Part IThe Story
At ten o'clock on the morning of October 23, 2023, Kim Beom-su walked past the cameras outside the Financial Supervisory Service in Seoul and was asked the obvious questions. Did he admit to the charges? Was this the worst crisis in his company's history? Had he known? He answered none of them. He said one sentence instead: "I will participate sincerely in the investigation." Then he went inside, where the Capital Market Special Judicial Police, a unit that almost never summons the head of a major corporation in public, questioned him as a suspect in the alleged manipulation of SM Entertainment's share price. He left at about 1:40 the next morning, fifteen hours and forty minutes later. Asked again, he again said one sentence: "I participated sincerely in the investigation."
That was all. Same words, same evasion, one verb moved from the future tense to the past. In between lay a day and most of a night in a room the public would never see, and the outline of a life that had always run through rooms: the single room in Seoul where a family of eight once slept, the card rooms of an early online game portal, the "chat rooms" that tens of millions of Koreans open every morning on an app he built with three other people in two months, the Kakao office in Pangyo that employees called the Ajit, a Korean word for a hideout. A room is a place where you can be together, and it is also a place where you can be kept.
The man questioned overnight was not, in any conventional Korean sense, a chairman. He was not a second- or third-generation son of the Samsung or Hyundai lines. His father had once run a butcher shop. Two years earlier, in July 2021, the Bloomberg Billionaires Index had briefly ranked him the richest person in South Korea, with $13.4 billion against the $12.1 billion of Samsung's Lee Jae-yong. The detail Bloomberg chose to emphasize was the one room. He had taken the English name Brian and asked employees to call him by it. He had signed the Giving Pledge. He had built a company whose messenger, by 2015, held about 90 percent of its home market, and whose name had become a verb, a utility, and, by the autumn of 2023, a target.
By the time he walked into the FSS, Kakao's chief investment officer had already been arrested. The prosecutors would get to Kim nine months later. They would ask for fifteen years.
By the Numbers
Kim Beom-su and the House He Built
8Family members who shared a single room during his childhood
~90%KakaoTalk's share of South Korea's messaging market by 2015
$13.4BNet worth when Bloomberg ranked him Korea's richest person, July 2021
220thHis place among signatories of the Giving Pledge, March 2021
15h 40mLength of his questioning by the Financial Supervisory Service, Oct. 23–24, 2023
15 yearsPrison term prosecutors sought, at trial and again on appeal
₩8.1TKakao's 2025 revenue (about $7.08 billion)
Eight people, one room, three birthplaces
The record cannot agree on where he was born. A Chinese-language encyclopedia says his family were farmers from Damyang County in South Jeolla Province, and that his parents left for Seoul to find work while a grandmother raised the boy. An Indonesian profile places his birth in Seoul on March 8, 1966. An English-language entrepreneurship site says Seosan. The year, 1966, is the only point of consensus. For someone who later built an archive of nearly every conversation a nation would have, his own beginning is strangely unrecorded, the way the beginnings of poor families often are.
Most accounts agree on the rest. Neither of his parents went to school past the elementary level. In his middle-school years his father put the family savings into a meat wholesale business, which failed. After that the father worked in a pen factory and the mother took part-time work at a hotel. The parents moved from job to job. Six children and two adults lived in one room in a working-class part of Seoul. Kim later said the children were left largely to fend for themselves, and that this taught him responsibility. A French asset manager's profile from 2020 recorded the remark without irony, and it may have been made without irony too.
He was the first in his family to go to university. He entered Seoul National University in 1986, studied industrial engineering, and paid for it with private tutoring, sometimes by skipping meals. He stayed on for a master's degree. The industrial engineer's question is how a system moves material through a sequence of steps with the least waste, and you can see it in nearly everything he built later. His products would be pipes more than places. The money was the flow, and the trick was to own the flow.
He once joked to an interviewer that if online games had existed when he was young, he might have "gone wrong." Online games did not exist yet. He would invent a fair number of them.
One more detail belongs here, and it is not about him at all. Search the Korean Wikipedia disambiguation page for 김범수, Kim Beom-su, and you get three men: a goalkeeping coach, the founder of Kakao, and a balladeer born in 1979 whose 2002 single "I Miss You" (보고 싶다) has sold some 2.5 million copies on the Gaon chart. In 2011 the singer won seven consecutive rounds on a television singing competition. For about a decade, a Korean who typed the name into a search engine, quite possibly Daum, which the businessman would eventually own, could not be sure whether the result would be a song about longing or a balance sheet. Kim the businessman never seems to have minded. He had chosen a second name in another language anyway.
The card table
In 1992 Kim joined Samsung SDS, the IT services arm of the Samsung group, and worked on online communication services. The Samsung of the early 1990s was the kind of institution a poor family's eldest son was supposed to stay in until retirement, accumulating seniority the way his parents had accumulated debt. It was also full of people waiting to leave.
One of them was Lee Hae-jin. Lee joined Samsung SDS around the same time and later founded Naver, the search portal that would become, in the shorthand of foreign correspondents, Korea's Google. Lee and Kim were two engineers in the same corporate laboratory who went on to build the two companies that, between them, would come to mediate most of what Koreans read, searched, bought, and said to one another online. Their paths split, joined, and split again. Their companies are now listed beside each other in the Korea Fair Trade Commission's roster of the country's largest business groups, along with Samsung, the company both of them left.
Kim left after five years. By most accounts he founded Hangame in 1998, though some records say 1997, reportedly with money from friends and family. Hangame offered poker and Korean card games, ordinary pastimes put online: the flick of a card, the small humiliation of a bad hand. Within three months it had a million users, and within eighteen months ten million. He worked as both executive and programmer, day and night. He later described an odd mix of emotions from that period, enormous pride undercut by the fear that he would not make payroll.
Hangame merged with Naver around 2000 to form NHN, and Kim became one of the two engineers running the combined company, at one point as its chief executive. The merger is worth pausing on. It was the first time Kim used a pattern he would rely on for the rest of his career: take something people do compulsively and socially (cards then, chat later), make it free or nearly free, and attach it to something that makes money. Search drew traffic and games kept it. NHN became one of the defining Korean internet companies of the decade.
Games run through this story like a family resemblance. Hangame's card tables. Kakao's "national games," Anipang and Dragon Flight, which a decade later could only be played with a KakaoTalk account. The 2015 trouble over "gambling and censorship issues" in the Kakao ecosystem that preceded his step back from executive authority. Kakao Games, part of which was sold in 2026 to an investment vehicle backed by the parent company of Yahoo Japan. Kim has never been a gambler in the casino sense. But he understood earlier than most that the urge to play is the urge to be with other people, and that both can be put on a server.
The wrong coast
In 2005 NHN sent him to Silicon Valley to build its gaming business in the United States. It did not work. Accounts disagree on how badly it failed but agree that it failed. A Korean company built on Korean card games and Korean social habits did not travel. Ten years earlier, while he was a junior employee at Samsung SDS, Kim had read a magazine feature on Microsoft's twentieth anniversary and decided he wanted to be an entrepreneur. Now he was in the place that article had come from, and it did not want what he had.
What he found in California was a different object: the iPhone. One profile says he was "hypnotized" by it. He saw before most of his Korean peers that the device was a new distribution channel, and that whoever owned the first habits formed on it would own a great deal of what followed. He no longer had a place at NHN, and he left in 2007.
The company that became Kakao had technically existed since 2006. When it released its first notable product, it was called IWILAB. A Korean business newspaper ran the story on March 18, 2010, with a headline about IWILAB releasing an iPhone messenger called KakaoTalk.
Between leaving NHN and that headline came the period that founders' biographies tend to compress into "several unsuccessful attempts." Kim, a rich man by then, had nothing he needed to prove financially. In 2009, by the Chinese encyclopedia's account inspired by WhatsApp, he started again with a team of four, himself and three others. They built three smartphone applications in two months. One was a free chat app.
What he did next has become a teaching case for every Korean founder since. He did not go big. He shipped small and repeatedly, and he watched which product people would not stop using. The founder of Hangame and co-architect of NHN took the posture of a garage startup. Whatever ego he had seems to have been spent in California.
KakaoTalk reached a million users in its first month. It passed ten million within a year. In 2012 Tencent, the Chinese company behind WeChat, invested and became the second-largest shareholder. The boy who grew up in one room now ran the room that everyone else was in.
Connect, don't sell
KakaoTalk's first job was to make a paid habit free. In 2011 CNET named it the number one free SMS app, which was a polite way of saying that it took away the per-message revenue Korea's carriers had collected from teenagers for years. Group chats, emoticons, voice calls. Within a few years, saying "send me a Kakao" meant something the way "send me a text" once did.
Kim's real insight came at the next step: once the conversation is free, you can charge for nearly everything that happens around it. He explained it most clearly at the Startup Nations Summit at the Sheraton Grand Walkerhill in Seoul on November 24, 2014. He was by then chairman of the newly merged Daum Kakao.
— Kim Beom-su, Startup Nations Summit, Seoul, November 24, 2014The strategy for growth in the platform business is different from services. It has to come with the question of how to connect to each other instead of how to sell products.
He offered KakaoGame as proof. When it launched in 2012 the platform carried ten titles. Two years later it carried more than six hundred. In August 2013 three of the top ten Android games in the world by App Annie's ranking, Everybody's Marble, Cookie Run, and Anipang, were tied into KakaoTalk. Because nearly the whole country was already in the messenger, games like Anipang and Dragon Flight, free to download but playable only through a Kakao account, became what the Korean press called "national" games. People played because their mothers, coworkers, and former classmates had sent them hearts. Each invitation was a message, and each message was an ad that cost Kakao nothing.
The money followed. Kakao took in roughly $200 million in 2013 from games, digital content, mobile commerce, and marketing channels for brands and celebrities. In December 2013 App Annie ranked Kakao the world's third-largest publisher by monthly revenue on Google Play, and the top publisher on both iOS and Google Play in Korea. In early 2014 KakaoTalk was nominated for the Most Innovative Mobile App Award at the Global Mobile Awards.
On May 26, 2014, Kakao announced it would merge with Daum Communications, one of Korea's two leading web portals, through a stock swap. The Wall Street Journal described it as the messaging-app maker buying the portal. The combined company began operating in October. After the merger Kim held 22.2 percent of the new entity and was its largest shareholder. Nearly fifteen years after first merging a game company into a portal, he had done it again on his own terms, with his own company as the acquirer.
In the same 2014 speech he spoke about something else. "The most efficient organization that can consistently change society is an enterprise," he said. "It should be capable of leading systematic change in society though innovative ideas and at the same time be able to achieve financial soundness." He had founded K Cube Ventures, an early-stage investment firm, and launched a project he called "Fostering 100 CEOs." At the time of the speech it was supporting thirty-six. He presented the merger the same way, as a means of having "a greater impact on society."
Hearing these lines from an executive who had just merged his way into control of a national portal, one might reasonably smile. Read across a decade, though, the instinct is consistent. Kim did not seem to separate a company from a cause or a platform from a public good. That habit made Kakao both beloved and, eventually, a source of resentment. It also became the defense he would offer when the public decided he had confused the two.
The delegation machine
In 2015 Daum Kakao went back to calling itself Kakao. That year the board also replaced its chief executive. The English-language record says this followed "gambling and censorship issues within the Kakao ecosystem," and Korean outlets mentioned share-option controversies. The new CEO was Rim Ji-hoon, called Jimmy, who was thirty-four years old. TechCrunch's headline noted the age. Kim was forty-nine. He stayed largest shareholder and chairman and stepped away from day-to-day operations.
This was the start of what Kakao later called its "community" model: many affiliate companies, each with its own CEO, its own cap table, its own stock options, and its own freedom to move quickly. Kim gave the founders of these units what he had wanted at Samsung SDS, which was room. The machine took in capital at one end and produced subsidiaries at the other.
The list from those years reads like a census of ordinary Korean life being moved onto a phone.
KakaoTaxi launched on March 10, 2015. Within eight months it was handling about 600,000 ride requests a day. By February 2016 a British trade publication reported that 84 percent of Seoul's taxi drivers had signed up. In 2017 it was renamed Kakao T, with a premium tier called Kakao Taxi Black running Mercedes, Lexus, and BMW cars at fares starting at ₩8,000.
In January 2016 Kakao paid $1.5 billion for 76.4 percent of LOEN Entertainment, owner of the Melon music service. LOEN had started in 1978 as Seoul Records, founded by Min Young-bin, the educator who also founded the YBM English-language empire, and had passed through SK Telecom and a private equity firm before Kakao bought it and renamed it Kakao M. It was a forty-year-old Korean institution absorbed by a six-year-old one.
Kakao Pay was spun off in April 2017. On July 27, 2017, Kakao Bank opened. Within twenty-four hours, by one count, 300,000 accounts had been opened. Within four days it had more than 820,000 customers, and within a month 3.5 million. K Bank, the rival internet-only bank that had launched months earlier, had gathered about 400,000 customers in its first hundred days. Kakao did not need to persuade anyone to download a banking app. It only needed to tell the people already in the chat room that a bank had opened next door.
Then came the Kakao Mini smart speaker in November 2017, e-bikes in 2019, KakaoStyle, Kakao Healthcare, Kakao Enterprise, Kakao Ventures, and stakes in Dunamu, Karrot, Watcha, and Lunit. Rim stepped down in March 2018 and was replaced by co-CEOs Yeo Min-soo and Joh Su-yong, both marketing executives. On May 23, 2020, as the pandemic pushed Korean life further onto screens, Kakao's market capitalization passed Hyundai Motor's and made it the tenth-largest company on the KOSPI. A messaging app had become worth more than a car company.
In March 2021 Kakao Page and Kakao M merged into Kakao Entertainment, a group of about fifty subsidiaries covering webtoons, web novels, music, drama, film, and talent management. Two months later it agreed to buy Radish, an American serialized-fiction app, for about $440 million. Later that year it bought Tapas, an American webtoon platform. Together the two cost about ₩1.1 trillion. This was the global expansion, the return to the American market that had beaten Kim in 2005, this time paid for in cash. In 2023 Tapas took a ₩46 billion goodwill impairment. Radish closed in 2025. In September 2026 Kakao Entertainment announced it would wind down Tapas too. The American coast had beaten him a second time.
The delegation machine produced Kakao's best and worst outcomes through the same mechanism. Each affiliate had the founder's freedom to move fast and his appetite for markets. None had his particular instinct, learned in a single room, for what Koreans would treat as an intrusion. On October 15, 2022, a fire at a third-party data center knocked KakaoTalk offline and locked about 53 million users out of messaging, payments, taxis, and logins. Co-CEO Namkoong Whon resigned. Three months before the fire, the company had appointed Hong Eun-taek as co-CEO, and the move had caused internal unrest over his past treatment of coworkers. The Korea Times headline used the word "bully." The fire was an accident. The outage showed how much of the country now depended on one company's servers.
Rudderless
On February 8, 2021, Kim sent a New Year's message to all Kakao employees. In it he said he would give away more than half of his wealth during his lifetime to address social problems. At a company-wide meeting on February 25 he went further. On March 16 Kakao announced that he and his wife, Hyeong Mi-seon, had become the 220th signatories of the Giving Pledge, the commitment Bill and Melinda Gates and Warren Buffett had launched in 2010.
His letter is the longest public account of his inner life he has given, and it is more candid than corporate philanthropy usually is.
— Kim Beom-su, Giving Pledge letter, March 2021After having achieved the wealth that I had aimed for, I was left feeling rudderless and lacking direction in life.
The letter opens with the young man reading the article about Microsoft's twentieth anniversary in 1995, and it says that signing the pledge gave him "a thrilling excitement as I did then." A man who learned what an entrepreneur was from Bill Gates was now writing to Bill Gates. The circle closes neatly enough that a skeptic might call it staged. Kim seems aware of that and continues anyway. He says that during his "rudderless" period he came across a poem, "What Is Success?," attributed to Ralph Waldo Emerson, and that it gave him a sense of direction. He writes that he and his wife discussed the causes "at length with our son, Sang-bin, and daughter, Ye-bin." He reframes the "100 CEOs" project from a decade earlier as the first draft of this one, and says that despite "much trial-and-error" it had grown into the Kakao Community. This time the plan was to find and support "100 innovators" working on social problems "in the areas that businesses cannot reach," and to "level the uneven playing field caused by inequalities."
In June 2021 he set up a foundation and named it Brian Impact, after his English name. He sold ₩500 billion of Kakao shares to fund it. A month later Bloomberg ranked him the richest person in the country. Kakao stock had risen 91 percent since January, driven by planned listings of affiliates including Kakao Bank. He owned 14.12 percent of Kakao directly. He also owned 100 percent of K Cube Holdings, Kakao's second-largest shareholder at 11.22 percent. Kakao was the fourth-largest listed company in Korea, worth ₩66.23 trillion.
The K Cube structure drew attention. In 2021 the Fair Trade Commission looked into whether he had omitted or misreported information about the holding company over the previous five years. Forbes Korea's 2022 list ranked him the richest Korean at $9.6 billion. By then he had stepped down, in March 2022, as chairman of Kakao's board.
Two impulses sit uneasily in the same man here. One is a founder privately holding about a quarter of a national platform through himself and a vehicle he fully owns. The other is a philanthropist publicly promising to give most of it away to correct "the uneven playing field." Both are sincere, and they are not equally visible. The Giving Pledge was a press release. K Cube was a regulatory filing. Kakao's critics read the second and doubted the first.
One hundred and twenty thousand won
SM Entertainment was founded by Lee Soo-man. A 2021 academic chapter on Korea's new entrepreneurs listed Lee alongside Kim, the gaming founder Kim Taek-jin, Coupang's Bom Kim, and Woowa Brothers' Kim Bong-jin as founders who "leveraged deep field-specific personal expertise" and brought "a more modern leadership style than chaebol entrepreneurs of earlier generations." In the winter of 2023 one name on that list went after another's company.
The other bidder was HYBE, the company behind BTS, run by Bang Si-hyuk. In February 2023 HYBE launched a tender offer to buy SM shares from the public at ₩120,000 each, about $86.50. On February 7 Kakao disclosed that it had bought 9.05 percent of SM and become its second-largest shareholder.
The prosecutors' version of what followed is detailed and specific, and a court has so far rejected it. Both facts need to be kept in view.
According to the indictment, Bae Jae-hyun, Kakao's chief investment officer, presented a plan to spend ₩590.7 billion to acquire 26.5 percent of SM and complete the combination by around August, working with SM management that was on bad terms with founder Lee Soo-man. Bae was the dealmaker every growing conglomerate needs, the person whose job was to turn the founder's appetite into term sheets. He would be arrested in October 2023, before Kim. The indictment says the company's then-CFO, Kim Ki-hong, and others objected. It says Kim Beom-su approved the plan with the remark, "From Kakao Entertainment's perspective, acquiring management rights of SM is a great opportunity."
The indictment then says Kakao money went through a private equity firm, One Asia Partners, to buy SM shares without a direct link to Kakao, pushing the price as high as ₩130,100, well above HYBE's offer. On February 27, when the price slipped below ₩120,000, Bae allegedly told a subordinate to have One Asia buy more: "We must maintain the price above 120,000 won." The subordinate allegedly told brokers to "buy it while supporting the price so it isn't detected as market manipulation. The closing price is most important, so pour in all remaining money at the end."
The subordinate was Lee Jun-ho, head of investment strategy at Kakao Entertainment, and his story is a small version of the larger one. Before Kakao Entertainment bought it in 2020 for ₩40 billion, Lee and his wife, the actress Yoon Jung-hee, were the majority owners of Baram Pictures. Baram was a drama studio with contracts with the screenwriter Kim Eun-hee, who wrote Kingdom: Ashin of the North for Netflix. Baram later produced When Life Gives You Tangerines. Lee was a founder who sold to the platform and joined it. His studio's catalog was the kind of intellectual property Kakao had bought LOEN, Radish, and Tapas to own.
In November 2023 prosecutors raided Baram Pictures. Lee and his wife were booked for breach of trust in connection with the sale. He faced two arrest-warrant requests. After six interrogations in which he denied wrongdoing, he changed his account following the Baram raid and said he had conspired to manipulate SM's price. He applied for leniency under a new self-reporting provision of the Capital Markets Act and was not indicted.
Most of the prosecution's case against Kim depended on Lee's testimony and on the KakaoTalk messages of the other defendants, who were therefore documented in the founder's own app.
The tender offer failed. In March 2023 HYBE sold its SM shares to Kakao. Kakao and Kakao Entertainment ended up holding 40.28 percent of SM between them. The Fair Trade Commission approved the acquisition in May 2024 with two corrective conditions. In the narrow sense Kakao had won.
The mind of the founding days
On August 10, 2023, the FSS's special judicial police searched Kim's office. HYBE had petitioned the regulator in February, saying a "specific group" was buying SM shares abnormally to block its offer. Investigators said they had found signs of involvement by Kim and other senior executives. The case was fast-tracked to prosecutors. Bae was arrested in mid-October, and on October 23 Kim gave his one sentence twice.
A week later he started holding meetings.
The first "community management meeting" was on October 30 at the Pangyo Ajit, the hideout. He announced a Compliance and Trust Committee to be run under outside control. The second was on November 6. About twenty executives attended, and he set up a Management Innovation Committee with himself as chairman. He said he would personally deal with "pressing issues" at affiliates. Those issues included allegations of accounting fraud and accusations that Kakao was moving in on small local businesses. The founder who had spent eight years distributing authority was now pulling it back.
"Until now, we have respected the autonomy and responsible management of each community by granting authority," he told the affiliate CEOs, "but as the founder and major shareholder, I will return to the mindset of the founding days and take the lead in overcoming the crisis." Then he said the sentence that, in hindsight, explains the whole situation. "Kakao is now a national platform and a national company, so each community should no longer perceive itself as a startup."
The third meeting was at 6:40 a.m. on November 13. It was not held at the Ajit. It was held at Kakao Mobility's headquarters in Alphadom Tower, Baekhyeon-dong, Seongnam, because President Yoon Suk Yeol had recently criticized Kakao Taxi by name, which was unusual. Taxi drivers had complained for months about the commissions on Kakao's franchise service. The 84 percent of Seoul drivers who signed up in 2015 had become, eight years later, a workforce that felt dependent on one company. That afternoon Kakao Mobility held a closed-door meeting with four national taxi organizations. In the morning Kim told reporters: "As the founder of Kakao, I am deeply accepting the criticism from many people."
On December 11, at 2 p.m., he spoke to employees at the Seongnam headquarters in a session called "Brian Talk." It was his first such meeting with staff since the company's tenth-anniversary event in February 2021, two years and ten months earlier. In that gap he had become the richest man in the country, pledged half his fortune, given up the chairmanship, approved the SM deal, and been questioned as a suspect.
— Kim Beom-su, employee meeting at Kakao headquarters, December 11, 2023I deeply feel that Kakao's growth model is no longer valid.
He told them the company had been criticized for "greedily trying to make money even by coveting neighborhood businesses," and that he was "devastated" by it. "We aimed to become a great company beyond just a good one, but now Kakao is even being doubted as a good company." He apologized. He said Kakao had to "discard the inertia of the past 10 years and redesign everything from scratch." He said the company would stop driving subsidiary growth "through investments, stock options, and full delegation," which described the delegation machine almost part by part. He said that even the use of English names, information sharing, and the horizontal culture would be reconsidered. And he said, "I am prepared to even change the company name 'Kakao' if necessary."
It is an unusual thing for a founder to say: that the culture he designed, including the name Brian he asked people to use, might be part of the problem. A Korean company that rejected hierarchy, that let a thirty-four-year-old run it, that called its office a hideout and its founder by a first name in English, had in the public's view grown into what it was supposed to replace. One Kakao source told the Korea Times that politicians had gone after Kim because Kakao was "increasingly criticized for emulating the family-owned business conglomerates, known as chaebol."
Eight days after Brian Talk, at a "Tech for Impact" event hosted by Kakao's foundation, he spoke in a softer register. "I believe that 'appropriate technology accelerates impact,'" he said. "Even very small technologies, if used for good, can change the world." In a single month he had both mourned his company's size and praised small things.
The verdict is scheduled
Kim went to the Seoul Southern District Court on July 22, 2024, for a pre-arrest hearing. The court issued a warrant, citing flight risk and the risk of destroyed evidence, and on July 23 he was taken into custody. Kakao's statement repeated what he had told the company: that he had "never instructed or condoned any illegal acts." Kakao shares fell 5.12 percent that day, to ₩38,950. Forbes put his net worth at $3.3 billion, down from $4.5 billion in April. He had dropped out of the world's thousand richest by one place.
He was indicted on August 8. He was released on bail after a hundred days. In The Economist, reporter Moeka Iida wrote that the arrest showed "how Korea's tech titans are becoming indistinguishable from the chaebol" and raised the question of whether founders like him would be treated as "too big to jail," as chaebol heads usually were. She cited Geoffrey Cain, whose Samsung Rising is the standard outside account of Korea's largest conglomerate. The comparison was the one Kim had spent thirty years trying to avoid. He had left Samsung so as not to become Samsung, and in the courtroom he was being measured against it.
On March 13, 2025, Kakao said he was stepping down as co-chair of the Corporate Alignment Council, the group's top decision-making body, because of health problems. A company official said he had recently been diagnosed with early-stage bladder cancer. The management reform committee he had chaired since November 2023 was disbanded. CEO Chung Shin-a, appointed in March 2024 and the company's first woman in the role, would run the council alone. Kim kept one title: head of the Future Initiative Center.
The first-instance prosecutors asked for fifteen years. On October 21, 2025, the court acquitted him on all charges, along with Bae, Kakao, and Kakao Entertainment. The 124-page ruling found that although Kakao had considered acquiring SM, the acquisition could not be called an "absolute necessity," and that the evidence did not establish a conspiracy to manipulate the price.
The presiding judge, Yang Hwan-seung, made the verdict news by going further. He criticized investigators for using "separate, unrelated cases" to pressure suspects into confessing, a practice Korean lawyers call byeolgeon susa, and said such methods "distort the truth and lead to unjust results." He rejected Lee Jun-ho's confession as unreliable because "Lee had a clear motive to cooperate with investigators to avoid being charged." In September, the same court had acquitted Lee of breach of trust in the Baram Pictures sale, describing Baram as "a valuable company." Judge Yang's remarks carried extra weight because Korea was preparing to abolish its prosecution service and split investigation from indictment.
The prosecutors appealed. At the first appellate hearing before the Seoul High Court's Criminal Division 4-1 on June 24, 2026, they argued that the lower court had "made no judgment on a large number of pieces of evidence," and asked the court to summon Bang Si-hyuk, who had skipped the first trial, citing a business trip to the United States. On September 23 they asked again for fifteen years and a ₩500 million fine for Kim, twelve years for Bae, and nine years for former Kakao Entertainment CEO Kim Sung-soo. In his final statement Kim said: "I have always believed that business growth must proceed in accordance with the law and principles, and in this case as well, I never gave any illegal orders." The verdict is set for November 20, 2026.
While the case continued, Kakao was being taken apart. Daum, the portal whose 2014 merger had made Kim the largest shareholder of Korea's second internet empire, was spun off in December 2025 into a subsidiary called AXZ. In June 2026 unionized Kakao workers went on strike over performance pay, the first strike in the company's history. In August 2026 Kakao announced it would split into two listed companies on January 1, 2027. Kakao AI would get KakaoTalk, artificial intelligence, advertising, commerce, and about ₩2.3 trillion in cash. Kakao X would get fintech, content, mobility, and investments, including Kakao Entertainment and with it SM. Shareholders will vote on December 17. In effect the plan separates the room from everything that grew up around it.
Another Kim with almost the same name went through something similar that year. Kim Beom-seok, known as Bom Kim, was born in Seoul in 1978, moved to the United States at seven, wrestled at Deerfield, graduated from Harvard, and dropped out of Harvard Business School to found Coupang, which grew to employ more than 40,000 people. In 2026 he faced legal scrutiny in Korea, and Washington asked for leniency on his behalf. Two Kims, one from a single room in Seoul and one from a boarding school in Massachusetts, both built companies that Koreans came to depend on, and both found that dependence turns into a legal case once the state decides the company has become an institution.
Nine months before the prosecutors repeated their request, on January 15, 2026, Kim went without notice to the group's new-employee training at the Kakao AI Campus in Yongin. He was fifty-nine and a cancer patient, and he was a defendant in an appeal that could put him in prison for fifteen years. He told the recruits that "joining Kakao means you will be at the forefront of experiencing major changes in the world." He told them that "the AI era is both a crisis and an opportunity," and that the key skill would be "the ability to ask the right questions and define problems properly." He told them that any task done more than twice should be automated, and that anyone with a new idea should try to build it themselves at least once a week. Four people, three apps, two months.
Then he went from table to table, as he had once gone through the Ajit, and talked with the recruits seated at each one. Many of them had never known a country without his app. Some of them asked for a photo. They held out their phones, which almost certainly had KakaoTalk installed, and he stepped into the frame. He agreed to every one.
Part IIThe Playbook
The principles below come from the record of Kim Beom-su's career, including the failures. Several of his most effective methods became, at scale, the cause of his worst problems, and those principles are written with that cost included. They are meant for founders and operators who are building platforms, or are about to find out that they already have.
The principles
- 1.Give away the habit; charge for the neighborhood.
- 2.Ask how people connect, not what they buy.
- 3.Lose somewhere else, then come home with the device.
- 4.Ship three things in two months and keep the one people won't put down.
- 5.Make the social graph your sales force.
- 6.Merge from strength; make the acquired company the amplifier.
- 7.Delegate radically, then audit what you delegated.
- 8.Know the day you stop being a startup.
- 9.Treat the dissenting CFO as a control, not an obstacle.
- 10.Fund your conscience before the market tests it.
- 11.Put your own culture on the list of things to redesign.
K
From One Room to Two Companies
The arc of Kakao, keyed to the decisions that shaped it.
1992
Joins Samsung SDS; works alongside future Naver founder Lee Hae-jin.
1998
Founds Hangame (some accounts say 1997); 10 million users within eighteen months.
~2000
Hangame merges with Naver to form NHN.
2005
Sent to Silicon Valley to expand gaming; the effort fails. He fixates on the iPhone.
2007
Leaves NHN.
2010
IWILAB launches KakaoTalk for iPhone in March; 1 million users in a month.
2014
Kakao merges with portal Daum; Kim becomes largest shareholder with 22.2%.
2015
KakaoTaxi launches; 34-year-old Rim Ji-hoon named CEO.
2017
Kakao Bank opens; 820,000 customers in four days.
2021
Signs Giving Pledge; founds Brian Impact; becomes Korea's richest person.
2023
SM Entertainment battle with HYBE; questioned for 15h 40m; launches reform committees.
2024
Arrested in July; indicted in August; released on bail after 100 days.
2025
Steps back for cancer treatment; acquitted at first instance on October 21.
2026
Appeal continues; Kakao proposes split into Kakao AI and Kakao X.
Principle 1
Give away the habit; charge for the neighborhood
KakaoTalk made money by not charging for its main product. It turned paid texting into free texting, and so it became the default way Koreans talked to each other. Then it charged for things that sat next to the conversation: games, emoticons, brand channels, later banking, payments, and taxi rides. The $200 million Kakao earned in 2013 did not come from messages. It came from what surrounded them.
This idea is often stated loosely as "free plus premium." Kim's version was more specific. What he gave away was the activity people already did compulsively and with others. Hangame had done the same with card games a decade earlier. A free habit holds users better than a free feature, because a habit renews itself every day without any marketing spend.
Tactic: Find the activity your users repeat daily with other people, remove every cost from it, and then build your revenue on what they need right after doing it.
Principle 2
Ask how people connect, not what they buy
At the 2014 Startup Nations Summit, Kim drew a line between "services" and "platforms": a platform "has to come with the question of how to connect to each other instead of how to sell products." That was the reasoning behind KakaoGame, which went from ten titles to more than six hundred in two years. Kakao did not design better games than the studios on the platform. It built the system through which friends could reach each other.
The practical lesson is about which metric to watch. A service watches conversion. A platform watches how dense the connections are between users. Kim judged products by how many relationships they activated, which explains why Anipang and Dragon Flight could become "national" games without a national advertising campaign.
Tactic: For every new product, write down which existing relationships between your users it activates, and if the answer is none, treat it as a service and fund it accordingly.
Principle 3
Lose somewhere else, then come home with the device
The 2005 move to Silicon Valley failed. Kim drew a useful conclusion from it. He did not decide that Korea was too small. He decided that what he had seen in America, the iPhone, would reshape Korea, and that he could win a home market reorganized around new hardware.
The pattern matters because founders who fail abroad often either retreat completely or keep returning to the market that beat them. Kim brought back the platform shift instead of the product. Notably, Kakao's later attempt to conquer North America directly, through Radish and Tapas at about ₩1.1 trillion, ended in closures. Even with a much larger balance sheet, the lesson held.
Tactic: When an overseas expansion fails, list what you saw there that has not yet arrived at home, and build for that before you try another foreign market.
Principle 4
Ship three things in two months and keep the one people won't put down
In 2009 Kim was a wealthy co-founder of one of Korea's largest internet companies. He started over with three colleagues and built three smartphone apps in about eight weeks. One of them reached a million users in its first month. The other two are footnotes, which was the intention.
Successful founders on a second run usually want to make one big bet sized to their reputation. Kim worked like a team with nothing to lose. He accepted being wrong about which product would work in exchange for learning quickly. Sixteen years later he was giving recruits in Yongin the same advice: build a new idea yourself "at least once a week."
Tactic: On your next zero-to-one effort, commit up front to shipping at least three small products within a fixed window, and agree in advance which usage signal will decide which one survives.
Kakao Bank did not acquire customers in the usual sense. It told people who were already in the messenger that a bank had opened, and it signed up 820,000 of them in four days, compared with K Bank's 400,000 in a hundred days. KakaoTaxi enrolled 84 percent of Seoul's drivers within about a year because passengers already had the app. Games spread through hearts and invitations sent between friends.
Each new Kakao business borrowed attention and trust from the core messenger. That is the main competitive advantage of a super-app, and it also creates a structural risk, covered in Principles 7 and 8: every affiliate draws on the same store of public trust, and any of them can spend it down.
Tactic: Before launching a new line of business, estimate what share of its first-year customers will come through your existing network, and if that share is low, ask whether you need to own it at all.
◎
The Kakao Expansion Map
How each business drew on the messenger, and where it ran into trouble.
| Business | Phase | How the messenger fueled it | Where the friction came |
|---|---|---|---|
| KakaoTalk (2010) | Connect | Free messaging became the national default | 2022 data-center fire locked out 53 million users |
| KakaoGame (2012) | Monetize | Games playable only with a Kakao account | 2015 gambling issues in the ecosystem |
| KakaoTaxi / Kakao T (2015) | Diversify | 84% of Seoul drivers enrolled within a year | Commission disputes; presidential criticism, 2023 |
| Kakao Bank (2017) | Diversify | 820,000 customers in four days | Regulatory scale and scrutiny |
| Kakao Entertainment (2021) | Diversify | IP and distribution in one group | Radish and Tapas closed; SM case |
| SM Entertainment (2023) | Reckon | Won 40.28% combined stake | Founder arrested; acquitted; on appeal |
Principle 6
Merge from strength; make the acquired company the amplifier
Kim took part in two portal mergers fifteen years apart. Around 2000, Hangame merged with Naver. In 2014, Kakao merged with Daum. In the second, Kim's company was the clear driver of growth, and he came out with 22.2 percent of the combined entity as its largest shareholder. Daum brought search traffic, content, and a public listing. Kakao brought the users and their habits.
The lesson concerns which side holds the growth. In a merger of equals, value tends to go to whichever side controls the fastest-growing asset, whatever the share-swap ratio says. Kim's 2014 explanation, that the merger would let the business "grow ... as a platform that will have a greater impact on society," was partly public relations. It was also accurate about which company was absorbing which.
Tactic: Before negotiating a merger, work out which side's core asset will be compounding three years after closing, and structure governance so that side holds control.
Principle 7
Delegate radically, then audit what you delegated
After 2015 Kakao ran as a "community" of affiliates, each with its own CEO, stock options, and autonomy. That arrangement produced Kakao Bank, Kakao Pay, Kakao Mobility, and Kakao Entertainment, and helped push Kakao past Hyundai Motor in market value. In December 2023 Kim rejected it explicitly, telling employees that Kakao would no longer drive subsidiary growth "through investments, stock options, and full delegation."
Delegation was not the error. The error was letting the founder's judgment about public tolerance stay with the founder while authority went to the subsidiaries. Affiliates optimized their own numbers, such as taxi commissions and acquisition pipelines, while drawing on trust that belonged to the whole group. By the time Kim called his emergency Monday meetings, beginning one at 6:40 a.m. at Kakao Mobility because the president had criticized a single product, the cost was already large.
Tactic: For every unit you delegate to, define in writing which shared assets (brand, user trust, regulatory standing) it may not spend down without group sign-off, and review compliance quarterly.
Principle 8
Know the day you stop being a startup
"Kakao is now a national platform and a national company, so each community should no longer perceive itself as a startup." Kim said this in November 2023. The facts that made it true had been in place for years: 90 percent market share in 2015, a top-ten KOSPI market capitalization in 2020, inclusion on the Fair Trade Commission's list of the largest business groups. The October 2022 outage showed concretely that a private company's server room had become part of national infrastructure.
Founders usually recognize this transition only after a crisis forces it. Behaviors that are virtues in a startup, such as speed, aggressive expansion into adjacent markets, and loose governance, read to the public as predation once a company is large. Kim's own description of the criticism, "coveting neighborhood businesses," is what a startup's adjacent-market strategy looks like from the other side.
Tactic: Pick in advance the measurable thresholds (market share, number of dependent small businesses, outage impact) at which your company will adopt institution-grade governance, and adopt it when you cross them, not when you are subpoenaed.
⇄
Startup Logic vs. National-Company Logic
Drawn from Kim's own statements in November and December 2023.
| Startup logic (Kakao, 2015–2022) | National-company logic (Kim, late 2023) |
|---|---|
| Grant autonomy to each affiliate | "Strengthen centripetal force" across the group |
| Grow through investment, options, full delegation | "Part ways" with that method |
| Expand market dominance | Strengthen "lacking substance rather than numerical expansion" |
| English names, horizontal culture as identity | Review them "from scratch" |
| Self-governance | Reform "under external control" via a Compliance and Trust Committee |
Principle 9
Treat the dissenting CFO as a control, not an obstacle
According to the indictment, CFO Kim Ki-hong and others opposed the plan to spend ₩590.7 billion on SM. The founder approved it anyway. The first-instance court acquitted Kim and found no proven conspiracy, and the appeal is pending, so the legal question is open. The governance lesson does not depend on the verdict. When a contested decision rests on the founder overruling the finance chief, every message and meeting note afterward becomes potential evidence, and every subordinate becomes a potential witness, including one who changes his account under pressure.
A founder's judgment is not the issue here. Kim's judgment built Kakao. The issue is that a dissent with no formal channel produces deals that can be won commercially and still cause years of legal and reputational damage. Kakao won control of SM and lost three years in court, its founder's freedom for a hundred days, and much of its standing.
Tactic: Require that any major transaction opposed by the CFO go to an independent board committee, with the objection minuted, before the founder can approve it.
Principle 10
Fund your conscience before the market tests it
Kim announced the pledge to employees in February 2021, signed the Giving Pledge in March, and in June sold ₩500 billion in Kakao shares to fund Brian Impact. He made these commitments near the top of his wealth, a month before Bloomberg ranked him first in Korea. He described the motive as personal rather than strategic: after reaching the wealth he had aimed for, he felt "rudderless."
The commitment was real and also incomplete. In the same period the Fair Trade Commission was looking into his reporting on K Cube Holdings, and Kakao's affiliates were growing in ways the public came to resent. Philanthropy funded from the gains of a platform does not protect the platform from criticism. It can make the criticism sharper, because it sets a standard the business may not meet.
Tactic: If you make a public philanthropic commitment, add a matching operating commitment for your company in the same announcement, so the two can be judged together rather than set against each other.
Principle 11
Put your own culture on the list of things to redesign
In December 2023 Kim told employees that English names, information sharing, and the horizontal culture, features closely tied to Kakao's identity and to his own name Brian, would be "reviewed from scratch." He said he would change the company's name if necessary. In 2026 Kakao went further and proposed splitting into two listed companies and spinning off Daum.
Few founders treat their own cultural inventions as possible liabilities. Kim's willingness to do so is not proof that he was right about what to change. It is a disciplined way of declining to protect what one built simply because one built it. His advice to new recruits in January 2026, that the key skill is "the ability to ask the right questions and define problems properly," applies to his own culture as much as to anything else.
Tactic: Once a year, list the three cultural practices you are proudest of and require your leadership team to make the strongest case that each has become a liability.
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Part IIIQuotes and Maxims
In their words
— Kim Beom-su, Giving Pledge letter, March 2021A young man that once dreamed of becoming an entrepreneur after reading a feature article on Microsoft's 20th anniversary in 1995, now awaits to join the Giving Pledge.
— Kim Beom-su, Startup Nations Summit, Seoul, November 24, 2014The most efficient organization that can consistently change society is an enterprise. It should be capable of leading systematic change in society though innovative ideas and at the same time be able to achieve financial soundness.
— Kim Beom-su, Kakao community management meeting, November 6, 2023Kakao is now a national platform and a national company, so each community should no longer perceive itself as a startup.
— Kim Beom-su, Kakao new-employee training, Yongin, January 15, 2026Any task that is repeated more than twice should be fully automated with AI, and if you have a new idea, I hope you try to build it yourself at least once a week.
— Kim Beom-su, final statement, Seoul High Court, September 23, 2026I have always believed that business growth must proceed in accordance with the law and principles, and in this case as well, I never gave any illegal orders.
Maxims
- Free the habit. Remove all cost from what people already do daily with each other, and earn on what comes after.
- Connection over transaction. A platform's question is how users reach each other, not what they will buy.
- Small team, many shots. A rich founder starting over should still ship three things in two months.
- Import the shift, not the market. When you lose abroad, bring home what you saw there before your competitors notice it.
- Borrowed trust is still borrowed. Every affiliate that grows on the core platform's goodwill is drawing down a shared account.
- Scale changes the moral weight of the same act. Moving into adjacent markets is strategy for a startup and predation for a national company.
- Formalize dissent. A CFO's objection with nowhere to go becomes evidence later.
- Conscience needs operations. A pledge made from platform gains will be judged by how the platform behaves.
- Nothing you built is sacred. Your culture, your name, and your structure are all candidates for redesign.
- Define the problem first. In the AI era, the scarce skill is asking the right question.
