I had founded three companies in the United States. While they weren't massive successes, they performed reasonably well. However, sensing that opportunities in the US were diminishing and the markets in Japan and South Korea were limited, I decided to move to China. In 2007, I foresaw China's immense growth potential and wanted to gain entrepreneurial experience in different countries. Another key factor was my family; my relatives live in South Korea. The distance between the US and Korea is vast, making it difficult to visit, whereas a flight from Shanghai to Seoul takes only two hours, making it much easier to travel.
When I arrived in China in 2007, the e-commerce sector was still in its infancy, so price comparison search engines weren't quite viable. At that time, my enterprise search engine business in South Korea was quite successful, providing internal search solutions to various companies and institutions. With around 1,800 clients—including Samsung, SK, and multiple government agencies—it generated $13 million in annual revenue. Believing China needed similar solutions, I started my Chinese venture with enterprise search services.
We operated this project in China for three years, but we found that Chinese companies were reluctant to pay for enterprise search engines and were hesitant to cooperate. This was largely due to differences in national conditions. In the US, South Korea, and Japan, labor costs are high, so companies prefer outsourcing rather than wasting resources developing their own search systems.
In contrast, because labor costs in China are relatively low, companies were unwilling to pay 200,000 to 300,000 RMB for service solutions. They felt it was more cost-effective to simply hire a few employees and invest more time instead. Additionally, many Chinese companies place a heavy emphasis on "scale"; there is a perception that a larger headcount equals a more powerful company, which often leads them to overlook the efficiency of small, specialized teams.
Another cultural aspect is that engineers in many companies are reluctant to use third-party technologies. There is a fear that relying on external solutions diminishes their professional value and increases the risk of layoffs. This made it difficult to promote our enterprise search solutions: large corporations preferred to build their own, while small companies lacked the budget. Consequently, my first entrepreneurial attempt in China was not very successful.
