Robert Smith '85 - Founder Chairman and CEO, Vista Equity Partners

[Music] for our next speaker I'm really excited about about this Martha is the 14th president of Cornell University and professor of computer science information science and linguistics she took office on April 17th 2017 president Pollock has embraced the one Cornell vision and strongly believes that a Cornell education must foster the joy of discovery set students on a path for lifelong learning and teach them to seek the truth assess evidence and determine the reliability of information Pollock was previously the provost and executive vice president for academic affairs at the University of Michigan it is my pleasure to welcome to the stage president Pollak thank you Scott and good morning everyone it's really my pleasure to take part in my first entrepreneurship at Cornell summit and to welcome all of you across all of Cornell's campuses entrepreneurship is thriving Cornell Tech I hope many of you have had the opportunity to visit the campus generating startups there is a key focus and it just opened its new campus on Roosevelt Island in September up in Ithaca students are using the e hub co-working space day and night and students from all the colleges and schools on campus are involved in the university's entrepreneurship ecosystem whose many activities are supported by entrepreneurship at Cornell each year since 1984 the university has presented our Entrepreneur of the Year award to an outstanding cornelian who demonstrates not only remarkable business achievement but also community service and high ethical standards it's my honor to introduce this year's recipient whose entrepreneurship and philanthropy are equally extraordinary Robert F Smith class of 1985 founded Vista Equity Partners 17 years ago and in that time it has grown to manage 30 billion dollars in capital Vista oversees a global Court phone of 50 software companies that employ more than 45,000 people as chairman and CEO mr. Smith guides vistas focus on enterprise software data and technology enabled solutions just last month he was named by Forbes as one of the hundred greatest living business minds he studied chemical engineering at Cornell where he designed his own co-op program and he went on to earn an MBA from Columbia Business School before working at Kraft General Foods and then at Goldman Sachs and tech investment banking there he played a key role in mergers and acquisitions evolving such major companies as Apple Microsoft and Texas Instruments mr. Smith has shown a deep commitment to using his resources to benefit others last year he personally and through the fund to foundation of which he is the founding director and president gave 50 million dollars to Cornell to fund chemical and biomedical engineering to support african-american and female students throughout the College of Engineering and to create a fellowship program at Cornell Tech Cornell named the Robert Frederick Smith School of chemical and biomedical engineer biomolecular engineering in recognition of his generosity mr. Smith's philanthropy extends far beyond Cornell and includes the largest personal gift of 20 million dollars to the new National Museum of african-american history and culture at the Smithsonian his public-spirited service includes chairing the boards of Carnegie Hall and Robert F Kennedy Human Rights as well as serving on the boards of the Boys and Girls Clubs of San Francisco and the Bay Area Discovery Museum just this May he signed the Giving Pledge which commits to giving back the majority of one's wealth at Cornell mr. Smith has earned served on the engineering advisory board and I am delighted to say that he recently joined the Cornell Tech Board of Overseers where his expertise will be extremely helpful mr. Smith your leadership and thoughtful socially responsible philanthropy mean a great deal to me personally to the world and to Cornell as one of the university's most distinguished alumni you set an outstanding example for our students by demonstrating the ordinary impact that corn aliens can have across the nation and around the world so on behalf of the entire cornell community it is my great honor my great pleasure and my great honour to honor you Robert Smith as the 2017 Cornell Entrepreneur of the year [Applause] another fireside chat this time with our entrepreneur of the year of lance collins isn't it come on up so something you know this but the Entrepreneurship at Cornell program is governed by 12 Dean's so the Dean of every school in college at Cornell which does indeed make us very unique the structure works out very very well this current a couple years cycle lance Collins the Dean of engineering is the chair of the governing board so I spend a lot of time in Lance which has been absolutely a pleasure and I don't say that just because you're here it it it really has been wonderful so Lance is going to have a chat with Robert and we will learn some more insights thank you great thank you thanks Zach it's a pleasure to be here congratulations so well-deserved well thank you so much and president Pollak thank you for those wonderful words and I want to thank the Cornell community and all these wonderful people in the audience to take time out of their data to hear us chat but again you know Cornell was such a wonderful experience in a formative time in my life and the School of Engineering was just you know frankly one of the elements that helped me actually think about solving problems in a very elegant way so again I'm deeply appreciative of all the Cornell has given me and hopefully I can give just a fraction of that back in some form or fashion well I appreciate it and I concur with your sentiment so hey let's let's let's get into it so we're not even yet know so it was interesting hearing about the path that you've that you've taken to becoming an entrepreneur and just you know in terms of the craft General Foods moving on to getting an MBA and then you know some time at Goldman and so forth and you know in many people's minds you know the standard pathway is through Silicon Valley which is which is quite a bit different and I'm just wondering how you view your a path in sort of a visa avi the the more true you know the what many people think is the way to becoming an entrepreneur sure you know it's interesting I when I was applying to colleges and I went to visit Cornell and Cornell had a wonderful program then I hope they still you know again we've talked about it's called the minority introduction engineering I got a chance to visit the summer of my junior year in high school and spent a couple of weeks and really got to me you know really was TAS professors we really understand a little bit more about what was happening in Cornell and was a wonderful experience and as many of you corny lian's may or may not know summer is the best time to be in school at Cornell and actually when I designed the co-op program it says you know what I kind of don't like these winters in Ithaca and I can go to school in the summer and was spectacular we used to tease they turned the synchotron on and kept the clouds away and it was just beautiful but I remember when I was applying to schools and I got into a bunch of schools and and one of them was the school Stanford I was put on the waitlist my mom said were you gonna go visit I said mom there can't be any more beautiful place than Cornell I was there this summer it was spectacular and unlike and it's like that the whole year 10 years later I finally got out to the west coast and went to Silicon Valley and I'm like oh my god but I have to tell you and I will tell you this I will choose a Cornell engineer over any engineering student tonight that I found I have the great choice don't know in all honesty I mean there there is there is something about that experience it's not just that Cornell believes in Riddler okay and there's there's a lot of programs out there that aren't as rigorous as our engineering program in engineering schools while tough generally we bring a different degree of rigor and beyond what I call the the ability to solve complex problems Cornell engineers have grit okay they actually come out with with a with a tenacity and a doggedness that is enviable frankly in the engineering community and so so just yeah if I don't I'm just going to I think those those hard winners are part of that grid yeah there's there's no doubt we're not running don't you over here I mean take a semester and go don't a Stanford were supposed to do it but but to a great extent I think you know that created a basis that that that helped me understand the importance of sticking with problems and in seeing them through and so while a number of people you know start schooled and they'll become an entrepreneur quickly you know I think finishing there you know working in industry for six years really helped him not the world I live in is actually a confluence of two worlds and it just so happened that they work pretty well together today one is technology and the other is finance and you know when I altum Utley made a transition went off to business school and I'll tell you about that in a second where I learned how much these people made Investment Banking was obscene I mean you know I'm a hard-working engineer I was making $42,000 a year I didn't think he made any more money than that in a world and then some of my friends are tell me about what these investment bankers me they're making hundreds of thousands like you gotta be kidding me I know these people there's no way and I said what is it that you do you know because you're clearly not solving any world problems right now they're creating them yeah you know in all honesty and from that when I looked at it and you know so I started interviewing these investment banks and all that sort of stuff and I said literally as an engineer I literally had over a hundred interviews because I was collecting data mm-hmm right I had no idea sales training your research what do you people do and you know and the only business I liked was mergers and acquisitions okay because I said because with the exception of warfare it's how assets get transferred across this plant warfarin Devore divorce but you know that's that's how assets get transferred across this planet and that was interesting to me and if you think about it now the confluence of Technology in the confluence of finance and M&A all kind of happened and I was sitting here in New York at Goldman Sachs and sit with my boss Matt Keller at the time and we're in in jeans hikes on the west coast you know we ought it we ought to start a tech group and I said you know that's that's probably a good idea and I said but if I'm you guys I'm actually thinking you you you may get an engineer to start this tech group cuz we don't have any other engineers no Department but me and so I got drafted they said that's a good idea you want to go out to California I would never do that unless you really convinced me to do it as long as our first M&A banker on the ground in San Francisco focused on technology and I got the chance to work with this little company that we were had some problems with the CEO and the board we got rid of the CEO kicked out the board and got this guy Steve Jobs to rejoin this company it's called Apple hmm all right worked on the spin-off of Agilent Technologies from Hewlett Packard work with a little company called Yahoo little company called eBay and realized that the short answer is no one was doing buyouts in enterprise software now getting back to my Cornell days and my tech days as a chemical engineer which we all know the the smartest engineers out there but as a chemical engineer one of the things we focused on was really process controls right and you know we weren't really developing any new unit operations it was process controls and I remember one of my first experiences where I was basically programming at EDC 3000 PLC and it created 26% productivity in the plant and I was like you know software is and continues to be the most productive tool introduced in our business economy in the last 50 years and likely will be for the next 50 but no one was doing buyouts sorry in enterprise software so that's where the idea came from and said you know if you actually created a standardized process for not only doing the buyouts but for creating value in these enterprise software companies you could actually do okay and that's the whole construct of what Vista actually is today well that's incredible because you know it touches on something a question I have been yeah in my mind for a while so I'm also a chemical engineer by training just brilliant see I told you all and you were a hand of the School of Engineering yes I so recognize there we go there we go yeah I'm totally I'm totally with you on the other hand on the other hand I don't remember the course that came you know in that chemical engineering suite that that told me how to become a private equity investor ya know like I'm still like I must have missed that you missed the Wall Street experience right I mean so again yeah part of that ultimately is you know we are a little bit of a you know some of the substances of our experiences sorry sorry just trace it back so you know you said a little bit of process right because you have attributed your success to chemical engineering in many occasions yeah and I just if you could you know for the for the audience just to kind of give again I didn't do that to the development department of Cornell but you know because I I'd love to understand how you know what you draw upon right from that yeah way back there yeah to help you today yeah so president Park and I were talking about this in the back room so that the thing about engineering is as many of you probably know and chemical engineering in some respects what we think about are repeatable processes you know we get messy things to deal with as engineers you know someone comes if we've got a mess and we need to create some order to this mess and most people look at this big mess and kind of throw their hands up and say let's go get an engineer right to sort this thing out what engineers are really good at is taking messes and putting into discrete components to drive a solution and then make sure it is sustainable I call them an engineered solution so what we do for instance it at Vista in our software companies is create engineered solutions rather than solving the problem just once we want it solved forever through the process that we bring to managing whatever that might be if it if it is a you know functional area in a business if it's sales or marketing or developed so even the way we run our sales departments and work with our executives and enable them to run their sales departments more effectively we create for instance a salesman fashion factory what does that mean well we have a system for hiring people let me give you all an example you know I if you think about this world seven point six billion people on the planet there's only about 19 million of us who actually know how to write code okay so now you got a problem if you're really trying to digitize anything from you know Walmart on the one hand to beekeeping on the other who's gonna write this code right and at every single industry on the planet is digitizing every single one they're trying to figure this out but where did you get these people from so now you've got to find smart people and even either they write code or they manage data and they're pretty expensive or you have to teach and train so we look we have a system that has an aptitude test and a personality profile so on average every three years we have one point four million people apply for jobs at our portfolio companies coming into our funnel we test about a half a million of them to hire 25,000 and I actually don't care if you know how to write a code a line of code if you get an A on an aptitude test we know we can teach you how to write code and so we will hire you and then teach you how to write code so we fill our system with a process or we have a process to fill our system with talented people and then we have a whole system for training rather than you know come out and get to work you know in two weeks it's six months and nine months of boot camp to teach you what our customers do what our software does and then if you're writing code teach you how to write code the way we want you to write it how to document it the way we want you to write it and then put you in a group that actually creates some peer mentoring and learning again it's a process orientation to developing a solution that is sustainable so that's just one of the best practices that we use as you're speaking it's making me think about unit operations bumps right right right yeah yeah unit ops are back in there and then you have to read to and then you have to constantly tune it right back and feed-forward loop constantly terms of how do you now tune the answer to optimize the solution in maximize output so that's private equity and a chemical engineers lexicon so you know tell us a little bit about Vista I'm curious about in particular kind of conflicting things I think you were the visionary right you put together something you wanted to in some sense imprint that your you know what your concepts are but you also have to remain flexible yeah and that's a you know that's always I always also have the same challenge right you know how do you I'm one hand you don't want to let it go because you know you're sort of wanting to get to something you know bigger and better right on the other hand you need to be opportunistic and you learn flexible how do you manage so listen for this audience which I think are made up of entrepreneurs it is important to have certain philosophies in managing your business there's a couple that I use I'm gonna focus on one here one is I call the principle of self replication right because you all will pretend that oh I'm the best representative of every person in my company and they should act just like I would act there's a problem with that okay because you actually aren't the best person in that job because it evolves and all those sort of things so you actually have to create what I call space and volume for people to fill with who they are and this is the principle that I call you know you need to create a platform where people can become their best selves okay and becoming your best self is not only understanding why we're doing what we're doing but you have to have room for them to contribute their capabilities into your ecosystem and into that ecosystem where it can now evolve into a better a better solution for the collective and then you have to have mechanisms by which that naturally occurs for instance I have these things called B P SSE's best practice sharing summits every month somewhere on the planet our top 300 400 executives by function are getting together okay for two or three days and it might be sales marketing GNA whatever it might be and in those two or three days you know of 50 portfolio companies there'll be you know 400 people in sales you know regional sales reps you know national sales rep etc and they're gonna teach and train each other on these best practices over two and a half in three days and so those who are doing the teaching of course now have the ability to what I call Express the refinements and Express how they've actually implemented some of these best practices and how they've been effective those in the audience who've just joined the portfolio we've just bought the company okay now have a chance to participate and see and learn and hopefully becomes aspirational because it usually does this a man you know in a year or two or three years I want to be the one up there teaching my colleagues and then you create a peer mentoring Network but it's very different entrepreneurs as you probably know as if you're executives I mean that's a lonely environment it's a lonely world who do you talk to right well if you think about you're in a company of 200 employees at five you're running sales and services well who's your peer group who do you talk to about some question that you have where there's not a conflict so I like to think that we don't like being Dean it kind of here it's a lonely job right you know but you can go talk to your president wonderful smart and helpful but you kicked you out if you don't do something I do it but that's an interesting thing right you know and so for you entrepreneurs in this audience I would also recommend YPO young presidents organization if you could join that and then the more important part of YPO people tell you in the networking all that that's nice but the important part of it is actually your forum okay in forum is where you pick six or eight people or they pick you they have to be in a business it's non-conflicting and then you will always say oh I don't have time for this you'll find out that's the best time you spent that month because you can actually now talk about ideas you people need to have some peer-to-peer network and mentoring and you know engineering school gives you that in some respects at that level and that's an important part of the refinement ultimately as an entrepreneur and an executive is to create a peer network to engage with so those are the things I think that important as entrepreneurs to focus on if I relate it back to me I might my comment about the deans is that actually the deans get together right and they you know have forums you know in a similar way since we have an audience of entrepreneurs I was wondering if you might say a word or two about what you consider to be the traits that lead to success sure as an entrepreneur yeah price to this to this group yeah probably if you're in the software or data or technology enabled business the most important thing you can do is first come see Vista before you do anything else okay yeah I mean so there's some picking up on a little bit of that I like to tell people that you know being an entrepreneur it is it is a lonely job if you make it lonely but you've got to find call it those penalty-free environments so that's kind of point number one you have got to enable a culture where where the the evolution in the development of your people is central to that culture not what I call the dictatorial pathways on which the way they should do things so that that would be point number two create a platform for people to become their best selves so that's that's how I characterize that I think it's critically important to always be aware of you know the the competitive dynamic in your market but not aware of it just in a point of fear but in a point of Education you should you should make sure you were continuing to inform yourself as to where your market is going and don't be so egotistical to know that you think that you know everything but to be open yourself to to be getting informed on where your markets going so those are so when I'm looking at companies or we're looking to buy businesses and the management teams quote-unquote coming along with it as opposed to a spin out of a carve out and there's no management team or might be you know an orphaned asset or what it might be we're looking for those things we're looking for those intellectually curious executives who can take take feedback who can take information and and relate it into their markets and be an expert in that market say this is how this is going to translate because our business is constantly changing you know five years ago we weren't talking about AI and ml and today ai and ml is a part of every one of our strategic plans for all 50 companies okay eight years ago we were in about cybersecurity to make sure it was a part of the plan you know seven and six years ago so our business has to constantly evolve today we're now we're talking about how do we bring you know the web of them called a blockchain fabric across our portfolio companies and guess what on the future we're looking okay how does quantum computing change all of this right so we we have got to if you don't have an environment in a culture in a company culture that can accept and welcome refinements and accept and welcome you know changes in either platform or delivery or market then then you've got a company that is destined to die a quick death so as entrepreneurs and as leaders of entrepreneurial organizations you have to keep that in the forefront of your mind and design your culture that way and that's the hardest thing to teach but when you get it right it will last for decades and that's an important part of that that dynamic I'm curious and a slightly different aspect of the same question about just the whole issue of risk and the degree to which are you is it something where an entrepreneur is someone who accepts a higher level of risk than the average person or is it really is it really the kind of thing where you're describing where you're you're constantly analyzing to kind of you know in somewhat in some sense de-risk the directions you're thinking about yeah so I'll put it into camp so when I first started Vista I had a a a I'll call it a a wonderful investor limited partner who saw the wisdom of this wonderful idea but created what I call draconian terms to manage risk to make sure that we were not going to lose money okay and if we were it was kind of coming out of my hide you know all that's what literally so was one of them so you know and I can tell my team you know we've now done 294 buyout transactions and have never lost money on a buyout ever in seventeen and a half almost eighteen years okay Wow there is there's there's no private equity fund I on the planet of this size who can actually state that part of that is the design the industrial design of Vista which I explained a little bit about that process orientation and industrial design of Vista and I said you know I taught my team not to lose money elegantly at all right so they're there and that's culture okay and so in some cases you got to manage okay that that downside risks are the detriment of potentially capturing all the upside okay and as entrepreneurs you have to think about that that's a natural dynamic but depending upon how you're capitalized you may have other degrees of freedom a little bit later and for many of you because of this democratization of computing power okay point number one the rate of change in your industries is far more accelerated than it was call it eight or nine or ten years ago so you're gonna have to about think about risk very differently than probably when you started your company because someone can come and disintermediate you you know in a moment I can guarantee you a year ago there wasn't a CEO supermarket on the planet thinking Bezos was coming in a supermarket business hmm and he just changed everything because he had a platform okay so and I can guarantee you three weeks ago there wasn't a pharmaceutical companies on the planet thinking that they were going to move it to the pharmaceutical business right so you've got to think about it in that context because if someone has developed a platform a software platform it is easy to migrate into different industries and disrupt those industries if you don't have those competitive advantages or sustainable advantages in that context and that's where the risk comes in do I hire do I build out the next level of AI into my business processes so I can offer next level solution two years from now or do I save that money today and do something else mm-hmm okay because if somebody's out there developing that on your platform a on that on that platform guess what two years from now you may not have a business to defend so it's a constant battle so that's what you have to be open to - you know accepting risk but you have to also be very open to what the solutions that you can bring in to mitigate and manage that risk so those are the dynamics that you're constantly constantly wrestling with you mentioned you know that the this I wanna see what kind of pictures he's drawn over there that's pretty good we sure you know we've you had an argument with your wife you map out a solution yeah well did he say he doesn't know this is what you said it's right here I need to talk to you man we gotta so you know you were you're talking about how technology is I mean evolving and I wonder you know cuz you're in this enterprise software business that you know how do you anticipate where things are going and you know your your point at the very end when you said something could come along that's disruptive yeah you know you could lose you know a whole hole just there's no way in you know again you know principles of self replication in that guy you gotta you know replicate your paranoia right and in you know across the whole portfolio you know we have I want to say tremendous insights from each one of our portfolio company as to what's happening in each of their markets right through constant updating and then you have to be thoughtful and anticipate well if they do this I mean you've got to play this game of chess constantly in that context and then you have to say how do I bring forward strategic mechanisms that cause dramatic change across the portfolio say a IML I will guarantee you we're the only private equity firm in the world who has a strategic a IML you know solution that we're driving across our entire portfolio 50,000 employees are going to be educated in AI ml over the next 12 18 months right because the democratization of that is going to I think enable each one of those employees to contribute and levels that is going to be you know unseen or unfair for any other private equity firm out there great this is the Vista University that's what that's one of the delivery mechanism we're having to keep a sharp eye on what pleased I said we will lease in some some intellectual property to you from time to time thank you yeah we were teasing cuz I think we are three times bigger than out I didn't mean to say that out loud I think you might have said it out Wow yeah okay I could be wrong yeah but that democratization is is an important part of how you because if it's all siloed again for you entrepreneurs if all your intelligence is siloed in the top three five eight people in your company I will guarantee you you're not collecting what's what's what's out there okay you you've got to make sure you have empowered people in your organization to bring back information feedback as to what competitors are doing on the one hand and what you should be doing because customers need this on the other right customers are out there demanding sets of solutions that don't exist and if you have an existing customer that is a wonderful asset yeah okay that you now have to think about how you mind to develop some products for them or for their ecosystem the way we like to think about it we're not just serving our customers we have to serve our customers customers enable our customers to be a part of an ecosystem as opposed to let me just sell you some software that helps you and helps me write so that's a dynamic of a mindset that's important to to inculcate in culture and deliver in a repeatable fashion across a broad scale organization yeah that's very interesting that's an engineering thing yeah yeah there we go there we go hey I'm gonna switch topics a little bit so you know this was also mentioned in the introduction you've become one of the world leading philanthropists and you know of course you know incredibly generous gift very grateful to it to Cornell to also the African American Museum and in other places but it's also brought you out of the shadows in some sense like you've become quite visible say a little bit about you know kind of what drives you as far as that's concerned kind of where you see it going sure so there's a whole bunch of factors that you have to think about one of them is what I call really the you know at its highest macroeconomic level you know look half the world's population is going to be on the other side of the planet by 2025 so that's kind of point number one right point number two if we don't take advantage of all of our citizenry here in America I tell people we're going to be downloading software not uploading it okay so we have to enable every citizen to have an opportunity to participate in what is this fourth Industrial Revolution so the way I think about it is we have to create all of these on-ramps and the good news is technology enables these on-ramps to happen much more quickly you know there are software platforms out there you know cloud based computing and the capabilities of enabling more people to participate there to participate in this economic shift that's occurring I think we had jet comm executive speaking earlier every single industry on the planet is digitizing and the massive disruptive effects of it we only feel some of it here in America we kind of owe Amazon okay there's two or three or five and uber and all that let me tell you in other parts of the planet it is completely disruptive there's a company in Indonesia okay that was visiting with a couple weeks ago that started off as a transaction processing business you know labeled as a bank they democratize what I'll call software programming so they didn't go hire a bunch of new software programmers and engineers they actually trained to their people okay and didn't hire one additional person yes people required ok this company in the last eight years went from a four hundred million dollar market cap to a thirty-five billion dollar market cap that's the same size as credit suisse and a little bigger than Deutsche Bank in Indonesia okay ninety percent of their transactions are done online or mobile and they've only got fifteen percent penetration in their home market now if they ever start to export those platforms that platform can be two and three times the size of some of the banks you all are using today so technology and technology development is absolutely changing everything so to a great extent the way I think about it is we have to enable our citizenry to participate in this transformation because if we don't I will guarantee you because the massive population is on the other side of the planet and the fact that they are becoming more technic enabled not burdened with what uh some of the legacy systems that we have had in some respects their innovative cycles are gonna be faster okay and their capabilities to capture markets is going to be accelerated its basic economics and its basic as we think about it so I want to ensure that our citizenry have that opportunity so that's what I thought I focus on so how do we do that so you know this the your your comment about wanting to activate the entire citizenry what are your thoughts about its different levels I mean so at the one level you know I focus and we've you know on a thing called in power in power basically takes high school graduates returning veterans and teaches them to become IT services reps right nine months you can start off and go from making $8 and $9 to $10 an hour to making thirty five forty thousand dollars a year as an IT services rep so that's right not everyone's gonna be you know a IML programmer but not everyone has to you know you know sweep the streets we're living you see what I mean so it is creating those on ramps and we put these in what I called embargoed communities the first one that we opened it as part of the program was in Baltimore okay a block away from where Freddie gray was killed the second one we put in st. Louis you know in within a mile of where Michael Brown was killed okay all those because that citizenry is actually feeling disenfranchised so where do I go how do I you know how do I you know lift we've now had over I think 120 graduates out of just those two programs in the last year and a half okay and now our programs are going from 30 to 60 to 90 people and graduating everyone in classes that is one level okay then the next level courses are things we're doing you know at Cornell and what we're doing with the UNCF and how do we drive these stem based programs into communities that haven't had access because if we don't take advantage of the brainpower that we have in this country it's going to be a tough slog for our kids and our kids kids and I have always found that that you know as you call it brainpower it's just distributed to you know to all people so if we exclude any any particular that's a great point so remember this aptitude test I was telling you yeah we get the same distribution in every community we take eight point eight percent of the population in that community gets an a 14 percent get a B period I don't care in a planet you are that's what you get okay so we hire from that 25 plus percent plus or minus that's what we're going after now if you just take that basic math and you look at the population okay on that on the other side of the planet they have more people who get a's than we have people okay it's actually not that complicated is basic math right even art students can do that right I should have said even electrical engineers I'll work on but I think again that's an important dynamic that you just have to understand and look at a point in time when there was scarcity and computing power and then you didn't have to worry about it because people don't have that well not anymore yeah you know there's was was an executive in India and he is building out in putting thirty billion dollars in building out you know 4G broadband network throughout India and it's connecting listen to this number one point nine million schools 1.9 million schools okay we own a company that we touch about you know half the u.s. K through 12 population we have 8,000 school districts where our companies power school we get to you know seventy five thousand schools 1.9 million schools now you enable those kids and do the distribution okay eight point eight percent get a is not the 14 percent get B guess what's gonna happen in the next generation people who saying I want to change my station in life and I know the best way to do that is to write software in the build code and to actually develop a product that has some meaningful impact on either by community or the economics in my community it changes everything and the economics change you know dramatically across this planet so it is it is a an imperative that we focus on this issue yeah absolutely so you know just I'm curious about your thoughts in terms of again I'm thinking about our audience here you know in you when you started your company I guess it was 1718 years ago I wonder what do you think about today so for the young people who are thinking about starting companies today is it harder easier there's there's no there's no greater time I think to be to be an entrepreneur at least in the world of enterprise software or you know I laugh a little bit with a little bit of fear in that laugh tell you why you know the paranoia that no it is it is because 10 years ago eight years ago everybody wanted to be Mark Zuckerberg right and I was fine with that everybody's going after the consumer I'm like great all those big brains and smart minds going after those consumer businesses everybody left enterprise alone right well now everybody wants to be Marc Benioff great was like how do I serve the businesses how do I serve businesses just like if you think about it the the be example okay that's not a consumer business that's business the business you know how do I enable these beekeepers yeah okay to be more effective in the job that they do we need to talk about the pricing model who come see me about that she's right over there my wife bought me a couple a bee farm last I don't have 3000 I've got like four but we should talk about we make we make great honey those cold was honey for my honey that's the brain Malibu farms it's awesome anyway anyway we'll talk but but if you start thinking about that whole dynamic business-to-business and you start to identify you know the economic rent savings three hundred thousand dollars per I don't know how many hives it was but you know three hundred thousand dollar savings for high by the minimizing yield ratio that is across every single industry yeah okay because software is massively productive we do a study every once in a while we did last time about four months ago across 48 of our software could actually 35 M of our software companies the average ROI of the products we sell to our customers this is our products to our customers 707 percent ROI payback less than five months think about I know we got pricing problems too that's what we need to talk because we just raised the price four times I feel good but if you are in the real estate business and you decide to actually make a building energy-efficient you know double pane windows and you know LED lighting and you know it's a forty five percent ROI seven hundred and seven forty five percent ROI if you implement you know little process controls right Six Sigma in a process industries plant two hundred percent ROI seven hundred percent you see the point and all you smart people from McKenzie you tell us that your reports give you three hundred percent ROI and I believe you kind of but that's the internet so what's actually an you know occurring is we actually have the ability to to to analyze what the savings is mm-hmm okay for enterprise software in a way that you can now go sit with customers and say oh by the way not only can I deliver the savings and more user-friendly and all those sort of things but I can distribute it in a cloud architecture and so you actually don't have to have a whole lot of up you know initial cost right you know the key to that is just don't compete with any vista companies and you'll do just fine I think it is easier to be an entrepreneur preneur today because of the distributed computing power and capabilities that are out there the hard part is is people and talent that's the hard part so just any any final thoughts I think we're just about out of time always hire Cornel Kimmy as your first second third fourth and fifth employee no I mean listen this is a wonderful time to be an entrepreneur I think you're gonna see over the next 10-15 years again a dramatic shift and what are the companies of the future you know half of the fortune 500 companies since 2000 no longer exist ok I mean it's a staggering statistic ok and there's a massive amount of capital that is now actually flown flow flowed into the VC market in the private equity market I think the last count was was 963 billion dollars in private equity of dry powder day okay and if you think about it there's been half the number since 1996 of publicly listed companies that are now still publicly listed so if you think about it it's the private markets that are fueling this growth and those private markets have never been more open they've never been more receptive to entrepreneurs and to people in companies who were changing the way business is done so you like all things I know you and I wish we were 25 again to start this over we got to go with what we got now but you know if you are actually starting a business now it is a wonderful time I think to embrace all the opportunity that that's happening because of the dislocation disruption and availability of tools yeah you know back in our day you used to have to sign up to get computing power and a half hour at a time you all get it any time you want you know day or night so so it's a great time I really want to ask the audience to thank Robert oh thank you thank you thank you thank you [Music]

Channel: Entrepreneurship at Cornell

Views: 21,501

Keywords: Robert Smith, Vista Equity Partners, Entrepreneurship, Entrepreneurship at Cornell, Cornell University, New York City, Business Advice, Career Advice, billionaire, cornell engineering, enterprise software, BET founder

Id: VfOUUrTggwo

Length: 46min 12sec (2772 seconds)

Published: Mon Dec 04 2017