Exploring business DNA
Megastudy CEO takes a cue from mom’s business philosophy
By Kwon Eun-young
Although former Apple CEO Steve Jobs died last year, his legacy is still changing the business world in two ways. First, it has entirely changed lifestyles in the 21st century with his innovative iProducts. Second, his entrepreneurial spirit has inspired many young people to start their own businesses.
The Steve Jobs syndrome has also swept through Korea, one of the world’s most wired counties. Some college students give up finding jobs and seek to start their own business. Some salaried workers quit their jobs to become a Korean version of Steve Jobs.
In the eyes of Megastudy founder and CEO Son Ju-eun, this might be a very dangerous move. He believes that there are only a few people who can run a business because an entrepreneurial spirit cannot be acquired overnight.
“I believe that only a limited number of people can run a business. A lot of people give it a shot but most fail. Those able to be a successful businessman have (business) DNA, which I think is acquired during childhood,” Son said in an interview with Business Focus at his office in Seocho-dong, southern Seoul, on Feb. 16.
He points out that childhood education is most important for developing such DNA. According to him, it is very difficult to produce a creative figure such as Steve Jobs in Korea’s education environment.
“Parents should let their children focus on what they like, which I think helps them develop energy for passion and creation. But in reality, our children get confused as they are forced to go to various cram schools for university exams,” he said.
“In this case, energy will never be created. Even if they go to elite universities through curriculums set by parents, they will not be bold enough to challenge something new and creative. They will be only good at handling something assigned.”
The social studies teacher-turned-CEO said that his business DNA was acquired during his childhood while helping his mom run a small business in his hometown of Changwon, South Gyeongsang Province.
Back then, although it was a small business in a small town, his mom had a clear management philosophy _ integrity and care for her customers _ which are now the core values for Megastudy, the biggest and most successful cram school company offering both online and offline education services.
“My mom placed top priority on ethics and integrity. She tried to sell good quality products cheaper. She didn’t sell alcohol and cigarettes. Her firm sales principle built trust among customers over time and eventually made her a big success,” he said.
“Also, she considered customers as kings. Even though they did something wrong, she never quarreled with them. While I helped her, I learned about how to run a business.”
Another key success factor for Son was his unique principle in talent management. There are two key criteria ― integrity and minimizing the risk of failure ― when the 52-year-old chief executive appoints senior personnel.
“When I appoint the heads of the company’s eight subsidiaries or choose a manager for an important project, I look at two things. First, I don’t appoint dishonest people. Second, I look for a person who will not lead the project into failure, not a person who will lead it to success” he said.
“Doing so, you can lower the chances of failure. If you find such people and trust them, chances are low that a project or business will go bust and they will surely reach a certain level,” he added. “I use my intuition when I decide who is suitable for a position.”
What is so special about Megastudy is that the company made it possible for students across the nation to get access to high-quality lectures that were once provided only for children from rich families through private tutoring.
In 2011, almost every student in Korea was taking private lessons either online or offline. Up to 71.7 percent of Korean students attended cram schools in 2011 according to the latest report by Statistics Korea.
Classes operated by the company ― both offline and online ― are accessible to every student. In addition, the classes are not only cheap but also superior in terms of content.
The business model is subscription for each course. Teachers can have an unlimited number of students and get some portion of the revenue for each class they organize, which is the reason why the company keeps the best teachers.
Before he launched Megastudy in 2000, Son was one of the most popular teachers himself. He thinks that he has the ability to talk people into what he teaches and to judge people.
“I felt I dominated students in my class when I first started private teaching in the 1980s.” he says. “I sometimes give speeches at public high schools. Principals of the schools are often surprised by how the students concentrated on my speech. I never let a student drowse while I am explaining something.”
Education in Korea
Korea’s education is the target of both praise and criticism. There are different views on the severe competition and private education here. U.S. President Barack Obama once said that competition is the energy behind the rapid economic ascent of Korea.
However, critics claim that inequality has been deepening due to private education. They also argue that since the current system focuses only on short-term college entrance exams, Korean students have become less competitive in the long-term, life-time competition.
Son, who majored in Western history at Seoul National University, is a person who can think about the phenomenon at a social level.
He tried to solve the first problem by opening Megastudy and providing comprehensive lectures for every student. For the second criticism, he says that the phenomenon is somewhat positive. He says that students need to think more deeply about themselves to face long-term competition with the competence prepared by short term competition.
“Private education tends to make students passive because private instructors teach everything perfectly. They have never had the opportunity to be confused and try to find one right track.”He says.
According to Son, these students may get frustrated once they get into society because they only think about entering universities but never think about how they should live. However, Son said that this can be an opportunity for them to reflect on themselves.
“It is a relief that the younger generation can have an opportunity to get lost. They can build energy by making attempts to find a breakthrough. A country like the U.S., where people pursue only richness and consumption, cannot prosper anymore even if they have a few geniuses like Steve Jobs and Mark Zuckerberg, because they have no energy,” he said.