Today’s guest is Patrick Lee, co-founder of “Hobo Labs”, which is a mobile gaming company. But he’s probably best known for being one of the founders of what is probably the most popular movie review website in the world, and that’s called “Rotten Tomatoes”. I’m sure you’ve heard of it.

Patrick shares with us his story of how it took him nearly 10 years to graduate from college, because he was too busy building companies on the side. He’s a very seasoned, serial entrepreneur, who’s on his 6th start-up now, and he’s been through multiple market bubbles, crashes and company exits. And he shares with us some valuable advice to start-up founders, at the end of the episode.

Let’s jump right in.

Jay: Patrick, thanks so much for joining us on The Jay Kim Show. We really appreciate your time. For our audience, that perhaps has not heard of who you are, or hasn’t heard of what you’ve done, maybe you can give us a little quick intro, and introduce yourself to the audience here, in Asia.

Patrick: Sure. My name is Patrick Lee. Born in The States, born in L.A., grew up in Maryland. Went to school out in UC Berkeley. Did a whole number of start-ups, 6 at the moment, though most well known was a movie review site called “Rotten Tomatoes”, where I was a co-founder and the former CEO. We sold it to IGN Entertainment back in 2004.

I went to China, did something there that was similar to Yelp. Went to Hong Kong, worked on a start-up there called “Alive Not Dead”, working with … a little bit like a Myspace, working with different celebrities and artists across Asia, to connect with their fans. And now, in The Bay Area working on a new start-up called “Hobo Labs”, making mobile games.

Jay: Wow, okay. I actually didn’t know about a lot of that, that I probably should’ve known. But I’ve heard of the brand, but I didn’t know that you’re behind it. Cool. So you … Wow, 6 start-ups, so you’re pretty born and bred, sort of this is what you feel like you were meant to do. Now, was Rotten Tomatoes your very first start-up?

Patrick: It was actually our third.

Jay: It was your third, okay. Maybe you can backtrack a little bit and tell us about how you decided that you wanted to become a start-up founder / entrepreneur, and what led you to that point in your life?

Patrick: I had some different friends I knew from the first two years of college at Berkeley, and I guess we were kinda getting bored of school a little bit, and we wanted to try doing some different things. And at the time, one of our friends was really good at using the Usenet and some of these other things, to find deals on computer hardware. So we decided to start-up our own computer retail business, selling computer systems and components. So we made a website, we kinda spread word to mouth, and people had placed orders with us for either parts or systems, pay us in advance. We put the orders in, drive down to South Bay, and buy the parts. And then we would come back, and build the systems and sell it to them.

Jay: Wow, so this is Web 1.0, like really … this is probably, what? ’90 …

Patrick: ’93, I think.

Jay: Wow, okay, all right. So you were on the forefront. I don’t think I even knew what the internet was back then. I think my first exposure was in ’97-ish. So this was like e-commerce 1.0.

Patrick: Yes. I mean, this was super early. I think e-Bay and stuff, they were relatively new at that point, I believe. Yahoo had just started. Yes, back then we probably should’ve jumped really into the internet at that point, but we were much more, just like, we wanted to do some sort of business. It seem like the easiest one to kinda get into. And we went and got our own apartment. Three of us shared the apartment, and we put the inventory there. Sometimes we buy extra inventory, leave it in a locker in our apartment.

We found that that was actually difficult, because things like CPU’s and memory would drop in value very quickly during that time. Even holding onto something for a week or two, we would be losing money. But it was a good experience in terms of just learning to kind of manage inventory, reaching customers, fulfilling orders, et cetera.

Jay: Right. So how did that one end up, in the end?

Patrick: We ended up stopping it, but then later on, one of the four … I did it with three other guys, so four of us total. One of the other guys, Jimmy, he ended up restarting it, brought me back on. We ended up getting a deal with Asus Computers. They make motherboards, and a bunch of other stuff. And help doing maintenance for them on their website, for I think it was like $7000 a month contract, because Jimmy and I had actually worked there over the summer, where we were part of their tech support team, so they kind of outsourced it to us.

We relaunched it, but then couples of months in I ended up leaving, because he had brought in all these other partners. They actually got a real store front. Then I left to go and do my second company, which was doing webdesign.

Jay: So you were in school, and then when you started doing the start-up stuff, and you were like: “Okay, this is actually … there’s something to it here”, even though the first might not have worked out the way you planned. Was there any sort of pushback from your family about when you left to go … I mean, you basically you stopped studying, right? And you just started working full time, doing your start-up?

Patrick: Well, I was kind of on and off in school, while I was doing the start-ups. So I basically did two years worth of school, then convinced the other three guys to leave school. In the end, I think only two of us ended up graduating. And it took me basically 10 years to finish the last two years worth of school, because I would take classes on and off, or take out a year or two off if I got busy, go back take summer classes. And that was over the course of three different start-ups so …

The first one’s selling computer system components, the second one doing webdesign, and the third one being Rotten Tomatoes. After we sold Rotten Tomatoes, I went back for a semester, finished-up, and then I went to Asia.

Jay: Was there actually a reason, a compelling factor that made you keep going back and … I mean, at some point you must have been like: “In order to be successful, I don’t need a college degree”. I mean, you must have realized that at some point, but something kept pulling you back to just get the degree, right?

Patrick: Yes. Well, when I left school the first time, my mom was like: “No, just finish your school first, then do start-ups”. And actually it makes a lot of sense looking back. But I was like: “No, I really wanna do this”. And I think this was … The first start-up we did, we put in our own savings.

The second one, when I did the webdesign company, I had one other co-founder, Steven, who also ended up co-founding Rotten Tomatoes with me. And for that one, my mom and his uncle ended up loaning us money. So even though she really wanted me to finish school, and I was like: “No, I really wanna do this”, she ended up loaning me money.

Jay: Wow, okay.

Patrick: And as far as finishing, yes … I mean, when we’re doing Rotten Tomatoes, or even when we’re doing the webdesign firm, we … I knew I don’t have to go and finish in order to work. We already had companies that were clearly making money. And because I knew when we sold Rotten Tomatoes I wanted to move to Asia, I was like: “Well, I’m really close, and if I leave I don’t know if I’m ever gonna come back to The Bay Area, so I might as well just take a semester, finish up first, and then go”. And just to finish what I started, it wasn’t so much that I felt like I need it to get a job.

Jay: Right.

Patrick: And actually, I studied cognitive science. I’ve never used any of it for any of the 6 start-ups I’ve done.

Jay: Interesting. So if someone turned up to ask you, or you had to give a talk, or something like that, about the value of a college education, what would you say?

Patrick: I would say two things: one, all 6 start-ups I did were with friends from Berkeley. So every single one were with multiple, different friends that I knew from the first two years of school. Most of them … half of them I knew through this martial arts club that I was really into, it was a Wushu club.

Jay: Cool.

Patrick: And the other half were on the same floor as me, freshmen year. So basically people I was really close to. I tell a lot of people, when they’re like: “Where do I find a co-founder?”, I’m like: “The single best place, in my opinion, to find a co-founder is while you’re still in college”. I think that’s a huge one.

And then, the second is: if you actually study something that may be relevant to eventually doing a start-up AI, like computer science, or artificial intelligence, or possibly some statistics, or probability, or math, or something.

Jay: Okay, yes.

Patrick: Or medical stuff, biology if you end up going bio-tech or something like that.

Jay: Yes. I mean, some of those I guess they actually have technical knowledge that you might need. I mean, I was a business major and that was pretty much useless. I mean, I don’t remember anything, and nor did I apply anything. It was all on-the-job training, whenever I graduated or whatever, but … No, that’s pretty interesting.

Okay. Let’s go now to the start-up that you’re probably the most famous for, or people probably know you most for, is the Rotten Tomatoes. So that, again, was with couple of your classmates, or dorm mates. How did that idea come about?

Patrick: Yes. I guess, stepping back a little bit, our second company was a webdesign firm called “Design Reactor”.

Jay: Right.

Patrick: I did that with Steven who I knew through Wushu. And we also had one other guy … I mean we had a whole team of people, but one of our creative directors was this person Senh Duong, who was a huge movie buff. Our design firm … we ended up doing a lot of work for the entertainment industry, Disney Channel, Warner Brothers, ABC, MTV, VH1, Arts and Entertainment. We originally started doing a lot of different kinds of websites, even like dentist website, or tech companies, et cetera. And we found that they’re really boring, we just didn’t care about doing those, and we just gravitated.

We got an opening into Disney. We ended up just focusing on all entertainment. We didn’t take anything else if it wasn’t entertainment. Or if it came through we pass it to other design firms, because we found that was something we’re really interested in.

Anyways, while we were running this design firm, Senh came up with the idea for Rotten Tomatoes on the side. Basically his idea for it was … you know, back in the day … I think they still do it now, but back in the day you would get a newspaper, and you’d see these poll page ads for movies. They’d basically be a movie poster, with a bunch of quotes all over it.

Jay: Right.

Patrick: And it didn’t matter if the movie was actually good or not, the quotes would always be positive. So if the movie was really good, their quotes would be from famous film critics, like Rogue River.

Jay: Right.

Patrick: If the movie was bad, it would be quotes from random radio station DJ’s in the middle of nowhere. Sometimes even fake.

Jay: Yes.

Patrick: So his idea was like: “Well, what if I do the same thing, but include all the quotes, good and bad”. So he just started doing this on the side, in his spare time. Back then, a lot of reviews weren’t even on the web, so he would go to the library, and he would actually go and look up the quotes in magazines and newspapers, and then enter the quotes in, without any link to anything, because they didn’t go anywhere.

Jay: Oh, wow.

Patrick: They weren’t on the web.

Jay: Wow.

Patrick: And yes, he launched it, and almost immediately we’re hosting for him. It was starting getting noticed, like “Cool Site of the Day”, week, month, et cetera. Link from Netscape, links from Yahoo. And yes, it was … it started kinda picking traffic almost immediately. All organic, he didn’t buy any ads or anything like that.

And at first, Steven and I were a little bit against it, because it was affecting his work, because he’d be busy every night, especially if the movies come out on Friday, he’d be super busy Wednesday, Thursday, sometimes pulling all-nighters. So then he would be coming into work late, or getting sick, or sometimes not showing up. So we were like: “Hey, we have all these projects that we have deadlines for, this is not cool”.

Jay: Yes.

Patrick: But over the course of the next year we kinda came around, we’re like: “You know, actually this is interesting. Maybe we should run it as business”.

Jay: So this was … what year was this, this was late ’90s?

Patrick: Yes. He started in ’98, the site, and within a year or so, we’re like … You know, the traffic kept growing, there was an article for this magazine called “Yahoo Internet Life”, where Roger Ebert wrote an article, picking out his favorite movie sites. He picked out like, I don’t know, 20 or so sites, and Rotten Tomatoes was one of them.

Jay: Nice.

Patrick: We also had a day where … pretty soon after the launch, where we noticed a big spike in traffic. It was the day that “A Bug’s Life” came out. And when we kind of looked into the IP addresses, we realized it was actually coming from Pixar. And from what we could tell, someone at Pixar probably found our page, sent it to everyone else at Pixar, and they were just refreshing like crazy, to see as we added more reviews on.

There’s couple things like that where we’re like: “Hey, you know, people in the film industry are actually using the site. Maybe we should run this as a business”. So January 2000, I went out and raised money. We basically brought Senh in, made him the co-founder of the design firm, and we kinda became co-founders at Rotten Tomatoes. So kinda the three of us became the co-founders of both. Then we actually found another group to take over our design firm, so we transitioned everything off to that group, so we could focus on Rotten Tomatoes. I went out raised a million US for it, and we decided to run it as our full time thing.

Jay: That’s awesome.

Patrick: And we actually transitioned, something like 20-something people from our design firm, over to Rotten Tomatoes. But then, 2 months after we raised, in March 2000 the market crashed big time. And we very quickly had to cut staff down to 7, and bootstrap like crazy.

Jay: Yes. So you were doing all genres of movies, or was it initially a certain genre, and then you just decided: “Oh, we have to do everything”.

Patrick: Well, the beauty of movies is pretty much if you focus on just the wide release movies, it’s only usually like 3 or 4 movies a week.

Jay: Right.

Patrick: So it was very easy to keep up with that.

Jay: Gotcha.

Patrick: And over time, we added the limited release movies, we added … we went start going back works into the DVDs and older stuff. We had actually started licensing data from other sources, we started creating parsers, to go out and grab reviews from all the different sites that were popping up with movie reviews, to make things a little bit more automated.

But initially, we were just focused on what movies are coming out each week, what wide release movies are coming out each week. And when it’s only 3 to 5 movies a week, it’s very manageable. It was very manageable.

Jay: And it didn’t even require you to have to watch the movie. You just literally have to get the reviews, right?

Patrick: Right, right.

Jay: Right.

Patrick: So we didn’t write our own reviews. We just aggregate the reviews, and then we would write a very short synopsis of the overall sentiment from all those reviews.

Jay: Right. And what exactly does Rotten Tomatoes stand for?

Patrick: The idea was basically … back in the day if you had a theater show, or something like that. If a movie would … if the performance was very bad, people would throw rotten fruits and vegetables at the actors. So Senh decided to try Rotten Tomatoes, and “You go it”, so …

Jay: Nice.

Patrick: … we stuck with it.

Jay: That’s very interesting. So by the time that you had … it was … you know, you were out there, and you decided to raise some money, that must have been like peak bubble. I mean, what was your experience fundraising? Was it either, they were just writing checks like: “Okay, that’s a good idea. Let’s do it”, or was it … I mean, this was the first time you raised institutional money?

Patrick: We raised half of million from a very small BC, based in Taiwan, and everything else was Angel.

Jay: Okay.

Patrick: They were all contacts that we made from our design firm, because we were working with folks who were doing start-ups, and we’re helping them with their logo, or their websites. And then those ones sold, so when we were like: “Hey, we wanna do our own company, our own start-up”, everyone was already supportive of that.

So yes, it wasn’t too hard to raise the million. Actually, if we had more time … we didn’t want to raise more, but I’m pretty sure we’d probably could have raised two. It’s hard to say that, because we’re hitting so close to when things burst.

Jay: Right.

Patrick: Had we started 3 to 6 months earlier, and if we wanted to, I’m pretty sure at that moment we probably could’ve raised more. And at the time when the market crash, we’re like: “Oh, crap. We should’ve raised more”, because yes, we had to cut down headcount, we had a sublet somewhere space. Not only did we cut out 7 people, everyone had to take out 30% pay cut, two of us went to 0 salary, myself and one of our marketing guys.

Jay: Wow.

Patrick: And we kind of compensated people with more equity, depending on how much of a pay cut they took.

Jay: Right.

Patrick: And for myself, it was something like 6 months, I just slept under the desk in our office, because we had a 5 year lease. We were maybe 2 years in …

Jay: Wow.

Patrick: … and we couldn’t get out.

Jay: You actually slept in the office. That’s …

Patrick: Yes.

Jay: Wow.

Patrick: Yes. Because we had all these cubes, and I just took a set of three cubes, and since we laid off so many people, pretty much everyone could have three cubes. So I just … yes, I took all three of them, just shoved clothes and stuff into the drawers, got a little sleeping bag, and … yes.

Jay: Man, that’s as bootstrap as it gets. So then you were able to hang in there, and actually survive that sort of market crash. And then you found an exit, a few years later, right?

Patrick: Right. So pretty much about a year after the crash … you know, we had cut down our headcount over the course of that year, from about 25 to 7. And at the same time we slowly kind of increase our revenue, increase our traffic. I think about a year, a year or so, we were at or near break even. But that was being very bootstrapy. But then, a year and a half after the market crashed … so it crashed in March 2000. In September of 2001 was 9/11.

Jay: Oh, yes.

Patrick: So when that happened …

Jay: Man.

Patrick: … it affected ad-buying across the board, because people didn’t wanna watch ads after something like that.

Jay: Right.

Patrick: So a lot of campaigns got pulled, or massively reduced. For us it was a very weird experience because we basically went through one of the worst crashes ever, or a really bad one. And we also went through, I think through the worst terrorist attack ever on American soil.

Jay: Yes.

Patrick: Almost like back to back. I think for us it was a bit traumatizing, so we didn’t think kind of the way they did pre-2000 or post- … you know, 2008 or so, where everything it’s just like: “We want to go to the world”. Really, for us, we were just like: “We just want to survive”.

Jay: Right.

Patrick: And even in terms of exits, we were just thinking like: “Oh, if we sell, we just wanna make sure our investors get their money back”. That was our goal, and looking back we’re like: “Wow, we totally aimed too low”, but I think it was also part of the time. It was just because two very extreme things happened right as soon as we raised, that I think it really kind of shrunk our thinking in our heads of what we had.

Jay: Yes. Well, I mean it was a different era, right? I mean, it was almost … I don’t know how to say this properly, but it was almost the … it was real, and that your investors … their best interest were at the top of your minds. I mean, I feel like post-’05, ’06, ’07-ish, it’s kind of like a new regime out there, where you fundraise and a lot of times you kind of … if a start-up fails, and it’s like: “Okay, sorry, didn’t work out. Sorry investors. I’ll do the next one”, right? So it’s kind of changed. I think the landscape’s kinda changed.

Okay, so after the exit, then you said you wanted to go to Asia. You went back and finished up your last couple credits or whatever, and then why did you wanna move to Asia?

Patrick: For me … I’m an “A-b-C”, American born Chinese. I was born in L.A. I’ve gone to China a couple of times, for a month or so at a time, and visited, I think, Hong Kong and Japan for a couple of days, but never really lived there. I just felt like: “Hey, you know, it would be …”, I didn’t ever do the exchange programs or anything like that, and I was just like: “Yes, you know I wanna try seeing what it’s like out there”.

And at the time I was … America’s a little bit ahead of China as far as the internet and everything else. We just had kind of a success under our belts from Rotten Tomatoes, so we kinda know what’s going on, maybe we could go over there and be kinda the head of the curve.

Jay: Right.

Patrick: But then, once I got there, I was like: “Wow”, you know, basically I didn’t have any network there, I didn’t understand the culture at all, it’s very different from The States.

Jay: Yes.

Patrick: I wasn’t fluent, I was like conversational manner, and I couldn’t really read or write.

Jay: Right.

Patrick: And even like Rotten Tomatoes, very few people would’ve heard of it. So I thought: “Oh, yes, we have these advantages”, but when I went there I realized: “Oh, no, I actually have a ton of disadvantages”.

I ended up raising some money, worked with one of the guys I did my first company with, Jimmy, on this company there. Even brought one of my co-founders, Steven, along with me, to work on the start-up. But very quickly Steven and I were like: “Wow, we just don’t know what we’re doing”. So we kind of relied on Jimmy to run the company.

Jay: Wat the idea already in the works, from before? Was it an idea that you had spawned before, that you were like: “Okay, when we exit Rotten Tomatoes, we’re gonna work on this right away”?

Patrick: Actually, I was interested in doing a dating site there. I found online dating to be kinda interesting. I had a friend, also from Berkeley, who had a company called “Hot or Not”.

Jay: Yes.

Patrick: And he had similar traffic to what we had at Rotten Tomatoes, when we were both running our companies at kind of at that time. But he was making a lot more revenue that we were. He had a small dating component to Hot or Not, that maybe 100000 were subscribed, paying $5 a month. But that’s $6 million a year, plus advertising revenue, so they were doing probably $8 or $9 million, maybe $10 million a year.

And it was essentially two guys. They hired, I think 6 more people to help them run it for them. And they ended up getting a house in Hawaii, and they essentially didn’t have to do anything. And it’s just running itself and we’re like: “Wow, we’re running Rotten Tomatoes”. And since we’re mostly based on advertising revenue, we actually constantly had to keep building you movie sites, and movie pages, and actor pages, director pages, to get the traffic up, try to sell ads across it. And it was just a lot more work for a lot less revenue.

So I was like: “Yes, you know, China has so many people. Dating is gonna be something that it’s gonna be important, so I kinda actually want to go there and do a dating site”. But then, once I went there, my friend Jimmy, who I know from Berkeley, was there already.

He was working on the start-up that was a little bit like a Yelp, doing merchant reviews, but then they had a machine that could do this loyalty program. So they could put the machines, these carburetors, into all these different stores, have these loyalty cards that could give out to people in the city, and they could go to the stores, to swipe, get a discount. The merchants could kind of track the purchases, and then be able to offer coupons and deals to people, based on how often they’re using a card, et cetera, and their purchase habits.

So I was like: “Oh, this is pretty interesting”, so I decided to go there and join them. But then, one big problem that we found out was that merchants would accept the card and give the discounts, but then they wouldn’t swipe. Two reasons for that is: one, they didn’t want to pay us anything. And then the second was: they were worried that if they would swiped it, the government could come in, grab our servers and realize now many transactions they were doing. And in China they like to do everything cash, as much a possible, because they don’t necessarily wanna pay the full amount of tax.

Jay: Right.

Patrick: So it broke kind of the whole model, because that was the big part of the revenue.

Jay: Right.

Patrick: So yes, we were just like: “Oh, wow. That wasn’t even something that I would even thought of”, because in The States … I mean, maybe that would happen a little bit, but you look at Yelp and generally people pay for all these other systems. Because yes, I guess in The States even restaurants may kind of not include like tips and stuff, but in general I think it’s not as bad as like in China.

Jay: Yes, that’s a different ball game in China, that’s for sure.

Patrick: Yes.

Jay: So at what point … I mean, what ended up happening to that start-up. And then, you said you were in Asia for 9 years?

Patrick: Yes. So I was in China for 3 years. It was a city called Xiamen, the part of China closest to Taiwan.

Jay: Yes.

Patrick: When that model wasn’t working, they kinda pivoted. We ended up buying this local bulletin board system that was very active around that city, called “XmFish”. I don’t know why they were using that name, but it was very popular.

And then they basically went around and kind of monetizing that, selling advertising across it, adding some serviced to it. And I think that was keeping the site, the company afloat. And I think it’s still running until this day, but then we basically … What’s the point where they won’t gonna raise more money, they won’t gonna sell, so we basically got the people who were running it, to pay off the investors a portion of what they put in originally, just to let them have some kind of exit.

Jay: Right.

Patrick: So it’s still running, but it has a lot of competition form all these other big companies in China.

Jay: So then after Xiamen you came to Hong Kong, or?

Patrick: Yes.

Jay: Okay.

Patrick: I knew a friend from The Bay Area, this guy Daniel Wu, who went to school in Oregon, but he was … he grew up in The Bay Area, so he come back in the summers and he also did Wushu, so we knew each other from the Berkeley Wushu club. He went to Hong Kong to see the handover … His sister there was like a VJ or something.

Jay: Okay.

Patrick: And she ended up getting him some modeling work in Taiwan. A director there saw, I guess, some of his modeling work and decided to cast him in a movie. And then Jackie Chan I think saw the movie, so they decided to sign him up into Jackie Chan’s talent agency or whatever.

Jay: Nice.

Patrick: Then Daniel end up becoming I think one of the biggest movie stars in Asia.

Jay: Yes.

Patrick: So when I was still in China, there was one time I was visiting Hong Kong, and him and a good friend of his, Terence Yin, they approach me and they’re like: “Hey, let’s grab dinner”, and I’m like: “Okay”. And when I was there, they basically pitched me on this movie idea, because Dan has … you know, traditional be an actor, but he wanted to direct a movie, where they create a fake boy band called “Alive”.

And they basically made a mockumentary, where they filmed the boy band for two years. The band actually released songs, made music video, actually went on tour for a while. It was with four actors, only one of them, Terence, who could actually sing. The rest, they were all 30-something, two of them were already married at the time. And I guess the whole idea was, they wanted them to film it all, and kind of as a statement about the entertainment industry, where how come you can have league four actors, 30-something actors, 3 of which didn’t really have any talent for music, make a boy band.

Jay: That’s incredible.

Patrick: And [words 00:29:22] would still be popular. So I thought it was cool idea, so I put in the money to make the movie. It was very low budget, because I think Daniel basically called in a lot of favors …

Jay: Right.

Patrick: … everyone, all the actors and stuff were working for free. But then, after the movie came out, they were like: “Maybe we’re making a statement about the entertainment industry, but we should probably do something not just to complain about it”. So we said “Hey, why don’t we make, kind of like a Myspace type of thing, where it’s about a community for artists. Not just celebrities, but artists of all types, including folks behind the camera, like producers and directors, and writers, et cetera. And not just in film, but within music, and illustration, photography, et cetera”.

We kind of joined forces on that. So myself and Steven from Rotten Tomatoes, along with Daniel, Terence and the other two, Andrew and Conroy from the boy band Alive. We all kind of started together, to make this company. So Steven and I move to Hong Kong, and we launched it, and it ran for about 6 years before we decided to kind of get out.

When we started, I think it was in 2007, and it was going pretty well, and we’re like: “Let’s raise some money”. And in that situation I started a little bit too late, and we hit into 2008. We had already verbal commitments, but then after the 2008 we’re like: “You know what, it’s not a good time to raise”. So then Steven and I just kinda kept putting our own money in. But then similar thing happen where, because of the crash we went from 9 people, we cut down until like 4, very bootstrapy still.

Then: “We should kind of keep it going”, but over time we were just having a little bit too much competition from all these different social media companies. Not just in China, but also The States, so we’re competing against …

Jay: Right.

Patrick: … [Chinese 00:31:13] in China, we’re also competing against Facebook, Instagram, YouTube in The States. And since the celebrities are one of our big draws, but eventually they had so many fans on these other platforms, that more and more of the content would start going on these other platform.

Jay: Right.

Patrick: So just made it very difficult for us. So we eventually managed to sell to a company “MeetMe” …

Jay: Okay

Patrick: … for stock. And one of our guys is still running it. But it’s kind of still like a shell of its former self.

Jay: Interesting story there, with the mockumentary. I didn’t know about that.

Patrick: Well, the movie’s called “The Heavenly Kings”.

Jay: Oh, cool. I have to look that one up. Heavenly Kings.

Okay, so now you’ve moved back to The Bay Area, I think that’s what you said, right? And what are you working on now?

Patrick: I came back about 4 years ago, and I mainly came back because there’s like … I didn’t expect to be in Asia for 9 years. I thought maybe 2 or 3 years, maybe at most 5 years. Because I was doing those companies, and I was trying to make it work, I just kept putting more time and more money in. And then the next thing I knew is almost a decade, and I was like: “Wow. I should probably go home to see family”.

And kind of the thinking I had there was, while I was in Asia I would go back and see my mom and brother about twice a year, but only every third time my dad would also go up. So I was only seeing my dad like every year and a half, and he was about 70 at the time. And I was like: “Wow, if I’m only see him once every 1.5 years and he’s 70, do the math” …

Jay: Yes.

Patrick: … how many more times you’re gonna see him?

Jay: Sure.

Patrick: So I was like: “All right. Yes, I should probably go home”. When I went back, I had another friend that I started my first company with, Lyle. He continued doing start-ups as well. He ended up doing a company “gamers.com” with his brother Dennis Fong. That crashed, but from there they spin it out. His brother spin-out out a company called “X Fire”, Lyle spin-out one called “Lithium Technologies”, which is like an enterprise company. They raised like $150 million, and had a couple hundred employees, I think 500 employees but I was hanging out with Lyle a lot.

He was kind of getting … thinking about moving on from Lithium. He approached me, and he was like: “You know, maybe we should … let’s do an enterprise company”, or “I wanna do an enterprise company”. I said : “You know, well, you already did an enterprise company and it did really well. You don’t really ever need to work again. Maybe you should just retire, or if you really wanna keep working, I suggest that either do something for fun, or do something crazy”. And for fun I was saying stuff like: “Make a movie” …

Jay: Right.

Patrick: … “Start a band, write a book”.

Jay: Right.

Patrick: “Or make a game, or something like that. Or do something crazy like SpaceX or Tesla”, like really out there.

Jay: Yes, yes, yes.

Patrick: And then about two weeks later, we were all at his house, he had a bunch of us there, and he stood up, he’s like: “I know! Let’s make a game”. And then he basically pitched us on making game, right there. And I was like: “Okay”, because both him and I are big gamers.

Jay: Awesome.

Patrick: Had been since college. So we raised money for that, and started about 3 years ago. We launched one test game, and not we’re working on at the real game. It’s been about 2 years. It’s a synchronous multiplayer game, meaning you play with other people at the same time.

Jay: Yes.

Patrick: It’s like an RPG …

Jay: Nice.

Patrick: … but simplified. It’s 2D, has a little bit of elements like Diablo, or one of those kind of games in there. But it’s actually been pretty hard, because as we’ve been building it, we made the mistake of just constantly increasing the scope, which is really bad, but it just kinda naturally kept happening. We’re hoping in trying to launch it middle of this year.

Jay: Awesome. We’ll have to keep an eye out for it. Where can can people find you, follow you or find you, the game and what you’re doing these days?

Patrick: The company’s called “Hobo Labs”.

Jay: Hobo Labs?

Patrick: So if they go to the website they can find the game, or information about the game there when we release it. If they wanna follow me on social media, they can find me on Instagram or Twitter. My handle is “Rotten Doubt”. “Rotten” like Rotten Tomatoes, and “Doubt” like No Doubt, because I used to be a big No Doubt fan.

Jay: Oh, cool.

Patrick: So I just kind of merged the two. And plus, I thought it was kind of a funny name, because both … it’s like a double negative.

Jay: That’s true, that’s true. Awesome! Thanks for your time Patrick. I had a good time. Like I said, you have a very interesting story. I have a couple last questions actually. I wanted …

Patrick: Sure.

Jay: … to ask you, as someone that is 6+ start-ups now, serial entrepreneurial type … and I just thought of this when you told me the story of telling your friends to do something crazy, or to do something fun, retire or …

Do you think that you yourself could ever retire? I mean, is there a certain points, I mean it certainly doesn’t seem like it’s a number in your bank account. Is there an accomplishment that you want to achieve, do you want to remembered as someone other that “the Rotten Tomatoes guy”, is there something that you wanna achieve before you maybe do something crazy, or do something fun?

Patrick: Yes. For me … I never did any of these start-ups for money, I always did something that I thought was interesting at that time. Most of them were entertainment related, or the first company was actually just a duo start-up, and the one in China was just to move to Asia, really.

As far as achievement, I’m like … Rotten Tomatoes was pretty good, most likely I’ll never do anything bigger than that, and I’m okay with that. But obviously … yes, I mean it would be cool if I had something else that I could be known for beyond just Rotten Tomatoes. For a while, when we were doing “Alive Not Dead”, when it’s kind of at its peak, and we had the movies out and stuff like that, that was kind of interesting. But for me, I kinda feel like I will always be sort of floating around tech and entertainment.

I don’t know for sure if I’ll always keep doing start-ups. What I’ve realized is as I’ve been getting older, I naturally have become more conservative, because you start valuing your time a lot more as you get older. When you’re ’20s versus ’30s versus ’40s, it’s like your day is way more valuable as you get older.

Jay: Right.

Patrick: Start-ups take a lot of time, as well as money. But at least … but really time. That’s always something any start-up’s gonna take. As I get older I’m like: “I don’t know if I can keep putting all this time in”. I haven’t figured out after this company what exactly I’m gonna do next, but I don’t know 100% if I will actually do another start-up, after this. But we’ll see.

Jay: We’ll stay tuned then. So last question, Patrick: having gone through all the ups and downs, multiple crashes and exits, if you have one piece of advice to give, say someone that wants to do a start-up, or maybe someone that is a start-up founder that’s going through a rough patch, or struggling, or building a company right now. What would that one piece of advice be?

Patrick: That’s a good question. One piece of advice … I would say at the end of the day, a lot of luck and timing is also involved in this stuff and it’s not always under your control, no matter how smart you are, no matter how hard you work. The one thing that you kinda can control though, and that should always be highest priority, is your own body and your mind, like your health …

Jay: Right.

Patrick: … and your stress, and all that kind of stuff.

Running a start-up is stressful. There are a lot of ups and downs, and for most people there’s a lot more downs than ups, because most start-ups will fail, and it can cause lots of stress, it can cause stress in relationships, it can bankrupt you, it can cause health problems, all these kind of things. Sometimes people overly prioritize a start-up, and it’s important when you do a start-up, especially if you raise money to really put all your effort in, but you have to balance that against the cost of yes, your mind and your body. And I haven’t always done a good job with that, but I’m trying to be better about it. But, you seen start-up founders who’ve committed suicide …

Jay: Right.

Patrick: … things like that, and it’s not worth it. So I would say, for people to make sure that they … you know, they always say the work-life balance, and it’s very hard to maintain that kind of balance when you’re doing a start-up, when you’re a start-up founder. But really it’s important to make sure that you’re not causing so much stress to get into depression, to cause health problems, or relationship problems. Because that’s actually still should be your priority, above even your start-up.

Jay: That’s great.

Patrick: Yes, I would say that was …

Jay: Your advice.

Patrick: … would probably be my main advice. And also the kind of unrelated note to try to get some kind of support that work around you, either friends, family, other founders, et cetera. Because it’s really tough to do this by yourself and a lot of times, as a tech founder, start-up founder, you’ll feel very alone. And yes, maybe you have your co-founders to kind of commiserate with, but they are going through exactly the same thing as you, so when things are bad it’s bad for all of you. So sometimes having a network beyond just the people on your company …

Jay: That’s the point.

Patrick: … is good.

Jay: Thanks, thanks for the sound advice and for the time, Patrick. We’re looking forward to seeing the game come out, in a few months hopefully.

Patrick: Yes.

Jay: But yes, really appreciate your time on the show, I had a good time catching up with you.

Patrick: Thank you Jay.

Jay: All right, take care now.

Patrick: Take care!