Aviram Jenik is a rare entrepreneurial breed in Korea. He has built and exited two global companies and his third venture, Beyond Security, is working steadily towards an IPO in the US. In his free time Aviram makes Angel Investments in and coaches Korean entrepreneurs. I caught up with him recently to learn about his experiences as an Angel Investor in Korea.
Disclaimer: Ok, before you think you've missed something, Aviram is not Korean and (sadly) none of his three companies were built in Korea, but for the last two years this is where he's called home, having been lured by the charm of a local lass, his wife.
Aviram Co-founded Beyond Security with no external funding and managed it to profitability and to a position as one of the leading vendors in the Vulnerability Assessment and Management space. Prior to this he has founded 2 other companies that resulted in very successful M&A's, one in excess of $100M.
He explained, "I've been there, done that, and want to help founders do what I have done. Many others have helped me get to where I am today; I'm grateful for their help and want to pass it forward." While not selfless, Aviram believes that he now has a duty to help young entrepreneurs find success, a trait I have picked up from entrepreneurs across the globe, but until very recently have seen little evidence of in Korea.
In order to build a structure around his current efforts with Korean founders Aviram co-founded KOISRA Seed Partners, an Angel fund that provides small investments and a wide mentor network derived predominantly from his home-country of Israel. In this respect his Angel investment philosophy has clearly been impacted by the legendary Israeli entrepreneur, Yossi Vardi, who was also an Angel investor in Aviram's first venture, when he was only 19 years old.
Aviram talks about the need for Korean companies to think global (micro video interview)
One of Aviram's key investment principals is that Korean companies must think, and act, beyond their native borders. While there have been successful Korea-focussed enterprises in the past (Daum, Naver, Ahn Labs, and a smattering of others) the market is different than it was as little as ten years ago. Foreign competition can quickly consume Korean-only companies, and Aviram believes that it is a dangerous misconception that companies can build for Korea, then scale globally later. In order to stand a chance of real success Aviram strongly feels that Korean founders must think global from day one, and steadfastly build their company with this one aim. This means thinking and acting global, and may even mean learning English. Of course, a wholly global strategy can mean higher levels of risk, but the rewards are far greater. If you are Korean founder looking for Angel Investment from Aviram, forget it if you can't demonstrate convincingly that you are building something for the global market, and can prove how you're going to do it.
Five Common Mistakes Korean Startups Make
- Non-English Speakers: In order to build a global company, you should be able to communicate in the global language of English. This doesn't mean perfection, but to engage with VCs, customers, and clients outside Korea, if you can't get your vision across in English, you're facing a cliff.
- Lack of Social Interaction: Get involved on LinkedIn, Facebook, and Twitter, especially LinkedIn. If you're not on LinkedIn people won't take you seriously outside Korea, and don't be fooled by the fact your Korean friends aren't on LinkedIn. They are in the dark ages, and stand at at a disadvantage.
- Overspending: Find short-cuts for everything to power your success. use free resources wherever possible. Get fee advice and be cheap. Successful companies are built from nothing and yours should too.
- Lack of Mentors: Korea has a lack of experienced mentors who have built global companies. That's a problem. But that's no excuse. Go out and find someone to be your coach. There are people who can help. Understand that the more you help others the more help will come your way. And don't be pretentious. Going to a good university does not guarantee entrepreneurial flair. Surround yourself with people who have a similar vision and grow off each other
- Don't Imitate: Build your own identity and don't follow trends, make them. In the same way that Facebook is not a copy of something else, you should not copy other ideas. Use your knowledge of your market, and steal ideas from your competition, but build your own unique service, that has a strong differentiation.
Rome (also Google, Facebook, Twitter, etc) Wasn't Built in a Day
My most recent meeting with Aviram was focused on two startup introductions that I had made, and I tagged along to hear about how they were received. I made the introductions because I was impressed by the founder's global vision and the fact that they were both tackling real problems. These guys were certainly thinking global as well.
Sadly though, neither of these startups ended up with the goods. While there were hallmarks of potential, the ideas were too scattered. One entrepreneur wanted to beat Google, Facebook, Twitter, LinkedIn, Quora (and the rest) in one fell-swoop. While Aviram found the idea of that compelling (who wouldn't?) the founder had no clear road map to achieve his vision, and certainly would not be able to raise enough capital to realize it from the start. "Grand ambition is vital, but success comes in small steps across the life-span of a company," Aviram explained.
An Existing Culture of Entrepreneurship in Korea
While many would say that entrepreneurship has not begun to flourish until recently Aviram points out that there are actually signs of it everywhere. The rate of turnover on high streets in Seoul is phenomenal. Small businesses pop up faster than perhaps anywhere else on earth. Whole streets can be transformed over the course of a year or two, changing from quite residential areas into thriving commercially focused hubs, filled with coffee shops, eateries and boutique clothing stores. While not entrepreneurship in the type or scale Aviram invests in, he believes it demonstrates a creative and independent streak in Koreans that can be leveraged for much greater things, given the current climate that is ripe for entrepreneurship to flourish. It also demonstrates that the perception that Koreans are scared of failure is perhaps dramatically overplayed.
What is Your Most Recent Investment?
KOISRA Seed Partners has recently made an initial Angel Investment in Colango. Aviram describes the company as a "YouTube for Language teaching, which can be used by both teachers or students. KOISRA has made an initial 10M KRW investment and, based on performance in the next few months, will provide an additional 30M KRW themselves, or bring in another investor if the opportunity warrants."
Why Can Korean Startups Succeed?
While Aviram has not found a large pool of fantastic investment opportunities yet, he is bullish about the future. He explained that there are many similarities that can be drawn between Israel 20 years ago and Korea today. There is certainly no lack of capital for investment. Aviram believes that Korean engineering and business graduates are well-equipped to be successful entrepreneurs, so there is a great talent pool. He also describes Korea as a hungry nation. He is impressed with the passion founders have for success, and also the growing trend towards founders thinking bigger than even one year ago. He believes that Korean founders have all ingredients for success. "The one thing that is absent from the ecosystem is a pool of good mentors", he believes.
Kill The Zombies!
Aviram believes that there is a worrying trend of what he refers to as 'Zombie Companies', those that are funded, but are not making revenue from paying customers. "Instead of building amazing products for the market, they are building presentations to access government funding. This is crazy, and has to stop," he said. "This is not only the fault of the founders, it also demonstrates a false economic policy that the government has adopted," he went on to say.
What zombie companies tend to do is build a company first, with the CEO acting like the head of a corporation rather than teh inspired team leader of startup. "Korean CEOs must understand that to build a successful company, they must first build a product and gain genuine traction in the market, rather than first building a company that suits the requirements for attracting government funding.
What is Needed to Get Over The Next Hump?
Simply put, Korea needs at least one big tech venture exit. This will produce a round of capital, backed by experienced entrepreneurs. In Korea at the moment there is plenty of capital, but a distinct lack of experienced mentors, like me, who have been there and done it. This is needed to lead the up-coming generation of Korean entrepreneurs to find their own success more quickly, and with a better knowledge of how to achieve it efficiently.