Bernard, SparkLabs is unique in that it is the only incubator for Korean companies looking
to take their businesses global. Could you tell us a little bit more about the creation
of SparkLabs? How are you able to provide benefits for start-ups, and how did you obtain
such a high-level advisory board? How were you able to provide benefits for startups?
It all started with my friend HanJoo, who co-founded a Top
5 global hosting company named Hostway in Chicago. About three years ago, he started
Hostway Korea and built it into a pretty good business. He then approached me about creating
a start-up accelerator business. At first I was hesitant,
but another friend, Jimmy
Kim (CFO of Nexon, the largest gaming company in Korea) and I had already created two start-ups.
I told HanJoo I would help as long as Jimmy was onboard and we'd have a full-time staff.
Everything just snowballed. Like anything in business, it's all about relationships.
I talked to some friends in Silicon Valley. It just so happens that I play poker with
the founders of Guitar Hero. I asked David Lee of SV Angel (one of the most influential
angel funds in Silicon Valley) to be a mentor. Within three weeks, we had forty world-class
mentors agree to come onboard. My friend Jimmy suggested to ask one of the big names you
know. I contacted Vinton "Vint" Cerf, one of the fathers of the Internet. He agreed
to be a high-level advisor, just lending his name and advice. Mark Cuban agreed to work
with us. We also got Ray Ozzie, who is most recently chief software architect at Microsoft
and he's the one who replaced basically Bill Gates. Tom Peters, author of "In Search of
Excellence" agreed to help us and everything snowballed. There was a lot of momentum and
buzz. By the time our first accelerator class was ready to start, there was an amazing amount
of interest in SparkLabs. We had an excellent first year.You told me a little bit about
the model for SparkLabs and that you looked to the Israeli accelerator model for the accelerator.
Could you talk to us a little bit more about that? The basic model is a cookie-cutter model
of accelorators in the U.S., such as Y Combinator, the best known. Then there's TechStars.
The program itself is pretty a standard three- month mentor-driven program.
We invest $25,000 into
each company with an interest rate of 6 percent or less. In terms of the long view we follow
the Israeli model, as Israel and Korea are very similar. Both countries have highest
PhD's per capital along with strong engineering capabilities. What a lot of Israeli companies
have done successfully is build their companies in Israel. They then transplant the company
to Silicon Valley. By the time they hit their Series A or Series B venture financing rounds,
they bring in a local CEO to help the start-up get to the next level. We see Korea's start-ups
as very similar to those of Israel because Korea has a very strong engineering base along
with significant design talent—something that is so important today. We see the Israeli
model as the best way our start-ups can take their businesses to the next level. When they
are ready to enter the United States, we help them find that next level CEO. In terms of
companies that we look at, we look either for companies that are aware of how
to cater their product to other markets, whether it's the U.S., Japan, or China, or we look
actually for companies that know how to develop what we would call "culturally neutral products,"
that could really go global right away. It's not intertwined with any cultural nuances,
lets say, within Korea.