Taking a byte out of technologyCrawl out of the bustling Seolleung subway station in southern Seoul and head toward the Posco Center at nine o'clock in the morning, and you are struck by surreal contrasts. A bizarre ensemble of steel-and-glass skyscrapers towering over endless rows of street vendors selling "egg toast" and cheap alarm clocks buzzing annoyingly. But this is the typical morning scene at Teheran Valley ?the center of the country's information technology industry.
For many, working in Teheran represents life in the fastest of the fast lanes. Popular television dramas frequently show young dot-com millionaires driving red Ferraris, adding to the neighborhood's affluent image, but complicating perceptions about what is real and fake in this adventurous part of town. Certainly the main road teams with herds of young securities analysts in trendy suits, making big investment deals over their cellular phones.
Those who are in the industry, however, are not fooled by this facade. The success rate for start-up firms here is less than 10 percent. To survive, you need to be tough. The dot-com bubble burst here a little more than a year ago, killing hundreds of start-ups and drying up millions of dollars in funding. If you walk down its main road, Teheran-ro, you'll notice signs of psychiatrists and pharmacies offering various drugs, from migraine medicine to Prozac.
"People here work until their bones grind to dust," says Shin Jung-hoon, the sales manager of the Teheran-based software company Posdaque.
Teheran-ro, like many other neighborhoods in Seoul, was once a nameless stretch of orchards with a few flat vegetable fields. The street was named in the mid-'70s for the capital city of Iran (a variation on Tehran). The mayor of Tehran, Gholam Reza Nikpay, visited Seoul in 1976 and the cities decided to exchange street names as a sign of brotherhood. The Korean government eagerly pursued major construction projects in Iran and the Middle East during the '70s oil and construction boom in the Middle East, sending many Korean engineers and workers there. Seoul Street runs through the southwest part of Iran's Teheran. Officials at the Iran Embassy in Seoul say the street currently enjoys a prosperity of its own.
Originally, the term Teheran Valley was used to refer to the eight-lane avenue that stretches about 10 kilometers, from Seol-leung Station to Samseong Bridge. But generally, the term also covers a part of Daechi-dong and the eastern parts of Seocho-dong. More important, the district name is more symbolically used to refer to the wider Gangnam district that is home to many information technology firms.
Though smaller, Teheran-ro reminds one of Sandhill Road in the American Silicon Valley. In fact, in many ways, Teheran Valley is more aggressive and luxurious than Silicon Valley.
According to Jo I-jae, the convention services manager of the Grand Inter-Continental Hotel, the major business hotel in Samseong-dong for venture capitalists and foreign business clients, about 30 percent of the hotel's annual seminars, press previews and international conferences are hosted by the valley's information technology-related firms. In fact, all the major hotels in Teheran Valley -- the Ramada Renaissance,Grand Inter-Continental and Ritz Carlton -- are where most contracts are signed and new business projects are introduced to economic journalists over big steak dinners. Even though a two-hour promotional luncheon for 50 reporters can run 8 million won ($6,000), many of the Korean start-up firms are willing to spend that kind of money for much-needed promotion.
Opinions conflict as to whether Teheran Valley is the ideal place in Seoul for high-tech firms to settle. Four years ago, when the "venture boom" first hit the nation's economy, there was no question about it. Software companies poured into the area and filled entire office buildings, gladly swallowing the astronomical rents.
Now, the skyrocketing rents and excruciating traffic jams have caused the neighborhood to lose its luster. Many of Teheran's earlier settlers are moving out to quieter areas like Bundang, south of the city.
But despite the loud grumblings of many tenants, others still think that there are enough advantages to make staying behind worthwhile. "It was a challenging investment, but it gave a fresh transition for our employees," says Lee Hwa-soon, the CEO of the electronic publishing company Hyunmin Systems. The company, after recovering from a period of stagnation after the 1998 economic crisis, recently moved its office from Yangjae-dong to Teheran Valley. "I personally needed a drastic change, possibly an office space where I could get some nice sun high up in the building and feel elevated when I work."
The company decided to move to the valley's "egg yolk," right across from the Posco building where the area's major players, such as Microsoft, Hewlett Packard and Silicon Graphics, are staging a fierce battle within the same block.
"It smooths work relations," Ms. Lee says. "It's convenient for giving office directions to people. The computer server facilities are more sophisticated, and there are plenty of restaurants nearby that are suitable for treating business clients. But really, just working in this part of town seems to empower the employees."
Mr. Shin from Posdaque shares a similar view. "There is a general assumption among Koreans that companies who are in the Valley are probably the ones that can be trusted. This corporate image-making may be laughable to some companies, but it is a serious concern for start-up firms that haven't gained any major business projects."
Despite its merits, nothing at the Valley comes cheap. The monthly rental rate for one square meter of office space on the main road in Teheran Valley ranges from 1.4 million to 3 million won ($1,100-2,400), about five times more expensive than neighboring districts such as Jamsil or Garak-dong. "Even with the meal prices, we could easily find restaurants in Yangjae-dong that sell lunch sets for less than 3,000 won. Here, the price jumps to at least 5,000 won," Ms. Lee says.
Meanwhile, Teheran Valley continues to attract scores of Ivy League graduates of Korean descent to its offices. The entrepreneurial spirit hasn't died out yet completely.
Ms. Lee says, "Look at the Korean media. They run after a story about an eccentric group of start-up firm employees. In a sense, people want to believe that venture firms are different and unique. For the companies, it's a strategy to stand out among their big corporate competitors."
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