KKBox did Spotify in Asia before Spotify even existed

Chris Lin, CEO and co-founder of KKBox

Chris Lin, co-founder and CEO at music streaming service KKBox, was born and raised in Taiwan before he made his move to New York City at age 14. After getting his bachelor’s at Boston University and later attending grad school at Stanford, he landed his first job in Silicon Valley at a management science consulting company. Unhappy with the job, he left and returned to Taiwan after a year. “I felt my opportunity would be better back in Asia,” Lin says.

Back in Taiwan, Lin met Lambert Chien and Mark Hsu and co-founded Skysoft in 2000 (Hsu left after a year). It was Lin’s very first startup and its first product was a desktop browser app called KKman (KK stands for king of kings).

At its peak, KKman had 22 percent of web browser market share in Taiwan, Lin says. In the 2000s, an era when 56K modems ruled the world, browsers and email were two of the most widely used applications on the internet. To generate revenue, KKman connected users to a designated Internet Service Provider (ISP) with a revenue share agreement.

“That was a dream business model. The company had less than 10 people, all engineers, and we just sat there and got free air minutes,” says Lin.

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But his dream business model didn’t last once broadband connections took over. Revenue plummeted and the business was in danger. In 2003, Lin ditched the browser business to focus on selling mobile content. He brought Japanese content like ringback tones and Java games, and distributed it in Taiwan. In addition, Lin and his team also did consulting work for carriers to ensure there was enough dough for everyone. In late 2004, fed up with the unscalable model, Lin was determined to change. That change turned out to be a good one. It was KKBox, a music streaming application inspired by Apple’s iTunes.

“We studied to see if the iTunes business model could be implemented in Asia. But we quickly found out that [in Asia it] is impossible. […] There’s too much piracy and people would not pay for music. So we needed to do subscription. Through subscription, people are paying for access [and convenience], not music. It is easier to persuade Asians to pay,” Lin says.

KKBox launched in late 2005 as a PC application. The adoption rate wasn’t high and the startup struggled in its first three to four years. There was a glimmer of hope though, as people were willing to pay for its service because they didn’t want their hard drive to be clogged with Mp3 files.

“But that was just a small group of people. Many people wanted to bring [music] on the go,” he says. Unfortunately, back then, without Google Play and App Store, the mobile app ecosystem didn’t even exist for KKBox to go mobile.

Failure was like death penalty in Taiwan

“We needed to think about profitability from day one. What we could offer was to let users stream five songs per day,” says Lin.

Lin lamented that the startup culture in Taiwan wasn’t very uplifting back then. It didn’t embrace risk. While failure in the US is okay, failure as an entrepreneur in Taiwan is akin to a death penalty in your resume. Lin said that Spotify could amass a great number of users by letting users stream music for free but KKBox couldn’t because it didn’t have big funding. “We needed to think about profitability from day one. What we could offer was to let users stream five songs per day,” he says.

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