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Korea's Silicon Valley: Meet the Smart Content Center

ITProPortal was recently invited to Seoul by Aving Global News Network to find out more about the Smart Content Center (SCC), an entity set up by the Korea Creative Content Agency (kocca) to foster the growth of small to medium-sized smart content companies. There I met and discussed matters with Youn Chel Choi, the manager of the organisation.

He explained to me that SCC, which was launched during May of this year, has two main objectives: the incubation and the improvement of venture businesses.

The first mission is accomplished through the provision of offices to the startups, which are usually crippled at the first hurdle by sky-high runnuing costs. These offices all come rent-free and with 50 per cent of all utilities (including electricity and Internet bills) paid for by SCC. They vary in size and can hold between three and 10 people. 34 companies, spread out over two floors, are currently making use of SCC's free workspace, but this figure is expected to rise to 50 by the end of the year.

These offices bring alternative advantages too. Since so many related companies (designers, developers and distributors) are grouped within such a specific area, cooperation between businesses is encouraged. Choi confirmed that the startups, which each have a few employees, cannot always cover all areas of business proficiently, and it makes sense for them to engage in teamwork when needed.

Several companies have resorted to bundling their services together, a move that makes a sales pitch easier.

In fact, Choi hinted that a number of incubated companies may merge in the near future and he referred to a pair of complementary companies, an eBook platform and an eBook developer, which are engaged in discussions. Similarly, two development businesses have incorporated music produced by SoundUX (another SCC member) into their products.

The second, more complex purpose behind SCC – development – comes about from a wide array of strategies and schemes. SCC invites professional authorities, such as advertisers, angel investors, business consultants and legal specialists, to speak to the startups. These set about suggesting steps through which the startups could be able to transform themselves into global enterprises.

Public relations, assistance with press releases and translation services are amongst the facilities on offer. Startups also have the option to undergo business mentoring sessions twice a month. These mentors provide advice regarding topics like marketing techniques, up-to-date trends and industry-relevant new technologies. Elsewhere, SCC organises virtual pitches between businesses and both domestic and overseas venture capitalists, with the aim of encouraging investment from a wide range of sources.

Choi also said that he is currently preparing for a selection of SCC firms to fly to the International Consumer Electronics Show (CES) in January 2013 in Las Vegas. A number of the companies are also set to attend February's Mobile World Congress (MWC) in Barcelona, through SCC.

Choi dreams of overseeing the rise of a Korean equivalent to Google or Facebook through the centre, but he knows better than to get carried away. In his opinion, graduating at least 20 per cent of SCC's companies would be considered an achievement, especially as only around five per cent of Korean venture companies typically find success on their own.

Choi tells me that, to date, over 200 companies have applied to receive SCC's support, with only around 15 per cent successful. In order to qualify, each candidate is required to pass inspections carried out by teams of accounting specialists, angel investors and venture capitalists. Successful applicants, provided they pass at least one of the two reviews conducted by SCC each year, can reside within the offices for two years. At the end of this tenure, they will be presented with the option of renewing the two-year contract.

Companies that grow big enough to generate profits and stand on their own two feet graduate and are replaced with fresh organisations. Choi tells me that six startups are expected to expand shortly,

There is, however, a bigger picture. SCC was originally set up with the intention of increasing employment and the participation of venture companies in the Korean economy, since there is only so much that the big corporations can do. The project is a long-term one and, Choi explains, will exist for as long as startups require help.