About Charles
Charles Huang is a entrepreneur, investor, and philanthropist who along with his brother, Kai, co-founded RedOctane, the creator of the Guitar Hero franchise. Under the Huang brother’s leadership, Guitar Hero became the first video game to reach $1 billion in sales, earning global recognition as the best-selling game in 2007 and 2008. RedOctane was acquired by Activision in 2006.
After selling RedOctane to Activision in 2006, Charles remained active in gaming and tech, advising IoT startups, serving as COO of smart home startup Leeo, and founding Indigo 7, known for developing Singtrix, a professional-grade karaoke system.
A dedicated philanthropist, Charles established the Huang Scholars Program at UC Berkeley, where he teaches entrepreneurship and serves as a trustee on the UC Berkeley Foundation Board.
Q&A with Charles
In our interview with Charles, he shared his story and interests, discussed what he believed contributed to Guitar Hero’s success, and offered advice for other companies on how to achieve their own success.
886: What are your recent interests?
Charles: “Well, on a personal level, I’ve been running marathons recently and doing a lot of traveling. I used to travel to explore and see different places, but now I mostly travel to connect with people and spend time with friends and family.
On the professional side, I’ve been focusing more on philanthropy. I’m on the board of several organizations, including groups at Berkeley and the Asian Art Museum. For the past five years, I’ve also been co-teaching a class on entrepreneurship at Berkeley.”
886: How would you describe entrepreneurship?
Charles: “At the most basic level, you are trying to create a product or service, but at the same time build a company. There’s multiple dimensions to it. You have to first build a product that is successful. You also have to build a company that is successful. Sometimes those two don’t necessarily align. You are also trying to find the right employees, partners, vendors, investors, markets.”
886: What motivated you to become an entrepreneur?
Charles: “I like to build interesting products. I think, no matter what I work on, it has to be intrinsically interesting. If someone told me that my company wouldn’t be super successful—but I could make games for the rest of my life and get a paycheck—I’d still be happy doing it.
One of the great things about making games, especially Guitar Hero, is that whenever someone tells us they played our game, they’re usually smiling when they say it because it brought them joy. It’s incredibly rewarding to know we were able to bring that element of fun into their lives. That sense of fulfillment is something you don’t get from just any kind of work.”
886: What are elements that make a good or successful game?
Charles: “What makes a game successful is different from what makes it good. Success is a completely different story. To create a good game, you need to build a world-class product. But to achieve success, you need both a world-class product and a lot of luck.
When I was at Activision, the CMO once said, ‘We have 12 games at this company pegged to be in the top 10 this year.’ But if you think about it, the math doesn’t add up—how can you have 12 games in the top 10? What you can always do, however, is make a good product. For a startup to be successful, they must create a world-class product. To me, that means being in the top 3 in the industry. In tech, the number 1 and number 2 players hold a disproportionate share of the market and are likely to survive. Number 3 might survive. Everyone else is just waiting to get overtaken by 1 or 2. So, you need a team capable of creating a world-class product in a specific category.
In our case, we specialized in building a hardware-software company during a time when very few companies were doing both. This was 15-16 years ago when you were typically either a hardware company or a software company—not both. It wasn’t until Apple came along and excelled at doing both that people recognized the value of combining the two. At the time, I thought neither our software nor our hardware alone could compete with the leaders in their respective industries. But because we combined both, we became the best at what we did, as very few companies were even willing to try. That gave us the opportunity to create something world-class.
In the gaming industry, monopolies are rare. For example, if you’re building a mobile operating system, it’s highly unlikely you can take down Apple or Android—they’ve already locked up the market. But games are different. They come and go, and there’s always an opportunity to dethrone the top players. That’s what we did—we came out of nowhere to have the best-selling game in 2007 and 2008. So, in some industries, like games, opportunities exist, while in others, there may be no chance at all.
What I always emphasize is that you have to build a great product. Whether or not it becomes successful depends on luck—finding the right investors, customers, and timing. But without a world-class product, your chances of success are slim.”
886: How do entrepreneurs overcome mental barriers, particularly in regards to funding?
Charles: “Speaking from my experience with Guitar Hero, we were somewhat fortunate in regards to funding because we started in a time where VCs were just not looking to fund anything. This was during the Dotcom bust, and they weren’t investing in any startups. Because of that, it was easy to just give up on looking after 6-8 months, since nobody was ever going to invest in anything and we didn’t want to waste our time. So we were able to build our company focusing specifically on what people would buy and how we would make money. Because of that we cut out a lot of useless stuff that we would have done and lost us money. That’s why I feel when a lot of startups raise money, it kind of clouds that clarity of what they need to do.
When we started, we did a lot of things that weren’t particularly innovative or exciting. We were selling dance pads for Dance Dance Revolution. People would tell us there was no future in dance pads. And they were right—we weren’t naive. But it made us money and kept the company going. While we were selling, we were also learning valuable lessons that helped us build the next product, and then the next one. Eventually, this allowed us to develop our own dance game and, later, Guitar Hero. But when we started, our business wasn’t flashy. We didn’t have the funding to build the products we thought people might want, so we had to make things work to keep the company running.
Silicon Valley has convinced the world that the way to run a startup is to start with an idea, secure seed funding, build something, and then scale through VCs. But people often forget that it’s still possible to build something on your own. I’ve noticed that many entrepreneurs are willing to break the rules of their industries—except when it comes to funding. It’s funny to me that they can find creative solutions to market problems and product challenges, but when it comes to financing, they all seem to think the same way: go to VCs for money."
886: Are there any products or features that particularly inspire or excite you right now?
Charles: “A lot of what I enjoy involves building hardware. I’m on the board of a couple of companies, and one that really fascinated me worked with Nintendo to create Mario Kart Live. It was an AR product, essentially the Mario Kart game but there was a physical drone with a camera attached that you played through. You could use your physical location and create your own race track and play Mario Kart. It was probably the most sophisticated AR product that has been built to date, and I always think those are pretty interesting. AR isn’t too popular right now but it was interesting to see how they built it to craft a Mario Kart experience.”
886: What are your thoughts on the trend of new startups heavily focusing on emerging technologies like Web3 and AI?
Charles: “Many years ago there were two startups I was advising. One company was building a FitBit/health tracking tool for dogs that predicts potential health complications. When they went to the customers like veterinarians, they weren’t super excited because it would take years to collect all the data from the dogs to train their AI. It wasn’t useful to the customers yet, so they were told to come back when they had the technology. But when the company went to VCs, the investors loved it because it involved AI, big data, pet health all that.
The other startup which was also pet related was taking pet medical records, which were on paper, and digitizing them using OCR to make it more accessible to owners and veterinarians. When they met with their customers, the vets were super excited because it saved them so much time. But the VCs didn’t care for it because they weren’t using interesting technologies. They were using OCR, so what’s to stop another company from competing in their market?
So for the first company, the customers didn’t really like it but the investors loved it. For the other company, the customers loved it but the investors not so much. And it made me realize that sometimes there’s a big disconnect between what investors want and what the customers want. Right now, AI is super hot with investors and a lot of people building in that space are getting funded, but many of these people actually have no idea what customers want. I also see a lot of good companies with product-market fit but don’t have the new technologies, so investors aren’t interested.”
886: How would you compare the growth trajectories of these two companies?
Charles: “I would tell the company that is doing the pet medical records that they probably aren’t going to get that much funding, and need to figure out how to scale properly and naturally. They need to manage their costs, and can’t hire a ton of people. But as long as you are profitable, you will likely grow since people like your product. Later down the line when you have more profits, you can create more products that may be more attractive to investors.
So I think you can survive in both tracks, but you just need to know the best way to grow your company.”
886: What is the most difficult decision you had to make for your company?
Charles: “By far the toughest thing that we ever had to do was layoffs. Particularly in 2008 when the economy crashed. It’s a very emotional process because these are the people that you hired, built a company with and you’ve gone through everything with. You’re probably very close since you’ve worked with them a long time and might know their family. And for me, the first time we had to do that in 2008, was really, really difficult. We had to call people into meetings and take the time to talk with them about their situations, it was very emotional and personal. I had employees who had financial goals such as purchasing a house and we had to assess what we needed to do. These are some of the things where you think it’s just a business decision but when you know them as humans you know it’s much deeper than that. They had lives and invested their effort in the company and we invested in them. So I would say that the hardest decisions are almost always the emotional and personal ones rather than for the business.”
886: What do you think about starting a company with a friend or relative considering you started a company with your brother?
Charles: “I always start with the positive: we know exactly how each other thinks. Since we’ve known each other our entire lives, we know how each other thinks, we don’t need to guess, which is very helpful. There’s also trust between us, I trust what he’s going to do and he trusts what I’m going to do. The trouble comes from how we behaved with each other. If I was interacting with someone professionally and they said something not so smart, I would respond politely. But if it was my brother Kai, I would say ‘that’s the stupidest thing I’ve ever heard.’ And then we would start arguing like we were twelve years old. There’s less formality between us and that sometimes would waste a lot of time when we got into arguments. It became a bit of a problem for business because we learned that when we disagreed, the rest of the company would just freeze since they didn’t want to disagree with either of us. And so we had to learn and act more professionally since we realized that it also affects other people, usually negatively.”
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