[Viewpoint] The Island Universe Phenomenon and Startup Growth

The U.S. presidential election offers several lessons for us. First, it revealed the shortcomings in the prediction process during the last election. After thoroughly investigating and analyzing to make up for the mistakes of the previous election, the prediction of Biden's victory in this election proved accurate. It became clear that in the last election, the prediction process was neglected due to overreliance on the prevailing trend. Second is the social turmoil caused by Trump’s refusal to concede. Many experts predicted that Trump would reject the election results if he lost, anticipating the ensuing chaos. According to foreign media, one million Americans protested, refusing to accept Trump’s defeat, and Trump supported and encouraged these actions.

Japanese sociologist Professor Miyadai Shinji defined the phenomenon where people with the same values form groups and communicate only among themselves, like Trump supporters, as the ‘Island Universe (島宇宙) phenomenon.’ Originally a term from Kantian philosophy, Professor Shinji reused it to explain today’s social phenomena.

The Island Universe phenomenon is amplified through the internet. Ignoring others’ opinions, only my opinion and our opinions are considered correct. As seen in Trump’s case, during his tenure, he filled government positions only with people who faithfully followed his views and listened exclusively to them. Those who did not conform were ruthlessly expelled, further strengthening the Island Universe. When the election results did not go his way, he played an unprecedented card of refusal, plunging American society into chaos.

The Island Universe phenomenon also appears in the growth process of startups. Startups grow through several stages after initial founding. In this process, the founder’s experience and ability positively lead the company initially, but when the company reaches a certain growth stage, this becomes problematic. Despite significant changes in the market and company size, relying heavily on past experience and the opinions of early team members prevents proper decision-making, causing difficulties for the company.

There are two common types of experiences among former large corporation employees who join startups. The first is that they overestimate their experience in large corporations and believe only their views are correct, disregarding existing small and medium-sized enterprise team members. In this case, they blame the organization rather than actively communicating with members and eventually quit the company themselves. The second is that startup founders and early members hire former large corporation employees out of necessity, listen to and communicate with them, but do not apply their opinions to the organization. They respond with, “That only works in large corporations, not for us.” In this case, the former large corporation employees also leave. Ultimately, only the original members remain to run the company, growth slows, and the company faces difficulties.

This year, the government’s 16 ministries provided approximately 1.4 trillion won in funding to support startups. Of this, 50.4% was allocated to startup commercialization and 35.3% to research and development. This does not include four rounds of supplementary budgets. Next year, the startup support budget to secure growth engines is expected to increase. Startups increase sales and create jobs as they grow through early stages. The five-year survival rate of domestic startups is about 29%, significantly lower than the OECD average of 41.7%. France has the highest survival rate at 48.2%, followed by the UK at 43.6%, Italy at 41.8%, Spain at 39.7%, and Germany at 38.6%.

While funding is important for startup growth, other areas such as marketing and research and development cannot be neglected. The success of any company depends on people, and the power that makes people succeed is communication. Many startups experience the Island Universe phenomenon because they manage their companies in their own ways without sufficient communication. Startups must change now. They cannot live forever in the shadow of the government. / Kim Kyunghwan, Professor, Graduate School of Global Entrepreneurship, Sungkyunkwan University