How this economist reluctantly became one of the most successful tech execs you've never heard of
Today he's the COO and cofounder of billion-dollar startup Qualtrics, working with his younger brother, CEO Ryan Smith.But Smith doesn't like to work, "as a matter of principal," he tells Business Insider. He likes to travel.
Teen tech star
His phenomenal career story began when he was in high school in Utah.He got an internship at word processing software maker WordPerfect, which was bought by Novell. He worked his way up to product manager by age 18.
But Microsoft was killing Novell, so Novell hired Eric Schmidt as CEO. That's when the teenage Smith first met him.Although Schmidt didn't end up saving Novell, he did give it a few years of breathing room. Then Novell began tanking again, and Smith quit his high-paying job to go to college in London, studying economics.
Juice was started by Kim Scott (who would later lure him to Google). The company designed software for the financial services industry.
It launched on September 10, 2001.The next day was 9/11. New York was in tatters, as was Smith's apartment which was near the World Trade Center towers.
Ultimately, the company bounced back and was sold to Microsoft. But as soon as he could - and before it was sold - Smith left New York to decompress. He spent a year hitchhiking around South America.
Having hitchhiked around Africa in college, he was an "incredibly seasoned traveler" who wasn't afraid of dangerous situations, he said. Still, his trip ended in Caracas, Venezuela, when he got caught in the "oil riots and coup against [President] Chavez. It was really tense," he said. "Tear gas in the plazas and everything else."It was time to go home to Utah.
A new product and a fistfightBack home, his dad, BYU professor Dr. Scott Smith had been diagnosed with cancer. The prognosis wasn't good. His younger brother Ryan had moved home to be with his dad. They were working in the basement "twiddling around on a survey product" and they asked Smith to help them sell it.
He looked at the product, declared it "worthless" and built them a new version, which would ultimately become the product used by millions of people and lead the company to big profits and a big valuation.
The brothers and cofounders are opposites in every way; they disagree often, but they rarely come to blows.They usually fight, dig in, then compromise, he said. "Normally, in every argument we're both right."Meanwhile, his dad made a miraculous recovery thanks to the doctors at the Huntsman Cancer Center. (Qualtrics just donated a $1 million dollars to Huntsman and launched the Five for the Fight campaign).
With the product built, his dad on the mend, Smith hired the company's first engineer and told his brother he was leaving again.
He didn't want to work on Qualtrics. That was "always Ryan's dream," he said.He wanted to travel. He bought a ticket to New Zealand intending to hitchhike through Asia.
Right before he left, Kim Scott called. She was working for Google and was offering him a job that would change his life, and Qualtrics, forever.
Dragged to Google
Smith didn't want to work there. "I was opposed to work on principal. I was going to go traveling. This tells you how stupid I was," he said.
"I think the only reason I got the job is that I didn't really want the job and they thought I was so humble," he says. 'It was like, 'How are you at this?' I was like, 'I suck at this.'"For instance, he says of his programming skills, "I'm a hacker at best. I have good design skills, but I would not consider myself an engineer. I'm not a computer scientist. I'm an economist. Compared to Google engineers, I would never make it in the engineering department."
Scott disagrees, calling him a great coder. He saw Google's daunting hiring process as a challenge, and did well, she remembers. And after he was hired, he earned the respect of the Google engineers, who even let him code a few things himself, the first non-engineer at Google given that honor, Scott said.But, according to Kim Scott, Smith's real gift is guiding engineers to build products that wowed the business side:
I could go to him with an acorn idea and he would go away for a weekend and come back with the whole oak tree, taking conceptually what I meant, making it look beautiful and actually building it. He gets more work done in a 24-hour period than any other human being I've ever encountered.
From Google, to quagmire, to QualtricsHe took the job at Google and discovered he didn't fit in, he recalled, thanks to his time at Novell.
Business Insider / Matthew Lynley
With Scott's help, he learned the Google way and did well. He worked on ad products, then on internal tools for the sales team. He learned how to hire and manage.He got stock options, which a New York financial industry friend advised him not to sell off every month like the other employees did. So he held onto them all.
One day, he went to lunch with his friend, Deep Nishar, another well-respected product manager. At the end of lunch, Deep asked him to lead Google's products in China.
"It didn't make sense. How do you lead products if you don't speak the language? So I turned him down. Similarly stupid to turning Kim down," Smith said.Deep was also persistent, and eventually Smith was talked into the China job, working under "Kai-Fu Lee, the guy we stole from Microsoft," he said. (Lee's resignation caused Steve Ballmer to throw a chair at Lee, and declare war on Google and Eric Schmidt, court documents later revealed).
Unhappy with the situation, Google yanked its operations out of China, moving them to Hong Kong."I had a front-row seat through all of that," he remembered. The situation put him, a product manager, in constant contact with some of Google's most senior executives, including Schmidt.Meanwhile, Qualtrics was taking off, too. It had customers. It was profitable. Ryan now had 40 employees and he was calling Smith regularly for advice, hounding him to quit Google and come back to help at Qualtrics.
Ryan pressed: How high did Google's shares have to go before he was willing to sell them all and become wealthy enough to quit Google and come work for his startup? Google had been flirting around the $600 mark.
"And in a moment of weakness, I gave him the price," he says. It was a price that would make Smith financially well off for life.The day the shares hit that price, Ryan called Smith. "I sold all my shares the same day," he says. Then Ryan flew out, helped him pack and escorted Smith back to Utah.
'Rude' to VCs
The truth was, the whole China thing had also worn him out. But when he got to the startup, he said, "I was bored. A 40-person operation, it took me about 20 minutes a day to manage."
But the company "was a sales machine" and growing. Soon, he was back to hiring and scaling.VCs had also found Qualtrics and were calling. Ryan was "rude" to them, Smith said, and Ryan confirmed. He saw investors like predatory lenders. "Why would I want to take on a mortgage?" Ryan Smith remembers telling them. Ryan also turned down a $500 million acquisition offer.
Smith hated the idea. "I thought it was silly to sell any part of the company because it was doing so well, profitably, growing 100% year on year," he recalled.
Ryan got the terms that Smith demanded.And, looking back, Smith said, "Ryan was incredibly right." The cash and the board pushed Qualtrics to grow in new ways. Without it they would have gotten "fat and lazy," satisfied with the old products and the profits it generated, Smith admitted.As for the investors, "They've all done phenomenally well. A dream investment," he says.
While Qualtrics, a private company, doesn't release revenue, and is officially valued at a billion as of its last raise - $150 million in 2014, $220 million total raised - at one point, Smith told attendees at its annual customer conference last month that it was a "multibillion" company. It claims over 8,000 customers. In any case, it's still highly profitable.
As Qualtrics grew, Smith implemented all of the employee management tools he learned at Google, plus wrote a few new ones."I really love building systems that transform organizations" he said. And since Qualtrics is his company, he's been known to take liberties. "Imagine Ryan's surprise when one day he walks in and I've coded something that puts all the salespeople on a curve and made it public. That's radical transparency."
The company now has closer to 1,000 employees including seasoned leaders. It just launched a second generation survey products and new data analysis products, retiring the original product Smith built in the basement 12 years ago.
And Smith is once again talking about not working."I put all the processes, machinery, and management stuff in place to scale the organization. Ryan is the CEO. I've started to slow down and spend more time at my beach house to give execs more space to work. When I left Google, I thought I was retiring and I'd like to end up there again," he said.
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