So long, Seoul! Final Reflections from South Korea

As I board the plane to JFK, I can’t help but reflect on the last week and everything that I learned about this warm, humble, dynamic country. Here are my top ten reflections from our time abroad:

1. South Korea has come a truly remarkable way in the last fifty years. During the Korean War in the 1950s, much of South Korea was destroyed. Now, less than a century later, an extremely urbanized and industrialized Seoul houses about half of the total South Korean population. It’s incredible to look at the Seoul skyline and remember that very few of these buildings existed when our parents were born.

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Me and Connor Stoval (’19) overlooking the Seoul skyline from the top of Lotte World Tower (the 5th tallest building in the world).

2. South Korea’s corporate landscape is dominated by chaebol, multi-vertical conglomerates that control almost every major industry in the country. There’s nothing like Lotte in the United States. Lotte, which is the 5th largest conglomerate in Korea, holds the highest market share across all its core business areas: food, retail, chemical, and hospitality. Picture CVS, 7-11, Forever 21, The Gap, 3M, Marriott, and Starwood all operated by one parent company—that’s Lotte. Oh, and Lotte owns the equivalent of SeaWorld and Disney World too (there is a full aquarium in the Lotte World Tower and an amusement park next door). It’s a corporate structure that could never exist in the United States due to our pro-competition, anti-trust laws, but it’s the way of doing things in Korea. The five major chaebols—Hyundai, Samsung, LG, SK, and Lotte—control pretty much every major industry in the country and competition is essentially impossible due to government support and intervention.

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Jack Kantelis (’18) asks questions about Lotte’s chemical division

3. The intersection of digital and big data will define the future of South Korea’s corporate strategy. At our visit to Samsung Innovation Museum, we watched a video of Samsung’s vision for the future. It showed a ten-year-old child scaling cliffs in Alaska while her father received updates about her health and wellness from his bathroom mirror. A few days later, at Lotte, we watched a similar video highlighting Lotte’s “Lifetime Value Creation.” In this vision for the future, we saw a couple experience auto facial recognition while checking into a hotel, automatically proportioned meals, and on-demand rental cars and bike shares. One quote from Lotte’s video summed up the visions particularly well: “From the moment you wake up in the morning, you are surrounded by Lotte.” Frankly, it was a tad dystopian in nature, and left all of us wondering about the pros and cons of excessive corporate access to and use of personal data.

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CBS students at the Lotte R&D Center
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At the Lotte Aquarium

4. The desire for innovation and start-up culture is thriving in South Korea across both corporate and social sectors. On Monday, we visited Hanwha’s DreamPlus Center, the Fintech accelerator of the life insurance conglomerate. On Thursday, we visited Hyundai Genesis, the company’s first luxury vehicle and first new brand in about fifteen years. That afternoon, we visited Heyground, a co-working space for social entrepreneurship founded by CBS classmate Kyungsun Chung. Across each visit, we saw an unprecedented desire for South Korean companies to be at the forefront of innovation, both in South Korea and across the globe.

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Me and Einat Aldaag (’18) learn about the strategic decisions behind Hyundai Genesis

5. The current threat of North Korea, as well as the tragedy of the Korean War, is present in the minds of the South Korean people. On Wednesday, we visited the Korean War Memorial and paused to remember the 30,000 Americans and 100,000 Koreans who lost their lives in the conflict. Then, on Friday, we traveled two hours to the demilitarized zone of the North Korean border and met with a North Korean defector who escaped the country through China, leaving her son behind. It was powerful to hear her story of oppression and perseverance and we all left the visit feeling extremely thankful for the rights and opportunities we possess in the United States. We also had the opportunity to travel 300ft below ground into one of the tunnels that North Korea built in preparation for an attack on South Korea, even after nonaggression agreements were signed. Four of these tunnels have been discovered, but it’s estimated that up to sixteen of them are still undiscovered. Finally, we went to a lookout point and looked across to North Korea through telescopes.

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CBS students at the North Korean border

6. The South Korean people we met were extremely humble and generous. At each corporate visit, we were greeted by company leaders who expressed their honor at being able to address students from Columbia Business School. We were all a bit surprised at how impressed they were by us! Moreover, we left every company visit with our arms filled with gifts. At Samsung, we were given mousepads with our group picture painted on them. At Lotte, we were given empty paper bags and asked to fill them with Korean snacks, candies, chocolate, and beer. It was a very unique experience and not one we are used to back in the United States.

7. We love Korean food! Bring on the kimchi, bibimbap, and red bean paste. We had the best time getting to live on spicy Korean dishes for the week. A few times, we especially appreciated the 24-hour Korean spots around the corner after enjoying Korean nightlife 🙂

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Lindy Gould (’19) is an MBA candidate at Columbia Business School.

There is No Textbook for Changing The World: Social Impact in South Korea

“There is no textbook for changing the world. But I can find the right people with the right missions and provide them with the resources to solve the most difficult problems.” -Kyungsun Chung (’19)

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Luis Acosta (’19) and Sebastian Brunal (’19) at the Heyground entrance

“I was thinking of going into my family business for twenty years or so,” Kyungsun Chung (’19) explained to us, “and then find a way to make a difference. But then I realized I am more of a channel. My purpose is to provide stable infrastructure for the social entrepreneur.”

Kyungsun Chung is one of the trip organizers for Chazen South Korea. He is also the founder of Root Impact, a non-profit that builds capacity for social innovation within his country. On Thursday, he brought us to visit Heyground, the co-working space he created for Korean social ventures. The building just opened in August 2017 and already has 500 employees across approximately 40 non-profit organizations. The nine-story building operates with community as its foundational principle; organizations interested in residency at Heyground must be equally as committed to building cross-organizational relationships as they are to driving their individual company’s success.

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Kyungsun Chung (’19) sharing his journey of founding Root Impact and Heyground

In addition to hearing Kyungsun speak about Root Impact, we also heard from a panel of three entrepreneurs-in-residence.

Enuma: Enuma is a mission-driven, for-profit company focused on providing digital learning for students in Korea with special needs. It also serves children in developing countries who do not have access to effective education. “This is the potential of digital,” said founder Sooinn Lee. “We can scale at large adaptability to serve every child.”

KOA: KOA is innovating in the landscape of sustainable fashion. The company seeks to push beyond traditional “do-gooder” fashion models, namely profit sharing and one-for-one strategies, by helping rural communities turn their raw materials and natural resources into targeted brands, like le cashmere.

Dr. Kitchen: Dr. Kitchen is a local Korean business that operates as the “Blue Apron for diabetes.” It provides subscription Korean-style meals with a low-carb approach. For example, the company mixes up the traditional Korean white rice by providing rice with complex grains, vegetables, and other protein sources mixed in.

After hearing from the entrepreneurs and getting a tour of Heyground’s space, we moved down to the ground floor to eat dinner in Health Club, a restaurant designed by Kyungsun’s sister.

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CBS students eating dinner at Health Club, Heyground’s public restaurant

As a CBS student, it was incredible to see my friend and clustermate Kyungsun already have such a direct and positive impact on the social landscape of Korea. We all left the evening inspired by his leadership and excited to see the continued results of his work when he returns to Root Impact after graduation.

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Lindy Gould (’19) is an MBA candidate at Columbia Business School.

DreamPlus: South Korea’s Fintech Accelerator

“In order to achieve sustainable growth, innovation is vital.” -Hanwha DreamPlus Entrepreneur

Read More: Columbia MBA students visit Hanwha Life’s startup incubator (Maeil Business News Korea)

Walking into Hanwha’s DreamPlus center, you might initially think you are at a regular office building for the life insurance conglomerate. Yet far from a traditional Hanwha outpost, the DreamPlus center—which will have its grand opening next month—is a Pan-Asian innovation ecosystem and the largest Fintech accelerator in Korea. It finds, cultivates, and supports startups in global expansion, investment opportunities, and innovation acceleration. DreamPlus centers handpick high-impact startups across payment, lending, security, cryptocurrency, and a variety of other Fintech spaces. Since 2014, five DreamPlus centers have opened across Asia, including three in South Korea, one in Japan, and one in China.

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Welcome sign in the lobby of DreamPlus

The DreamPlus center is intentionally designed to foster a collaborative and growth-oriented culture. For example, the 4th floor contains a media center, complete with soundstage and recording studio, while the 3rd floor is built out as an expansive library. The lower level includes a sports bar, convenience store, and a meeting space decked out with neon lights and graffiti. On the 9th and 10th floors, early- and mid-stage start-ups are housed together to promote continued conversation and shared resources.

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The library at Hanwha’s DreamPlus Center
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Jess Beidelman (’18), Taylor Palank (’19), and Kelly Lundy (’19) in DreamPlus’ recording studio

The Korean start-up scene sits within a unique landscape. One of the major benefits to start-ups is that the Korean government invests heavily in its conglomerates, or chaebols, providing subsidies that allow for quick growth, expansion, and maturity. In addition, many Koreans we met with pointed to the economic and cultural dynamism of the country as a key facet of the industry’s competitive advantage.

Yet start-ups here are not without challenges. There already doesn’t exist a lot of work-life balance in Korea, and this is even more pronounced in start-up culture. It can also be difficult to attract top talent to these companies. The Korean education system is incredibly competitive and, most parents want to see their kids go to work at traditional market leaders, like Samsung and Hyundai.

We asked one of the entrepreneurs about the biggest benefit of DreamPlus. “You don’t have to spend money or time here trying to appear successful,” he said. “You can focus on the work, the innovation, and solving the problem at hand.”

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Students in Hanwha’s lounge and meeting space
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Checking out the green screen in the media lab
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DreamPlus’ soundstage and filming room

Lindy Gould (’19) is an MBA candidate at Columbia Business School.

#SeoulExcited for South Korea: An Interview with Kyungsun Chung (’19)

With our Chazen South Korea study tour kicking off on Sunday, I sat down with trip leader Kyungsun Chung (’19) to chat about his plans for the trip. Prior to joining CBS, Kyungsun was the Founder and CEO of Root Impact, a nonprofit that focuses on building capacity for the social innovation sector in Korea. He is in the third-generation of the Hyundai family.

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Why did you want to plan a Chazen trip to South Korea?

I really wanted to add something to the Columbia community. I knew this Korea trip was something I could do well and it seemed like a good fit. Since I’m coming from a family business background, I thought I could add an interesting mix into the trip.

On that note of family business, I know one of the things we’re going to be learning about is this idea of chaebol. Would you tell me more about that?

A chaebol is a large business conglomerate that is owned by family members. With companies like Samsung, they are billion-dollar companies, but they are controlled by maybe 10-50 people in a family. So chaebol is basically family business—but with a crazy business size.

How did this idea of chaebol get started in South Korea?

This idea of a family-controlled conglomerate is especially popular in developing countries. When an economy is developing and doesn’t have a lot of resources or infrastructure, you’ll see a government make a conscious decision that they will basically concentrate the economic power within a few family businesses so they can compete internationally. As you know, the international businesses coming from Europe or the United States have much more capacity to compete; the developing government needs to put everything they have into a small number of businesses.

In Korea, the government gave a lot of tax breaks, bank loans, and other benefits to these family businesses so they could grow fast and drive the Korean economy. In Korea, there was basically nothing after the Korean War in the 1950s—it was really devastating—but now you have these Korean conglomerates, Samsung and Hyundai, which are the #1 conductor company and #6 largest automaker in the world, respectively. I really wanted my friends at CBS to learn more about chaebol because it’s really one of the few successful cases of the government-intervention economic model.

Aside from the company visits, what are you most excited about?

Basically… everything! The food part, of course. We are going to Korean traditional barbecues. On Wednesday, we have a cultural day—we are going to the Korean War Memorial Museum.

What do you think are some misconceptions that people have about Korean culture?

Because of North Korea, a lot of people think that South Korea is dangerous. They’re worried we are going to be invaded. But it’s not at all like that. I mean, there are more than 20,000 U.S. citizens living in South Korea. In terms of crime, we are one of the safest cities in the world.

Lindy Gould (’19) is an MBA candidate at Columbia Business School.

A Historic and Whirlwind Week in the South Korean Capital

Miriam Krule ’18
Chazen South Korea

New York—I’m back in the United States attempting to recover from the 13-hour time difference by donning one of the 43 Korean face masks I did not at all impulsively purchase on Dongdaemun Street, so there’s no better time for me to take a few minutes (the directions advise 15-20) to reflect on our whirlwind week in Seoul.

It was a truly fascinating time to be in South Korea. Many in our group arrived in Seoul the day after the president’s impeachment was upheld. Just blocks from our hotel, there were rallies both supporting and protesting this decision on the Saturdays that book-ended our trip . (Video above from March 11, courtesy of Heather Liu.) To top it off, United States Secretary of State Rex Tillerson spent some of Friday in Seoul due to mounting tension with North Korea and China. This tension also meant that there were significantly fewer Chinese tourists in the country, which, while bad for the South Korean economy, made for an interesting and somewhat empty experience for us. This is all to say that our time spent visiting the DMZ and the Korean War Memorial felt like it held just a bit more significance than it ordinarily might as the historical implications of such a young country could be felt everywhere we went.

The importance of this history was the backbone of many of the companies we visited. Take the skin care and cosmetics company Amore Pacific. Even as its grown to be one of the world’s largest beauty companies, more than half of its company presentation was devoted to its humble origin story about the company’s founder’s mother. This emphasis on a foundation story was true of Lotte and Samsung as well. Even the country’s former president was in the family business. On the other hand, all the companies we visited emphasized their plans beyond South Korea and into international growth. Our meeting with newer companies, like YG Entertainment, SendBird, and Line were informative for us, but also served as mini focus groups for our hosts as they think critically about the opportunities for U.S. expansion. One of the biggest challenges for them is thinking about how to maintain their identity and home base while also appealing to a wider audience. At places like YG Entertainment, this is a particular challenge with language and style presenting a particular challenge, one that I look forward to seeing how they approach.

During our final night (post DMZ, pre Octagon) we had a few moments to debrief in small groups at dinner. My table was interested in looking forward. Coming from the DMZ, we were all wondering if it would be possible for the two Koreas to reunite. The discussion turned into a debate about whether it was economically feasible for the south to absorb the north, or if Russia or China would get to it first. The one image I can’t get out of my mind though is how cut off from the rest of Asia, and by extension Europe, South Korea is by land. At the DMZ, we visited a train station that was meant to be part of the Trans-Asian Railway. It was eerie to see hopeful signs that say “To Pyongyang” despite the fact that North Korea hasn’t agreed to anything yet.

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Looking to the future … and North Korea.

And no, I didn’t forget about the live octopus dinner. For the queasy (me) or vegan (me) I’ll just link to them here and here.

Seoulong for now!

A Whole Lotte Fun

Miriam Krule ’18
Chazen South Korea

SEOUL–I would apologize for that punny headline, but if you had the day we had, you’d have Lotte fever too. Lotte is the largest confectionery manufacturer in South Korea, but over the past 50 years has grown from a Japanese gum company to become one of South Korea’s largest conglomerates, expanding into hospitality and chemicals. It’s impossible to walk around Seoul without seeing something Lotte on every corner.

We started the morning at one of Lotte’s distribution centers where we learned about the three different processes they use to pack deliveries using the “pick-by-light system.” For items that are purchased the least frequently, they use a “decanting” station to unpack from the bulk orders and then grey bins are sent over to operators who match the incoming grey bins to the outgoing red bins.

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Image via KPF

We then headed to Lotte World Tower, the fifth-largest building in the world, and, as you can see in the above image, designed to look like a calligraphy brush. Before hearing from Lotte’s CEO, Shin Dong-bin, Columbia Business School class of 1981, about the history of Lotte and its 2020 goals, we got a private tour of the still unopened observatory where we could look directly down all 123 floors.

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We also saw the beautiful concert hall and enormous aquarium, both inside the tower. The only analogy we could think of for how comprehensive the tower is–it also has offices, hotels, restaurants, movie theaters, and every possible retail store you could ever want–is a modern-day palace. Within its gates it has everything you could ever need.

After lunch, we headed over to Lotte Accelerator, Lotte’s newest division. We heard presentations from some really fun-sounding startups, like Prinker, which allows you to sketch an image on your phone and then use a handheld inkjet printer to create a temporary tattoo. With something like this, there are a lot of opportunities for growth beyond just fun tattoos–hospitals can use it to track patients vitals for example. But we definitely had fun playing around with our personalized CBS/Lotte images.

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Bonus Points:

On Wednesday we visited Gyeongbokgung Palace dressed up in traditional hanbok:

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Some of us also ate LIVE octopus for dinner. Check out my next post for video evidence!

Gangnam Style

Miriam Krule ’18
Chazen South Korea

SEOUL–It’s been a bit more than 48 hours since our group touched down in Seoul (and became #CBSSeoulMates), so it’s no surprise that we already got Gangnam Style down. In our first two days we met with a representative from YG Entertainment (the home of PSY and his record-breaking music video), experienced an authentic night of passionate karaoke, and spoke with startup founders in Seoul’s answer to Silicon Valley, Gangnam Valley.

YGA small group of us interested in media had the chance to speak with a member of the global investment team at YG Plus, a division of YG Entertainment. Unlike in the U.S., South Korean record labels generate revenue from all commercial activities of their artists (like concerts), not just the record sales. While this seems to work in South Korea, in the pre-visit case we read, this model was compared to what Motown was like in the late 1960s, when companies owned artists’ likeness and artists were not very pleased with that situation. On the other hand, it also pointed out that Lady Gaga has a “360-degree deal,” which is similar to what YG Entertainment offers. This difference is one of the many important things YG has to think about as it begins plans for expansion into the U.S. The representative spoke candidly with us about these plans and how it might affect YG’s existing Korean fan base. We also learned about some quirks of the Korean music business. One fun fact: All Korean music is released at 12 a.m. so that fans can listen right away and the song can immediately top the charts that day.

In continuing on our musical theme, I was going to tell you a bit about our evening of karaoke, but I think it’d just be best to leave you with this video:  Read more