A growing number of Korean startups are looking for opportunities to join one of today’s most popular startup accelerators overseas. Famous examples include: MemeBox, a successful Korean beauty commerce company, which participated in Silicon Valley’s Y Combinator in 2014, MycooN, offering battery swapping & portable chargers at local convenience stores, which graduated from 500 Startups in 2014 and BitFinder, a manufacturer of portable air purifiers, which graduated from Techstars in 2015.
Of course, enrollment in a prestigious accelerator program doesn’t immediately guarantee your startup a glorious success. However, it is undeniable that there are many benefits to be a part of such accelerators outside of Korea, including international networking opportunities, exposure to foreign investors and advice on scaling your business through overseas expansion.
In addition to MemeBox, two Korean startups, “Miso(미소):O2O home-cleaning service” and “Soomgo(숨고): specialized lesson matching service” that proudly went through Y Combinator (YC) in the last two years. Platum, a leading online startup media portal, sat down with the founder of each company (Victor Ching from Miso and Robin Kim from SoomGo) to hear about their incredible experiences at YC.
Q: Both companies are focusing on the domestic market right now. What motivated you guys to apply for overseas accelerator, specifically YC?
Miso: I was born and raised in Hawaii, went to University of Illinois – Urbana Champaign, and my first job was in the United States. I always had a fantasy about YC. I had an investor meeting at the beginning of my startup journey. At that time, Kakao was about to enter the market while similar companies went out of business. I was fluent in English and had some foreign network to leverage, so I figured I should prepare myself to attract foreign investment. In fact, YC rejected me three times until I made it on the fourth try.
Soomgo:YC is ranked #1 in Forbes Magazine’s “Top 100 Start-Up Accelerator Program” and is more selective than say Harvard MBA. It has a strong alumni network, including Airbnb and Dropbox. YC has graduates of more than 1,000 startups from all over the world, and has been studying their successes and failures since 2005. Embarking on a startup journey often makes you feel lost and hopeless. Therefore, I thought that it was necessary for me to receive mentorship and guidance from those who were in my shoes before.
Q: Any memorable questions or parts of the application?
Soomgo: The biggest part of the YC application is answering who your co-founders are and why they started the company. Instead of submitting a single application under a company title, three co-founders must submit their own applications. Founder’s story and perspective must stand out in the application. Most early-stage startups aren’t ready to prove their product-market fit with certainty. As such, YC places greater importance on the founder’s ability to quickly adapt and respond to unexpected changes, such as market demand or customer needs, over the completed product itself. Since running a startup requires grit, YC seems to care a lot about whether founding members have a sense of mission and purpose (why they do it). They also seem to look for the story of the founder’s growth to see if he/she has the potential to tackle the obstacles he will face in the future.
Q: There tends to be a lot of companies run by a single-founder in Korea. Is it absolutely necessary for co-founders to work on the application together?
Soomgo: This is the aspect that Korean ventures find very intriguing. At YC, you have a lower chance of getting admitted if the startup is led by one founder. In the media, it is the CEO that typically receives the spotlight, but YC advises that startups have a better shot at succeeding when at least two founders operate the company together. If the co-founder owns less than 10% equity stake in the company, YC doesn’t acknowledge him/her as a co-founder and thus won’t allow them to list his/her name on the application. In our case, we have two co-founders (Kim Hwan: CTO, Jiho Kang CPO) whose YC application were denied twice in 2010 and 2012, which motivated them to prepare a stronger application this time. Their experience at 500 Startups in 2011 also helped a lot during the application process.
Q: What kind of experiences did you have at YC?
Miso: The program made our team grow tighter. Nine of us lived in a three bedroom apartment while spending day and night working together. Overall, this was an invaluable experience for us.
Soomgo: Silicon Valley has the highest average income in the U.S. I expected there to be a lot of societal issues due to large income gaps but I was wrong; I felt that in many ways their sense of community was stronger than in Korea. Their high-income earners seemed to have a strong sense of social responsibility and were very modest.
Q: What are some differences between foreign and Korean accelerator programs?
Miso: First, YC didn’t make participation of any of their programs mandatory. When there were sessions that we felt not directly relevant to us, we didn’t attend them. What YC really emphasizes is “focus”. Too many founders spend about half of their time on going out meeting people, but YC discourages founders from doing so. Rather, they encourage you to focus on their customers and service instead. For me, had they not reinforced this point again and again, I would have felt more discouraged about the lack of network.
Q: What are some advantages of Korean startups receiving investment from foreign VCs?
Soomgo: It sounds obvious but network is the main advantage. If you only stay in Korea, you are limited to seeing only the successes or failures of domestic startups. Although it makes sense for Korean ventures to walk in line with the Korean market, sharing your experiences and learning best practices from foreign investors or accelerators allow you to develop a more flexible problem-solving competency.
Q: Lastly, what are your company’s near-term goal?
Soomgo: People often check out G-Market (Korean Amazon) to buy goods and I hope that’s the case for Soomgo when people need services help from others. To make this happen, we plan to expand our existing service category up to 1,000 by 2018. Our service is currently limited to connecting service providers to consumers, but we plan to offer our own services, including schedule planning, insurance, payment management and escrow. In addition, we plan to launch an iOS app this quarter. In the longer term, we will consider entering the Indonesian, Malaysian and Thailand markets.
Miso: We intend to increase the transaction volume of house-cleaning service. Our goal is to transact over 10,000 orders per day. We’re about to offer a new moving-out cleaning service and will continue to provide the utmost life convenience to our customers.
Inspired by Platum
Soomgo(숨고): Soomgo is service marketplace where customers and local professionals for over 450 services come together. Their services range from private music lessons and home cleaning to wedding planning and web development among many more.