The recent announcement of Shin Dong Bin, the chairman of Lotte Group to dedicating US$85m (KRW 100b) towards accelerator funds was covered by major media outlets including Chosun, Joongang and Hankyung. Naturally, the articles offered positivity in covering the launch of ‘Lotte Accelerator’ which would commence in January next year and support youth startups with a total of US$85 million in funds.
The articles also focused on Shin Dong Bin's pledge of US$8.5m (KRW 10b) of his own personal funds to be dedicated towards startup early funds, infrastructure and mentoring. Among other plans, Chairman Shin also announced his plans to promote more than 100 startups in the next three years.
As the editor of this site and pundit in startup investments, I have my thoughts regarding this recent coverage. From all my experiences (direct and indirect) in this field, I have learnt a thing or two about startups. Perhaps the most significant is the realization that in majority of cases, in order for any startup support to be meaningful and successful, the focus needs to be directed towards areas that will provide the group a foundation for new growth.
Over the years, there have been many startup encouragement programs, however in many cases they have been underhanded and as a front only to win government favor or to appease members of corporations. Typically, they often invite key global figures to startup inauguration events, yet finding any evidence of their existence beyond this event is near impossible. So you can guess what lies behind all the smokes and mirrors. In some many cases the representative responsible suddenly changes position or the accelerator business becomes obsolete following organizational changes.
Similarly, for ‘Lotte Accelerator’, many in the startup field are questioning the intent: “Why now?” “What solution is Lotte, a duty free shop operator looking for?”, “What sort of mentoring would a Lotte representative offer”, “Why does the expressions of a person pledging a donation look more like he’s paying a penalty or fine?”, “Media articles report $85m, yet Chairman Shin Dong Bin contributes $8.5 million”, “Is this an investment rather than a donation?”. Clearly there is much scepticism from those in the startup field regarding Lotte's intents and reason maybe due to a disappointing history.
If I were asked, how would I confront these negative reactions, I would above all ask actual person in charge to change their perspective on startups. Startups have built up much experience, and with it the ability to easily recognize whether a company representative is parading for ‘quick benefits’. My hope is that we can do away with previous disappointments and instead focus on creating opportunities for modern companies to partner with startups to create future opportunities.
Using this opportunity, I would like to ask all those in the field of accelerator business to think about “Why are we operating an accelerator and how can we partner to create future opportunities”. In particular, I would like to invoke deep meaningful thoughts about goals for operating partnerships focused not on 1 or 2 years but instead on 10, 20 years and beyond.