Skot Waldron:
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Hi, everybody. Welcome to another episode of Unlocked, where we talk about unlocking the potential of your people so that we can unlock the potential of your organizations. I'm Skot Waldron. I've got an interview today with Sherwin Estanislao. I think I got that right. I'm trying. I swear, Sherwin I tried. But Sherwin is the CEO of CI Tech Ventures. They are a venture capitalist group that invest solely in tech startups. And they have an interesting angle on that so I want you to listen for that later in the show. We talk about investing in things and investing in companies and the things that they're developing, but also the people running those companies and making sure that there are certain things in place. We talked about two of them specifically so I want you to listen up for those. The two things that Sherwin makes sure that they have so that they can be successful together. All right, you ready? Let's do this interview.
All right. Welcome Sherwin. This is going to be fun. I'm excited to talk to you about what you have going on. The venture capital world, you focus a lot on new technologies, emerging technologies, startups, that's kind of your niche. Tell me why, why startup world? That's kind of a iffy world in one way or another. There's some great success there and then a lot of great failures. What can happen there?
Sherwin Estanislao:
A lot can happen, Skot. First, thank you for having me on your show and yeah, to answer your question, why the startup world? Well, my whole life I've been surrounded with a family full of entrepreneurs and inventors. Throughout life, I've seen my family members go through a lot of failures and a lot of success. And so, the startup world, I believe that they deserve, everyone has this great idea. And I just believe that they deserve a running chance in the race. I got into the whole tech venture space to be able to invest into the technology of the products and to really help scale these companies into an investible company or into a company that is competing in their respective space in the market.
SKOT WALDRON:
Okay. You've been doing this for just a short amount of time, 20 years. I say short, kidding.
SHERWIN ESTANISLAO:
20 years.
SKOT WALDRON:
20 years you've been doing this, right?
SHERWIN ESTANISLAO:
I guess it's been quite some time, bit over 20 years, correct. Technology's actually only been the last 12 years. Actually 13 years, but yes, over 20 years.
SKOT WALDRON:
Okay. And in that time, what is something you've learned about you're investing in these companies, but really you're investing in the people that are running these companies. What have you learned about that journey? What is it that now after almost 20 years of investing, 13 years in the tech space, what are you looking for in a leader or a team?
SHERWIN ESTANISLAO:
Just based on this experience, I've had a lot of great investments. I had some great exits in my path and I come to find out that no matter how great the product, the venture, the technology, depends on what you're investing in. Doesn't matter how great the product is, if the team and the people are not aligned with your core values and somewhat, you're going to have issues one way or the other. The startup or the company might not fail, but you will have issues.
SKOT WALDRON:
Okay, what kind of issues?
SHERWIN ESTANISLAO:
That's what I've learned. sorry.
SKOT WALDRON:
What comes out of that? That misalignment of values, because I'll just say it right now. When I go in and I coach individuals and teams and I do a lot of brand strategy work too, from the internal side, I'll get kick back. I'll get, that's fluff. Or hey, we did our values 20 years ago and we've got, 15 values or whatever they are. Or we don't really need to worry about the fluff stuff. Look at this thing I built. Look at this thing. Why is values so important to you?
SHERWIN ESTANISLAO:
I think and I believe based on my experience, value is super important to us only because it's what allows us to last in terms of longevity of relationships. Because at the end of the day, Skot, people is the one that builds the company, the people the one that builds the technology and supports the technology at the end of the day. If you don't have that, if you don't value that and if you don't have the same core values and that's not aligned with your team and people that you invest in, again, it will fail at some point whether the relationship will fail and there'll be a nasty divorce within partners or the company will fail in terms of going under. You have to dissolve the entity.
I've been through that cycle many times in so many different ways and it's some good, some bad and I can go into details if you'd like. And it just all depends on the goal of the whole team together for me. I know I'm kind of on a tangent here, but for my partners and I, we brought on partners before and find out a year later that our core values wasn't aligned, although it was spoken that it was aligned and it was acted as if it was aligned, but at the end of the day, different decisions, especially when it's coming from an executive role, these types of decisions can tarnish a relationship or tarnish your reputation. And so we had to divest from that relationship.
SKOT WALDRON:
Okay. What I hear there a little bit is that you're talking about transparency in those relationships as well. And we saw a lot of that I feel like in 2020, come out with the rise of COVID and the racial injustice issues being brought up more and more, that a lot of companies are being called out on their values. We had a lot of companies that were saying, "Hey, beat our chest. We're inclusive. Hey, we do this. We value this person, that person." And then at the end of the day, we have the employees coming out or partners or whoever saying, "Yeah, no, you're not that." That misalignment is what you're talking about. They were talking the talk, but not walking the walk. It was that. And so you've seen that bring down companies or just your relationship with them.
SHERWIN ESTANISLAO:
Absolutely. Both. In both worlds.
SKOT WALDRON:
Okay. Okay. And the companies that you've had success with, are not only because your values were aligned. But you see that as a fundamental aspect of what you look for in partners.
SHERWIN ESTANISLAO:
Absolutely.
SKOT WALDRON:
Okay. What else are you looking for? You get past that value stage, that, hey, we're on the same page. We believe the same things. What are you looking for next?
SHERWIN ESTANISLAO:
In terms of the, my apologies, my two year old just walked in.
SKOT WALDRON:
Zoom life, man. It's okay.
SHERWIN ESTANISLAO:
That's what it is in work from home. And so, Skot, can you repeat that last question one more time? If you don't mind.
SKOT WALDRON:
Yeah, What else are you looking for? When you've got alignment on values, you kind of have this company has sparked some interest in you, what are you looking for next? Whether it's the team, the people, what are you looking for?
SHERWIN ESTANISLAO:
Results. Results in terms of, when I say results, I don't mean just financial results or financial success. Results in terms of execution. And when you value that alignment with your team and they produce results, I think success is inevitable at that point. And for me, we look to really take on that market space in terms of depending on what the technology is or the company that we invested in. And once everything is aligned and we're able to tackle issues together, whether the tough ones and the easy ones, and that relationship will allow us to function with integrity outside of that. Sorry, I'm not sure if that really answers your question, Skot.
SKOT WALDRON:
Yeah, yeah, it did. I think that when you're talking about a foundation of values coming first and then you throw that word integrity in, that we're operating in the same way, we can eventually get to the point of increasing execution and capacity and whatever we're doing. I think that a lot of companies make the mistake of saying, "Hey, let's just execute. Go, go, go, produce, produce, produce." And whether it's inflated numbers, whether it's this false sense of we're getting things done, but it's not really the quality that we want. Without first forming the value system, the integrity system, the building of relationships through good communication, you're going to eventually fall flat. There's only so much you can do by just go, go, go, go, go. You've got to have that foundation. You've been doing this for a long time. What are some key criteria of companies that make it and some key criteria of companies that don't?
SHERWIN ESTANISLAO:
Okay. Some key criteria is for companies that do make it, it's really the execution level on their part. When we're investing in the company, what we look for in a company that we believe that has a leg to stand on, are the companies that shows a high level of execution. And I'll give you an example. A recent company we partnered and invested with and invested in, they're a group of retired military men and they're super task oriented and all they do is execute above and beyond. And it's a company that never had a product. And we took a chance on him and now we're making some great traction with that company, with that startup and it was all because we based our decision to invest in them on the quality of character, the team, the way they execute. And we invested in the people. And their technology is just going to improve and as we continue to build it.
And there are other companies where, you know, the technology we saw was great and at the end of the day, their executive team were not aligned and about a year and a half into investing into the project, we had to shelf it. We had to actually dissolve it. Those are the two different ones and the criteria for that one, it's very simple. They just weren't aligned. And one person gets greedy and the other one is so mission focused with their original plan and original venture. And those are the ones with the passion that I look for to invest in. Because you can have the passion, but then you also have to be able to separate that emotional side of yourself and the passion and really executing on your present deliverables.
SKOT WALDRON:
Do you find that balance of passion and execution? Is that easy to find in one person? Or do you find that in maybe partners or teams?
SHERWIN ESTANISLAO:
Well, Skot, one person can only provide so much. And with those different types of character traits or values in a person, eventually you'll have to be able to trust and delegate and build your team to be able to help you scale. You have those founders that feels like they can wear all the hats and that's great and they don't want to depart or take these hats off and hand it to somebody else. Then those are the guys that we call that as pretty much uncoachable. And some of those might be some really smart individuals, but again at the end of the day, will that really allow this company to scale? And would stand the growth of the company because he's wearing all the hats? The answer is probably no. And that company will probably fail because of, I don't know if you want to use the word being arrogant or thinking that you know it all and you can't hand off your trust and delegate important tasks to other team members. Yeah, in a nutshell, those are the guys that we don't like to engage with or invest in.
SKOT WALDRON:
Okay. I hear you saying that passion, that execution component is important, but really it's about understanding your strengths and being, well, I heard the word coachable. Being willing to accept feedback, being willing to hear the other people on the team in order to understand the potential we have as a group to move forward and to achieve a goal together, right?
SHERWIN ESTANISLAO:
Absolutely. Transparency is a huge factor in there. Skot, I can only help someone if they're being transparent about their weaknesses. It's great to always be confident about your strengths, but what about your weaknesses? I think it takes a bigger person to be able to say, "Hey, I need help in this areas."
SKOT WALDRON:
Right. I think, yeah. I think that's super valuable, but not only being able to speak to our weaknesses, but to even recognize them in the first place. You see a lot of people out there that may just don't really aren't self aware We call it they don't see the broccoli in their own teeth. It's they kind of walk around like there's nothing wrong and it takes a lot to first recognize it, but then to be able to talk about it too. That's really great. You mentioned here that one of the biggest mistakes that companies make when developing company culture is just thinking mentality, paycheck mentality or that 9:00 to 5:00 mentality of I'm clocking in, I'm clocking out. Why is that so painful? Why is that so toxic for culture inside of an organization?
SHERWIN ESTANISLAO:
From our organization, if we're going to be driven by if our vision and our mission for the company are aligned, when all of our executive members and our leads, then that whole 9:00 to 5:00 mentality and that paycheck mentality, it's really the least of what's driving them. What's driving them is really to get to that mission statement. To get to that destination of our goals. Because otherwise, all these guys are going to be looking, they're going to be short sighted by only looking at the next week's paycheck or the following week's paycheck, the biweekly paycheck. The 9:00 to 5:00 paycheck. With having that type of mentality to us is very toxic. And my business partners and I, we always talk about and assess our team and our team members, a lot of people refer to them as employees, but to us they're team members.
And we go through these exercise of talking about each and every single one of them and seeing the kind of values and the kind of strengths and weaknesses that they've displayed. And we do this religiously, once a week and once a month. Yeah, it's super toxic because they're not going to go above and beyond because it's not their goal. Their goal is that 9:00 to 5:00, to see that 5:00 o'clock and to see that paycheck. It's really just that simple, I think.
SKOT WALDRON:
I love that. You get compliance, you don't get the passion. And I think a lot of what you're talking about has to do with execution. And that's something that you really look for is their ability to execute. That was something you mentioned a few times. For your people to execute, their partners that you're investing in to execute in that way. But also what's really interesting about what you're saying is that you're not just execution focused. Yeah, that's something that's really important, but understanding the passion, the values that are behind that driving, because that's where the true buy in is going to happen on the end. That's where we're actually going to change worlds. Is when that passion and that execution meet in the middle and do something great, right?
SHERWIN ESTANISLAO:
Absolutely. You said it way better than I could have ever explained it, Skot. You hit it on the button.
SKOT WALDRON:
Well, you can cut me a little check later for that one, man. You can use that. That's fantastic. What makes CI Tech Ventures unique? There's a lot of, I would think in the tech startup world, there's a lot of companies out there, venture capitalists going out, throwing a lot of money behind these tech companies, why you guys?
SHERWIN ESTANISLAO:
What makes us unique, Skot, is as an investor, you can either syndicate different deals or you have a group of investors that you co-invest with from time to time, but never a co-investor that is really technology focused. We're in this niche of technology. We invest a lot in technology. In fact, that is the number one criteria for us that you have to be technology centric. And so what makes us unique is that we don't build the technology just like any software development company, but we also build and invest the technology in these startup companies, along with our own private syndicate of investors. And different groups of investors at that, that also specializes in technology. And we de-risk everyone's investment by developing the technology internally with our teams because we have a big team of engineers that are experts and they're not outsourced, they're all internal, they're all on salary.
We have all that in house. That's what makes us unique. And we do not just build technology nor invests or help them strategize with their funding. But we also help them with the B2B relationships from top down and approach with our existing relationships in different markets and different organizations. And these relationships we have are, I call it the first degree relationship circle, which is they're not just someone we just rubbed elbows with or bumped hips with At a networking event. These guys, we have established relationship with these guys that can help us with a top down approach when it comes to B2B introductions and yeah, generating revenue earlier than later. Yeah, that's what makes us unique.
SKOT WALDRON:
Wow. Okay. The whole engineering team inside to help develop that software is really, that's really cool. I didn't realize that. That's awesome. If there's anybody out there that wants to get in touch with you, maybe they're a startup in the tech space, maybe they're looking for some extra capital or maybe whatever rounds they're in, whatever they're doing, how do they get in touch with you?
SHERWIN ESTANISLAO:
Well, they can reach us or they can just simply email me sherwin@citechventures.com and or they can go to our website, citechventures.com. And we're going through a rebranding right now as well so our new site will be launched in the next couple weeks.
SKOT WALDRON:
Very cool. Awesome. Yeah. We'll put some of that contact information in the show notes as well so it's there for people to access you. I really appreciate you being on today, taking some time and it was good hearing your two year old in the background and know that you're alive and kicking over there in our COVID quarantines.
SHERWIN ESTANISLAO:
Yeah. Well, thanks for having me, Skot and also thanks for having my two year old. He's actually my boss.
SKOT WALDRON:
Nice.
SHERWIN ESTANISLAO:
He was just checking to make sure that I was on time with you.
SKOT WALDRON:
Oh, make sure you're doing your job. That's good, man. That's good. All right, Sherwin, take care of man. It was good to have you.
SHERWIN ESTANISLAO:
Thank you, Skot.
SKOT WALDRON:
I hope you got the two things I was talking about at the beginning of the show that are important for Sherwin. He's a faith based, family oriented man. Values are very important to Sherwin and his partner. They make sure that when they're looking for companies that the values align because when they don't, conflict arises and they've learned this over the many years that they've been doing business. The second thing they talked about is can they execute? That is the second thing because they got to make sure all the foundational elements are there first, before they can move on into the execution realm. I'm really grateful for Sherwin and the insights he gave us today. If you want to find out more about me, you could go to skotwaldron.com, I've got more interviews posted there. My YouTube channel has all the videos as well of all the interviews I've done. Please like, subscribe, share, comment, do all those things. The more people that do that, the more visibility they get. I'm really grateful for you. I will see you next time on Unlocked. Let's unlock the potential of those people out there. See you.
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