Episode 10

Kun Gao ·  Building the World’s Most Popular Anime Brand, Crunchyroll

“I did an internship for three months at Hot or Not. And that's when I really learned on how to be a product engineer, learned how to launch with product-market fit. This was web 1.0. 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. Most people don't know how straightforward it is or are unwilling to take the risk.”

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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Podcast Transcript

Kun Gao

Intro: (00:00:00) Hey guys, welcome to Asian Hustle Network Podcast, my name is Bryan and my name is Maggie. 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: (00:00:00) Today we have a very special guest Kun Gao the co-founder of Crunchyroll. Kun, welcome to the show.

Kun: (00:00:14) Thanks for having me, guys.

Bryan: (00:00:17) We’re super excited to have you here huge fans ever since we were young kids, we watched a lot of anime, like no lie, so much anime on Crunchyroll. I would say it’s a huge integration in my childhood growing up, I constantly referred to Crunchyroll whenever I need to look for new inspiration, new anime, especially watching Bleach and Naruto. I couldn’t find anywhere else to watch it. So, it was Crunchyroll and it’s been a huge part of our culture, so super happy to have you here.

Maggie: (00:00:47) Yeah, thanks for taking this time, to be on the podcast, Kun.  

Kun: (00:00:53) It’s my pleasure.   

Bryan: (00:00:53) Kun, can you kind of tell us a little bit about who you are, what your upbringing was like, where’d you grow up and we want to learn a lot more about you?

Kun: (00:01:03) I was born in China, Beijing moved to the US, 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. My upbringing, I think pretty typical immigrant story moving to the US, having to learn English, having to try to fit in, and just growing up to remember and just life was pretty 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.

Maggie: (00:02:03) That’s amazing. Can you talk a little bit about your upbringing and your childhood? What were your parents like? Were you living in a strict Asian household or where they kind of laissez-faire?   

Kun: (00:02:16) Oh, very, very strict, typical Asian that’s right. My parents were super supportive to get me excited about science and math. And I think they aspire for me to be a doctor. I think at a certain point, I want to be an engineer, which was fine as well. I think those are the two choices doctor, lawyers, okay, too, and then with engineering, it was just, pushing me to participate in science fairs and to have academic achievement and then pushing me to the best engineering schools, which was why I applied and got into, Berkeley.  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 leaned on in the later years in grad school or in life.

Bryan: (00:03:23) Well, that’s pretty amazing too. I think we all felt that kind of pressure right from my parents. Hey, I want you to be a doctor, and lawyer. My parents 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.

And it’s crazy because at the time growing up, man, what am I, why are 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, creates a foundation for you to draw on for experiences when you’re hitting hard shifts, we’re hitting roadblocks.

So, whatever this, maybe because I’m getting older in my thirties now, I’m thinking about, wow, like when maybe my parents were right, there were so strict on me that it turned out for the better, but at the same time, listen to your story about you going to your entrepreneurial path is inspirational for our newer generation.

Cause a lot of us don’t want to follow that conventional path. We had the engineers; you have to be lawyers. You have to be a doctor. You don’t have to necessarily go down that path. There are more options now and it feels the company that you built Crunchyroll is built on passion. And that’s what we want to highlight in this podcast. It’s awesome.

Maggie: (00:04:41) I think it’s amazing that you did follow your passion because a lot of parents, like you, said, your parents wanted you to become a doctor. And we see that within every Asian household, 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 very stable job, right. But they don’t understand that there are 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 it.

But once you do show them hey, I can make money doing Crunchyroll and putting out anime shows that’s when they’re oh, that’s interesting.

Bryan: (00:05:20) So walk us through your career before December 2007.

Kun: (00:05:28) Well before 2007, I graduated Berkeley in ‘04 and this was right, right after the.com burst and there weren’t many, many job opportunities out there. And either you go work at Microsoft or you go to academia? I didn’t feel 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 and I got into Carnegie Mellon and specializing in Ph.D. in computer science, specializing in programming language and database and, and scalable systems and before, before I went to Carnegie Mellon, that summer I had a choice. It was either to take an internship at VM-ware, 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 ex-alum. And so, they were recruiting on campus and they just 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 whenever. 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 learn how to be a product engineer, learn how to launch with the product-market fit, and just was one point when was web 1.0.

And so, I think that was really what I learned the lesson there was. It’s not hard to build a startup, a web startup, especially if you’re an engineer with a little bit of product sense, you can code it all yourself. And so just seeing that it’s not difficult. And the challenge that people have is most people don’t know how straightforward it is or are willing to take the risk.

I think that’s been huge. That was a huge learning and so after that internship, I continued on to 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, and this kind of sucks. The faculty was great and the campus was great.

But 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 can 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’ve picked up at the hotter internship. And that’s kind of how my entrepreneurship career,

Bryan: (00:08:52) Wow. That’s, that’s really inspirational. It’s the fact that you had, it’s crazy how life works, right? You built your experience in the startup field. It’s open up your horizon and be like, yo, this is possible. I can do this.

I think most people, when they first start are not properly visualizing themselves and realize that they can do it. And that’s a huge roadblock for a lot of us because of what happened with our generations younger is given the opportunity between a startup and a more established company.

Our parents have pushed us towards the established company. You guys go here, a stable job. What are you complaining about? It’s a stable company, but you took that risk and you came to a startup, not letting you at the whole foundation of where you are right now, and entrepreneurship.

It’s fantastic to hear this story because I would say given the two choices that you have. As we said before, 80% will be on the safe side, but he went on the entrepreneurial side. So, we hear this and we want more listeners to hear this story, take these risks while you’re still young.

Maggie: (00:09:59) It’s reassuring to hear you say that it’s easy to start a startup right. Because a lot of people may think, oh, I can never do that. That requires so many people, that requires a lot of work, but yourself, you were an engineer and even if you aren’t an engineer, you can always hire people, right. 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 start a startup.

Bryan: (00:10:27) Well then again, it’s Kun, it makes everything sound a little bit easy.

Kun: (00:10:32) 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 product out there for someone else to hire, to pay 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. concerning 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 and parts 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 there are plenty of ways that that can be addressed? And I think that the number one role as an entrepreneur is, to mitigate downside risk and increase upside entrepreneurs are looking to do this too, to get into the riskiest thing ever.

There, we’re not in the business of creating risk and jumping into risk we’re in the business of maximizing the upside and minimizing the downside right and so I just think there’s it to your point though, it is 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 do very well when you have a family when you have trade-offs, but it’s just so much easier to jump into all of the risks and the reward when you’re younger.

Bryan: (00:12:20) That’s, that’s pretty darn inspirational. So, after you started your first company, what happened with that company? That was the biggest learning lesson from that. And how did you apply to make Crunchyroll successful?

Kun: (00:12:35) The first company was just a test in product-market fit. We launched quite a few ideas. We launched an idea around a LinkedIn type of service and shared it with our friends. It didn’t take off and we weren’t discouraged.

We were like, well it’s and it was myself and two other, two other founders. One was a 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 want it to build, a calendar app back then, there wasn’t such a thing as responsive UI, and every action you take on a webpage cost, a web page to have to reload and refresh.

And right when we launched our calendar application, right when Microsoft first released, the background requests for HTML. So, you could write requests that updated the webpage without having the webpage where we load. And so, what we built was built kind of Google calendar where you can create calendar events.

We thought that was the coolest thing ever. And we were competing with other companies. We’re just trying to do this in this space. And it was, it was useful. It was growing, but not that quickly and so after a few months, okay, let’s try something else and so we pivot it to the next idea, which was building on a social layer on top of Google maps, and Google maps just opened up their API event.

And I remember we had together with the app is like a weekend and it was just. And share this link with your friends and your friends can add themselves to a pin on the map we launched it and then within a week, it just blew up. And so, I think the lesson is just to persistent the product-market fit test quickly.

If it doesn’t work in a couple of weeks or a couple of months, try a different idea. And I don’t know. 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 a new idea and it works once and then you’re successful.

Bryan: (00:14:52) That’s also a really good story 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 used to failing. They’re like, oh yeah, I got straight A’s and like a really good school, all of a sudden, as you fail, most people do take that pretty personally and they can’t recover from it.

And you said before, all you need is one, keep throwing ideas out there, but just don’t throw them out there. You have to have some sort of strategic plan, and just, be prepared to, and it comes that too. You had to envision yourself and think bigger about what would happen if this blew up yet kind of picture yourself in the process because if it comes too quickly, you’re not sure how to deal with that. Then the company will not grow as quickly. You can’t scale as fast because you weren’t mentally ready for it. Oh my God. So many decisions to make. So, keep in mind that you have to think big, and be able to pivot, like you mentioned, to find the product-market fit ultra-important.

Every single founder that we had in the podcast talked about how important it is to find a product-market fit that you find that you seize the moment, and you make you grow, and exactly what you guys did and you found it, you seized it. So, kind of walk us through the humble beginnings of Crunchyroll.

Now I know you guys started in December 2007. And what are your other interviews that be watched? You traveled to Japan to figure out the licensing in 2008. So, we want to listen to you that’s a very humble beginning.

Maggie: (00:16:23) I love to know how did you meet every one of the co-founders and how did that inspiration draw all of you guys together?

Kun: (00:16:32) With my first startup, we were acquired by a company in the Bay area and so that’s when I moved from Pittsburgh too, back-to-back to the Bay area and I think at that time, 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 there at that time.

So, the people’s thinking about what entrepreneurship means and you’re starting doing a startup and all that is 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, So, you’re going to go back to grad school, right? I don’t know. I don’t think so but I think so that would, that I moved to the bay area and started working at the company that acquired 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 the end of 2006 we just started coding and tooling and ideas. Engineers and we all had plenty of like stupid ideas, about how we can throw it against the wall. And so, we just started trying out ideas and one of them was, can we build a video site?

Part of it was just, the technical challenge of building a video site because back in 2006, there wasn’t technology. You can get, you can take off the shelf. If you want it to encode video, you had built a Linux box and installed FFM, peg, and tweak it yourself and all of that.

There wasn’t a great way of serving video. There wasn’t a great way of like 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 showing whether.

We shared it with our friends and they just, happen to upload a lot of Asian content. They couldn’t normally watch in the US and so that’s the kind of early days of Crunchyroll as well as getting back to reconnecting with friends from Berkeley and just all that off.

Bryan: (00:19:24) That does sound cool. You guys solve a big market need before 2006. I mean, before Crunchyroll 2007, 2008. I was one of those people the used torrents to download animes, from Japan, because I couldn’t find a website to watch them. There weren’t any legitimate sources. So, your kind of just guessing what episodes you download, and you hope that it didn’t give you a virus.

Maggie: (00:19:50) I remember going to random websites and wouldn’t download a virus onto my HP laptop. So, and then Crunchyroll I discovered Crunchyroll. It was the only thing that was like so seamless and the quality was good. Everything was just very organized.

Bryan: (00:20:09) 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? So that’s how I discover at least like 2008, 2009, was when I was looking at it. Yeah, for different ways to watch my favorite enemies.

Kun: (00:20:30) And that’s kind of one of the things that I think resonated with me certainly every entrepreneur is different. Some entrepreneurs are good at identifying problems out in the market and solving them for me, how I approached these problems is I’m trying to solve a problem for myself. 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 know the use case or why the problem needs to be solved or deserves to be solved.

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

We’re, okay, the first time to drop it drops. It’s one uploader and like 5,000 downloaders and 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. You can stream videos on the internet.

So why isn’t anime and other premium content streamed in the same way, you can 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. That was a problem 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.

Maggie: (00:22:02) Yeah, I think that’s important because if yourself, 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 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: (00:22:30) This draws in parallel with how we started the Asian Hustle Network. You want it to find a community where Asian people would support each other and we can find that we’re looking around a line between really fine of the community where people selflessly want to help each other and to fit our, we sound kind of weird to fit our personal needs.

We created the Asian Hustle Network because we wanted to hear more stories of people like yourself, like us, or just starting. What we realized talking to our friends as we all feel lonely in this process because we don’t know who else is doing it. And if I were just starting and I hear about you, I’ll be, man, this guy’s Superman.

He must have come from a super-rich family; his parents were super supportive. I can’t be like him. And having you break down your story to the very beginning shows us, hey, we do have this common ground that we can listen to each other and help. And one of the bigger inspirations is very similar to you.

We love Japan, we love Japanese culture. And when we were in Japan, we were at the shrine and Tokyo and we were reading everyone’s story tablet from a wall. We want it to bring that inspiration back. Cause we knew that was going to be good for our community. So, we had a format, Asian Hustle Network, where everybody shared their story right where you guys come from, what do you do? And 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. Asian Hustle Network. So, it’s glad, glad to know that history does repeat itself and the way you tell your story, he’s oh, we did meet the right decision.

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

Kun: (00:24:30) The first company was bootstrapped. I think we raised a little bit from, angels, but we didn’t need the money. And obviously with Crunchyroll, we series A and then B and so forth. I think it, it just really depends either whether you need the financing to accelerate your growth or if you don’t, there are 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 fixed cost investments, ones that are in spaces where there aren’t competitors that have a lot of money to compete so, there are plenty of reasons to both, I think is just something you have to work through what makes sense for the entrepreneur and when you.

and there are certainly trade-offs. When you are taking in someone else’s money, you want to do right by them. You want to make sure that there’s a return on your 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 and family 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 like a bit more of a discipline at least for me, because when you’re bootstrapping, it’s just you and you can kind of do whatever you want. When you have a formal board, then you need to change the level of 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 those kinds of things.

Bryan: (00:26:48) Cause I know when you first started, Crunchyroll are mainly to stream video, but you’ve found a business ball that worked. Can you kind of walk us through how you explore the different business models? Cause I think, one of the bigger challenges that most people face is, when you have a strong fan base. You have a strong community that believes in your vision. Most of the time, it doesn’t exactly translate to monetary reasons, and getting people to donate and buy your subscriptions is extremely hard. What is your initial challenge with Crunchyroll and getting subscribers to believe in you guys, and start paying you guys for your service?

Kun: (00:27:27) 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 are a lot of people who love anime. That’s already clear because there were plenty of people watching anime before we arrived. What we don’t know are they willing to pay for it?

And if you look at the audience before a Crunchyroll, there are certainly plenty of people who buy home video DVDs or go to the attic to watch or watch on TV without support. But it wasn’t clear that it would be a subscription subscriber audience. And I think the naysayers at the time. Oh, these are just animate pirates.

They’re never going to pay you the minute you put up a subscription, they’re just going to go somewhere else, right? I think we never bought, we never accepted that. We just knew that if you’re passionate about something and there’s a reason and a value to be a subscriber or to pay for it for service, I think you will.

And I think you will with Crunchyroll and generally, I would say entertainment, people love entertainment and entertainment if you think about it 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.

There’s no end to that. So, I would say the value of entertainment is quite inexpensive now. There is a difference because what kind of content you’re putting in front of an 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 anime, very premium it’s on TV.

It costs a lot to make, and there’s a very high-quality bar our bet was, people were willing to pay to subscribe to it. And so, we had an ad service. We had a transactional, like download the download to rent, download to own. And at the 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 the value proposition of the subscription service? And that’s very important. Initially, what we thought was that 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 are a 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 believe as well as number one and foremost is they cared about access immediacy of access. If you think about it, the analogy to when you were waiting for. You’re just waiting and you’re like, man, if I could pay a dollar or $2 to just get it, now that’ll be so awesome right? So, the subscription service, in the beginning, was built around the immediacy of access. You can get this show the minute it comes out in Japan, on TV, get a 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: (00:30:49) I think that’s a really good point because nowadays it’s we’re living in such a fast-paced world that people are like very reluctant to wait. So, in terms of like access, people want to get it right away.

Bryan: (00:31:01) I think the timing was really good too because I remember whenever I used to wake up early to download it and see that it takes five to six hours to finish. All right, I got to get up a four-click on download and go back to sleep. By the time I’m waking up at 10:00 AM, the anime is already. So definitely that point. I remember that period exactly. You create access for it. Of course, pay for it. It was better than waiting six hours a day to show up.

Maggie: (00:31:34) In terms of the content that you guys were putting out, I’d love to know, when you guys first started in 2007, was it always your guys’ intention to do 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 you were doing K dramas, there were J dramas that were on there as well. So, I would love to know did, was always your intention too, strict anime, or did it kind of just trend towards that?

Bryan: (00:32:07) I do you want to add more towards that too? Is that the community you built up at the very beginning? Did they help you make that decision, or did you make the decision? Right guys, I’m the boss here.

Maggie: (00:32:17) Cause it’s kind of there’s a big, like Crunchyroll family, right? This is very like, camaraderie kind of based feeling. We’d love to just pick your brain on if you guys were like listening to what the viewers were seeing, I love to see more content this year. Yeah, and if you guys took that feedback and made changes to Crunchyroll?

Kun: (00:32:38) That’s a great question. In the very beginning, it was Crunchyroll as a user-contributed platform, meaning people upload content and upload content. They could normally watch here. And that included Korean dramas, J dramas, various live-action, and a little bit of e-sports.

And what we did was we try to help facilitate a community and we always felt that. At least with ourselves, the model we were following was back in college. You would wait for the latest anime episode to drop, and then you would get it. Like the whole floor together and then just watch animate together and then we’ll talk about it and you would like to speculate on what’s gonna happen next.

And, community features just made a lot of sense to us from the very. And so, right after we pushed out Crunchyroll and it was serving video. The next thing we built was we built a forum feature and then we built a social networking type of experience.

We built a lot of the community features, expecting that people would be using them because that’s how we use we were consuming anime in real life, right what we found was that while the community features were awesome for anime, that was the most popular engagement.

It wasn’t as strong in other categories. And so even though, we 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 double down on anime.

I think that the challenging part for us was not that we weren’t doubling down on 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 and kind of figure out.

Bryan: (00:34:44) Wow. That’s, crazy. Yeah. 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 literally door-knocking all the studios and be hey, yeah, can we sign a formal contract to make sure we’re doing things legally? Or how’d you got it? Cause I know Japan has so many anime studios, how’d you get access to all the licenses and stuff.

Kun: (00:35:10) Pretty much just knocking on doors. So right after we received this funding and this was the beginning of 2000, 2008 into 2007, we said, okay, well we need to figure out our licensed content. And at that time, we were still engineers. None of us knew anything about content licensing and I think the other engineers were a little bit better coders than I was.

And so, okay, I have to go and figure out the business side and it was a very brute force. 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? And then you’ll keep asking how I found someone who has a little bit of connection to content and media.

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, it helps interest more companies. And then it’s just every, meeting we were trying to like find someone closer to anime until we found someone who was in anime.

And then we just, 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 my meeting. 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 talk, you ask some Google person can you introduce us to Facebook?

It just seems so naive, but it worked because animation is a pretty small, pretty close-knit industry. And people generally, genuinely wanted to just introduce us to other people because I think we were interesting. We’re strange we’re foreigners. And so that’s, how we were able to for 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 and it was like, well, we don’t license your content, but we’re streaming it surprise. But by the way, we come with the best of intentions 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. But if we do that, then your fans would go back to, all the dark places on the internet. If you’re not 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, well-lit place for all the anime fans. And so, I think with that messaging and a lot of persistence, we’re able to slowly convince partners to officially be.

Maggie: (00:38:08) That’s amazing. Yeah, that’s the craziest story. I think a reason why they were so welcoming with open arms as well, is because anime, was just kind of slowly in Japan right they wanted more western influence as well right. Can you talk a little bit about how they took it and what their feedback was and was they open to bringing anime more into the Western culture because now you see anime is so intertwined with the Western culture as opposed to back then, it was mostly in Japan, but nowadays we have so many Americans are obsessed with anime.

Bryan: (00:38:47) Yeah and I do want to add to that, Kun is the Asian hustler, he’s the Asian hustle inside our network.

Maggie: (00:38:55) That’s a big part of why it’s so intertwined with western culture is because of Crunchyroll, right? Because it is, it’s just so easy to access and 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 how they were able to take in what their opinions were and what were their perspectives in terms of bringing anime into the Western culture?

Kun: (00:39:26) So, there’s a lot to unpack there and I don’t think there’s a clear answer. I think it’s just one of, it’s a continuous ongoing process and I think when you talk about something as nuanced, as cultural phenomenon’s pop culture, it’s something that continues to evolve. And I think the backdrop to all of this was, there was a point there was a period and it’s still happening now, but there was a period in which the only anime brought into the US was dubbed and edited.

And that was because people at the time though, well this product anime is too Japanese, who would want to listen to Japanese audio? And so all of it was edited all through was dub with English voice actors, and that’s the product you experienced. And I think what drove the adoption of an anime.

It partially did that, but a big part of it was also this underground movement of fans who wanted the Japanese experience and they want Japanese audio. They wanted to hear what the original actor or actress, the performance of the show is and sometimes there’s something more magical about listening to listening to the 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 the Japanese audio feels like you’re adding more to it. And this is the same for a lot of foreign content when it’s brought over in language.

And so, when we were doing a Crunchyroll at the time, I would say it was still very much like an uphill battle in terms of convincing others. Those subtitles were the way to go. When, when people mostly were thought, well, of course, you just localize it and delve it. Why would you want to just do subtitles?

And we said, no, this is the authentic experience. This is what something like fans wanted to do. I can imagine if you were watching Avengers or listening to music, but all of it was translated into a different language. That just seems not as a natural right and so I think over time, what 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 and they become creators and so that I think has a really powerful effect on may make bringing animate into the pop culture and same way from any other, foreign content, like by K-pop-, that’s another great example, not in language content.

That’s, well embraced as part of the pop culture. So, there’s a separate thread that I think you brought up. 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 were 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. I think it’s one where it’s kind of tough to not be, it has to be more of a collaboration project if you were a Japanese creator and, you’re influenced by domestic anime content.

You’re influenced by Disney. How else is there a way to collaborate? Well, there are not a lot of great ways to collaborate beyond that. What you’re looking for is someone not from Japan who has a non-Japanese local, sensibility you can work with to make the product different, right?

We’re all a function of the environment and our upbringings. And so, what you know is kind of what, so for someone in Japan to have not grown up outside of Japan to make something super international is kind of. It happens by chance, right? So, if you were to want to do it more systematically, I think, one of the only ways to do it is to create more fans globally. Have those fans grow up, understanding why anime is so powerful and what the sensibilities anime are, but to still be grounded in us or Europe or China or wherever, and then to want to create animate themselves, but not the enemy that’s created in Japan, but more towards fans.

Bryan: (00:44:27) Wow. That’s, that’s a great answer.  I didn’t, want to trace back a little bit too. I think for entrepreneurs just starting, there’s a lot of pride and ego nowadays is you don’t want to do the nitty-gritty stuff, but you have to go up there and your door knock and get yourself dirty because the huge fantasy right now as you raised a lot of money, you just harvest and let us do it.

Your kind of, when you first start, you kind of have to do that part to understand, what are the true business needs? What are the customers want? These are details that you can wholly miss out on it. You outsource it and you hire someone else to do it, especially as, and from, I love listening to your stories 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.

Because before this, I was 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, the developer? And it’s crazy how people are very open to sharing these resources. Have put yourself in a position where you, you have to ask it, you don’t ask, you never get and that’s something that I guess in Asian culture we don’t typically do.

Cause that’s the scene as a weakness, you know? 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 a little bit, put yourself in a growth mindset hey you can find these resources. 

It’s linked back to the Asian Hustle Network. One of the biggest values adds that our network is that, we, as a network, want to connect you to the right resources. You’re looking for lenders, you’re looking for VCs, you’re looking for someone whose industry just posts inside the group.

And you’ll find that person, that industry, and it always surprises us because we never really intended to be this way, how collaborative people are, it 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, or anywhere in the world, you have these core Asian values that you’re polite.

You’re open to helping each other. You have a commonality. And once people see that as hey, I want to help you succeed too, because let’s be real. You’re like family to me. We have a lot of things in common. And it’s cool seeing that unfold when in the Asian community, do you have any other questions?

Maggie: (00:46:58) I guess I would love to know, what would you say to someone who is trying to be an entrepreneur, you’ve been an entrepreneur for so long now, and you have a vast experience in that field. And, we have a lot of listeners. We’re going to have a lot of listeners to this podcast who are aspiring entrepreneurs. We just would love to pick your brain on what kind of advice you could give to aspiring entrepreneurs who would be listening to those podcasts.

Kun: (00:47:28) 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 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 are plenty of great ideas out there.

What 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 up 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, a lot of people miss that, it’s easier today to do that than many years ago, just because the tools are so readily available 10 years ago if you were to start an internet company, you had to have a development team.

Otherwise, you can’t, there’s nothing you can do today. You can find tons of products on the internet that lets you without coding piece together, internet service, or whatever. There are 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 and you’d be willing to go hustle and so I just think first before. Just focus on like execution and just getting it done.

Bryan: (00:49:01) Wow. 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 what I Crunchyroll. I think I wouldn’t even be here right now because I feel like most of my life lessons are shaped by watching a lot of anime. A lot of things that, 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 was, for example, I was watching Naruto is 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. For most of the lessons that I was telling people, I was watching a lot of anime and,

Maggie: (00:49:48) You’ll find a lot of inspiration from anime as I find myself dreaming about certain episodes or I’ll be writing in my journal and I’ll be, what would this character do? It’s just very inspirational.

Bryan: (00:50:00) Credit to you a lot without you creating Crunchyroll yeah. I wouldn’t even be here talking to you. Yeah, appreciate it. Yeah. How can our listeners find out more about you reach out to you?  

Kun: (00:50:14) Just find me on LinkedIn and I’m available. I’m always going to be helpful and let me know how I can help.

Bryan: (00:50:26) Thank you so much for being on the Asian Hustle Network podcast. It was super fun. I appreciate it. And yeah, we will be chatting again pretty soon.