"Anyone starts up with his or her own theory. The startup is the process to verify the theory. Whether the theory is successful or unsuccessful, it is still an essential part of the success of the startup. How have the successful startups verify their own theories in their field? We will investigate the incredible cases of successful start-ups. So-called, “the theory of startup’s success"
CIZION is an eight-years-old startup (corporation establishment standard) which introduced and established the social comments service “LiveRe” to the domestic market of South Korea. LiveRe has been installed in about 30,000 websites and has approximately 27.35 million cumulative adopters. Kim Mi-Kyun, one of the leading female CEOs, started CIZION with Kim Bum-Jin, the co-founder, while in college. Since its start-up, CIZION has attracted the total 1,200 million won of investment.
<Achievement made by LiveRe as of Feburary 2018>
Theory 1. Online debate will create a healthy online comments culture.
“It was 2008 when I started to be interested in the problem of the comment system. At the time, the malicious comments have become the big social problem. I thought that this problem will be solved by the online debate. People usually communicate by replying the comments after comments. It is a kind of debate, and I thought if there is a proper service for online debate, people will healthily express their opinion and ideas through the debate rather than replying the comments. Therefore, I created the debate service “OnToRon”” by Kim Mi-Kyun (The CEO of CIZON).
<CEO of CIZION Kim Mi-Kyun>
CIZION trusted the theory that the online debate service will solve the problem of malicious comments. They started to develop “OnToRon” which was like a two on two game of people with opinions and put them in debates while the arbitrator mediates. They released the prototype of “OnToRon” after one year of development. Because the CEOs were the students, they aggressively promoted the service at the school. However, the result was not satisfying against their expectation. When they ask their friends or acquaintances to use this service, their participation did not last long, and there was not anyone who uses it after all.
<Service screen of “OnToRon”, the online debate service that CIZION developed>
To figure out the reason for its failure, they carried out a survey. Even though the survey asked the questions such as “How can the online debate be well-utilized?”, “Why do you think the online debate is important?”, and etc., people’s answers mostly focused on the ideas and opinions about the comments. They said “people would like to keep writing comments even though there is a debate service”, “I wish there is a function that people can easily express their fors and againsts the idea of the comment”, and “the current comment system is uncomfortable” etc.
“When we asked about “OnToRon”, people only talked about the comments system. The result of the survey showed us that our theory was wrong. Comments are comments and debate is a debate. They are not interchangeable. The comments, not the debate should have solved the problem of malicious comments. The online debate service was only for us not for the public. We learned the truth after we created the service. We couldn’t but wrap up our “OnToRon” service that we had developed for one year.”
Theory 2. The malicious comments decrease if the system requires the users to sign in their SN account to leave comments.
“When we gave up “OnToron” and were considering pivot, we found Twitter. We found an interesting point while using it from its prototype. The malicious comments were rarely found in Twitter which requires the users to sign in their account to leave the comments. It was because the users’ acquaintances can see their comments. People censored their own comments in the relationship-focused SNS. That was it! There were not many Twitter users in South Korea. Also, SNS was not popular, and we thought that it could be an effective solution to reduce the problem of malicious comments. We earned the theory that the relationship-focused service can change the way of people’s commenting.” by Kim Mi-Kyun
CIZION also considered about developing a service like Twitter at the beginning. However, the Twitter publicized the API. So do other SNSs. CIZION utilized this API and created “LiveRe”. It was simple. We added the text box to “OnToRon” we had already created.
It was not easy to find to verify their theory. They were looking for a website where people leaves many comments, but not a single one was interested in “LiveRe”. From August 2009 to June 2010, they couldn’t find any website which willingly installs the “LiveRe” in their website and the verification on the theory was put off.
< Kim Mi-Kyun (middle) and Kim Bum-Jin (right) in the early stage of startup>
"It was tragic. After giving up “OnToRon” and finally created “LiveRe”, no one used “LiveRe” for ten months. We even regretted giving up “OnToRon”. Thankfully, the team stayed strong together and went through the difficult time. In July 2010, we could install “LiveRe” for the first time. It was on “Bloter.net”
At the time, “Bloter.net” was categorized as a website with 100,000 daily visitors and should procure the limited identity verification system according to the government policy to solve the problem of malicious comments. “Bloter.net” decided to close the comments system. Kim Mi-Kyun persuaded “Blotter.net” to install “LiveRe” before closing the comments by saying “please try “LiveRe” before closing up”. After three months of persuasion, “bloter.net” accepted the offer. Finally, “LiveRe” could see the light of day in August 2010.
< Bloter.net which notified the users about the closure of comment system>
The outcome was significant. The total number of comments increased while the malicious comments decreased. The phenomenon that was found in Twitter was reproduced and the theory that the malicious comments decrease if the system requires the users to sign in their SNS account to leave comments was proved to be right. The theory did not need any amendments but fit correctly.
The outcome is very dramatic in numbers. Maeil Business Newspaper installed LiveRe in late 2010. Its website could have 12 times less malicious comments than the previous amount of malicious comments. The definition of malicious comments is the comments which elliptically express unilateral insults and attacks. After installing “LiveRe”, the number of malicious comments decreased sharply and the portion of malicious comments out of the total comments was only 3.3%.
The outcome became known to many people, LiveRe grew briskly. In 2011, the websites which installed LiveRe increased more than 100.
<The Service screen of LiveRe in the early stage>
Theory 3. “Solving the problem creates the market.”
“When I told people that I was creating a service to solve the malicious comments problem, they all said that there was no market for it and warned me that I would not make money from it. However, I believed that people who suffer from the malicious comment problem would willingly pay for it if the service does really solve the problem. Finally, we have solved the malicious comment problem and created the market for social comment. Any startup can succeed if it focuses on solving the problems rather than concerning the available markets.” by Kim Mi-Kyun (CEO of CIZION).
When LiveRe came out, the press companies had severely suffered from the malicious comments on the articles posted online. Therefore, the press companies heartily welcomed LiveRe. The press companies willingly paid for the service because LiveRe is the solution for the problem that they had suffered from for a long time.
<Kim Mi-Kyun, CEO of CIZION, in the early stage of startup>
"After installation of the service in “Bloter.net”, the customers rapidly increased. At the time, Korea Communications Commission was about to restrain our service. They reasoned that the social comments could divert the real name policy. It was the critical moment for the company. However, our customers, mostly the press companies, solved the problem for us. Our clients persuaded the government by insisting that LiveRe is indispensable to their business."
At the time that LiveRe faced rapid growth, they faced a formidable obstacle. Korea Communications Commission ruled LiveRe out of order and announced that they would put legal sanction on it. When CIZION hovered on the brink of a decision for the countermeasure, their clients, the press companies pitched in and helped them. The people in charge of digital in the press companies which installed LiveRe organized “Social Comments Operation Consultative Organization” and hold a “Social Comment Meeting” with Korea Communications Commission. In the event, CIZION could not enter the meeting, but the press companies emphasized the importance of the social comment.
“Social comment is more effective than the real name policy”, “Social comment effectively decreased the malicious comments”, “the purpose of the social comment is same with the real name policy and there is no way to stop the service.”
Korea Communications Commission held the meeting three times and admitted the effect of the social comment service. It decided to maintain the social comment service as a grace period for law application.
It is not common that the customers or clients fight against the government for the company they paid the service fee. If the clients did not admit the value of LiveRe, it would have disappeared back then. I wish the case of LiveRe to let people focus on solving the problems rather than considering the availability of markets.
<Group photo of CIZION members>
As-Is
- After the failure of “OnToRon”, CIZION conducts surveys before it plans the development of services. It only develops the intersection portion of the service that CIZION wants to develop and that the public wants.
- Discovering the characteristics of SNS in the early stage led LiveRe to succeed. CIZION paid attention to Instagram as a next-generation SNS, and it created “Attract” which is an Instagram Contents Curation Solution. The market response is very positive.
- Currently, the clients who pay for LiveRe is 1,149, and it is 75% of the total revenue of CIZION (as of 2017).