Hosted by Hans Tung and Dimitra Taslim.
Today we have our first ever husband-and-wife duo on the show, Sonny Vu and Christy Trang Le from Arevo. Arevo develops technology to enable direct digital additive manufacturing parts for end-use applications in high volume. It makes advances in materials science, 3D printing software, and robotics to automate the production of carbon fiber reinforced polymer structures, otherwise known as CFRP.
Sonny is a serial entrepreneur, currently the CEO of Arevo. Previously, Sonny founded various startups including Misfit which was bought by Fossil for $260 million. Before that, he worked at Microsoft Research NLP, under Kai-Fu Lee, and worked on a Ph.D. in linguistics at MIT under Professor Noam Chomsky. Both Arevo and Misfit are GGV portfolio. Christy is the CFO and president of the Vietnam operations for Arevo. Previously, Christy was a country director for Vietnam at Facebook, and before Facebook, she built Misfit along with Sonny. Prior to Misfit, Christy was a consultant at McKinsey and an investment banker at HSBC. She graduated Double First in Economics at Oxford (BA & MPhil) and an MBA from MIT Sloan.
This episode was co-hosted by GGV colleague Dimitra Taslim.
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Hans Tung 01:17
Today on the show we have a very special duo, our first husband-wife team, on our Next Billion podcast ever. It’s Sonny and Christy. Sonny is a serial entrepreneur, currently the CEO of Arevo. Arevo develops technology to enable direct digital additive manufacturing parts for end-use applications in high volume. It makes advances in material science, 3D printing software, robotics to automate the production of copper fiber, composite, and reinforced polymer structures, otherwise known as CFRP. Previously, Sonny founded various startups including Misfit, and was bought by Fossil Group for $260 million. Before that, he worked at Microsoft Research NLP, under Kaifu Lee, and worked on a PhD in linguistics at MIT under Professor Noam Chomsky. He studied math at UIUC and both Arevo and Misfit are GGV portfolio companies.
Dimitra Taslim 02:15
Christy is the CFO and president of the Vietnam operations for Arevo. Previously, Christy was a country director for Vietnam at Facebook. And before Facebook, she built Misfit along with Sonny. Prior to Misfit, Christie was a consultant at McKinsey&Company and an investment banker at HSBC. Christy graduated with a double first in economics at Oxford and an MBA from MIT Sloan. Welcome to the show, Sonny and Christy.
Hello, thank you for having us.
Great to be here.
Hans Tung 02:43
It’s great to have both of you on the show. I’ve known guys for over five years, and with a common MIT link. You gotta tell us for the benefit of audience. How do you guys meet? What was it like when you guys first met each other?
Well, depends on which version it is. Well, the most common version is that we met each other at an event of a International University in Vietnam, back in 2006, and we happened to sit next to each other. And that’s where everything started.
Happened to sit next to each other.
Hans Tung 03:28
Have you guys known you guys wanted to be lifetime partners, and also, business partners?
That’s pretty obvious after the second date, actually, the fact that she put up with me. We talk mostly about linguistics on the first the second date.
Hans Tung 03:45
You are very excited.
That’s – that’s the one.
Well, for me, I was quite skeptical about long-distance relationships. But somehow it worked.
Yeah, so the linguistics party trick worked once again. But it’s been a pretty awesome ride being both life and business partners. It’s not easy, but I would say the rewards have been great.
Hans Tung 04:16
Do you guys meet before MIT during MIT or after MIT?
I joined MIT after we got married. So I was introduced to MIT after I knew Sonny, of course.
We got married, we moved to the US, and then we’re 15 minutes away from MIT. And she applied to school, to different business schools. Hopefully, she gets into MIT. I think it would come to either Wharton or MIT. And I said you could go either way, whichever one you want. But we are 15 minutes away, walk to Sloan school. So that worked out pretty well? We still have our house there. It became a kind of a Sloan party house for a few years actually.
And Hans, maybe you could tell us a bit more about the first time you met Sonny and Christy, how do you meet them?
Hans Tung 05:20
That story is much less interesting but very important to us. Both Jenny, my partner, and I were introduced to Sonny via a common lawyer friend. He was very kind and he just thought that Sonny would be a great fit for GGV. I am so glad that he made that introduction. Both Jenny and I were impressed by Sonny. I ended up leaving that investment and sat on the board. And they were also my second collaboration with the Founders’ fund in that company. So your work what that? Well, I met many friends on that board.
Dimitra Taslim 06:07
I can give a little more color on the story, actually. So we were specifically introduced to Hans because we had met Xiaomi a while before that. And because we’re trying to buy a company that Xiaomi was an investor in, and then the company had to get permission from Xiaomi. And I didn’t really understand why, I didn’t know who they were. So they asked, could you please talk to one of our shareholders, that is really important. So we end up meeting with Lei Jun. I didn’t know he was. So I showed up to the office. And the first thing he said was I don’t need your money. I was like, Okay, I’m trying to pay you good, cold, hard cash for your company. Then we left and like, whatever. And then our lawyer friend introduced us to Hans. Hans asked us that do you realize who Xiaomi is? Do you have any idea? And he basically spoke some sense into us and said, you really should take their money if they’re investing because they don’t generally invest in the US company. Anyway, so one thing led to another and with Hans leadership really kind of led the round. I think it was our series C at that time. And then you guys helped bring JD.com into the fold as well and we’re very grateful. None of that would have happened without Hans. So that’s how it all unfolded. So it was a good collaboration.
Dimitra Taslim 07:39
I’m just curious, because you both are very unique, we meet a lot of Vietnamese entrepreneurs, whether they’re Vietnamese Americans going back to Vietnam, or people who have been domestic in looking at Vietnam for a while. And I feel like you both are the first few who sort of put your money where the market is and really build both software and hardware in Vietnam. It is really great for you to sort of take the the listeners through your journey or your takeaways from building Misfit from scratch, both software and hardware, and eventually selling it the fossil. And why Vietnam, why do you have so much faith and conviction in Vietnam’s ability to build a software and hardware?
I think it all starts with belief. I mean, although the statistics are clear, there’s a big population that’s really educated. It’s kind of overlooked, with Singapore being a hub in the area, and China being a large neighbor that gets a lot of attention. You have all the statistics talking about why Vietnam is untapped and whatnot. But at the beginning, it was because we were Vietnamese, and we ended up moving here. But it really came down to us believing that you can make this happen in Vietnam, and everything drew up from that. All of the tail winds that we have all the benefits we have from being here, kind of flow from that belief. You kind of have to think you can do it before you can do it.
Hans Tung 09:09
Yeah, as someone who was born in Taiwan and sees that within East Asia, manufacturing shift from Japan to South Korea, and Taiwan and from South Korea, and Taiwan to China, and now to Vietnam. It’s a circular trend that’s been playing over the last 30/40 years. And just for us, it feels like this is the right thing to do for the country and for the talent base. That’s up and coming. In the field like Misfit, you tap into that, but we didn’t have a chance to fully utilize that until at Arevo. What were some of the takeaways that you can share about the opportunities and challenges of building a global team?
Yeah. There is kind of like one big takeaway from this whole thing. It’s building for global. Having a global presence from the beginning really helped us, the year when we did Misfit. It’s not just about being distributed, but also selling on a global basis. Because the conventional wisdom is you focus on one market and expand from there and get traction and then grow and expand, and we just knew that if we started in the US, we’ve just got our butt kicked by Fitbit, who have been around five years longer than us, they had the bigger brand. And so we started east, we leaned heavily into China, sold a lot of stuff there. A lot of help from the GGV gang and the Xiaomi crew, a lot of support in China that just gave us a lot of love and friendly help. So all of that was an unfair advantage. But from an IP creation perspective, I think Vietnam is just been overlooked. And people just think we manufacture stuff here. And what we discovered is, there’s a reason for what they call Vietnam effect. I’m not sure we are familiar with this, but the World Economic Forum talks about the Vietnam effect. So there’s this chart, that’s, that maps out PISA scores, which is basically an aggregated measure of STEM and literacy scores that the World Economic Forum uses to measure basically how educated a country is. And they map this out with respect to GDP per capita. So you imagine one X is GDP per capita and one X is how educated you are. And it’s mostly linear chart, but there are some outliers. You’ve got outliers on the bottom, you’ve got a number of countries, a lot of Gulf countries with high GDP per capita and low PISA scores. And then you’ve got on the other end, Vietnam has low GDP per capita and high PISA scores, exceptionally high. So it’s actually close to Switzerland level scores, which has eight times GDP per capita as Vietnam, but with the same level of PISA scores. It’s unbelievable. And there’s 100 million people outside, I have a feeling that people are overlooking this as an outsourcing shop, and so we leaned heavily into this, partially because of our heritage and an opportunity and, we just wanted to live in Vietnam. But it’s informed by a pretty strong tailwind. If you google Vietnam, World Economic Forum, and then you can see about that.
Hans Tung 12:46
I remember, as Sonny is out there, evangelizing for Misfit, speaking at these conferences, and lots of reporters asking him questions on the beautiful design of Misfit. Christy was at the backend in the headquarters, manning many operations, not just in Silicon Valley, but also multiple offices in Asia. So how do you make sure the train runs on time?
Well, I guess one biggest takeaway that I had out of the Misfit experience is hiring the best people on the team. The reason why we can maintain our presence both in the West and in Asia, and traveling a lot is that we have people who are very strong, both professionally and in terms of personality, as leaders in different hubs around the world. And once we have those core people to anchor the operations in multiple countries around the world, they just build the great team around them.
Yeah, we had a good crew in Japan as well, Japan has always been an area where we’ve done well, kind of disproportionally well for our size. I think it was like seven or 8% of our revenue, for Misfit. And once again at Arevo, our innovation is Silicon Valley, we’re a deep tech company. And they’re leaning into Vietnam for Asian scale and speed. We’re also leaning into Japan, we have one of our key executives based there, we just have a lot of strategic partners there. A lot of good, and expection of innovation there. If you find the right partners.
Hans Tung 14:31
How did you decide that you want to sell Misfit to Fossil? Take this through the logic as many founders have to struggle with whether they continue to grow? Or do I sell? And if I sell or am I gonna find another great idea again? How do the two of you go through that process and decide that? How do you make that decision?
For me is much simpler because I run the operational role. Personally, at that point, we just had our first child. For me, I would love to have a break. That happens very naturally for me. But on the other hand, at the time, Misfit was well known for the design, around beautiful design and executing on products that are beautiful. So once we found Fossil, who has the capabilities in the fashion world, as well as the distribution side of fashion, beautiful products, we do find this the common language between the two. And we believe that Fossil will be the complement, as well as a strong foundation for the capability of Misfit to reach out to more users.
I can give you the raw part of that if it’s okay, It’s five years post-acquisition now. 2013, Apple announced Apple Watch was coming out. So we knew the end was near. Okay, I’m sorry, but by version three. Everyone’s like, oh, we’re gonna beat Apple by making a watch. I’m like, are you kidding me? Whatever they want to make, they’re gonna make, they’re gonna dominate by three versions. And that’s it. Hardware is hard, but competing against Apple is much harder. I’m feeling like it is 3,000 times harder than making hardware, whatever there’s a formula for it. So at that point, 2013, we started to pivot from some wearables, believe it or not, into smart home and other places. And we just knew that wearables was going away at some point, so let’s enjoy the ride, enjoy the right way. The revenue was right for, for the next few years, it was good. It was good money, if you remember, our financials are pretty strong. When we entered that, I think we still have most all of our series C and a couple million from our Series B still in the bank, which is kind of crazy. But we knew that if, unless we were going to partner with someone bigger, we’re probably gonna be toast. So when Fossil came along, we said okay, it was kind of all cash. The exit terms were quite favorable at the time. So we said, okay, that’s pretty good timing. 2015 is probably about as good as you’re gonna get for wearables. And so our plan originally was to sell that, but they wanted everything. So we said okay. That’s kind of the other part of the backstory, was timing was just right. And then we saw what happened 2016, why things got acquired. And then the other folks got acquired. And man, it was just timing. They had more revenue, more products, they’ve been around five years longer, and they got acquired at two thirds the price. So timing really was strongly on our side at that point.
Hans Tung 18:03
I remember when, when you explained the logic to me. My head says, yes, I get it. But my heart felt like, you still have all this series C money, he could go off to the next idea, something that’s more health-related. That’s more to your roots at MIT.
It was a tough decision. Because we had a lot of firepower. We had a 45, almost $50 million war chest at the time. And we were break-even. I mean we’re pretty strong financially.
Hans Tung 18:38
You’re promising me to get to a billion dollar valuation. I know I make more money. Christy asked Sonny the question. Do you really want to raise this round? If you do, you have to feel like you could have a good shot of getting a billion dollar more evaluation. Otherwise, don’t bother.
I mean, it’s how we – it’s actually formed our thesis around investing. We’ve been investing out of the family office for the last five years, in 30+ deep tech investments. Let’s go for the things that where we can really swing for the fences and Arevo ended up being our biggest. It is our biggest swing for the fence right now. If we can go for a few-hundred-million-dollar exit at this point, it seems kind of pointless. Even a billion dollars, it’s like we’re gonna be there in the next few years at a rate. So we want to build an important company.
Hans Tung 19:37
Christy, do you approve? Do you feel the same way or there’s another chunk coming?
You know how things function, right? It leads to another story around how we collaborate. Sonny is the visionary person, and I’m more of an execution person and run the operation behind it. So that explains how I view his strategy and how I view my role in the company as well.
Yeah, the shorter summary is that I get us in trouble. I promise that. And Christy came to rescue me and get us out of trouble pretty much.
Hans Tung 20:35
It’s like all experience with Peloton, John Paul is a super amazing visionary. And then William helps make sure everything gets executed. As a 36, 35, billion dollar market-cap company. So we the combo works, it’s amazing.
I think the key is staying out of each other’s swim lanes, that’s easy…
Hans Tung 21:01
And respect for each other.
Dimitra Taslim 21:04
So it sounds like you both already made it. You’re a power couple, right? You sold your company to Fossil, you both started a family office called Alabaster, made more than 30 deep tech investments, as you said. And so how did you find this sort of company called Arevo? Tell us what happened before you found them. And what was so exciting about it that you and Christy and the family office decided to go all-in on this new venture?
A little bit of background, after the exit, we did our two years at Fossil and that was fine. They treated us very customary. I love the people there. Being officers in a public company in fashion wasn’t really what I went to MIT for. We didn’t go to fancy schools to do that. Fashion is fun.
We love Fashion, but to be the core of what we do is different. We’re tech people. Christie took a number of executive roles after she did Facebook, she was country director for Facebook for about a year. And then, there were a bunch of other tech. There are a lot companies like Apple, Google, and P&G, which are looking for a country manager at the time. And that’s right. So Christy did a number of these executive roles for a few years while I was building Alabaster. We look at our passion and it was in deep tech science. We like the crazy stuff and so the various sources where we find crazy stuff. I think people know that we like weird stuff. We were pretty early in food-related things. We’re involved in Perfect Day, which is a dairy company. They’re doing pretty well. Actually, you know who replaced my seat at Perfect Day? They just got Bob Iger to join the board. So congratulations to my successor. I just got lucky.
It was an amazing thing to watch. The founders build the business there. We were there for the first five years. We loved food, biotech, deep techs. And then, it was a person who would send us some of these deals. And they were like, sell cat food online. Not so interesting. We don’t see those deals. But when stuff like an Arevo comes up, it was pretty easy to sell. Lasers, carbon fiber and robots. I love it. Send it over. He sent it over. And we’re like, oh, my gosh, this is one of most interesting things we have ever seen in the last few years. And then he said they’re looking for a CEO as well. At that time, it was actually really good timing, because we talked about maybe starting another company, but it’s just a lot of work. And how about the idea of joining a company that’s already out there?
They need 1 to 10 now. So this is the first time I’ve actually joined someone else’s startup, which is kind of weird. But it worked out really well. I mean, at first, I was a little hesitant because we thought, what was wrong with the company? Usually, when a company is looking for a CEO, that means there’s something wrong with it. And probably the most surprising thing about Arevo that we found out at the time was that there wasn’t anything wrong with it. Including the founder, everyone got along really well. It’s just a really healthy company. And the founders are really pleasant. They were truly looking for someone to grow this company from 1 to 10 after they did from 0 to 1. So it was kind of an easy decision. It wasn’t an easy decision from a sector perspective. Because basically, I talked to a bunch of my friends who had worked in 3D printing. And there were a bunch of them from Boston, because there’s a lot of 3D printing firms. All these guys were in the MIT 3D circle
And basically, they all told me not to take the job. One investor, I think you know who he is, but I won’t mention his name. He’s an early investor in one of the big 3D printing companies. He even said, it’s really tough business man, don’t do it. Basically, four people were telling me not to take the job. It made me think let’s do something to this. Because clearly, additive manufacturing is going to be a future. Because supply chain must be transformed in some way. And I looked into it and I realized, oh, you shouldn’t be selling 3D printers, you should be selling parts. That’s what you need. And I think that’s probably the most fun and interesting thing of Arevo now because it is really changing the business model in this space to actually make it work.
Hans Tung 26:25
So if I’m 3D printer, I am changing from selling 300 to now selling parts, and maybe even 3D printing as a service?
Yeah. People don’t really need 3D printers, they need the things that they produce. Using 3D printers pretty hard, actually. So why not just make the parts for them? And that’s just become much more interesting, the sales cycle is a much lower hurdle cycle. When you try to sell 3D printers, you’re trying to convince people for new technology about why it’s gonna be useful. And then you got to make sure that they use it. So they’ll buy your materials. Selling cat food online definitely is easier than that. I don’t think the industry is supposed to be this way. I don’t think you’re supposed to sell 3D printers. So that’s our thesis, to provide service that’s far more interesting, and much more scalable, I think.
Hans Tung 27:33
So learning from the internet, from software, SaaS, to a hardware business, traditionally hardware and deep tech, and you make that a much more addressable market, much bigger and shortness.
You can get rid of that. Exactly. Because we’re born and bred in the recurring revenue model. Who sells one off things? So the scalable recurring revenue was what I think we’re about.
Hans Tung 28:06
To make the committed cost, you have to be able to build a presence in Asia. If it is not actually large perform, it will not make that work.
Yeah. One thing we realized was that a lot of these folks don’t. So I asked the question why aren’t you guys have massive facilities that print stuff? And they’re like, oh, man, getting the permits? And I’m like, oh, you’re trying to do this in Boston, or Sillicon Valley? That’s your problem. You’re trying to hire westerners? So our innovation is key. You got 50 people inventing stuff, laser physicists, roboticists, and material scientists, you’ve got this whole cater, a lot of PhDs working on hard problems to figure out how to make a composite 3D printer or printers that print fast enough and at scale. But you also have to combine it with Asian scale, Asian aggression, to kind of get to one bill, to get it going, to run it, and to scale it. We can make the printers five or 10 times faster, but we’re not going to be able to make it 100,000 times faster. So just have a bunch of printers. That’s the other way to do it. At some point, there’s scale versus technology. There’s a crossover point. Now, let’s scale up. You’re just not gonna be able to do that in Boston.
Hans Tung 29:39
And for Christy, how did you decide that Arevo worth taking your life over again?
Yeah, the story of Arevo is very much similar to Misfit. I was definitely drawn into Arevo because of Sonny. But what kept me at Arevo is, I would say two things. First thing is, at first, I thought that I would just help while they figuring out like how they will form the team and stuff. But working with the team at Arevo gave me a very positive feeling. They are a bunch of super talented people, at the same time, very kind, and very positive about things. So very naturally, I feel fitting as part of the team. The second thing that drawn me was the numbers. So between having a vision about the future, how are we going to commercialize a very advanced technology and bring it to the reward. Bring it to certain changes to the world is a different story. So when I tried to translate that vision into numbers, financial models, somehow all the stars line up, and I was truly convinced that it is gonna be another firm I really want to join.
Hans Tung 31:20
Got it. And then for both of you, going back and forth between Vietnam and Silicon Valley is not that easy. And as you tried to build another cross-border team, what are some of the new challenges and opportunities that you see now this time? Now you are combining hardware, software, and services. There’s B2B, and there’s also B2C products. So it’s a mixture of everything.
Totally agreed. And that’s why this journey got to be more exciting. Imagine if we do something similar to Misfit before, it will be much less exciting. The great thing about this time is we have experience of what we have done. But also we have friends, the people who were with us at Misfit and other businesses, they joined us and helped us anchor the new company very quickly. And that gave us hope, even though the scope of the work is gonna be huge. This time, we don’t start from zero, we start from somewhere, especially with people.
Yeah. And I feel the fundamentals in some are safer. Because with B to C, sometimes you never know are you really gonna succeed or not? But here, it’s like we can make carbon fiber stuff, one that you can’t possibly make. Because it’s a 3D structure, we have the excess strength. So there’s things we can make that you can’t possibly make with traditional composite approaches. Second is, we can make it cheaper and faster. So we just have to scale it. So it just seems lower risk. So I think the weird thing is when we looked at Arevo and was thinking that I’m not used to having so little equity. I am used to owning 100% of a company as a founder. Here, we have a lot less than that. But we realized that there’s been so much derisking, it just seems like we just have to execute, we just have to show up with the product. Do you really have 3D printed bike at that cost? That’s amazing. And of course, can you do that for us? The whole point of doing our bike was to show off what we can do. So the value proposition seemed very obvious. In some ways, I felt like it was much less of a risk than before. People ask that why are we piling in onto Arevo. Technically, I think we have negative income on this because of more investment, because we’re getting paid with minimum wage. I don’t know that.
We’re all in because we need this to make sure that this works. We need to make sure we’re with a company that would really go for years to come that we can build on. Not something that we could just flip, because if you just flipped it, it’s just not interesting. Why would we spend our next 5 or 10 years trying to flip a company? So we wanted to build a company that was pretty transformative. A company that would really leverage this global presence. You really need both a deep tech and innovation from Silicon Valley and you need the Asian scale. And it’s not just Vietnam. Yeah, the Asian speed. And also Japan. So this is a triangle here. We have five or six strategic investors from Japan, we have aerospace investors, we’ve got construction like Kobayashi, one of the largest development companies in Japan. So it ranges across industries, and it feels much more promising because these industries desperately need what we can provide. Because at the bottom, it’s about why do you need our stuff? Do you need things to be lighter? What is the reason that it needs to be lighter? And if that’s valuable, and you’ll pay for it, because we’re kind of the only solution.
Dimitra Taslim 35:51
Amazing. I think it’ll be really useful for our listeners to hear. So far, we’ve been diving pretty deep into Sonny and your decision to join Arevo. If you could paint a picture of the shift in the supply chain that you see happening, why is it important that we live in a future where we use carbon fiber more for different applications? What difficulties are the manufacturers facing in terms of procuring and manufacturing these parts on time for their process? Just paint us a picture about how you think the supply chain is shifting? And why carbon fiber is important for the future?
Taking a step back, why did we get excited about this? To begin with, a big thesis in our family office was radical solutions which are often technology-driven, that could have a positive planet level impact. And so about 70% of our stuff is about climate change, reversal, which is related to deep tech. Being able to make things lighter and more energy-efficient seems like a pretty obvious thing to work on. So that’s why the mission was very meaningful for us. And it is also because of the fact that it was hard to do so that it’s hard to copy. You have to figure out how to do the materials, the robotics, the software to design for a composite material, which doesn’t really exist in a big way now. And how to deposit the material, the actual 3D, the fabrication, the additive manufacturing aspect of it. Those are the four things that you have to figure out. Innovation stack is pretty deep in that regard. So it set the stage for something that we could really work on for a number of years and create a lot of value and transform a bunch of industries. So the question is, why do people need it now? People have always needed stuff to be lighter, like in heavy industries. Like big trucks, they’re not heavy because they want to be heavy. It’s heavy because you have to be able to lift big things. So if you can make those big trucks and cranes lighter, because you can print them in carbon fiber. It’s an enormous value add. And the question is, why hasn’t that happened yet? And it’s because it’s really expensive to make.
Yeah, it’s so expensive. Like in the aerospace industry, it’s $2,000 plus per kilogram of finished parts and it’s really expensive. In consumer industries, it’s probably five $600 per kilogram of finished parts. So this is a very valuable material. So if you can actually make stuff out of it cheaper. I think the world is at your feet in that regard. So it really comes down to this execution question.
Hans Tung 38:55
That’s where the Asian scale, speed, and cost come.
That’s right. If you think about it the reason why it’s expensive. It used to be because the material was expensive, it was expensive to make carbon fiber. A carbon fiber composite is just the carbon fiber and apply a polymer like a plastic matrix to encase it in. So that’s what a composite carbon fiber is. It used to be very expensive to make the carbon fiber, but now it’s kind of a commodity. To actually make the part the composite part, that’s actually very labor-intensive. Now it’s primarily labor content. So that’s what you automate. That’s what robots and lasers in material sciences are for. If you can have a solution around that, it can be pretty transformative.
Hans Tung 39:43
How do you guys decide that your first product will be a To C product and that would be a bike?
When we found the company, the company had been focused on longer range, revenue opportunities, aerospace and automotive. It’s a long time. We have Airbus as an investor, and it still gonna take five years to get revenue from them. It’s obviously not their fault or whatever, it’s just the industry. It’s a pretty mission-critical thing, you can’t mess around.
That’s not something I’m sure about. So there’s a reason why it takes a long time. And I just felt like, , one way to really get the technology out there is just kick ourselves in the butt and get out there. And the only way I know how to do that to get immediate revenue and market feedback is to execute B to C. So we kind of took this nutty approach and say let’s just put some out there to show off what we can do and get some attention. And carbon fiber in many consumers’ minds, is associated with things like bikes, military aircraft, and stuff. We’re not about to crowdfund that, you can’t do that. Right. We’ve actually been printing bikes for a couple of years now, just to see what we can do. We take a serious swing at it now and develop an entirely new design that was really beautiful and different. And we’re obviously not a bike company. Some people actually take us very literally, and think we are odd, but that’s okay. But the bike really helped get us get the world out there. It brought in a lot of interest that was from outside the bike industry. In fact, that was the whole point, it demonstrated what we can do.
Dimitra Taslim 41:57
Yeah, for f our listeners, by the way, the bike is called the Superstrata. And if you scroll down in the link or share a link of the bike, you can check out the photos of the bike, which is very cool. And you can still buy it now.
That’s the weird thing. We’re gonna make a few 100 demo bikes to sell online. That’s why we did the crowdfunding campaign. When getting 5000 orders, which was not what we were expecting. We were thinking about why are you buying the demo? This is just a demo. We did put a lot of work into the brand and the design. We’re thrilled that people liked this first product. But the bike really just show off that we can print something that’s complex and large. If you try to print on any other 3D printer, we’d say that you can print a bike for ants, but not for humans. So we wanted to print something large, complex, and also at scale. So we didn’t want to just print a few 100, we want to be able to print tenth of thousands, hundreds of thousands a year, realizing the vision of additive manufacturing as a mass manufacturing technology. So that was the whole reason for doing the bike. It wasn’t because we just wanted to get into the bike industry.
Hans Tung 43:24
But why not? You have actually beautiful bike. It’s light and sturdy.
We were hoping to get maybe 2 or 3 million bucks in revenue this year. As for the bike, we got it for the 13 days since the launch. We’re not gonna stop printing them if people keep buying them. I think we’re gonna lean into it a little bit, but we’re a B2B company, not a B2C company. We’re here to serve other bike companies, car companies, aerospace companies.
Hans Tung 44:05
Your first bike Superstrata is out now. What’s the sell cycle like now for other B2B products, whether it’s in bike or in another area that is related to?
We are going to do another product, another crowdfunding campaign, to launch to kind of show off other aspects of our system. The bike was complex, in large part was to show that we can make them complicated. Our next products are to show that we can make large things. It won’t have any wheels. So just to make the point that we’re not a bike company. We’re gonna launch one, two, or three products each year to show off different aspects of our technology.
But the cycle is pretty straightforward. People hear about it. They’re like why haven’t I heard about this company? They reach out and ask if we can make certain parts for them. We’ve had several scores of inquiries across industries. We’ve had all sorts of it. So a lot of bike companies and some aerospace companies. We’ve had furniture companies and construction companies. There’s a lot of things that we wouldn’t do. We wouldn’t do iPhone cases stuff. It’s too small and low value. It would be things where lightweight, and complex structures really mattered.
Hans Tung 45:30
So again, same question, now that you show off a great bike. How does that impact your other B2B sales? Does it make it faster?
Hans Tung 45:41
My point is that is the faster sales cycle in B2B worth not doing your own B2C product in some of the first two or three products that you choose to demo?
So it makes the inquiries inbound, which makes it a lot easier in terms of a B2B cycle. Or instead, we will come to someone and say, we can build it and we can 3D print this thing composite for you. Let’s do a proof of concept. Let’s do some studies, send us some white papers. I was thinking let’s cut all that silliness. I’ll just show you bike. In fact, I’ll ship you the 10,000th bike that we’ve printed this quarter. That demonstrates scale and completeness that we can do something end to end. So it made the inquiries inbound, made the conversations much more much easier. And second, it establishes a benchmark of believability so that you don’t waste time with the usual B2B dancing around doing white papers and data sheets and all that stuff .We can skip that.
Hans Tung 46:55
Somehow I still have a nagging feeling that you’ll have a lot more B2C sales. Now you will have B2B part sales in a short term. These guys move so slowly, even if they want to, they cannot move that fast.
Yeah, that’s definitely true. We’re not embarrassed about our B2C sales. Every day we get new orders off the internet. We’ve got some really good stuff coming out where it’ll really demonstrate more of our capabilities. It’s gonna be the beast. B2C is gonna be a big part of our lives for the next one or two years. So the plan is B2C, B2B to C in the first three years in the automotive industry, heavy Industries, or other industries, especially the low regulated industries. In three to five years to get into the aerospace space industry and whatever else, maybe defense. That’s just how long it’s gonna take.
And I’d like to add certain angles from the operation side. So while we were discussing on whether we capture the opportunity of B To C or B To B. At the end of the day, I think the limit to our imagination probably partly lies on how much we can scale and how quickly we can scale. And that’s the reason why I believe in Arevo that it starts from a pretty orthogonal approach. For a high-tech company like Arevo, it is very brave to step into a strategy of building out print farm instead of selling printers. Our print farm is not about a few machines that we can showcase, printing certain prototypes. We are talking about replacing manufacturing. That is on me, I have to figure out how to scale. That’s when we can capture the opportunities.
A lot of big companies will have a few of our machines. We’re talking about having hundreds in one place. Each one’s the size of the room. When you walk through the print farm, it’s gonna be pretty cool. Nothing like a typical factory. In a typical factory, you have a line of stuff. Buts there’s no line.
Hans Tung 49:29
I have faith in Christy, she’s so good. She showed me to figure out how to scale hundreds of printers, and they’re operating at peak efficiency. As you lay that out, you need to make sure there’s enough demand for that capacity. And I still feel that B2C initially will be much faster to give you enough demand to justify the cost of setting up the hundreds of printers in the printer farm.
But the thing is we’re actually also making the printers here in Vietnam, which is kind of nutty. The parts that are sensitive will be made in the US. But most of it is done here, and it’s half the price and four times the speed. So a lot of times people think it’s about cost here in Vietnam. We have that advantage, but it’s actually about the speed. Speed is much more. In two months, we got the permit, we got the rights, the land, the buildings, the infrastructure, electrical and plumbing infrastructure, and people.
People are super excited about the project here in Vietnam. It is such a radical innovation that they have never seen in Vietnam, especially in the country where tere are talents who are super excited about what we’re doing. It is such an unfair advantage that we have.
Dimitra Taslim 51:12
I’m just curious for our listeners. Christy mentioned print farms. Is it almost like a multi-brand, independent cloud kitchen where different brands and principals can sort of rent a couple of machines in his 100 machine print farm? Talk us through when someone walks through this print from in the future. What do they see? Do they see different logos? One is Boeing or Airbus. One is a tennis racket manufacturer. One is a bike manufacturer. What do you see when you walk through a print farm like this?
I’ll take a swing at it. So we’re taking one step back. We’re starting with carbon fiber composites. It is going to be our core forever. But we started there before a reason which is the business is really valuable. Part of the reason why additive manufacturing hasn’t taken off in the past is because it’s hard to compete against plastic injection molding or other metal shaping technologies. It’s doable with carbon fiber. Now, what will it look like in the future? I mentioned that first, but only because we would love to see us producing all sorts of things, not just carbon fiber stuff eventually over time. But the point here is just like an AWS for manufacturing, instead of sending up lines of stuff, just buy print time. You don’t even need to lease the printers, we set it aside print time based on material or size. if you need 1000 hours of print time on the metal on the composite machine, and then another 12 on metal, there you go. Over time, it should be something that you can just order online. So that’s the whole, that’s the vision for the print farm.
And it’s not only about how many units we turn out of the print farm, it is about how the composites and the material will change certain design of products that we’re used to. So behind this whole machine, our engineering capabilities, material science, innovation. So what I imagine in the future about the print farm is not only that it changed the way that we make products, but it also changes the kind of products that we can make.
Hans Tung 53:49
We have talked quite a bit about a product, and then your printer farms. Let’s switch topic a little bit and talk about your culture. Both of you mentioned that your culture is built on the concept of servant-leadership. What does that mean? Can you share more about that?
I’ll share. First, what I view about servant leadership. I’m coming out of Asia, which is quite a hierarchical environment. What I realized over the years is that the power actually comes from the bottom of the pyramid from the mass. So I believe that whoever can leverage the power of the crowd, the power of very common people, that will be the biggest opportunity for the community and for the society in different contexts. So that has somehow resonated with me whenever people talking about servant leadership. I feel like it’s the only way that could work. And I see that at Misfit and also in other organizations that I was part of from the leaders that I very much admire. And I really hope that I can bring it into my leadership style.
This is about where leaders view themselves as servants, and their main function is to serve others and that it’s not about themselves. That’s a pretty radical view. It sounds cool on paper, but a lot of people don’t subscribe to it. We’re not talking about collectivism. We love individual innovation and contribution. But the point here is, the CEO is supposed to serve the leaders, the leaders are supposed to serve their team members and the engineers. That’s the only way the engineers can focus on serving the customer, which is what we’re all about. Because engineers and the technical folks are busy serving the leaders, and the leaders are busy serving the CEO. Nothing gets done, and we just have a self-sacrifice. It’s one of those things. It’s like, who do you want to work with? You want to work with a bunch of self-serving people? Do you want to work with people who are ready and eager to serve other people? That’s something we’re pretty uncompromising about in terms of cultural fit. We find some pretty amazing people, but they can’t park their ego at the door, they’re not ready to give me. It’s also kind of a weird thing to ask , they will ask that you’re paying me to work here, why do I need to be self-sacrificing? Because that’s how everybody else is. If you are not, you’re gonna be always about yourself. You’re just not gonna fit in here. You’re gonna feel like a jerk? It’s not gonna work out. That’s servant leadership.
Hans Tung 57:13
Sonny, by picking Christy as your partner, you’re ready to serve Christy then? Do you feel served, Christy?
Yes, he serves me so that I serve the whole world.
Hans Tung 57:35
We look at the differences. How do you resolve it when Sonny doesn’t do a good job of serving you? What do you do, Christy?
Well, that’s a very good question. How did we resolve the differences? Well, the fact is we never did, we actually remained different. And we learn how to embrace the differences, different strengths, and definitely different weaknesses as well.
Organizations. I’m not that organized. And she’s like the ultimate in organization and discipline. It’s just like how we run a family. Yeah, chop, chop. It’s just everyone’s on time. It’s awesome. I couldn’t possibly pull that off by myself.
As expected, I don’t come up with great ideas. Ideas only come from very organized thinking, and I can’t pull off great ideas the way that Sonny can.
If people ask me would you recommend starting companies with your spouse? I’d be like, hmm, maybe, Am I serious? Maybe. Am I glad that we did it? Yes. But is it hard? Yes. That’s freaking hard. Because you bring in stress. Unless you have kind of a pretty strong foundation, you probably shouldn’t do it, because it’s going to bring stress into the family. And that’s tough. But if it does work out, it actually is pretty awesome. Because now you really can spend a lot of time with each other and see each other in action, and there’s no hiding. You see through each other which only makes you stronger. So if you can pull it off, I would say yes, go for it. But I will say one thing. Some people have asked questions like what about hiring friends or family members and stuff. We have a fairly contrarian view about this. Short of saying that we embrace nepotism. I don’t embrace that. Nepotism has a sense of very negative things. I’m saying if two people are qualified, and one is a friend or family and they have equal qualifications. Take the friend or family member, at Misfit, we had several pairs of brothers and sisters, a couple of husband and wife teams. We had a couple of father and son ones too. We have one of those at Arevo. And they actually work out great, because basically, there’s a self-correcting mechanism, because there’s already trust built-in. Because if someone does something stupid, or say something like, obviously kind of dumb or arrogant, they will just get smacked. And I can’t do that. Because, there’s like HR laws and stuff, but the brother can smell them. When you get home, there’s no HR law. And this stuff gets self-corrected. The downside is if you had to let one go, sometimes you feel like you have to get to the other one go. But people are pretty mature. He’s kind of a screw-up, you should let them go. And there’s no hard feeling. I actually think it actually works out really well. We’ve benefited from that.
Hans Tung 1:01:24
Okay, I’m gonna ask you one more question. And I’ll let Dimi take over. Sonny you said that now is actually the best time to start a business. Maybe that’s partially why you decided to do join Arevo. Why is that? What are some of the macro trends you’re seeing that make it easier for you to start a business now?
I’d say it’s easier to start one rather than it’s better to start one now. But I think one thing is a lot of rules just got restarted. A bunch of stuff just got reset with COVID. The world doesn’t function that way anymore. It’s functions like this, this, and this. Now’s the time to jump on that. The world’s permanently changed because of the pandemic. And so there are so many opportunities. Second is, a lot of people aren’t doing it because they’re chicken. They will think that they just need to survive through this thing. And those are the best times. It’s one of the things where I feel now’s the time for the best entrepreneurs to pursue new rules, and also other people aren’t doing it, and also the availability of talent.
Dimitra Taslim 1:02:56
Now we’re off to quick-fire questions to end this. The first one is, what is the one thing that you admire about each other?
Clarity of thought. She always has a clear angle. Whenever she gives you the answer, it’s like, I got three points, bang, bang, bang, and two sub-points for each. I’m like, how did you just come up with that? I have to write that down. Before I talk on the podcast, I was already wondering what to talk about. But she knows what she’s gonna say.
For me, I like Sonny’s visions. He always comes up with the picture of the future ahead of people. And it’s about the market trends. It’s about the product. And many times he’s right.
Dimitra Taslim 1:04:14
Next question is, we’ve got a lot of listeners who are actually couples working in startups together. So I just want one piece of advice from you guys, to couple entrepreneurs.
To me, I think Take it easy. Always take it easy. That’s gonna be my advice. Eventually, and take it easy.
Yeah, that’s a good one. The obvious thing is, keep stating your swim lanes, clarify roles, and never ever cross over no matter what. Taking that easy, that’s a good one.
Dimitra Taslim 1:05:07
The last one is, what is the habit that you have that has changed your life, the one habit.
So for me, I have the habit of planning out the day and be very punctual. I set up 6am in the morning, I’ll get up. 11:15 is when I would do something, and at 12 o’clock I definitely have lunch. And I’m very punctual to the schedule of the day. It became a very helpful tool for me in life, mainly because as life gets more busy, it helps me plan out and squeeze in a lot of things that I can do during the day. And whenever I do certain things, I become very focused on what I do. And even when I only have 15 minutes, a focus for that 15 minutes I get things done. Eventually, I can get a lot of things done for a day.
Hans Tung 1:06:05
That’s right. Very good advice.
I’ll give a lower-level life hack. And I found that having accountability groups on WhatsApp, or WeChat, whatever chat program you have, has been very powerful. So I have a group of guys that we make new year’s resolutions. And we check in with each other every day, 365 days a year on WhatsApp. And we just say yeah, did it, did it, did it. So I actually have two groups of people, one for pushups. It sounds kind of stupid, but we do pushups every day. And we just type in how many pushups we did, whenever we do. I have another one where we read the Bible together. And we just check in the app, read this chapter, or read that chapter. I just feel like if you do something, even if it’s small every day, for a whole year, something changes about you. You’ve developed a habit that you didn’t think you would normally do it. It’s hard to do it on your own.
Hans Tung 1:10:03
There you go. Thank you both so much. I’m so glad we invited you to join this podcast. You make the podcast even more fun, even more interesting. So thank you both.
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