- You can actually make
more money being smart than you can being strong or fast. Running your own race
demands trusting yourself even when others don't. This is not a lifestyle business. And if you want to make
it a lifestyle business, this is the wrong business to be in. - He's the founder, chairman, and CEO of Vista Equity Partners, a firm with over $26 billion under asset control. He's ranked by Forbes as the 268th richest person in America. He has an estimated net worth
of over three billion dollars. He's Robert F. Smith, and here is my take on his top 10 rules for success. Rule number two is my personal favorite, and make sure to stick
around all the way to the end for some special bonus clips. Also, as Robert is talking,
if he says something that really, really is meaningful to you, please leave it in the comments below. Put quotes around it so other people can be inspired as well, enjoy. (whooshing) (upbeat music) - Intelligence can create huge profits. And in fact, you can
actually make more money being smart than you can
being strong or fast. Okay? And so the importance of
developing intellectual property cannot be underestimated. 'Cause I want you to
think about something. Intellectual property, no one else can take that from you. Point number one, if you manage it right. Point number two, it
is constantly evolving, and it actually takes no capital. If I were to go into real estate business, it takes me a whole lot of
money to go buy a building and get in real estate business. Intellectual property, I
just have to think through how it actually works,
and then develop it. And that's what really
launched me on the path to saying, you know what,
as good as I thought I was playing football and all
those wonderful things, and my mom was a wonderful
governor to my ambition. She said you're a far better
scholar than you are athlete, which kind of hurt my
feelings at the time. But she was absolutely right, and I started to turn my
attention to what I call developing my mind. Running your own race
demands trusting yourself even when others don't. Because guess what, there
are a lot of people, good people, people who
love you, who trust you, and who you love and trust, who want the best for you. And you'll come to them
with some ideas about what you want to do and
how you want to do it, and they're going to say that's crazy. Just like when I left
my first engineering job at Kraft and was telling
my grandfather I was going back to business school, and he said that's a great paying job, that's crazy. And when I finished business
school and decided to join the tumultuous world
of investment banking, my friends and my family
spoke up with concerns about my sanity. And when I left Goldman Sachs
right after we'd gone public to set up a private
equity firm called Vista, my mentors and colleagues at Goldman Sachs thought I was crazy. And to top it all off, when
I told 'em I'm going to start a firm, we're going to
focus on enterprise software and not be diversified like
all other private equity firms, and I was going to hire
a team of smart, young, talented people who'd
never done this before, everyone knew I was certifiable. And I did this, of course,
in the spring of 2000, about two months before the
entire tech bubble crashed. Well, all I can tell you
is I've never been mad at these folks, in fact, I'm
grateful for their advice and their concern. Because in their caution,
I found my courage. In their doubts, I found my resolve. And in their warnings, I found my voice and chartered my own journey. And I'm proud of the Vista story. We take risks, we do things differently, and we listen to our own
voice, we run our own race. And it has worked. We're now considered to be the number one private equity firm on the planet and have been so for the last decade. - And did you go straight to
Wall Street after college? - No, I worked for about six
years in applied research and development, you know. One of the joys of being
a chemical engineer is, you know, we talk about becoming
the modern-day alchemist. You learn how to create
things, transform matter from one form to another. And that's what was important
to me, I wanted to be an inventor, and so I
worked for about six years in applied research
development, got a chance to travel all over the world
with big companies like Kraft, General Foods, and Air
Products and Chemicals, solving some very complex problems. And with using my engineering
skillset, and I loved it. Absolutely loved it, until one day I was sitting there with
the head of my division and head of marketing, the head of sales, head of development for, you
know, it was a small division, but then Philip Morris,
'cause it's part of Kraft. And I realized when we went
through our six most important strategic priorities, I
was leading five of them. I was half the age of
everybody in the room, and I know I was making a
third of everybody in the room, and I said I'm either
doing something very right or very wrong. And it was a bit of both, right? And so this is kind of that
lesson of the realization of worth and self-worth,
right, and I said, you know what, this is a great experience. I'm having fun, I got three promotions in like 18 months 'cause
I was doing all these great and wonderful things. But then I realized there was probably something else out there. That you are enough to
be who you want to be and to create what you want to create, you have to make sure that beyond the intention that you put out there, you put action to support the intention. Don't say I want to be a millionaire, but don't take the activities to do it. Or I want to be the best at something but don't practice it. It's important to understand
that you are enough pieces, you know, put in the
vision, have the vision of what you want to become, but you have to put consistent
action behind that vision in order for that to manifest. And it has to be consistent. I have the good fortune to be able, I was invited here by one
of my fraternity brothers, Louis Debias, and I remember many a day, Louis and I, Friday night,
we're going to go to the party, and we went to the party,
and we finished the party at 2:30, and three o'clock,
we were back studying so that we could do well
on an exam on Monday. It is the importance of knowing that it's your own intention and
your power and your actions that can actually lead to the outcome that you want to have manifest. And the first and foremost
important thing about running your own race is dreaming big. And here I'm called back to my childhood when I was just starting
elementary school. At that point in time, the
Supreme Court had just ruled that public school districts
could pursue desegregation by using forced busing
to achieve racial balance in their schools. In fact, I started my own
education as a first grader being bused to a school across town, even though my father was a principal at a school five blocks away. Although I was a live subject
in one of the nation's most controversial legal
debates, I frankly didn't know what the big deal was all about 'cause these kids who didn't look like
me sure acted just like me. But desegregation was a
big deal to my parents, and leaders of their generations
knew that great change was in store, and it was
the right thing to do. And they often met with resistance, and often violent resistance. But because of their
struggle, their sacrifice, I received a great gift. And that's the gift to dream big. I knew my history, I remembered
the pride of my mother telling about when she
took me and my brother, brought us back to Washington, D.C. and held me as a nine-month-old during the March on Washington
when Martin Luther King laid out his dream for
equal and harmonious meritocratic America. And dreaming big to me
meant knowing my history, but not being bound by it. It meant harnessing the past
to drive me into the future. It meant grounding myself in who I was and where I came from so I could soar to become
who I wanted to become. The sponsors of Robert Smith's career only did so after I demonstrated
that I'm willing to make the commitment to my career. It's a two-way street,
it's not just, oh, here's, you know, the person
you're going to sponsor. Make sure that they get on good deals. No, it is, they see you in the office, you're grinding a hundred hours, you're getting it done, you're making sure there's no mistakes, and
if there is a mistake, you correct it. You're following up,
you're reaching outside of your knowledge to go learn more. When you do that, sponsors
are more than happy to then take credit for you. Okay, and that has been my experience, but it has all come through you got to demonstrate
that that's who you are and that's your priority. If it's Friday night and it's five o'clock and your sponsor seeing
you leaving 'cause you got, you know, happy hour with your boys, well, guess what, and I
mean, and they're there. You got to be conscious of
that sort of stuff, okay? I like when they come back in on Saturday, 'cause they did come back, and I'm wearing the same thing I wore
on Friday night, right? Okay, this guy's dedicated to his craft. And so when this deal happens,
they're happy to stand up in front of the managing
principal of the firm at that time to say, hey,
Robert did this work. You see what I mean? So it's a two-way street. And sponsors, you know,
again, I have the opportunity, and I do in my firm,
build and develop people. But we have, when we do our reviews, part of what we're looking
at, do you have that kind of grit, are you dedicated to this? This is not a lifestyle business. And if you want to make
it a lifestyle business, this is the wrong business to be in, okay? So that's, in the world I
live in, that's something we think about and we talk
about in that context. That's just the nature of it. So we look for, you know,
again, I will sponsor those, any of my folks now who
have not grown up with me in this business, I sponsor
them because I saw them putting that level of effort and energy in 15 years
ago, and guess what, they still do it today. In America, education is not enough. Especially for us as African Americans. You also need to have
access to the economy. And so as I'm now going
from elementary school to middle school to high
school, I started to actually think about, well, what
is access to the economy? Why do they live in
that great house and, A, their father is a contracting, but owns his own contracting business. And yet, down the street, I had a friend, his father worked for a
contractor, but didn't own his own contracting business,
and he lived near us. And when I looked at
that, I said, you know, part of what has to
happen, and in my mind, was I needed to, and I wanted
to become a business owner. And that was early on,
so literally, you know, I started my first business
when I was probably nine or 10 years old, I
was selling golf balls, and I cut grass, I did
all those sorts of things, 'cause the fact of the matter
is, I actually didn't like wearing my brother's clothes
until I was 14 years old. You know, I wore hand-me-downs basically until that period of time. And I don't know if any of
you have experienced that, but, you know, kids can
be cruel in some respects. But part of that also hardens
you to help you understand and help you to reach some of your goals, and part of my goal was to be part of an economic class in
America where I could buy my own clothes, the ones I wanted, and buy the shoes that I wanted, and go the places I wanted. And one of the advantages
of, again, having parents who wanted me to read and forced me to read, I got a chance to read
a number of things, and one of the things that
inspired me early in my life was actually, believe it or
not, the James Bond novels. Because as I read them, they
took me and transported me to places that I had no idea
actually really existed. And if you ever seen any
of those movies, I mean, they characterize him in
these movies, and I was like, wow, this is pretty terrific. I want to figure out a way to
actually get to that place. And that is part of the
impetus behind me working hard and also driving myself to go figure out how to create an opportunity that I could actually make big and lasting and have an impact. So when I got to Bell
Labs, they shared offices, and I happened to share offices with a PhD in chemical engineering. And this man had patents that
were probably 30 pages long. And he had become one of my first mentors. And on my first day of
work, as we got settled into his office, he
turned his chair around, he kind of looked me up
and down and held this computer chip in front of me and said, "This is an operational amplifier. "It's failing in our Merlin
systems out there in the field. "You need to figure out why it's failing "so we can fix it. "If you have any questions, ask me." And then he turns around. And so you see, unlike today's
technically sophisticated high school students, I had no idea what an operational amplifier was, what it was supposed to do,
what this one didn't do. And so before the days
of Google and Wikipedia, we had this thing called the library. And I went to the library
and I pulled every book on operational amplifiers I could find. I talked to everyone in
the halls who would listen and asked questions. And by the end of the summer,
not only did I have an idea about why this wasn't working,
but I had built a system that simulates the field conditions that causes them to fail. And then with my mentor's
help, we fixed the problem. My guess is even now, I'm
probably the most knowledgeable intern at Bell Labs on
operational amplifiers in the history of that company. But the important thing was
the challenge from my mentor was more than to teach
me something about this obscure integrated circuit. It's a challenge that has
reaped rich dividends for me over my entire career. It is the joy of figuring things out. - What do you think the
accelerators to success are, particularly in environments
where structures are not designed to help people succeed? - Sure. This is complex. There's an education piece. Then there's a knowledge piece. And then there's a
practitioner of a craft piece that all are important, and
you do need to have guides along the way. At least if you're a
person of color, okay? And I say that because, you know, being a person of
color, I see the difference in my experiences versus others in what their experiences have been. And I wouldn't say that it is, who knows it's overt or
not, I just can tell you what my experience has been. So first of all, you
have to do well enough, no, actually not. You have to have a desire to be great at what is you want to do, first of all, to do this business,
that's the first thing. There's a fundamental base
level of understanding of, you know, basic math. You have to be good at it,
okay, really good at it. And then from there you have to understand and start to listen to the structures around how deals are
done, and there's a whole fact pattern capturing that's important, that while you can listen, the only way to really learn it is to do it. And you have to become expert,
and there are talks about, you know, what is an expert? Well, an expert's someone who dedicates 10,000 hours to their craft. Okay, that's a lot of time. Not over 20 years, but
in as compressed a period of time as possible. The advantage of going
to these investment banks is in a heady environment,
that happens, you know, in hundred hour work weeks. - [Woman] Right. - Right, and, you know,
while all your friends who you graduate college
with are going out on Friday night and Saturday night, guess what, you're
working, you're working, you are working. But that's how you build that fabric. To be an expert at your
craft, you cannot do this business well if you are
not an expert at your craft. So all of those things, first
of all, you have to have structures and opportunity to see it. Then you have to dedicate yourself to it. And then you have to have
people who can help you understand and navigate to some extent why certain deals went one
way and why certain deals went the other way, and
it's highly nuanced. It isn't something that you
can just read in a case study. You have to live it,
and you have to live it through the eyes of
someone who has lived it. And to the extent you see
people who have lived it and you're in that environment,
you have to now seek out the time and force that
engagement of why it went one way versus another. And see how that fits in the
context of the deal business. So those are I mean,
it's complex, and it is. But the rewards, beyond the personal
rewards, but, you know, the rewards are just astounding, okay, in terms of personal growth,
personal development, and frankly, the opportunity to then train and build others so that
they can become experts in their craft and realize
their dreams, right? So I think that's the arc
of the opportunity there, that is in this world, I
mean, it's a rarefied era, people who are really good at this and who really get an opportunity to do it and practice it at a size
and scale that matters. You know, in this world, the importance of actually
going through the process of understanding what the problem is and then figuring it out yourself. And every now and then you
need some help, that's fine. But if you get too much
help, you never figure out how to do things, and you
don't develop the grit. And some of the older
folks in this audience are shaking their head,
yeah, you got to have grit, and grit means getting
turned away from things 14, 15 times, calling
someone every two weeks, you know, every day for five months, and then finally it materializing in something that you want. And discovering the joy of
figuring things out means fight through those problems. Understand and learn how
you address those problems and come up with the
answers to those problems and a solution that is uniquely yours. That's an important part of
growing up and solving problems, 'cause if you can't
solve easy problems now, you will not be able to solve
difficult problems later. - Thank you guys so much for watching. I made this video because
Arlethia White asked me to. So if there's a famous
entrepreneur that you want me to profile next, leave
it in the comments below, and I'll see what I can do. I'd also love to know
what of Robert's message had the biggest impact on you and why. What was your favorite clip,
what did you learn from this, how is it going to impact
your life or your business? Please leave it in the comments below. I'm going to join in the discussion. I also want to give a quick shout out to Jason "J-Ryze" Fonceca
from ryzeonline.com. Thank you, J-Ryze, for
picking up another copy of my book, it really, really,
really means a lot to me. So thank you guys again for watching. I believe in you, I hope
you continue to believe in yourself and whatever your one word is. Much love, I'll see you seen. (whooshing) - I went to the same high
school in East Denver as my father did, Denver East High School, and I remember taking a
computer science course. And at the time, they
introduced this thing called a transistor, which is the
building block of computers for those of you who don't know. And transistors were
invented at this place called Bell Labs, which had a facility
about 20 miles from my home. And after that lesson, I went and I dug up the telephone number to
the Bell Labs facility, and I called 'em, I said, "Do
you have summer internships?" They said, "We absolutely do." I said, "Fantastic." They said, "If you're between your junior "and senior year in college." I said, "Hey, I'm a junior in high school, "I'm taking advanced math
classes and computer science, "getting all A's, just
like being in college." (audience laughing) They said, "No, it isn't." (audience laughing) So I called every day for two weeks straight. The HR director of course
stopped taking the calls after the second day. And I left a message with my phone number. Then I called every
Monday for five months. And every time I called, the
receptionist just chuckled, and she took my name,
and she took my number, and she said, "We'll get back to you "if there's an opening." And I kept at it. And to my surprise, the
human resources director called my house in June and said, "Listen, an intern
from MIT didn't show up. "We have an extra slot, we're
not promising you anything, "but why don't you come
on in and interview." Now of course I knew I
was the most qualified candidate for this job. (audience laughing) And the truth is, I went in, I interviewed, I got the job. So the important thing that I
want you to think about here is the persistence to get that job led to me working at Bell Labs for the next four years, becoming a co-op student,
and ultimately finishing with a degree in chemical
engineering from Cornell, all from being persistent.
