Mitt Romney at Silicon Slopes Tech Summit 2018

please welcome Vivint president Alex done former Massachusetts governor Mitt Romney [Applause] [Applause] it's a big crowd hey guys there's a lot of people here yeah yeah they must heard your comment Alex no I would have emptied the place but alright let's start with a hypothetical here yeah hypothetically let's just assume or pretend that a lot of people are waiting to hear you make some kind of announcement hypothetically would you be making that announcement in the next 30 minutes you know enough about politics to know that you would never make a critical announcement on the day when the Mormon Church excuse me the week that the Mormon Church just names the new president when when it's a Friday and of course you only put out bad news on Fridays and and number three when someone lights a a gasoline truck on fire on i-15 so no they'll be no there'll be no announcements today yeah okay okay so we've gotten that out of the way so I was I was looking doing a little research getting ready for this and I was interested to see how big Bain Capital has gotten so went and and saw that Bain Capital currently has about 85 billion dollars of assets under management how big was your first fund that you raised when you started Bain Capital we went out to raise a fund in 1984 there were two of us that that hit the road and went to a number of institutions and wealthy individuals and after a full year of fundraising we came up with 37 million dollars that was the first fund and that fund did very well the next fund fund ended up being almost 200 million dollars but that first fund of 37 was probably our best we had a number of good investments than that but people would ask us how successful we were in our personal investments and we had to telling the truth not very successful and they said well you know why are you gonna be successful doing what you're doing and we said well we have a very different vision we think we can we can do something very different than anybody else that's in the venture capital and private equity space and we convinced a few people a few individuals that that was the case and that's how we got going awesome so when you started back with that 37 million dollar fund did you have any idea that bank capital was going to be as successful and as big as it's gotten today no it's kind of embarrassing to say this but but we we studied the venture capital and private equity back then it was called the L Bo or leveraged buyout business we study that and concluded that it really peaked and this was 1984 and that beyond that it was probably gonna have some rough times of course the stock market was what one or two thousand and now it's 25,000 26,000 so we were completely wrong about the timing we never would have imagined that it would grow to the extent it has but but our vision was that we would have a good time we do well for our investors we put their interests first and that we would only invest in settings where we thought we could see something or add something to the investment that everybody else didn't see if if what we saw was the same as everybody else was saying then we really shouldn't be investing and only if we saw something we used to say if there was the hair you know on the deal or we could find some spin on the ball somehow that's when we'd get involved so if you didn't see back then that it was gonna be what it is today what things did you do back then that you think laid the foundation to allow it to become what it is today well the the co-founder and I guy named Coleman Andrews recognized that we were not the smartest people in the room we were at that time associated with a large consulting firm called Bain & Company we knew their competitors McKinsey and BCG I'd actually worked at BCG and I knew there were a lot of smart people out there smarter than me and if we wanted to be the most successful and the most effective we could be we should hire people smarter than us so number one was we went after really smart people or people who had skills that we thought were particularly adept at dealing with the the kind of marketplace we were looking at number two we decided very early on we would not spend a lot of time worrying about people's flat spots everybody has flat sides some part of their total package that just isn't ideal for the marketplace or for the challenge that you have but if you spent your time working on people's weaknesses you'd end up working all the time on weaknesses we said instead what we're gonna do is we're gonna find people that are extraordinary in one way or another and then make up for their weaknesses with other members of the team so we had some folks that were really great at finding deals but were lousy at evaluating them others that were extraordinary analysts but really couldn't go out and make friends and find opportunities one guy that was a extraordinary structure he knew how to put together all the financing and all the documents and so we built the team that was so much better than any one of us could have been and of course collectively a lot smarter than either Coleman Andrews awry and and I think that's part of what made us as successful as we were that's really really good advice so you've probably heard hundreds probably thousands of pitches by company founders entrepreneurs business people over the course of your career what advice would you have to an entrepreneur who's just getting started and needs to pitch his business either for financing or for other purposes that would allow them to be a little more successful than maybe they would be on their first time it's probably going to surprise you a bit but what we looked at first as we considered a an entrepreneur to back and that could be an entrepreneur in an existing company an individual who had a vision for making it better or it could be an entrepreneur in a brand new enterprise the single most important element was not the business plan or the financing or the the wisdom and the the power of their idea but it was the capability of the person bringing that idea the person who would lead the enterprise and and we looked to see whether people around that individual respected and admired them did they have friends did they have colleagues in the professional world that that admired them because I happen to have found that the most successful senior executives I've met are people who other people admire and respect and trust and follow and so that was first the and oftentimes by the way you could see that by their their prior track record but sometimes a track record wasn't great so Tom stemberg who came to us with the idea for Staples the office superstore I called his prior boss who was at first national grocery stores and I said you know what can you tell me about Tom Stenberg he said well he's he's brilliant and everybody loves him but we fired him and I said you know why did you fire him he said well they made this terrible mistake in our fresh food department and it would cost us a lot of money and we hadn't let him go but people really respect them and admired Tom stemberg and that's what we wanted to hear now of course that so press that was number one the the quality of the character of the person that would lead be leading the enterprise and then number two I think was the the the vision of the of the business plan which is is there something here that is truly compelling that says this is not just a product a lot of people that came to us with ideas that you look at it say this is a great product but you ought to go license it to someone or sell it to someone but it's not a company you haven't got to even got a corporation here and and there were others that had a business plan that said this is not just the first product this is going to create an industry or create a business that will go on to change change an entire sector of the economy so you started your career at Bain consulting or you were there early in your career you then went on to start Bain Capital but after you had done that bang consulting got into some trouble and actually was was if it wasn't bankrupt it was on the verge of bankruptcy and you were asked to come back and turn around bang consulting what what did you do to obviously we know now that Bain consulting is is certainly one of the premier names and consulting in the u.s. so we know you were successful in getting that turned around what did you do to turn it around and what lessons did you learn what was maybe a little different in a turnaround than in building something ground up yeah yeah actually we had been fortunate Alex that in in our work in the private equity world we had invested in some businesses that were in real tough shape so we bought a company called vet Co gray for instance we we bought it was from Houston Texas it made subsea well heads in the year before we bought it it lost 72 million dollars the chief executive officer of the parent company said we would sell vet Co gray to anybody for $1 and so we showed up and said we're here with our dollar we want to buy it he laughed and said well that was just a figure of speech did you pay it in quarters yeah they actually went out and and and hired an investment bank to auction the company and Baker Hughes was the parent company they auctioned it around the country no one wanted it because it had a lot of debt you weren't just paying the dollar for the equity you had to assume a lot of debt probably a bad strategy to tell people you'd sell it for a dollar and then put it up for our tech yeah you're probably not going to forget optimize your selling price but we ended up buying it for virtually nothing I think a dollar and and so we had learned in that experience and others like it to sort of follow a formula number one when we got in a tough situation was to do what we called a strategic audit now that's not you know the CPA is coming in it meant let's take apart the entire enterprise and see what's the quality of our people our human resources how do we stack up against our competitors what do our customers think about us how is our Rd relative to the other people and of course our financials what if what is our financial footing look like is it match our growth needs and so forth so the first thing was to be entirely brutally honest about where we stood so when we came into Bain & Company the first thing we did the Bain consulting side the first thing we did was okay let's take a look at what the the setting is and and take apart the financials and we recognize right away we weren't didn't to be able to make payroll in ten days or two weeks that's how bad it was so step one with that being the case with that brutal honest recognition we we called our landlord and and we said we we have good news and bad news the good news is we always intend on paying you our rent the bad news is the check that your wrists are about to receive in the mail we put a stop payment on it because we can't afford to pay it this was over a million dollars for for the the lease on our property in Boston and they weren't happy we didn't pay him for two years but but that was essential to understand what our needs were financially but the strategic I don't also told us that instead of firing a lot of the senior people which is what the company had planned to do we said you don't want to fire the Salesforce in effect the senior people are the ones that get new clients so we can't afford to fire people we have to keep all these senior people as a matter of fact this is so critical to us that I'm gonna go to them as the the new CEO of this difficult setting and I'm gonna ask each of them to make a commitment that they'll stay for at least one year they won't go anywhere else because we had a thousand people at that point whose lives depended upon the success of this enterprise so why needed that team to stay in place that was part part one is strategic audit number two is build the right team for the needs that you identify how many people did you actually get to commit to the year every single one every every single partner at that time there were probably 50 or so partners of the firm they all committed those one who was not the right fit that we did not ask that but all that we asked signed a statement literally signed a statement saying they would they would stay with the with the enterprise what were you telling him in those meetings that it couldn't have been good news so how did you get them to do that well number the number one was audit number two was get the right team number three is focus focus focus and we said okay here's how we're gonna be successful this is how we're gonna change the product offering we have this is how we're going to change our compensation system to reward people not just for doing good analysis but for going out and finding new clients and selling our new vision and and they bought into that did they also recognize that if they didn't that the whole enterprise was going to go down and that a thousand people would lose their jobs in what would be very difficult economic circumstances now obviously some of the partners that were the least performing of the partners they'd probably sign on to anything but some of the best performers could have been hired almost anywhere immediately for probably more money but the collective sense of eight there's a purpose here and a mission greater than just how much money I can make this year allowed us to be successful so those three things audit team and then a focus division it's really really good advice so you've had a lot of success I think especially people that are maybe newer or younger in their careers just starting out I think look at people like you and say wow it's amazing what you've done you can list out all the accomplishments have you ever been truly scared of failing along the way and if you have how did you how did you kind of work through or overcome that fear of failing or perhaps failing to have the success you did you all may not know this but I actually ran for president lost so the fear the fear I was talking about business not the fear the fear of failing was was actually realized I love what Walter Mondale said he he had the misfortune of running against Ronald Reagan and and of course losing famously and and he is reported to have said that all his life he wanted to run for president in the worst way and that's just what he did and Alex each time I began a new enterprise when I left the the home and comfort of a successful consulting firm Bain & Company to go with another guy and form Bain Capital we were afraid we'd lose people's money I mean I was terrified and I was probably too conservative are in the in the 15 years I was at Bain Capital our compound annual growth rate for our investors this is before fees and carry but the gross growth rate was a hundred and thirteen percent so that says I was a bit too conservative I shoulda done more deals but but we but but I was afraid that we would be not successful and that we would lose people's money and they'd be very very harmed by that likewise when I was asked to come out here and take the reins of the of the Olympics I was very very concerned that that we would let down the people of Utah the people of the country the athletes that counted on coming to the the games here and performing here where they'd been training for years I was very concerned about that when I became governor of Massachusetts you were there we we projected that we were going to have about a half a billion dollar shortfall in our budget well we got in it turned out to be as I recall two billion dollar shortfall and I had promised I wasn't going to raise taxes or cut vital services how was I going to do it so in each of these cases you're if you're not afraid I mean if you go into an enterprise and you're not worried they're not being bold enough and you know you've got to have you've got to have a vision that says I'm going to do extraordinary things and it may mean I get there but I'm gonna I'm gonna try me you know I aspired though I achieved not I was satisfied and and that that phrase has been one that my father described pretty much throughout his life and the only answer I have for a setting like that is it's thrilling it's thrilling to be in a setting where you know you could fail or fall but it's also a part of life it's exciting its life and life in the in the fullest sense so you dig in give it your your full potential your full energy and and if things come together and by the way there's a lot of serendipity the idea that somehow that you can take on any challenge and you're always going to be successful no that's not the case some things happen that just you didn't plan on and you fail but but failures not the end Phares part of life you learn from it and move on yeah those are really really great lessons let's talk a little bit about your dad so people may or may not know probably most people know but your dad was a very successful person as well he CEO of AMC corporation he he was governor of Michigan he served as Secretary of Housing and Urban Development under Nixon and I know that you really looked up to him I think everybody that knew him looked up to him whatever may be a lesson or two that you learned from him that the people here today would would be interested in well first was don't just muddle along have a vision for where you want to go so so he he came into an automobile company which the audience won't remember because it's now gone but it got purchased by Chrysler Corporation but but he made something called Ramblers Nashes Hudson's and jeeps that's what American Motors made when it got sold to Chrysler he came in at a critical time for the company the chief executive passed away unexpectedly he was a vice president a new vice president at the company and was made the the new top dog and and his his vision was that he was going to change the company from one that competed with Chevrolet and Ford which dominated at that point the auto industry to make not the most expensive car or the fastest car or the coolest car but if you will everybody's second car we called it the grocery getter the station wagon the car that mom or dad would take to the grocery store on the weekend to pick up the groceries to take the kids to the soccer game and he would make the most reliable most fuel-efficient and safest automobile you could possibly have so when everybody else was making bigger and bigger cars with bigger and bigger engines and huge tail fins he went and said let's reintroduce a car that we made excuse me that we made several years ago that was smaller let's reuse it and introduce that same car call it a Rambler and put it on the market again and we're and we're gonna change the whole direction of this company so number one was a clear vision for where he wanted to go with the company and then number two I mentioned it before be bold believe in yourself give it all of your energy and passion and he sold our house he took the money from the sale of the house and bought stock in his company it had dropped from about I think $30 a share under the prior president it dropped to about seven dollars a share he took the money from the house and bought style he'd given us savings bonds every birthday and Christmas I think fifty or hundred dollars savings bonds he sold her savings bonds and bought stock what stock in the company now a year to lay know that he did that I was a kid I had a year or two later the stock went from seven dollars to over $90 a share and an American Motors in this Rambler for a while there became the number three selling automobile in America so now it doesn't always work like that sometimes you fail as I said but but having a clear vision and not muddling along and then being willing to be bold and aggressive in pursuing that vision is something which I learned from dad those are really awesome I know as you know I know your son's very well and I would be really proud to have any of my kids end up as as well as your sons have turned out how given everything that you were doing and and how busy you were and starting companies and running the Olympics how did you and Ann raise such a great family I don't know that I have any great insight in that regard I mentioned a couple of things and and part of this just comes sort of naturally it it maybe flowed back to when I was going to school I was going to law school and and I figured that because I was coming from from BYU and I was now at Harvard that I was going to flunk out this again a fear of failure and and so I was studying all the time just scared to death I was gonna you know be kicked out of the class and and there was always this cloud hanging over me this this sense that if I'm not studying that that you know I'm getting further and further behind the other kids are studying and and I never was able to relax I was always sort of fearful and feeling this dark darkness around me and one day I said you know I'm actually gonna live the the law of the Sabbath I'm gonna take sunday off and I'm here to devote Sunday to my family and my church and I'm not gonna study on Sunday and that way what I found was it freed me of this dark on Sunday it's like I know I don't study on Sunday so it's all family and and fun and and church and and things I enjoy and it just it just lifted my life and it allowed me to really concentrate on the times when I was studying that was part one and and that that led to something when I when I got into my second job my first job at Boston Consulting Group I just worked like around-the-clock and and when I moved to go to Bain & Company which was a couple of years after my first job I went to Bill Bain and I said Bill I you know I really like to join you and I I appreciate your offer but there a couple things I got to tell you one is I don't work Sunday if there's a crisis of course I'll jump in like anybody else but under normal circumstances I can't work Sunday and and at the end of the day I'm gonna go home and I'm gonna spend time with my family and he said that's fine at the end of every day when I got home even though I carried a briefcase I don't recall almost any occasion when I ever opened my briefcase I came home and spent my time with Ann and the kids and we enjoyed dinner together usually it was the kids that eaten first I came back and they joined me for a little late dinner and but we watched TV or we read books we had fun times together I devoted the time I had either to my church to my family or to my work entirely focused on that so when I was traveling for instance in an airplane or in a hotel room I worked I didn't watch TV in my hotel I worked every minute when I was away from home but when I was totally completely focused on the family that's great so and has MS and has had for a long time now and what if what have you and Anne learned in her battle with MS well I begin with with the first experience we had our life had seemed almost you know like a honeymoon life up until the point when when she began to have numbness in her leg and it got worse and worse and spread up into her side and we went to a neurologist he did all these tests and and and took spinal fluid out and we were sitting in his office waiting for the the diagnosis and and there were all these brochures on that on the table in the waiting room in his office and I picked at the brochures and one was for ALS or Lou Gehrig's disease and their other diseases and and I looked at Lou Gehrig's I knew that was fatal and and I said to Anne I don't care what it is we can handle anything as long as it's not fatal and and sweetheart we can we can do this together as long as it's not fatal and and so when she was diagnosed with MS we we both talked to each other and cried in sadness but also in happiness that it wasn't something that would take us apart so early in our in our marriage we we found in the the service that we've both had in our community as well as in the disease that she has that almost everybody at one time or another in their life will have a bag of rocks that they're carrying that you don't see you know you see people to church or on the street or in the office and they're smiling and you think all their life is also easy and then you should get to know them you realize they've got some great burden they're carrying but they don't tell you about they don't wear it on their sleeve they're carrying it behind them and it might be a disease it might be a child that that has severe disabilities of some kind it might be a loved one it might be a divorce that a loved one that's being a strange divorce that's breaking up a wonderful hopeful marriage but people virtually everybody you meet has some kind of burden and and that makes you a great deal more empathetic to other people and a great deal more forgiving of other people what when people are rude or cut you off or angry or short with you sometimes you realize they may have had something that that has made their day or their week or their month or their year particularly difficult I mean the life experience that we enjoy has challenges it's kind of meant to have those kind of challenges and and and and Anne's MS has been one of those things we battle through it but I have to tell you every day you know I thank my Heavenly Father that she's still here and that she's well as well as can be and I feel like a blessed person that's great I tried that once thank you I agree so as governor in Massachusetts and being a Republican Massachusetts you know and this is a period of time that I got to work with you for you you're you're in the heavy heavy minority there and what did you learn about getting stuff done as a Republican governor in Massachusetts well and and you remember this Alex but the folks in the audience may not my state was overwhelmingly Democrat at the at the state level and at the federal level actually our delegation as well about 87 percent of the House and Senate where Democrats and and that means of course that my veto wasn't worth spit I mean I could veto something and at a voice vote they would just override it and and and so it was not lost on me that for me to get anything done I had to be able to work with the leadership in the Democratic Party and and so as we began my chief of staff Beth Myers said let's have you go around and meet with all the committee chairmen of all the Senate and House committees have you meet with the leadership in there offices don't call them to the governor's office like you're this big high-and-mighty person you're not a big high and mighty person I mean you you have no power at all they're the power and so I went to their offices and asked them what they were working on and said how can we work together and I'll never forget meeting with Bob travel Eenie the the Senate president I went in his office which by the way is much more elaborate and beautiful than the governor's office and and he said this he said the campaign is over the people expect us to do the people's business and I thought boy that is just the right kind of attitude that I had hoped to find and and so we we ended up working together I we would have a a meeting as you recall every Monday for one or two hours the Senate President the Speaker of the House both Democrats and myself and maybe a couple of other invited people would come together you know it would rotate offices wasn't always in my office we'd go to their offices and and then we talked about what was happening in the state what things we needed to do none of that ever leaked out I don't recall us in four years every week having a meeting like that not a word leaked out at one occasion I remember one of the two of them said to me we had a bill that came up before the legislature there was a very pro-union bill that we all agreed would not be good for business and might cause jobs to leave our state but it was very popular among the unions and the Democratic party got a lot of support then in my state from the unions and one of those two men I won't mention which one I don't want to put him on the hussy but they said to me governor you got to fight this harder you didn't to give us more cover on this because they didn't want it to pass but they had to be for it so they wanted me to fight harder against it to make sure it didn't pass and and that's that's how we were able to work together we would get together occasionally with our wives for a dinner in the North End where spaghetti and other Italian delicacies were available just on a social basis and when I was fighting for the the health care plan I wanted at Massachusetts I've met a lot of resistance from both these guys and I wrote out a letter as to what I thought needed to be done I went to their homes knocked on the door on a Saturday and delivered it to them and spoke to them at the door it does show how important this was and who was the power I mean look if you want to get something done you have to recognize that not everybody agrees with you that the the country is made up of Republicans and Democrats and some kind of in between is independence and and you've got to find ways to see if you can't get common ground and I was able to do that in part by the necessity created and I think by the way that President Obama had the misfortune of having a super majority in the House and Senate when he got elected for his first two years so he could do anything and didn't realize how important it was to respect and work with and collaborate with Republicans and so in his last six years he couldn't get much done I was lucky it's funny to hear that but I'm ever talking to governor Leavitt he said you know having an opposition party is not necessary necessarily a bad thing for getting things done and I agree that's really good so there's some anxiety I think in the world today about the future and what the future holds in our state and in the nation and in the world do you have any thoughts about what you think the future holds for for us that's a big topic let me let me connect a few things one I think our economy is going to do well continue to do well we will probably have a recession at some point I don't know when I mean Alan Greenspan in his book says look recessions are the result of irrational behavior and it's hard to predict irrational behavior it's an overreaction to something so at some point there will be some event which will cause a spiral in a recession I don't know when it'll happen it's conceivable it won't happen for years and years but I happen to think that the the elements are in place for us to have a continuing growing economy lower unemployment and finally to see some real growth in wages and salaries I think you're going to see that I think the tax plan that was passed by a Republican administration and and Washington is good for starting enterprises starting businesses and growing businesses and keeping them here and by the way one of the great failings that I have and that my party has as we talk about business and business formation without making the connection as to why we care so deeply about that we care about business and business formation and business growth not so that wealthy people can make more money no the wealthy people are doing fine what we care about is how do you get wages up for the average American the only way I know to get real wages up is to have more businesses and more growth so people have to compete to hire people and as they compete to hire people they have to raise their their wages to get them and that gets wages up that's why we're fighting for better conditions for enterprise so so I see those conditions I see those conditions at play by the way the whole world the world economy is doing well every region of the world is doing well even Japan seems to be a little better China has seen the best growth I think in seven years or so so it's it's looking pretty encouraging so I I think the economy looks good for the intermediate intermediate future globally we face some real challenges Russia continues to be a a geopolitical competitor adversary they basically back the the world's worst actors and sort of put a stick in our eye whenever they get the chance to do so I think is it as a in some respects and effort to to show that they're a big player that they're a superpower even though I mean John McCain says they're a gas station for rating as a as a country but I think they're more than that by the way but I think there is Center or something and and then of course you have North Korea which is unpredictable in some respects I don't think Kim jong-un is crazy enough to launch a an attack against the US because it would be suicidal for him in his entire country but but he represents a probably the most immediate military threat we'd face and you don't quite know what will happen there things could happen that would inspire a lot of out of control and China is a I guess a a real uncertainty and that I mean they're very serious about dominating the world economically and maybe more than economically we talk about a trillion dollar infrastructure program here China is spending a trillion dollars building infrastructure outside of China in Africa in Pakistan in to build better relations with these other countries to also secure routes for raw materials key raw materials that they believe will be essential for the coming century I mean they're playing the long game to be the powerful economic engine of the world and and you know we of course focus on what needs to be done here in America but we also have to play recognizing that longer term our capacity to compete and to have friends around the world is very very important to us so these things affect what the future looks like and then of course there's technology and and technology I mean I'm so excited about the next 50 years I hope I get to see all of it on this side of the the dirt and as much as possible because these are exciting times Moore's law which is as you know applies to computing power which is a doubling of capacity every 18 to 24 months Moore's law is now affecting sensors storage devices computing power healthcare it's going to change the entire way our economy works a book called the rise of the robots says that we're gonna see about half of American jobs over the next couple of decades disappear hopefully be replaced by new jobs but these are exciting thrilling times and I want to see it all and and I you know I think to those people just starting off in enterprise today particularly those in the room that are in technological technologically advanced enterprises what a fabulous time to be around I mean you don't just list you know work for your entire career in some little Carol you know punching an adding machine I mean all that stuff is done by artificial intelligence and and and automated devices and robots it is yeah yeah I'm gonna have to tell Todd I need to know it's this is a time for innovation and in an innovative world one of the reasons I'm so optimistic about America is not just our our new tax policy and and better regulatory vision that we have now but in an innovative world where innovation drives the future and I believe that's what we're moving into America wins because America is the innovator of the world and as long as government gets out of the way and Uncle Sam doesn't come in and mess things up America can win and America winning is key to the preservation of Liberty on this planet thank you well met thank you very much for coming and I think these are really insightful lessons let's let's give a round of applause from it all right ladies and John a big standing ovation for Governor Romney as daleks done what a great morning Thank You Governor Romney thank you Alex done

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Length: 39min 51sec (2391 seconds)

Published: Mon Feb 26 2018