Candid Look at South Korea’s Start-Up Scene: Book Review

Krafton Way is an unusually in-depth look at South Korea's start-up scene.

Candid Look at South Korea’s Start-Up Scene: Book Review

Discussions about the South Korean economy are often limited to the roles of chaebol 재벌, the mega-conglomerates like Samsung 삼성 or Hyundai 현대 that make everything from automobiles to semiconductors to women’s shoes. Less discussed is South Korea’s vibrant tech sector that gave rise to new giants like Naver 네이버 and Kakao 카카오, as well as unicorn startups like Krafton, Inc. 주식회사 크래프톤 - creator of PUBG: Battlegrounds, the world’s best selling videogame on PC and Xbox One and the fifth best selling videogame of all time.

Krafton Way 크래프톤 웨이, written by journalist Lee Gi-mun 이기문, was written as a ten-year retrospective of what started as a small shop of six founders to a company with more than 1.6k employees and a market capitalization of nearly KRW 13t (USD 10b). The book is unusual in terms of its depth and candor; Jang Byeong-gyu 장병규, one of the founders of the company, gave Lee access to all of his previous emails, and let Lee interview any current and former members of the firm.

The result is an honest look at the company’s numerous different failures before it finally produced Battlegrounds. The failures seem so vivid and devastating that one reviewer wrote: “This is the most stressful book I’ve read recently.”But it is also a rollicking read about one of the most important sectors in South Korea’s business world.

The title of the book in fact feels like a misnomer, because it’s difficult to discern a “way” that led to Krafton’s success. With a team of game designers that migrated from NCSoft 엔씨소프트, the larger videogame company at the time, the company launched in 2011 with grand ambition and a detailed plan to achieve it. In the next ten years, little of that plan survived. The company wanted to be the leader of MMORPG (massive multiplayer online role playing game) games, but its first MMORPG Tera was a flop.

The company’s slogan was “On Time, On Budget, Maximum Quality,” but Tera went KRW 10b (USD 8m) over budget and a year over deadline. Five of the six founders ultimately left the company; Battlegrounds was created by Kim Chang-han 김창한, an outside recruit. Jang, the sole survivor who initially bankrolled the company, pledged hundreds of millions of dollars of his own money to keep the company afloat, potentially facing bankruptcy if it were not for Battlegrounds.

But a closer read of the book reveals the lessons learned from those errors, which contributed to Battlegrounds’ creation. Tera’s failure gave a reality check to the founders, who abandoned the initial plan of maintaining a wall of separation between game production and business management. Dropping the MMORPG-only business plan allowed the company to survive its low period by selling cheaply made smartphone games. By losing the pride of being the founders’ company, Krafton could attract outside developers like Kim who created the blockbuster.

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