Yahoo Finance Robo investment adviser Stockspot hits $600 million in assets
Chris Brycki founded Australia's first robo-advisor Stockspot in 2013, after more than 25 years in investing (starting as early as 10). He has been a member of the ASIC Digital Advisory Committee and volunteers as a member of the Investment Committee for the NSW Cancer Council. Over the past seven years Chris, as founder and CEO, has grown Stockspot to more than 11,000 clients and $600 million in assets. Yahoo Finance caught up with him to hear how he did it.
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What led you to start Stockspot?
CB: My past job was working in the world of finance (big bank) but not acting for average investors out there. Working in that world, I realised that when it comes to investing, it's quite difficult for a lot of people. They don't know how to do it and a lot of the products out there that had been kind of ‘built for average people’ were quite expensive and hard to access and not actually very good at building wealth in the long run.
I thought there was a good opportunity to build one online platform that could be accessed by anyone so you didn't need to have millions of dollars to be able to invest but also used all of the well-researched ways to build a great long-term portfolio that the rich guys were using. There were a lot of people in my life that would always come to me asking for how they should invest, like my dad and my girlfriend at the time. My girlfriend had all of her money in a bank account and I would always be encouraging her to put some in shares and other other investments to get a better return. Whereas my dad would put the money in shares and I would be telling him: "Hey, that's pretty risky. If one of those shares doesn't go well, you're going to lose a lot of money. You actually want to be spreading out your money more broadly across a range of companies." I just saw lots of people in my life needing an easier and better way to invest the money.
What are some of the biggest milestones you’ve hit in your business?
CB: Even though it doesn't sound like a big one now, one of the ones I remember as a founder is an amazing moment when we had our very first customer that I didn't know, that had just discovered us off over the internet and thought the idea and concept made sense. And they were looking for a way to invest and we were solving that problem for them. I think that was my happiest moment, to think, "Wow, maybe we do have ... a product that might solve some people's problems".
What's amazing is in meeting some people that invested in those early years. I had lunch today with someone who said that he first came across us in 2015 and he knew his girlfriend's been investing ever since. Hearing their stories about life, their journey of learning how to invest and how it's helped them save up for having a kid, paying for a nanny and putting them through school. I think it's always a nice milestone hearing the stories of clients who have used the product and it's helped them.
What has been your biggest mistake in business?
CB: It was probably an early one in the business that delayed the impact of our growth in that first year of business. I always thought when launching a new company you should be really secretive about it because someone might steal the idea - I think people always heard the idea of Facebook and Mark Zuckerberg - so I was very cautious and secretive in that first year. But what I learnt in that first year is the more people you actually share your idea with, the more potential customers you have or partners or people to spread the word are also people to get feedback on where ... your product could be improved.
Really when it comes to starting a business, it's probably only 5 or 10 per cent in the idea and the rest is in the execution and having the resilience to keep going through the good times and bad. If you're passionate about it, and you really want to do it, then you shouldn't worry about other people knowing about the idea. It's a mistake to keep it secret, because you're going to be much slower in getting the idea up and running.
What would be your biggest tip for starting a business?
CB: People think it’s very exciting to start a company, but starting a successful business, I really think it's just about solving a real customer problem. Trying to hone in on not trying to solve a problem for millions of people on day one, but what's the little group of people out there that have a problem that you can solve. Starting actually quite niche, although it doesn't sound like a way to create a very big scaling business, but actually solving a few people's problems really, really well is much more valuable than solving a lot of people's problems only 10 per cent better than how those problems are currently getting solved.
I always give the analogy of a fire; when you start a fire you don’t put the the big logs on the fire straightaway and light a match underneath. You first put the kindling on with a little bit of newspaper and get the heat burning. And then you add the twigs and the bigger sticks and the logs come on the end and I feel like starting business is the same. You've got to like really start with a little tiny fire and get that fire burning kind of consistently well before you start to spread the flames.
What impact did the global pandemic have on your business?
CB: Investing was one of the areas where markets fell quite heavily, and so we have to really reassure clients. We had a lot of clients that were calling us quite nervous, asking, "Should we take our money out?" So, there was a lot of reassurance (from us) that, you know, they're investing for the long run and they shouldn't be making changes to their strategy.
So I would say there was a lot of client handholding and reassurance initially but, since then, markets have obviously done really, really well and the share markets have gone up a lot, something like 50 per cent in Australia and even more in the US. There's been a lot more interest in investing and we've seen through the COVID crisis our business has close to tripled in size, largely because there's a whole bunch of people out there now that are looking for ways to invest their money. There seems to be a lot more savings momentum around and people want to make sure their savings are working hard for them.
You’ve hit $600 million in assets. What are your plans for 2022?
CB: We've been around now eight years and we've been just growing very consistently over that period and focused on doing one product really well. I've always thought rather than spreading yourself thin and trying to be something for everyone, just do one thing really well. For us, we think that thing is providing a great long-term investing product.
There are other opportunities we think out there to help people with their long-term savings and investing. At the moment, a lot of our clients are saving up for medium-term goals like buying a house or going on a holiday. Long-term goals like retirement and super are, for us, two other areas that we think our product can help people save more. So, for us that's the next opportunity - focusing on different time-frame goals. The biggest focus for us will be on the really long-term goals, which is making sure they've earned that money in retirement.
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