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[KITA KGSF 2017] 2017 Startup Challenge Platform Demo Day: Lectures by Graduate Company CEOs

On November 28, ‘10th Korea Grand Sourcing Fair 2017' was held at COEX D Hall in Gangnam-gu, Seoul. The ‘10th Korea Grand Sourcing Fair 2017', which will be held until the November 29th, will connect Korean with overseas and regional large distribution corporations, manufacturing companies, and consumer goods import vendors for both on-line and off-line to support the export of domestic products through a large global distribution network. The event, which will be held for the 10th time since 2008, is sponsored by Korea International Trade Association (KITA), sponsored by Ministry of Industry, Trade and Energy and the Ministry of SMEs and Startups and KB Kookmin Bank. In this event, 140 foreign big buyers, 20 WTC member companies, 900 domestic export companies and 100 PPL companies participate in consultation activities and incidental events. '2017 Startup Challenge Platform Demo Day', an incidental event of ‘10th Korea Grand Sourcing Fair 2017', is an exhibition as well as demo day of '6-month Challenge Platform' progressed by Seoul Center for Creative Economy and Innovation. It is prepared by Seoul Center for Creative Economy and Innovation to raise the opportunities of investment and business linkage by informing the accomplishments of the startups that were fostered through the project period to private accelerator and investing institutions. A total of 19 companies selected through the recruitment of participating companies participated in the event. Targeting domestic angel investors, accelerators, and VCs, incidental events including "Company IR", in which six companies conduct their own IR, "Selected prototype exhibition", which discloses the products produced as a result of the performance, "Startup representative lecture", which presents success stories of excellent startup representatives among graduate companies, and "Networking", held for exchanges among attendees such as selected company representatives, accelerators, investors, center employees, and visiting buyers. At 'Lectures by Representatives of Graduate Companies', Lee Seung-min, CEO of BLUEREO, and Ryu Jun-woo, CEO of Red Velvet Ventures. gave lectures on the main items of the company, the process so far, and advice for other start-ups. BLUEREO is aiming at the niche market between the electric toothbrush and the suction toothbrush through the new concept toothbrush 'Oral Clean' with the suction function. 'Bomapp' of Red Velvet Ventures is a service which allows to see collection of user's insurance information in one view, manages it, and utilizes for the general users and insurance planners. ▲ Lee Seung-min, CEO of BLUEREO. Lee Seung-min, CEO of BLUEREO Inc., said, BLUEREO 's items is an electric toothbrush that can suck in gargling water that cannot be spit properly with the electric toothbrush function to the socially weak people such as the elderly or the handicapped who can not brush themselves. It is introduced that, during the 6-month challenge program, the company received support for mockup, R&D projects, KIPS, and video production as connected business. This connected support could be done through checking confirmation of the eligibility or condition for priority selection. BLUEREO also received various proposals such as going on Demo Day and attracting investment by connecting to VC. In these cases, KIPS was chosen, and every company has different forms of investment, but BLUEREO received investment in the form of redeemable convertible preference share. On the other hand, he received advice that "It is expected to be a lot of fund formation next year, and if funds are run out afterward, get your breath back and invest when the funds are created." It is emphasized that starting with good people, making what customers want, and saving money are important during Seed or investment before Pre-A. Especially, he highlighted that 'person' is important. When passing every step such as seed investment, Pre-A, or Series A, the required IR data is different because the information needed for the review is different, and it is important to emphasize possibilities and verification when seeding. For investment, the team, item, and market aspect are important. In the case of the team, BLUEREO started the business alone, felt thirst for the team members, and scouted people around him. In addition, judges at Demo Day or a contest may be mentors, investors and buyers, and they have become mentors by responding to inquiries about favorable opinions. BLUEREO had done incorporation transition in March 2016 and founded the company with a person who is from a large company, who could supplement the technical part or who worked for a long time in the venture. Moreover, he pointed out that the subsidiary of the patent corporation is included as a unique point for the shareholder composition, and he commented that it contributed to the legal process, such as patent, in preparation of the product. At the same time, recruiting people also takes a big portion in business for startup, so he recruited experienced personnel, such as designers for ergonomic design and public officials from the Ministry of Health and Welfare according to the characteristics of the B2G business. On the other hand, the trial and error of development and the problems in production are completely different, and they also suffered from quality problems in early production. The company has introduced more than one revision of all molds and produced products in the third quarter, firstly supplying products to long-standing customers, and most of the current quantities are being exported to France. The company is also developing people's oral healthcare monitoring services, and even global large companies are not working on this. ▲ One of the unique aspects of BLUEREO's history is its initial investment attraction. Currently, there are no products similarly used like BLUEREO's product in markets, but there are two categories of products with similar characteristics. This is impressively accepted to VCs since it has a broad range of accessible market. Also, for this, there is a need to analyze and introduce the whole market, valid market, target market, and the base market that can enter right now. In case of BLUEREO, it is a clear example of strategy to niche market. The competitors for electric toothbrushes and mouthwashers are well-known global companies, and the competitors for suction machine and suction toothbrushes are medical equipment companies, but both sides are not direct competitors. The results of the IP R&D project showed that about two thousand patents related to patent analysis, R&D roadmap, and patent attack avoidance strategies were confirmed. It is found that most of the patents are about the spray and vibration functions. In addition to the inhalation function, which is now a blank patent, some companies have set up the pattern analysis and remote medial treatment part, which are pioneering new markets, as a future technology development area. He added that there would be a possibility of cooperation with universities, not companies. Meanwhile, at present, the total number of IPRs of BLUEREO is about 52, and SYP Patent Law Office, a stockholder, dispatches and supports patent attorneys with investment costs. The technical support other than financial support is effective at the seed investment stage. VCs conduct confirmation of technology, patents, and products as well as feedback and market research before investment, and it is emphasized that BLUEREO judged these feedbacks significant from the initial stage. BLUEREO has observed the daily life of people with disabilities through volunteer activities, collected feedback from customers, reflected on the products and responded to the market. Moreover, VCs require data on whether it had relevant effects and feedback when the product went into the market. On the other hand, BLUEREO's products are classified as assistive technology device and welfare equipment business in Korea from B2G model, and there is a characteristic that government subsidies are offered for product prices. In addition to health insurance, BLUEREO said it is promoting cooperation with Japan to advance into the care insurance market. As a result, cash flow and product sales have risen to a certain level, but before that, consumers and purchasers are less likely to have room to spare. So, the company is increasing line-ups through differentiation strategy. Meanwhile, he added that competitors can become customers through participation in various events. BLUEREO has been supplying products by receiving orders worth about 1.3 billion won at the time of incorporation transition. This was possible even though the company was start, because when the B2G model enters the government, manufacturers and sellers enter consortium, and the sole distributors and exclusively sale parts are naturally formed. Moreover, selecting partners for each market has a positive impact on initial investment. Also, European market is characterized by not only welfare budgets but also subsidies from private insurers. They are trying to divide the market to do business with key players, and there is a need to invest in product research to expand the market to the general public or infant markets. As advice related to investment, it is introduced that "take it when you can" most of the time. He also advised, receive investment as much as possible until reaching a stable orbit even for responding to the unexpected problems, but a careful review is required when negotiating, and the investment should be used for a purpose and systematically. VCs seem to want an appropriate stake in their investments, and VCs that initially invest in are likely to take the lead in sequential investment. In addition to this, as for provision of preferred stock in investment, it could be policy for each investment company and there may be some tiresome parts due to the management intervention of VCs. There is no reason not to take the investment, and it could be built as relationship for cooperation by utilizing situation well. Also, he advised that an investment contract must be received and reviewed in advance. ▲ CEO Ryu Jun-woo of Red Velvet Ventures Ryu Jun-woo, CEO of Red Velvet Ventures Co., Ltd., has been servicing "Bomapp" app since February 2017, in which users can check and claim all the insurance information that users registered with only mobile phone authentication. The company secured more than 300,000 users without marketing, and has recently invested 3 billion won with Series A. In addition, he worked in Seoul Guarantee Insurance and decided to start a business. He had a lot of worries about solving his thoughts on insurance, so he accumulated experience by changing his career to a startup and established corporation with co-founders. The first business model they thought was to transfer the photo of insurance certificate to the data and manage, but this method was not successful since it received bad response. The preparation of a new model had to go through a difficult period like ‘death valley’, but at that time, support from accelerators of large companies was active, so the company could receive various supports. He was worried about the investment a lot. VCs judged by their own experience, and insurance is the area where user experience is clearly divided. He also added that there was a coincidence that the introduction video created by the accelerator appears on SNS and an investor visited him. He said that which VC you meet is important, and there are VCs that are interested in this business somewhere. It depends on how you prepare for the process until you meet them, but this process is not only just meeting. He personally uses Facebook as PR channel, and he stressed to CEO of startup the need for promoting their services from the most accessible channel, which is SNS. In the early days, a relatively small investment, such as a 6-month challenge platform or accelerator, was used well. After the service was released, it grew rapidly, and the situation became more flexible. ▲ It is introduced that the presentation for VCs consists of life experiences, expertise of members, and then problem solving strategies. Meanwhile, Red Velvet Ventures has been a structure where CTOs and CFOs have been working together since early on, and this could prevent CEO from losing the essence of the business when doing a lot of related paperwork, investment, and HR. Investors invested after looking at the team, and in the process of negotiating the terms of the contract, the presence of the CFO also raised the value of the team. Even if the CEO can do this, it is recommended to co-found with CFO who is fluent in this area. Likewise, what CEO needs to focus on is attracting investment and recruiting good members. They went through a 6-month challenge platform, met many good teams, and proceeded collaboration during workshops at CCEI in Seoul. They said that networking within it could be a great help for the future business. In addition, to shape the ideas and to absorb good members, CEO should be free. To do so, gathering good members from the beginning or joining good co-founders will eventually lead to faster growth. The service was introduced that it scraps and implements insurance companies' homepages in their own way, and moved the process of customers' confirmation of insurance coverage to mobile. In order to organize the field values visible in the app, different interfaces are implemented to each insurer, and a subscription model for insurance planners was introduced as the profit model. Now, it is a difficult situation to collect insurance policies from customers, but it is a subscription model that enables certified designers to check customer information. Also, marketing starts from what insurance planners across the country recommend to their customers.

[KITA KGSF 2017] 2017 Startup Challenge Platform Demo Day Connected Business Briefing Session

On November 28, ‘10th Korea Grand Sourcing Fair 2017' was held at COEX D Hall in Gangnam-gu, Seoul. The ‘10th Korea Grand Sourcing Fair 2017', which will be held until the November 29th, will connect Korean with overseas and regional large distribution corporations, manufacturing companies, and consumer goods import vendors for both on-line and off-line to support the export of domestic products through a large global distribution network. The event, which will be held for the 10th time since 2008, is sponsored by Korea International Trade Association (KITA), sponsored by Ministry of Industry, Trade and Energy and the Ministry of SMEs and Startups and KB Kookmin Bank. In this event, 140 foreign big buyers, 20 WTC member companies, 900 domestic export companies and 100 PPL companies participate in consultation activities and incidental events. '2017 Startup Challenge Platform Demo Day', an incidental event of ‘10th Korea Grand Sourcing Fair 2017', is an exhibition as well as demo day of '6-month Challenge Platform' progressed by Seoul Center for Creative Economy and Innovation. It is prepared by Seoul Center for Creative Economy and Innovation to raise the opportunities of investment and business linkage by informing the accomplishments of the startups that were fostered through the project period to private accelerator and investing institutions. A total of 19 companies selected through the recruitment of participating companies participated in the event. Targeting domestic angel investors, accelerators, and VCs, incidental events including "Company IR", in which six companies conduct their own IR, "Selected prototype exhibition", which discloses the products produced as a result of the performance, "Startup representative lecture", which presents success stories of excellent startup representatives among graduate companies, and "Networking", held for exchanges among attendees such as selected company representatives, accelerators, investors, center employees, and visiting buyers. At '2017 Startup Challenge Platform Demo Day', the sessions to introduce various support projects of Center for Creative Economy and Innovation (CCEI), are prepared for startups. In this session, major projects focusing on the business plan of 2017, which is currently in the final stage, were introduced. Many of these projects are expected to continue in 2018 with similar characteristics. In addition, the session provided an introduction to how startups can utilize various connected businesses. ▲ Song Yong-jun, general manager of startup promotion division in Seoul Center for Creative Economy and Innovation Song Yong-jun, general manager of startup promotion division in Seoul CCEI, introduced about the connected business of CCEI in 2017. Although the introduction of the business is about the last 2017, it might be an opportunity to guess the direction of the future when considering the current government's keynote. The business plan for 2018 will be decided by the end of the year. After preparation of the connected business, the place for introducing it at the center will be prepared in March to April as they have done every year so far, and he expected to start in April. CCEI is working on linking and collaborating with government related projects to effectively support startup and business growth step by step. In 2016, 20 projects from the four ministries were conducted at a total of 252.2 billion won, and in 2017, the number of projects from six ministries was expanded to 24. In this regard, government policy has a direction to expand startup support, and CCEI is expected to continue to play a role in its position as a startup hub. In terms of the connection of each subject, it is found that the connected business also increases and the role of the center will be important. In 2017, the project budget amounted to 97.8 billion won, and 256.7 billion won in connection and collaboration. Among them, 19 consortiums and smart factories are included in direct consignments, so the actual execution scale of CCEI was just under 50 billion won. In addition, ‘Connection and collaboration’ is the tasks that center just connect and support, the center does not progress directly to. On the other hand, as the selection criteria of the linked projects, concrete business beyond the level of cooperation with a simple human exchange between ministries, and whether there is a substantial link in the program unit are suggested. ▲ Changes for each major business in 2017 are briefly introduced. In terms of changes for each business in 2017, a direct consignment businesses such as '6-month Challenge' and accelerator connected supporting are not confirmed yet, but the '6-month Challenge' project is known to be considering support in some way in the future. In 2016, Research Foundation made selections while each center gathered apply, but in 2017, the method has changed to make a selection from each center by itself. The Seoul Center has been selected separately from before, but this year, there was a part to be selected in cooperation with Creative Economy Town. 'Smart Factory' is to support automation and intelligence of existing factory facilities. In 2017, its budget has been expanded, and in 2018, discussions are under way on the subject of change in operation. In 'Integrated Mentoring' project, the scope of education object has expanded to towns, mentors of other institutions, center operational manpower as well as mentors of Innovation Center. In 'Investment-linked type enterprise growth R&D', only center-fostering enterprises were supported until last year, but starting this year, the target has been expanded to enterprise with transfer public technology, investment company, crowdfunding attracting. Therefore, if there is an opportunity such as transfer public technology, it will be utilized for the qualification of supporting project. In 'R&D Enterprise, Startup Growth' project, inclusion of preferential indexes for the discovery of innovation center incubating enterprise in the performance index of private TLO (Technology Licensing Office) and priority recommendation to the center incubating enterprise as a global accelerating program supporting target are pointed out as major change points. Moreover, in 'Creative Fusion R&D, Quick Support to Industrialization' project, the innovation center participated to regional consultative group that selects the support targets, and this part is expected to continue in the next year. In terms of the additional points of applied tasks to the incubating center, Creative Fusion R&D got five points from three points, and Quick Support to Industrialization got additional three points. In TIPS, TIPS operators do not deduct operator's recommended TO when recommending Innovation Center incubating company, so it can reduce operator' s burden on recommendation of Innovation Center incubating company and apply TIPS more advantageously. In addition, the Seoul Center was selected as a task planner in the 'Re-challenging Technology Development' project. So, it supported the advancement of the business model through mentoring, and received some comments that, although it has shortage in regional specialization, it is performing well on other parts. Besides, Pohang and Bitgaram Center are operated by private autonomy, and these centers will promote participation in the connected support project. ▲ A total of 7 consignments were carried out by the Center. At the current state of the connected business of the Innovation Center in 2017, a total of 7 projects have been conducted by direct consignment businesses. Among them, the '6-month Challenge Platform', which focuses support for 6 months to commercialization of ideas of startup companies for pre-founders or having experience less than one year, selected 55 teams last year. However, this year, a total of 22 are supported. That is, they are divided around 10 for each center, and Seoul Center supported 12 through connection with Creative Economy Town. Meanwhile, although the '6-month Challenge Platform' will disappear in the coming year, it may appear as a new program. It is a program that is just as relevant to the role of the center, so it is expected to appear next year. Accelerator connected support projects usually selects 8 to 10 candidates, and accelerators progress investment to about four of them. The investment amount is introduced to be about 30 million won per company usually. And this year, each center is matched with accelerators, and in case of Seoul Center, it had applied with Sunbo Angel Partners. Meanwhile, the project has a feature that can be taken over by a graduate company from 6-month Challenge Platform. It is currently being announced as a project running until this year, but since there is a direction for strengthening the functions related to the accelerator next year, the related opportunities could be expanded. 'Innovative Job Leading' project supports the process of making ideas into business models and business model development as well as employment matching through network operations in which local companies, professionals and employment support companies participate. In addition, 'Spread of Smart Factories' provides cost support for the advancement of factory facilities, and Samsung Electronics is participating with the support of 7.5 billion won. 'KT Win-win Supporters Program' is a form in which KT appears and operated by Kyunggi-center to support global advancements. This year, there were a lot of collaborative efforts with national innovation centers, and many other incubating companies were supported. Next year, it is introduced that the expansion of customized support projects, which were good in this year, is being discussed. ▲ A total of four function support projects are prepared. A function support project of the center has 4 functions. Among them, establishment of the integrated mentoring support system progresses dedicated mentoring targeting companies that enter the incubating center until October or graduate the center, through mentors of integrated mentoring operated by the center, and mentoring day once a month with mentors, entering companies, and graduate companies. However, there are problems such as very hard to arrange schedules between mentors and mentees, and for the purpose of expanding the object of support, 'Dedicated-Mentoring and Mentoring Day', which was held in November and December, received mentoring applications for 6-month challenge platform and graduate companies. It is introduced that it also received applications through matching mentors inside the center or liaising from outside, and progressed a program for 3 to 6 hours. In the future, it is added that mentors who are invited from outside by companies will be formed to form a mentor group so that they can support other teams. In legal support, legal, financial and patent parts are supported through 'one-stop zone', and there is also a business about consulting services by the resident lawyer, as well as introducing lawyers in connection with the center and supporting a part of the litigation expenses. Patents-related consultations are conducted once a week at the regional intellectual property center, and to some good ideas, application support and consultation on disputes are provided. In addition to this, counseling on financial matters is also provided. In this year, there was a case that an official dispatched from the Korea Credit Guarantee Fund and has been mentoring all the time. Since November, the counseling has changed be conducted once a week due to the small number of consultations, and it is expected that the number of consultations will increase if the demand increases. There are a total of thirteen connected support projects, and the Seoul Metropolitan Center is excluded from some projects related to regional specialization. Among them, 'Investment-linked type enterprise growth R&D' is a business that supports R&D fund by attracting investment from a designated investment organization. It is a business that can be connected after accelerator support, and the center plays a role of recommending support targets. 'Support for Research institute and Startup Growth' supports the commercialization of regional public technologies and the establishment and growth of research institutes. The center recommends the candidates to be supported through the qualification examination of the companies, and it is explained that the activities such as creating prior consensus by collaborating with investment institutions will be advantageous for selection. Through global innovation centers in Berlin, Germany, in China, and two in US, a total of four centers, KIC support provides startup support program for each base for the creation of local base for global advancement and expansion of activities. Besides, 'Rapid commercialization support' is supported through Techno Park, and it supports up to 20 million won and rapid commercialization for selected teams after receiving applications for every month and then evaluation. In the utilization of Techno Park, the Center and Techno Park have a relationship like a form of connecting to the next step with the initial company. ▲ There are a total of 13 connected supporting projects. The center mainly has a role of recommending candidates to be supported. TIPS program is a program that is expected to be of great help in commercialization as up to 500 million won of technology development funds and up to 400 million won of startup funds are supported to excellent startup companies in which an operator invested 100 million won. In addition, it is mentioned that there are many TIPS operators among center-connected accelerators, and Demo Day, which was originally conducted on the existing investors, will be expanded to accelerators or VCs. Also, 'Visiting Demo Day' will be progressed. Besides, the support project for development of startup growth technology provides a cost of about 100 million won. The creative innovative type re-challenging technology development support project supports development of new products by comeback small and medium-sized enterprises, which are difficult to participate in general R&D projects, and the project is expected to expand opportunities in accordance with the government's policy direction in the future. Moreover, as for employment creation-related project connected to the Ministry of Employment and Labor, it is recommended to get counseling or utilize consultations in job offerings and joint consultations through Matching Day, since there might be a program which can support for employing new employees. Meanwhile, the overall business schedule starts from February to March, emphasizing the importance of communication. In terms of business systems linked to the Innovation Centers at each stage of growth, each of the support projects is matched at the stage of startup, growth and leap in the pre-startup. At the 'startup' phase, where most of the participants are involved, the 6-month challenge, accelerator, investment-linked R&D and startup growth R&D projects are considered. On top of that, rapid commercialization support for marketing or rapid commercialization, KIC support project in global advancement, and smart factory supply project for SMEs will be also continued. ▲ The various businesses that have been introduced are structured and connected to this extent depending on the location of the company.

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