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Just a couple of years ago, typical college graduates in Korea would plan to start their careers at a large firm. They would work hard burning the midnight oil and dream of becoming a business executive one day.
Only a handful of fresh graduates would ambitiously start their own businesses. In fact, the term "entrepreneur" sounded somewhat distant and unreal to the majority.
However, things have changed over the past couple of years, as not only a good number of graduates but also a number of employees of large firms in their mid-30s dream of starting up their own business.
What happened over the course of the past couple of years to radically reshape the landscape of the Korean labor market? I point to the global financial crisis in explaining the heat for startups, as the greed of the market has directed our young generation to be owners of their own lives.
Young entrepreneurs are striving to become innovative and change their way of living. In this sense, the startup movement in Korea is on the same page as Robert Shiller, Joseph Stiglitz and Michael Sandel in promoting a "good society," which reflects the drawbacks of the market failure during the global financial crisis and seeks how society should work normally.
Now the question is, despite the fresh hearts of the young entrepreneurs in Korea, are we ready to be a good society? I am hesitant to say that we are, since the winner takes all in our society, and at the same time the loser takes all as well.
In other words, the penalty of failure is so harsh that it is contradicting for our society to promote startups, especially considering the low possibility of a startup to survive.
The misery of failure is the cruelest not in terms of monetary damage to the entrepreneur, but in the stigmatization by the market.
With little chance to remedy the failure, entrepreneurs often find narrow ground for a rebound. For this reason, the Korean startup fever is being misplaced from the perspective of the understanding of startup investment.
When I visited Silicon Valley with my colleagues from KAIST, what most greatly inspired me was witnessing the rich culture of trust and reciprocity between investors and startups that cultivated the community.
In Silicon Valley, there is a term for the failure of an entrepreneur. They call the failure an "experience." Investors value the failure of an entrepreneur and reinvest with trust.
Unlike the motives in startup investment in Korea, which is mostly confused with stock market investments or real estate investments, investors in Silicon Valley understand that a startup investment is investing in people and their lives so it requires patience and discipline as true "angels."
In fact, the gurus of angel investment in the bay area come from the rich experience of successfully founding their own startups. They not only invest money but are enthusiastic to invest time and effort to share their experience as mentors, returning the mentorship they received when they were young and hungry.
Even many would happily share their experience and wisdom with no charge and become friends with young entrepreneurs, just as how Andy Grove of Intel mentored Steve Jobs of Apple, where Jobs, in return, mentored Larry Page of Google and Mark Zuckerberg of Facebook, and Zuckerberg mentored Reid Hoffman of LinkedIn.
This rich culture of trust and reciprocity is the heart of Silicon Valley, pumping fresh blood into the startup network.
We as Koreans, have all grown up being taught that "failure is the mother of success" at school. However we are not really good at exercising what we have learned, at least in the startup world.
What we really need is not government safety nets and matching funds for startups, but true investors and mentors of startups with trust and reciprocity. When more people value the failure of passionate entrepreneurs and reinvest with reciprocity, we will become a society that promotes startups to pioneer a good society with their values and beliefs.
The writer is a Ph.D. student in strategic management at the KAIST College of Business.
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