Last summer our startup won “Telecom idea 2016” competition. Besides “Multicube” (“Multikubik”) young businessmen, scientists, students and different teams of researchers from 18 russian cities took part in this competition. Five hundred of projects in total, 42 of which reached the final including us  Our pitch was appreciated by the advisory council of the contest: the representatives of MTS, Moscow City Telephone Network, Joint-stock Financial Corporation “Sistema”, MEDSI medical corporation, NVision Group, as well as respected experts in the field of innovation, venture capital market and Telecom. We have won in RetailTech nomination (products / services for the retail and e-commerce) – this is a new category of products for the children development from 2 years. As a prize “Miltikubik” got a trip to Korea.

The purpose of the trip

The purpose of the trip was to acquaint russian startupers with technological accelerators and associate partners of MTS in Korea.

Day 1.

We were in Incheon – a city of innovations and a tax free zone in Korea. We call it “zone of priority development” in Russia (for example, free port of Vladivostok). The city is still being built, there are a lot of vacant lots. But it is in the project to make it green (as contrasted to dusty and smoggy Seoul), and there are 3 million of inhabitants there. The city welcomes to open representative offices and entrepreneurs all over the world especially in the field of IT and energy. There is a school, university and kindergarden. There are venture capital funds as well.

We were more like tourists in Seoul. Participants of telecom-trip had a sightseeing tour. All participants got acquainted in the evening: there were startupers from Tomsk, Yaroslavl, Moscow and Novosibirsk, as well as 10 experts from MTS.

Day 2.

A trip to Samsung Electronics

(Korean pronunciation [sʰamsʰʌŋ]) with voiceless guttural “ŋ” –  translated as “three stars” in Korean).

Today Samsung represents whole Korea. According to some reports government makes some decisions with an eye to Samsung. There is a real battle for the job in this megacorporation in korean labour market. Tough competition similar to one in Google takes place. Such desire in highly understandable: this is the job for the whole life, very respectable and well-paid. However, inside the company competition is very tough, it is very hard to grow up to high positions. In addition, Samsung gives inside information in very small dozes. All communication happens only via PR-service, employees do not give any comments and do not tell anything. That is why we could see only one office in the center of Seoul (to be more precise its show-room). Also, we were in developers’ office in the town, but we were let only in company’s museum.  There we saw first transistors, radios and TV-sets.

Samsung building (“digital light”) in Seoul and Samsung logo in the very beginning…

All devices in the house are controlled with the help of tablet, huge flexible TV (and other b2b stuff like interactive half-wall charts with touchscreen).

First transistor (still works)

Samsung TV-sets and conditioners.

* * *

Local “Skolkovo”

Next day we headed to Pangeyo Gyeonggi Creative Center. National startups and global established companies like SK telecom are based there. This is a huge complex of two or three tens of buildings of different size (sometimes very large) and the construction cost 6 billion dollars. We were invited in a nine-store co-working where korean startups rent just one chair or the whole office. They are financed by governmental funds. Governmental funds itself are not based here, but their advisors work here so they help to get financing.

Entrance to the innovation center. At that day Big Data conference was held there.

It looked like it was not very crowded, but those who were there were sitting and working.

In comparison to their offices there is an ideal order on our tables at “#tceh”.

Lazer projector (the image is generated by colored lazers). It is presented as a great success of their startup. The color is vivid, the brightness is low.

And this startup makes wooden bricks painted so that one could collect various figures of 3×3 or 4×4. This figures are taken by the tablet’s camera with the help of special attachment with prism (the tablet is near, in the stand). If a child collects the figure correctly the tablet application compliments him and offers to collect the next one. If not, it gives a tip about which brick should he move or turn.

There were also startups with some innovative measuring reel, exoskeleton for the hand, several 3D-VR (based on Oculus rift), some technologies connected with health (water cleaning and other).

NOKIA headquarters in Korea

Afterwards conveners took us to NOKIA office which is focused on innovative telecommunications after escaping mobile department.

Their head Andrew Cope told that LTE-network development led to the traffic volume increase but at the same time ARPU (average revenue per user) hasn’t changed. This forms the problem for the field because the costs have increased, but the revenues do not grow. The reason is: LTE-Internet access in Korea reached 85% (this is roughly speaking the whole population). They propose to promote “Internet of things” (IoT – household appliances and sensors connected to the Internet). Such decision requires new infrastructure, and it is possible to take extra money for these services.

The problem turned out to be on a very unexpected point: the industry cannot agree on how to share the revenue from the IoT users between a) device manufacturers, b) retail and telecom operators and c) sellers of technology solutions. Despite this there are legislative problems (restrictions).

Nokia is going to expand 5G network during winter Olympic games in Korea. Huge amount of sensors will be installed everywhere: one – directly to the athletes, the other – on the sports equipment and so on. They will read the traverse speed of the competitors, pressure, temperature and so on, record sound and video. The system is helpful for coaches, doctors, TV-people and other specialists. For the present Nokia tests this network in its laboratory. Besides it prepares decisions for mass calls support and data transfer for cell operators.

This is the laboratory and installation for cell equipment testing while mass calls – all phones are connected into integrated system that imitates users’ behavior. Nokia has 9 such boxes with phones (127 phones are making calls, sending SMS and video simultaneously).

Day 4.

LG U+ company was the result of combining several units of LG. If to judge on the mobile market share the company is quite small. We came to their office in Seoul where we were warmly welcomed.

LG conglomerate (chaebol) is as giant as Samsung i.e. a country in the country. On the contrast to Samsung the atmosphere is more friendly. It less bureaucratic, employees are more relaxed and friendly. We were in their telecommunication department.

Senior representatives of LG made a speech in the beginning. They complained about low company incomes and market that is not going to be grow. But at the same time they state that exactly their profit (nor income!) per client is the highest in the industry.

According to them, the LG is the most profitable of the operators (ARPU $ 35 +, it is really a lot).

At the picture there is a man that is responsible for M&A bargains of merger and takeover. He believes that electronic (for websites) and wireless (like Pay Pass) payments infrastructure support will be a good source of income for them in future.

Besides that, LG believe in “Internet of Things” (IoT) technology and see the growth strategy as following.

  • Creeping penetration of low-cost sensors and gadgets (IoT), creating the need for them. From this follows the readiness of consumer to pay for such services in future.
  • Alliances conclusion initiative for standardization on the market of IoT.
  • To seize the initiative on the IoT market and receive benefits as a supplier of solutions for this market.
  • Maximizing profits through cross-sales (primarily through communications services for IoT).

Here is a simple plan for world domination.

Then startup relations and development of new technologies manager took the floor.

He admitted that Korean market is oversaturated and there is nothing to catch here. That is why the only way out is to internationalization. He understands his task in the search for startups with new decisions that would enable LG U + to enter the new spaces. For this purpose they are ready to cooperate with international startups. They also regard the possibility of investing, though, for the present moment, as he admitted that they are limited to investing into Korean projects (1-3 millions of dollars) and co-investments into foreign. Though they have only two investment projects: voice user support system based on AI (in Silicon Valley) and wireless safety system (startup from Tel-Aviv).

According to the manager, this is only beginning of the way. Their own expertise is not sufficient for startup selection and they cope with intermediaries – funds and accelerators all over the world. “Skolkovo” is in their number. But the majority of them is in China, USA and Germany.

* * *

First of all MTS functionaries made the speech. Then we presented our product – #Multikubik #CINEMOOD. We had only 2 minutes for the presentation. After there was question session and LG representatives were turning the cube in the hands and examined it carefully.

We had a dinner in this dining hall. It is arranged as follows: there are three sets of product:

You can choose one of them. When the choice is done you should stand in the right line where agile Koreans with habitual movements fill in your tray with dishes with soups, meat and vegetables. At the end, you make a salad according to your taste as this IT-Korean:

Nota bene. Many Korean men (almost a quarter) wear glasses while there are hardly any girls wear glasses. May be one or two in the whole dining hall. The same situations is in the streets… It seems that Korean girls shy to wear glasses. It is a mystery why Koreans have such a weak eyesight.

BONUS

There is a huge amount of Protestants and Catholics in Korea. This is due to the fact that exactly a church was a place where starving after the war Koreans could get food, and they also help young Koreans to get an education. That is why it is not surprising that YMCA 🙂 (probably the cheapest hostel for young people) is widespread in South Korea.

KAIST University (кор. 한국과학기술원) Korea Advanced Institute of Science and Technology

KAIST University is believed to be one of the best in the world (KAIST shares the 17th place in the world rating with Harvard in “Engineering” specialty). It is interesting that foreign students study there absolutely free. Only 40-50 foreign students enters the university a year. Due to the fact that the quantity of such students in KAIST is very small (5-7%), it does not let to rise higher educational institution in the ranking (number of foreign students and the relation to it – one of the important criteria in such ratings).

KAIST is financed by the government since 1971. Initially, there were working scientists who got education in the United States. It was the institution concentrating on theoretical and applied research. Now it is the main center of strategic research projects in South Korea.

The University operates a large innovation center where students and graduates develop their startups. The buildings inside are big, it is not crowded and people work quiet. We accidentally collided with students only on the stairs on the way to the buffet. On the other floors it was somehow empty.

Passing labs we got to the elevator. On the last fourth floor we were told about what university students-innovators are busy with.

Among their developments is a flexible battery that can be placed in the wristlet. This is not an easy task as it might seem: the circuit of the layers in such a battery is unacceptable when, for example, a steep bend. Also there is the issue of protecting it from damage, overheating when worn on the hand and the capacity for such small dimensions. Most of these technical problems they solved.

Cosmetics industry is very developed in Korea, so there are a lot of startups associated with biotech, cosmetic and health. Most go under the wing of one of the major companies in Korea. According to the professors, companies appear abroad very rarely and mostly because of the language barrier.

The university itself occupies a huge area of many hectares, so that from the building to the building one can reach either by bus or by bike:

The University is located in the middle of the peninsula, it will take more than two hours from Seoul. But on the other hand, a great environment and a clean river nearby pleases the eye of the student:

And bonus at last

There is A DELIVERY in McDonald’s in Korea!