Taehoon Kim — CEO of nWay on Raising $90M, Selling to Animoca, and Gaming x Web3

This interview features Taehoon (TK) Kim, Co-Founder and CEO of nWay. We discuss going to arcades with his mom in South Korea, why he wasn't allowed to play console games as a kid in Canada, what he learned from Samsung's work culture, why it's hard for VCs to invest in gaming, finding passion at the intersection of technology and art, the best type of IP for game partnerships, how he ended up selling nWay to Animoca Brands, and how player ownership in games creates attachment and meaning, and prevents gamer exploitation.

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Interview Transcript

The interview was lightly edited for clarity.

Chris Erwin:

Hi, I'm Chris Erwin. Welcome to The Come Up, a podcast that interviews entrepreneurs and leaders.

Taehoon Kim:

So I was really upset when Lightspeed thing fell through. I went out drinking with my friends and I got hammered that night. I had another VC pitch the next morning. I was so hungover that during the presentation I threw up three times. During the pitch, I would say, "Excuse me, I'd run to the bathroom." I would throw up, come back, continue the pitch. And I did that three times., And I did the presentation 9:00 AM I came home and I was, "Oh, my God, I totally screwed that up." I fell asleep. I woke up at 4:00 PM, got a call at 5:00 PM saying that he was in. Usually it doesn't happen that way, but it was a really weird period of time in my life.

Chris Erwin:

This week's episode features TK Kim, CEO of nWay and a serial gaming entrepreneur. So TK was born in Seoul, South Korea to a mom who was a gamer and a lover of arcades. After studying at Cornell, TK started his career at Samsung, where he helped launch their smartphone and next gen mobile gaming businesses. TK then went on to co-found three gaming companies, and raised over $90 million in venture capital. Today he's the CEO of nWay, which is a developer, publisher, and tech platform for competitive multiplayer games across mobile, PC, and consoles. nWay was sold to Animoca in 2020.

Some highlights of our chat include why he wasn't allowed to play console games as a kid in Canada, why it's hard for VCs to invest in gaming, finding passion at the intersection of technology and art, why he doesn't mind getting rejected by investors, the best type of IP for game partnerships, and how player ownership in games creates attachment and meaning and prevents gamer exploitation. All right, let's get to it.

TK, thanks for being on The Come Up podcast.

Taehoon Kim:

Hey, thanks for having me. Super excited to be here.

Chris Erwin:

We have a pretty amazing story to tell about your career, but as always, we're going to rewind a bit and kind of go to the origin story. So it'd be awesome to hear about where you grew up and what your parents and what your household was like.

Taehoon Kim:

I was born in Seoul, Korea, and then I moved to Vancouver, Canada when I was in fourth grade. I think I was 10 or 11. At the time, growing up in Seoul, a little bit more strict environment. One funny thing is that my mom was a gamer and she would take me to the arcade, I think when I was super young, five or six years old. That's when I got really into gaming and how fun could that could be. But when I moved to Canada, however, she didn't really let me have any consoles, when that switch from the arcade era to the console era happened.

I think she was a little bit influenced from the Asian culture and didn't want me to be getting too loose on academics. But when I got the computer, that's when I started really getting back to gaming. She didn't know I was playing games, but I was really into that. And then when Doom came out, that's when I really also started getting into online gaming, which is a big part of the reason why I'm so into PVP and competitive gaming.

Chris Erwin:

So your mom was a gamer and she would take you to the arcades in Seoul. What were the types of games that you guys liked to play together? And was this just something special that you and your mom did? Or was it a whole family outing that you did with your mom and dad and your siblings?

Taehoon Kim:

My dad didn't really like games, so it was just me and my mom. And she was really into Galaga and getting on the top of the leaderboard there. Oftentimes, I would watch her play and I would also try, but I wasn't as good as her. So I mean, I would mostly try to beat a record, but I couldn't. That's how I got into it early on.

Chris Erwin:

Did you also go to the arcade with a lot of your peers growing up when you were in Korea? And did any of your peers parents play? Or was it kind of like, I have the cool mom, she's into gaming, and we'd go do that on the weekends?

Taehoon Kim:

Oh, later on when I got older and I got in elementary school, yes, I definitely did go to the arcade with my friends. And then later on, in Seoul, arcades turned into PC bang. I'm not sure if you heard of it, but it's like the room full of PCs and it would play PC games there. I mean, I got in earlier than my friends, because of my mom.

Chris Erwin:

Remind me, what was the reason that you guys came to Vancouver from Korea?

Taehoon Kim:

I'm not a 100% sure if this is the real reason, but my parents would always tell me it's because I wasn't really fitting well with the type of education in Korea, where it was more, much more strict and less creative. They wanted us, me and my brother, to get a Western education. I think it turned out to be good for me, I guess.

Chris Erwin:

Do you remember when you were kind of joined the academic and the school system in Vancouver, I know it was at a young age, you were about 10 years old, you said, did you feel that that was like, "Hey, this is immediately different and I really like it and enjoy it"? Or was it nerve-wracking for you to make such a big change in your life to be uprooted at such a young age? What were you feeling at that time?

Taehoon Kim:

It was immediately different, lot less grinding. Even at third or fourth grade, back in Seoul, it was pretty tough. After school was over at 5:00 PM, I still had to go to all these after school programs until 9:00 PM or something like that. And I didn't do the homework afterwards and everybody was doing it. So there was a lot of peer pressure for parents to also put their kids to the same kind of rigorous program. And when I was in Vancouver, I didn't have to do any of that. So it felt more free and math was a lot easier.

Chris Erwin:

Math was a lot easier in Vancouver.

Taehoon Kim:

You know how crazy it is for Asian countries with math early on.

Chris Erwin:

So you're probably the top of your class. You were such a standout, and I bet at a young age that was pretty fun because it was easy to you too.

Taehoon Kim:

People thought I was super smart. I wasn't, it was just that I started earlier doing more hard stuff in math. It wasn't necessarily that was smarter. But again, on the other subject, because my English was suffering, I had to get a lot of help. So I would help them in math and they would help me with the other subjects.

Chris Erwin:

And you mentioned that in Western education there's also probably more emphasis on using the creative part of your brain as well, and balancing that out with the math or the quantitative side. What did that look like to you as you were going through middle school and high school before you went to college? Any specific applications or stories stand out?

Taehoon Kim:

Yeah, one thing that stood out to me was how a lot of the homeworks and assignments were project based and group based. Where teamwork mattered, and I would have to work with two or three other students to do a project, where we had a lot of freedom to create what we wanted. And the fact that there's no right answers. And it was really weird for me at the beginning, but I got used to it later on. But I think that's kind of a key difference. And at least at that time.

Chris Erwin:

During your teenage years and coming of age, before you go to Cornell, what was the gaming culture in Vancouver? And what was your role in it?

Taehoon Kim:

Early '90s when the console wars were happening with Nintendo and Sega, and there was a lot of cool things happening there, but I didn't get to really partake in that. My parents didn't allow me to have consoles. But same things were happening in the PC gaming, especially without modems and the early stage of internet happened. Me and my friends, we got started with Wolfenstein, which was mind blowing.

Chris Erwin:

Oh, I remember Wolfenstein, it was one of the earliest first person shooters on a PC.

Taehoon Kim:

It was mind blowing. It was the first game to really utilize 3D spaces in the way it did. But then the real game changer was Doom because you can... Even with the slow modem, I think it was an amazing feat, think about it now, with limited technology and networking, I could dial into, using my modem, and then connect with my friends, and I could play PVP. And that was when the gaming was the most fun for me, actually, playing with friends live. And I would play it late until night early in the morning, over and over again, the same map.

Chris Erwin:

I remember playing Wolfenstein at my friend's place, shout out, Adam Sachs. And then I also remember playing Doom, and I remember having the cheat codes where I can go into God mode.

Taehoon Kim:

Oh, right.

Chris Erwin:

And I was invincible and I could play with five different types of guns, including the rocket launcher. I can specifically remember from my youth some of the different levels. And sitting at my PC station kind of right next to my family's common room. Those are very fun memories. I don't think I was ever doing... I was never live playing with friends. Were you able to do that within the Doom platform? Or were you using a third party application on top of that?

Taehoon Kim:

I think it was within the Doom platform. It's pretty amazing. Doom was a fast game, so the fact that it worked, it was amazing. When Quake came out, afterwards, that's when I think e-sports was really ended up becoming more serious and people were going to playing at a more higher tier. But that's when I got out of FPS and dove into fighting games.

Chris Erwin:

Got it. You moved to Vancouver, you're a standout in school, on the math side just because of all your training in Korea. And you're learning about work in these more kind of project based environments or team based work, where there's also a lot of freedom for collaboration. You end up going to Cornell. When you were applying to school, what was your intention? Did you have a very clear focus of, "This is what I want my career to look like, so this is what I'm going to study in undergrad"? Or was it a bit more free flowing?

Taehoon Kim:

I really wanted to go into a top engineering school. I knew that was what I wanted to do. I wanted to study electrical engineering or computer science, and I was looking at Cornell, MIT, Stanford, they had really good engineering programs. And I knew that the playing online games and doing a lot of mods and all that stuff in the computer, and looking at kind of the early stage of internet, I knew that was going to be a big thing later on. My goal was to kind of get into that sector by studying engineering or information technology.

Chris Erwin:

Was there any certain moments when you were at Cornell that to help to point you in kind of this gaming leadership, gaming entrepreneurship career path that you've now been on for the last couple decades?

Taehoon Kim:

Well, a couple things happened. I was good at math. I was good at engineering, and internet was happening. And then one thing I didn't talk about was that I was also really good at art. At one point, I even thought about going to art school. I think it was because of my mom's side of the family, a lot of artists. And I think it was the DNA from my mom's side. What I love about gaming was the fact that you can kind of combine technology and my love for technology and also my love for art.

And when I graduated, Cornell, started work at Samsung and there was an opportunity to go into a new gaming. That's when it clicked for me. I was like, "Wow, I really want to get into this industry. It's as both of what I love." But at Cornell, because we had super fast ethernet, a lot of people were playing StarCraft at that time. And that's how I saw the world in terms of, "Wow, these type of massively play online games. I mean, RPGs or games where you can play competitively is going to be a big thing."

Chris Erwin:

I don't want to date you TK, if that's uncomfortable, but around what time period was this? What year was this around?

Taehoon Kim:

College was from 1997 to 2002.

Chris Erwin:

I have to ask, too, when you say that you almost went to art school, and that you had a passion for arts, since it's very early on, what type of art applications? Was it painting? Was it drawing? Was it sculpture? Was it something completely different? What did that look like?

Taehoon Kim:

Sculpture, I was good, but I didn't excel at it. I was mainly good at sketching, painting, and doing just a lot of creative art, concept art, which is a big part of game development, actually.

Chris Erwin:

Your first role, what you did for work right after Cornell was you went to Samsung, and there you were a product manager where you helped start Samsung's smartphone business, and you're also a product manager for next-gen mobile gaming. And as you said, this was exciting to you, because you saw gaming as the intersection of technology and art. Tell us how that first role came to be and kind of what you focused on there.

Taehoon Kim:

I was part of a team called new business development team. Group of 13 people, and our job was to create next-gen businesses. Three businesses that we isolated as something that we should work on was telematics, which is using the map data to help people and navigations and bring new technologies to the car. Second one was smartphone business, taking some of the operating systems from PDAs at the time and then moving that over to the phone. And then third one was gaming, because Nokia was going big with gaming at that time. And Samsung was second to Nokia in market share and someone wanted to do whatever Nokia was doing at that time.

So those were three main things. And I got into the gaming side after one of the first business trips was to San Jose, which at that time was hosting GDC, Game Developer Conference. And it was my first time going to GDC. And, yeah, I was just fascinated with the group. It was engineers, artists, players, developers, publishers. And that community really fascinated me, and that's when I decided, "Hey, I really want to be part of this group. I want to get into gaming." So I came back and said, "Hey, I want to take on this project." And a lot of my peers were avoiding the gaming sector, because they knew that was difficult. And Samsung previously tried to do a console and it failed. So they knew it was difficult, but I wanted to get into it. I was super excited to get into it.

Chris Erwin:

Was it hard to convince your leadership, just based on the past challenges that Samsung had, to do it? Or did they just say, "Hey, TK, sure if you have an idea, see what you can do and then come back to us"?

Taehoon Kim:

Well, the leadership really wanted to do it mainly because Nokia at the time, that's when they launched their first gaming phone called N-Gage. I'm not sure if a lot of people remember, but it was a really weird device. They launched that business, and it was getting a lot of press. And our CEO was like, "We also have to a quick follow, and we have to get into gaming phones as well." So it was but different from what they did in the past, because it wasn't just a pure console, it's a smartphone plus a gaming device.

So it was a completely different type of environment at that time compared to when they were doing console. But nonetheless, because gaming is a [inaudible 00:14:06] driven and also because it's a tough business, my peers were, "Hey, I want to be in another sector." So it was less competitive for me to take on that project.

Chris Erwin:

So that must have been pretty exciting. Your first role out of school, you work for a very large technology company that essentially gives you as a young in your career a mandate. It's like, "Hey, TK, you know what? You want to go forward and figure out a new gaming business line for Samsung? You got the green light to go and do it." That must have felt pretty good. And I think you were there for a few years. What did you accomplish? And then what was the reason for why you decided to move on from that opportunity?

Taehoon Kim:

It was a very unique opportunity for me. I think I got lucky being at the right place at the right time, because that's when Samsung was really taking off as a global brand name. That's when they first overtook Sony in brand value. And that's when the consumers were looking at the brand more than as a microwave company, and a major player in the IT space. And that's when they were also hiring a lot of people from overseas.

And I did both undergrad and master's program at Cornell. And when I was in my masters, I got to know the founders of Palm, which was also a Cornell EE grad, through my professor. I got really stuck into Palm OS. I was semi expert with the Palm OS. I think that's why they hired me, because Samsung was the first major mobile manufacturer to adopt the Palm OS into their phone. And then the second thing is, because at that time Samsung's culture was still, it wasn't easy for Western certain people to... A lot of people from the US schools starting there, they weren't lasting that long. So it was hard for me as well, but I kind of decided, "Hey, I'm going to really make sure that I can stick around and tough it out."

Chris Erwin:

I think this is another important point for the listeners is that you are also building another company that you had founded while you were at Samsung called IvyConnection. Is that right?

Taehoon Kim:

Right.

Chris Erwin:

I like this because I think this is the beginning of a ongoing theme in your career that you are a builder and you're a founder. You're working at a full-time role, you're also building something on the side. And then this leads to, I think, some other big entrepreneurial ambitions kind of later on that we'll get to. But tell us quickly about IvyConnection.

Taehoon Kim:

IvyConnection kind of came out of the school project that was doing at Cornell, my master's program. At first, it was supposed to be a platform to connect tutors and students. And then I quickly realized, when I got to Seoul that there were a lot of parents who were looking to send their kids overseas to top schools, and they didn't know that things were different over there in terms how admissions worked. So I kind of created the category, which is a huge category is now it was the first company to do it. And so we did get a lot of demand. I started that right before I started working at Samsung, and it was just continuously growing. I recruited a whole bunch of my friends, and I had them kind of run the company. I was a co-founder, and while working at Samsung, I was advising and helping the growth.

Chris Erwin:

It's amazing, because you describe at Samsung it was a very brutal work culture at the headquarters. So you're probably working very long hours, very demanding, and then you're also building something on the side. It's like when did you have time to sleep?

Taehoon Kim:

I was young though, so I didn't need... I was happy to just work, until I was young and single. I was at my early 20s, so it was not problem for me. But, yeah, it was pretty brutal. We had to get to work right at 8:00 AM and the system kind of keeps record of exactly when you get into the company. And then you also had to come out on Saturdays for half a day.

Chris Erwin:

I did not realize that, that's the expectation across... Is that across all companies in Korea, as part of the work culture and the work norms? Or is that just unique to Samsung?

Taehoon Kim:

I think what's pretty unique to Samsung. I think at that time chairman wanted us to start early. You basically only have one day weekend.

Chris Erwin:

And for you, where you're also building another company on the side, it's almost like you never had time that you weren't working or very little bit, most likely. So you're at Samsung for about three years, but then you transition to Realtime Worlds. Explain why did you transition from your Samsung role? And what were you building at Realtime Worlds?

Taehoon Kim:

As I said, I was a project manager for a new gaming platform, and part of my job was also to source content for the device. And I remember playing Lemmings and I met the creator of Lemons, Dave Jones who just sold DMA Design and created Realtime Worlds. And I try to convince him to create games for my platform, but him and his co-founder, they ended up recruiting me. They're like, "Hey, join us. We just started Realtime Worlds, and we'd love to get your help, because we want to get into online gaming. And you have a lot more exposure to online gaming from Seoul, from Korea. So we wanted to be part of this exciting venture." So I decided to leave Samsung and joined them.

Chris Erwin:

How was that experience? Was it a similar work culture? Did you feel your past experience was very helpful and so you got in there and you're like you knew exactly what to do? Or was it still a very steep learning curve at that point in your career?

Taehoon Kim:

It was a steep learning curve for me, in terms of game development, because I have never done game development. Because Realtime Worlds is a game developer and publisher. That's right around when they just signed a contact with Microsoft for a game called Crackdown. It was like a souped up version of GTA. Dave Jones was also the creator and designer of GTA, the original GTA 1 and 2. So it was creating a similar game. And they had ambition to also create an online version of GTA, which is where I got involved.

I got one of the large publishers in Korea called Webzen to do a publishing deal to fund portion of development for the GTA online project, and be a publisher for that. So they wanted me to create the Asia branch for Realtime Worlds, they called it Realtime World Korea. I started the studio here in Seoul, recruited some engineers and designers and also did biz dev work to get that publishing deal with Webzen.

Chris Erwin:

And I think also one of the highlights from your time there is that, did you also help to raise money from NEA, in your role at the company as you guys were growing?

Taehoon Kim:

Oh, yes. My professor from Cornell, he was friends with the founder of NEA, and he knew a lot of VCs. And Realtime Worlds was based in Scotland, and they knew very little about Silicon Valley. So I told him, "Hey, we're doing something amazing here and online gaming is a new sector, so I think we should be able to raise some money." So I created the deck, which I learned from school on how to do, so created a deck, created a business plan, and then flew over to Sand Hill Road in Menlo Park and pitched to a few VCs including NEA. I was surprised. I was like, it was fairly easy at that time to raise money. NEA decided to, all by themselves, bring $30 million into the company and we didn't even have product launched at that time.

Chris Erwin:

This is pre-product. Did you go to Sand Hill Road by yourself? Or did you have a support team? Or was the company leadership saying, "Hey, TK, you know what you're doing here, you have the connections, go make this happen by yourself"?

Taehoon Kim:

It was just me at the beginning. It was just me by myself, just trying it out, because the first meeting is exploratory anyways. So at the beginning it was me. They love what they saw, and then afterwards it was like everybody, all the partners from the NEA side and also everyone from our side. At the beginning, it was just me.

Chris Erwin:

Wow. Did you enjoy the fundraising process? I mean, it seems like you're wearing so many hats, you're doing business development, you're fundraising, you're also building out different offices as part of the core game development practice. Was there something that you felt like you were gravitating towards more specifically? Or did you like doing it all and having a broad top down view of the company?

Taehoon Kim:

Yeah, I think the reason I ended up taking the fundraising process is because I actually enjoyed the process. A lot of people hate it, because part of the fundraising process is just being comfortable with getting rejected. But I didn't mind that at all. I'm like, "Fine [inaudible 00:21:57]." And big part of the process is also not only selling, but knowing what they're looking for. So I got really good at researching all the VCs, and instead of having one deck and just one approach for all the VCs, I would custom create the deck for each of the VCs, and only target the top tier ones. I quickly realized that it's actually easier to raise money from the top tier VCs than the second or third tier VCs, surprisingly. And that approach really worked, and I love the process.

Chris Erwin:

Why is it easier to raise money from top VCs versus tier two, tier three?

Taehoon Kim:

It's actually simple. The top tier VCs are able to make decisions on their own, even though it seems odd or different or something that doesn't seem intuitive. They are able to say, "Hey, we're going to take a bet on this," and they can make a quick decision. The second and third tier VCs are always looking to see what others are doing. They're always looking for validation. They're always looking to see what the first tier guys are doing.

So a lot more due diligence, it takes a lot more work, and they kind of beat around the bush a lot more. They take a lot longer to make their decisions. And a lot of times they bring in other VCs to co-lead or see what they think. So it's actually a lot more work to get them to lead. So if you have a great product and you have a good vision, then just go to the top tier guys. Go straight to top to your guys. They'll be able to make a much quicker and faster decision.

Chris Erwin:

That's a great insight. TK, though, I do have to say yet again, while you're at Realtime Worlds, I think the same year that you start working there, is 2005, you also are the co-founder of another company called Nurien Software. So yet again, you're working at a company, it's a very big role, you're working across a variety of different company functions, but you're also building something on the side. Is that right?

Taehoon Kim:

Right. Yeah.

Chris Erwin:

What was Nurien Software?

Taehoon Kim:

So Nurien Software was actually a spinoff off of the Realtime Worlds' Korea office. Dave Jones, he introduced me to the guys at Epic Games, and that's when they were launching on Unreal Engine 3. And he also introduced me to another studio who was doing a music game, and that kind of clicked for me. I was like, "Hey, what if we take Unreal Engine 3, which is very high graphics fidelity, which is usually used for like MMORPGs and then create a music game out of it, because the music is to be very visual." And they wanted this to be kind of separate. So I decided to be make it, instead of doing it Realtime Worlds Korea made it into a separate one.

And that also started to get momentum. And it turns out music plus gaming was a huge thing, especially in Asia. Just as we were starting the development for, we call it MStar, a music based MMO, another game called Audition just took off massively in China. It was doing a billion a year. It was a tough time for me because Realtime Worlds and Nurien Software, at the same time, was kind of taking off.

Chris Erwin:

And again, for Nurien Software, you also led a $25 million fundraise from NEA and top VCs.

Taehoon Kim:

I pitched them on Friday, and they told me they were in on Monday. So it was crazy times. That's when online gaming was really taking off. So it was actually, it's not just me, but it was much easier to raise money at that time.

Chris Erwin:

Probably, again, working a lot, building, not a lot of sleep. You're running both these companies. And then Nurien Software sells in 2010 to Netmarble CJ E&M. And what was the end result for Realtime Worlds? What happened to that company?

Taehoon Kim:

I was only running both companies for a short period of time. So right after Nurien Software got funded, the board wanted me to focus on the new VCs, and Nurien Software wanted me to focus on Nurien Software. So I helped Realtime Worlds find a replacement for me, and I left Realtime Worlds, and I was full-time at Nurien.

Chris Erwin:

Hey, listeners, this is Chris Erwin, your host of The Come Up. I have a quick ask for you, if you dig what we're putting down, if you like the show, if you like our guests, it would really mean a lot, if you can give us a rating wherever you listen to our show. It helps other people discover our work, and it also really supports what we do here. All right, that's it everybody. Let's get back to the interview.

Taking a step back, so, TK, you're part of these very exciting companies. The leadership and the founders clearly, really believe in you, and think you are someone special. So they're giving you the green light to essentially co-found spinoffs, and then go raise additional venture funding for that. Did you feel at this point in your early career that you're like, "I'm exactly where I'm supposed to be. This is an exciting path, These are growing industries. I'm good at it. I have the right international connections. And now it's time where I want to double down on this, and I'm going to be an entrepreneur. I see white space in these gaming markets, and I want to build towards that. And I'm going to go raise capital to make that happen." What was going through your head? Because it feels like the story that you're telling is so exciting for someone to be at your career stage. What were you feeling?

Taehoon Kim:

That's when I realized that this act of dreaming something up, raising money for it, and actually launching it and seeing it become real and seeing a product go live, and enjoyed by millions of people, is just really fulfilling. And it's something that I knew that I wanted to continue doing. It's something that I really enjoy.

So even to this day, that's the main reason that I'm doing this. Well, it's more than financially driven motives. I just love creating new things and bringing it out to people and surprising people and seeing them delighted. It makes all the hard work worthwhile, and it's a very kind of thrilling experience for me. And that's when I realized, "Hey, I want to do this long term. This is what I'm good at. Coming out with new ideas and getting it funded and launching it." Not all of them are successful, but that's fine. The act of doing it is a reward.

Chris Erwin:

Very well said. So I think, was it that mindset, I think, a company that you did found and you worked at for one to two years before nWay was Pixelberry. What was the quick take on Pixelberry? What was that?

Taehoon Kim:

So Pixelberry was also a spinoff from Nurien Software. Nurien Software was an MMO company, so, as I said, it was using Unreal Engine 3. It was still very heavy. You had to download a big client, and run it on pc. And back in 2009, 2010, that's when social gaming and hyper-accessible gaming was taken off. So Pixelberry, at the beginning, was an experiment to try to bring over a lot of the core technologies built at Nurien Software and make them more accessible, and make it so that people can just instantly play on a browser.

And the first game that we tried to do was a fashion game, because we realized from launching MStar, which was a music MMO, the best way to monetize those games were through, we're making a lot of money by selling clothing for the avatars, selling fashion, in other words. So we wanted to create a game, a social game, focused on creating fashion and selling fashion.

Chris Erwin:

I didn't realize that Pixelberry was also a spinoff of Nurien Software. So it seems that you had a really good thing going with the founding team of Lemmings that created Realtime Worlds. There was a lot of market opportunity. The founders really believed in you, and you had all these different ways, as you said, to kind of create and innovate as the gaming markets were evolving, and bring these incredible gaming experiences to users. And I think you were part of that team for almost six years, from 2005 to 2011. What was the catalyst that caused you to break off from that, start the venture that you still run today, which is nWay?

Taehoon Kim:

I was doing Pixelberry and it wasn't doing that well, mainly because, me as a gamer, didn't really enjoy fashion games that much. Maybe that was the reason. Or maybe because the industry was kind of changing rapidly, but it wasn't doing that well. Zynga and a handful of others were kind of dominating the social gaming space. And the co-founders of Realtime Worlds, Dave Jones and Tony Harman, at that time, just sold realtime worlds to GamersFirst. And they're like, "Hey, TK, let's start a new company together." And that's when I kind of jumped at the opportunity, because I really wanted to work with those guys again. And that's when nWay was founded.

Chris Erwin:

Oh, got it. So Dave and Tony are part of the founding team of nWay?

Taehoon Kim:

Yes, the three of us that were the founders [inaudible 00:30:16].

Chris Erwin:

So I think what would be helpful for the listeners is to explain what was the initial vision for nWay, when you, Dave, and Tony were coming together to found the company. What was your vision for what you wanted to build?

Taehoon Kim:

By that time, I did a lot of different type of games, did [inaudible 00:30:31] mobile gaming at Samsung, I did MMOs, PC MMOs Unreal Engine 3, and then also browser based games at Pixelberry. And the vision at nWay was like, "Hey, a lot of people are becoming gamers now through new technologies, new devices, mobile was really taking off. People were playing games on mobile browsers, smart TVs, and there was new technologies to bring them all together." So the vision was, "Hey, let's go back to the type of games that we love. Let's go back to the days when we were playing Doom online, and playing fighting games with other live players. Let's bring competitive gaming, let's bring real time multiplier gaming to the emerging platforms." So that was the vision.

Let's create new technologies to bring console quality, competitive multiplier games that could run on mobile browsers, smart TVs, where people can kind of play together regardless of what device they were on." That turned out to be a big thing, these days with Fortnite and Minecraft, everybody's playing crossplay games. Your friend is on tablet, somebody else is on a Nintendo Switch, and you can play together.

Chris Erwin:

Okay, so when you start out, that's the vision. So where do you start? What was the first steps? Is it pre-product, we're going to go raise money, and put together a team? Or in the beginning of it self-finance and you were working on a certain game or a certain platform? What were your first early moves?

Taehoon Kim:

I took a lot of the learnings from the previous products. So by then I knew how to make games that would run on multiple devices. I knew it wasn't easy, but we wanted to do a quick prototype of an action RPG game, where it can have four player co-op and two player PVP mode that would run on a mobile phone and a browser. We were able to create a quick prototype in about six weeks, and the prototype, it did all the selling for us.

Because I could just show it to the investors, "Hey, look, I'm over here. There's another guy on a mobile device, there's another guy on another device." And they could see that we're all synchronized, and they could see that it was a very fast action game. A lot of them were blown away at how there was low latency and running so fast just over the internet. And so we were able to raise money from the top tier VCs. But at the same time, 2011, 2012 was a period of time when there were a lot of acquisitions happening, and we were also getting a lot of acquisition offers at the same time, that complicated the process.

Chris Erwin:

So six weeks into building a prototype, you're fundraising on Sand Hill Road, but you're also getting inbounds from companies that want to buy your business that early.

Taehoon Kim:

Yeah. They saw the prototype and immediately give us ridiculous offers to buy the company. It was basically VCs and companies trying to buy us competing, which helped the valuation to go up.

Chris Erwin:

All right. So a couple questions on that. It's really interesting. One, were you at a point, because you've successfully raised money from Silicon Valley investors, you've had exits for them, where you and the investment funds made money. Were you able at that point, where you felt like you could walk into a room, do a product demo, you didn't need to show up with a deck and they would say, "Yeah, this sounds great, TK, we're going to give you money"? Were you at that point or were you still running a formal process? You show up with the business plan and everything?

Taehoon Kim:

We didn't need the business plan anymore, but we still need a deck. By then, I just became really an expert on how to create a simple deck that walked through the business, and I knew what type of prototype need to be created to fundraise. It was a simple 15 to 20 slides deck plus a quick demo. And simpler story the better, is this basically a storytelling deck walkthrough, why you're able to do what you're doing now. Why it hasn't been done until now. And then you talk about the market and how big the market would get, show a quick prototype, and talk about the technologies involved. And that was pretty much it.

Chris Erwin:

You're getting these incredible inbounds from companies who want to buy you, plus, you're also raising from venture capitalists. How did you and the two other founders come together to decide, do we sell or do we not sell?

Taehoon Kim:

The VCs helped us with that as well, maybe because they were trying to convince us to maybe take their deal. But they would let us know what each of the companies are like, and they would connect us to founders who have sold to that company previously. And I was able to pick their brains or interview them. We decided, "Hey, we really want to try this on our own." So we decided to take the VC route. And I think at that time that was, the VC was Lightspeed Ventures, who gave us a good term sheet and we decided to sign that term sheet.

And the reason in the beginning I told you why things became complicated is because after we signed the term sheet with Lightspeed, one of their portfolio companies, KIXEYE, they also decided that they wanted to buy us. And they give us an offer we rejected, and then they got really mad at Lightspeed Ventures asking them why they're funding a company that could be a competitor to them. And KIXEYE basically threatened to sue them if they invested in us. So at the last minute it kind of fell apart.

Chris Erwin:

Oh, so Lightspeed did not end up investing in you at that point.

Taehoon Kim:

So imagine this Zynga gave us an offer, a pretty good offer to buy us. We rejected Zynga's offer and signed with Lightspeed, but Lightspeed couldn't follow through because of KIXEYE. I'm thankful to them because at that time they actually gave me a check for a million dollars, it was like a loan, with no interest rate.

Chris Erwin:

Lightspeed gave it to you?

Taehoon Kim:

Yeah, I was really surprised by this. They were like, "Hey, we need to talk." I met them at a coffee shop, and they like, "Hey, here's a check for million dollars. I'm really sorry to have wasted your time, and take this money and use it to give more time to find another investor, because it's not your fault that this deal kind of fell through." So if we didn't get that, it would've been a lot harder for us. Because we did spend a lot of time, a lot of cycles with them, and that meant we had less time to finish the fundraising. That million dollar check, give us more time.

Chris Erwin:

Think about that million dollar Check is an incredible marketing for Lightspeed as being a go-to partner, as a tier one VC, right? Because one, for you, TK, in your career, knowing that they did that, that they had your back, they understood the challenging situation that they put you in. And they were very direct with you about how they want to do a make good. Next time you go need to go raise money for the next thing that you found, are you probably going to have a conversation with Lightspeed? I would say the answer is yes.

Taehoon Kim:

Yeah, became really good friends with them. But isn't that incredible? They don't know if they're going to get the million dollar back. What if we fail, and we just kind of go bankrupt or whatever, and then I have to pay them back? But they were, "Hey, here's a million dollars, there's no interest rate. You can pay us back time."

Chris Erwin:

I agree, it is amazing. I think what they were putting a price tag on was, we want to be in the TK business. We want to be in business with Dave and Tony. And so this is not the last time that we're going to have a chance to invest in a company that could make them millions, if not billions of dollars. And so they said, "We're going to invest in that relationship," and probably a $1 million check to them was easy money, right?

Taehoon Kim:

Yeah.

Chris Erwin:

That's amazing. I've never heard of something like that before, but I totally get why they did it. That's incredible. So I understand that Lightspeed and other venture firms were introducing you to founders who had sold their businesses to these potential acquirers of your business. What was one or two things that you learned that made you decide, "I don't want to sell right now"?

Taehoon Kim:

They were describing to me the culture of the company, because once you sell, you're basically getting a job at that company. And if there's a culture fit, that's great. But if it's a different type of culture, then maybe you won't enjoy it as much. Again, I was doing it because I love that process because the actual act of creating and launching is what's rewarding for us. So I think that's main reason why we decided, "Hey, maybe we shouldn't sell." But after Lightspeed thing fell through, we were like, "Oh, maybe we should have sold." Right after that million dollar check and that conversation, literally, the next day or two days from then I was able to get another term sheet from another VC. So this one is actually a funny story. So I was really upset when Lightspeed thing fell through. I went out drinking with my friends, and I got hammered that night. I had another VC pitch the next morning. I was so hungover that during the presentation I threw up three times, and I was doing a pitch.

Chris Erwin:

During the pitch.

Taehoon Kim:

Yeah, during the pitch, I would say, "Excuse me, I went to the bathroom." I would throw up, come back, continue the pitch. And I did that three times, and whenever I made that trip to the bathroom, people were kind of laughing at me, who were at the front desk. I did the presentation 9:00 AM, I came home and I was, "Oh, my God, I totally screwed that up." I fell asleep. I woke up at 4:00 PM, got a call at 5:00 PM saying that he was in. So I was like, "What the..." Because I told him the story of what happened as well, so he said, "Hey, all that stuff just added more color to your storytelling," and then he was in.

But then later I realized that the reason he was able to make quick decision, this is a Baseline Ventures, by the way. Baseline Venture was, it was a very unique firm that they had one partner, so they were able to make decision very quickly. And I pitched to them, I think, two days after Instagram was acquired by Facebook. So Baseline was in a flush with cash and they were very happy about the outcome. And so I think that's one of the reasons why they were also able to make a bet, and make that decision very quickly. I literally made a pitch 9:00 AM, and then got a call 5:00 PM saying, they wanted to put in the money. Usually, it doesn't happen that way, but it was a really weird period of time in my life.

Chris Erwin:

No incredible in a situation in which you thought that that was probably the worst pitch that you've ever given in your life, because you're running to the bathroom to throw up. It turns out that it was, at least one of the more impressive pitches in converting a VC into someone who has interest within just a handful of hours. So it just goes to show you got to stay resilient. And you're human, you just went through this traumatic event where Lightspeed pulled out at the last minute, so you need to go blow off some steam. You go out boozing with your buddies, but you come back the next morning, you put your game face on, and you do what you got to do. That's an incredible story. Thank you for sharing that.

So then you raised the money from Baseline, and a few others, and then when did you feel, "Okay, we turned down some initial inbound offers to buy the company," but when did you feel that you really started to get some real momentum that showed you and the other founders, "Hey, we have something much bigger here"? What did that look like?

Taehoon Kim:

That's when mobile gaming was becoming more serious and evolving from just casual Match 3 games to a device that could run any type of game. So that's when we really got a lot of momentum. So the first prototype they created, I told you it was a four player co-op plus a PVP action RPG game. So we continued to develop on that prototype. We called the game ChronoBlade, and when we had a much more alpha version of the game, that's when things were really blowing up in Asia for RPG games and mobile.

And during GDC, when a lot of the publishers were in San Francisco, we had publishers after publishers lined up, literally, signing offers on a napkin table and presenting us, "Here's how much we were willing to pay for MGM and royalty fees for your game." And we were able to just pick from the top tier ones. So we had offer from Tencent, NetEase, Netmarble, the biggest and the best. That was at the point in the company when we knew that things were becoming really serious.

Chris Erwin:

What year was that?

Taehoon Kim:

I think that was like 2013, about a year after fundraising.

Chris Erwin:

Seven years later you do end up selling the company to Animoca. How did that come to be?

Taehoon Kim:

Oh, this is a complicated story. So in 2018 there was a company called Tron, it's a big blockchain company, who moved in right above our office space. And that company was just taking off like crazy and they had happy hours, they had events. As neighbors we would show up, and that's how we kind of learned about blockchain space, and merging blockchain with gaming could be a new thing. And at that time it was getting really difficult to monetize competitive games because the game has to be fair. So we can't sell things that's [inaudible 00:42:30] base, it can only sell cosmetics. And we were always trying to find new ways to innovate on how to monetize those type of games.

And we quickly realized, "Hey, if we can make items in the games that players can earn into NFTs, and if the players can kind of trade NPS items among themselves, and we don't have to even sell them, they can get them in the game, and then exchange from themselves," which was already happening in the MMORPG space anyways. And if we can charge a transaction fee for each of the trades, that could be a model where we didn't have to do any of the [inaudible 00:43:01] box stuff that the players didn't like, and have a enough steady and viable business model.

And that's how we got into the blockchain space. At the same time, Animoca was investing like crazy into anything related to the blockchain. It's when I met Yat Siu, the chairman of Animoca, and we kind of hit it off. But funny thing happened to my board at that time, I've never seen this happen. I had a five member board, and our lead investor, our biggest investor at the time, Bridge Ventures, which was a IDG Ventures US, who renamed themselves Bridge Ventures, and they separated from IDG. And so they had to raise their own LPs, and their LPs looked at their investment portfolio and said, "Hey, you do a lot of gaming, you do a lot of enterprise, maybe you guys should pick one instead doing both."

And they decided to pick enterprise and get out of gaming. But the partner at Bridge Ventures who was on our board, basically, said, "Hey, then what am I going to do?" And he ended up leaving with Bridge Ventures to create a new VC fund called Griffin. Now it's like the biggest gaming fund by the way, but he left. And then TransLink Ventures, which was our second biggest investor, partner from TransLink Ventures for another whole separate reason, he ended up leaving TransLink. And so he was gone. And then our third board member, Peter Levin from Lionsgate, he ended up leaving Lionsgate. So he was gone from the board. So three of our biggest board members all left for different reasons around at the same time, and they were all replaced by new people and the mandate was to get out of gaming. All of a sudden, boom, my board was gone.

And so they wanted to get out. They wanted to sell the company. So when I went met with Yat Siu, I hit it off with the Yat, and I thought it would be amazing to work together. And that's how the deal went through. If it was the same board and then there wasn't that kind of shake up at the board level, I'm not sure if I'd be able to sell the company, probably would've been the state of independent. But because of that and the special circumstance, the deal was able to go through. So that was a good thing for Animoca.

Chris Erwin:

Good thing for Animoca. But if it was up to you, you would've stayed independent for at least a few years longer, because you saw a bigger opportunity ahead, right?

Taehoon Kim:

Yeah. If it wasn't for that shake, I probably would've stayed independent. But looking back now, I'm thinking that it was a good thing to kind of join forces with Animoca. Right after we joined forces with Animoca, Animoca went through a growth phase. I've never seen a company grow that fast. They basically went from a $100 million valuation to the $6 billion valuation in like two years. They were doubling in valuation every three months. It was kind of nuts. It was really fun to be part of that ride. And right now it's an amazing partnership.

Chris Erwin:

In that sale, was it a cash and equity deal? So are you able to participate in this crazy run that Animoca's had?

Taehoon Kim:

It was mostly equity, so it was a huge upside for the investors.

Chris Erwin:

Got it. A final note before we get to the rapid fire section is now that you're partnered up with Animoca, what do you see as the future for nWay and what you're building together? What gets you excited? And what is some recent success that you want to be building upon?

Taehoon Kim:

I'm super excited about what we're doing. I think that we're still very early stage with about three, and this whole kind of digital ownership revolution that we're going through. I think there are opportunities for companies like us to develop and publish online games where players can truly own things. I don't want to make a game where it's like an instrument for people to just make money, but I do think that there's something special about being able to really own some of the items that you're playing with. I think it adds meaning, and when you have ownership you just get more attached to things. And so our vision right now is to create more meaningful entertainment through real games that players can play and also have ownership in. And we're going to be doing a lot of experiments and try to really bring together the Web3 community and the gamers under one community.

Chris Erwin:

And I know something that you've talked about is some recent wins and partnerships and games that you've done is the International Olympic Committee you published Sean White NFTs, likely a powerful marketing engine for that. And then also you have a Power Rangers game, and a game with the WWE. Do you have similar type projects that are upcoming that build on top of these?

Taehoon Kim:

So Power Rangers and WWE, those are just regular free to play games. They don't have any blockchain or NFT components in there. The innovation there was to have a game where people can just quickly pick up and play and immediately play with another player. Power Rangers especially was super successful. We had over 80 millions downloads, and I think it's in two year five now, and it's continuously profitable. So the game's been amazing.

With the Olympic game, we were able to meet with IOC right when their decades long exclusivity with Nintendo and Sega was coming to an end. And so they wanted to explore a new type of game partnerships. One thing that they were noticing is that the younger audience, who were not watching TV anymore was caring less about Olympics and they wanted to focus on bringing the younger audience into caring more about their brand. And they also at the same time noticed that the younger audience are on Fortnite and Minecraft and they're playing games that are crossplay.

So they were looking for a game developer or game development partnership where they could have their game run on multiple devices at the same time. And a real time game where people can play to have a social experience. And as you know that's like right on our sweet spot. We were able to prove that we have some of the best kind of technology to make that happen. With another Power Rangers game called Power Rangers: Battle for the Grid, I think it's still is the only fighting game in the world where it runs on everywhere, the runs on Xbox, PlayStation, and the Switch. It even ones on a browser through Stadia. And it's a really fast action game and you can play together with anybody on any device, and there's no lag and there's no [inaudible 00:48:45] issues.

So they saw that and they were like, "Hey, we want to partner with you guys." I threw them curve ball and said, "We want to partner with you guys, but we also want to add this thing called NFTs. And we think that there's a 100-year-old tradition that's already there with your brand. When people go to the Olympics they still trade the Olympic pins. We want to make the pins into NFTs, also integrate them to the game, so that when people collect these NFT pins, they could use it in the game to give them a boost in the game." To my surprise, even though they are a very conservative organization, we won the RFP, and they wanted to partner with us. And we launched the project and we got a lot of press from that. And that was a really fun project to launch.

Chris Erwin:

And I just have to ask, this is a minor detail, but this 100-year-old tradition about trading Olympic pins, are these pins like representative? If you're from the United States and you go to the Olympics, you're wearing a US pin, and then the different athletes will trade them amongst themselves. Is that how that works?

Taehoon Kim:

Well, there's tons of variety of pins created from poster artworks, emblems, mascots, Coca-Cola always creates Olympic pins together. But the tradition got started, I think, in 1932 or something like that, when they had Olympics in Paris, and the officials, for the first time, had badges or pins and they started trading that. But right now there's a really high variety of pins out there.

Chris Erwin:

Super cool. It sounds like digitizing those pins and converting them into NFTs that can be traded on chain and in an efficient digital manner that seems it's like a perfect application. I had no idea about the underlying tradition behind that, but makes a ton of sense to me.

So let's go into rapid fire. Before we do that, I just want to give you some quick kudos. Look, I think we first met two to three months ago over a Zoom call. And so this is literally our second conversation ever. I did research into years story online, but hearing it come to life, there's a few things that really stand out. I think, one, that your willingness to really work hard and also try different things and take bets very early on in your career, but align those bets with things that you are really passionate about.

So even if they were risky, you are doing them down these vectors where it was strong, passionate, and meaningful areas to you. And there's almost in a way you were going to will them into existence or make them work. And clearly you took a bet at the intersection of technology and art, which manifested in gaming that has really paid off.

Something also stands out is within the category that you've bet on, in contrast to others that would just say, "Hey, I found myself in this unique opportunity. I'm able to open up doors to raise capital, build businesses." And instead of having the goal just be, "I want to make a lot of money," it is. Instead, "I want to bring delight to users. I have a unique expertise of what the gaming ecosystem, where it comes from and where it's going. And I know what users want. And I want to give them delights. And I'm going to enjoy the journey along the way."

And I think that's probably something that we didn't get into, but this probably speaks to a reason why you've been able to recruit teams that build alongside you consistently, and investors that want to back you is because you're going to enjoy the journey. And I think when you focus on the end user and the experience and delight, the money is then going to follow versus going about it the other way. So it's clearly worked out incredibly well for you and very excited to see what you continue building next.

Taehoon Kim:

Thank you.

Chris Erwin:

Welcome. Let's go to rapid fire. So six questions, the rules are very straightforward. I'm going to ask six questions and the answers can be either one sentence, or maybe just one to two words. Do you understand the rules?

Taehoon Kim:

Yes.

Chris Erwin:

All right, here we go. What do you want to do less of in 2022?

Taehoon Kim:

Less of Zoom meetings, and more of in-person interactions.

Chris Erwin:

Got it. What one to two things drive your success?

Taehoon Kim:

I think it's the ability to read the market, ability to raise money, and then having the optimism to try new things and innovate on things that could be deemed risky.

Chris Erwin:

Got it. What advice do you have for gaming execs going into the second half of this year?

Taehoon Kim:

The advice would be to focus on making a fun game. There are a lot of game companies who are getting funded going to kind of play to earn or Web3 games, where they're kind of losing that kind of focus. But I think at the end of the day, the game should be fun. And if the games are able to create a community of gamers who really care about the game and their kind of community inside the game, then you can create an economy within the game that's not a bubble, that's sustainable.

Chris Erwin:

Well said. Any future startup ambitions?

Taehoon Kim:

I think AR and VR would make a comeback. It's a really difficult business to be in now, but if I kind of look decades into the future, I think that could be something that could be a new space that could be blossoming later on.

Chris Erwin:

Proudest life moment?

Taehoon Kim:

I think that would be a tie between when I got married to my wife and also when I had my twin boys in 2011.

Chris Erwin:

Oh, you're a father of twins. I'm actually a twin myself.

Taehoon Kim:

Oh, yeah, I have twin boys.

Chris Erwin:

Oh, that's the best. How old are they?

Taehoon Kim:

They're both 11.

Chris Erwin:

Very cool. TK, it's been a delight chatting with you. Thank you for being on The Come Up podcast.

Taehoon Kim:

Thank you so much. It was definitely a pleasure.

Chris Erwin:

All right. Quick heads up that our company has a new service offering. We just introduced RockWater Plus, which is for companies who want an ongoing consulting partner at a low monthly retainer, yet, also need a partner who can flex up for bigger projects when they arise. So who is this for? Well, three main stakeholders, one, operators who seek growth and better run operations. Two, investors who need help with custom industry research and diligence. And, three, leadership who wants a bolt-on strategy team and thought partner.

So what is included with Ro