Meet YouTube Cofounder Steve Chen

Steve Chen’s experiences as an early employee at PayPal and later Facebook played a significant role in his success as a YouTube cofounder and its Chief Technology Officer. In 2006, Chen and fellow cofounders Chad Hurley and Jawed Karim sold YouTube to Google for US$1.65 billion. Chen and Hurley later started internet company AVOS Systems. 

After years of angel investing and entrepreneurial endeavors in Silicon Valley, Chen and his family moved to Taipei, where Chen was born, in 2019. Chen received the first Taiwan Employment Gold Card, a special visa aimed at attracting highly skilled foreign talent. He has since worked to enhance Taiwan’s startup community. 

TOPICS Senior Editor Julia Bergström met with Chen at the Ghost Island Media recording studio in late March to discuss the art of business scaling, whether Taiwan has what it takes to become the next Silicon Valley, NFTs, and YouTube’s first-ever cat video. An abridged version of their conversation follows. Listen to the full interview on Apple Podcasts or Spotify.  

How did you end up in Silicon Valley?  

I moved from the Midwest to Silicon Valley during the era of ICQ, one of the first instant messaging apps. In 1999, I was invited to interview with Max Levchin, cofounder and CTO of PayPal.  

Like me, Levchin attended the University of Illinois Urbana-Champaign. As PayPal expanded, Levchin returned to Illinois to tap into the network from our alma mater to recruit engineering talent. As a result, many former students followed him to Silicon Valley.  

In late 1999, Paypal’s success was uncertain, and the dot-com crash tested many companies soon after. But I found Levchin inspiring, and decided to move to Silicon Valley knowing I could return to the Midwest if all else failed. I felt that whether the company was successful or not, it would still be an invaluable experience. 

What lessons did you learn at PayPal about building and scaling digital companies that you later adopted in your own endeavors? 

Working at PayPal from 1999 to 2005 was an incredible experience. The dot-com crash obliterated many startups that used to have easy access to funding, and companies had to rethink their strategies, focusing not just on raising funds but on creating sustainable business models. PayPal managed to find a niche in providing a useful payment service for eBay’s auction transactions. 

The early challenges at PayPal and hands-on experience in a fast-evolving tech landscape prepared me for leading YouTube’s product engineering and design teams. I didn’t just face industry challenges but also learned how to adapt to new situations. For example, when PayPal was looking to penetrate the Chinese market, my key takeaway wasn’t just the project itself but managing a diverse team that included engineers, designers, and specialists. I took on a management role at an early age, and it taught me vital lessons about aligning individual motivations with the company’s objectives. 

How did YouTube evolve from its early days?  

YouTube was initially conceived as a video-based dating service, completely different from what it’s known for today. The initial concept didn’t take off – no one wanted to upload videos for the dating feature. But the technological infrastructure we developed laid a crucial foundation. We decided to broaden the scope, allowing any type of video to be uploaded, which led to a significant increase in user engagement and content virality.  

The ability to upload a video and have it transcoded in real-time, enabling global viewing directly in a browser without additional downloads, was groundbreaking. Another important feature was one that allowed videos to be embedded into other websites through a snippet of HTML code. 

The real turning point for YouTube’s growth was its integration with existing social networks like MySpace. At the time, MySpace users couldn’t embed videos in their profiles or posts. YouTube filled this gap, providing a simple way for users to enhance their MySpace pages with video content, catalyzing YouTube’s early and rapid adoption. 

Do you have any specific steps for identifying and developing innovative ideas into successful products or services? Are there any “must-haves” in this process? 

As an angel investor in Silicon Valley and a longtime entrepreneur, I’ve gathered a lot of experience evaluating startups and their growth potential. Particularly in early-stage investing, the key is assessing the founders’ track records and adaptability. Successful entrepreneurs must be willing to shift direction when necessary. 

Startups in Taiwan need to target a global market from the outset. A population of 23 million does not work for scalability, and it’s not enough to gain regional traction and translate the product for international audiences. Starting with a local approach will lead to overlooking significant cultural and lifestyle differences that can affect a product’s global viability. 

Silicon Valley benefits from a huge domestic market that often sets global trends. In Taiwan, entrepreneurs face the challenge of understanding and accessing larger markets without having lived in them. To support Taiwanese entrepreneurs, it’s important to build bridges with larger markets and exchange ideas of global consumer behaviors. A bi-directional flow of knowledge and culture is essential for creating products that can succeed worldwide. 

In the past few months, you’ve been featured in numerous articles discussing Taiwan’s potential as an Asia Silicon Valley. Do you think this vision is feasible? 

After moving to Taiwan in 2019, I realized it has a unique ecosystem that fosters the birth of global tech giants. But in terms of startups, Taiwan needs to catch up.  

Initiatives like monthly gatherings for Gold Card holders from diverse backgrounds to replicate Silicon Valley’s networking magic have enabled spontaneous collaborations and idea exchanges, but attracting global talent requires more than entry permits. You need to smoothen out everyday hurdles like banking and telecommunications, which are surprisingly complex for newcomers to Taiwan to navigate. Taipei also competes globally with cities like Dubai, Singapore, and Hong Kong, which often outperform Taiwan in creating a welcoming environment for international entrepreneurs.  

I’m now working with a group of people to help Gold Card holders continue or start their ventures, find cofounders, connect with investors, and navigate the local business ecosystem. Working with the Taiwanese government, I’ve also been highlighting the need for systemic changes to make Taiwan a more attractive hub for global entrepreneurs. 

It’s not enough to open the doors – the entire relocation and integration process needs to be streamlined. Taiwan also needs to ensure that talented individuals can efficiently translate their ideas into action and find the right partnerships and resources. If Taiwan is to capitalize on its potential, it needs to remove these barriers and foster an ecosystem that not only attracts but also retains international entrepreneurial talent. 

You are now closely tied to an NFT based on your cat, Pajamas. Can you tell us a bit about that?  

It all started with a strange incident a few weeks ago, when a video I uploaded to YouTube of my cat Pajamas in 2005 suddenly gained attention on Twitter. Back then, I was trying to create more content for people to view and ended up providing YouTube’s first-ever cat video. Some dedicated fans created the token $PAJAMAS, and it led me down a rabbit hole of discovery in the crypto world.  

I’m very touched by the movement, and I think $PAJAMAS was possible due to the creative and interactive spirit of YouTube. Whether it’s cat videos, vlogs, or cooking tutorials, YouTube is a gold mine for any and all interests. 

How does networking differ between the Bay Area and Taipei?  

The language barrier and cultural differences present significant challenges in Taiwan, especially when compared to more linguistically accessible hubs like Hong Kong and Singapore. Taiwan has strong engineering talent but struggles with bridging communication between local engineers and international entrepreneurs. 

To really thrive, the Taiwanese startup community should create more frequent and diverse opportunities for interaction and collaboration. Interaction could extend into educational institutions and business schools to build a culture of networking and innovation that spans beyond isolated events.  

Did becoming a father change the way you view work? 

My journey into parenthood has revolved around nurturing risk tolerance and diverse experiences. I’m happy my kids get to experience the contrasting cultural attitudes toward risk between Silicon Valley and Taiwan.  

In Taiwan, the ease of exposure to a lot of activities has broadened my kids’ horizons beyond what was accessible in the United States. As a parent, I try my best to advocate for the expression of individuality and exploration. I encourage them to try different things and stick with them long enough to form an informed opinion without steering them toward a particular career path. Interestingly, I’m not sure I would dare to encourage my kids to take risks the same way I encourage entrepreneurs to take a leap of faith. Parents always want to protect their children. 

What do you like to do when you’re not working? 

The saying, “If you love what you do, you’ll never work a day in your life,” may seem clichéd, but I genuinely feel that it’s true. My passion right now is contributing to the broader entrepreneurial landscape in Taiwan. I hope I can help enhance the Taiwanese startup ecosystem and create an environment where the next global success story can emerge. I enjoy the satisfaction of playing a part in this process, helping ideas transition from inception to reality, and possibly witnessing a startup’s evolution from a local project to a worldwide phenomenon.