No Pay, No Gain
The people in the small auditorium looked puzzled at the title projected on the screen. After all, that phrase wouldn’t become popular until the mid-21st century, so it was hard to grasp right away. That was why Yoo Jae-won’s immediate priority was to turn those confused expressions into ones of understanding.
“I know there are many among our ID Group family who want to start their own businesses.” Even if ID Group executives and employees weren’t swayed by headhunters’ sweet talk, Yoo Jae-won expected there would still be at least several hundred people like Kim Taek-jun—ambitious enough to boldly step out on their own.
“After thinking about what policies we could offer them, I arrived at one conclusion: an internal venture company development policy.”
As Yoo Jae-won continued his explanation, more faces showed signs of understanding. Still, even more people looked like they hadn’t quite caught on yet.
The slide changed. A new screen appeared, outlining guidelines for those who wanted to launch an internal venture. For anyone who had a business idea and the ability to execute it but lacked time and money, this policy offered the clearest path to support.
The approach closely resembled angel investment. Since he had to draft the policy in just a few days, he naturally turned to the nearest available reference—the angel investment bylaws of ID Investment. The biggest difference, however, was the much lower threshold. ID Investment’s investments required rigorous expert verification. For internal venture applicants, a single business plan was enough.
Next came the matter of equity. In investments Yoo Jae-won personally selected, the group typically secured at least 51 percent of the shares, effectively folding the company into the ID Group itself—as had happened with Silicon & Synapse and Origin Systems. Under this new internal venture policy, however, applicants could choose their own equity arrangement. They could retain management rights, or they could relinquish them like Silicon & Synapse and focus solely on development while receiving full support from the ID Group.
The trade-offs were clear. Keeping management rights meant full control over profit distribution and company operations, but it required giving up a stable, generous salary and weaker access to the ID Group’s human and technical resources. Relinquishing management rights reversed the equation: the ID Group’s strong operational backing created an environment where one could devote themselves entirely to core technology development. Salaries for both the founder and employees would continue, leaving almost nothing to worry about. Those dreaming of an internal venture could weigh which path suited them and indicate their choice when submitting their proposal.
If Yoo Jae-won judged the business plan well-crafted, the applicant would immediately receive funding and time. Investment amounts ranged from a minimum of $100,000 to a maximum of $10 million. Depending on the venture’s progress, the group would later decide whether to recover the investment or expand it. “Time” referred to a policy allowing employees to dedicate part of their working hours to the internal venture—starting with three or four hours a day and potentially extending to several months of paid leave to focus entirely on the business.
“Naturally, this means they’ll have less time for their original duties. So anyone hoping to start an internal venture should first secure their team’s understanding or request a transfer to a less demanding department.”
Of course, the ideal outcome was someone who could deliver extraordinary results in both their regular role and the internal venture. Such people would certainly exist. But since not everyone could manage that, the procedure had been established.
“There is no fixed format for the business plan. Write it freely and send it in.”
Silicon Valley’s greatest strength was its freedom. Forcing people to wrestle with rigid paperwork was far less efficient than letting them focus on their actual work.
“You can submit it through ID Talk or email, but there’s one strict requirement: the document must be created with ID Office. Anything written in Open Office or similar programs won’t even be opened.”
Open Office was the Free Software Foundation’s open-source office project. As its name suggested, it was positioned as a counterpart to ID Office. Though still lacking in many areas, it was advancing at a frightening pace thanks to its excellent reference point. Even so, from an absolute standpoint it remained far behind—its convenience and functionality had yet to reach even the level of ID Office 1.0.
“And there’s one more absolute rule, which appeared in the title earlier: No Pay, No Gain.”
The original meaning of the phrase was simple: don’t give away what you’re good at for free. There was no such thing as a free lunch in this world, yet too many people were being exploited under the excuse of passion. The line was a direct rebuke to that practice. At the same time, it served as a warning to internet startups just getting off the ground—don’t even consider launching a business without a clear revenue model.
Obviously, the fields that internal-venture hopefuls would target were internet-related. The problem was that many believed they could start first and figure out monetization later. Countless internet sites were already boasting about having amassed a million members or growing faster than Nextcom, yet when you looked inside, their only revenue plan was advertising. Advertising was undeniably important—Yoo Jae-won never denied that it was the internet market’s largest income source. The ID Group itself derived a significant portion of its revenue from internet ads. There had even been a period when sales from twenty-four ad slots in the Android Gaming Edition exceeded revenue from the ad-free version, and at Nextcom, advertising remained the top earner. Still, the group was also pouring effort into developing proper revenue streams beyond ads. Nextcom had been the most aggressive in selling high-quality paid content. Even after spinning off ESD.com, it had pioneered online sales of packaged software and now offered Marvel and DC comics as web services. The issue was that any new service they launched was immediately copied by competitors—always positioned as free. The fiercest competition was in free hosting. Even if they couldn’t match ID Technology’s cloud service, the number of companies offering free storage and traffic for file sharing or bulletin boards had exploded. Their clear strategy was to use free access as bait, grow their user base, and then hit a Nasdaq jackpot like Yoo Jae-won. The ironic part was that the very lines these half-baked companies relied on were the North American Information Highway built by Nextcomcast. Every time he saw such sloppy operations, Yoo Jae-won felt a strong urge to switch the backbone usage fee from a flat rate to a pay-per-use model. If the goal had been to spread cheap broadband for the sake of the internet boom, then at least some quality services should have emerged—yet only garbage was multiplying rapidly.
An internal venture from the ID Group had to be different.
“I’m not saying you can’t offer free services. If you can, it’s fine to do so. But you must create products or services differentiated enough that consumers are genuinely willing to pay.”
Monetization success didn’t come solely from building superior products. A strong monopoly policy that made the service unavailable anywhere else was another viable path. Right now, the only place to read Marvel and DC comics online was through Nextcom. While the service was currently free, access to back issues and high-resolution downloadable files would soon become paid-only. Because the content existed nowhere else, users who wanted it would have no choice but to subscribe. That was why the phrase No Pay, No Gain sounded somewhat harsh to users. Yet there was no intention of using monopoly power to impose excessive burdens. The true advantage of electronic documents and the internet lay in dramatically reduced distribution and production costs, and Nextcom’s monetization model was built on sharing those savings with users. People who believed the internet should be unconditionally free would dislike the message, but without it, there would be no reason to run a business at all. Therefore, No Pay, No Gain would remain an ironclad principle in everything Yoo Jae-won did.
“Let me say it once more: what I value most is the revenue model. If your business plan presents a truly innovative revenue model, I won’t just approve it—I’ll adopt it as an official ID Group business model and offer exceptional royalties.”
A revenue model was synonymous with a business model, and a business model was a powerful right that could even be patented.
“We always welcome new challengers!”
Yoo Jae-won repeated the same words he had used during the Security Challenge, and in this moment, no better phrase existed. Amid loud cheers and applause, he stepped down from the stage, already anticipating just how many groundbreaking and original business plans the ID family would submit.