[fn Square] Rediscovering the Venture DNA

Fairchild Semiconductor, founded in 1953 by eight so-called 'traitors' who left Shockley Semiconductor Laboratory, is considered the first venture company in the United States. William Shockley, who led the laboratory, was a Nobel laureate for inventing the transistor, but the eight geniuses turned away from his eccentric leadership. Fairchild Semiconductor created the world’s first integrated circuit (IC), a core semiconductor component, and then spun off into other ventures.
Intel Corporation and Advanced Micro Devices (AMD) originated from Fairchild Semiconductor, and Sequoia Capital, the financial backbone of Silicon Valley, also traces its roots there. Sequoia Capital has invested in countless companies, including Apple Inc., Oracle Corporation, PayPal, and Google LLC. When Nvidia Corporation was on the brink of bankruptcy in its early days, Sequoia Capital reached out to help. Although Fairchild Semiconductor no longer exists, its people and technology became the seeds for a chain of startups. Notably, Fairchild Semiconductor established the formula 'failure equals venture assets,' making it a textbook case in Silicon Valley.
The first venture company in Korea was Qnix Computer, founded in 1981 by Beomcheon Lee, a graduate of Korea Advanced Institute of Science and Technology (KAIST), who left his professorship and started the business in a small room in Anam-dong, Seoul, with a capital of 50 million won. The company developed a Korean word processor and made headlines by turning a profit just one year after its founding. It awakened the belief that ventures were possible in Korea, but Qnix Computer could not survive the 1997 Asian financial crisis.
Ironically, the period when Korean ventures, inspired by Qnix Computer, began to lay their foundation coincided with its exit. The legacy of Lee Minhwa, a KAIST colleague and junior to Beomcheon Lee, should also be remembered. Medison, the medical device venture he established while at KAIST, created a stir in the market with its technology and sales prowess, making ventures a central topic of the era.
It was around this time that the term 'venture' was first officially used in Korea. In late October 1995, 13 people, including Lee Minhwa, gathered at a Chinese restaurant in Yeoksam-dong, Seoul. These founders, who had technology but struggled with funding, talent, and market access, resolved to tackle these challenges together. Members included Chan-Jin Lee, the creator of Hancom, and Jang Heung-Sun of Turbotek. The Korea Venture Business Association (KOVA) was established about a month later.
This was the dawn of the Korean venture era. The first generation of entrepreneurs toured university campuses, holding roadshows to attract talent and energize the venture movement. The catchphrase at every event was 'Gather, the Bill Gates of Korea!' Inspired by these roadshows, students and researchers began forming startup clubs. The roadshows, dubbed the 'Venture New Village Movement,' drew large crowds wherever they went. This movement expanded into the 'laboratory startup movement,' with campaigns to create one venture company per lab. At the time, being a venture entrepreneur became the most sought-after quality in a groom.
The first generation, who saw themselves as 'those who plant trees in the desert,' persuaded various sectors to create new systems. The Korea Securities Dealers Automated Quotations (KOSDAQ) market in 1996 and the Special Act on the Promotion of Venture Businesses in 1997 were the culmination of these efforts. Ventures also absorbed many who lost jobs during the financial crisis, including heads of households and unemployed youth. The 100,000 Webmasters Training Initiative, jointly promoted by the public and private sectors, trained many unemployed university graduates as advanced IT professionals. This laid the foundation for portal companies like Daum and Naver Corporation to establish their platform sovereignty.
Hardships struck unexpectedly after the financial crisis. The collapse of the dot-com bubble in the 2000s led to mass bankruptcies and a harsh investment winter. The government’s belated measures to stabilize the venture sector ended up prolonging the downturn rather than distinguishing strong companies from weak ones. The venture ice age, which lasted over a decade, finally thawed as innovators in the smartphone and mobile era took center stage. Many believe that Korean venture DNA has continued in content, finance, and transportation sectors.
Now, thirty years have passed since the first generation sowed the seeds. Amid the sweeping transformation brought by artificial intelligence (AI), Korean ventures face a new phase. The challenge of the era is to go beyond the domestic market and set global standards. There is hope that AI semiconductor companies like FuriosaAI and Rebellions, classified as the fourth generation of ventures, will lead this trend. It is up to the government to cultivate the soil for the next FuriosaAI and Rebellions to emerge.
Policies to encourage entrepreneurship have advanced dramatically. The number of venture companies, which was fewer than 500 thirty years ago, has now reached nearly 40,000. The boldness to not fear failure is at the core of Korea’s venture DNA. The remaining task is to create a flexible system that shares the cost of failure across society. As the Year of the Red Horse dawns, we cheer on the challenges and adventures of Korean ventures.
jins@fnnews.com Reporter