An Investor Who Sees The Future

The business continued to progress.

“After the transition to a paid model, we plan to venture into creating our own content using the profits. We aim to expand into VR content production through collaborations with various production companies.”

VR (Virtual Reality) is gaining attention as the next-generation video technology. While VR devices have been released in various forms, there is still a lack of compelling content.

Experts predict that pornography will play a crucial role in the proliferation and popularization of VR in the future. Global investment firms forecast that the VR porn market will grow to $1.5 billion within a few years.

Taekgyu’s eyes widened in surprise.

“What’s VR porn?”

“It’s virtual reality.”

Currently, wearing VR devices to watch videos is possible. Experts in various fields are conducting research to enhance the experience by incorporating actual senses like smell and touch.

Hyunjoo rubbed her temples as if she had a headache.

“They’re researching all kinds of things…”

As Taekgyu continued to show interest, Gerard enthusiastically interjected, “Pornography will evolve from just watching to immersive enjoyment. VR porn offers overwhelming realism unlike traditional pornography…”

Impressed, Taekgyu exclaimed, “How did they come up with that? Did they learn it at Stanford?”

“Well…”

Although the exact source of learning is unknown, it is true that Stanford has produced outstanding talents. Hopefully, they will succeed and eventually lecture on the porn industry at their alma mater.

“This is amazing, isn’t it?”

Hyunjoo looked at me, her expression questioning if Taekgyu’s statement was correct.

“Well…”

It’s true, but it’s hard to admit.

I wish he wouldn’t ask me.

As I remained silent, Taekgyu looked at me and exclaimed.

“Why can’t you be honest? You like adult videos too, just say it confidently! You were the one who told me about the new releases of the actor I liked back in middle school!”

“Gasp!”

Why are you talking about that here, you crazy person!

Ellie looked surprised, widening her eyes and staring at me.

“Do you like adult videos?”

“······.”

I never thought I would be asked such a question by a girl in my life.

I raised my hand.

“Oh, it’s a misunderstanding.”

“But what exactly are adult videos?”

“······.”

Even if you know Korean, if you’re not Korean, you might not know certain words. Would they believe me if I say it’s baseball videos?

Clap, clap, clap!

Taekgyu stood up from his seat and applauded. I was about to stand up too but stopped as I looked at Hyunjoo noona and Ellie.

Instead, I silently applauded their passion in my heart.

Hyunjoo noona sighed and said, “Do you really think this is a feasible business idea?”

In Korea, pornography is strictly illegal. Both producing and distributing it are crimes. (In a country where adult videos overflow on the internet, such a business is unlikely) Hence, it’s not possible for this business to operate in Korea.

However, foreign countries are different. In countries like the U.S. and Europe, pornography is legal. There are no legal issues.

Doesn’t it seem quite visionary?

I reviewed the proposal once again.

Unlike Japan, which mainly operates on DVD rentals, in the U.S., there were already several sites operating on a pay-per-view or subscription basis.

To survive and grow in this gap, it is crucial to establish a sophisticated recommendation system and adapt well to next-generation content markets such as VR or AR.

“We need $7 million for negotiations and content provision with server infrastructure and content providers.”

$7 million is approximately 7.7 billion Korean won.

For a fledgling startup, this is a significant amount to raise. If successful, it could yield returns many times over, but if it fails, the money will simply vanish.

Taekgyu strongly insisted, “We must invest in this, for the greater good if nothing else.”

Indeed, this is a business that should be approached not for profit, but from a public service perspective. If it works out as planned, it could bring great joy to many people in the future.

“What are you waiting for, Nuna? Say you will invest already.”

Instead of speaking sincerely, I betrayed my friend.

“Since Taekgyu is eager to invest this much, let’s do it.”

I’m sorry. If this moment were a dream of my inability to be honest…

Ultimately, the decision rests with me.

Hyunjoo adjusted her expression and told Toby and Jared, “We will invest in Faceit.”

Suddenly, a question arose.

Do these startups grow into unicorns because we invest in them, or do we invest in companies that will grow into unicorns?

In the former case, they won’t succeed without our investment. But in the latter case, they will find success with or without our investment.

Whichever the case, caution is crucial in investing.

Foresight tells us which startups will become unicorns, but it doesn’t tell us exactly how much to invest and how much equity to buy.

That’s our job.

Hyunjoo Noona negotiated around the scope of stake acquisition. In theory, it’s advantageous to have as much stake as possible if it’s the same amount.

However, demanding a large stake without a clear plan may harm management motivation or make it difficult to attract future investments.

Our goal is not to interfere with management by acquiring as much stake as possible, but to support the company’s growth and make profits.

At the end of negotiations, it was decided to acquire a 42% stake for $7 million.

Ellie handed over the investment contract written in English. Toby and Jared, co-CEOs of Faceit, signed first, and Hyunjoo Noona signed as a representative of OTK Company.

The two couldn’t hide their happy faces. They probably didn’t expect to find investors from a country like Korea.

After the contract was signed, we shook hands again.

Toby looked at us and said, “Faceit will be the leader of the porn industry.”

“······.”

Alright, that’s enough now.

The first startup investment concluded successfully. Well, whether it will truly be successful remains to be seen.

Ellie still had a shocked expression.

Hyunjoo Noona sighed, “Of all companies, we chose that one for our first investment.”

An hour later, another meeting was scheduled.

Today alone, three teams are set to meet. One team down, two more to go.

During the break, Ellie reviewed a proposal on her tablet. It seemed like she needed to know more about the startup after what happened earlier.

Similarly, while looking at the proposal, Hyunjoo Noona said, “This time it’s a pizza business. What kind of pizza startup is this?”

“I remember.

When I first read the proposal, I had the same thought.

“It’s not your typical pizza company. They aim to create innovative pizzas that completely revolutionize the concept of pizza.”

Taek-gyu asked,

“What kind of innovation are they bringing to pizza?”

“You’ll see once you meet them.”

***

Milo, who worked at an IT company, and Max, who operated a restaurant, were friends. They often gathered at Milo’s house to play games and have drinks.

One day, they got hungry and decided to order pizza. The pizza that was promised to arrive in 30 minutes did not show up even after 45 minutes. Over an hour after ordering, the pizza finally arrived.

The pizza was cold, the cheese hardened, and even the leaked oil had the paper stuck to it. They were irritated as this wasn’t the first time this had happened.

“Why are delivery pizzas like this?”

Max tried to calm down the frustrated Milo.

“Pizzas are best when they are freshly baked. It’s inevitable for the texture to deteriorate if they cool down during delivery. So, if you want to enjoy a proper pizza, you should eat it at the restaurant.”

“Can’t they keep it warm during delivery?”

Max jokingly said, “Why not just put an oven in the delivery vehicle and bake while driving, like a food truck?”

“Heh, that’s nonsense… Wait, why didn’t I think of that?”

“What are you thinking?”

“Since pizzas are made and delivered, they take time and get cold, right? If we make them during delivery, we can reduce the time and serve freshly baked pizzas to the customers right away.”

From that moment on, they brainstormed together.

The advancement of robotic technology and automation systems was affecting the food industry. Robots that could cook by inputting recipes and robotic bartenders had already been commercialized.

Currently, all pizza-making tasks from spreading the dough, applying sauce and toppings, to putting it in the oven are done by people.

What if they introduced robots to reduce time and labor costs? They envisioned par-baking the pizzas, loading them onto delivery trucks, finishing the baking right before arrival, and handing them to customers.

It may not have been a groundbreaking idea. It was simply about delivering pizzas a bit faster and warmer. Yet, they saw great potential in it.

They began experimenting at Max’s restaurant. Instead of immediately introducing automated facilities, they first modified a truck to install an oven.

Upon receiving freshly baked hot pizzas at home, customers showed great satisfaction, leading to repeat orders.

Feeling confident in the business potential, Milo resigned from his job and Max converted his restaurant into a pizza shop.

They decided on the name “M Pizza,” combining the first letters of their names.

In reality, it was inefficient for trucks to make round trips just to deliver one pizza. To make a profit, they needed to scale up.

While Max ran the shop, Milo planned and approached investors with his portfolio, working hard to convince them.

He emphasized how much American consumers desired fresh, hot pizzas and the positive responses received upon delivery.

However, investors were skeptical. The US pizza market was saturated with big players like Dice Pizza, Mamas, and Pizza Hut, alongside many new startups emerging each year.

With plenty of other lucrative business ideas available, was it necessary to invest in the overly competitive pizza industry?

Rejected by investors once again and on his way home, Milo received an email from Golden Gate indicating interest from Korean investors.

He immediately boarded a flight to Korea.

***

We listened to Milo’s presentation in the meeting room. Since Max had to manage the store, Milo went to Korea alone.

Hyunjoo asked several questions, and Milo answered diligently.

The core of the business was simple.

1. Except for essential parts, robots make the pizza.

2. Reheated in the oven just before delivery to reach the optimal taste temperature for customers.

3. Analyze various data to predict order volume and plan efficient delivery routes.

4. Cost savings from automation are reinvested in ingredients.

The current size of the US pizza market is approximately $40 billion. This market is dominated by three companies, Dice Pizza, Pizza Hut, and Mamas, which control over half of it.

That’s why, despite having a good idea, they couldn’t secure investment.

Hyunjoo asked me, “What do you think?”

“What about you, Hyunjoo?”

“The market is saturated, and the barriers set by franchise giants are too high. To break through, there needs to be differentiation from existing companies. Simply reducing delivery time and using an oven during delivery might not be enough, don’t you think?”

Listening quietly, Taekgyu then said, “It could be a huge success.”