Noom founder inspires foreign startups with his Korea-to-New York story
By Dennis Clemente
NEW YORK–If you’re a foreigner in the United States, how do you start a tech company in the United States? You can approach the challenge by connecting with people who can really help you. Those who have first-hand experience in raising funds; knows the legal ins and outs of the business, and those who can get support from an influential organization to facilitate that success for you.
Last August 16, Kotra hosted the Korean entrepreneur and founder series at its Park Avenue offices with startup panelists Saeju Jeong of Noom, the widely renowned fitness app, and Sang Lee of Return on Change. Other guests, Sonny Whang and Sonwha Lee provided legal advice that Saeju and Sang admired for their comprehensive scope.
If there’s anything Saeju has learned, it’s not to be content with his homegrown success; by home, that’s South Korea. He had a successful independent music label called BuyHard Productions, chosen as the most promising business in Korea in 2001 but he still went to the States, to pursue bigger dreams.
More than five years ago, Saeju left South Korea to make it in the States. He arrived without knowing anyone and now extols the value of networking. Failure was not even an option for him, he said. In his determination to succeed, he made lots of cold calls and even entrusted $50,000 of his money–cash that he handed out in a brown bag—to the people behind the musical “Bye Bye Birdie.” He wanted the show to hold an Asian tour.
That’s how Saeju got his start. After that, he decided to do more with his tech startup, but he was again faced with several rejections. I pitched more than 1,000 times, but I also learned how to pitch better. “In my persistence, I was able to raise $180,000—average of $20,000 to $50,000 each person, from angel investors, doctors, engineers, and “even the founder of LG,” he said.
Then he met tech developer Artem Petakov who he partnered with to create Noom. What came out of it, he said, was the highest-grossing fitness app on Google Play for nine months. “Our mobile apps help people live healthier through diet and exercise,” he said. “It’s hard to believe we have not spent a dollar on acquisition marketing. We serve 18 million customers.”
“We earned $10,000 in two weeks—and a million dollars in only a year,” he said, explaining his success came from the growth of the smartphone business.
“Our app is not really about what to eat, but how to build you a better habit. We customize messages and tasks. Also, our no. 1 priority is product quality,” he added.
Saeju took an arduous route to success when there were no crowdfunding sites yet.
The next speaker, Sang offers his crowdfunding site for people who want to succeed like Saeng.. “You got the 3Fs– friends, families and fools.” Today, he is promoting his site called Return on Change, a crowdfunding platform like Kickstarter.
Sang gave us startling data that could douse any startup’s dreams, saying “98% of business plans are rejected by venture capitalists,” adding that “only 1,500 startups get funding from VCs in the US.” He is trying to make a compelling point about how crowdfunding is another way for tech entrepreneurs to get much-needed funding.
In terms of seed deals, Sang said “innovation is being stifled with the 32.9 percent in seed deals.”
With these challenges facing the growing number of startups, it’s more important than ever to have an original idea, according to Sang.
Sang said the good thing about crowdfunding nowadays is that you can openly solicit funds now, because the JOBS ACT has been passed and will take effect on September 23 this year. “It will revitalize the startup industry, lift the ban on general solicitation and permit crowdinvesting.”
What is the big deal about the JOBS act? “Before you could not email people to solicit funds nor could you tweet about it. Now you can use social media and advertise your solicitations.”
Sang didn’t just promote his company but also asked for a change in perspective. “If Americans invested 1/10 of what they gamble per year, they would (amount) to $55 billion,” he said.
For those who are thinking of putting up a startup in the crowdfunding space, Sang suggests startups have the following in mind:
• Business plan
• Financial model
• Term sheet
• Incorporation
• Right platform
• Transparency
He also recommends how people should address the following:
• Define the need (for your business)
• How big is this market? Who is your customer?
• How are you going to make $
• Who’s your competition? How are you different?
• How are you going to brand your business?
• Who are your team and advisors?
• How are your investors going to make money?
• How much money do you need to start?
The event was hosted and organized by KOTRA and by the Korean Startups & Entrepreneurs (KSE) with KOTRA IP desk consultant Joseph Juhn moderating.
KOTRA is a Korean government agency focused on facilitating Korea’s economic development through various trade promotion activities such as overseas market surveys and business matchmaking. The KSE meetup group was created to bring together Koreans and those of Korean heritage who are passionate about startups and entrepreneurs.
