Speaking at Tech in Asia 2017 in Singapore, Tan in a fireside chat with Saemin Ahn, the managing partner of Rakuten Ventures, said: “Raising capital back in the early days was very difficult. I think – specifically for Razer – we were in the gaming industry, which wasn’t really considered an industry but a niche market. Now, it’s a big market. Secondly, we were looking at hardware. And back in the day, hardware was a complete no-no for the investors out there.”
Tan transitioned out of a law career to start Razer in 2005. Since inception, the gaming hardware developer has grown into a global brand that sells gaming laptops and peripherals such as mice, fitness bands and tablets, attracting high-profile investors such as IDG-Accel, Temasek Holdings and Intel Capital.
Speaking with candour on the nature of building up his company, Tan pointed out how the hardware renaissance – which has happened in the last few years, due to the success of Apple’s iPhone and the resulting competition between firms like Google and Samsung, were lacking in the mid-2000’s when Razer first launched.
Acquisitions & brand growth
With its value proposition being connected hardware, much of Razer’s success, according to Tan, comes down to its focus on quality, which has resulted in a sustainable business.
On Tuesday, the firm announced a major strategic partnership with mobile operator 3 Group, a move that will enable Razer to further expand its international presence in Europe and East Asia and work with the telecoms firm on global branding and co-marketing to reach out to the youth in the form of e-sports.
In addition, the deal will see Razer work with 3 Group to customise data plans and products to cater to the Millennials through a number of regional initiatives, as well as the use of the digital currency zGold, which can be used for various gaming-related transactions.
Tan also highlighted the effectiveness of Razer in building a hardware-software platform. Given its roots in gaming mice and its eventual expansion into gaming systems – requiring a different approach in terms of engineering and design – this has seen the company acquihire talent in Silicon Valley to drive its growth, he explained.
An instance of this growth was the acquisition of the software assets of OUYA, including its content catalogue and online retail platform, in July 2015. The transaction also saw its technical team and developer relations personnel join Razer.
Noting the multi-platform nature of modern gaming, Tan emphasised the importance of mobile gaming, movies and content, which had also led to its acquisition of THX. This is part of a larger move that sees Razer position itself to grow as an entertainment company, rather than just being a gaming brand.
Tan said: “It’s all about the talent, it’s all about the team, it’s all about the people.”
On the shifts in the gaming industry towards mobile platforms as well as the rise of e-sports, Tan noted the role of organisational culture in determining its success, sharing that its identification with gamers helped drive its success. This was due to Razer’s staff essentially “creating products for themselves”.
An example of this was the decision to enter the gaming PC space, which has seen the gaming PC market emerge as the only growth area amid declining PC sales worldwide.
He added, “The mobile space is very exciting and we do see a lot of things that can be disrupted and products that can be built for mobile gamers”, noting that the latest technical developments saw the gaming community and its demand for enhanced offerings as a central focus driving the growth of the gaming market and its corresponding technologies.
An outcome of its focus on gaming hardware and the gaming community – the “bread and butter of Razer” – has also seen its products being used in corporate environments such as banks, as well as a customer base in the military, due to the processing power, precision and compact nature of its computing products.
Tan also highlighted how music DJs were making use of the product and that Razer had the potential to expand beyond its gaming focus. However, he observed the need for a distillation and refinement in developing a brand ethos, particularly in how Razer was building its products and brand. “Maintaining a sense of focus is incredibly important and it will serve in all aspects,” Tan said.
According to him, the gaming premise would continue to be a core focus of Razer, with community relations and a dialogue also being important on how Razer would continue to connect and engage with its community. Tan highlighted that he managed his own social media as part of engaging with his customers.
“Our focus is the best possible product. We put in a price tag and we have a premium. We have profits and are open to what our customers say. These profits get churned back into better R&D. And that’s what allows us to be the consecutive best at CES. The fans are really passionate about our brand,” he added.
Tan maintained that the core philosophies which enable Razer to retain and enhance its market position were its orientation towards the gaming community; a focus on acquiring talent with a passion for gaming; and a focus on product lines that are highly selective and limited in nature, allowing the company to maintain quality in its offerings.
“Whether it’s fundraising or a business model, it is a single-minded goal. Everything else doesn’t matter. It doesn’t matter if my investors get nervous or things get tough. Because at the end of the day, when you’re trying to get something truly great done, it’s incredibly difficult. But you need to understand that only you can execute it on behalf of everyone else,” he said.