Justin and I got the opportunity to chat with Jeff Clavier about the Korean startups and the ecosystem. Jeff Clavier has a MS in Computer Science and a degree in Distributed Computing and is the Founder and Managing Partner of SoftTech VC (one of the most established seed VC firms in SV. They closed 150 investments since 2004!). What I found fascinating and admirable was that although SoftTech concentrates on the US, Jeff makes at least 1 trip to Asia per year to understand the current trends and the general outlook of the ecosystem in Asia. Jeff was abe to give me his insight to the Asian market from a non-Asian point of view.
On the Asian market in general
To him, what was most interesting was the penetration of mobile and broadband in Korea. He mentioned that the market for mobile app services in Korea is huge, and so some of the prominent Korean services will eventually make it to the US. So: there's a lot of potential here. But the Chinese market is huge - so big that it is enough for those outside of Asia can solely concentrate on it alone. Korea is a small country. This means that the company can only grow to a certain size. During the chat Jeff highlighted that Korean startups need to "understand the domestic market, leverage what we have here (the broadband, the mobile first) and leverage it with a global approach".
On US startups expanding to Asia
When I told him that I was at the Pre-Disrupt party in NY earlier on this year, and how I found it interesting that the US startups are not too excited about expanding to Asia (but Asian startups seem eager to expand to the US). This is of course because American startups want to be well-grounded in their own country first, before moving on to others. This will take at least 3-4 years. He also told me that "typically US entrepreneurs will know that if they are successful they will try rule the world. If they can, they will manage and scale to owning the US first (First target). Once they’ve done that successfully they will expand to Europe or Asia. Doing both is usually hard. It's really rare. If they go to Asia, They will go to Japan, Korea, Taiwan - before going to China, because China is too huge. As for Europe, the beach-head will be in the UK because we speak the same language. It's easy. Then they will expand to other parts of Europe. That's the 'tried and true' way of doing things." (He gave us an interesting example of Fab.com - we will be writing another article on this, so watch this space.)
On having a global outlook
Having a global outlook is important, obviously. But Jeff raised two interesting issues that I never thought of. In SV, failure is more generally accepted, which is different from most cultures around the world. On that point, he also added nobody can blame you for failing (because it was either too risky or your goal was too high), but the fact that there is still no radical innovation being done does not change. There is some creative innovation around already existing platforms, but "there is nothing at the moment that will fundamentally change the world and save people's lives."
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