Seven start-ups later, Rotten Tomatoes co-founder Patrick Lee now knows when to quit

Lee’s education in letting go began in an unlikely place: a Beijing wushu training facility. He’d grown up on a steady diet of Bruce Lee, Jackie Chan and the Shaw Brothers films. As a high school student, he got really into Chinese martial arts. At university, he would train up to five days a week, while also helping to organise tournaments and coach fellow students.

“I loved it,” he says simply. But when he travelled to Beijing for a summer training camp, reality delivered a crushing blow. “I saw how good they were, and I’m like, I could train 24/7 the rest of my life, and I won’t even be as good as their average high school-level team member,” he recalls. He was referring to the Chinese athletes who were handpicked as young as five based on their parents’ body types and physical potential, and trained full-time ever since at state-sponsored athletics academies.

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Having started wushu only in high school, Lee said he could never close the gap. “It’s physical,” he explains. “Your body just can’t do it.” Watching the Beijing team train, Lee experienced not inspiration but discouragement. “Some people see them and get inspired. I saw them and got disillusioned.”

What made the realisation more difficult was recognising the unfairness embedded in creative and physical pursuits. “It’s just as hard to be a really good martial artist as it is to be a really good programmer or doctor,” he says. “But where you can go in terms of making a living, especially in the US, it’s so different.”

Lee made a choice that day that would define his career. He would pursue fields where determination and intelligence could overcome late starts and physical limitations. 

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This pragmatism wasn’t new. Even as a teenager living in Maryland in the ’70s and ’80s, Lee would channel enthusiasm into achievable outcomes. When his parents—one a computer scientist, the other a physics professor—gave him a modem and a second phone line, he and his brother started a bulletin board system, which was a precursor to modern online forums. Their high school friends, neighbours and local residents would call in to post and read messages, and play games together.

“It was like running a website with one person on it at a time,” Lee recalls. On occasion, these online interactions would lead to in-person meet-ups organised by the Lees. Eventually, this early experience of community-building, of gathering strangers around shared interests, would prove more valuable than any university course.

Pragmatism reached its fullest expression in Lee’s decision-making around Rotten Tomatoes. When he and his co-founder, Stephen Wang, at a web design firm they had started in 1997 were weighing their next move, they had two compelling options. The first was to build a Yahoo-like portal for westernised Asians and Asian Americans like themselves, anchored by actor Jet Li, who had expressed interest in the idea and promised to bring in fellow movie star Jackie Chan. The second was a movie review aggregation site that their co-founder and art director at the firm, Senh Duong, a movie buff, had been building as a hobby.

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Their investors delivered a verdict that would spark the start of a cultural institution: “They said, you should do Rotten Tomatoes, because it’s more mainstream. Everyone watches movies. If you target only Asians and Asian Americans, that’s only 3 per cent of the population [in the US]—it’s too small and too diverse.”

The logic was irrefutable. Also, Rotten Tomatoes already had traffic, and it was growing. “When they explained it that way, we were like, yeah, you’re right,” Lee says. “And then they were willing to put money into Rotten Tomatoes.” With the new funding, Lee, Duong and Wang shifted their focus to scaling up and monetising Rotten Tomatoes. 

Lee and his co-founders brought structure to what had been Duong’s hobby and officially launched Rotten Tomatoes in January 2000. Duong first started the site in 1998 after wanting to know what critics thought of Jackie Chan’s first major Hollywood movie, Rush Hour. “Most of those reviews were not online at the time,” Lee explains. “So [Duong] would go to the library or Tower Records to look at magazines and newspapers, and write down the quote.” 

Duong had been doing this manually, gathering reviews one by one, creating pages on a simple site hosted on the web design firm’s server. What Duong had created was deceptively simple: aggregate all the reviews for a film and give it a percentage score. Fresh if 60 per cent or more critics liked it, rotten if below. The Tomatometer, as it became known, reduced the overwhelming noise of film criticism into a single, digestible metric. 

In an era when competitors were building sprawling entertainment portals with news, forums, shopping and games, Rotten Tomatoes did one thing—and made it the industry standard, not despite its simplicity, but because of it.

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After selling Rotten Tomatoes to IGN Entertainment in 2004 for a reported US$10 million, Lee embarked on ventures in Hong Kong and mainland China, where he realised how cultural context overwhelms raw talent. “I massively discounted how hard it is to do business in another country,” he admits. 

The guanxi system of relationship-building felt uncomfortably close to bribery; his conversational Mandarin couldn’t handle technical business discussions; and being an American-born Chinese meant being perpetually foreign. “When I went to China, they would just look at me and ask, ‘Where are you from?’”, he recounts. “Just from the way I was dressed, the way I carried myself, they knew I wasn’t from there.” 

His Hong Kong venture—a MySpace-inspired social network called Alive Not Dead, where Asian celebrities could connect with each other and their fans—faced different challenges. It had to compete against Chinese and American giants, such as Weibo and YouTube, for attention, funding and celebrity partnerships. “We were mainly only getting westernised Asian celebrities on our platform,” Lee explains. Daniel Wu, Vanness Wu, Karen Mok—“mostly Hong Kong celebrities or Asian celebrities who had broken into Hollywood,” he adds.

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Looking back, Lee admits letting several of his ventures run for far too long, especially when they involved friends. “I should have been like two years in, it’s not working and stopped. But we went for six years,” says Lee of Alive Not Dead, which he ran from 2006 to 2013. His sixth company, Hobo Labs, which he co-founded with the same friend he launched his first venture with, burned through US$5 million before launching a mobile game that couldn’t acquire users profitably. “Both of [these ventures] should have [lasted] two years.”

Lee now teaches founders to think like poker players: “The best strategy for most people is tight-aggressive. You fold until you get a good hand. Then, when you get a good hand, you go aggressive.” In startup terms: “You keep experimenting with ideas very, very cheaply until you find one that’s working. Then you put a lot more resources into it.”

The fatal mistake is playing a bad hand all the way to the end. “You should know when it’s not working. When it’s working, you can put in zero dollars, and people will still want it,” he says. “Take a realistic look at your company, and take the emotion out when you’re evaluating it.” The signs will be unmistakable—if you’re willing to see them.

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Now on his seventh venture, Lee has only become clearer about where to invest his energy. Despite the hurdles and failures, he maintains he’ll always work with friends. “I like working with friends. I imagine I will always do so,” he says. “Life is short. Why would you want to do something that you don’t like with people that you might not get along with?”

This philosophy goes back to childhood experiences of constant displacement. As a child, he switched schools four times between kindergarten and high school. “I was quite shy because I was always the new kid,” he recounts. “I don’t think I really came out of my shell until maybe senior year or college.”

Being introverted but constantly uprooted created a particular survival strategy: gather people. From running the bulletin board system and starting his high school’s Chinese club, to organising wushu tournaments and building companies with friends, Lee’s life mission has fundamentally been about building communities.

“I imagine I will be doing that my entire life,” he says. His current venture, Venn, continues this pattern. Venn is a membership community for creators and talent in comic, anime, gaming and pop culture fandoms. Whether it succeeds or fails, it represents his authentic interest in bringing people together around shared interests.

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