Ep411: Patt Soyao – Make Your Dreams Real

Andrew Stotz 00:01
Hello fellow risk takers and welcome to my worst investment ever stories of laws to keep you winning. In our community. We know that to win in investing, you must take risk, but to win big, you've got to reduce it. To join our community go to my worst investment ever.com and receive these five free benefits first, you get the risk reduction checklist I've created from the lessons I've learned from all my guests. Second, you get my weekly email to help you increase your investment return. Third, you get a 25% discount on all a Stotz Academy courses. Fourth, you get access to our Facebook community to get to know guests and fellow listeners. And finally, you get my curated list of the Top 10 podcast episodes fellow risk takers, this is your worst podcast hosts Andrew Stotz, from a Stotz Academy, and I'm here with featured guests, Pat. So yeah, Pat, are you ready to rock? Yeah, let's do this. All right. Well, let me introduce you to the audience. So Yao is currently the managing director and founder of icon executive, Asia, an executive solutions firm that focuses on executive search and executive events, that service a roster of high profile and high net worth clientele. He's also the chief strategy officer and co founder of shopper tainment. Live the leading live stream Shopping Network in the Philippines. Also check out his podcast job define, which is all about debunking job descriptions through interviewing actual professionals who are doing that job right now, Pat, take a minute in filling for the tidbits about your life.

Patt Soyao 01:43
Okay. Thanks for that intro. So, again, my name is Pat. I'm an intrapreneur. I started my business back in 2013. I'm on my third and fourth business. So I had my few, not really few, I had more misses than hits eventually, and experienced my own fair share of losses, a lot of them monetary. And I guess that's why I'm here.

Andrew Stotz 02:13
And just maybe give me a little idea about like, what, what strengths Do you have as an individual or as a company? Now that you've been in business for a while, you know, what you can deliver? I'm just curious to understand that also, so that listeners can understand, potentially, maybe they should hire you?

Patt Soyao 02:33
Well, I believe my strongest business development, and I've been doing a lot of business development, it's not just it's more than sales, it's actually a lot of things. You're more of a generalist, you know, several points. And that's the beauty of it. Because if you try to connect points from the same location, then it's pointless. And the number one skill that I have, in my opinion, and that I've seen this, I always do this, in all of my businesses is I make things exist. So from thoughts to tangible things, I'm obsessed of bringing that thought into something tangible, from the thought of having my own business from the thought of having this particular project from the thought of reaching this level. For a new project that's never been sold. That's something that I'm actually obsessed with. We want to make things exist.

Andrew Stotz 03:36
That's exciting. I remember hearing from somebody that everything is that exists in this world was created twice versed in our brain, and then making it exist in real life. So there we have it. Well, now it's time to share your worst investment ever since nobody ever goes into their worst investment thinking it will be. Tell us a bit about the circumstances leading up to it, then tell us your story.

Patt Soyao 04:04
Or it's, it's not really, I don't think it's an investment. It's sort of an investment. For my second business, we did a lot of events. These are big events, high level productions. We mostly did it for multinational companies, fashion shows, launches, sales conferences, we were the ones who were organizing it. And the thing about doing events and having multinational clients is that they have terms. And that's their leverage being giant. And normally they will charge 30 to 60. And I actually, for this particular client, I just remembered now it's 9090 days from the time that you've built them. So it's basically three months. And this project was too big to pass and we were able to pay And we were able to win it. And we were barely a startup during that time. And once we won the project, with, of course, joining that particular business of mine, I was in charge of business development, acquisition of clients and the same time finance. So when I finally got the cost estimate, it was more than $100,000, for us to mount that particular project. And we barely had $5,000 in the bank. And I remember, my previous business partner, told me that she would be able to find a financer who can finance the event. And I trusted her. And I told her, you know, what, I'm busy with this business dev thing and making sure that our event will be profitable. And she said, okay, just leave it to me. And so when we met this person, we were just a few weeks before the event. And that's when she dropped the message to us or to bomb. You know what? I can lend you $100,000. But that's 10% per month,

Andrew Stotz 06:23
per month, per month, not per year,

Patt Soyao 06:25
not per year? $30,000. So, yeah, I was shocked, then, there was only like two to three weeks left before the actual event. And of course, we had to pay suppliers we had to. And this was our first big event. And I was, you know, I didn't know where to start. They didn't know, I try, should I borrow money from my friends for the borrow? Do I have any other choices for this one. And because of the lack of time for us, we grabbed it. And the reason why I grabbed it is number one, we had no choice. We already signed a contract. The invitations were already sent out. These were like 800 people who would go to that event, and it's from it's going to be held at and one of the most prestigious hotels and one of the biggest multinational brands. And I just wanted to save face. But at the same time, I tried to find some silver lining it with this one, even if I knew that this is gonna eat up our margins for this event. Normally big events would get at least a 30 to 40% margin. So if 100,000, we would earn at least $40,000 at most, or if you're really good with numbers and your terms are most likely you bump it up to 50%. But we were able to, I think close to 35%. And yeah, so when we were able to successfully mounted, and I thought to myself, well now, basically we did it to for this person. So we're gonna give them our margins that this person can lend that money, because this multinational Of course, they won't budge within 90 days. So and the silver lining that I was talking about earlier was if there's one silver lining that made me say, yes, the disagreement, not just because we lack time, is because even if we don't earn from this the concept of loss leader, I told myself, Well, I'll just call it the put this under the lesson of loss leader, like you're gonna lose now. But you win in the long run, because because of this event, we were able to use that as a springboard that we share with our clients with Dallas. As I mentioned, I wanted to make something access right now. And we were sort of a startup. And when people ask us, can you do this event? We'll just play this video and show it to the client. And they would say, Wow, that's a great event. And number two, that's a big client. So even if we then earn back then it did wonders for the business. Is it worth it? No.

Andrew Stotz 09:39
It's so that that idea that you had was just kind of a justification for what you did. But it didn't turn out that it you could have still built your business without that.

Patt Soyao 09:53
Yeah. And again, it's not worth it. It's up to this day. If I look back into my God that was the it's like a word for that person. Huh? I can't believe that. Remember the time that I wrote the check? I just couldn't give it wholeheartedly. It essentially gave it to that person. And up to this day, I hope this person made good use of that. It's just ridiculous. Yeah, no getting buy a car you can get Can you imagine the, for a startup, that amount would definitely help the organization right away? Yeah. It can provide you two to three months runway in terms of salaries. But instead, it went to this person.

Andrew Stotz 10:40
And when you did the event, did you know right from the time that you got that loan, that this was just going to suck up all the profit? Or was there a point in your mind you were thinking, no, no, no, this could work. But then when you ran the numbers later, you realized how would How did that happen?

Patt Soyao 10:55
Oh, I knew from the get go. That's why throughout the event, I was resentful. I knew from the get go, I was resentful. And I was already thinking of action points, how to move forward, I don't want to happen again. That remember, my partner before, told me what we should be thankful for this person that this this person loaned us money. It's kind of hard to be thankful if this is more than this beyond cutthroat. That's a loan shark if you think about it, even loan sharks have better terms compared to that person. And just, again, I think we I felt that we were taking advantage of because of the time. And I know for a fact in myself that I could have gotten better. And the best part is, you know, the silver lining work, we got another project, right, the same amount of money for us to mount. But this time, you know, I knew better, huh? And the rest is history.

Andrew Stotz 12:04
So maybe you can summarize the lessons that you learn from this thinking about people out there that you know, are facing and very similar situation.

Patt Soyao 12:17
You know, when you start your business you try to one of the biggest challenges is finding that funding from the get go, right. So where do you find these funds? Of course, banks, you know, in my first business, I tried to get a loan anchored in what nothing dreams and I got shut down right away. And you'll be surprised where you can actually find funds. And for this second event that we did, I tried to borrow from friends I borrow for friends. And I was surprised that they were initially I didn't like or I didn't even borrow from my friends back then. Because just the thought of me failing and losing their money, I can't bear that. And I think that the same time when you borrow from friends or the stories that you hear that your first customers are not even going to be your friends but you're going to random strangers but I tried anyway, so I started with my best friend and another close friend of mine I was so nervous back then. And then a member I asked them 10% again, but this time six months

13:49
and

Patt Soyao 13:52
they agreed and the best part is the even extended the term because we're friends. And then remember I was the the appreciation that I felt for my friends back then was I The thing that I was feeling the most of me getting rejected was not even there because they were all out support and that made me more appreciative of them and in a way motivated not to fail because you know what? They also plays their dreams on you. Because anytime that money can just go up in smoke up and you know, gone I remember my business partner just went us shared the story as well. For this particular project, I mentioned to my partner that I was able to grab this just for reference the reason why I closed my second business is because I different vision different perspectives with my partner back then. So remember, at this point, she was doing more on the execution I was doing on a business development and finance. And the thing about business development, you don't see it tangible. Right away. With execution, it's easy because it's right in front of you know, and then I remember I told her, okay, for this next event, you borrow money from your friends, I borrow money from my friends, and let's see how much you can bring. I was able to borrow at least $100,000 again. And she was able to borrow $500 the most. And it seemed like it was easy for her. It seems like borrowing money is easy. And she brushed it off as something that's not very important for the business. Because she's all about execution. And I told her, you know, what, I agree that execution is a lot is a big factor in the business. But I want you to understand that when you borrow money, it's more than the money. It's because this, I remember I told her what's in line here is friendship that's been built throughout the years, and the trust that they were able to give the me It says a lot about the person on how much I this is what I believe in, if you can borrow money from your friends and families, or whoever it says a lot about you, because that means in a way, you're you're trustworthy.

Andrew Stotz 16:48
It says even more when you can pay it back.

Patt Soyao 16:50
Exactly. Remember, I paid it back. My friend got a guitar. They were so happy. It was like, You know what, I'm gonna use this money to pay for the things that I like, I was like, Okay, do whatever you want. And my friend went abroad and was like, You know what, go ahead, go crazy. Enjoy.

Andrew Stotz 17:12
Well, maybe I'll share my thoughts on you know, what i what i heard from this reminds me of two stories that I had on one of them was that when we started one of my businesses, coffee works coffee factory, we struggled through the 1997 Asian financial crisis here in Bangkok, and just barely alive, just barely alive. But we had this big factory, and a very nice Singaporean man came into town, and somehow we met him, came out to our factory, and he says, I'm gonna order the X number of containers from your factories to ship to Eastern Europe. And we were so excited. And, you know, he said, it's got to be the low cost, I mean, we really, really competitive. So we did a bidding as low as we possibly could. And then it turns out that we didn't have the production capacity to meet his needs. So we had to start buying equipment. And we didn't have the budget to buy, you know, the right kind of equipment. So we had to get kind of substandard grinders and substandard roasters. And we put out a lot of money to do that. And we got it going, because we signed the agreement, and we were going to fill, you know, those containers, and we needed this, this is our way out. And I can still remember, in the factory, you notice like, dust everywhere, people wearing face masks and stuff, because we were just grinding coffee with these really industrial grinders. And so we shipped out a few of those containers. And once we started making the calculations, we just realize it's a money loser for us. And we're not in a position where we can bear that for very long. And basically, I happened to be in Singapore for a meeting for something else. And I asked if I could come see demand that we signed the contract with. And I just said, Look, we signed this contract with good intent. And we definitely want to we needed this. But we can't do it at this level, or else it's just gonna kill us. And he and I discussed it and we agreed to exit the contract. And we walked out of them. And it's just a lesson lesson is that you can always go back and ask, you can always go back and try you know, you may not get it. But you can try and you can always say well, I'm sorry. I'm not going to kill my business over this contract for this huge company that had all kinds of business. That's the first lesson. The second one was we had a big company in Thailand recently not too long ago wanted to wanted us to supply them. But their credit terms were like 90 days, and we just didn't have the funding to do it because we shipped the equipment from Italy. It took a while to get Here, we had letters of credit to some extent, but you know, it was just, we knew we would be financing these guys massively, and they weren't going to order a tiny number, they were going to order like 1000 or 2000 coffee machines. And in the end, we basically went to them and said, with the most that we can do is 30 days, and my business partner stuck with them. And we walked away from a huge deal that could have made us much bigger, or it could have been the weight that sunk our ship. And so I think, when I listened to your story, it makes me realize, and I want listeners to think, you know, when you find yourself in a situation like that, you know, you can, you can either decide I'm gonna deliver this no matter what, or you can decide, I've got to go talk to them. The third choice is kind of run away with some people do, and I don't think you need to do that. So those are some lessons I learned that you really reminded me of, and I appreciate that. Is there anything you would add to that?

Patt Soyao 21:00
Oh, yeah, I asked the one who loaned us money. She didn't bunch. I tried. I was like it. Can we go lower than this? And? Nope. Yeah. So that's why again, it's a still a tough pill to swallow for this day. And yeah,

Andrew Stotz 21:21
well, someday, she may come to you and ask to borrow some money. All right.

Patt Soyao 21:29
Well, you know, it just the world just goes round and round. You know, right. Yep.

Andrew Stotz 21:35
So based upon what you learned from this story, and what you continue to learn, what one action would you recommend our listeners take to avoid suffering the same fate?

Patt Soyao 21:45
Well, know your numbers. Definitely. I'm very big on numbers, margins, runways. But at the same time, think bigger. This, or the second time that we did that event, we had better terms with our suppliers. Because we had better terms with our suppliers. That's another silver lining, because the since it was our first big project, the suppliers, of course, it can't just simply ask for terms for first. And then when they got paid, I had more leverage. So I asked better terms. So you have to understand when money's involved, you really have to manage the cash flow, you really have to manage? How long can you survive without the sale? That's always, that's always in my head. Because in my first business, I remember her having three months runway for almost three years. And it made me anxious. Can you imagine you deliver a service in 30 days, and then you collect after 30 days, which is normally 45 days, so in, so all in all, you had 30 plus 45, that's 75. And you only have like 15 days left. And that's a constant anxiety. And that's why right now, when I create runways, if it's six months, it's already like read for me, it that anxiety triggers. If it's one year, I'm, you know, I can rest for a bit, but normally, that's a that's very important, because that would give you peace of mind. And so you won't be able to make rash decisions such as what I did agreeing to a 10% interest per month now. Great. It gives you more freedom if you're prepared. Definitely know your numbers.

Andrew Stotz 23:48
That's good advice. All right. Last question. What's your number one goal for the next 12 months?

Patt Soyao 23:54
number one goal for the next 12 months? Well, for my one of the goals right now is it's pandemic right now. So executive search is one of my business events, which was severely affected. And the other one is live stream shopping. So, in, in this pandemic, there are three statuses for companies in my opinion, the first status is dying. The second one is surviving. And the last one is thriving. So in the next 12 months, executive events, executive search is more on the spectrum of surviving, I know a lot of executive search firms who already closed shop because of the pandemic because their clients stop hiring. And right now, even if the market is bouncing back, it's still kind of a challenge because those who survive I right now. are fighting for whatever piece of meat is out there. So the competition is tougher compared to pre pandemic. So I want to get that go beyond into the spectrum, I want to cross to the thriving side in the next. Fantastic. And for the live stream shopping us of what we know we are currently leading in the country. And we do want to keep that lead and really make it big and scale it to the point of It's crazy. So right now, we just got another floor. And we're still gonna create more and more studios for that particular company. So more of the thriving side in next 12 months.

Andrew Stotz 25:44
Great. Well, we'll follow up in 12 months. Well, listeners, 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 listener, reduce risk and increase return in your life. To achieve this, I've created our community and my worst investment ever.com. I look forward to seeing you all there. As we conclude, Pat, 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?

Patt Soyao 26:27
Just keep on keeping on. That's me make things exist. If you're going to be a business owner, that thought into tangible things make things exist and you know, ups and downs are normal. So just keep on keeping on.

Andrew Stotz 26:43
Right on. 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.