Revive the street, grow the business
Kdrama Business Review: “Itaewon Class”
I’ve recently been hooked on the webtoon-based Kdrama “Itaewon Class,” depicting the story of Park Saeroyi, a high school dropout and ex-con who seeks revenge against the owner of the country’s top food conglomerate, Jang Dae Hee. I won’t go into detail to spare you from the spoilers.
Revive the street, grow the business
As compelling as the revenge story goes, it’s not what really sold me on the series. Instead, it’s Saeroyi’s persona as a businessman and the tidbits of business advice littered throughout the episodes that piqued my interest as someone whose work revolves around writing about tech startups and startup founders.
At one point, Saeroyi is forced to relocate his business, and seeking to avoid landlords altogether, buys a building to house his bar and resto’s next location. Unfortunately, the building he is able to afford is situated in an alleyway with hardly any traffic. While his manager launches social media campaigns to promote the new location, it doesn’t lead to the long lines they had enjoyed in their previous spot.
A friend and restauranteur advises him that regulars are important in such an alley with sparse traffic. Then, seemingly prompted by such advice, the scenes that follow show Saeroyi helping out the other restaurants and bars along the street. His manager questions the practicality of such an approach when his own business isn’t doing well, and Saeroyi responds saying that he’s been spending time with the other shops for survival — the street needs to be revitalized if their business is to survive.
When cooperation trumps competition
His response oddly reminded me of a piece on the Ken about online lending in Indonesia. Online lending platforms began working together late 2019 to create an alternative data centre to better monitor for fraud and bad loans that have been plaguing the market.
There are certain scenarios — from a market under threat from negative externalities (an empty street or fraudsters) to a nascent market with untapped opportunity — where sticking to flat-out, unhealthy competition limits market value and can be detrimental to all players in the long run.
Saeroyi’s door-to-door approach isn’t the only solution. In his meeting with the restauranteur, the latter had already pitched several ideas to the local government to bring more foot traffic to the area, but they had been ignored. Saeroyi took it upon himself to help liven up the market.
When it comes to both markets under threat and blue oceans with opportunities yet untapped, cooperation and focusing on the larger market can be needle moving for market capitalization, instead of burning cash in an unhealthy competition that will likely lead to no long-term winner.
Sharing is supporting market growth
Of course cooperation doesn’t have to involve sharing recipes or going door-to-door; a business still has to remain competitive. There are several ways where such relationship building and positioning can bring returns to the business:
- Making specific technology infrastructure public. We’ve seen this with the open source revolution, and when tech platforms opened up business opportunities by making APIs or software public. Such an approach can make players within the same space users of a competitor.
- Thought leadership. Pioneers share lessons for other players, establishing themselves as leaders in the market. We see this often in the marketing industry, where top agencies dish out advice on winning campaigns that smaller players look up to.
- One can also be the business that raises the market cap within their industries, as with Amazon extending into cloud services and fresh produce or Tencent’s superapp WeChat hosting other apps within its ecosystem.
- Building key relationships with institutions to drive regulation. Given government’s reactionary stance to rule setting and infrastructure support, starting such relationships not only enables the business to influence how the market grows but also sets the business as a leader in the market from a branding standpoint.
Key to engaging in such approaches is (1) having certain differentiation or be at a level of growth relative to other players where it is not impractical to cooperate and (2) extending to lines of business valuable to competitors or adjacent markets.
Staying ahead of the game is also crucial as it arms the business with enough assets to share with the market without jeopardizing differentiation. If Saeroyi didn’t have enough employees or hadn’t established marketing and operations after moving to the new location, it would have been useless and impratical to already start helping other business.
Also, Saeroyi didn’t help the other restaurants by sharing his suppliers or recipes; he simply helped fixing up the signages of stores and their displays. While such elements do play a factor in the decision-making process of customers, it’s not core to the business. Ultimately, if the street looks better because the stores look better, that creates a larger pie for the stores to split up.
