Some time before Rakuten’s acquisition of Singapore startup Viki for a reported $200 million, founder Razmig Hovaghimian and SingTel Innov8 CEO Edgar Hardless had a friendly wager on how much the startup could be acquired for.
The stakes? Dinner in any restaurant in Singapore.
Razmig’s prediction was unbelievably rosy at the time, said Edgar at a panel discussion held at startup accelerator JFDI last week. Innov8, a $200 million venture capital firm, is an investor in Viki.
It turned out that Razmig won.
But the bet was trivial compared to the series of gambles Razmig and his co-founders had made as entrepreneurs.
Experimenting with online videos
The videos exploded in popularity while they were holding daytime jobs, and Razmig, who was working at NBC Universal on international distribution, realized that translation can untrap content and bring it to a larger audience.
“So we quit our jobs — we had put all our life savings in it — and in 2010 we released series A, came out of beta in December 2010, and we’re building, you know, a global destination for the best of world TV and movies, for the fans and by the fans,” said Razmig in an interview with Anime News Network.
Today, Viki has about 22 million monthly active users, with ten million coming from mobile. It has content in more than 160 languages and a team of 47 spread out over Singapore, San Francisco, Seoul, and Tokyo.
For Razmig, getting from not being able to afford the desired domain name — they were initially called ViiKii — to becoming the it-story in town required a good deal of faith.
Halfway across the world
Rather than being located in Silicon Valley, Razmig moved to the island state in 2008 on the backs of generous Singapore government funding. He settled in at Hackerspace.sg, a maker space that “looked like a massage parlor” at first glance.
Meng Weng Wong, co-founder of JFDI, termed the Viki co-founders the “hipster, hacker, and hustler” — the ideal “holy trinity” for many web and mobile startups. Jiwon was the graphics designer and language education expert while Changseong had the engineering chops.
Razmig, meanwhile, knew the content distribution business and had the sales relationships.
Cash was scarce, and Razmig had to borrow to keep his startup afloat. But the team had no shortage of domain expertise. Working his phone while pacing back and forth, Razmig pitched Viki to investors. He also had to convince his co-founders that Singapore was the right place for a global headquarters due to its status as a gateway to Asia-Pacific.
He succeeded in doing both, counting Greylock Partners, Andreessen Horowitz, and Charles River Ventures amongst his backers.
Edgar of Innov8 explained why his firm invested in Viki: “It was something we had never come across before. It’s an interesting model.”
Getting buy-in from investors and business partners was just the start – he had to rally support from family. His daughter was one year old when he started out, so he enlisted his mother and in-laws to look after the baby in shifts.
His wife was not exactly an investment banker, he said in a video interview with JFDI, in fact she was studying film directing. But she agreed to move with him to Singapore.
With so many balls to juggle and startup events begging for attention, keeping focus was challenging.
Ultimately, Razmig pared down his commitment to speaking engagements and focused on building his product, learning from mistakes, and discovering what worked and what didn’t.
“We really didn’t know what we were doing,” he told JFDI. While there’s a lot of talk about lean startup methodology, many of Viki’s product decision-making relied on instinct. He added:
I had a good intuition for where the market is going, yet we’re market-making, so we can define it and open up the path.
Yet the toughest part about building a company is not the product — it’s leading the people behind it. Razmig called entrepreneurship the toughest thing he’s done in his life.
On some days, he didn’t know if he could meet payroll. Up and down moments came in close succession, and his decisions had real impact on people’s lives.
From bootstrapping to takeoff
The pressure valve eased after he raised funding, but other concerns banged at the door: He has to grow the scrappy startup into a sustainable business that makes returns. That entailed testing different monetization models to see which made most sense.
Razmig wasn’t too concerned about dilution of shares as long as he retained control of the company’s vision. He didn’t mind giving more shares away as long as the board was kept small — three seats for founders (one was vacant), and two on the investor side. That gave him the flexibility to stay true to his vision and make moves that might not have short-term impact, but could prosper the company in a market that was just being built.
Before Razmig sold Viki, he had full intentions to raise a series C round. So when he met Rakuten CEO Hiroshi Mikitani, he wasn’t thinking about exiting.
Yet in a series of meetings, both realized that a closer relationship would be a good fit. Rakuten, after all, has ambitions beyond being just another e-commerce company. It wants to be like Amazon, not just offering goods but an ecosystem of media products.
Viki was Rakuten’s passport into the world of video content powered by a devoted community, and Razmig believes the site has potential for more.
With the need to please investors now much less of a factor, Razmig has the flexibility to play the long game and be more methodical. The Viki Mafia will come in time, but much remains to be done at their office on Tras Street.
The investment gave Viki wings. We’re still building for something that is ten times bigger… this is just our next phase of growth.
Photo: Joi Ito
Edited by Steven Millward and Paul Bischoff