Updated: Apr 7, 2020
I got rid of my apartment and moved into the office because we had cubes and space for 20 something people. We are down to seven so we just had a lot of empty cubicles and so I took a set of three.
Below is an abridged audio transcript of Episode 40 from Season 3 of Rock The Boat: Against All Odds, edited for clarity.
For Rock the Boat Season 3, we've been talking to people who have gone up against the odds to do great things. One of the things we've noticed is that Asian founders don't necessarily build a brand for themselves. They aren't as well known and it's difficult to name some off the top of our head. In this episode, we talk to Patrick Lee, who was a serial startup founder and a co-founder of Rotten Tomatoes. Most people probably didn't know that an Asian American was one of the people behind one of the biggest entertainment sites out there.
Patrick talks to us about the early businesses that he started during his time at undergrad. He took long breaks from his studies so it actually took him 12 years to get his degree. But during that time, he did some cool things and did his best to do things differently than other people.
We hear about:
why he chose to go to Berkeley,
starting his first business with friends,
sleeping in cubicles when the dot-com bubble burst, and
what he learned from starting several businesses.
I. Meet Patrick Lee
Patrick: I'm Patrick Lee. I was born in LA, grew up in Maryland. I went to school at UC Berkeley studied cognitive science left school after two years to do a couple of different startups eventually took another 10 years to finish last two years worth of school.
It took me 12 years to get my undergrad, six different startups for in the Bay Area, one in China, one in Hong Kong and now I'm just kind of taking a break. Try to figure out what's next, seeing friends and family, doing a lot of speaking organizing events with interesting people things like that.
Lucia: Patrick was a shy kid growing up. He didn't have a lot of friends because he moved around a lot in elementary school. He was always the new kid. Patrick and I bonded over that. We both moved around a lot as kids and we both lived in Maryland for a while. I can see Patrick's journey reflected in my own as an only child who was always the new kid.
Patrick's ability to organize people and his desire to keep his friends together became the through line and Patrick's career as a serial entrepreneur.
Patrick: That was one thing that I liked pretty early on was to try to get people together and just to have community and I think all the startups I ended up doing or sort.
Lucia: Patrick ended up attending UC Berkeley for college. The reason, again, to feel a sense of belonging.
Patrick: You know when I was growing up in Maryland. There weren't too many Asian people in my elementary school for junior high and high school. We had the magnet program so there was a lot more Asians. Then when I went to Berkeley it was because it was like 40 percent Asian and I wanted to be kind of a place that I felt more like I belonged.
II. Starting up
The first business we did it out of our apartment in college. There was four of us total.
Lucia: The company Patrick started with his friends out of his dorm room was called Human Ingenuity. He and his college friends would sell and assemble computer components by hand. Patrick made it clear that he didn't do it for the money. It was more so to learn the ropes of running a business.
Eventually the business no longer made sense. Prices for computer components kept dropping and holding inventory became a risk. Things weren't great with his co-founders, so Patrick knew it was time to leave. He turned his attention to a graphic design company his friends started, they both borrowed some money from family and rented an office in Berkeley.
Patrick: When I came on board, we sort of reformed as design reactor and it was still kind of around web design. It was very small projects in the beginning. It'd be like things like a dentist website and we managed to get some jobs with like tech sites.
Lucia: The company was making some money, but not a lot until a stroke of luck brought them in front of a big client.
Patrick: A movie that was coming up. They didn't have a website for it and it was Mighty Ducks 2. We ended up going to Blockbuster, renting the movie, getting some pizzas, and we just had a little pizza party. We all watch the movie and then after that we decided, you know, let's split the work.
I think it was like Monday after the weekend. I sent it over to Kara who is the person that Disney Channel and said look, we don't have anything at our portfolio that we can really show you but we made this over the weekend to kind of show you what we could do and she was just blown away because she knew there's no way we would have known in advance. They ended up buying.
Lucia: This was a big break for design reactor. They kept winning projects from Disney, which eventually led them to become their lead developers.
III. The origin of Rotten Tomatoes
Lucia: So earlier we talked about the problematic employee, a design reactor. His name is send Wong, and he was actually their creative director.
Patrick: He was a huge Jackie Chan fan and when Rush Hour was coming out he wanted to know what everyone was saying about the movie.
And so he went out and he actually had looked up reviews and back then most of the views were not online.
So he had actually go to the library, you know, pull out magazines and newspapers to find the reviews write down a quote from those reviews and then go back home and work on the site. He wasn't an engineer. So everything was static HTML.
The idea was basically, you know, you open up a newspaper. You see a full page ad for a movie. It looked like a movie poster with posts on it. And the main issue was those quotes would always be good regardless of the movie was actually good or not. And if the movie was good the coats would be from famous film critics like Roger Ebert. If the movie was bad, it would be like radio station DJs in the middle of nowhere.
So his idea was this what if I only put quotes from professional critics and I include all the quotes good and bad and then have a score and so that's how it started.
Lucia: Patrick and Steven. The two cofounders of design reactor were bit annoyed at first over sends obsession with his new project, but as the site grew and started to pick up traction, Patrick changed his mind.
Patrick: I remember Steve and I were like, oh maybe this does make sense. It's like you're putting so much time into it. But at the same time, you know, we're hosting for him. We saw that it was growing in traffic and there's two things that kind of changed our minds.
One was Roger Ebert actually wrote an article where he pointed out his favorite movie sites for a magazine and Rotten Tomatoes was one of them.
Lucia: Roger Ebert is the famous journalist and film critic. He wrote for the Chicago Sun Times and was the first critic to win a Pulitzer Prize.
Needless to say, he was a big deal and his endorsement of rotten tomatoes gave the site credibility.
Patrick: and the second was when Pixar released A Bug's Life. There was a spike in traffic because back then there wasn't a lot of traffic and what we looked into it was actually coming from Pixar.
So we did was we brought Steve on as a co-founder of our design firm and we all were cofounders of rotten tomatoes. Then I went out raised a million for Rotten Tomatoes brought our entire design team over which was at the time 25 people and we gave our design firm off to another group to take over so we can just focus everything around Tomatoes.
IV. The dot-com bubble bursts
Lucia: Internet businesses were going down left and right. pets.com famously went out of business just nine months after the initial public offering and investors disappeared. Patrick had to lead the company to profitability or shutter the business. He decided to do something drastic to save the company. He asked his team to take a 30% pay cut and he himself decided to forego his salary altogether.
Patrick: the way I did that was I got rid of my apartment and moved into the office because you know, we had cubes and space for 20 something people. We are down to seven so we just had a lot of empty cubicles and so I took a set of three that were kind of in an L shape and made that into my like apartment. And I just hid my clothes in the drawers. And I set up in a way where if all the doors are closed, it just looks like any office cubicle.
And then when I needed to sleep at night, I had like a little fold out mattress and sleeping bag and I could just go into sleep there.
And it was it was good. I think I did that about half a year and it wasn't really as bad as people think it was.
Lucia: At the beginning of this episode, I talked about Asian founders who seemed invisible despite the prolific number of tech companies they founded. They seem to melt into the background of their brands and they stay unnoticed if they are successful. We know of their companies as household names and if they fail, we never hear of them again.
Patrick: After we sold I decided I need to deal with this weakness of networking and a related weakness of just fear of public speaking.
I took these beginner acting classes, but they were intensive two-day workshops and it was roughly around eight or so people and you were just up in front of folks over and over and over doing improv or you know, getting a short bit of script that you had to act out or even try to memorize and act out which was super hard.
And for me it wasn't about trying to learn how to act but it was learning to like that feeling of getting in front of people and trying to speak. And those workshops helped a lot in terms of helping me understand the fear I would have in that situation.
Lucia: Patrick's not looking to do another startup, but he is interested in paying it forward to other entrepreneurs out there.
Patrick: I'm actually volunteering as a mentor in Hawaii for a tech accelerator for two months.
It's been a month so far. It's been great and I'm working with a lot of startups. And one thing I've realized is I do like working with startups. I like giving them advice.
Lucia: As always, we ask Patrick our signature question, what does rocking the boat mean to him?
Patrick: Rocking the Boat is I think just doing things differently than everyone else. You know, everyone I assume is this boat to have a nice ride, and someone who's rocking the boat is making waves and causing disruptions.
And I think that's something that I try to do with a lot of my startups was just doing things differently not taking the standard path.
You're probably familiar with Rotten Tomatoes already, but you may not follow them on Twitter or know that they have a YouTube channel called Rotten Tomatoes TV where they discuss movies and give recommendations for things to watch.
Patrick Lee is also a core team member of Gold House Collective and you can follow him on LinkedIn.