abroad. In Korea, with such high infrastructure, population density and Internet connectivity, local entrepreneurs have the opportunity to develop their business models here before exporting them abroad, he said.
From Silicon Valley’s point of view, he said, the peninsula over the Pacific is getting more and more appealing. They view Korea not only for its technological development and connectivity, but also as a strategic hub that could serve as a jump-off point into thriving Southeast Asian markets like Indonesia, where smartphone penetration growth is explosive.
Investors who have never eyed Korea before are reaching out, like Sequoia Capital, which led a $100 million funding round for Coupang last year.
U.S. investors know the game has changed. More start-ups in Asia are building huge cash balances, and innovation is springing from the continent ― meaning they have to keep their eyes not only on Facebook and Google, but also Alibaba, Samsung, Nexon and Naver, Kim said.
“There’s a lot of innovation happening here (in Asia). There’s no monopoly of innovation in any one geography anymore. That’s the new reality we live in,” he said.
And from Cyworld of the 1990s to Memebox today, Korean start-ups are leading the trends especially in mobile messaging, next-generation e-commerce and mobile monetization, he noted. Same-day delivery service Coupang has become one of the world’s most innovative e-commerce giants, while Kakao used SundayToz’s wildly popular “Anipang” to drive its mobile game platform growth at a speed the world had never seen before, Kim added.
The success of today’s leading Korean start-ups is no coincidence. Their founders’ global mindsets, being able to see things from diverse perspectives, were key, Kim said. Coupang’s Bom Kim went to Harvard, Kakao’s Kim Beom-soo tried his hand in Silicon Valley and Memebox chief Dino Ha interned for fashion designer Tom Ford in New York before entering Parsons School of Design.
That perspective was the game changer for Memebox, which the venture capitalist did not find investable based on its first vision as a subscription service for Korea. But the start-up’s pivot to a K-beauty global cosmetics brand through Internet and mobile channels, a new concept at the time, earned it funding from not only Goodwater but also Formation 8, Altos Ventures and other big names. After expanding into San Francisco and China, it is seeing demand from more than 60 other countries, Kim noted.
While the Korean start-up scene is still nascent, Kim finds its advancements “incredible” from when he was an entrepreneur here. The industry has created thousands of jobs in a short time, and support centers like Maru 180, D.Camp and Google’s Campus Seoul mark exemplify the changes.
Entrepreneurs’ global mindsets will breed more success cases, which in turn will propel the local ecosystem’s growth, he said.
“A rising tide raises all boats,” he said. “I think we need to see more of these winners like Kakao, like Coupang, and that will fuel that virtuous cycle.”
For more information, visit goodwatercap.com.
By Elaine Ramirez (email@example.com)
Start-up Seoul is a series featuring players in Korea’s emerging tech start-up scene. This is the 14th installment. ― Ed.