Ep382: Chris Slee – Believe in the Idea but Continue Your Due Diligence

Andrew Stotz 00:01
Hello fellow risk takers and welcome to my worst investment ever stories of loss to keep you winning in our community. We know that the win in investing you must take risk. But to win big, you've got to reduce it. If you're not already a member of our community, please go to my worst investment ever.com right now to join and receive the following five free benefits. The risk reduction checklists, my weekly investment research email to help you increase return a 25% discount on all a Stotz Academy courses, instant access to our Facebook community to get to know the guests and fellow listeners. And finally, my curated list of the Top 10 episodes. Fellow risk takers This is your worst podcast host Andrew Stotz from a Stotz Academy, and I'm here with featured guest, Chris Slee. Chris, are you ready to rock?

Chris Slee 01:02
I am. I'm definitely ready to rock.

Andrew Stotz 01:05
Yes, I see you got a cup of coffee 7am Is that right? 720? Yep. Yeah, it's, it's,

Chris Slee 01:12
it's, you know, it's pandemic early here. So there you go.

Andrew Stotz 01:18
And the magic of the internet allows me to be beautiful. Bangkok, Thailand and you to be in amazing. Dublin, Ohio outside of Columbus. So those,

Chris Slee 01:29
those don't sound equal.

Andrew Stotz 01:32
one's a little more exotic than the other I have to say being an Ohio guy. I I watched these guys on YouTube called the bearded butchers. And I can't remember they're, they're West, southwest of Akron. So really kind of center of Ohio a little bit closer to the center. But check them out for anybody out there if you can, if you enjoy meets, these guys, two of them are just amazing. And they take you inside their butchery in Ohio. And they just you know, I just watched this one on ribeye, you know, what's the difference between grass fed grain fed wagyu and bison which they also have a they have their whole cattle there. So they've got like their, their hay, their straw, their cattle and the butchery. So really impressive guys, the bearded butchers from Ohio. I didn't plan on plugging them on the show, but I've enjoyed their videos so much. So anyways, I literally go back to Ohio. But Ladies and gentlemen, that is not why we are here today. We are here today to meet Chris Lee. So let me tell you a little bit about Christopher sleep. He's the founder, Principal, and Chief Product officer at AWS h A Dublin Ohio software engineering firm currently celebrating its 26th year of creating innovative digital products for business clients. At AWS. Chris leads internal and external development teams across all platforms, all applications, from web, mobile and desktop platform to virtual reality and machine learning. Even though Chris has been programming for more than 30 years, he continues to push the technology on below, from drones to artificial intelligence. Chris continues to exemplify the spirit of continual learning in the tech space. Chris, take a moment and play for the tidbits about your life.

Chris Slee 03:31
Yeah, so I was, you know, I know you're from Ohio, I was born and raised here in Central Ohio, went to Ohio State and just never left. Every time I go on vacation, I wonder why I live in Central Ohio. But I come back to Central Ohio. So that's, you know, there you go every week because every place you go, then it's like it's a great place here and you go to the next place. And this is a great place to eat. You still want to come back to Central Ohio. It's nice. It's comforting. It's you know, and you can just go about your business without too much drama. Whereas I think if I lived in a beach town, I would get too distracted.

Andrew Stotz 04:09
Ohio, the heart of it all.

04:11
There you go.

Andrew Stotz 04:12
Yes. Well, I remember you know, for the listeners out there, I grew up outside of Cleveland, Ohio and a little town called Hudson. And I really had a great, you know, a great time in my youth in Ohio. I have to admit that the winters were brutal outside of Cleveland and the Cleveland area because of the lake effect from Lake Erie. But generally, you know, it was a great place also for rock and roll like a lot of great cities like Detroit and others that were really rocking out when I was young. So I really enjoyed that time in Ohio. So anyways, now it's time to share your worst investment ever and since no one goes into their worst investments, thinking it will be tell us a bit about the circumstances leading Up to then tell us your story. Yeah, so

Chris Slee 05:03
just give you a little background. So for the last 26 years, I've spent my life working with startups and upscaling, you know, younger companies that are out to Greenfield a digital product, get it out into the market, and capitalize on that. And then, you know, and we help many at the same time. So we have engineering teams, and product design teams and designers and those kind of things working on multiple things at the same time. In the early days, that was easier because people come to us and go, Hey, I need a website, right, you know, back in the 90s, and then the e commerce and you go through that whole process, it's a lot more elaborate today, because you know, products have evolved in the consumer desire for the complexity of products, you know, hey, we expect our, our apps to be smarter and do things for us those kind of things. So in the process of doing that kind of work, we ended up taking on some venture arm where we will help organizations in that startup phase, who may not have traditional funding, you know, we sort of go through that concept of, you know, an entrepreneur comes up with an idea, they go through a round of funding called friends and family, where they're financing it themselves, and then maybe they find an angel investor. And then maybe they find an early stage investor, and then they, you know, they, they've made it that far, then they're going after a seed investment and those kind of things, we sort of work between the friends and family and Angel, you know, into the early seed. And from an engineering perspective, that has nothing to do with the finances and risks sitting around investing in a company that doesn't exist. So while there, I don't have a single worst investment, I said, there's no Titanic moment where we were in the thing into an iceberg. And everyone that what we have is a series of learnings over years and years and years of running the ship slightly aground having to drag it off of this. And then driving it to the next show running in the ground and dragging it off the show. Right. So you have this series of very painful lessons,

Andrew Stotz 07:21
but you're going in the right direction.

Chris Slee 07:23
Yes. Wow. I'm shoulder to shoulder. Yeah, it turns out open sea would be easier we keep from going around the little islands that we've got right to maintain our beach metaphor. So yeah, there was no there was no single incident that I could sit and go oh, that was you know, we almost died right there. We add in the fact that we have multiples running at the same time, I could have one on the shoal and one just sailing clear, right. So but the the learning that you get over that experience on people on the internet glibly say, hey, you should fail as fast as you can and start over again. So yeah, we've been doing that for 26 years. And I think that the The, the, one of the very first premises that we that we have to work on is you, you have this dual sort of reaction of, I have to believe in the products that we're building, I'm 100% if I don't believe in the entrepreneur, and the product and the market space, and the product market fit, and hey, this could work, we don't want to do it, because we don't want to be associated with you know, not successful things. And at the same time, that means that you emotionally get drawn into that product and that market and that and that CEO in that idea. And so there's this sort of pool between rational thought and looking at something and the emotion that goes around the I have to believe to do it. And at the same time, I need to be skeptical enough to go It's my money am I going to spend it right? And that balance shifts back and forth you know, as you get closer to the shore and as you get more into open water right the those two things become you know, your steering wheel of what's going to happen. So there are many times where the emotional drive and belief in the product and belief in the entrepreneur lead us ashore right around the ship because you can 100% believe you're right and be 100% wrong. Right. And I think that's that's one of the things about investing early on is due diligence and continued due diligence and believe your gut sometimes by not just that not just that you know, hey, this is great I and good money after bad and look Good, we could power through that, that I keep using this metaphor, but I'm going to stick with it. We can power through that sandbank, right and make it to the other side, if we're just going fast enough, when we hit it, it's like, you should not be thinking that way. You should be thinking, I'm not hitting the show, right and, and be able to go around it and stay in open water. And as a very difficult lesson, to teach yourself over years and years and years,

Andrew Stotz 10:27
you know, I was thinking about in your case, and the way you've been through a lot of different experiences, I kind of feel like I want to go through what you learn, and then come back to some, some questions I have about some stories, but maybe you could just share, I mean, that first thing that you've talked about, that you learn is that you've got to believe. But you've got to also doubt, but you've got to also do your due diligence continually. Let's just describe, what have you learned from all of those years of going, you know, back and forth. Um,

Chris Slee 11:05
well, we say when when, when someone comes to us with a with a product idea, and we start to look at them sort of holistically, that they have a blurry vision of what they want to build, right, because they can't come in, they typically don't have engineering specs, and they don't already have a design. And they don't know, they don't have a running company that they go, Oh, I needed to copy this is something that has never existed before. There also needs to be a healthy bit of skepticism and the fact that they actually understand their business. Because many times it's the first time they've done it, or it's they've been running a successful business, and now they're approaching a brand new market. Are they just as foggy? On what their business model is? In? What market they're approaching? And do their customers even want to buy? Are their customers? a? And do their customers actually want to buy what they're building? is b? Because that's how we get our money back? Right? Yep. They become successful, they go to a next round of investment, we, you know, we get bought out or we stay with them for longer. And then, you know, there's monetization on that side. So understanding that a, someone could sit with a pitch deck, and walk through it, and everything sounds correct. But then you really start to have to ask, have you ever done this before and, and in entrepreneurs hate that? Because of course, I've never done this before, because this is a brand new thing that never existed, and we're approaching the market. And you would never ask Zuckerberg when he created Facebook, if he'd done it before? Because of course he hadn't, right? It's like, Alright, that's fair. I get that being a rational human being, but at the same time, Do you have any experience in this early stage to you know, late stage sort of product space, and if you don't, it's okay. But know your market, you should know someone who wants to buy your product before you start to build your product. Otherwise, you're building for yourself? And if no one, there's a possibility that you're the niche of one that wants your thing, and that there's not a market for it?

Andrew Stotz 13:12
You know, so I, I was gonna say that I, I went to all the startup ideas that people talked about on the podcast, and I came up with six common mistakes that they made. And I thought I just opened up that file I thought, could be interesting. Given your experience. Would you like to hear them?

Chris Slee 13:30
Oh, I would love to hear them.

Andrew Stotz 13:31
Yes. So number one most common mistake that startups made. These are only the startups of the people that I interviewed out of the 360, I think I took about 40 of them to compile this list. Number one, bad hiring decisions. Number two, poor management in time of time and people. Number three, ineffective teamwork and collaboration. Number four, waited too long to start selling. Number five, weak accounting and finance. And number six, low product quality or product market fit. Any thoughts based upon what you've been through?

Chris Slee 14:11
Well, I would agree with all of those. And I think, you know, I hate on some of these to plug AWS too hard, but we prevent at least five of those from happening. Right? The fact that we have an engineering team, a product team and design team, you know, it's all that teamwork, management and time to market. And we will normally be the cheerleaders for you've got enough features go find the client versus Oh, I need to buy it, no one will buy it. If it doesn't do these 18 things. It's like, no, go get two things working really well. And let's go find out, you know, customer, that's might not be the two that they want. You're gonna know when you put it in front of them, right. So what's the core of the product and what's getting out there so the things around teamwork and quality Higher hanging, and time to market and market fit. Those are all things that we help you with the one that we have sort of on the outside that we don't is, yeah, if you're not managing your money and your burn rate and those kinds of things now we do it from a here's the plan perspective. Yeah, but we need to make sure that the spend on the marketing side the spend on you know, ads, and, and all those kinds of things is appropriate to the level that you're, you're spending, or you're trying to get to Market. But that's interesting. I like your list. Yes, I would say as a competitive advantage, we take care of almost all those for early stage and upstarts.

Andrew Stotz 15:43
That's, that's pretty exciting. And for the listeners out there that would love to not make any mistakes. You know, those shows,

Chris Slee 15:52
we made all those mistakes for 26 years? Why would you want to go alone and try to make them all at once? Right,

Andrew Stotz 15:58
exactly. One last thing I'm going to ask you about is what I find very difficult these days is reaching the market. You know, it's one thing to have a great idea and stuff but and you know, I mean, it's everybody's dream that this is gonna be on fire, and it's gonna be viral, and everybody's gonna, but you know, for the rest of us that don't have some kind of explosive product like a shaver. You know, for the rest of us that just can't figure out how to get to the market.

Chris Slee 16:31
hardiness kits right there, though, right? marketing kit? Yeah.

Andrew Stotz 16:34
And that's the point. And my, I find that the hardest part, I just wonder what your experience is with a good idea, you know, it's not going to change the world, but it's a good idea that you come across, what's your experience about getting to the market?

Chris Slee 16:48
Yeah, so and that's where, you know, when we talk about product market fit, we're trying to make sure that the product that you're building has an audience before we build the product. That's the key, because once you can get into an audience that starts buying it now, you know, we're doing mostly business to either business or business to consumer kind of applications. In when we say consumer, we mean, our customers customer is somebody who's sort of in a targeted environment, right. So whether it's a we do a lot of healthcare, so a lot of either patient oriented or provider oriented, are professional, the, but to understand what their needs are, what you're not what our customers needs are, but what our customers customers needs are, yeah, and then we live in that space with them, and help them in there. So I think that's probably the key.

Andrew Stotz 17:44
It used to be, you know, like giving away free samples or free downloads. But people seem to be more skeptical these days. Like, it's not as easy as getting a lot of free stuff in front of them. Getting them to pay for something that they don't know, getting them to test something has its flaws. Because, you know, if you're asking them, they may give you something that, you know, I'm just just curious, like what works these days out there?

Chris Slee 18:10
Well, we have a We have a saying that. When you're an early product study, you believe the potential customers that you're asking, right when you're doing surveys. As soon as you'd have the MB, the first product and you put it in their hands, you assume they're lying to you, and you only watch what they do. So, right because it's Hey, well, when free, Hey, would you use this app? And well, and then it's things like, never asked that question like, hey, do you think this is a good idea? never asked that question. Because you put somebody on the spot, and they're going to try to empathetically go, Oh, yeah, I would use this every day. It's like, would you Really? Oh, no, but you seem like a nice person. So I'm going to tell you yes. Right. Like, okay, so there's a lot of pre work that goes into magic. And one of our customers that is having a great ride right now. And you know, the great, great valuations and they're going to the next level. And, yeah, they've been a startup for 13 years. And it's, it seems like just in the last like two years, it's just like, and it's like, everyone's like, Oh, these guys came out of nowhere. It's like, these guys have been working in their basement for 10 years to get to the point where it's actually now going up. Right, and now we've got venture capitalists coming in and saying, you know, next round next round next round prepping for a large seed round. And but they've been doing it, it's not like they came up with the idea a month ago, and then and then suddenly they got a $30 million valuation. No, they, they've been working on this for 13 years. And it's only in the last two years, that they really started to get traction and it's only in the last year that they really started getting valuations that they needed to get to a good seed round and that entire long tail takes effort and you got to know what you're doing. So there's no, I would say that there's no magic. in marketing there is sweat and due diligence and effort.

Andrew Stotz 20:13
And that, that's a great listener. That's a great learning for the listener, which is also the point that you need a runway, you need some financing, because you have to iterate, you have to work on the product market fit. Sometimes you have to wait, you know, competitors doing something, or the markets not ready or the markets distracted. And then the time comes, and if you can't finance and support that period to get there, then it ends just before the miracle happens.

Chris Slee 20:43
Yeah, in fact, that company that his two brothers in one of them's the CEO, and one of them's the primary designer, and neither one of them were working well, while they were working with us in the early stage. This is probably six years ago, neither one of them were getting paid by their company, they had to pay us but they weren't being paid. But and, and we would have meetings with them at least once a week. And they said the only reason their company still exists is because we would that interaction, once a week, we would have a status report. Here's what's going on, even though we weren't doing any engineering, we were just looking at product fit. What's the next thing? Is there? Is there a trade show that we should be going to because they had a tangible physical product? And they said the what kept them going at times was the fact that they had to show up with a meeting with us and, and answer for their actions. That's great.

Andrew Stotz 21:39
That's and that that is accountability. Right? Yeah. And that must feel great. I think I have a client right now who's got an operating business, they're trying to raise capital here in Thailand. And we meet with them every Monday to go through the construction of their business plan, and strategy and the way that they're going to pitch that to investors and all that. And, yeah, they mentioned about the value of the discipline of that meeting. And also it, you know, there's some there's, you can open when you're not in the middle of it, the pain and struggle, and you just step out of it, and you listen to someone else that you trust. It is helpful, very helpful, you know, and that's, I can see that in action. When I talk to these guys. I'd like to just summarize my one thing I take away from your, from your story. And I'm going to pull out just a tiny little thing that you said that you didn't, you didn't emphasize, but I want to emphasize it. And that is, you said, Listen to your gut. And you know that sometimes you have to listen to your gut, or your intuition. And the point that I've come to learn from this podcast is that I've come to learn the difference between feeling and intuition, which I didn't really understand the difference between the two. But now I can say that intuition is that momentary tinge that momentary cringe, and that momentary instant, where you feel something, and then our bodies and our minds overcome that, and it's gone. And we overcome it with, you know, our confidence, and we overcome it with logic. But the truth is that, if, if there's one lesson I've learned from this podcast, it's to become more aware of that gut or intuition and be, you know, accepted, and think about it, search for it, you know, bring it out. I'm just wondering if you have any thoughts about them?

Chris Slee 23:43
Yeah, I, I experienced that quite often. where, you know, all indicators point to, you know, you use the ball, right, all indicators point to Yes. And there is just something there that, that in, that shouldn't be there, and you're in sometimes, you know, you try to convince yourself that, why am I Why did I have that thought, right, this errant thought goes through your head, listen to that. Because that is your long term memory, I think going, Hey, there's, you know, you know, I do a lot of machine learning now. So, you know, it's in training machine models and those kinds of things for and and for trying to get output for clients. And it is just one of those an outlier. Sometimes you need to pay attention to, because it will change the equation. It's like, well, if I have an outlier thought or now that intuition feeling, I think it's probably because over an extended period of time, there's been enough outliers that a pattern has developed, and you should probably pay attention to it.

Andrew Stotz 24:50
Beautiful. All right. So based upon what you've learned, from all of these experience, what one action would you recommend our listeners take so they can Minimize the shoals or the you know, hitting the banks and they can maximize the distance they drive or the speed that they travel.

Chris Slee 25:09
I think probably one of the big things is, is being comfortable with the fact that you don't have all the answers, and to be able to surround yourself with people that they don't have all the answers right with, we're all in this big experiment together, you know, as we go forward. There is there's no magic with there's just learning and application of what you learn to the next thing. So it is okay. When someone says how is this going to work to say I don't know. And be looking for the people that can bring ideas with you, and help you I always have the I joke with my recruiters that they should always be trying to hire people better than the current staff. Only because, look, we want the best. And the only way you're going to hire the best is due to be uncomfortable with the fact that the person you're talking to is much, much smarter than you are a lot more experienced, and embrace it, because those people are there to help, you

Andrew Stotz 26:12
know. All right. Last question, what's your number one goal for the next 12 months.

Chris Slee 26:19
Our goal for the next 12 months is we have tactically there's several clients that we're trying to get to their next rounds. And that is that is if someone today what they do, which is go out our goal is always to get our customer to the next level that is really at the end of the day, our goal. So from an organizational perspective, it is making sure the team is thriving, and you know the work from home. We've seen embrace that. So we've got now employees and clients spread all across the globe now. And then I think our next goal is to make sure our company and our employees feel like a team. Because that you know, when we're all sitting in the office, and we're all next to each other, and we're all in conference rooms, that's easy. We've been learning how to do that, and 20 and 21. So most of our staff says that they don't really want to go back to an office and we're not going to make them. So, you know, that kind of thing. My personal 21 goal in the next 12 months is I would like to go on a vacation outside of this house. So

Andrew Stotz 27:33
sure you will, I'm sure you well. Listen, there you have it, another story of loss to keep you winning. My number one goal for the next 12 months is to help you my listeners, reduce risk and increase return in your life. To achieve this, I've created our community where you gain the five free benefits that I mentioned early. Just go to my worst investment ever.com right now, and join us. As we conclude, Chris, I want to thank you again for coming on the show. And on behalf of a starts 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?

Chris Slee 28:19
I think you know, embrace your ideas, go after it. But learn, keep learning and that's the key.

Andrew Stotz 28:29
Beautiful. Well, 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.