Dr. Ahn Chul-soo – his name has an impact beyond software ventures. Founder of the famed antivirus software and security solutions provider, AhnLab Inc., Ahn`s name itself stands for principled management and endless challenges to create new value. His life story explains the brand value of his name. He quit a coveted professorship at Seoul National University`s College of Medicine to start a firm to handle computer security solutions, an unexplored field at the time. His decision belied common sense back then and as CEO he nurtured a successful venture company. Then, four years ago, he opted for another change. Leaving management of his company in the hands of professional managers, he enrolled in an MBA program at Wharton School of the University of Pennsylvania in his mid-40s and upon returning to Korea he transformed into a professor at KAIST (Korea Advanced Institute of Science and Technology). He teaches entrepreneurship, a disappearing choice among the younger generation, warning students about the shortcomings of seeking stable jobs and easy lifestyles.
Ahn`s lectures, animated by his own experiences, arouse sympathy among his students and more than a few of them altered their life choices. His lectures are so popular that they rated 4.8 out of 5.0 in the students` lecture evaluation. Besides teaching he keeps himself busy with various social activities, including public lectures, writing, and overseeing corporate management as an outside director. All of his activities are geared primarily toward enhancing the possibility of success of the venture industry as a seasoned consultant analyzing the systemic problems of small and midsize enterprises (SMEs) and venture businesses and offering counsel.
I met Dr. Ahn to hear his opinion about the declining venture and software industries and during the interview I brought up "Nintendo," a popular topic these days. I asked him casually, "What do you think of President Lee Myung-bak`s remarks that he wonders why we can`t make a game player like Nintendo?” His answer was far from casual, however. He said the reason we are unable to make a Nintendo relates to all the problems faced by Korea`s software industry today. He explained that Nintendo symbolizes the synthesis of a standard platform, a horizontal way of thinking to look at hardware and software on equal terms, and a win-win structure for SMEs and large corporations.
Ahn stressed that venture and SMEs are nearly the only alternative for job creation. In view of the vulnerability of a conglomerate-centered economic system to crises, the venture firms and SMEs can assume a crucial role in reducing such risks and even help the large corporations improve their competitiveness by providing innovative ideas and markets. The government cannot foster venture firms alone, but there certainly are things it can do. There are more tasks to be done behind the scene regardless of public recognition. He insisted that the government should help reshape the business environment by ending unfair trade practices between large corporations and SMEs and changing the legal system in ways to allow those who have failed in venture businesses to start up new companies without stigmatizing them as economic criminals.
He couldn`t suppress anxiousness, saying, “This crisis is a great opportunity for the government to foster venture and small and midsize firms. If it doesn`t come forward right now, there won`t be another chance within five years.”
Questions and answers follow:
Q. In view of your experience as a CEO, what is most necessary for corporate managers and employees in difficult times like now?
A. I went through the IMF regime and afterwards my company fell into crisis again. But we overcame it and turned around. What I realized in the process was that companies, like individuals and nations, can`t fare well all the time. On the contrary, they can`t always fail, either. We all go through ups and downs. What is truly important is how individuals, companies and nations spend time in the downward cycle not in the upward one.
We make various efforts to do better when things go well. But these efforts have extremely insignificant influence on our entire life. Rather, I thought it`s far more crucial how to spend our time when things go wrong. Once they have gone through the tunnel wisely, all individuals, companies and nations can find another opportunity. As I wrote in my book based on my own experience, there are three things to remember in order to smartly spend difficult times.
First, it's important not to fall into temptation. Second, it's important to use the opportunity to repair those problems that you realized but failed to fix. Third, it's important to have confidence in the future of yourself, your company and your country – that things will go well sometime in the future even though it`s difficult at the present and the future looks gloomy. In regards to temptation, you are tempted into window dressing when your company is faced with adversity. It may give you some comfort for the time being but will eventually end up becoming indelible like a “scarlet letter.” You can temporarily smooth things by succumbing to the temptation to resort to expediency, but from a long-term viewpoint, you will find yourself shackled in a bottomless pit.
When things go well, you don`t fix problems even though you realize them. Most of us become self-conceited and, even when we see the problems we lack the resources to fix them. Then, when is our best time to fix our problems? It`s when we are in difficult times. A crisis can be a god-given chance to fix problems. And then when a new chance comes we can leap again.
In difficult times your mindset is more important than anything else. It is very important to squarely look at the reality, analyze the situation objectively and coolheadedly, and at the same time have confidence and passion about yourself and the future. When you have confidence in the future, you can endure and wait for a chance without falling into temptation and mend problems. This is what individuals and corporate managers need the most at this time.
Q. Can't the software industry be an alternative for creating new jobs?
A. I once had a discussion with a senior government official. He said he was twice surprised when he looked into the software industry. First, he was surprised to find far more people than he had thought working in the industry. Second, he was surprised to find so many people producing so little sales. He said the software industry is inefficient beyond imagination.
So I said, "Can`t you think in a different way? The fact that it needs many people means it is a labor-intensive industry. In other words, when this industry prospers a little, it can create many new jobs. It is a significant industry in this sense.” In my view, the software industry can create more new jobs than any other industry.
Also, the software industry once existed independently by itself. But it no longer does now. Most people think LCD production belongs to the hardware industry. But a person in the industry told me that software development accounts for 40 percent of the entire production cost. If so, we can`t say it is exactly a hardware industry. Next, the nation`s shipbuilding industry ranks at the top in the world. Someone asked me if I knew the portion of IT development, including both hardware and software, in the entire production cost. I answered it might be somewhere around 10 percent. But it was 30 percent. In the past, automobile production was delayed mostly due to hardware-related problems such as wrong designs or faulty parts. These days, however, automobile production can be delayed due to slow software development or malfunctioning software because each vehicle needs some 50 digitized devices.
Therefore, the software industry doesn`t exist as an independent industry but its industrial competitiveness determines the competitiveness of our automotive, shipbuilding and LCD industries which account for large portions of the nation`s exports. This means the software industry has enormous influence on other industries as well as job creation. So I believe it`s a really important industry.