"I heard all these people saying, 'Gaming? Isn't that child's play?'" he said. "No one wanted to get into gaming."
Today, his Singapore-based company Razer (RAZFF) is one of the biggest providers of gaming hardware and software in the world, with a market value of about $1.6 billion. A big part of its success came from getting in early on eSports, an industry where hardcore gamers compete for money and fans.
Razer designs products such as headsets, controllers and keyboards. But it all began in 2005 with a computer mouse designed specifically for gamers.
"We said we are going to come up with something that's going to eat up all the other mice out there," Tan said. "So we called our first mouse the Razer Boomslang, after the African tea snake."
The futuristic design of the Boomslang made it stand out from other computer products of its time. Razer sold it with the slogan that would define the company's brand for years to come: "For gamers, by gamers."
Over the years, Razer developed hundreds more products including laptops and smartphones. It aims to meet demands for fast and ultra sensitive products, which are essential in eSports events where the tiniest delay can cost a game.
"You're talking about events with tens of millions of dollars in prize money, where win or loss could be just a matter of a single millisecond if somebody is able to click faster," Tan said.
The company continues to come up with new and improved versions of its signature gaming mouse. The most recent is the Mamba, which charges wirelessly from its mousepad.
Razer now has more than 800 employees and offices in cities such as San Francisco and Shanghai.
It still has work to do to convince investors, though.
The company's revenue grew 39% to $274 million in the first half of 2018, the most recent period for which it has reported earnings. But it's still losing money and its stock has lost nearly 60% of its value over the past year.
That put a dent in Tan's wealth. He was once ranked as Singapore's youngest self-made billionaire. But Forbes downgraded his net worth last year to $690 million.
Despite competition from rivals like European tech firm Logitech (LOGI), Tan is confident about Razer's future, saying demand for advanced gaming products is increasing, driven by the popularity of eSports.
This year, online gaming will make its official debut alongside other sports at the Southeast Asian Games in Manila, a key milestone for the industry. Razer has already marked its territory as the official gaming sponsor of the event.
"It's a serious business right now, so we're heavily investing in it," Tan said.
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