Hi, welcome back
In the previous sessions,
we saw how difficult for the company
to be sustainable
and how competitive out there
Any big company started from small startup
Then they achieved the success
and then they become big company
They end up dominating the market,
but it is not enough
In order to be sustainable for a long time,
all the big company or small company
just focused on two different types of innovation at the same time
What are they?
Incremental innovation and radical innovation at the same time
They will be very busy
So, this fact reminds me of
one of the very interesting stories of Alice in Wonderland
Have you heard about the Red Queen effect?
Alice in Wonderland met the Red Queen
and the Red Queen said that,
"here, we must run as fast as we can"
Why?
Just to stay in place
You know what I mean?
Just to stay in the place
So, if you do not run, what happens?
Clearly we fall behind
Same thing happen to the businesses
Although you start your businesses,
although you achieve the success,
it's not enough
In order to stay in place,
what are you going to do?
You should run as fast as you can
You should look at the innovation,
two different types of innovation at the same time
Looks like this
Red Queen effect in the business,
you have to keep running just to stay in the same places
Because competitors keep moving
and some competitors will kill you
with the radical innovation
If you do not catch up this dynamic trend,
then you clearly fall behind
and you will be disappeared
You will go to the bankruptcy
Because no one uses your product, no one uses your services
Because your product and your services will be clearly outdated
So, that's why the modern company in these days,
they will ask the employees
to think like entrepreneur,
act like entrepreneur,
behave like entrepreneur
So, although you have a job at a big company,
your approach is very similar to the entrepreneurs
That's why this class is very important for you
I want to give you widely recognized practices
for the corporate entrepreneurship
The first one is intrapreneurship
We say intrapreneuring
Second type is corporate venturing
Kind of broad concept
And third type is corporate venture capital
Let's start with intrapreneurship
Not entrepreneurship, it's intrapreneurship
Intrapreneurship means we empower employees
within the organization
to act as entrepreneurs
Although they are the waged workers,
we ask them to think like entrepreneur, act like entrepreneur
What do you mean by that?
We ask them to identify the unmet consumer's need,
identify the consumer's problem,
and come up with a new solution,
and test your hypothesis from the consumers,
and receive the feedback,
and revise your hypothesis,
and prepare for the prototype
to get the real feedback from the consumers
Exactly the same as what entrepreneurs do
Again, develop new product services or process from
within the companies
For example,
the Google's 80 to 20 rules
Have you heard about it?
It's very famous
Google asks its employees
to spend 80% of the time on their day job,
day-to-day operation
On the other hand,
what about your 20% of time?
You use 20% of your time on something new
Whatever it is
You just find out something that you are passionate about,
and you just focus on this new area
This is 80 to 20 rules
It's a clear example of entrepreneurship
Let's look at the real example with NAVER
NAVER is number one search engine company in Korea,
very similar to Google
It's a Korean Google
NAVER is also a very strong company
Let's look at this picture
In the middle,
he is a very famous man in the world
Do you know who he is?
His name is Jensen Hwang,
the founder of NVIDIA
He became very famous right now
And next to him,
the guy who wears the eyeglasses and Korean man,
and his name is Lee Hae-jin
He's the founder of NAVER
Lee Hae-jin was an employee
at Samsung SDS
after graduation from KAIST
And then he majored in engineering at KAIST
Then he got a job at Samsung SDS
Then what happened in Samsung SDS?
Lee Hae-jin developed some new idea,
which is Webglider
Webglider is early version of search engine
And he made his own team inside the Samsung SDS
And Samsung SDS supported his idea
So he made this project successful
So the Samsung SDS was impressed,
and then, let him go out there,
and Samsung SDS invested the money into the new businesses
Again, the new project, the new project team was
spun off from the Samsung SDS
And then this team
became the independent company, which is NAVER
Look at this picture
This is the early version of NAVER
So inside NAVER, from the beginning,
there is a kind of entrepreneurial mindset
We say it is intrapreneurship
And the founder of NAVER
is a person who experienced intrapreneurship at Samsung SDS
So after making this Webglider team
independent company NAVER,
he encouraged his employees to
think like entrepreneurs, to act like entrepreneurs
LINE is the clear example of intrapreneurship
LINE is Japanese dominant messenger application
But originally, LINE was developed by NAVER teams
Did you know that?
Actually, NAVER Japan
developed LINE services
It happened after the 2011
Great East Japan earthquake
In order to respond to this natural disaster,
LINE Japan, assembled a small and agile team
and asked them to rapidly build on
new types of messenger services
This is LINE
Then later, what happened?
NAVER empowered the LINE team with significant autonomy,
allowing them to make a fast decision
Then what happened?
LINE achieved explosive growth,
reaching millions of users in Japan
and across Asia within a short period of time
Later in 2016,
LINE went to the New York Stock Exchange
and also the Tokyo Stock Exchange
Huge success
because of the intrapreneurship
What about Papago?
Have you heard about Papago?
Papago is an AI machine translation service
At that time, we had the Google translations,
but the Google translation is a little bit different from Korean language
And many Korean people found the existing tool unnatural, inaccurate,
or hard to use in daily life,
such as the Google translation service
So, NAVER decided to solve this pain point
by developing its own AI-powered translator
This is the starting point of Papago
Many teams inside NAVER
were involved in the Papago project
For example, NAVER Labs and Clover Teams,
NAVER Searches, UI, and mobile platform teams
And so many teams collaborated together
All the teams involved in the Papago project
acted like the entrepreneurs
So, they made it happen
This is a classical example of intrapreneurship
So, remember,
the intrapreneurship is one of the widely recognized practices
Let's move on to another type
and another practice of corporate entrepreneurship
The next widely recognized practice
of corporate entrepreneurship is
corporate venturing
So, the corporate venturing refers to
entrepreneurial activities,
either by making new businesses inside
or investing new business outside
In order to invest new business outside,
we should have some specialized organization
We say it is an in-house incubator or accelerator
Then, another one is we can develop our new businesses inside
Then, if these businesses achieve the success,
then these businesses can spawn off our original company
It is called a spin-off
The best example of the spin-off is GE Healthcare
GE Healthcare was developed in-house of GE
Later on, GE Healthcare was spun off from GE
Later, this company became the independent company,
totally separated from GE
Of course, GE invested the money and got the equity stake
This is the relationship
Let's look at the spin-off case first
NAVER again
Have you heard about Camp Mobile?
Camp Mobile is a kind of a NAVER project
NAVER recognized the urgent need to adapt the mobile revolution
Traditionally, NAVER is a web-based business
After 2010, what happened?
So many people used the mobile phone
So, NAVER recognized
the emergence of a mobile environment
And then, NAVER got a response to this fast-changing environment
So, that's why NAVER set up CAMP27
to serve as a mobile task forces
Mobile task forces to respond to the fast-growing industry
In 2012, the NAVER prepared for
the independent space located on
the top of the building of the NAVER headquarters
Basically, they prepared for new types of area
and asked employees to get together
and develop some kind of ideas
to respond to the mobile area, mobile industry
So, in the new space,
the project team gathered together, and they did some experiment
And they developed some new idea,
and they prepared for the prototype
to respond to the mobile environment
And they tried to develop new types of mobile applications
Their mobile applications
are totally separate from NAVER's core businesses
And they target to the global market,
and they target to the totally separated business area,
which is mobile
From doing so,
they ended up producing
a great mobile application, which is NAVER Band
NAVER Band is a group social networking application
It became a notable achievement
And this could be the flagship product
of the CAMP27 project
So, the CAMP27 project
was spun off from the NAVER in 2013
because of the huge success of NAVER Band
Then, CAMP27 changed its name
to Camp Mobile
So, after that, Camp Mobile operated several successful applications,
such as SNOW, Whosecall, WatchMaster, etc.
NAVER continually invested in Camp Mobile up to
about 100 million dollars
Which is a huge investment on the Camp Mobile
So, thanks to the investment from the NAVER
and their effort-like entrepreneurship,
Camp Mobile successfully produced
great services, great mobile application
One of them is SNOW
You know the SNOW?
SNOW is a mobile camera application,
featuring filters and animated stickers
The Camp Mobile produced it in 2015
And then, the SNOW app quickly gained the attractions
Especially among the younger users in Asian countries
Then, what happened?
SNOW was also spun off from the Camp Mobile
to become an independent company in 2016
Think about this
There is the CAMP27,
which is an internal project inside NAVER
And CAMP27 produced a really good service, which is NAVER Band
And thanks to the success of NAVER Band,
CAMP27 was spun off from NAVER,
and they changed the name from CAMP27 to Camp Mobile
And then, Camp Mobile received a lot of money from the NAVER
And then, Camp Mobile produced really good mobile application
One of them is SNOW
And then, SNOW was also spun off
Camp Mobile to become an independent company in 2016
I think, of course,
SNOW Mobile invested a lot of money into the SNOW
And to get the equity stake
Then, later, what happened?
Camp Mobile was merged back into NAVER in 2018,
which is after five years
from its first independent company
So, this merger allowed NAVER
to unify its mobile strategies
This is a story of the NAVER's notable spin-off cases
So, now you understand what spin-off is
What is the relationship between
entrepreneurship and corporate venturing
Let's move on to
another type of corporate venturing
This is an in-house accelerator
In order to invest outside the startup,
we need to have a specialized organization,
an in-house company
So, NAVER has an in-house accelerator
The name of the in-house accelerator is D2 Startup Factory
D2SF, we say D2SF
So, the D2 Startup Factory is an in-house accelerator firm in NAVER
What does this organization do?
This organization tries to select
potential startups out there,
educate them, and invest the seed money to them
Then, help them to be successful
This in-house accelerator was founded in 2015,
and D2SF is just primarily invested in
very early stage of the entrepreneurial company
So, the 99%
99% of the companies that they invest is very early stage
By 2025, 10 years later, what happened?
D2SF has invested in over 115 startups
The amazing thing is
D2SF achieved significant success
For example,
the D2SF-backed startups
have an exceptional, almost 99 % of survival rate
In Korea, the survival rate is pretty low
But D2SF-backed startups
sustained for a long time
This is a huge achievement,
and one of the notable achievements is
to invest the unicorn-level companies,
such as Furiosa AI
Furiosa AI is AI chip maker
It's almost approached to the unicorn level,
and look at this picture
The man in the middle,
he is a current president
Before he became president,
he visited Furiosa AI to encourage them
So, the NAVER already invested in this company
This is one of the significant achievements
Then, look at this
The D2SF activities
create some synergy with the internal team,
within the NAVER company
For example,
around 70 % of the portfolio companies
are actively collaborating with NAVER
For example, there is a logistic startup,
TechTaka, closely collaborating with NAVER shipping
NAVER shipping, same-day delivery services
So, NAVER can leverage out their service together
And also, the AI video startup VDO
received investment from the D2SF in 2016
Later, what happened?
NAVER Webtoon acquired
this D2SF back to startup VDO,
and then, integrated this company
So, this is a clear example
of why D2SF, which is an in-house accelerator,
is important for the NAVER
in terms of corporate venturing
Let's move on to the last practice
of the corporate venturing,
which is corporate venture capital
What is that?
Corporate venture capital is a form of venture capital company,
where the large corporations invest their own funds directly into
the external startup companies
This practice allows corporations
to assess the new technologies
New product or new business opportunities
developed by the startup
because they invest their money into the startup
The best example will be the Google Ventures
Google Ventures invest tons of money into the new startup
And what about KT Investment?
KT Investment established,
the telecommunication company in Korea, KT established the KT Investment
as a corporate venture capital arm
And then, KT Investment
tried to search for some potential startups
Then, KT provided 20% of the fund
that can be invested into the new startup
to assess the new technology or new product
developed by the startup
Why?
The reason is very clear
Nobody want to be a victim of disruptor
Remember that
Let me compare the traditional venture capital company
and the corporate venture capital company
According to the source of fund,
traditional venture capital company use the pooled fund from
the multiple investors
On the other hand, the corporate venture capital company
can use the pooled fund
and also they rely on
a single money sources from the parent's company
because they had a parent's company
What about the main objective?
The objective of the investment
for the traditional VC company is about financial benefit
On the other hand, the corporate, venture capital company
try to achieve the strategy fit between
the startups and the parent's company
And also, they expect the financial benefit
So, last one is motivation
And these two different,
the venture capital company have a different motivation
The traditional VC company
motivated to maximize the return
That's it
On the other hand, the corporate VC is motivated
to access to the new innovation
and new market
or the synergy with the parent's company
This is the big differences
So, anyway, corporate venture capital
is the one of the practice of corporate entrepreneurship
Look at him
He is Lee Hye Jin,
CEO and founder of NAVER
And then recently,
he announced that NAVER
will establish a new corporate venture capital company
in Silicon Valley
Why?
Because NAVER wants to access the new technology
New technology or new innovation
Where the new technology, new innovation come from?
Mostly the Silicon Valley
That's why they went there
They went Silicon Valley and established
the corporate venture capital
to invest a newly developed startup
to access the new technology and new innovation
So, the NAVER Ventures in Silicon Valley
already made the first deal with TwelveLabs
TwelveLabs is the AI company
specializing in a video analysis
Anyway, so far,
we have discussed about the corporate venturing
Real example of corporate venturing throughout the NAVER's practice
Again, NAVER is a classical example of corporate venturing
And now we understand why NAVER is so strong
in this competitive market
There is a Google out there
There is a Chinese company out there
There is a Japanese company out there
So competitive in Korean market
and in website or in the search engine,
whatever it is,
so competitive
But NAVER did not lose any market leadership in Korea
It is not because of the luck,
but because of their effort,
In order to assess new technology all the time
In order to asess new businesses
New opportunities
In order not to be a victim of disruptors
Remember the Red Queen effect
And also we should think like entrepreneur,
act like entrepreneur
Even if we have a job
at a big company like a NAVER
Don't underestimate the importance of the entrepreneurial mindset
Wherever you are, it is very important
Thank you for listening