Robert Taylor, an American entrepreneur living in Seoul, clearly remembers one of his earliest attempts to pitch his life coaching services to a marketing director at a big Korean firm.
“For 45 minutes, we sat there while he told me why my business wouldn’t work,” said Taylor. “He assured me that cold calling simply couldn’t succeed in Korea, because everything is based on relationships.”
Fortunately for Taylor, he decided not to heed the marketing man’s words. Today, he says, his firm, One Amazing Life, has a growing clientele of both foreign and Korean business people for his classes on life coaching and presentation skills.
“I sold my car, my 401(k), and my wife and I had to move to a smaller place,” said Taylor of the trials he faced in establishing his business.
“So in January I decided to adopt this more aggressive pitch. It was a crazy idea, but it kind of worked.”
Though Taylor’s approach and business model may be unorthodox, his attitude toward naysayers is a common one among Korea’s growing coterie of foreign entrepreneurs.
Keeyeon Warren and Jonathan Carfield, two ethnically Korean adoptees from the United States, are constantly asked whether their Internet start-up, Korea Bites, which lets users order food from Korean restaurants in English, is really viable for such a limited and transitory English-speaking population.
“Think of a McDonald’s that opens in a small (American) town of 7,000,” said Carfield. “They think it’s profitable, so we think it’s silly to say the market here’s too small. We have a core audience of 20,000, we have low overheads, and we expect plenty of gyopos (foreigners of Korean ethnicity) to use us regularly as well.”
“If you want to do things differently, it can be very hard, because people say, ‘Koreans don’t do it that way; we do it this way,’” said Reto Zimmermann, co-owner of the newly opened luxury men’s shoe shop Zimmerman & Kim. “But this is also a great opportunity because you can offer something truly new.”
Statistics indicate that, for all Korea’s opening to the world in recent years, plenty of opportunities remain for the budding foreign entrepreneur. Though foreign direct investment into Korea hit a 10-year high last year, it still only amounted to $12.9 billion, comfortably more than Malaysia and Thailand, but a fraction of the sums pulled in by Hong Kong and Singapore.
In addition, despite concerted efforts to make Korea more conducive to FDI ― including the adoption of an array of English-language business services ― the total number of business applications by foreign concerns numbered just 3,107 last year, marginally down from the year before and more than 1,000 fewer than the year 2000. In conditions such as these, foreign entrepreneurs often find they have niche markets more or less to themselves.
Take Simon Walsh. After trotting around much of Western Europe and Asia, this 26-year-old New Zealander finally settled in Korea because he “wanted to live in a country where they play rugby.”
After spending a year here, he grew aware of the minimal presence of New Zealand wines in Korea and decided to do something about it ― along with one of the female Korean rugby players he had been coaching.
“Korea was an untapped market for us because most New Zealand firms focus on Japan or China,” said Walsh, who runs Tiwi, a firm importing New Zealand food and wine, with his Korean partner, Sunny Myung. “Basically the market wasn’t there ― by staying specialized, we built a market around New Zealand wine.”
But of all the countries they could do business in, why choose Korea? For some, family or heritage is a big pull. Zimmerman and Taylor both have Korean wives ― which greatly simplifies visa issues ― and Warren and Carfield are of Korean descent. But among this new wave of foreign entrepreneurs, other similar reasoning emerges.
“As developed as the economy is, it’s still a blue ocean,” said Carfield. “As foreigners, we could take advantage of certain niches.”
“There’s not much competition in our field,” said Taylor of life coaching. “And because I’m a foreigner and I speak English, I can get access to CEOs in a way Korean guys and even my wife can’t.”
For Zimmerman, Korea is in some ways the best of both worlds: still with gaping holes in the market, but without the often problematic infrastructure or political conditions of India or China.
Yet as the five men acknowledge to varying degrees, business in Korea comes with its own, particular brand of challenges, not least the issues of language.
“If it weren’t for communication problems, we’d have been up and running three months ago,” said Warren, “which is kind of ironic, because our platform helps solve communication issues.”
“Organizationally, it’s almost impossible to get accurate information to the last detail,” said Zimmerman. “In Europe if you ask for business fees at a bank, you’ll probably get a leaflet.
Here, the banks said, ‘That’s not important, everything will be fine!
“Also, the IT infrastructure is an absolute nightmare. They always say ‘Korea has great broadband!’ but Korea is stuck in a big Internet bubble that has nothing to do with the rest of the world.”
Though Walsh was quick to talk up the advantages of being nimble and occupying a niche market, he also highlighted the lopsided nature of Korea’s corporate landscape.
“Big companies dominate in Korea, leaving small firms fighting for the scraps,” he said.
“If you go into New Zealand with a good product and a good price, they’ll buy it,” he added. “But in Korea, you actually have to be on the ground, building relationships. There’s a barrier to break, but once it’s broken, Koreans are very good to deal with.”
“Businesses need to be here,” added Zimmerman. “You can’t do it by remote.”
As for two other oft-cited issues about Korea’s corporate landscape ― bureaucracy and the sometimes merciless cut-and-thrust of business dealings ― the five entrepreneurs were generally upbeat.
The business registration process, they said, was pretty straightforward, with extensive help available in English. Though the 50 million won, or $45,000 (now 100 million won) required to gain a foreign investor’s visa added to what Walsh called “massive upfront starting costs,” he also said he was able to complete the process fairly quickly.
“You hear all these horrible stories about how Korean business guys are shady,” said Warren, “but it’s case by case ― you’ve got to try. The Korean people have actually been our biggest advantage.”
Whether an indication of their early enthusiasm, or of the genuine business conditions prevailing in Korea, these young entrepreneurs all agreed that business in Korea was a risk worth taking ― whatever the skeptics might say.
“Don’t do it,” Walsh said, when asked what he would say to aspiring foreign entrepreneurs. “But if you’re the kind of person to ignore that advice, then you should definitely do it.”