Feb 26 2014, 3:16pm CST | by Forbes
By Jessica Tan
A couple of weeks before the launch of a sexy new product at the CES trade show earlier this year, Razer’s 37-year-old CEO had an uncanny moment while watching the movie Paranoia on board a plane bound for Taipei. In true Min-Liang Tan fashion he tweeted about it as soon as he got off the plane: “Just watched a sci-fi movie. Was scary to see a character describe in detail a product in the future that we’re actually working on now.”
That product is the Razer Nabu, a smart band that’s a hybrid of a smartwatch and a fitness band. Like the gadget in the movie, the Nabu is an “all-seeing, all-knowing product,” says San Francisco-based Tan, who cofounded the entertainment devices company almost a decade ago. Dressed in his signature black T-shirt and jeans in his Singapore office for the interview, he cuts a dashing figure and comes across as a refreshing next-gen Singaporean entrepreneur. He has a flair for design and stays connected with Razer fans via tweets and status updates on Facebook and China’s Weibo. Tan is a complete contrast to Singapore predecessors like media-shy Sim Wong Hoo of Creative Technology, the company that launched one of the world’s first MP3 players in 1999 but failed to lead the market because of the weakness of design and marketing, losing out to Steve Jobs’ 2001-released iPod.
The Nabu, named after an ancient god of wisdom, won the Best of CES 2014 Readers’ Choice award and is expected to hit the retail market the end of this month. Calling it a “smartband,” a cross between smartwatches like Samsung Galaxy Gear or the Pebble and fitness bands like the Fitbit, Tan says the Nabu does a couple of things really well. “It solves the dinner time problem,” says Tan, in that it streams all notifications from one’s smartphone so that whenever a call, Facebook message or e-mail comes along, notifications appear on a slim Nabu screen, sparing the phone click. It also does the job of a fitness band as it collects all kinds of data such as calories burned, steps walked and hours slept in a day. Furthermore, the Nabu boasts a social aspect. It’s able to exchange data, adding, for instance, someone to your Linked?In network, through a simple band-to-band handshake.
Sounds impressive. Yet as much as Razer might have proven itself in the gaming devices industry, where it has sold millions of gaming laptops, mice and tablets worldwide over the past decade, does it have the X-Factor to claim a slice of the hot global wearables market? It doesn’t have much of a choice. “Razer’s traditional business of gaming laptops and peripherals is likely to see a more narrow growth because of the general decline in demand in PC gaming,” says Gartner principal analyst, Shalini Verma. “The move into wearables is a natural extension for a PC peripherals company. So I think this is a move in the right direction.”
Gartner predicts that global revenue from wearable electronic devices, apps and services for fitness and personal health will be $1.6 billion in 2013. By 2016 that figure will hit $5 billion. But everyone’s eyeing the same pie. Samsung’s Galaxy Gear and the Pebble have been creating a buzz, and now all eyes are on highly anticipated smartwatches from Google and Apple.
Verma believes that Razer’s investment in wearables is promising. “The Nabu has tried to combine the best of capabilities available in smart wristbands and smartwatches. In that sense it is an improvement on existing products.” Though, she notes, Razer will need to put in strong marketing efforts to make Nabu a success against known brands such Samsung. “In terms of Razer’s long-term prospects, it would have a sustained opportunity if it is able to build a platform for attracting a third-party apps community that can collect user information via Razer’s sensor-based wearable devices.”
Toward this end Razer has created the Nabu to operate on an open platform. The company is on a drive to welcome third-party developers to build apps for its smartband. The company has not released its retail price but will offer developers a discounted price of $49 for them to create and develop applications for its smartband.
Razer also has a fan club with members from high places. In 2008, 15 angel investors, including big names such as Lee Hsien Yang, the former CEO of Singapore Telecommunications and the brother of the Singapore prime minister, and the prolific Koh Boon Hwee, who was formerly the chairman of Singapore Airlines, SingTel and DBS Bank, gave the thumbs up to Razer. “Most of them did their due diligence by asking their kids: Do you know Razer?” Tan says.
Then came along China-focused venture capital firm IDG-Accel, backers of Nasdaq-listed Chinese internet companies like Baidu and Ctrip in 2011 and Temasek Holdings in 2013, which both picked up minority stakes. “They’ve been superactive and incredibly helpful,” says Tan, declining to elaborate. He maintains that he owns “a little less than half” of Razer, which is profitable and sells one product “every six seconds” across the globe. Based on latest available financial data, an estimate of Razer’s revenues for 2013 is in the ballpark of $250 million. Tan’s net worth will likely be underscored by a planned listing in the U.S. in the near term. Not bad for someone who took a chance with a career switch from being a lawyer back in 2005 in Singapore, when he started Razer with an online gaming friend Robert Krakoff, who was then living in Carlsbad near San Diego. Today Krakoff, in his 70s, is no longer active in the day-to-day operations, but Razer remains headquartered in Carlsbad.
Another thing that Razer has going for it is its loyal base of gaming fans from Asia, Europe and America. “We have a cult brand. We are only one of the two consumer tech companies in the world where people tattoo the brand’s logo on their bodies,” says Tan, adding that the other brand is Apple. Coincidentally or not, Tan’s daily get-up and his obsession for design have likened him to the late Steve Jobs by some. Fans have even built “shrines” of Razer products in their homes, and Tan even gets stopped on streets by fans, especially in the U.S. and Europe, wanting his autograph. Today Razer has 4 million followers on Facebook and hundreds of thousands on YouTube and China’s Weibo. “All of this is organic,” Tan says. “On my Facebook home page, I have almost 300,000 followers, and I talk to them constantly.”
Also behind the Razer brand is the company’s strong focus on R&D and Tan’s geeklike obsession for design. He has turned his own Singapore pad in a condo tower, where Facebook’s Eduardo Saverin used to live, into his design studio. That’s where he often tinkers with new product designs, if he’s not checking in on his staff at his three design centers in San Francisco, Singapore and Taipei. “I work closely with the industrial designers on everything, not just the Nabu, be it for a poster in Poland, a retail rack in the U.S. or a giveaway something in Asia,” he says. “It all has to be passed through me, I’m a bit of a control freak.
“We sort of have an ivory tower of sorts, where the R&D folk or design guys operate, and then once we are done we will say ‘This is it, go forth.’ ” Today, Tan says “ more than half our head count are R&D staff.” In comparison, sales and marketing staff represent a tenth of Razer’s 500 employees, whose average age is 30. About half of Razer’s employees are in Asia, with the rest in the U.S. and Europe.
Tan also admits that he’s “not very disciplined when it comes to R&D budget.” Back in 2008, when Razer first launched the wireless Mamba mouse, Tan recalls the sales guys telling him: “Min, look we are not going to be able to sell any of this. The most we could probably do is sell 1,000 of this worldwide.” At that time every other mouse was retailing at between $20 and $70. The Mamba hit the shelves at $130 apiece. “Today that mouse has sold a couple of millions in total and it’s still being sold at Best Buy,” he says.
Early angel investor Koh Boon Hwee credits Razer’s success to Tan’s intensity. “Stylewise he is impatient, has a great sense of urgency and is a perfectionist in delivery,” says Koh. In fact, his pursuit of perfection has meant that subpar work is not tolerated at Razer, where “shouting matches” during product development meetings aren’t uncommon. Products have been pulled back hours before launch simply because they weren’t perfect. To date the Nabu has “gone through about 100 iterations,” Tan admits.
“I don’t fire somebody because their design sucks, but I’ve fired some who have no passion for the product. If they are not there to create the best possible product, then why exist? I’ve literally asked people, why do you even bother living?” says Tan.
“The way I see it is that life is really, really short. You get very few opportunities to do what you want to do–even then, you gotta be blessed with some amount of luck, because hard work and smarts don’t necessarily get you anywhere all the time. Here we have an incredible platform with a huge user base of people who are incredibly passionate about our products. It’s our responsibility. I mean some of these guys have tattooed [the Razer logo on] themselves for life.”/>/>
Source: Forbes Apple
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