Ep330: Eric Siu – Do Not Chase the Money, Chase the Opportunity

Andrew Stotz 00:02
Hello fellow risk takers and welcome to my worst investment ever stories of loss to keep you winning in our community we know that to win an investing you must take risks but to win big you've got to reduce it. This episode is sponsored by a stocks Academy's valuation masterclass the complete proven step by step course to guide you from novice to valuation expert go to my worst investment ever.com slash deals to get your 30% discount before March 31 2021. Fellow risk takers This is your worst podcast host Andrew Stotz. And I'm here with featured guest, Eric Sue, are you ready to rock?

Eric Siu 00:41
I'm ready to rock. Thanks for having me, Andrew,

Andrew Stotz 00:43
I'm glad to have you on the show. And in fact, you are I went to Cal State Long Beach. So I used to be in the LA area for a long time. So it's good to reconnect with lovely la what I used to call the center of the universe at that time. So let me introduce you to the audience. For those people that don't know, Eric, he is the CEO of content, intelligence software, click flow, which helps you grow your traffic while looking like a genius and who doesn't want that. He also owns an ad agency, single grain and has worked with companies such as Amazon, Airbnb, Salesforce and Uber. To acquire more customers. He hosts two podcasts, marketing school with Neil Patel and leveling up, which combined have over 48 million downloads today. He's also speaking frequently around the world of marketing, and software as a service. And he's recently publishing a book called leveling up. And I happen to tell you, Eric doesn't know this, but I've managed to get an inside person to give me the first copy of the book and let me find it. And there it is,

02:00
whoa, they sent it to you.

Andrew Stotz 02:03
No, just kidding. I made it myself. I may put it on a little booklet that I had. But that's what it's gonna look like folks. And it's called leveling up. And right now you can get chapter number one, which I've been through in, and I'm really excited. So maybe you can just tell the audience a little bit about yourself, and what what they're going to get from this book and what they could do now to get some of that and you know, when's it coming out?

Eric Siu 02:28
Well, here's the physical copy. Here's what it's gonna look like, boom. This is what it looks like. It's coming out February 24. But my name is Eric Sue. So you know, to your point, yeah, a couple businesses I kind of my goal is to level out the world through marketing. So you know, the businesses you mentioned, but we also have an events business, we have an education business, and we also invest in other mahr tech related SAS. And, you know, to podcasts you mentioned, I just love learning, I love teaching, to articulate my thoughts. And you know, I'm here on this podcast to talk about my worst investment, I think there's a, there's a theme here, I'll try to tie everything together. Without you know, me too wordy.

Andrew Stotz 03:05
That's great. You know, it's interesting, because when I read through the first chapter, and also, I'm a, I'm a listener of your podcast, both of them, you know, what I what I get away get from you is that we come from a slightly different generation, let's say I graduated from university in Cal State Long Beach in 1989. And I didn't really I wasn't in the gaming, you know, realm at the time. And I wasn't, you know, that when it started really hit, I wasn't that interested in it. So what I noticed about you, and I suspect that this is what people were going to get out of the book and said, you focus on some really short, actionable things. And it's a feel like whether it's your podcasts, or when I read your book, it is a lot about getting to that next level in little steps. And that's not the way I was kind of brought up, I was brought up with heavy, you know, big content, read this whole book, and then tell me what you learn. Is that correct to think of it that way? Or how do you think how does your mind work?

Eric Siu 04:04
Yeah, you know, it's, so I have this turtle in front of me that I got from Puerto Rico and I visited, you know, Puerto Rico, for obvious reasons. But, um, you know, it, it reminds me to slow down and to understand that, you know, leveling up 1% every day, just trying to get a little better every single day. That's what it's all about. Because, you know, you look at if you think of decades, that force, you think of your results in decades, you'll be amazed at what you accomplish, and you have short term hustle and long term outlook. It's the same thing as investing, you know, at the end of the day, so I think it's, um, you know, I'm glad that you noticed that I actually never thought of it that way. But yeah, that's exactly what it is.

Andrew Stotz 04:44
Yeah. In fact, before we get into the question, I just quote one thing out of the book is, you say just because you have struggled in the past, does not mean you're not in it does not mean you're entitled to anything to play it the next time. level, you'll have a new set of struggles. And that's something that really, you know, hit me because, you know, first of all, you know, at the age of 55, you know, life's supposed to be good and easy and all that, no, no, there's still struggles that you got to face. That's the first thing. But the second thing that I took away from that is this, again, this kind of incremental way that you look at things, focus on the struggles in that one little level, you know, and there's always going to be those new struggles. And so that's, you know, a big thing that I've taken away from, and I'm looking forward to getting to the whole book, someday I'll have it.

Eric Siu 05:35
By the way, like, I noticed a little Warren Buffett character in the back. And I think that's what it is. And so if you think about it, you know, he's 84 point. So I think he's worth about 85 billion, right 84 of that didn't come until after his 65th birthday. So you talk about patience. There you go right there poster child for that,

Andrew Stotz 05:54
exactly in it highlights an important part, which is the compounding effect. And one of the things that most people don't realize, even in the world of finance, and this is an important one Eric to always remember when you see that chart that shows the compounding effect where the wealth is compounding in later periods. The most important thing that most people never realize, and me as a professor of finance, but also as a finance professional, is that it only can happen if all the income streams that you earn from that investment are reinvested in that investment. And a lot of people think they're going to passive income, and they're going to take that money out to the earning No, no, the only way that you get the exponential return is if you reinvest what you have earned. So it's an important thing that most people miss. You know,

Eric Siu 06:43
it's it's a it's a good point. So you think about, you know, some people will say, Oh, you know, nobody, nobody ever got poor taking a profit. But then you look at the billionaires out there. And remember watching this on CNBC, and I know that's not the most reputable place. But the billionaire responded saying, hey, look, but nobody ever got rich either taking a profit, right? So it's, you know, time in market versus timing the market and I think, too many people misinterpret it as like, Oh, we should be taking money out. But then it's like, what are you gonna do with the money anyway? Besides take care of your family? Take care of yourself? What are you gonna do with the money? You might as well just put it back in for I'm blanket statement right now. But you know, in a lot of cases,

Andrew Stotz 07:17
yep. So, now it's time to share your worst investment ever. And since no one ever goes into their worst investment thinking it will be tell us a bit about the circumstances leading up to it, and then tell us your story.

Eric Siu 07:31
Yeah, so you know, I was going to say college first. But I feel like a lot of people would say that. And, you know, depends on what you're looking to do, but just wasn't the right fit for me. So for me, you know, circumstance, this is not the college story. I had taken over my ad agency single, right, that wasn't going too well, the first year. And so I decided, hey, what's an opportunity I can get into, so I ended up settling on this the senior living niche, because that, you know, we're going to have a lot of people aging into that. And you know, Senior Living is gonna get a lot bigger, you know, assisted living, Senior Living that type of stuff. And, and so, you know, at the time, my friend who came from investment banking, he had actually helped to take a company public, he was interested. And then, you know, we had another friend from high school, so we're all high school friends. He was also interested, as well, he was the developer. And then so we had, you know, my other friend, he kind of kind of had this finance and operations background. And then we had me with a marketing background, and we're like, Okay, this is the ultimate team. Now, you know, we decided to start this company called care sprout. And, you know, it's, you know, like, for caring for people. And, you know, we spent probably a year two years on it, and the money wasn't so much of a big deal. You know, we I invested about $80,000, which is a lot, right, you know, in any, no matter how you look at it, and then my friend put into save about 80,000, as well. So that was kind of we funded it ourselves, we didn't raise any money or anything like that we had actually hired someone, you know, like, one or two employees as well. And we spent a year or two on it, you know, my friend would drive over to my house, my other friend, the technical one, he would work on it, he would work on it part time, right. And, you know, about a year, year and a half working into it, we didn't get much traction at all, like we acquired another website, we did all these things, we designed it and all that we talked about it. But what was missing the whole time was, you know, we just weren't really passionate about the space. And you know, this by the way, this is while I was trying to save single brain at the same time while I was trying to start my first podcast leveling up. And so I was doing too many things at once. That's, that's one of the most mistakes, but trying to do something I'm not passionate about and just trying to chase the money instead of chasing the opportunity was something I that's a lesson that I learned, but also learning to know whoever you're gonna partner up with. You have to have the same values. It's the same thing as a company to you have to have the same core values. And so for me, you know, I I'm working around the clock because every Today you talk about the leveling up concept, I feel like it's playing a game. So to me, I'm very much playing a game the whole time. Now, you know, the technical person, he had a job. And he also had, you know, he's in a serious relationship at the time, too. So he's priorities are different, right? Like, I'll look at his, his Snapchat or his Instagram at the time. And he's showing pictures of him cooking food while we like we need stuff done. Right. So there was an alignment in terms of the work ethic as well. And I'm not saying he's not a hard worker, he just worked hard in different areas. So I didn't evaluate my partners. And by the way, these are still my friends, we still talk that that's one critical mistake that I made. The other mistake was again, instead of chasing the opportunity, I chased the money. And no matter how, like, you try to keep chasing the money, you're gonna run out of steam at a certain point, like what happens when you get burnt out what happens when poopoo hits the fan, you're not gonna want to work on anymore. And that's exactly what happened. My other partner in finance and operations, at a certain point, you could just tell the wind was knocked out to him, we just didn't want to work on it anymore. So we ended up wasting a lot of time and effort. And I would just say, look, you know, if I were to reflect again, you know, know your partner's, right, don't try to work on too many things at once. And also understand that, you know, chase the opportunity, don't chase the money necessarily. And the only good thing that came of that this is a funny story. Or this is more ironic than anything is Neil, my podcast co host, he ended up buying a tool called Uber suggests, which is doing really, really well. Now it's a free SEO tool. And, you know, he, he only bought it because he saw me acquire a website, maybe a week or two before in the senior living space to acquire the rankings for it. So at least we learned something positive from it. And then somebody created, you know, positive, Evie from it. So,

Andrew Stotz 11:44
yeah. And Neil was Episode 231, for those who want to go back and listen to his worst investment ever. Let me just ask you a question.

Eric Siu 11:53
His was his hosting company.

Andrew Stotz 11:55
Yeah, it was. Yeah, in the beginning. And his main lesson learned too, is, you know, experiment, experiment, experiment. You know, let me ask you a question about, can you remember the day? Or the conversation that you needed to have when you realize this is a loss? It's Oh,

Eric Siu 12:13
yeah. So actually, my finance operations friend, he was like, hey, so should we put more money in? And I was like, No, I think we should shut it down. So. So like that, that was another point where like, we could have easily put another 70 grand in ourselves each. And we're just like, no, because I could easily see myself racking up a couple $100,000 before we even become profitable on it. And then it's like, Okay, do we want to raise money for all this stuff, and then you're working with, you know, one partner that's not so passionate about it. So there's just a lot that went into it. And I just decided at that time, it was time to cut our

Andrew Stotz 12:50
losses. So let's just go through and list out the lessons so that the listeners got it super clear.

Eric Siu 12:56
Yep. So lesson number one, don't chase the money chase the opportunity. Lesson number two, focus on one thing until you have it working. So nail it before you try to scale anything else or work on anything else. Don't try to nail multiple things at once, right. So focus is really important. And the third thing is making sure that you have core value alignment with your partners. Because, by the way, I've made this mistake in the past before, you know, I've worked on, you know, one or two other ventures with partners, we buy an e commerce website, one guy ended up having drug problems, the other one wanted to work on other stuff. So not vetting and not understanding roles and responsibilities is going to lead to the risk and ruin that happened to me.

Andrew Stotz 13:38
So Huh, got it. Okay, um, let me Maybe I'll share a few things that I take away from it. The first thing is that, you know, we just get idea, people get a lot of ideas. And I think that it's important for us to remember that to implement the ideas is such a much more huge challenge. And it's better to work in an area, and then implement an idea in that area. So to give you an example, five years ago, my mother, my father passed away, and I brought my mother to live with me in Thailand. Now she's 82. And I've learned a lot about caring for an older person, particularly in Thailand. And I've thought about doing a charitable type of activity where I set up some caring place for elderly who don't have money or somebody to take care of themselves. And I can see much more clearly that vision than if I had just come up with that idea right at the beginning. So I think one of my big lessons is the idea that, you know, make sure you're trying to implement it in some way before you go out and implement it in a big way. Which raises the second issue and that is, the matter how it goes, you know, okay, some people want to start a business as a hobby. That's okay. But if you want to make a business big, you're going to come to a day where you're going to have to Go out to investors and say, put your money in this. And my worst investment ever came at the time when it failed was when I realized, okay, now we need 3 million bucks to make this really work is not going to be just the 80,000 or whatever. Am I ready to go out and tell other people put your money in this, trust me, I'm going to make this $3 million in 230 or 300 million. And it's that point when you realize, Oh, yeah, we don't really have a business. And I think that's probably my biggest takeaway I like the last thing I would just say is that, you know, I always say, as a financial guide, people say, Oh, you only think about the money. And I always say, money secondary. The idea, the implementation, the passion, the customers are primary money is just a measure of that success. Anything you'd add to those takeaways?

Eric Siu 15:53
No, I think I think it's well said, I think, look, you know, at the end of the day, we were talking about raising money, things like that, we easily could have raised a couple million dollars, but it's, you know, to me, understanding that it's important to have a formula that works first before raising money, you know, because me as an investor, that's what I look for. Right? So we didn't have that. And it didn't make sense to do it. I think a lot of people fall into the trap of let's raise money for something that doesn't have proof of concept yet. Right. And I've had that issue, you know, even with software things as well, where, you know, partners would want to raise money when we're not quite there yet. So, product market fit is important.

Andrew Stotz 16:27
Yep. So based on what you learn from this story, and what you continue to learn, what one action would you recommend our listeners take to avoid suffering the same fate?

Eric Siu 16:37
I think slowing down in general, right, like so I'll pull this turtle up. Again, it's, you know, slowing down thinking things through thinking about the second and third order consequences, understanding those mental models, so you can have the tool belt to, you know, sidestep critical mistakes, right. I think that's what it is being very intentional and just slowing down.

Andrew Stotz 16:57
Beautiful. Last question, what's your number one goal for the next 12 months?

Eric Siu 17:01
Yeah, number one goal. I mean, it's to hit the wall street journal bestseller list for this book over here leveling up. So you know,

Andrew Stotz 17:08
that's what it is. So for the people that want to get on that train right now. I suspect they can go to leveling up.com would that'd be the best place.

Eric Siu 17:16
You can go to leveling up.com or they can go to their favorite online retailer. It's available on Kindle and hardcover for pre order, at least as of this recording. And then the audio book would probably come out six months

Andrew Stotz 17:27
after. Fantastic fantastic. All right, listeners. There you have it. Another story of loss to keep you winning. Remember to go to my worst investment ever.com slash deals to claim your discount on the valuation masterclass. As we conclude, Eric, I want to thank you again, for coming on the show. And on behalf of a Stotz Academy, I hereby award you alumni status for turning your worst investment ever into your best teaching moment. Do you have any parting words for the audience?

17:56
Keep going.

Andrew Stotz 17:58
Beautiful. All right. That's a wrap on another great story to help us create, grow and protect our well fellow risk takers. This is your worst podcast host Andrew Stotz saying. I'll see you on the upside.