Why Sung Cho Walked Away From Oracle's Million-Dollar Options

Picture this: You've just walked away from potentially millions in stock options at Oracle, one of the world's largest tech companies. You're sitting alone in a San Francisco cafe at 9 AM, laptop open, with absolutely nothing to do. No emails. No meetings. No one looking for you. Just spam emails that you're actually grateful to receive because "at least someone cares about me by something stupid."

This was the reality for Sung Cho, founder and CEO of Chartmetric, who made the gut-wrenching decision to leave his comfortable product manager role at Oracle to chase his Silicon Valley startup dream. Today, Chartmetric has hit $7 million in annual recurring revenue, serving major music labels like Universal, Sony, and Warner, plus tech giants like Netflix, Facebook, and Amazon.

But the path from that lonely cafe moment to building the "Bloomberg for music" wasn't just about finding the right idea—it was about surviving the psychological warfare of entrepreneurship, learning when to price your product before it's ready, and understanding that nothing truly important can be built in less than 10 years.

Sung: It was not my original intention to join a startup, frankly speaking. I was a student. I loved learning more about computer science. That's when I met the founders at GameVille. It was about game programming, which just sounded fun. I joined as the first employee and started building computer games.

Later, the company decided to focus on mobile games, so I managed the mobile game department. The company kept growing, and I managed the engineering team, which was only like 2 or 3 people in the beginning. Over time it grew to 50 or more people. It was one of a kind experience to join a startup at its early stage.

I joined Oracle after graduating from business school. Oracle has offices everywhere - in every major city you go, there is a building, Oracle building, so it was a great feeling to be part of this huge 100,000 people family. But at the same time, what stifled me was that this company is so mature. Once customers sign with Oracle, they have to pay monthly fees. To me it seemed like it was in a bad way, a tax collection agency.

Sung: I remember that the company was generating roughly $1 billion in cash profit per month. It was incredible. That provided comfort after working for 5 to 6 years. Someday I could just get by by working only for like 4 hours. That was enough and go home and still I made money.

Oracle is famous for acquiring big companies, making big bets, and they are so good at that. They purchase these companies and bring the innovations from the outside. So as an insider, maybe I should have felt proud that our company is buying other companies, but no, that's not how I felt. Innovations are happening outside of this company, so if I stay here longer, I may have less and less chance of participating in those cool innovations.

If you succeed, then you can be proud of this for the rest of your life. So that's what I wanted in my life, that pride.

Sung: It was definitely a tough decision. I had some shares plus stock options that were being vested, so if I waited longer, I could have made more money from those stock options, and it was a sizeable amount of money. But I couldn't wait longer. I was approaching 30, wanting to start my own company in Silicon Valley someday - it's now or never, so I decided.

What I realized was when you start a company, three things have to match. You have to feel passionate about solving this problem. You have to be good at this. You have to have some skills to help solve the problem. But in many cases it's so difficult to find ideas that satisfy these conditions. So that's what I wanted to be careful about and I wanted to find the right one, but it was hard, so I dropped every idea.

Sung: I remember going to this cafe in San Francisco, opened my laptop at 9 a.m. in the morning. I sat down and I got lost. Nobody was looking for me. Nobody. When I was working at Oracle, I had like 50 emails waiting for me every morning. But after several months after quitting and when I dropped my idea, there were only a couple like spam emails. Even those spam emails I felt thankful for. At least someone cares about me by something stupid.

After several months after quitting, and when I dropped my idea, I got lost. I had absolutely nothing to do. Some sort of depression hit me. I remember that feeling. I called a friend, asked him, how did you feel when you started, and he said one thing. "Hey, Sung, I've been there. I know exactly how you feel. I've seen many people who have felt that way, so my advice is just move forward only one step per day."

That was advice from someone I trusted and someone who has done this and who made it, so I really took it to my heart. That also relieved some stress and burden out of me because I didn't have to make 10 steps forward per day. I wanted to make huge steps per day, but I couldn't. From there, I just decided to go one step at a time, and that's what I have been doing for the last 7-8 years ever since starting a company.

Sung: After 1.5 years after we got first seed funding, the company was running out of money, and that forced me to prove that this is a product worth paying for. So I don't think we were ready to charge, but I did it anyway because we ran out of money. I could have just gone back to the investors and raised again. Instead of doing that, I wanted to prove first that there's somebody who may be willing to pay for this product.

For a couple of months, I funded the company myself, moving money from my personal bank account to company account every month. I just stayed there and focused on building the product, making it better, and putting that credit card charge module. We announced to the users that you can still use the product for free, but it will be limited. If you want full features, then you need to pay $95 per month for premium, $65 for a standard tier.

Sung: I sent an email to beta testers, which was such a small number actually. It was like 100 people total. I don't think it was really ready, but anyway, I began and surprisingly I think it was the same day, like in the morning we deployed this new version and waited nervously. Will there be anyone, just someone in the world out there, out of these people who sees the potential, who saw the value and saw the potential enough to pay for the service monthly subscription $95 or something.

Then, I got a notification that somebody paid $950 which was one year's worth of subscription. His name was Renee McLean from RPM Group, and I couldn't believe myself what just happened. I just wished that someone would pay at least $65 - that would have made my day, but somebody paid $950 and that was the first payment. It was crazy. It was incredible. I remember like jumping around the office, like jumping and dancing, shouting.

After 20 seconds of jumping and dancing, I calmed down and realized that this could be a mistake. Somebody didn't intend to pay for the full year. Who would commit one year to this startup who didn't prove anything, and this startup may disappear the next day, but somebody paid for one year full worth of subscription.

Sung: So I emailed back right away after preparing myself - even if he says that was a mistake, he wanted a refund, I'll give you a refund. And I called him and he picked up the phone. He said he has been using Chartmetric actually as a beta customer for a while and he saw how fast we were iterating, how fast it was becoming better. He actually got some value from the product.

So I asked him why yearly, annual subscription. He said, I can never forget this - I can never forget what he said. He said, "I'm running my own agency here in Manhattan. I'm also a business owner. I know how cash is precious in the beginning, so I thought some extra cash could help you. So I decided to give a one year subscription. And anyway, I'm going to use this product for the next 12 months anyway, so paying for annual subscription is a better deal for me."

That was not a mistake. Plus somebody trusted me so much that he prepaid for the service for one year. And also he said that he saw the real value. He could apply this tool and this data onto his business and make some real difference. That was the day when I finally thought that this is going to work.

Sung: For SaaS companies, it's incredibly difficult to get those first customers because it means that you have to gain this much trust that they are willing to pay something upfront. That also means that once you get the first customer, it's incredibly important that you really exceed their expectation.

The first couple of customers know that this company or this product is still in early stage. They know that, but they still decided to give their money to you. I was so appreciative of that - somebody's trust and belief in me and they are willing to pay. So my focus was to deliver something not just on time but ahead of schedule.

Then what happens to those first customers is, wow, I knew that this product was still like being baked. It's not a delicious bread yet, but this bread is OK. It's still edible, so I ate that bread. I purchased that bread. Next week I came back. Guess what? The bread is now much more delicious. But it's still the same price, and you get delighted.

You have this pride - I discovered this bakery among my friends, ahead of my friends. Bread was OK in the beginning. But since I paid for that bread, this bread baker used my money to go back and develop the skill further and purchase better flour and better ingredients and came back with even more delicious bread. Then I feel like I contributed to the success of the baker. This is the reciprocity that happens and you can see more in SaaS business.

Sung: Many investors asked me a question - what is your competitive advantage? Why would those customers come to you instead of going to somewhere else? Frankly speaking, I never had a really good answer to that. I always struggled.

This is something I learned when I was at GameVille. Everyone focuses on competitive advantage. You want to become different. So we were at GameVille. We wanted to become different from any other mobile game developers, so we tried different tastes. Everyone drinks Coke. You launch cherry Coke or lemon Coke, vanilla Coke to the market. Do you think people want it? No, Coke is what people want.

So that's what I believe about competitions actually. You're not necessarily trying to build something different. You try to build something quite similar or sometimes even the same, but if you pursue that vision over a long period of time, then someday your product is different.

Sung: Human psychology is quite complex. People do not make those decisions based on only one or two things. Price, of course, is a very important factor, so what we did, at least in the beginning, is to offer our service at half of our competitors' price. That provides signals to people that, OK, at least that's a competitive advantage. Let me give it a try. At least it's cheaper.

Nowadays our price is no longer half of the price, but we are actually more expensive. But that was the difference. Over time we kept on building and after 7 years our product is now looking different, and we have more data than any of our competitors and we have partnerships.

There's this one interesting event that happened last year - a competitor called Next Big Sound. When I started this company, it was announced that this company was acquired by Pandora Radio for roughly $50 million. They kept on innovating. It was a really good product. I learned so much from Next Big Sound, but over time, they decided that Next Big Sound is no longer going to be their focus and decided to sunset the product. When you go to nextbigsound.com, they explain why they decided to shut down the service and the last bullet point says, 'if you liked us for social data tracking, go to Chartmetric.com.'

Sung: This is my formula internally in my mind. When you think about a tool, the price of the tool should be 1/10 of the cost that you would have incurred if you did not use this product. That's my belief, meaning if we charge $140 per person to someone, that person should at least save $1400 per month by using our product, then it's the right pricing.

Are we saving $1400 worth? Totally. If you did not use Chartmetric and try to get this much insight, you probably need to hire an engineer first because you don't want to write down all these numbers, thousands of numbers every day. If you hire someone to do this manually, it costs more than $2000 to $3000 easily. If you hire an engineer, initially you have to spend $10,000 per month until you build something. For big companies, they can easily spend a million dollars if they try to build this on their own.

Sung: When you build a SaaS tool or a business, that's important as a founder. Are you willing to put many years of effort into this? Are you ready to do that? Then I think that can work.

Long term vision for me is to see that this product Chartmetric becomes an indispensable tool. In the beginning, we began this service when we first made this service, it was a vitamin product. You can take it. If you don't take it, it's OK. Nothing happens. Maybe you feel you have a little less energy, but nothing happens really. We became more and more important and indispensable product over time, but I wouldn't say it's really indispensable yet.

There are some other examples in other industries where some businesses or some software became indispensable. One such example is Bloomberg. When you are in finance, you cannot imagine doing business without Bloomberg Terminal. That was our initial vision. Bloomberg for the music industry was our motto and still it is. That's my goal. That's my dream.

Building such a product takes time in my own clock. For any such business, it takes at least 10 years. That's my theory. Nothing important can be built within 10 years. If you think about all these products that you love, you feel like they were born overnight because you only discovered those when they were already successful. After 7 years of grinding, you discovered that. Nothing can happen within 10 years at least. That's my belief. 10 years is the minimum. It's been 7 years, so I have minimum 3 years more, 3 more years to go or even longer.