Episode 2: Chris Cheung | Subverting the System
"I think because of my great grandfather having made a fortune but losing it in the casino and making bad investments, my grandfather and father were of the opinion that you should find something stable, take care of your family...don’t rock the boat, so to speak"
- Chris Cheung, Co-founder of Boxed.com
Below is the audio transcript for Episode 2, lightly edited for clarity:
I. Are you willing to break the rules?
Hey there, it’s Lucia. Welcome to Episode 2 of Rock The Boat. This week, we talk to Chris Cheung, the cofounder of Boxed.com. If you haven’t heard of Boxed.com. they’re an online and mobile wholesale retailer that offers direct delivery of bulk-sized packages. They recently raised $111M in venture funding in their Series D round.
I wanted to chat with Chris because I was curious about what being at the helm of a successful startup would be like and how he got there.
We were connected through a friend of a friend which is how I got to hear Chris’ life story and wow, it’s a heck of a story.
We speak with Chris about:
• Breaking rules, lots of them, and how they actually led him to a path of entrepreneurship
• Subverting the system and why it helped him succeed
• His desire to build something from nothing with his own two hands
• And his hopes for the future
If you’re someone who’s interested in starting something on your own or aren’t afraid to take the unconventional route, Chris’ story will certainly inspire you.
Word of warning, there’s some strong language in this episode.
II. Chris’ Origin Story
Lucia: I met Chris in a conference room at Boxed HQ in Soho NYC.
Chris: I’m Chris, I’m a co-founder here at Boxed Wholesale
Lucia: By most accounts, Chris was a pretty typical Asian American guy. He was born in New York City, grew up in Jersey, and attended an ultra competitive high school called JP Stevens. You can even say he was raised by stereotypical Asian parents.
Chris: My parents took care of all of our needs, not necessarily all of our wants, but our needs, just so my brother and I could focus on studying. Given their path in life, they knew that education was the best path ahead and would take care of anything getting in the way of that
Lucia: Since education was his parent’s top priority, they made sure to assign Chris with plenty of math problems. To them, it was all about rigor, discipline, getting those reps in. They believed the reps would get Chris better grades, which would increase his chances of attending a name brand university, which would then lead him down the path to becoming a doctor or lawyer.
Chris: It would be math class, algebra or something like that. The teacher would assign all the even problems of a particular chapter. My dad would make me do all the odd ones AND the even ones, and it got to the point where he would write more problems for me. On top of that, I think a lot of family friends were taking the Kumon classes outside of school.
Lucia: For those of you who don’t know what Kumon is, you’re really lucky. It’s a very popular tutoring center that originated from Japan. Asian parents would send their elementary or middle school children to either the math or reading class, where they did extra problem sets on top of their normal school work. Parents thought the extra work would help their kids practice for exams.
Chris: Instead of actually paying for me to go to Kumon, he would just photocopy all their textbooks and make me do the questions. It was probably just like what they experienced in the Asian education system where it's was a lot of rote practice, just like a lot of afterschool activities, going through the same types of problems, just drilling it in. I never had time to hang out with friends, I was always just like doing homework whether from school or from my parents. There was no way in hell I was not going to be either like a doctor lawyer or have some kind of three letters after my name.
Lucia: Sitting across the room from Chris, I could tell that he was a very intelligent person. But Chris wasn’t interested in academics. In high school, he saw through the dysfunctional systems and started to try his hand at negotiating his way out of work. This was the first time he showed that he wasn’t interested in playing by the rules.
Chris: I think one time I asked my Dad, "Hey if you just help me do half of the math problems, then I can get the A. Looking at it backwards, if the main goal is to get an A, why don’t we make it a family effort?
Ultimately, he said no, you’re doing all the work. I guess what he was trying to teach me were the principles, the hard work, integrity - whereas the school system growing up Central Jersey probably just valued, What did you get at the end of the year? It didn't really value whether you intrinsically know the information or whether you retain it at all .
III. Not Playing By The Rules: Cheating at Hopkins, Defrauding Facebook, Auctioning Used Clothes of Korean Pop Stars, Selling Twilight Tshirts
Lucia: Chris ended up attending college at Johns Hopkins. But without the oversight of his parents, he rebelled against the education system. In computer science class, for instance, he copied someone else’s code. One time the school’s algorithm picked it up and he got caught.
Chris: I got a degree in economics but the four years spent there I pretty much got a degree in cheating, lying, stealing, bullshitting.
Lucia: What?! Please elaborate.
Chris: Everything kind of laddered up into you know, whatever we needed to do to to just get in get out, get ahead.
The theme there was me learning to subvert the system. I didn’t want to play by the rules. In the middle of my sophomore/junior year, I studied computer science. It felt akin to studying Spanish in school. You’re just not going to beat the kids who grew up with it...I wasn’t going to be able to compete. If I put in 1000% effort, then yes maybe. But I had other things to do.
Lucia: At what point, were you just like fuck the system?
Chris: Around that time. If the deliverable was a file with letters that represent code, I could probably just get that from somebody else.
Lucia: In his college days, Chris was lazy. He found ways to cheat the system so he could focus more on hanging out with friends. Perhaps that framework of thinking, of finding the cheat code, comes from Chris’ love for video games and his disenchantment with the modern education system. I can see how Chris’ ability to spot opportunities attributed to his current success. However, it also got him into plenty of trouble. Despite Chris’ effort to subvert the system, he barely graduated from Johns Hopkins.
Chris: Me cheating lying, stealing, bullshitting, didn’t necessarily amount to a 4.0 at all. I think it was a vestige of me being lazy as a kid, or having other interests outside of academia. I wanted to play video games, or read comic books. Anything that was able to increase my available time there and shirk away from my responsibilities having to do homework or study for exam
I didn’t know what to study. I think I went poli sci, IR, and something else. My dream was like, OK I’ll become a lawyer... I quickly found out that Hopkins seems a place where maybe you didn’t get into an Ivy but you’ll work your ass off and prove yourself. I think everyone there had a chip on their shoulder.
I ended up with an economics degree but barely graduated. I think I had a 2.09 GPA.
Lucia: Oh my gosh!
Once Chris graduated, he moved back to New Jersey to work for his old employer at a document research company. Just a regular job, nothing particularly entrepreneurial. But while Chris was there, his boss whose background was in film became interested in starting an online ecommerce site and asked Chris for his help.
Chris: That was my first foray into entrepreneurship. What does it take to set up a website, inventory, marketing...I never thanked him for this but that was the first real instance of, with just an idea and the right amount of interest in it, then you can do anything...That was the first time I realized, you don’t need to know everything. Coming from something without knowing everything, you can come at it with fresh eyes.
Lucia: This was one of the turning points in Chris’ life where he realized he could use his ability to spot opportunities for business. But once again, his parents didn’t approve.
Chris: Shortly after that I had a sit down with my Dad and he was like, there’s no way I paid X amount of dollars for your education and you’re getting paid $10 an hour. You have to get a real job. I resisted but eventually he came back and said, Take this job, he works for MTA. And so I worked for MTA for a while not doing much quite honestly..I literally just sat there and read books, and listened to radio...I just sat there and collected a paycheck, so that was kind of rough.
Lucia: After a year of working at the MTA and feeling bored out of his mind...Chris had to get out. He was thirsting for something more.
But due to the pressure he felt from his parents he didn’t start his own venture. Instead, he sought out jobs at various Fortune 500 companies; first as a sourcing analyst at Revlon and then a consultant at Goldman Sachs. He wasn’t a huge fan of the corporate cultures there. They valued materialism and titles, while Chris valued something else
I valued what I could do with my two hands. I wanted to do something. I wanted to see what was possible.
Actually during that time, I started a few side businesses..I was passionate about doing something outside of work that could bring in some passive income….I went to see Twilight with my ex-girlfriend at the time *
Lucia: Sitting amongst a sea of giggling women and their mothers, Chris developed an idea for his first side project. He spent months working nights and weekends from 7pm - 2-3am in the morning designing Twilight T-Shirts.
I can tell that Chris’ mild and calm demeanor belies his incredible drive. He started taking the lessons he learned from college and applied them to business.
In 2009, Citi created a product called virtual credit which generated credit card numbers that expired after 24 hours. Online shopping was still at its infancy and people didn’t trust websites with their credit card numbers. The idea Chris had was to use these fast expiring credit cards to pay for FB ads.
Chris: When I realized that CitiCard had this system by which the CC#s would expire, I thought - what if I just pump credits through the card into my FB advertising? If the CC expires, they couldn’t charge it. So I was pumping thousands of dollars to FB new advertising system and i was sending people to my site and they would eventually purchase.
Lucia: Did it work out?
Chris: It worked for a little bit. Eventually FB caught on. They sent me a letter and told me how much money I owed. I wanted to fight it, and it was kind of ironic - I got sent a Credit Fraud Analyst position at FB from a friend, not knowing I was doing all this on the side. I thought it was hilarious. I had made more than enough to cover the fine.
Lucia: Talk about rocking the boat!
Chris: The only thing I asked for was that I wanted my Facebook account. They ended up deactivating my account but I signed up with another email address. It was fine.
Lucia: One thing I admire about Chris from his story is his tenacity and his unwillingness to back down from challenges -- even if what he was doing was questionable. Traditionally, as Asian Americans, we’re often taught to put our heads down and work hard. We’re not taught to play the game, to figure out the rules of the system and find the cheat code if you will. But Chris did and he played the game well.
Chris: I had another small business. You know I think spent $500 on a bunch of blazers the first month, sold it for $1000, took the money to buy $1000 worth of blazers. Eventually it caught up with my day job so I had to bring on a partner...we were expanding into other things because we found the right keywords and the right marketing.
My dream of building all these small businesses was kind of coalescing into this idea where I could actually give up my day job.
IV. Itching to Create
Lucia: It was around this time that two major events changed history. One, the iPhone was released. And two, games like Farmville and Cafeland on Facebook were starting to take off. Chris and his grade school friends, Chieh Huang and Will Fong saw an opportunity. Mobile social gaming.
Chris: Any kind of startup you need a hustler, hipster, and a hacker. I ended up being the hipster, Will is the hacker (programming since he’s been 11 years old), and Chieh’s the hustler.
I’ve known Chieh since we were in middle school. He was always the funny, outgoing one who ran for student government...I remember one time in middle school, he made me laugh so hard I got detention