[Person人] A Dirt Spoon's Motel Part-Time Job... The Beginning of the 10 Trillion Decacorn 'Yanolja Magic'

Saving Seed Money While Working at a Motel... Bitter Experience from First Business 'Salad Delivery'
Using Experience to Open a Lodging Cafe... Acquired 'Motel Tour' in 2005
Connecting Businesses and Introducing Date Courses... The 'Foundation' of Yanolja
Marking a Milestone in Lodging Culture... Accelerating Leap to IT Company

Soojin Lee, CEO of Yanolja.
Photo by Yanolja

[Asia Economy Reporter Junhyung Lee] 10 trillion won. This is the valuation of Yanolja after the Vision Fund, led by SoftBank Chairman Masayoshi Son, recently invested $870 million (about 1 trillion won) in the company. With this investment, Yanolja became a decacorn (a private company valued at over 10 trillion won). The company's valuation surged nearly sevenfold in just two years, from 1.5 trillion won in 2019. At the center of this ‘Yanolja Magic’ is Sujin Lee, Yanolja’s CEO, who is regarded in the industry as a "unique figure in venture history."

A Dirt Spoon Who Challenged Business from Her 20s

CEO Lee is a typical ‘dirt spoon’?a term used in Korea to describe someone from a humble background. Unlike entrepreneurs who grew up in affluent environments, followed elite paths, and built unicorns (private companies valued at over 1 trillion won), she started differently. She often said, "I wanted to succeed because I was poor." She lost her father at age four, and her mother left home when she was six. She was unable to read properly until the fifth grade of elementary school due to lack of proper education. She earned the nickname ‘Jjangi’ (meaning ‘kimchi’ in a teasing way) at school because her lunchbox only contained kimchi as a side dish. To make matters worse, her grandmother, with whom she lived, passed away when she was in middle school, and she spent her teenage years moving between relatives’ and friends’ homes. After graduating from Dowon Technical High School, she wanted to attend Inha Technical College but could not afford the 2.4 million won tuition, so she enrolled in Cheonan Technical College (now Kongju National University), which offered her a scholarship.

Her desire for success was greater than anyone else’s. She challenged herself to start a business with the money she saved while doing various odd jobs such as lodging management and room cleaning at a motel that provided room and board. Her first attempt was a salad delivery company. However, after tasting failure, she had to return to working at motels.

[Image source=Yonhap News]

Motel Cafe Became the ‘Cornerstone’ of Yanolja

Despite repeated failures, CEO Lee’s entrepreneurial spirit did not stop. Leveraging her experience working at motels, she launched a portal site cafe called ‘Motel Story’ in 2004 for lodging industry workers. She posted writings about her experiences as a motel employee. The cafe gained popularity in the industry and surpassed 10,000 members within a year of its launch.

In 2005, the acquisition of ‘Motel Tour’ marked a turning point in her business life. Motel Tour was the third-largest internet cafe in the industry at the time, with 200,000 members. CEO Lee boldly acquired Motel Tour, expanded its scale, and accelerated her motel business. The site connected users with lodging businesses as a motel promotion platform. In fact, it contained the original form of what would become Yanolja.

The beginning was modest. Yanolja started in an acquaintance’s apartment because they could not afford office space. Nevertheless, CEO Lee aggressively expanded the business. She increased partnerships beyond the lodging industry. Not only motels but also dating courses and other content were diversified. Then, with the advent of smartphones, the mobile era arrived. CEO Lee quickly recognized the market change and launched an application (app). Within a short period, she secured hundreds of thousands of users. Gaining confidence, CEO Lee accelerated app development and attracted investors looking for a ‘Korean version of Airbnb.’

Marking a New Era in Domestic Lodging Culture... Leap to IT Company

Yanolja is credited with bringing motels into the mainstream and marking a new era in domestic lodging culture. This is thanks to continuous efforts to improve the motel’s traditionally decadent image. CEO Lee believed that motels could be places of ‘play’ rather than ‘love hotels.’ Yanolja’s directly operated locations were decorated mainly in bright colors, emphasizing a cafe atmosphere, reflecting this philosophy.

She is also leading another transformation. Yanolja is shedding its existing image and evolving into an information technology (IT) company. This reflects CEO Lee’s determination that the company should not remain just a lodging app to grow into a global enterprise. The hotel service solution business, launched in 2019, already accounts for about 30% of the company’s revenue and has risen to second place globally in this field. Recently, Yanolja announced its ‘Tech All-in’ vision, pledging to have over 70% of its entire workforce composed of research and development (R&D) talent. Yanolja’s R&D personnel ratio is already about 40%, the highest among online travel agencies (OTAs).

‘Co-prosperity’ remains her remaining challenge. The Fair Trade Commission recently reviewed the contract process between lodging apps and their partner stores and concluded that Yanolja and others did not properly disclose information that significantly influences the selection of advertising products in contracts. Furthermore, according to the Korea Federation of Small and Medium Business’s ‘Survey on Difficulties of Lodging Businesses Using Lodging Apps,’ 94.8% of lodging businesses responded that ‘lodging app commissions and advertising fees are excessive.’ In a situation where the importance of ESG (environmental, social, and governance) management is growing daily, Yanolja cannot avoid feeling the burden of co-prosperity issues. Attention is focused on whether CEO Lee, who wrote a dirt spoon success story by leading lodging app innovation, can continue the ‘Yanolja Magic.’