Now I know many tech founders have attained the level of adoration normally reserved for rock stars, but this is a little pushing it. So what has Tan done to stir up such fervent expressions of love? How did he manage to build up a cult following over expensive gaming accessories and laptops?
At an Innovfest Unbound 2017 fireside chat with TechCrunch’s Asia-based correspondent Jon Russell, Tan explained how his product design-focussed business approach has helped him to succeed.
“In the early days, nobody wanted to invest in a hardware company. We thought we were just going to come up with one product and do it for ourselves,” said Tan.
But a satisfied customer never keeps mum about a good purchase. Through word of mouth, Razer ended up gaining a lot of distributors — many of whom were “gaming pals” of theirs; Some eventually joined the company.
In 2007, Razer’s first salesperson was initially skeptical about having to move what is, to the untrained eye, an overpriced computer mouse. He estimated that he might be able to sell 400 units, but gamers saw its worth, and he was able to sell a lot more (to date, he is still with the company, according to Tan).
Manufacturers that Razer first approached also baulked at their idea, claiming that there was no way they could build a gaming laptop that was lightweight — and that only Apple had the clout to sell expensive laptops.
But Razer ignored the criticism. After three iterations, they built a gaming laptop that lived to their vision. The same manufacturers then tried to emulate their design.
A product for gamers built by gamers
It’s not fair to simply dismiss the misgivings Razer’s early naysayers. Razer’s products priced far above most laptops and accessories — they are not catered for the mainstream market.
The average consumer who uses only Netflix, Facebook and Microsoft Office is not going to plunk down S4,000 (US$2,860) for a top-of-the-line Razer Blade laptop. And even the casual gamer who plays League of Legends or DOTA2 would not require a balls-to-the-walls setup. Most people aren’t going to spend a couple of hundred dollars on a mouse either. Not the most prudent move if one desires maximum profitability.
But that is not the ethos of Razer. The bottom line is not a primary concern for Razer.
“Our focus has always been on R&D and engineering…why would anyone want to buy a Razer Blade? It’s the only platform that has the GTX 1080, in a form factor that is as thin as that [referring the laptop] … and the mouse has the best performance from a wireless perspective,” said Tan.
“Most companies look at price brackets and they try to shoehorn a product into the price bracket. We, on the other hand, we know our users, we are designing for ourselves; and if I’m designing for myself, I don’t want a shitty mouse, I don’t want a shitty laptop, I don’t want something designed for a price bracket or budget. I want to design the very best product out there.”
As a company hyper-focussed on its product, Razer has a large team overseeing the engineering and development. But Tan also likes to get down on the ground and test out every product and prototype. Every month, he flies between Razer’s offices in San Francisco, Taiwan, and Singapore. In one case, he even ordered the flooring of a Razer store be redone because the seams were off.
Delivering an experience through brick-and-mortar stores
E-commerce transactions are rising exponentially, and traditional retail spending is on a steep decline. But Tan is bucking the trend by opening up more brick-and-mortar stores instead.
“Razer is opening stores everywhere because it provides a direct conduit to users themselves — and we design them to be areas we want to be in,” says Tan. And that means stores where customers can play games to their hearts’ delight without any salespeople bugging them.
Tan said that he had shop owners and operators coming up to him advising to outfit the Razer store with more lights or have salespeople pitch more aggressively.
But the purpose of a Razer store is not just to display products; it is to provide customers with the full-fledged Razer experience, and just, you know, hang out and play games.
“You can stay all day and play games. Every weekend we bring in tournaments. Sometimes we have [gaming] streamers and other fun stuff. We want it to be a nexus or a temple where all gamers come together,” said Tan.
“We are selling our philosophy of building a really great product,” he added. And this has also made an impact on the bottom line. Tan claimed that in cities with Razer stores, there has been an uplift in their product sales.
Having a bit of fun
Sometimes, Razers builds products based on peoples’ whimsical requests or simply because there is a need for it — even if there is not much money to be made.
In one case, an employee put “kitty ears” add-ons on her Razer headphones and requested that an actual kitty-eared Razer headphone be made. Tan challenged her to find 10,000 consumers who wanted the same design if she wanted it made — and she did. In another case, a fan wanted a Razer-designed toaster. Tan told him to get a million followers if he wanted one; there is no outcome, yet.
Razer has designed mouses for left-handed gamers. But because there is simply no economies of scale for a product like this, Tan said he does not expect to recoup the cost of production.
“We don’t have a financial case for everything. We design our products just for the community.”
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