Korean serial entrepreneur turns to China for next big opportunity
A Korean man who went to grad school at Stanford has started and sold several companies in the United States and Japan. But in his search for the next big opportunity, he's transplanted himself to China, where he's expecting a boom in innovation.
Yeogirl Yun was fast out of the blocks when he got out of graduate school from Stanford in 1995.
He worked a year for Tandy, and then for a start-up that went bust. Then, he created the shopping comparison website MySimon.com — and sold it two years later for $700 million.
“Mostly, it was very lucky — the right time and the right place,” he said. It was just before the original U.S. dot-com bubble popped.
Yun started a few more companies, tried his luck in Japan and is now in Shanghai. He’s convinced that China is the future.
“This is going to be the country, in my industry, that is bigger than the U.S.,” he said. “I’m talking about the dollar amount. The people who spend money in an e-commerce transaction is going to be bigger than the sum of the money that’s spent by all the U.S. people, in two years, by all measures.”
Yun’s startup in Shanghai is called B5M — in Chinese, “Bang Wo Mai,” or Help Me Buy. It’s a shopping search engine using search technology Yun has been honing for a decade.
B5M’s office is pretty standard, white walls, cubicles, employees focused on their computers. It’s the work culture here that’s different, says Wang Min, 32, a former math teacher who’s worked at other high-tech companies in China and Hong Kong.
“I am very excited every day here. It’s all new things,” he said. “I can learn a lot from my colleagues and my boss. You know, Yeogirl is a very energetic person, and I like him very much. He chooses to trust his man, and let his man do what he’s good at.”
In other words, Wang says, Yun lets his employees experiment, and show what they can do with their talent.
“And he always gives us all those chances, or even it’s a wrong direction, you can try,” Wang said. “So, our culture is to try. Do it right now, not just thinking in your mind, just do it.”
That’s pretty rare in China, he says, even in the high-tech field.
Yun says creating the right work environment is something he learned in Silicon Valley — after learning something even more basic when he left Korean schools for Stanford.
“I was raised in a very competitive environment,” he says. “I had to study 12 to 13 hours a day, every day. And I entered Seoul National University, which was very difficult to enter, very competitive. But what was lacking was, not a lot of this innovation. It was more of memorizing and understanding and being able to solve the problem according to the text, more of that kind of knowledge. And then I went to Stanford, and it was a real culture shock.”
For starters, Yun says, the tests were open-book.
“So all my strength — gone. Because my strength is, I can memorize and then write answers. But now, no one needs to memorize," Yun said. "And the professor doesn’t ask things that are in the book. He asks you to apply what’s in the book, and come up with a new solution.”
For Yun, it was the beginning of a new way of thinking.
“I had a hard time adjusting, myself,” he said. “I learned how to ask ‘why’? Why do you do things? What’s the purpose?”
B5M’s data engineering manager, Jing Guangfeng, says Chinese people could use more of that in their education.
“Frankly speaking, Chinese education system is not as good as Western countries like the U.S.,” he said. “I think the Chinese education system is very good for preparing you with a required set of skills to be an engineer or a technician, but I think for innovation, we still need to learn from the U.S. system, which is very open and innovative. I think most of the engineers and students here still need to learn and polish themselves.”
Jing says it’s also a good thing that more Chinese are studying and traveling abroad. He went to India, to work at Infosys. A recent college graduate who grew up in a village in central China, it was eye-opening.
“It was a very different culture,” he says. “And seeing that let me see China from a more globalized perspective. Infosys is also a global company, where I could meet people from all across India. Before I left China, I thought of China one way. But now, I can look at China from a different perspective, and ask, should China like this or that? How can China be better?"
Jing says his time in India also made him appreciate how a freer flow of ideas and information can foster innovation.
South Korea found that to be the case, when it shifted from authoritarian rule and censorship to a more open democracy in the 1980s. Yun was a teenager there when the transformation happened.
“It made a major, major impact,” he said. "Basically, everyone can speak up. And that’s transparency. And that’s a system where innovation can win. Because now, everyone can see what’s better, and what’s good — what’s more efficient.”
Yun says, he’s trying to help China make progress, but sometimes, it’s hard going in unexpected ways.
“I realize now that even if you have a good solution, the big companies are not willing to create a win-win,” he said. “They want to have a win-lose.”
He’d gotten used to the Silicon Valley approach, where big companies look to cooperate with promising start-ups, in ways that benefit each for a win-win. But he’s found that many Chinese companies seek to crush the competition — I win, you lose.
Yun says there’s also a general lack of respect for intellectual property rights. Many Chinese companies don’t see the point in leasing someone else’s software. Either they copy it and tweak it for their own use or they try to come up with their own.
“There was even an underwear company that decided, rather than lease my shopping search engine software, it was going to hire engineers to come up with their own search engine,” he says. “I’ve been working on mine a long time, and it’s good. It could hold its own in the U.S. market.”
A problem, Yun says, is that many Chinese companies don’t want to be dependent on another company. What if something goes wrong in the relationship? In this, they echo the approach of the Chinese government, trying to have a secure pipeline of oil, commodities and food.
“These companies do not trust other companies’ products. They’re worried about relying on someone else. That’s why there’s no win-win," he said. "Win-win requires a synergistic dependence. That’s what win-win is all about. I help you — you help me. Right? But because of the lack of trust, it’s hard to rely on someone else. And that creates win-lose.”
Still, Yun is relentlessly optimistic, or at least tenacious. He admires the drive and work ethic here. And he still thinks China’s the place to be to make money in his field. He believes China will eventually become innovative itself, because, he says, once Chinese companies have caught up by copying what’s already out there, there is no other choice.
Then will come the test — how much real innovation can come out of a society that lacks trust, intellectual property protection, and a free flow of information and ideas.
For now, the game remains for the innovative to come in, and stay just far enough ahead of those ready to copy, pirate or crush them. Even with a slowing economy, the brave and the ambitious still find it a game worth playing.
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