Doing business and thriving as a foreigner in Korea
We don’t deny certain realities of our portfolio companies. Doing a startup overseas = extreme difficulty and suffering. But the life of an entrepreneur is about taking one step at a time through the constant repetition of encountering difficult problems and striving to find or build solutions to them. There are many cases, however, where problems are solved via unexpected situations and opportunities, which may arise from issues with employees, fundraising, and uncertainty regarding business models, to name a few. Surprisingly, there are even cases where clues to solutions are found in chance meetings between acquaintances or amongst former colleagues and alumni gatherings. And without certain intersections via education or life, wouldn’t the chance of such “coincidences” be more limited?
The founders of our portfolio companies based in the United States are fortunate in a way. In places like California, it is like a melting pot with strong racial diversity, to use the cliché. There is limited discomfort experienced for startup founders coming directly from Asia. However, if someone from Turkmenistan or Eastern Europe were to found a startup in Korea, a very homogenous country, it would be very challenging. The protagonist of this extreme example is Nazarov Suleiman, the CEO and founder of our portfolio company CloudHospital.
CloudHospital is a platform that connects patients from around the world to hospitals and doctors worldwide. This may not be immediately intuitive, as medical services are typically provided in traditional methods within a patient's own country. To connect patients, hospitals, and doctors across borders, content creation and search must also be available in multiple languages, and language barriers must be addressed when receiving medical treatment or exchanging opinions, requiring the use of interpreters. If this level of effort is required in all activities, patients and doctors particularly may not be interested in treating mild illnesses such as the common cold. As such, the majority of patients, hospitals, and doctors who use CloudHospital are typically related to the treatment of severe illnesses such as pancreatic cancer or providing highly complex and sensitive plastic surgery. Large hospitals such as Samsung Medical Center and Severance Hospital in Korea, as well as medium and large hospitals around the world, are putting in great effort to attract overseas patients by employing coordinators in various geographic regions such as Eastern Europe, the Middle East, and Southeast Asia. This is because there is a limitation to expanding hospital revenue by only treating domestic patients. However, this attraction of foreign patients is being carried out very inefficiently due to the lack and asymmetry of information, government regulations in each country, and difficulties in providing multilingual services.
As a SaaS platform, CloudHospital provides hospitals with features such as service introductions, doctor profiles, medical content, remote consultations, patient management, global marketing, and SEO in more than 10 languages. For patients, they develop and operate a platform that provides functions such as search and content for information on hospitals and medical professionals worldwide, thus enabling the provision of medical advice, connecting with medical professionals, and remote consultations.
While the CEO Suleiman has lived in Korea for over 10 years, obtained a degree, and worked here, he has become fluent in Korean and has gained significant knowledge and networks regarding business in Korea. Despite this, he faced many difficulties in founding and operating a startup as a foreigner based in Korea. Although we eventually had the opportunity to hear a detailed explanation of the business and were recommended this investment from an existing investor, The Invention Lab CEO Jin-young Kim, we initially came across the service through a cold call and not through a network introduction. Thus far, this is the only case in our portfolio where an investment was made starting from a cold call.
As we came to understand the company better, our perspective on foreign startup founders changed as we realized that there are not only disadvantages but also significant advantages in starting a business as a foreigner.
First of all, it is quite difficult for someone who was born and raised in Korea to come up with CloudHospital’s business model, let alone execute it. This is because the model itself is not easily understood from the perspective of Koreans who experience convenient and high quality access to various medical services regardless of the seriousness of the illness. Consequently, it is difficult for Korean people to realize that most countries around the world do not have the same level of healthcare insurance systems or medical service infrastructure. For example, while cancer patients may require some form of surgery, in many countries the reality is that patients might not be able to connect with a medical professional and receive proper examination or diagnosis, let alone have the opportunity to receive effective treatment. Even in the United States, a giant and superpower in itself, there are many cases where people cannot receive adequate medical insurance even with employment and cannot afford to visit hospitals due to the burden of medical costs, thus preventing necessary care. For Suleiman, having grown up in Turkmenistan, he had personally seen many cases where people cannot access appropriate and timely medical services, resulting in suffering from serious illnesses or even death without even having the chance to be treated. Therefore, when discussing these issues with him, his level of understanding, empathy, and sincerity was clearly different.
In addition, CloudHospital is building a cross-border business model, so it is necessary to hire various personnel such as developers, salespeople, marketers, and doctors from around the world. Initially, because Suleiman’s network is strong in Eastern Europe, he hired a lot of personnel from that region. Consequently, from the very beginning, he had to establish processes and systems for remote work and set up a metrics-based structure using things such as OKRs. This enabled much more advanced and transparent processes, systems, and policies than those typically seen in other early-stage startups. As a result, the company is recruiting talent such as developers, salespeople, medical staff, and coordinators from a range of countries, and since onboarding barriers are low, the company experiences little difficulty in talent acquisition compared to other companies. Needless to say, this is an organization building structure that is difficult for local entrepreneurs to establish or emulate.
Doing business abroad as an entrepreneur is definitely very difficult. However, if it is a necessary or obvious decision to make, even as a foreigner if one fully utilizes one’s advantages and competitiveness, it is not impossible to find paths to success. Conversely, like CloudHospital, there are many other cases where foreign entrepreneurs are able to leverage their strengths to enjoy difficult to obtain competitive edges. When investors review startups, rather than simply dismissing investment opportunities due to conventional thinking such as the difficulty for foreigners to succeed in a given country, if they look a little more deeply into what the company has accumulated and achieved, they may see unmistakable critical differentiation from their local peers.
One more thing. CloudHospital’s key metrics are growing rapidly, and more and more meaningful business cases are emerging. I hope that like a rocket, it will break through the ceiling and rise to the point where countless patients around the world can access better medical services perhaps in line with Benthamian utilitarianism.
