Kun Gao // Ep 10 // Building the World’s Most Popular Anime Brand, Crunchyroll

Welcome to Episode 10 of the Asian Hustle Network Podcast! We are very excited to have Kun Gao on this week's episode.

We interview Asian entrepreneurs around the world to amplify their voices and empower Asians to pursue their dreams and goals. We believe that each person has a message and a unique story from their entrepreneurial journey that they can share with all of us.
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Kun is Co-Founder and former CEO of Crunchyroll, the world’s largest destination for anime and manga, with more than 50 million registered users and over 2 million subscribers. At Crunchyroll, Kun spearheaded international content, business development, corporate strategy, monetization, marketing, and brand.

He brings 15 years of experience in consumer media, including founding social mapping service Frappr, product and engineering roles at Slide and HOTorNOT. Kun graduated from U.C. Berkeley with honors B.S. in Electrical Engineer and Computer Science and B.A. in Applied Mathematics in 2004, and was a PhD candidate in Computer Science at Carnegie Mellon focusing on Database research.

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Transcript

Intro: [00:00:00] Hey guys! Welcome to the Asian Hustle Network podcast. My name is Bryan. And my name is Maggie. And we interview Asian entrepreneurs around the world to amplify their voices and empower Asians to pursue their dreams and goals.

 We believe that each person has a message and a unique story from their entrepreneurial journey that they can share with all of us.

Bryan: [00:00:25] Hey guys, welcome to Asian Hustle Network podcast. My name is Bryan.

Maggie: [00:00:29] And my name is Maggie.

Bryan: [00:00:31] And today we have a very special guest Kun Gao, the co-founder of Crunchyroll. Kun, welcome to the show.

Kun: [00:00:39] Thanks for having me guys.

Bryan: [00:00:41] Definitely. We’re super excited to have you here. Huge fans ever since we were young kids. We watch a lot of anime, like no lie, so much anime, you know, and having control come out with a huge, I would say it’s a huge integration in my own childhood growing up. I constantly refer to control whenever I need to look for new inspiration, new anime, especially watching Bleach and Naruto. I couldn’t find anywhere else to watch, you know, so I was into Crunchyroll and it’s been a huge part of our culture. So super happy to have you here.

Maggie: [00:01:12] Thanks for taking this time to be on the podcast, Kun.

Kun: [00:01:15] It was my pleasure.

Bryan: [00:01:16] Definitely. So Kun, can you kind of tell us a little bit about who you are and what your upbringing was like? Where’d you grow up and you want to learn a lot more about you?

Kun: [00:01:27] Sure. I was born in China. Beijing actually. Moved to the US in Houston when I was eight and to LA when I was 11 for middle school and high school. Undergrad, UC Berkeley, and a few years of grad school at Carnegie Mellon. Upbringing, I think a pretty typical immigrant story, moved to the US, having to learn English, having to really try to fit in and, just you know, growing up remembering and just, you know, life, life was pretty, you know, very much, very interesting, but very different. And I think as an immigrant, you always have a chip on your shoulder. You’re always pushed to excel by your parents to use hard work and dedication and just academic achievements to grow and prosper.

Bryan: [00:02:22] Wow.

Maggie: [00:02:23] That’s amazing. Can you talk a little bit about your upbringing and your childhood? You know, what your parents were like? You know, where are you living in a strict Asian household or were they kind of like laissez-faire?

Kun: [00:02:35] Oh, very, very strict. Yeah.

Maggie: [00:02:37] Very typical Asian.

Kun: [00:02:41] That’s right. My parents were super supportive to get me excited about science and math. And I think, you know,  they really aspire for me to be a doctor. And I think at a certain point I really wanted to be an engineer, which was totally fine as well. I think those are the two choices doctor, lawyer. Lawyer is okay too. And then, with engineering, it was just, you know, pushing me to participate in science fairs and to have, you know, academic achievement, and then pushing me to go to the best engineering schools, which was why I applied and got into Berkeley.

And, it was just a, you know, I have very fond memories. And I think a lot of the things that, was instilled in me, especially the hard work aspect is something that I really lean leaned on in the later years in grad school or in entrepreneurship.

Bryan: [00:03:37] Wow. That’s pretty amazing too because I think growing up, I think we all felt that kind of pressure right from our parents. Hey, I want you to be a doctor, lawyer. My parents actually wanted me to be a dentist. The reason being is that my mom always told me you’re not smart enough to be a businessman since she used to be a dentist, you know? And it’s crazy. Cause you know, at the time growing up, you’re like, man, what am I, why is my parents so strict?

But when you get an opportunity to showcase your abilities and your hard work. The foundation, they help you set as a child, as a young person growing up, it creates a foundation for you to draw on for experiences when you’re hitting hardships. We’re hitting roadblocks, you know. So whatever it’s made me feel, I’m getting older in my thirties now. I’m thinking about wow when maybe my parents were right. [inaudible] that it turned out for the better, you know, but at the same time, listen to your story. How about you going to your entrepreneurial path is inspirational for our newer generation, because a lot of us don’t want to follow that conventional path. Like we have to be engineers. We have to be lawyers. We have to be doctors. You don’t have to go down a path. There are more options now. We have passion. You know, and it feels like the company that you built Crunchyroll is built on passion, you know, and that’s what we want to highlight in this podcast, you know?

Maggie: [00:04:55] Yeah. And I think it’s amazing that you did follow your passion because a lot of parents, like you, said, your parents wanting you to become a doctor, right. And we see that within every Asian household, like either a doctor or a lawyer, something very stable. And we see that a lot because a lot of our parents are immigrants and they come from times of war and they want us to have a job that’s very stable. Right.

But they don’t understand like there’s a lot of different ways we can make money now. And we’re living in such a digital world that it’s hard for them to grasp onto it. But once you do show them like, Hey, I can make money, you know, doing Crunchyroll and like putting out anime shows like that’s when they’re like, Oh, that’s really interesting,

Bryan: [00:05:33] Definitely.

Maggie: [00:05:34] Yeah.

Bryan: [00:05:34] So walk us through your career before December 2007, we’ll save that for later.

Kun: [00:05:42] Well before 2007, I graduated Berkeley in 04 and this was right after the dot com bust. And there weren’t really many, many job opportunities out there. And either you go work at Microsoft or you go to academia?

I personally didn’t feel like I wanted to just join the workforce immediately. I thought there was just a lot more I wanted to learn. And so I applied to grad school. I got into Carnegie Mellon and specializing in a Ph.D. in computer science, specializing in like programming language and database, and scalable systems.

And before, before I went to Carnegie Mellon, that summer I had a choice was either to take an internship at VMware, which was a hot startup back in the day. Now it’s a huge company. Or to go to this very small startup that people might not recognize today. It’s called hot or not. And the founders of the hot or not used to be Berkeley alum.

And so they were recruiting on campus and they pitched me and said, look, you’re only going to get this opportunity once a lifetime to go work at a real startup and to see what startup life is like. And you can always go back to VMware [inaudible]. So I said, that makes a lot of sense. And I did an internship for three months at hot or not, and that’s when I really learned how to be a product engineer, learned how to launch with product-market fit and what one point when was web 1.0. And so I think that was really when, what I learned the lesson there was, it’s actually not hard to build a startup, a web startup, especially if you’re an engineer with a little bit of product sense, you can literally code it all yourself.

And so just seeing that it’s actually not difficult. And the challenge that people really have is most people don’t know how straightforward it is or on willing to take the risk. I think that’s been huge, that was a huge learning. And so after, after that internship, I continued onto grad school and about six months into grad school, this was in Pittsburgh, snowing and it was just depressing. There was no sun. And I thought this kind of sucks. You know the faculty was great. The campus was great, but and if you go to academia, typically, you’re doing research for many years. You’re focusing on one topic that maybe you write a dissertation on that 20, 30 people in the world who really appreciate.

I just wanted to do something that I hopefully millions of people can appreciate. And so that’s when I started in Pittsburgh, my first company with all the lessons and the skills that I picked up at the Hot or Not internship. And that’s kind of how my entrepreneurship career really began.

Maggie: [00:08:59] Wow.

Bryan: [00:08:59] Wow. That’s, that’s really inspirational. You know, the fact that yeah, you know, it’s crazy how life works, right. You know you can get built up your experience in the startup field. It’s really opened up your horizon and be like, yo, this is possible. Like I can do this. You know, I think for most people, when they first start out is not visualizing, not properly visualizing themselves and realize that they themselves can do it.

And that’s a huge roadblock for a lot of us because what happens with our generation generations younger is a given the opportunity between a startup and a more established company. Our parents would push us towards an established company. You know you guys go here, a stable job. What are you, what are you complaining about? It’s a stable company, you know? But you took that risk and you came to a startup, not lets you at the whole foundation of where you are right now, you know, and entrepreneurship. It’s, it’s fantastic to hear this story because I would say giving you the two choices that you have. You know, like we said before, 80% will be on the safe side, but he went on the entrepreneurial side.

So we’ve really like hearing this and we want more listeners to hear this story, take these risks while you’re still young.

Maggie: [00:10:07] It’s like really reassuring to hear you say that it’s actually really easy to start a startup. Right. Because a lot of people may think, Oh, I can never do that. You know, that requires so many people, you know. That requires a lot of work, but you know, you, yourself, you were an engineer and even if you aren’t an engineer, you can always hire people, right.

Bryan: [00:10:26] Or meet people.

Maggie: [00:10:27] Or meet people and it’s all in your network. And it’s just really refreshing to hear you say that, that it’s really easy to actually start a startup.

Bryan: [00:10:35] Well, yeah, it’s cool. You know, so it makes everything sound a little bit easy.

Kun: [00:10:39] No, I think, I think it’s something that anyone can do. And I think that it just takes passion and it takes persistence. And you have to assume that if you are joining the workforce, you’re putting your productivity out there for someone else to hire, to pay you for your productivity. They’re not doing it as a charity. They’re doing it because they think they were going to get more out of you than literally the dollars that they’re paying you.

So, in a sense, you aren’t undervalued, right. With respect to any job you take. There is an aspect where you are being undervalued. And so how do you properly value yourself? Well, I think it’s just making sure that you get all of the upside. And part of that is you have to deal with the downside.

What if you’re not successful? What if the idea you’re working on is not the right idea, and you know, there’s plenty of ways that that can be addressed. And I think that’s actually the number one role as an entrepreneur is to mitigate downside risk and increase, reincrease upside. Entrepreneurs are looking to do this to get into the most risky thing ever.

Like they’re not, we’re not in the business of creating risk and jumping into risk we’re in the business of maximizing upside and minimizing the downside. Right. And so, I just think there’s to your point though, like it is something that’s a lot easier to do when you’re younger when you don’t have a family, so you don’t have to necessarily worry about balancing trade-offs.

And it’s certainly something that you can definitely do very well when you have a family when you have trade-offs, but it’s just so much easier to take, jump into all the risks and the reward when you’re younger.

Bryan: [00:12:24] Yeah. Wow. That’s pretty darn inspirational. So after you started your first company, what happened with that company that was biggest learning lesson from that? And how did you apply to make Crunchyroll so successful?

Kun: [00:12:39] The the first company was just, I think a test in product-market fit. We launched quite a few ideas. We launched an idea around a LinkedIn type of a service and shared it with our friends. They didn’t take off and, you know, we weren’t discouraged.

We’re like, well it’s and it was myself and two other founders. One was that technical founder, like me, a co-founder. And then the other was more of a business-oriented co-founder. And the next idea we tried was we wanted to build a calendar app, basically, back then, there wasn’t. There wasn’t such a thing as like, Responsive UI. And every, every action you take on a webpage costs, a webpage to have to reload and refresh. And right when we, right, when we launched this calendar application was right when Microsoft first released the background requests for HTML. So you could write requests that updated the webpage without having the webpage reload.

And so what we built was we built kind of like Google calendar where you can create calendar events. And we thought that was the coolest thing ever. And we were competing with other companies. We’re just trying to do this as a space. And it was, it was useful. It was growing, but not, not that quickly. And so after a few months we’re like, Okay, let’s try something else.

And so we pivoted to the next idea, which was building on a social layer on top of Google maps and Google maps just opened up their API then. And, I remember we had together the app in like a weekend and it was just create a map. And share this link with your friends and your friends can add themselves to a pin on the map and we launched it and within a week, it just blew up.

And so I think the lesson is just be a persistent product-market fit test really quickly. If it doesn’t work in a couple of weeks or a couple of months, try a different idea. And I don’t think. That’s this is one of the big secrets of entrepreneurship. It doesn’t matter how many times you try an idea and it doesn’t work. It just matters if you try an idea and it works once and then you’re successful.

Bryan: [00:14:53] Yeah. That in itself is also a really good story, you know, because I feel like a lot of entrepreneurs out there, especially new ones, we get kind of discouraged. Because I think for our culture, we’re not really used to failing.

They’re like, Oh yeah, I’ve got straight a’s, like really good school. All of a sudden, like you fail, you know, most people do take that pretty personally and they can’t recover from it. And like you said before, all you need is one, you know, keep throwing ideas out there, but just don’t throw it out there. You have to have some sort of strategic plan, you know, and just be prepared too, and it also comes back to thinking bigger. You know, like you had to envision yourself and think bigger by what would happen if this actually blew up yet to kind of picture yourself in the process because if it comes too quickly, you’re not really sure how to deal with that. Then the company will not grow as quickly. You know, like you can’t scale as fast because you weren’t mentally ready for it. Oh my God. It’s so much decisions to make. So keep in mind that you have to think big, be able to pivot like you mentioned for find a product-market fit, important.  Every single founder that we had in the podcast talked about how important it is to find a product-market fit.

Once you find it, you seize the moment, you know, and you make your grow. And he’s exactly what you guys did. And like you found it and you seized it. So kind of walk us through like the humble beginnings of Crunchyroll. Now I know you guys started in December 2007.

And what are your other interviews that we watched? You know, you traveled to Japan to figure out the licensing in 2008. So we want to listen to you. Like, that’s a very humble beginning.

Maggie: [00:16:24] And love to know, like, how did you meet each and every one of the co-founders? And how did that inspiration draw between all of you guys together?

Kun: [00:16:33] So with my first startup, we we were acquired by a company in the Bay area. And so that’s when I moved from Pittsburgh back to the Bay area. I think at that time, One entrepreneurship wasn’t really as embraced as it is today. And two, I would say my parents were born in China and certainly the Chinese entrepreneurship market wasn’t really there. So well thinking about what entrepreneurship means and, you know, you’re starting doing a startup and all that is it’s a little bit different. Right. And so, the first I remember one of the first things my parents said was after I sold my company for like millions of dollars, they were like, So you’re going to go back to grad school, right? I’m like, yeah. I don’t know. I don’t think about, I don’t think so. But, I think, so so that. With that, I moved to to the Bay area and started working at the company that acquired us, which was called a slide, founded by the former CTO of PayPal. And during that process, just back in the Bay area, reconnected with friends mostly from Berkeley days.

And we got together and we said, Hey, why don’t we just throw some ideas on the wall and see what sticks? And so about a year in this was closer to end of 2006, we just started coding and tooling on ideas, and we’re all engineers. And we all had plenty of like stupid ideas, how we can throw against the wall. And so we just started trying out ideas and one of them was, can we, you know, can we build a video site? Part of it was really just the technical like the challenge of building a video site because back in 2006, there wasn’t really technology can get, you can take off the shelf. If you want it to encode video, you literally had to build a Linux box and install FFmpeg, and tweak it yourself. And all of that, there wasn’t really a great way of serving video. There wasn’t a great way of distributing it. And so we had to figure all that out and it was right when YouTube started taking off as well. And so the video was kind of the crazier on wanting to do.

And so we built a really simple video-sharing website. We shared it with our friends and they just, they happen to upload a lot of Asian content. They couldn’t normally watch in the US and so that’s kind of how, that’s the kind of early days of Crunchyroll, as well as, you know, getting back, reconnecting with friends from Berkeley and just, roll that off.

Bryan: [00:19:17] That does really cool. You guys really solve a big market need. Prior to 2006… I mean, prior to Crunchyroll in 2007, 2008. I was one of those people that used to torrent all the animes from Japan because I couldn’t find a website to watch it. You know, there weren’t any legitimate sources. So you kind of guess like what episodes you download and you hope that it didn’t give you a virus.

Maggie: [00:19:43] Yeah.  I know how you would go to, like, I remember going to random websites and like hoping that I wouldn’t download a virus onto my HP laptop. So, and then like Crunchyroll. Like I discovered Crunchyroll, I was like the only thing that was like so seamless and like the quality was good. Everything was just very organized.

Bryan: [00:20:03] And the most ironic thing is when you’re searching the web to download these animes illegally, that’s when Crunchyroll came up. What is this platform? You know, so that’s how I discovered it at least like 2008, 2009 was when I was looking for different ways to watch my favorite animes.

Kun: [00:20:22] And that’s kind of one of the things that I think really resonated with me, certainly every entrepreneur is different. Some entrepreneurs are really good at identifying problems out in the market and solving them. For me, how I really approached these problems is I’m really trying to solve a problem for myself. Like if I don’t solve a problem for myself, then I might not be as passionate or might not care as much, or I might not even no the use case or why the problem needs to be solved or deserves to be solved.

And so a lot of the problems that I, later on, counter including control is just a problem that I personally have. And like you, my friends and I would just wait until Naruto launches every week. And it would be like, I don’t know, 3:00 AM in the morning. And then we’re like waiting for that to drop.

And we’re like, okay, the first time that it drops, it’s like one uploader and like 5,000 downloaders, everyone’s going to stop waiting for it. You don’t know if you’re going to get a virus or not. And it’s just a shitty experience. And so we said, this has to be better. Clearly you can stream video on the internet. So why isn’t anime and other premium content streamed in the same way, you could just press one click and the minutes available on TV in Japan, it’s available on the internet. So, that was a problem that we had, our friends had. And that was a problem that I think a lot of people had, we just didn’t know it at the time. And, I think that’s the problem, the Crunchyroll solved.

Maggie: [00:21:50] Yeah, I think that’s really important because if you, yourself, you know, the co-founders have that same problem and your audience recognizes that you guys see that as a problem, then they will be able to see that passion through your perspective. Right? If they can tell that you are not passionate about it, then obviously your customers aren’t going to be passionate about it. So that’s really important for the co-founders to have that passion, to have that fire so that they know what it is that they need to solve. Right.

Bryan: [00:22:19] Draws in parallel how we started Asian Hustle Network.

You want it to find a community where Asian people will support each other, you know? And we can really find that? Like, we’re looking around like a line. We couldn’t really find a community where people selflessly want to help each other and to fit our, this sounds kind of weird fit our personal needs, we created the Asian Hustle Network.

Cause you wanted to hear more stories of people like yourself, like us, or just starting out. Well, we realized talking to our friends as we all feel lonely in this process, because you don’t know who else is doing it. And if I were just starting out and I hear about you, I’ll be like, man, this guys Superman, when he must have came from a super-rich family, parents are super supportive, I can’t be like him, you know?

And having you break down your story from the very beginning shows us, Hey, we do have this common ground that we can listen to each other and help each other. And one of the bigger inspiration that very similar to you, we love japan, you know, like we love Japanese culture. And when we were in Japan, we were at the shrine in Tokyo, we’re reading everyone’s story tablets from a wall.

We wanted to bring that inspiration back. Cause we knew that it was going to be be good for our community. So so we had a format in Asian Hustle Network, where everybody shared their story, you know, where you guys come from? What do you do? And we found, ironically, we found our product-market fit and it grew exponentially.

So very similar story to your humble beginnings and ours it’s because you found that product-market fit based on what you felt was needed. And we did the same. Asian hustle Network. So glad to know that history does repeat itself and the way you tell your story, like, Oh, we made the right decision.

That’s awesome. So, you know, as you were, let’s trace back a little bit, did you raise funding for your first company or did you… was it all bootstrap and what’s, what’s your, what’s your view on like bootstrapping towards and raising money?

Kun: [00:24:19] The first company was bootstrapped. I think we raised a little bit from angels, but we didn’t really need the money. And obviously with Crunchyroll, we raised series A and then B and so forth. I think it just it just really depends, either whether you need the financing to really accelerate your growth or if you don’t, there’s plenty of businesses that I think are great as bootstrap businesses, ones that aren’t necessarily as capital intensive. Ones that you don’t necessarily need to make a lot of fixed cost investments. Ones that are in spaces where they’re on competitors that have a lot of money to compete. So so like there’s plenty of reasons to both do both. I think it’s just something you have to work through what makes sense for the entrepreneur. And, and when you. And there’s certainly trade-offs. When you are taking in someone else’s money, you obviously want to do right by them. You want to make sure that there’s a return on their investment. You want to make sure that there’s a good outcome for them. And a lot of times the first people who invest are friends or family.

And then, and then your institutional investors. Definitely having investors forces you to be in growth mode. At least back then maybe now that there’s a shift more towards profitability, but also I think it adds a lot more, as a bit more of a discipline, at least for me, because when you’re bootstrapping, it’s just you and you kind of do whatever you want. When you have a formal board, then you need to, you need to level up your game in certain respects. You’re still doing the same thing, but you do need to think about, how to message to investors, how to manage your board, how to get the most out of them and how to think about the growth of the company. Not just in terms of absolute growth, but also growth as relates to dilution and cap table and, and those kinds of things.

Bryan: [00:26:29] Yeah. Cause I know, you know, when you first started out Crunchyrolls, it’s mainly just between video, but you’ve found a business model that works. Can you kind of walk us through like how you explore the different business models?

Cause I think, one of the bigger challenges that most people faces, you know, when you have a strong fan base and you have a strong community that really believes in your vision, most times it doesn’t exactly translate to monetary reasons and, you know, getting people to donate and buy into your descriptions extremely hard.

What was your initial challenge with Crunchyroll and getting subscribers to like believe in you guys and start paying you guys for your service.

Kun: [00:27:08] So this was one of them, at least in the early days, this was one of the biggest challenges for us was how do we make the business side work? We know there’s a lot of people who love anime. That’s already clear because there’s plenty of people watching anime before we arrived. What we don’t know is, were they willing to pay for anime? And if you look at the audience before Crunchyroll, there’s certainly plenty of people who buy home videos, DVDs, or go to theatrical to watch or watch on TV with ad support.

But it wasn’t clear, there would be a subscription, a subscriber audience. And I think the naysayers at the time were like, Oh, these are just anime pirates. Like they’re never going to pay you the minute you put up a subscription, they’re just going to go somewhere else. Right? Like, I think we never accepted that. We just knew that if you’re really passionate about something and there are a reason and a value to being a subscriber or to or to paying for service. And I think you will. And with Crunchyroll and generally, I would say entertainment, people love entertainment. And entertainment, if you think about it is is so inexpensive. You’re talking about the price of a Big Mac, like four or five bucks a month, and you can be entertained however many hours you want. Like there’s no end to that. So I would say the value of entertainment is quite inexpensive.

Now, there there is a difference between. What kind of content you’re putting in front of audience.

Certainly if you try to get people to pay for YouTube content, maybe they won’t just because there’s so much out there and it’s already free, but with animate and enemy’s very premium, it’s on TV. It costs a lot to make, and there’s a very high-quality bar. our bed was, people were willing to. Pay to subscribe to it.

And so we, we had an ad service. We had a transactional, like download the download to run and download to own. And in beginning of 2009, we turned on our subscription model. And when we were doing our subscription business, I think the number one thing to figure out when you have a subscription business period is.

What is, what is the value proposition of the subscription service? And that that’s like very important. Initially what we thought was what is the value proposition? Well, we know that we are trying to go after super fans in the beginning, not casual users. With super fans, what do they care about? Well, there’s few things they care about. They care about like quality, they care about ease of use, but what we found and this was kind of what we believed as well is number one and foremost is they cared about access, the immediacy of access. If you think about the analogy to when you were waiting for a torrent, you’re just waiting and you’re like, man, if I could pay a dollar or $2 to just get it, now that’d be so awesome. Right?

So this subscription service in the beginning was really built around immediacy of access. You can get this show the minute it comes out in Japan on TV. Get it faster than anyone else. You can play right now. And you can talk about it with your friends at the water cooler the next day. And so that was the value proposition we focused on at the beginning.

Maggie: [00:30:26] Yeah, I think that’s a really good point because nowadays it’s like, we’re living in such a fast-paced world that people are very reluctant to wait. So in terms of like access, you know, people want to get it right away.

Bryan: [00:30:38] I think the timing was awesome. Really good because I remember whenever I used to wake up early to download it and to see that it takes five to six hours to finish. I’m like, alright, I gotta get up at four, click on download and go back to sleep. By the time I wake up at 10:00 AM, the anime’s ready. So definitely that point, I remember that that time period exactly. You know you create access for it. Of course, I was going to pay for it.

Maggie: [00:31:05] Yeah.

Bryan: [00:31:06] That’s better than waiting six hours.

Maggie: [00:31:10] In terms of the content that you guys were putting out, I’d love to know, like when you guys first started in 2007, was it always your guys as an intention to do you know, anime or did it naturally kind of trend towards that direction based on what the viewers wanted to see, because I know you guys were saying like you were doing K dramas, J dramas that were on there as well.

So I just want to love, I would love to know, like, you know, did it always was always your intention to go, you know, strictly anime or did it kind of just trend towards that?

Bryan: [00:31:43] I want to add more towards that too? Is that the community you built out the very beginning? Like, did they help you make that decision, or did you make the decision? All right guys, I’m the boss here.

Maggie: [00:31:53] Because it’s kind of like, there’s a really big, like Crunchyroll family, right? This is very like, camaraderie kind of based feeling. And you know, we’d love to just pick your brain on, like, if you guys were like listening to what the viewers were seeing, like, I love to see more content in this area. And if you guys took that feedback and made changes to Crunchyroll.

Kun: [00:32:14] That’s a great question. In the very  beginning, it was Crunchyroll is a user-contributed platform, meaning people upload content. And they upload content they couldn’t normally watch here. And that included Korean dramas, J dramas, various live-action, a little bit of eSports.

And what we did was we, we try to help facilitate a community. And we always felt that at least with our with ourselves, the model we were following was all the way back in college, you would wait for the latest anime episode to drop, and then you would just get like the whole floor together and then just watch anime together and then we’ll talk about it. And you would like to speculate on what’s gonna happen next. And so community features really just made a lot of sense to us from the very beginning. And so the, you know, right after we, we pushed out Crunchyroll and it was serving video. The next thing we built was we both have a form feature.

And then we built like a social networking type of experience. And so we basically built a lot of the community features, expecting that people would be using them because that’s how we… we weren’t consuming anime in real life.

And, what we found was that while the commune features were really awesome for anime, and that was the most popular engagement, it wasn’t as strong in other categories. And so even though we obviously felt like Anime was the right focus for Crunchyroll, that was also validated by the community and by the engagement of the community around anime. And so it was a very easy decision to say, okay, we’re just gonna really double down on, on, on anime.

I think that the challenging part for us was not that we weren’t doubling down anime, was more of should we exclude other content from Crunchyroll that wasn’t anime at all. And that took actually a few years for us to kind of work through it and to kind of figure out.

Bryan: [00:34:17] Wow. That’s really crazy.

It means this for me is it’s a little bit more of a curiosity question, but how’d you work through the licensing for all the animes? Did you fly to Japan and be like literally door knocking all the studios and be like, Hey, yeah, can we start formal contract to make sure we’re doing things legally or how’d you get? Cause I know in Japan has so many anime studios, you know, like how’d you get access to all the licensing stuff?

Kun: [00:34:42] Yeah. Yeah, pretty much just knocking on doors. So right after we received these defunding, and this was the beginning of 2008, end of 2007. We said okay, well we need to figure out our licensed content.

And at that time we were so engineers, none of us knew anything about content licensing. And I think the other engineers work a little bit better coder than I was. And so I’m like, Okay. I have to go and figure out the business side. I don’t like. And it was a very, very brute force method.

The first thing I did was I looked for friends, or friends of friends that I knew who did any sort of business in Japan. Contacted them to say, Hey, who do you know in Japan? You’ll keep asking. And how I found someone who has a little bit of connection to content and media. And so I then just flew out to Japan, met with him, and then he knew a friend who was even more adjacent to entertainment and that person, you know, it help interest more companies.

And then it’s just every, every meeting we were trying to like find someone who was closer to anime until we found someone who was actually getting anime. And then we just, you know, we took that meeting. And then every meeting in that we took, this seems kind of awkward if you were to do it in the US, but every meeting we took, we were like, at the end of the meeting, we’re like, So, who else do you know, can you, and it’s almost like if you go to, I don’t know, go to Google today and you ask some Google person, can you introduce us to Facebook?

You know, like, it just seems so naive, but it worked because anime is a pretty small, pretty close-knit industry. And people generally, genuinely wanted to just introduce us to other people. Cause I think, I think we were interesting, we’re strange ,we’re foreigners. And so that’s how we were able to, over the course of about a year, meet enough people in the anime industry to then start talking shop.

And that was a completely separate process because when we went in, it was like, well, we actually don’t license our content, but we’re streaming it. Surprise. But by the way, with the best of intentions we were, you know, we’re so passionate. We think there’s a future to building this thing on the internet. And back then there was no internet business. And we said either it’d be licensed as your content, or we’re happy to just take it all down. But if we do that, then your fans would go back to, you know, all the dark place on the internet. If you’re not really going to talk to them, you’re not gonna be able to monetize them. You’re not gonna be able to engage them. And so we said, we want to create a bright Walnut place for all the anime fans. And so I think with that messaging and a lot of persistence were able to still be convincing partners to officially work with us.

Maggie: [00:37:33] That’s amazing. Yeah. That’s a crazy story. I think like a reason why they were so welcoming with open arms as well, because, you know, anime, it was just kind of solely in Japan. Right. And they wanted more western influence as well. Right. And can you talk a little bit about, you know, how they took it, what their feedback was and were they open to, you know, bringing anime more into the Western culture? Cause now you see like, anime is so like intertwined with the Western culture, you know, as opposed to back then, it was mostly in Japan, but nowadays we have like so many Americans are like obsessed with anime.

Bryan: [00:38:11] Yeah. I do want to add the, you know, Kun is the Asian hustler. He’s the Asian hustle entire network.

Maggie: [00:38:18] Yeah. I think that’s a big part of why it’s so intertwined with Western culture is because of Crunchyroll, right. Because… it is, yeah. it’s just so easy access and, you know, whenever we think about anime, a lot of us, we think about Crunchyroll and we’re able to make that distinction right away.

Yeah. So yeah. Talk a little bit about, you know, how they were able to take in like what their opinions were and what, what were, what were their perspectives in terms of like bringing anime into the Western culture?

Kun: [00:38:50] So there’s a lot to unpack there and I don’t think there’s a there’s a clear answer. I think it’s really just one of…  it’s a continuous, ongoing process. And I think when you talk about something as nuanced, as cultural phenomenons pop culture, it’s something that continues to evolve.  And I think that the backdrop to all of this was, there was a point, there was a period of time and it’s still happening now, but there was a period of time in which the only anime brought into the US was dubbed and edited. And that was because people at the time thought, well, this product anime is too Japanese, like who would want to listen to Japanese audio? And, so all of it was edited all through was dubbed with English, voice actors, and that’s the product you experienced. And I think what really drove the adaption of anime is partially that, but a big part of it was also this underground movement of fans who really wanted the Japanese experience.

And they wanted Japanese audio. They wanted to hear what the original actor or actresses performance of the show is. And sometimes there’s something more magical about listening to original audio, because you feel like you’re getting something even richer experience. When you listen to the English version, it just seems like, Oh, that’s it.

Like the Japanese audio feels like you’re adding more to it. And this is the same for a lot of foreign continents. It’s brought over in language. And so, when we were doing Crunchyroll at the time, I would say it was still very much a like a uphill battle in terms of convincing others that subtitles was the way to go. When people mostly were thought, well, well, of course, you just localize it and delve it. Why would you want to just do subtitles? And we said, no, this is their authentic experience. This is what something like fans really, really wanted to do. I can imagine. Imagine if you were watching, like Avengers or listening to music, but all of it was translated into a different language. Like that just seems not as natural. And so I think over time with that’s done is created a fan base of millions, tens, and hundreds of those people all over the world that appreciates content for what it was not a localized version, but the content itself.

And, a lot of those people grow up. And they themselves become creators. And so that I think has a really powerful effect on, they make bringing anime into the pop culture, and same way from any other, foreign content, like K-pop like that’s another great example of not in language content, that’s it well embraced as part of the pop culture.

So there’s a separate thread that. I think you brought up about it. What does it mean for creators? Right? In Japan in the first few years, the people we talked to were mostly business people, and they’re really more interested in expanding the business side of anime. Meaning how do you monetize animate better? How do you find more partners to distribute? How do you find people who can reach more audiences globally? There was a different conversation about what happens on the creative side and the creative side. I think it’s really one where it’s kind of tough to not be a, it has to be more of a collaboration project.

If you are already a Japanese creator. And, you know, you’re clearly influenced by domestic animated content. You’re clearly influenced by Disney. How else is there a way to collaborate? Well, there’s not a lot of great ways to collaborate beyond that. What you’re really looking for is someone not from Japan who has a non-Japanese local sensibility you can work with to make the product different. Right. I grew up, we’re all, we’re all a function of the environment and our upbringings. And so what you know is kind of what you know, so for someone in Japan to have not grown up outside of Japan to make something super international is kind of like it happens by chance. Right? So if you were to want to do it in a more systematic way, I think one of the only ways to do it is to create more fans globally. Have those fans scroll up. Understanding why anime is so powerful and what the sensibilities of anime are, but to still be grounded in the US or Europe or China or wherever, and then to want to create animate themselves, but not the animate that’s known, created in Japan, but more towards fans like them.

Maggie: [00:43:38] Yeah. Yeah.

Bryan: [00:43:40] Wow. That’s a really great answer. You know, I didn’t want to trace back a little bit too. I think for entrepreneurs just starting out, there’s a lot of pride in Eagle nowadays. It’s like, you don’t want to do the nitty-gritty stuff, but you have to go up there and door knock and get yourself dirty because a huge fantasy right now, as you raised a lot of money, you just harvest and let us do it. But you kind of, when you first start out, you kind of have to do that part. You really understand, like, what are the true business needs? What are the customers really want? Like, these are details that you can wholly miss out on if you outsource it and you hire someone else to do it, especially as a founder, you know? And, you know, from, I love listening to your stories like, Hey, I talked to so and so do you know so-and-so? That’s the type of person I am originally before Asian Hustle Network and everything else. Cause before this always curious I’m real estate. So I’m like, so do you know a lender? Do you know a property manager, do you know a developer and it’s crazy how people are very open to sharing these resources.

So you really have to like put yourself in a position where you have to ask it, you don’t ask, you never get, you know, and that’s something that I guess in Asian culture we don’t typically do because that’s seen as a weakness, you know, like, Oh, why are you asking for help? Why are you asking? Cause you don’t know.

Because in a nationality, these qualities will help push you forward even more, kind of have to lose the Asian this little bit. You put yourself in a growth mindset. But Hey, you can, and you can find these resources and to link it back to Asian Hustle Network. One of the biggest value adds of our network is that we as a network, want to connect you to the right resources.

You know, you’re looking for lenders, they’re looking for VCs, they’re looking for someone who’s industry, just post inside the group and you’ll find that person in that industry. And it always surprises us because we never really intended to be this way. How collaborative people really are. You know, it totally blows their mind that the values that we have as Asians growing up are similar. It doesn’t matter if you’re in the United States, China, Australia, Canada, Europe, anywhere in the world. You have these core Asian values that you’re polite. That you’re open to help each other. You have a commonality. And once people see that as like, Hey, I want to help you succeed too, because let’s be real you’re like family to me. We have a lot of, a lot of things in common, you know? And it’s really cool seeing that unfold within the Asian community. You have any other questions?

Maggie: [00:46:09] I guess I would love to know, you know, what would you say to someone who is trying to be an entrepreneur? You know, you’ve been an entrepreneur for so long now, and you have a vast experience in that field. And, you know, we have a lot of listeners or we’re going to have a lot of listeners to this podcast who are aspiring entrepreneurs. You just would love to pick your brain on what kind of advice you could give to aspiring entrepreneurs who would be listening to this podcast?

Kun: [00:46:39] I think it comes down to some of the key lessons that I’ve learned. And one of the most important things I think is being willing to roll up your sleeves and to go and just do the work and do the hard work. And I think that’s what separates a lot of ideas from actual companies, there’s plenty of great ideas out there. What really it comes down to is execution. And I think execution starts with the entrepreneur or the founder like they need to be willing to roll their sleeves and to do the work, any work, whatever work it takes to get to the next step. And I think a lot of people miss that, it’s actually easier today to do that than many years ago, just because the tools are so readily available, right.

10 years ago, if you were to start an internet company, you literally had to have a development team. Otherwise, you can’t, you can’t, there’s nothing you can do. Today, you can find like tons of products on the internet that lets you without coding piece together an internet service or whatever like there’s just so many ways that you can be an entrepreneur without you even needing to worry about coding.

You just need to come up with a great idea. Would you be willing to go hustle? And so I just think first and foremost, just focus on like execution and just getting it done.

Bryan: [00:48:10] That’s amazing. I guess I just want to add one more part to it without Kun creating Crunchyroll, I think we talked about this at the beginning before the podcast. I know without him creating Crunchyroll. I think I wouldn’t even be here right now because I feel like most of my life lessons are shaped from watching a lot of anime.

You know, you know, a lot of things that my, my parents would teach me is that you have to stay in isolation. You can’t help someone else cause they’ll overtake you. Whereas when I pro licensed, for example, a group watching Naruto is like, you know, you can work together with family and all that stuff. And I didn’t realize how much of a positive effect anime had in my life until I was giving a speech recently. And I realized that most of the lessons that I was telling people, this is because I was watching a lot of animes.

Maggie: [00:48:57] I do find a lot of inspiration from anime as well. I find myself dreaming about certain episodes or like I’ll be writing in my journal and I’ll be like, what would this character do? It’s just very inspirational.

Bryan: [00:49:09] Yeah. So credit to you a lot without you creating, you know, Crunchyroll, I wouldn’t even be here talking to you.

Kun: [00:49:15] Thank you.

Bryan: [00:49:18] Yeah, appreciate it. Yeah. How can our listeners find out more about you reach out to you?

Kun: [00:49:24] Just find me on  LinkedIn and ping me, I’m available. I’m always willing to be helpful and, let me know how I can help.

Bryan: [00:49:35] Definitely. Yeah. Thank you so much for being on the Asian Hustle Network podcast. It was super fun. We appreciate it and yeah, we’ll definitely be chatting again pretty soon.

Maggie: [00:49:45] It’s great to have you on.

Kun: [00:49:46] My pleasure. Thanks for having me.

Maggie: [00:49:48] Thank you so much, Kim.

Bryan: [00:49:49] Thank you.

Outro: [00:49:52] Hey guys, we hope you enjoy this episode. Please subscribe to the show.

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