Video Transcript of Robert F. Smith’s 2017 Cornell Chat on Entrepreneurship and STEM.
In this video clip of the 2017 Cornell University fireside chat hosted by the university’s former Dean of Engineering Lance Collins, Robert F. Smith discusses the influence of STEM learning on his entrepreneurship. In particular, Smith, the Founder, CEO and Chairman of Vista Equity Partners, delves into how engineering methodology steers his perception in business practices. Smith’s remarks followed his receipt of Cornell’s 2017 Entrepreneur of the Year Award, and the theme of the evening was entrepreneurship.
The following is a video transcript Smith and Collins at Cornell discussing the connection between entrepreneurship and STEM learning:
Lance Collins: Well, that, that’s incredible, because you know, it touches on something, a question I have been…
Robert F. Smith: …yeah…
Collins: …in my mind for a while. So I’m also a chemical engineer by training just so you…
Smith: Wow. Brilliant, see? I told you all. And you were head of the School of Engineering?
Smith: So recognize.
Collins: Yeah yeah yeah yeah yeah. There we go. There we go. There we go. Yeah, I’m totally I’m totally with you. On, on the other hand, on the other hand, I don’t remember the course that came, you know, in that chemical engineering suite that, uh, that told me how to become a private equity investor.
Collins: You know like I’m still, like I must have missed that missed that one.
Smith: Yeah, well you you you 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 a sum of the substances of our experiences.
Collins: But sorry, sorry, just trace it back. So you know you said a little bit of process.
Collins: Because you have attributed your success to chemical engineering.
Smith: Oh no no question.
Collins: On many many occasions.
Collins: Um and I just, if you could, you know, for the, for the audience just to kind of give it give it.
Smith: I didn’t do that to the Development Department of Cornell but yeah.
Collins: No no, you know, in all seriousness because I’d love to understand how, you know what you draw upon.
Collins: From that you know…
Collins: …way back then…
Smith: …yeah, yeah…
Collins: …to help you today.
Smith: Yeah so President Pollock and I were talking about this in the back room. So the about engineering is, as many of you probably know, in chemical engineering in some respects, what we think about our repeatable processes. You know, we get messy things to deal with as engineers. You know someone comes. 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 in and and 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 at Vista and 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 is a, you know, functional area in the business. If it’s sales or marketing or development. So, even the way we run our sales departments and work with our executives in in in and enable them to run their sales departments more effectively.
We create, for instance, a salesman factory. What does that mean? Well we have a system for hiring people. Let me give you all an example. You know I I, if you think about this world, 7.6 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 going to write this code, right? And every single industry on the planet is digitizing, every single one. They’re trying to figure this out.
But where do they get these people from? So now you’ve got to find smart people, and either they write code or or 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 1.4 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 that 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.
Collins: As you’re speaking, it’s making me think about unit operations…
Smith: Giving you goosebumps, right? Right, right yeah yeah…
Collins: …Unit ops. So back in there, you know, you’ve got your distilling column and you’ve got your reactor…
Smith: And then you have to retune. And then you have to constantly tune it, right, to feedback and feed forward loop constantly, in terms of how do you now tune the answer to optimize the solution and maximize output?
So that’s private equity in a chemical engineer’s lexicon, right?