Seoul: Land of the entrepreneurial Korean returnees

The December issue of Inc. Magazine has a lengthy and fascinating article about how Seoul is now the home of a burgeoning corps of young entrepreneurs and a “shocking number” of them are Korean returnees who were either born or educated in America. Inc. Magazine then asked the question: Why aren’t they starting companies here (as in, why aren’t they staying in America to become entrepreneurs)?

That’s a good question because a well educated person quitting a job to become an entrepreneur in South Korea can be considered a brazen act in a deeply conservative society – despite the fact that Koreans are known as “relentless self-improvers” because they spend more on private education (like English lessons and cram schools) than the citizens of any other developed country while cosmetic surgery is more common in the country than anywhere else in the world.

In fact, one Korean returnee turned entrepreneur met with an executive from a large Korean conglomerate to talk about a marketing deal, but the executive refused to talk business and instead wanted to know why a young man with a wealthy family and an Ivy League diploma was “messing around with start-ups.” He said that if his kid did what the young entrepreneur was doing, he would have disowned him.

Meanwhile, another young entrepreneur who is now the CTO of a California start-up and the CEO of another one in Seoul, got kicked out of the family home by his father, a college professor, for starting a company after finishing high school.

Unfortunately, older Koreans still view risk taking with suspicion as it was the Chaebol, Korea’s family-owned conglomerates, that has provided stability for Koreans while being an entrepreneur is seen as rebellious or even deviant as it goes against the system that made the country rich. Its also difficult for Korean entrepreneurs to raise money.

The good news for returnees? Those viewed as “American” or those who have good American connections can bypass the hurdles and raise money venture capitalists in the States:

“American Koreans have a big competitive advantage,” says Ji Young Park. “They can raise much larger investments from outside of Korea, and they can take business models from the U.S. It is much harder for a genuine Korean.” This has a cultural component as well: “Korean Americans aren’t predisposed to the Korean mindset,” says Richard Min, co-founder and CEO of Seoul Space. “They’re open to risk.”

The South Korean government has also recognized the need to encourage the creation of more start-ups and they have launched a series of policies to help budding entrepreneurs who, more than likely, will end up being Korean returnees.

Ironically, some Korean returnees talk about returning to the States for at least another stint to see if they can replicate the success they have achieved in Korea in a much bigger and more competitive market:

…even though he now speaks passable Korean, he has never stopped thinking of himself as an American. “I don’t know when, and it’s too early to think about ideas, but I know I’ll probably end up going back and forth,” he says. “I think it’s possible to do stuff in both places.”

In other words, Korean returnees are a win-win for both Korea and for America.

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