From Startup to Global Leader: The #Razer Journey with CEO Min-Liang Tan | SXSW Sydney 2024

Thank you. Thank you for having me. Can you hear me? Okay, good.

Black and green. So, typically I think what we like to say at Razer is today, if you see black with a hint and an accent of green, you'll think about gaming. And probably my favorite colors.

In business and gaming? Well, I'm Singaporean, so, you know, Lee Kuan Yew, who was the elder statesman and founder of Singapore, was always a big kind of inspirational figure of sorts. I think over and above in gaming itself, many of the old-school games, and many of the developers of whom I've met, I think today have all been pretty much inspirational. But I think specifically having founded a company and driving the day-to-day and stuff like that, every day is a new day. So, I do look at references from different companies, different founders, all the time, and I've realized that at the end of the day, everybody pretty much charts their own destiny. Everyone's got their own style of doing things. It's hard to kind of look at a founder or a person and say, 'I'm going to model it after that person.' It's difficult. So, pretty much, it's a blank slate, so to speak.

Sure. And this is an easy one. For gamers, by gamers. I think that has always been our motto. You'll see it from day one when we founded the company. And till today, you'll see that single motto through all our retail placements. You'll see it internally with our HR guidebooks and stuff like that. But it's something that isn't just a motto. It's something that we really believe in. That we want to bring in the gamers to our company, to have gamers in all aspects, whether it's administration, whether it's finance, so on and so forth. But for gamers, by gamers, and keeping that single focus on the gamer demographic has always been what we've been doing at Razer. Now, what has changed, however, over the past 19 coming to 20 years at this point of time, is the fact that the gamer demographic has changed. It used to be when I first founded the company, we were all 14 to 25, predominantly male kind of thing, but the demographic has really grown horizontally or geographically, where back in the day, you didn't have China as a very big gaming market. Today, it's one of the largest gaming markets on the planet. Then emerging markets, Southeast Asia, Latin America, Middle East, they're all new demographics of gamers coming through. But over and above, it's also grown vertically in the sense that you get gamers who are a lot older. I think the pandemic really drove a huge number of new gamers into the equation. And of course, gamers getting younger. And I always like to use the example, you get a two or three-year-old toddler today going up to an analog TV screen trying to swipe it, you know? So that's the budding gamer that we see at this point of time. And the whole entire gaming industry has just exploded, right? And for us, we still remain true to our core, for gamers, by gamers. It's just that the demographic of gamers has really changed.

But there's a funny story there where I think, and this is the stuff that kind of tells you how even the definition of gamer has changed over the years. Good example would be exactly the Kitty Krakens and we have got millions of these cat ear headphones out there and one of the very early marketing team members that we have today, he's lecturing in a college in the US where he pinged me and said, 'Min, you know, back in the day you said that Razer would never be working on like Hello Kitty and stuff like that, along the way.' And that was my view, right? We didn't want to make cat ear headphones, but there was a movement internally within the organization and they reached out. There were these gamers that were creating petitions, they're posting stuff on social media saying, 'Oh, Razer, we'd love for you to make cat ear headphones and stuff like that.' And I said, 'Over my dead body, right?' But the movement got so large that finally I said, 'Okay, fine. We'll start making one. We'll start making two.' And today we are probably the largest brand on the planet for cat ear headphones, for what it's worth. So, if you see anyone with cat ear headphones, it's probably the fault of the gamers.

Sure. Well, it's how we founded the company. From day one, to be very candid, we didn't just invent the world's first gaming mouse. We created this entire multi-billion dollar industry primarily because of the community. And the community has always been really important for us, the gamer community. And when we did the first gaming mouse, it wasn't even meant to be a business. It was not meant to be a product per se that would go on to have a life of its own. But we said, 'Okay, we've got this product. We really want to design something that helps us beat our friends.' And when we created it, we said, 'Okay, let's find out from the guys around who would want...' It's like the very early days of Kickstarter. And then one thing led to another. I was playing a lot of Quake back in the day. And all of a sudden somebody would say, 'Oh, but have you thought of this new feature? Have you thought of doing that?' And we said, 'Okay, fine. We'll put all these features in.' And it got really annoying and things like that. Communities are always very annoying. But we built that up and we've kind of kept that tradition even up till now. Now we're shipping over a billion dollars worth of hardware a year, but we really focus on the fact that at Razer, the community is insanely important to us. So, I'm on LinkedIn. I get messages all the time. I'm on X. I'm on the various platforms. And while I don't answer all of it, I do make an effort to read pretty much every single bit of feedback that comes through, whether it's bug reports, whether it's feature requests, so on and so forth. And the entire organization is really geared toward doing the same. And it's one of those things that we get great marketing ideas. We get great product ideas. We get great engineering ideas. And we're pretty open. And that's how we've really continued to grow. And I would say that the big difference for us is that we weren't born from a company that was, for example, good in making mice and then we said, 'Okay, we're going to make great office mice. We're going to make great gaming mice and stuff like that.' We didn't start from a productivity notebook or laptop company and say we're trying to do laptops for different people. We were very focused on the gamer community. We remain very focused on the gamer community and that has allowed us to build hardware, software, and services just for the gamer. And again, with this constant feedback loop that comes through.

Well, you know, what is the journey of deciding you're going to make the toaster? I will do that. So, unfortunately, there's a bit of Australian connection over here. For some bizarre reason, a gentleman in Australia took it upon himself and he decided that given the design and engineering that we do for our hardware, instead of building spaceships or rockets to Mars and stuff like that, he decided it would be best that Razer apply our design and engineering talents to building a toaster. For the life of me, I have no idea why a toaster. So, of course, given that we tend to listen to the community and he was just one voice at the point of time, I said, 'Well, funny idea, but you're just one man and there are 300 million gamers on the Razer platform. There are 3 billion gamers out there. You've got to come in with a little bit more than one person now.' And I thought that was it. No, it was not, all right? So, he went out and he started creating a little campaign and all of a sudden we saw a couple of thousand people turn up and they were posting saying, 'Oh, we want a Razer toaster.' I said, 'Oh, you and what army, right?' With a couple of thousand people. But that kept growing and they said, we aren't going to eat toast until you make a Razer toaster. So I said okay, fine. If you get a million likes on your stupid campaign page then maybe I'll consider it, right? And clearly I don't spend a lot of time as a CEO doing my job and I thought it would be fun to needle him all the time. So I just checked in once in a while and I was like what, 50,000 or 40,000 people? That's a bit of ways away, nothing that would get me really concerned, right? And then I think in a random moment he was like, 'Oh, we're trying to get these...' and I said, 'Well, fine. If somebody gets a tattoo of a Razer toaster, I'll count 100,000 votes for that.' And all of a sudden boom, there were like 13 or 14 people with a tattoo of a Razer toaster and unfortunately I had that in writing. Now, fortunately for me I didn't say when I was going to launch it. So but, true to form we have actually put together a team, a design and engineering team dedicated to thermals and design and by the way this is serious business for us. Every time we design a product at Razer it's serious business. We've put in a lot of effort, a lot of resources across to that. Now, we've kind of toned down a little bit of the needling inside of things for good reason. We've been getting death threats for not launching the toaster. It's not funny. I mean when you think about it, it's kind of funny because it's death threats about a toaster but it's not funny because it's death threats and they're directed at some of our engineering team. Like why are you taking such a long time? So on and so forth. So what we have done is to say look, we aren't going to be talking about this at this point of time. We've made the commitment to be launching the toaster called Project Breadwinner. You know, go figure at some point of time. And it is something very serious for us. We want to make sure that if and when we launch Project Breadwinner, it's going to be the ultimate toaster on the planet. But do be patient and we will get there. And there's been press following it and stuff like that. But, yeah, chill out on the death threats. That's the thing.

Sure. So, typically when I do some of these events or speeches, one of the questions I always get is, 'What's the toughest moment as an entrepreneur?' 'What was the lowest point?' and things like that. I always disappoint, primarily because when you've got a bit of a gamer's mindset, and the gamers in the room will definitely know, whenever there's a challenge, you just keep plowing away at it over and over. The guys that played Elden Ring or Dark Souls game will really appreciate this, where you kind of live in the now. You don't dwell in the fact that you've died 2,541 times, right? You really focus at, 'Okay, this time I'm going to jump on the platform. I'm going to roll this way, and I'm going to execute it a lot better than the other 2,000 times before.' So, I suppose you do see a lot of entrepreneurs today who are gamers, primarily because it's this mindset of living in the now, all the failures in the past water under the bridge. I'm going to get it right this time around. And it's maybe to the point of insanity to a certain extent, but you just keep going over and over. You roll with the punches. And pretty much that's what we do. And that's what we encourage also at the same time. We like to say at Razer, we want to see mistakes. We like to see people screw up, just so that we are really pushing the envelope. Because if we don't feel uncomfortable, like we are trying new things and it's something that's potentially going to get us in trouble, that's something that we really appreciate. To be able to be put in a position where we're always a little bit off balance.

Sure. So, I think for the benefit for those who are not aware, we were public for a couple of years and then we took the company private. And a big reason for that is when we went public, we were really building out this entire ecosystem. So, Razer, a lot of you guys may be familiar with us for our hardware. We make really great hardware. We're number one in the world for like mice, keyboards, headsets, so on and so forth. But on the software and the services front, we've really grown an entire ecosystem. We've got about 300 million gamers on our software platform. We've got a monetization platform that we work with game companies to help them monetize their game, so on and so forth. And we process billions of dollars for that. And these are all completely disparate businesses, which typically when you're public, you get analysts that understand a certain aspect of the business, and a hardware analyst would say, 'Oh, we understand. You're shipping over a billion dollars worth of hardware. This is where you're at.' But if they're looking at our services or our fintech business, it's a completely different kind of business altogether. So, what we've realized is that it needs a lot more education. It needs a lot more understanding that we're building this entire gaming ecosystem. Now, what has been helpful is the fact that we're also getting a lot more gamers who are becoming analysts at this point in time. But it's going to take a while. So, what we decided to do very quickly with a partner, we took the company private. And being public as a company, I think we learned so much, in terms of the rigors of being a public company. It has been good for the organization. And at some point, we will probably look at going public again. And I think but by then, we'll probably be a lot more prepared in terms of the entire ecosystem. There are new initiatives that we've been spending a huge amount of time on. AI, for example, is something that we're very focused on at the company. And once we bring some of these initiatives to life, and maybe at some point in time we go public.

Sure. So, I like to say that at Razer, you get the best of what a startup has and the best of what an established large corporation has, and at the same time, the worst of what a startup has and the worst of what an established company has. So, we're in a bit of an interesting phase of sorts, where on one hand, I think because I've been very privileged to be able to continue leading the company. Typically at some point of time, the shareholders start trying to fire the founders and stuff like that. So, I've been very privileged to be able to kind of keep under the radar such that the shareholders don't decide to fire me.

Yeah, that's right. So, that's one, I think from that perspective. So, I've been able to see the entire kind of timeline from when we are two people to 2,000 people at this point of time. And on a certain level, culture is incredibly important for us. So, for example, for us to be able to say, 'Look, we are 100% focused in terms of the gamers.' I get the chance to meet various members of the team, the Australian team, for example, is over here to talk a little bit about culture, what we're focused on, how we continue to be laser-focused in terms of the community, the gamers, because there's always this temptation. And we've had this happen often times before, where somebody would say, 'Hey, look, we make great hardware, but why don't you try to go for the broader audience? Why don't you try to go mainstream? You can make so much more money out of that.' And to me, from day one we've always wanted to say, 'We won't go mainstream, but mainstream may come to us.' And with the pandemic, with the growth of the entire gaming population, this has kind of come to pass, where today, I meet a lot of young people, some of whom kind of freak me out and say, 'Oh, I've loved gaming, Razer, since I was a kid.' And I'm going to go, 'You know, but that is one aspect, the culture, the focus on gamers, the way that we remain very focused on this community, which is sometimes very misunderstood, I think in many cases,' all the way to the other end of the spectrum where on a certain other level, I'm also mindful that to scale a business, you've got to put the processes in place because everything from HR to finance to being able to understand financial statements, over and above to be able to watch your top line, your bottom line, things of which typically when you're in a hyper growth state as a startup, you don't necessarily get that formal educational sort. And that's when usually you replace the founders with established management, guys who have done that before. But, I do firmly believe that there's a place for both. You can get really experienced, really great managers who have done it before many times, and at the same time be open enough to say, 'Hey, look, there are certain things that used to work well for us as a startup that don't necessarily translate very well to a much larger organization. Certain things like communication, where what used to be that you can shout across the office to somebody else, all of a sudden you've got US, Europe, Asia time zones at the same time.' So, about a third of our business is in the US, a third in Europe, a third in Asia, and we've got team members spread out all over the world. Some remote, some in the office. So, making very clear processes, being very in some cases even absolutely black and white and saying, 'This is the way to go, and this is the only way.' is unfortunately some of the things that you'll have to go through when you're scaling up the business.

Yes, pretty much. With a lot of, and having to pay them at the same time.

Sure. I think on a certain level, I see hardware-software fusion as being more important than ever. So, I think for Razer, we kind of pioneered a lot of things. One of which was very early on, we decided that all our products would connect back to the cloud. We've got a larger software team than our hardware team. We've been very focused in terms of how do we bring additional value to our gamers from not just component design selection, technology, but even on the software side of things to ensure that there's this perfect fusion of sorts and upselling, of course, with services so that you've got a holistic view of the entire ecosystem. Now, over and above AI, I think this is a buzzword of sorts, but if you really delve down into AI, specifically for gaming, I think there's a huge amount of opportunity on that level. On one end, it's tools internally for organizations that AI will be able to not just increase productivity, but to really provide for new ways of doing the same things, from that perspective, whether it's design work over and above, and of course, how AI is going to be transformative for gaming, whether it's designing new generative AI to help create more assets, is it new ways of gaming, are there AI applications that can be used for gamers? Over and above, that is going to be something that will define gaming for the next couple of years.

Sure. So because we do hardware and hardware is very hard. The initial phase of designing and engineering hardware is usually the most expensive. It's usually the hardest. It takes the longest time before it moves into manufacturing phase and so forth. So, typically the way that we look at it is, and we're in a very privileged position, I would say, given that we've got leadership in this space. We tend to have exclusivities on most of the new technologies out there. So, there's a reason why I think when somebody buys a Razer product, they would say, 'Oh, you tend to have the best sensors. You tend to have the best components and stuff like that.' And the reason for that is because we've been able to kind of negotiate that. We've got a brand presence that a lot of the companies that develop these new technologies approach us because they need us to kind of endorse it and we push it down the line. Case in point, perhaps we were probably one of the earliest to do lighting for game peripherals. Now, it sounds kind of banal and it's just lighting and early days somebody would say, 'Ah, you don't need so much lights. Does RGB make your rig go faster and stuff like that?' But today, pretty much it's an incomplete industry standard and we kind of created that. And a couple of years before, high DPI sensors for mice. There were a whole bunch of guys who say, 'Oh, you don't need that. A gaming mouse is the same as a regular mouse.' But today, it's pretty much the industry standard that's out there. Now, most recently, we've just announced and again to a lot of negativity, will be things like haptics. For example, we believe that haptics is going to be the next phase in terms of immersiveness. We've put that into our chairs, we've put that into our headphones, and things like that. Again, new technology is always usually met with a lot of negativity. All right? And the early adopters would be enthusiasts about it. They would say, 'Oh, let me develop haptics application so on and so forth.' Then it takes it onto the next level where all of a sudden it becomes ubiquitous through the entire industry. So, case in point, 10 years, well, probably 13 or 14 years ago, I set out and I said, 'You know, I'm sick and tired of carrying these really thick and heavy gaming laptops.' And I was really frustrated about it. So, we did our own design, but back then, we didn't have the resources to be able to make the entire laptop. It's a lot of engineering work and stuff like that. So, I went to many of the today notebook companies out there, and I spoke with them, and I would say that I said, 'This is my design. This is how I think it could be done. Do you guys want to do it?' And literally every single one of them said, 'Look, this is what a gaming laptop should be.' And I said, 'But we are from Razer. We kind of know what we're talking about because we're gamers and stuff like that.' They said, 'No, no, no. You guys are just a bunch of gamers. We make laptops. We know what's the best thing for gaming laptops.' So, fast forward, we couldn't do that. So, we figured it out. We went to acquire an ODM back in the day. We worked very closely with Intel and Nvidia back in the day, and it was fortunate because by sheer coincidence, they said, 'Okay, we're going to give you a shot. We're going to build this out.' 10 years later, every single one of the gaming laptops are today referenced from that same design. Thin and light, focus on thermals, and it's really completely changed the entire industry as it stands. Now, everyone says, 'Oh, that's of course the way a gaming laptop should be.' It's now as a given, but it took a while to get to that point. So, I would say that for new technologies, new innovations, sometimes, you've got to convince not just the consumer, but in particular when it comes down to hardware, you've got to convince the supply chain, you've got to convince the component suppliers, you've got to convince the engineers that this is possible. And it's a multi-year kind of effort.

Sure. Well, first up, I think which might be something on the minds of a lot of business managers in the room would be how would the corporation or the company itself adopt AI, right? As an AI tool. And to this end, the biggest challenge is usually existing workflows. And it's just being human. You're used to using your workflows in a certain level of certain case. You know how you do certain things and trying to get AI tools being propagated through an organization is very hard. Because sometimes, well, change is already very hard. Good change is also very hard, right? So, to this end, I use this as an example and I found...

Really interesting in the sense that we were looking at Gen AI tools for image generation, for example. So typically we'll go to our graphic design team, and what's kind of unique for us is that we do everything in-house. So when it comes down to generation of assets and stuff like that, when the designer is using Midjourney, he's used to doing Adobe Photoshop and stuff like that, not necessarily generating prompts for Midjourney. So just because he's in that right role doesn't necessarily mean the tools are going to be the right tools for him. And that needs a lot of additional thinking that needs to go over and above. I think just saying, 'Oh, everyone's going to use Copilot right now, everyone's going to use ChatGPT, so on and so forth.' So that's a lot of change management that needs to be done, I think, from that perspective.

Now, over and above, what about AI for the entire industry? So I do think we'll see a lot more AI being used in terms of development of games. You'll see indies, I think, being able to design games and a lot more of a game in the sense that you don't need a large team anymore to do a lot of work where the heavy lifting can be done by AI. So you'll see a proliferation of content. Of course, a lot of the content's going to be terrible, but there's going to be a lot of great content that will also come up from individual indies or small teams that can now create really great games with the help of AI. Over and above, I think you'll see AI being relevant for the gamers, right? How they play the games will be also very different over and above all the publishers in the case. So lots of opportunity, I think, when it comes down to AI.