Weekly VentureSquare Stories are summaries of some of the week’s top posts relating to the Korean startup and venture Industry.
Socialinus Receives More Support from Stonebridge Captial
On the 20th of December it was announced that social game company “Socialinus” received a further 500,000,000won investment from Stonebridge Capital. Socialinus is a gaming company which has combined the talents of former staff from NCsoft and NHN. In 2010 the company released the Facebook game ‘VNH Poker’ which is now available in 13 different languages. VNH Poker ranked as the third most played poker game on Facebook and the company is now planning to branch out into other platforms. In January this year Stonebridge Capital originally invested 400 million won into Socialinus. CEO Klim Mi-young said that the company would use the new capital to extend their services to mobile devices and work further towards their goal of becoming the global leader of board games on Facebook. Stonebridge expressed confidence in the startup’s service, stating that the company’s revenue model had good potential for success. Socialinus’s second game “Farkle Online” is expected to be released early next year and another game for mobile platforms is currently in the pipeline. The company is also planning to focus its efforts on puzzle games in the coming year.
Softbank Ventures Invests 1 billion won in VCNC
On the 22nd of December it was announced that Softbank Ventures had invested 1 billion won into ‘relationship focused’ venture company VCNC. ‘Between’ is a “closed” social networking app which is available in four languages and has been receiving good reviews on the Android Market. You can read more about VCNC and their app Between here.
The Guardian and Financial Times Report on the Spread of K-Pop
Recently both the Financial Times and The Guardian reported on the popularity of K-pop around the world and how it has spread. Financial Times claimed that the globalization of Hallyu was because of easy access to social networks and Youtube, while The Guardian gave an analysis stating that Korean dramas played a big part in drawing more fans. The article divided Hallyu into two periods. The first was from years 1997 to 2000 which came about due to the popularity of the drama ‘What is love all about?’. The second ‘hallyu wave’ started in 2003 due to the popular drama ”Winter Sonata’. After this, YouTube acted as a catalyst for viewing Korean dramas which are always accompanied by soundtracks of K-pop artists. The Financial Times did not actually focus too much on K-pop itself but focused on the fact that international investors were not too confident in investing funds out of fears about bubbles that may be forming.
Will North Korea’s Economy Open Up?
Over the last 24 hours people have asked questions such as; Is Kim Jong-il really dead? How did he die? Was our government aware that he was dead or were they in the dark? And then to questions such as how stable the change of leadership will be and what effect it will have on the Korean peninsula. But many people like me will be asking questions about how this will change North Korea’s economy, such as:
Will North Korea’s economy open up?
There is no doubt that this will happen. Countries worldwide have opened up their economies including close neighbor and friend Russia. Even China, which still had a very closed economy when Kim Il-song died, has proven it has an economy which has certainly opened up.
If it does open up, how will this take place?
It is bound to happen within 1-2 years or if it takes longer, 4-5 years. We can look to China as an example of the order in which the economy might change. 1) State-owned enterprises and development of the heavy industry 2) Development of coastlines and establishment of areas for foreign trade, 3) Agricultural reforms.
If it does open up, what economical benefits could it have for South Korea?
There could be many economic gains for South Korea if North Korea’s economy opens up. The two main possibilities can be divided into two parts; potential for future demand and potential for future supply.
To list some of the main points:
- Physical distance: The market is in very close proximity.
- Market size: The market size is approximately half the size of South Korea’s population.
- Consumer relevancy: Due to similar language and culture, products and services can offered with little modification and used immediately.
- Economic development: Due to the countries undeveloped economy, we will once again be able to provide simple businesses for infrastructure such as engineering, construction, phones, distribution and consumer goods similar to South Korea during its heyday from 1970 to 1990.
Analyzing the Competitiveness of Platforms
In celebration of the of publishing of “After Smart”, a panel discussion was held at KT’s Digieco. After Smart is a recently published book by the developers at KT Digieco, Jeong Ji-hoon, Kim Jung-tae and myself. The book mainly discusses future trends which are associated with the keyword ‘smart’. I mostly wrote about platform wars. Here are some questions that were asked to me at the event.
Issues involving personal information are become bigger, what is the fundamental solution to this?
All the incidents involving personal information over a number of services have all involved users’ national identification numbers. We need to stop telling internet companies to not use the system and just get rid of it completely.
From a platform’s point of view, why do they have to focus beyond Korea?
Platform’s compete for the number of customers. Because of this, without at least 50,000,000 to 100,000,000 it is difficult to become a platform. Hence, you cannot make those numbers with only domestic users.
Why isn’t the Venture ecosystem growing?
I think that large conglomerates and mid-sized companies having no experience and no will to initiate M&As is the biggest reason. If ventures are to grow then they need an exit model, but in Korea there are not many instances of this happening. This is why many smart people are staying away from ventures.
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