Third-Generation Chaebol

The first half of 1996 had already passed.

The Ford-Taewoo-Shanghai Automotive joint venture had been officially established.

To begin complete vehicle production in China, Taewoo Auto was shipping large quantities of molds and parts to the country.

While Taewoo Group was thriving, South Korea's economic situation was worsening.

Signs of an impending foreign exchange crisis were emerging everywhere, as confirmed by a report from the Planning Director.

"This year's economic growth rate is projected to be around 7%, which is a 2% decline from last year."

"So, exports are slowing significantly. I've heard that major corporations are aggressively pushing for voluntary retirements."

"Yes, to the point that the term 'early retirement syndrome' has become a buzzword."

Even Taewoo Group was not immune.

Under my leadership, several subsidiaries had been sold off, and I had carried out restructuring measures to drive up their value before selling.

"The exchange rate also seems unstable."

"The USD-KRW rate has surpassed 800 won per dollar. Despite that, the trade deficit is expected to reach $20 billion."

Warnings were flashing everywhere.

It was clear a major disaster was brewing, yet both the Korean government and corporations chose to ignore the signs.

"What do you think? Do you believe the economy is in crisis?"

"I think it's just a passing wave. The Chairman believes that economic downturns are opportunities for bold investments."

The Planning Director's unwavering confidence mirrored that of many so-called experts, who failed to grasp the true gravity of the situation.

"Even if it's just a passing wave, failing to prepare will lead to disaster. Wouldn't it be wiser to invest boldly after the storm has passed?"

"The Chairman always says that the moment a duck stops paddling, it sinks. To prevent Taewoo Group from falling, we must expand into more industries."

A duck sinks if it stops paddling?

That's not even true. Ducks naturally float due to their buoyant bodies.

But that wasn't the issue here.

Grandfather's obsession with expansion was unstoppable.

I had managed to restrain him in many ways, but blocking every path would eventually cause an explosion.

Before that happened, I needed to create a release valve—a low-cost, high-potential business opportunity.

"What about venturing into the IT industry? You've heard that IT-related businesses are booming in the U.S., right?"

"Do you mean business through the Internet?"

"Why not expand Taewoo Department Store and Taewoo International's distribution business to the online space?"

The dot-com bubble.

It was the IT frenzy that swept through both the U.S. and South Korea in the late '90s.

Back then, just slapping 'IT' onto a company's name could send its stock soaring tenfold.

Of course, the bubble wouldn't last.

By the year 2000, the IT market would collapse.

In just four years, the entire industry would crash.

And yet, I was determined to jump in.

Why?

Because even though the collapse was inevitable, there were still at least three years of enormous profit to be made.

What we needed wasn't the long-term future, but the next year.

If we could ride the IT boom from now until 1999, we could secure enough capital to weather the financial crisis safely.

And most importantly—

Even though the dot-com bubble would burst, not all IT companies would go under.

Some companies managed to survive the crash, and a decade later, their value far exceeded what they had achieved during the dot-com boom.

And I knew exactly which ones would survive.

That meant I could create a strategic roadmap for how Taewoo Group should ride the IT boom.

"Are you suggesting we launch a distribution business through the Internet?"

"Let's call it 'T-Market.' Prepare a report detailing the concept—including online product displays and an integrated electronic payment system. I'll present it to the Chairman myself."

"It'll take some time to put the report together. We have very little existing data, so we'll need to start from scratch."

"Reach out to the Economic Research Institute. They have reports on how the rise of the Internet is reshaping industries, as well as forecasts for the e-commerce market. Those should help."

The Economic Research Institute, led by Advisor Fukuda, had already been conducting various studies at my request.

That included the IT industry, and they had already produced multiple reports on the subject.

***

A Few Days Later

The Planning Office's efficiency shone through once again.

Even though they had collaborated with the Economic Research Institute, it was impressive how quickly they had produced a comprehensive e-commerce business report that was exactly what I had envisioned.

Wasting no time, I headed straight to the Chairman's office.

I needed to calm my grandfather's eagerness for business expansion—and this was the perfect opportunity.

"Director Kim Min-jae, is that you? You must have worked hard on the China expansion. I still can't believe Taewoo Auto is officially entering the Chinese market!"

"The real expansion won't begin until next year. I don't think I deserve any praise just yet."

"Nonsense. There are executives who have worked at Taewoo for over ten years and couldn't achieve what you did in less than a year. You absolutely deserve praise."

Hearing praise from my grandfather was rare.

He was notoriously stingy with compliments, but Taewoo Auto's entry into China was such a monumental achievement that he couldn't hold back his admiration.

And honestly, it felt great to hear.

Maybe I could get him to praise me again?

I handed him the report from the Planning Office.

"This is a proposal for a new business venture."

"An Internet-based distribution business? That's a rather unfamiliar field."

"As you know, the Internet is rapidly spreading into households, and its adoption rate is accelerating every year. If we seize the online distribution market now, we stand to gain immensely."

My grandfather flipped through the report multiple times, carefully reading the details.

It was clear something had caught his interest.

"So, we'll integrate Taewoo International's distribution sector with Taewoo Department Store to launch an e-commerce business. This certainly seems promising."

"I guarantee that the online market will grow several times larger than traditional retail. We need to act immediately."

"I think you're right. Whether it's on TV or in the newspapers, everyone keeps saying that the future belongs to the Internet. If the world is heading into the Internet era, it only makes sense that people will start buying goods online, too."

As expected, my grandfather's foresight was extraordinary.

Despite his old age, he had no hesitation in embracing new advancements.

"Also, while I was on Wall Street, I built a connection with an entrepreneur. He started an e-commerce business two years ago. The company is called Amazon, and they're planning to go public next year."

"So, are you suggesting we form a joint venture with this Amazon company?"

"Something similar, but a bit different. Instead of a joint venture, I want to acquire Amazon's system, modify it for the Korean market, and launch our own platform. This way, we can significantly shorten development time and reduce the need for extensive manpower."

Amazon had already gone through two years of trial and error.

With the support of SAVE Investment, Jeff, Amazon's founder, had refined the system and resolved many early issues.

On Wall Street, investors were flocking to Amazon, with widespread expectations that its IPO next year would be a massive success.

"So that means we won't need a huge initial investment?"

"That's true, but we still need a considerable amount of capital. We'll have to establish a dedicated IT division or even a new subsidiary under Taewoo Group."

I needed to keep Taewoo Group's liquidity tight.

Since I had personally invested in Amazon, we could obtain their system at a low cost.

But more importantly, I needed to limit my grandfather's ability to fund his relentless business expansions.

"Hmm… I see the potential in e-commerce, but I'm concerned about pouring too much capital into it."

"No investment offers a better return. I can confidently say that owning an e-commerce platform that dominates the Korean market will be far more valuable than operating ten department stores."

"So how much initial capital are we talking about?"

This was a delicate moment.

If I quoted too high a figure, he might lose interest.

But if I quoted too low, he might divert his attention to other ventures.

"500 billion won should be sufficient. That would cover acquiring Amazon's system and recruiting IT specialists to establish a new division."

"Hmm… that's more than I expected."

"It's not a large amount at all. Tell me, what business could you launch with just 500 billion won? In manufacturing, even building a single factory costs several trillion won."

My grandfather fell into deep thought.

500 billion won was indeed an ambiguous amount.

Compared to manufacturing, it was a relatively small investment.

But for an Internet business, it seemed excessive.

On top of that, if 500 billion won were allocated to this venture, Taewoo Group would lack sufficient funds for other new business expansions—exactly what I wanted.

I knew Taewoo Group's financial situation inside out, which is why I set the amount at 500 billion won.

To ease my grandfather's hesitation, I delivered the final blow with a voice full of confidence.

"I will generate more than ten times that amount in profit within three years. If I fail, I'll return my shares in Taewoo Electronics to you."

"You reckless brat! Do you know how much tax I paid to transfer those shares to you? And now you want to give them back?"

"That's how confident I am. This isn't just about e-commerce. Taewoo Group must expand further into IT if we want to become Korea's No.1 conglomerate and compete on a global scale."

My grandfather carefully reread the report.

After going over the projections for the Internet market's future multiple times, he finally looked up.

"Do you really believe the Internet market will grow this much?"

"It's inevitable. Why hasn't Taewoo Group become the top conglomerate in Korea? Because other companies got there first. This time, we must be the pioneers. We must dominate the Internet market before anyone else!"

"Alright! We can't keep trailing behind others forever. This time, Taewoo will take the lead in the Internet industry!"

Finally, he was convinced.

With the green light for our Internet expansion, my plan was to digitize all Taewoo Group subsidiaries, starting with Taewoo Department Store.

But my next big target was Taewoo Securities.

Just as people would soon shop online, the era of buying stocks over the Internet was fast approaching.

Though the current financial laws didn't allow it, by next year, the laws would be revised, and securities firms would begin launching HTS (Home Trading Systems).

It would happen within just four months of the legal revision.

The first HTS platforms were rushed, with basic functions and clunky designs.

But if we developed a flawless HTS ahead of time, Taewoo Securities could dominate the online stock trading market from day one.