There Is No Second Employee

What I Saw at Bujeon Station Platform

At seven in the morning on a weekday, people carrying laptop bags line up on the Mugunghwa train platform at Bujeon Station. Mixed among the transfer passengers heading to Dongdaegu and Seoul are some who clearly started their work in this city. People who attended school in Busan, started their first company or landed their first job in Busan, and now leave the city weekly or daily. When you view the startup ecosystem on a city-by-city basis, this platform is the bottom line of the income statement.

Busan appears to be a city with much to offer entrepreneurs. Centum City and Munhyeon Financial District have office spaces, the Busan Center for Creative Economy & Innovation operates, and demo days and IR events are held every year. Funding announcements are updated every quarter. Yet the number of companies that survive five years and employ ten people is completely disproportionate to the numbers on event posters. The common diagnosis is lack of capital. I believe that diagnosis is wrong. The real enemy of Busan startups is not money, but the second hire.

They Hire One, Collapse at the Second

Founders usually manage to find their first employee somehow. A friend from graduation, a junior from the same club, a former colleague. It's a position filled through trust and connections. The problem comes next. The second and third employees must be acquired from the labor market, not through connections. Real hiring where the role is defined, experience is verified, and salary is negotiated at market rates. Busan founders commonly hit a wall at precisely this point.

Why do they hit a wall? Because there are no people to hire in the city, or even if there are, they leave for better options. Busan has many universities and many graduates, but the pool of mid-level professionals between their 3rd and 7th years—'second employee material,' meaning those who can independently handle a function—is thin. People at that career stage have generally already moved to the Seoul metropolitan area. A developer who can design backend architecture alone, a marketer who has run performance marketing from scratch, a sales person who has completed a full B2B sales cycle. Anyone who has tried to recruit a 4-year professional in these roles in Busan knows. There are virtually no candidates.

So founders choose one of two paths. Either seat an unverified entry-level employee as the second hire and take on two people's workload themselves, or postpone hiring and give up on growth altogether. The former is the path to founder burnout, the latter is the path where the company remains a one-person project forever. Injecting more capital doesn't make this fork in the road disappear. Even with an extra 100 million won in the bank account, if there's no 4-year professional in the city to hire with that money, the numbers are just numbers.

Events Look at Input, Talent Looks at Output

What Busan does well is widening the entrance. Startup competitions, office spaces, seed funding. All infrastructure for 'people starting out.' This has its own merit. However, ecosystem health is measured not at the entrance but at the exit. How many companies survived five years, did those companies create double-digit employment, did those employees start their next company also in Busan. If this output is meager, no matter how wide you make the entrance, the ecosystem doesn't fill up. It's like a bucket with a hole in the bottom that you keep pouring water into.

This is where the urban structure conversation comes in. Talent doesn't leave because Busan is an unattractive city. People who leave behind Gwangalli's evenings and Yeongdo's scenery don't leave because they dislike the scenery. They leave because they can't see the next step in their career. People will commit to settling in a city only if there are enough other companies in the same city to move to even if the startup they currently work for fails. In a place with only ten companies, when one collapses, changing jobs means moving house. That's why the more rational 4-year professionals choose Pangyo or Gangnam, where hundreds of companies are clustered, from the start. It's not personal betrayal but a bet on market depth.

A counterargument is possible. What does a city-level talent pool matter in the era of remote work? Can't you work for a Seoul company while living in Haeundae? It's half right. Indeed, more people are living this way. But that model creates Busan residents, not Busan companies. That 4-year professional's labor, taxes, and career flow to Seoul companies. Busan's second employee problem remains. Remote work can tie talent's residence to Busan, but it doesn't put them back into the candidate pool for Busan startups. Rather, as more people live on Seoul salaries with Busan cost of living, the conditions local startups can offer become relatively more paltry.

What Builders Should Look At

So what should someone trying to grow a company in this city look at? First, elevate the second hire to risk number one in your business plan. As concretely as your fundraising plan, first verify whether you can find mid-level professionals for core functions within Busan. If you can't, either open that position to remote work, or build into your business timeline the time to develop an entry-level hire into a second employee over a year. Vague optimism is the most expensive.

Second, look not at the exit where people leave, but at the entrance where they return. Among the 7-year and 10-year professionals who left Busan, some are willing to return due to family and life considerations. These are people who have already led teams beyond being 'second employees' in the Seoul metropolitan area. One returnee takes the company further than five entry-level hires. If regional talent policy is focused only on retaining graduates, it's faster for individual builders to directly design return pathways for those who left.

Third, artificially create depth by sharing talent with companies in the same situation. The belief that an employee can move to a neighboring company even if one company fails keeps people in the city. A perspective that views competitors not as enemies but as co-operators of a talent pool. This is what Pangyo has and Busan doesn't yet have.

Busan is a good city to start a business. The problem wasn't starting, it was the second step. As long as the city drains people rather than developing them, applause in event halls won't show up on the income statement.