Korea: The first regional stop for Singaporean Startups
By Joshua Lin
With many countries loosening their Covid-19 restrictions, the timing is perfect for startups that are ready to look beyond our borders. As a Singapore-based startup fresh off a 9-month incubation program, we were on the radar of VCs, but not enough for them to commit to investing with us, as we didn’t have the backing of key players in our industry.
South Korea is one of the world leaders in battery recycling technology, where our focus lies, so we took the plunge and joined the K-Startup Grand Challenge. It was an intense but fruitful experience that deepened our understanding of our business. Here are some of the lessons and pitfalls we learned for Singaporean startups looking for their first foray overseas.
Scale and relevance
Scaling is always top-of-mind for startup founders, but it is essential to do so in manageable steps. Locally, we had good feedback and validation; the next step was to test our business and product regionally before considering going global.
Do your research. Does your product or service fulfill a need outside of Singapore? Is the territory ready for you regarding the people, the policies, or the infrastructure?
Where and why
South Korea became the most obvious choice for our expansion. A study by Statista in 2018 revealed the population boasts 100% mobile penetration. A technologically driven country, it has its robust capabilities and produced global companies like Samsung, LG, and Hyundai–companies we wanted to get in touch with.
At the time of writing, South Korea has ten unicorns, reaching that status almost exclusively through its domestic market. The country has a support infrastructure that enables startups like ours to do business. There are plenty of good VCs in the country who invest across the spectrum of tech startups, and they have a deep understanding of aligning tech with business viability.
The way we saw it, if a startup could make it in South Korea, it would have a strong standing regionally.
Before you choose to accelerate or incubate
We believe all startups plan on entering a country with the best intentions, but may do so haphazardly and without a plan. Always look for existing programs.
When you’re overseas, it can be distracting and stressful to worry about the logistics and commitment of spending weeks away from home. Most programs that accept foreign participants will have living and travel arrangements to cover lodging and visa issues.
Getting a firm understanding of the legal paperwork, requirements, and assistance (financial or otherwise) available to operate in your chosen country will play a crucial role in your decision to expand. A good program will guide you in issues such as accounting and employment laws, and other applications that you need so you can focus on growing your startup.
Often, accelerators and incubators are thrown synonymously into the mix; they do have differences. It is essential to know which one suits your startup best at your current stage. Incubators are for the beginning stages, take a longer, somewhere between nine months and beyond, and having startups that scale fast is a bonus, not a must. Accelerators, on the other hand, are directed towards existing companies with a business model in place, with a shorter time, usually between 3 to 4 months, with stricter KPIs geared towards scaling up.
Our advice for startups wanting to expand is to avoid doing any incubation programs overseas. Join one locally and see how far you go first. Validation needs to be built upon to avoid logistical nightmares if you drop out of an incubation program halfway through in a foreign land.
For accelerator programs, check out the KPIs. They should include tangible measures, such as sales and investment milestones, LOIs with more established companies to further integrate your startup with the local ecosystem, and team growth within your startup. The business matchmaking, along with all these metrics, will help align your startup towards being market-ready.
Culture and connection
Effective communication goes beyond speaking the language fluently. Being attuned to those nuances that can significantly affect both personal, professional interactions isn’t something that can be learned and picked up remotely. Take the time and effort with the people and culture of the place they want to expand to, be proactive.
You can learn more about your host country by joining their local interest or hobby groups and linking them with their local networks. Put that experience in context by linking up with your embassy, get in touch with your country representatives and communities to get a balanced outlook and approach. Your efforts will aid you in making enduring connections in your startup journey.
The pandemic has so far shown us how well we can get by ourselves, and how some of the old ways of working have become redundant, but it has also taught us how much we can accomplish with others if we step out of our comfort zone.
As the world opens itself up, we hope to see more startup founders take bold steps, and seize the moment.
About the Author
Joshua is the CEO of Anzene, a clean-tech hardware startup focusing on a universal swappable battery system to power the smart cities of tomorrow for light-electric mobility and consumer electronics sustainably with renewable energy and IoT. They were part of the 2019 batch of K-Startup Grand Challenge, representing Singapore. They were selected into the top 20 startups during a demo day in Seoul after a three-month acceleration program.