Saleem Khatri is a Co-Founder and CEO of Instavest, Inc, a collaborative investing network. He was previously a member of the Office of Financial Stability at the United States Department of the Treasury.
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- Wunderlist – Saleem’s online business resource – (Sorry! This link was active when this episode was first published in 2016. This resource is no longer available.)
- Traction – Saleem’s top business book
- Instavest in LinkedIn
3 Key Points:
- Always be in communication with your customers.
- Entrepreneurship is a roller coaster — buckle-up your emotions.
- Be relentless in your work ethic.
- Billy Gene is Marketing: If you’re a marketer focused on helping local businesses, then check out this free training from my friend Billy Gene, where he’s going to show you the best performing Facebook and Instagram ads that get results!
Time Stamped Show Notes
(click the time stamp to jump directly to that point in the episode.)
- [00:38] – Started out professionally in the investment world in 2001
- [01:30] – Value Bomb Drop — #1—Investing is easy if you don’t overthink it and #2—Talk to your customers
- [02:54] – What is something you’ve changed your mind about in the last 6 months?—“I used to think that people wanted to do the work of investing, but now I’m realizing they’d rather have someone do it for them—set it and forget it”
- [04:47] – Worst Entrepreneurial Moment — “A few months ago, 1-year into Instavest, I got a text message from our co-founder letting me know that our lead engineer was walking away… then, my co-founder decided he wanted to quit, too”
- [07:22] – Unsolicited letter from a large investment house who wanted to “tour” the office
- [09:08] – “You need to learn how to manage your emotions because start ups are a roller coaster”
- [09:27] – “This too shall pass”
- [10:21] – The most successful entrepreneurs are those who persevere
- [11:19] – Entrepreneurial AH–HA Moment — While people enjoy tracking investing success and implementing it, what they really want is passive investing success
- [13:28] – What is the one thing you are most FIRED up about today? — “I finally know what my customers want”
- [15:39] – The Lightning Round
- What was holding you back from becoming an entrepreneur? – “I felt like I didn’t have a good idea”
- What’s the best piece of advice you’ve ever received? – “Mange your emotions and talk to your customers”
- What’s the personal habit that contributes to your success? Respond to customers within 5 minutes… it’s hard, but impactful
- Share an internet resource, like Evernote, with Fire Nation – Wunderlist
- If you could recommend one book to our listeners, what would it be and why? – Traction
- Imagine you woke up tomorrow morning in a brand new world, identical to Earth, but you knew no one. You still have all the experiences and knowledge you currently have – your food and shelter is taken cared of – but all you have is a laptop and $500. What would you do in the next 7 days? – “Take it one customer at a time”
- [18:47] – Parting piece of guidance: “Work hard—then work harder”
- [20:01] – @JohnLeeDumas On Instagram and SnapChat
Saleem S. Khatri: Absolutely, let’s do it!
John Lee Dumas: Yes! Saleem is a cofounder and CEO of Instavest, Inc., a collaborative investing network. He was previously a member of the Office of Financial Stability at the United States Department of the Treasury. Saleem, take a minute, fill in some gaps from that intro, and give us just a little glimpse of your personal life.
Saleem S. Khatri: Absolutely. So, thanks so much for having me. I’ve worked in the investment world since 2001, but I’ve always had a real passion for entrepreneurship, and I’m super excited to be on your show today to talk about my lessons and the stuff that I have learned along the way.
John Lee Dumas: Well, you have learned a lot along the way, both back in the traditional sector and in the current sector, so I’m really excited to hear about that, but before we do, Saleem, take us through what you consider your current area of expertise, and then give us two quick value bombs, just two nice little quick hits that’s gonna really help us know your area of expertise a little bit better.
Saleem S. Khatri: Absolutely. So, as I said earlier, that my career has been predominantly in the investing space, both investing in the stock market and investing in private companies. And throughout my time, I’ve always felt that only the rich or the elite few had access to good investment strategies and the rest of us were left to fend for ourselves. So, what I wanted to do was build a marketplace where people who had great ideas could share them with people who wanted them, and they could exchange money in order to continue foster that approach.
And so, I would say two quick things that I would have your listeners understand. One is investing is easy if you don’t overthink it, and No. 2, talk to your customers. If you’re a fellow entrepreneur, talking to your customers is the No. 1 thing you can do in order to build a great product because, at the end of the day, you wanna make something that people want.
John Lee Dumas: You have to do things that don’t scale, Fire Nation, and yes, sometimes that’s going to mean having a one-on-one conversation with somebody so you can learn what their pain points, struggles, and obstacles are. Then you – the person they know, like, and trust – can create the solution.
Now, Saleem, I wanna take a little bit of a different tact because you, again, are in the investing field, and you’re building this great business around that. What is something that you’ve actually changed your mind about in the last six months? What’s something that you used to believe that you just don’t believe anymore?
Saleem S. Khatri: Instavest was something that I actually built for myself, which I think is also really important for your first-time entrepreneurs to understand. But I used to think that people wanted to do the work of investing, but the person who’s not a professional investor doesn’t really wanna do that. And so, that was the truth that I used to hold, that people actually wanted to have the optionality and the control to pick certain things, but what they really want is they want the benefit of making a lot of money without doing the work.
And that’s why websites like Betterment, Wealth front, Vanguard are so popular, even though they don’t really outperform the market, and you really just get what the market gives you. They’re really, really popular because you just have to set it and forget it. And so, that’s something that we’ve realized at Instavest, and that’s the direction that we’re moving in.
John Lee Dumas: So, Fire Nation, that’s such great advice. You need to realize that, “Hey, what is something that I believe that I maybe don’t really think that other people might believe because I have that curse of knowledge?” If you take yourself outside of your own box, outside of your own curse of knowledge, and put yourself in the position of your potential future customers, you might have that aha moment that you’re like, “Wow! Well, this is something that I know, but for whatever reason, they don’t want or know. And these are my customers, so why don’t I serve them powerfully?”
Now, Saleem, you have had quite the journey. I wanna go through this again. The Office of Financial Stability at the United States Treasury Department? I’m gonna say that it sounds like the most boring job in the world. I’m sorry; that’s just what it sounds like.
Saleem S. Khatri: That’s okay. Pretty stable.
John Lee Dumas: Pretty stable, I guess. “Stable” is another word for “boring” for entrepreneurs, just so you know. Take us to what you consider your worst entrepreneurial moment to date. So, since you’ve entered this entrepreneurial world, take us to that worst moment and tell us that story.
Saleem S. Khatri: It is quite a story, and I actually debated whether or not I would share this because I haven’t shared this publicly. A few months ago, when we were about one year into Instavest, it was a Thursday night, my wife and I were sitting down, winding down for bed, and she took a pregnancy test, and, thank god, she found out she was pregnant. And so, we’re super psyched about that. I was feeling really good.
I walked into the office on Friday, and I got a text message from my cofounder saying, “Brace yourself. Our lead engineer has decided to quit, and he’s gonna go to [insert large company over here].” So, we were a very small team. We had two engineers, one contractor who was helping me on the business side, and myself, and we were in a small, 500-square-foot office. And so, I sat down, and I already knew the news that was coming. The lead engineer tells me, “You know what? You guys have done a lot for me, but I’ve decided to take this offer. It’s more money. It’s exactly what I wanna do. It’s my dream,” etc.
I got up, I shook his hand, I said, “Thank you for everything you’ve done for us. We wanna keep in touch with you,” was very gracious, and I said, “Let’s begin the transition.” Not a problem, right? Employees quit all the time, and you just have to backfill them as best as you can. So, I’m searching for new employees, new engineers, over the weekend, and Monday rolls around. I usually get into the office a bit earlier than my cofounder did, and as soon as I walk into my office, my cofounder is already there on Monday morning, so I kinda knew something was going on.
So, he says to me, “Can we take a walk?” I said sure. And we’ve gone on many walks in our office from Mountain View, California, because that’s how we talked about strategy issues and stuff that had to get done. So, we go on our walk, and my cofounder says, “Listen, things are not working out for me, and I need to pull back on Instavest.” And that was sort of like a knife in the stomach because I knew the writing was on the wall. He was trying to soften the blow by saying he wanted to pull back, but what he really wanted to do was quit.
And so, I tried to understand him a little bit more, and I dug deeper, and I said, “Do you wanna leave? Why do you wanna leave?” And he was having financial issues, and he thought that Instavest would probably take one or two more years of work before we were probably able to get a market salary, if you will. So, he quit, and that was a very, very difficult challenge for me, but he was very honorable about it, and we got through that phase.
About a few days later, I received an unsolicited letter from a very large investment bank, a well-known investment bank, who was representing the largest brokerage in the world, saying, “Hey, this brokerage wants to bring their 18-person senior-executive team to your office, and they’re really interested in, quote-unquote, having a conversation with you.” Now, I did investment banking, and as you know, the time of an executive is very precious, and they’re not gonna bring 18 people to your office unless something is going on.
So, at that point, I had no office because I was the only employee left. My cofounder had gone on vacation because he had just quit, the former employee was starting his new gig, and really it was just me, literally. So, I had no office to bring these people to, and I had no team to show them to discuss what it is that we were building; even though we had built what I thought was a really compelling product that a lot of people were using and we were making money.
So, I was scrambling. I didn’t know what to do. I had never felt so alone in my life. And so, I called a bunch of my friends. I said, “Hey, look, I basically need a couple bodies at this meeting.” Some people were pretty difficult about it and said, “Oh, I have stuff to do and blah-blah-blah, and I don’t wanna misrepresent that I’m an employee,” etc.
I called the old employee, and I said, “Hey, this is the situation. Would you at least tag along with me since you worked on the technology stuff?” and he said absolutely. And thankfully, I still have a great relationship with him today. He’s a hell of a guy. And then, I found another buddy of mine who was a partner at a law firm, and I convinced him that we could use his office.
Now, nothing came of that conversation, but I can’t tell you how alone I felt at that time. And one of the best pieces of advice that I received from our partner at Y Combinator, our first investor, is, “You really have to learn to manage your emotions because startups are a complete roller coaster. One minute, you think you’re gonna go public and things are gonna be great, and the next minute, you think you’re gonna die.”
So, I would say that was my worst entrepreneurial moment, and I’m so thankful – fast forward four months later – we’re doing so well. We have incredible traction, we’ve rebuilt our team from the ground up, and, man, I just wish you could have seen me at that time.
John Lee Dumas: “Manage your emotions.” If those three words could just be stamped on the forehead of every entrepreneur backwards, so that when you look in the mirror every morning and start to question, “What am I doing?” or “Oh, my god, this is amazing!” you need to just have those three words, “Manage your emotions.”
It kind of reminds me of another phrase that’s so important is, “This, too, shall pass.” Because that works out both ways, Saleem. That works when you’re crushing it. It’s like, “Oh, my god, I’m on top of the world!” Guess what? This is gonna pass. And also when you’re at the lowest of the low, this too shall pass. So, I just love those two phrases, and manage your emotions, Saleem. I think you nailed it.
What’s the one thing, if you could just say, beyond that that you want Fire Nation to really get from your worst moment?
Saleem S. Khatri: Obviously, manage your emotions, and I think the most successful entrepreneurs are those who understand that they have to persevere. So, this too shall pass, but you actually have to do your work. You actually have to do your work. There’s an old Arabian adage that basically says, “You need to tie your camel. Otherwise, your camel will basically walk away or get stolen in the middle of the night.” And so, you really need to put in that effort, and you really need to understand that if you put in hard work and effort, then you’ll get through this difficult time.
And so, that’s what I would say. Just know that it’s coming, be prepared for it, and when it comes, just say, “Look, I expected this. No surprises. I know I can bulldoze through this.”
John Lee Dumas: Those Arabians, they’re clever, Fire Nation: Tie up your camel at night. Now, Saleem, let’s talk about one of your greatest aha moments to date. You’ve had a lot, but maybe it’s gonna be your Instavest idea. Maybe it’s not. Take us to one of those great ideas, and then talk us through how you turned that into success.
Saleem S. Khatri: Instavest is basically a website – think of it as a Twitter feed – where folks can look at different investment ideas, and see how much people have put in, and copy that investment with one click. But what we found is that while people enjoy doing that, they wanna be much more passive, and they want the delivery of those investment ideas to be much more simpler.
So, what we’re doing right now internally is we’re building those tools to make investing even more easier. Rather than sort of serving it up to you on a silver platter, which I already feel like is what I’m doing in terms of great investment ideas, we’re gonna put them directly in your inbox or directly on your phone, or with one click, you can actually make an investment.
And most people make investments, for better or for worse, kind of blindly. They do it based on trust. And so, we figured out that in order for people to feel comfortable and actually engage with the product, trust is actually paramount. So, we’re really focused on those two things to make sure that they have a better experience.
But I’ll say the reason why we got that aha moment is because I’ve continued to talk to customers. I’m always talking to my customers to see what it is that they like and what it is that needs improving. And then, from there, you have to decipher what they’re saying.
John Lee Dumas: And this is theme, Fire Nation, that you’re seeing develop throughout this interview is you need to sometimes do things that don’t scale. People are always like, “Oh, my god, I’m terrified. I can’t get on a call with one client. That’s such a waste of time. That’s not scalable. That’s not leverageable.”
Well, what about if that one conversation gave you that idea, gave you that understanding of the pain points, the obstacles, or the desires of that client that you can leverage across all of your other clients because that is basically a speaker for the rest of your avatars? What if you had that one breakthrough because of that one conversation? Is it then worth your time? Of course, it is. So, you need to consistently step back, do things that don’t scale, and consistently connect with those people that matter most: your current clients, your current customers, your listeners, your viewers, fill in the blank for that.
Now, Saleem, what is the one thing, right now, today, that you are most fired up about?
Saleem S. Khatri: The one thing that I’m most fired up about is I feel like I know exactly what my customer wants. Before, I had a very general idea of what it is that they were looking for, which was they wanted to make money. But now, I know exactly that they actually don’t wanna do the work, but they wanna make the money. So, I’m building tools exactly around that thing.
And I just wanted to go back to the conversation we had about do things that don’t scale. We live in an amazing country. We love our country with millions and millions of people. But there’s a reason why the president of the United States takes a random sampling of ten letters that are written to him and reads them every single night before he goes to bed. It’s the same reason why I’m talking to my customers or why you talk to your podcasters to understand what they want. It’s because he wants to keep his pulse on what it is that matter in this country, and to me, it’s the same exact thing. So, there’s a reason why Steve Jobs used to respond personally to emails that were sent to him.
So, no matter how big you get, you have to stay in touch with your customers. That’s the only way you’re gonna make something people want.
John Lee Dumas: I did not know that Obama did that. Wow!
Saleem S. Khatri: Yeah, ten letters every single night.
John Lee Dumas: Every single night, wow. Well, Fire Nation, we’ve got some surprises for you coming up in the Lightning Round, so don’t go anywhere. We’re gonna take a quick minute first to thank our sponsors.
Saleem, are you prepared for the Lightning Round?
Saleem S. Khatri: I am. Let’s do it!
John Lee Dumas: What was holding you back from becoming an entrepreneur?
Saleem S. Khatri: I felt like I didn’t have a great idea. I had a number of ideas that I tested, and they didn’t necessarily work in the near term. So, my advice to folks would be: Take any one of your ideas and run them in parallel process to see if it makes sense. So, try to do really, really small tests. If they pass that test, then do another test. And you can sort of layer in, very carefully, into what your idea is so you actually have the confidence to move forward.
John Lee Dumas: What’s the best advice you’ve ever received?
Saleem S. Khatri: Manage your emotions, and talk to your customers. That’s the only way you’re gonna make something people want, and you’ll be prepared for all the perils and all the fun that come with startups.
John Lee Dumas: Fire Nation, if you don’t take anything away from not just this interview but the past 1,453 interviews of EOFire, that’s the advice. Manage your emotions. Talk to your customers.
What’s a personal habit that contributes to your success, Saleem?
Saleem S. Khatri: I have a rule that I try to respond to my customers within five minutes of them messaging me. So, no matter how many emails I have, I really look at all the customers, and if I can respond to them very, very quickly, I do. Otherwise, I save it for a later time. But I try to treat each one of my customers as if it were my only customer. And that becomes really hard because we’ve grown very, very fast, and now it’s getting to the point where that makes it very difficult, but I want them to feel special, and I want them to feel that they know that I’m honored they’re using my service.
John Lee Dumas: Can you share an Internet resource, like Evernote, with Fire Nation?
Saleem S. Khatri: So, I use Wunderlist a lot. I use them both personally and I use them professionally. It’s a great way for me to keep track of all the stuff that I have to do, and it makes sure that I stay on track in terms of being productive. There’s a big difference when entrepreneurs feel like they’re being busy versus they’re being productive. You have to do at least one thing a day that’s gonna move the needle for your business. If you don’t, then you’ve wasted your time.
John Lee Dumas: If you could recommend one book, what would it be and why?
Saleem S. Khatri: It’s a book called Traction: 30 Different Ways for You to Find a Scalable Way to Distribute Your Product. I think Marc Andreessen, the great VC, has said that a lot of companies have great products, but they have not spent the time or they haven’t found a distribution channel. If you don’t have a scalable distribution channel to acquire customers, then you’re dead in the water, and Traction helps you find that.
John Lee Dumas: Saleem, this is the last question of the Lightning Round, but it is a doozy. Imagine you woke up tomorrow morning in a brand-new world identical to Earth, but you knew no one. You still have all the experience and knowledge you currently have. Your food and shelter is taken care of, but all you have is a laptop and $500.00. What would you do in the next seven days?
Saleem S. Khatri: I would do the exact same thing that I’m doing, one customer at a time.
John Lee Dumas: Saleem, let’s end today on fire with a parting piece of guidance, the best way that we can connect with you, and then we’ll say goodbye.
Saleem S. Khatri: You can visit us at Instavest.com, I-N-S-T-A-V-E-S-T.COM, and you can email me at Hello@Instavest.com. I’d love to hear from you.
John Lee Dumas: And a parting piece of guidance?
Saleem S. Khatri: Work hard, work harder, and know that good things will come to those who are really passionate about what it is that they’re doing. It’ll happen for you; it just takes time.
John Lee Dumas: Fire Nation, you’re the average of the five people you spend the most time with, and you have been hanging out with SK and JLD today, so keep up the heat. And head over to EOFire.com, just type “Saleem” in the search bar. His Show Notes page will pop up with everything that we’ve been talking about today. I mean everything, because these are the best show notes in the biz, Fire Nation. So, just type in S-A-L-E-E-M in the search bar and that’ll pop up.
And of course, head over to Instavest.com. You can check that out, and you can see everything that they have going on there – a lot of cool stuff. And hey, when Saleem drops his email in there, take him up on it, Fire Nation. Check him out, Hello@Instavest.com. Say, “What’s up?” Say hello to Saleem. He’ll get back to you within five minutes. Maybe 15.
So, Saleem, thank you for sharing your journey with Fire Nation today. For that, we salute you, and we’ll catch you on the flipside.
Saleem S. Khatri: Thank you.
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