AI transcript
0:00:02 – This is Ryan Smith,
0:00:05 a guy who went from a 1.9 GPA high school dropout
0:00:07 to a $2 billion net worth.
0:00:09 But this isn’t your normal dropout story.
0:00:10 At some point, you have a conversation with yourself,
0:00:12 like, okay, I gotta make this happen.
0:00:15 – Yeah, I gotta find a gear that I’ve never used before.
0:00:17 – When he dropped out, he had no plan,
0:00:18 no money, and nowhere to live.
0:00:20 There’s a great story about the early days of Qualtrics
0:00:21 and Focus.
0:00:23 – We were religious about it,
0:00:26 and it was actually an incredible forcing function for me.
0:00:28 – At some point, you get offered $500 million
0:00:29 to sell the company.
0:00:30 And you turned it down.
0:00:32 – Every other person I would talk to about this offer
0:00:34 was like, take it and run.
0:00:37 – You’re building it from your family’s basement
0:00:39 all the way to the end zone, basically.
0:00:41 Sell for $8 billion, you end up going public.
0:00:43 – I didn’t do anything else when I was doing Qualtrics.
0:00:45 I didn’t invest, I didn’t sit on boards.
0:00:46 – No side hustles.
0:00:47 – No side hustles.
0:00:50 Nothing except for hoops.
0:00:52 – What’s it like to now own an NBA team?
0:00:53 That’s insane.
0:00:56 – My philosophy was don’t bling, just go.
0:01:01 – I feel like I can rule the world.
0:01:04 I know I could be what I want to.
0:01:07 I put my all in it like no days off.
0:01:09 On the road, let’s travel, never looking back.
0:01:10 – I want to start with this.
0:01:14 Like, you know, you’ve done what kids like me dream up.
0:01:18 It’s like, build a successful company with my family, no less.
0:01:20 Become the super successful guy, billionaire,
0:01:21 NBA team owner.
0:01:22 You live this really interesting life.
0:01:26 What’s cool is that if we rewind the clock,
0:01:29 you were a guy who dropped out of high school
0:01:32 and had a 1.9 GPA in high school.
0:01:36 So going from a 1.9 GPA to like, I don’t know,
0:01:38 a $2 billion net worth, that’s a pretty big jump.
0:01:41 We hear these stories where it’s like,
0:01:44 Mark Zuckerberg, Bill Gates, they were at Harvard
0:01:46 and then they dropped out with this big grand idea
0:01:48 and it came to fruition.
0:01:49 That’s not your story at all.
0:01:50 So let’s do the origin.
0:01:54 Can you take us back, you know, you’re 14, 15, 16, 17 years old.
0:01:56 What was going on in your life at that time?
0:01:59 Yeah, I mean, it’s no secret, like my parents split up
0:02:02 when I was like 14 and the world was rocked.
0:02:07 And, you know, I was very much like, okay, screw everything.
0:02:10 No one can tell me what to do.
0:02:12 And, you know, I think my parents were trying their hardest
0:02:14 to keep us, I mean, we had five kids.
0:02:16 They were keeping us all kind of afloat.
0:02:21 And I think to be honest with you, you know, I never really developed the skills for,
0:02:24 for school and, and I didn’t think I was really good.
0:02:26 I knew I was a good athlete.
0:02:29 I knew I was good at golf and could play poker.
0:02:35 And like, I, I knew there was something there, but I didn’t work hard.
0:02:37 I didn’t finish anything.
0:02:45 And it was really hard, like this concept of finishing and it just never happened.
0:02:53 And so I think the trajectory I was on at 14, 15, 16, 17 was not a very hopeful one.
0:02:56 And there was no indication that there was a spark.
0:02:59 There was no indication that there was good ideas in there.
0:02:59 Right.
0:03:01 So what was your move?
0:03:05 So you’re not, you’re not loving school, not doing that well, no spark there.
0:03:09 What was the decision to, to quit, to drop out, to, to leave?
0:03:09 Yeah.
0:03:11 I mean, it was just kind of forced.
0:03:14 It was like, hey, school was like, this isn’t working out for you.
0:03:15 Like you don’t go to class.
0:03:16 You’re like, it’s not us.
0:03:17 It’s you.
0:03:20 You know, there’s probably another path for you.
0:03:25 And I had an uncle who reached out and said, hey, Ryan, you’re 16.
0:03:26 We’re doing a tech company.
0:03:28 It was called iMall.
0:03:31 You’re not going to just screw off all day.
0:03:32 You might as well come work.
0:03:33 I’m running a sales team.
0:03:33 Come work.
0:03:37 And I worked in the mailroom and I worked with three older gentlemen.
0:03:39 I mean, one was in his 40s.
0:03:40 One was there.
0:03:44 And the founder had just gotten back or someone had just gotten back from Seoul, Korea.
0:03:47 And I would always say like, I’m going to go make money one day.
0:03:49 I’m going to go work on the fishing boats in Alaska because they’re
0:03:51 paying 20 bucks an hour.
0:03:52 I’m going to go do this.
0:03:54 And my parents were like, go do whatever you want.
0:03:56 Just graduate high school.
0:03:57 Like we don’t care.
0:03:59 The bar was really low.
0:04:02 And like these guys were like, no, you should go to Korea.
0:04:05 And I was like, that sounds good.
0:04:09 And my dad was like, if you can pay for it and graduate high school, we’ll do it.
0:04:09 So I graduated high school.
0:04:11 I got a GED when I was 17.
0:04:15 I went to like a university and just like cranked it out.
0:04:16 Like a few months.
0:04:18 Like three months through like packets.
0:04:22 And like, I was with like mothers and like everyone else who would not.
0:04:25 And it was like, I was like, okay, I’m going to crank this thing out.
0:04:27 And I did it.
0:04:29 And there was a little bit of a moment like, whoa.
0:04:31 All right.
0:04:33 When I kind of set my mind to something, I can do it.
0:04:36 And then I went out and that’s, that’s when I went to Seoul.
0:04:39 And so you go to Seoul, you’re what, 17 years old at this time?
0:04:40 Do you have a plan?
0:04:42 The plan was I communicate.
0:04:43 I’d never left Utah.
0:04:48 I, I’d communicate with someone and like, we were supposed to show up and like, we had jobs.
0:04:49 They had a house for us.
0:04:50 They had all these things.
0:04:53 And, you know, we had talked to them.
0:04:57 So I remember getting there and like, we had limited cash, but we were there.
0:05:01 We were there to sign a contract and work for a school and move in.
0:05:07 And we get there and we, we go right to the hotel and we’re waiting and we call where we’re
0:05:11 supposed to meet up and no answer, no answer, no answer, no answer.
0:05:13 Next day, no answer, no answer, no answer.
0:05:15 And we’re like, what in the world?
0:05:17 And then finally someone answers.
0:05:19 And it’s a Korean woman who didn’t speak any English.
0:05:25 And it was like, okay, well, but this person, like, I thought we were showing up and they
0:05:27 were just gonna, I’ll be there waiting.
0:05:29 Hey, we’re so excited to have you.
0:05:30 And it was the exact opposite.
0:05:36 And like, basically after a week in this hotel, it was like, you have no job.
0:05:37 You have no house.
0:05:40 You don’t have enough money to be staying in this hotel.
0:05:47 And so I remember sitting in a, in a coffee shop and, you know, we kind of all called our
0:05:48 parents to come home.
0:05:54 These guys, all the parents went to the airport, bought them a ticket and they all jumped on the
0:05:57 plane, but like, I sat there and my dad’s like, you’re not coming home.
0:05:59 And I was like, what in the world?
0:06:02 He’s like, I know what you’re going to do here.
0:06:06 Like, you got a chance to go do something.
0:06:09 And I, and I look back as a parent now and I was like, what in the world?
0:06:16 Like, I would never leave my kid over there, but he was like, the upside is like way better.
0:06:21 And so what was your dad, was that tough love or was he just sort of like, look,
0:06:23 you just need to look at it this way, hang in there.
0:06:26 Like what, what, what was he, what was going through the mind?
0:06:28 You think I have no idea.
0:06:31 I like, honestly, I’ve thought about it so much.
0:06:32 It’s like, and that’s just my dad.
0:06:35 Like he, he’s like fine with this kid’s failing.
0:06:37 Did you feel like rock bottom at that point?
0:06:38 Oh my word.
0:06:46 So homesick in a country, no Americans, no English, no money.
0:06:50 And you just kind of had to go figure it out.
0:06:51 All right.
0:06:52 So you meet this guy, crash on his couch.
0:06:56 At some point you have a conversation with yourself like, okay, I got to make this happen.
0:06:56 Yeah.
0:06:59 I got to find a gear that I’ve never used before.
0:07:01 And so what’d you do?
0:07:04 Ended up running into someone who needed an English teacher.
0:07:07 The school was a ways away.
0:07:10 I didn’t have a place to stay.
0:07:13 So he said he’d pay me $10 an hour, which isn’t a lot there.
0:07:19 So I teach the kids from, you know, three hours a day in the mornings.
0:07:26 And I had found out about a place where Koreans go to study called the Goshiwon, which is like
0:07:28 that locker room we just looked at.
0:07:29 It’s about that big, but a little bigger.
0:07:31 No one ever sleeps there.
0:07:36 And I’d convinced the guy that if I could teach him English one hour a day,
0:07:39 he’d let me sleep there because I had a shower.
0:07:40 I found a little stove.
0:07:43 I would cook ramen noodles on it because that’s all I could afford.
0:07:45 Obviously, it’s tough.
0:07:49 Obviously, you’re sort of it’s like character building moment because you’re on your own for
0:07:51 such an extended period of time.
0:07:57 But was there like a part of you that was in sort of enjoying MacGyvering it a little bit?
0:07:57 Not at all.
0:07:59 This was not…
0:08:00 No momentum.
0:08:02 No.
0:08:02 No.
0:08:07 Like at the time, there was no like, there was no of like myself now looking back going,
0:08:08 “Okay, I’m gonna get crafty.
0:08:09 This is an experience.
0:08:10 I’m backpacking through Europe.”
0:08:11 Didn’t have that attitude then.
0:08:12 This was not that.
0:08:15 I mean, this was like, I gotta get home.
0:08:15 Right.
0:08:18 And so you’re teaching one guy.
0:08:20 Did you eventually get more students?
0:08:20 And how’d you do that?
0:08:28 In Korea, there was, you know, 20 big 15 to 20 story high rises where everyone lived.
0:08:30 And I was like, “Okay, I’m teaching English.
0:08:32 I’ve got 12 hours in the day.
0:08:37 The better, rather than teaching a school, it’s way better to do these private lessons.
0:08:45 And if I could get into one of the high rises and get like starting at four o’clock in the
0:08:50 afternoon, teach every 55 minutes, like it’s going to be great.
0:08:51 Well, how do you do that?”
0:08:53 And I got someone to write.
0:08:54 I had a pager at the time.
0:09:00 I got someone to write a message in Korean and I made like 5,000 flyers.
0:09:06 And I would go in and they’d have these huge mailbox rows, but there was a security guard there.
0:09:08 So I would go in and talk to the security guard.
0:09:09 And I was like, “Hey, man.”
0:09:11 In English or a broken Korean?
0:09:12 Whatever it took.
0:09:14 I would just try to be their friend.
0:09:15 Okay.
0:09:17 And I was like, “Let me put these here.
0:09:17 This is it.
0:09:19 Let me put these in all of these.”
0:09:20 And they’re like, “Well.”
0:09:21 And I was like, “Come on.”
0:09:24 And I would normally be pretty successful at it.
0:09:25 Right.
0:09:27 And then my beeper just started hammering and blowing up.
0:09:28 And I was like, “Whoa.”
0:09:30 Like this was the first time in my life I was like,
0:09:32 “Actually, there’s something in there.
0:09:35 Like you have a good idea and you can execute on it.”
0:09:39 And then I started getting a schedule.
0:09:43 And like literally like a month later, I was making like $8,000 a month
0:09:47 as a 17-year-old teaching English.
0:09:50 And I was like, “How in the world did I go from there to here?”
0:09:52 That’s amazing.
0:09:53 Let’s talk about the start of Qualtrics.
0:09:58 So you build this company, you build it with Stuart, you build it with your brother, with your
0:10:06 dad, and you’re building it from your family’s basement all the way to the end zone, basically.
0:10:11 Sell for $8 billion, you end up going public, you have a pretty crazy story over like a 20
0:10:12 something year period.
0:10:14 What’s the origin?
0:10:16 What was the idea?
0:10:18 And, you know, what were the early days like?
0:10:24 Yeah, so I think that the origin, and if you talk to all of us, it’s a little different.
0:10:27 Like, so it was really my dad and I who started.
0:10:30 I was doing an internship at Hewlett Packard in L.A.
0:10:36 And I get a call that my father had cancer, and it was terminal, like, or pretty close.
0:10:42 I mean, it was like three years to live, max, and probably a couple months.
0:10:48 And he ended up going through and recovering, you know, and is alive today, which is an amazing
0:10:48 story.
0:10:55 But I kind of had a moment where I just left California, I was working in L.A., and came
0:10:59 back, deferred school, and said, “I’m spending this whole semester with my dad.”
0:11:03 My dad was always working on technology.
0:11:10 He’d come up with this idea of, like, collecting research online, and it seems normal now, but
0:11:12 at the time, it wasn’t trusted.
0:11:13 Right.
0:11:13 And it definitely-
0:11:15 What were companies doing before Qualtrics?
0:11:22 Yeah, they were either doing customer satisfaction, paper, pencil, or not doing it at all.
0:11:23 Okay.
0:11:28 Like, the thought of asking your employees feedback or your customer feedback, that seems
0:11:28 normal now.
0:11:29 Table stakes today.
0:11:30 They wouldn’t do it.
0:11:33 And so, they’d have blind spots everywhere.
0:11:36 And he would get paid a lot of money to go in there and help companies do this, and it was like
0:11:38 a novel thing.
0:11:41 We were going to go put the customer at the table, we were going to have them part of the
0:11:45 decision-making process, and this is what we were going to come up with.
0:11:51 And so, he had this idea, but he was always messing around, and he never really went commercial
0:11:52 with anything.
0:11:59 Well, I was in Hewlett Packard, and I had gotten pretty, I learned some tricks around how to,
0:12:02 like, go to market over the phone with technology.
0:12:07 And so, I saw what he was working on, and I was like, “Actually, I had just been doing that
0:12:09 with, like, some software and support stuff.
0:12:13 What if we applied it here?”
0:12:18 And so, he would come home from his, like, radiation and chemo, and you’re just kind of
0:12:21 sitting there, and I’d be like, “Let’s do a business.
0:12:22 Let me take this to the world.”
0:12:23 He’s like, “Well, I don’t have any money.
0:12:24 I can’t pay you.”
0:12:29 I said, “Well, let’s just go 50-50.”
0:12:33 And, you know, by the time he recovered, he couldn’t speak.
0:12:40 We had 10 customers, and, like, we kept finding people that would believe in what we were doing.
0:12:46 And it was a little Jerry Maguire moment where I had to find, like, one person who was, like,
0:12:47 then take it to the world.
0:12:50 And, like, that’s kind of how the business started in the basement.
0:12:52 And so, he couldn’t talk at the time.
0:12:53 So, even, he’s what?
0:12:53 He’s writing down?
0:12:55 He’s writing on a board.
0:12:56 And you’re the guy on the phone.
0:13:00 And I’m on the phone, and these people are asking, like, about deep statistical stuff.
0:13:01 I don’t know.
0:13:07 And I’m, like, going back and forth, and, you know, it was a pretty gnarly time.
0:13:11 I wish I had more pictures in that moment, but no one thought it was going to be anything.
0:13:11 Right.
0:13:16 And everyone’s like, “Oh, you started with your dad, and it was just great.”
0:13:16 Like, no one.
0:13:19 Like, my roommates didn’t think it was going to be something.
0:13:20 Like, I didn’t even think it was.
0:13:22 He didn’t think it was going to be something.
0:13:27 Hey, let’s take a quick break for a message from our sponsor, HubSpot, who’s making this
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0:14:05 All right, back to the show.
0:14:10 There’s a great story about the early days of Qualtrics and Focus, and I love this when
0:14:12 I was researching it.
0:14:15 I guess it was you and your brother who were talking about like, “Well, we have this market.
0:14:17 We can sell to these people, these people.”
0:14:19 And you guys at some point decided, “No, no, no.
0:14:20 We want to narrow down.
0:14:21 So, only the universities.”
0:14:25 And the part I love, because focus is a word anybody can throw around, right?
0:14:28 But like, if you take focus as an action word, what does it mean?
0:14:31 It means saying no to a bunch of otherwise believable ideas.
0:14:36 And the thing I read in the research was, your brother was basically like, you know, if you’re
0:14:40 talking to him about some other type of customer, he’s hanging up the phone.
0:14:44 He’s like, “Unless you’re talking about these 250 universities, I don’t want to hear it.”
0:14:47 And so, could you tell me about like, how that went down and what that was like?
0:14:53 Yeah, so this is probably 2006, 2007, and we had found some traction in universities.
0:14:55 We’d found people like my dad.
0:14:57 My first customer was Angela Lee at the Kellogg Business School.
0:15:03 She made all of her students use Qualtrics and then it just kind of went from there.
0:15:06 And I can go through every professor and kind of how the whole thing worked.
0:15:09 But my brother at the time was a Google.
0:15:16 He was an early Googler, and at this time, like, I didn’t have very many people to call.
0:15:24 And, you know, I didn’t know how good he was, but I knew he was like running a big piece of the internet.
0:15:25 Okay.
0:15:25 Right?
0:15:33 And Google was kind of having a moment, and he had been assigned to go run China for Google.
0:15:38 So, he was living in Beijing, he was working with Kai-Fu Lee and like running Google China.
0:15:39 Wow.
0:15:45 So, for me, I think when I would call him and ask for advice and we started developing this dialogue,
0:15:47 he was four years older than me, so we were close, but not that close.
0:15:52 I think for him, it was like, dude, you’re all over the place.
0:15:55 I don’t have time for this.
0:16:02 If you’re going to call me, stay on script, stay focused, and like actually finish something.
0:16:04 And it was a little bit more like, get out of here.
0:16:04 Right.
0:16:07 But he was religious about it.
0:16:13 And it was actually an incredible forcing function for me and the team to be like,
0:16:18 okay, we’re going to go get the top 100 universities and nothing else matters.
0:16:18 Right.
0:16:18 Right.
0:16:20 These forcing functions are so powerful.
0:16:21 Yeah.
0:16:22 You know, it’s like we play basketball.
0:16:25 Like if there’s a shot blocker, it’s like you can’t bring that weak stuff in here.
0:16:30 You can’t show up on the call and be scatterbrained because you know how the other person is going to respond.
0:16:32 I know what he’s coming at me with.
0:16:34 Even when they’re not in the room, you start editing.
0:16:34 Oh, yeah, yeah.
0:16:35 What am I going to tell him?
0:16:37 What’s the story on our next call that we have?
0:16:39 What progress am I going to show him?
0:16:39 Right.
0:16:43 Am I actually telling him the same story I told him last week?
0:16:45 So what did we actually get done this week?
0:16:45 Right.
0:16:49 I’ve got to actually come up with a new story.
0:16:55 And, you know, ultimately, I was able to recruit him out of Google to move back to Utah.
0:16:58 And that happened in 2009.
0:16:59 So we were seven years in.
0:17:05 And then when we got together, magic started happening.
0:17:06 Why is that?
0:17:07 What changed?
0:17:08 Just because he’s that good?
0:17:09 Or what do you mean?
0:17:09 Yeah.
0:17:10 I mean, I knew he was good.
0:17:16 I didn’t know he was a top five or six, whatever at the time, product person in the world.
0:17:19 And there was a dynamic between us.
0:17:21 And I’ll just be super honest.
0:17:21 We were brothers.
0:17:22 We had to love each other.
0:17:29 And we were just able to push on each other harder than any executive or person I’ve ever met.
0:17:29 Right.
0:17:34 You know, with executives, I could probably go, or teams, I could probably go three or four rounds
0:17:38 on something really hard before someone said uncle.
0:17:40 With my brother, I could go 15.
0:17:44 Because we had to wake up.
0:17:45 And there was no drama.
0:17:46 There was no nothing.
0:17:48 Like, we spoke each other’s language.
0:17:50 But we were so different.
0:17:52 You know, he was full engineer.
0:17:54 I was full, like, business.
0:17:56 And we met on the product side.
0:18:02 And we almost had to grow together to, like, almost like a relationship.
0:18:07 Like, where, like, my weakness is he had to go fill in those gaps.
0:18:07 Right.
0:18:08 My blind spot.
0:18:08 And me too.
0:18:10 Yeah.
0:18:13 I’ve read something where you were saying that, you know, he came to you at some point.
0:18:15 And he’s like, hey, here’s my weaknesses.
0:18:17 What are yours?
0:18:21 And you’re like, I had never really thought about it to that level of detail.
0:18:21 I’m great, right?
0:18:22 No.
0:18:24 He’s like, hey, I suck at these five things.
0:18:24 What do you suck at?
0:18:26 I was like, I don’t suck at anything, bro.
0:18:29 And he was like, oh, boy.
0:18:35 And I’ve heard him say this, like, my job is to develop my younger brother.
0:18:36 Who does that?
0:18:37 Yeah, that’s great.
0:18:45 And when we took money in 2011, Sequoia, I remember, was like, we’re only doing this if there’s a CEO.
0:18:47 Which one of you is the CEO?
0:18:49 So it wasn’t really even stated.
0:18:50 No.
0:18:51 We worked together.
0:18:52 He said clearly, we are co-founders.
0:18:55 I’m not working for my little brother.
0:18:58 And, like, I remember sitting in the room.
0:19:03 I’m looking across from Mike Moritz, who gave Steve Jobs his first dollar and back Larry and Sergey.
0:19:06 And, like, they’re like, we need a CEO or we’re not investing.
0:19:08 And, like.
0:19:09 You guys kicking each other under the table?
0:19:11 Literally, it was just crickets.
0:19:13 Because I knew where this conversation was going.
0:19:17 And I still remember the silence.
0:19:20 Because we’re all just looking at each other.
0:19:24 And finally, he just stands up and slaps the table and is like, it’s him.
0:19:26 And he points at me.
0:19:29 And he goes, I won’t do media.
0:19:30 And then sat down.
0:19:33 And, like, if you find a Jared interview, it’s rare.
0:19:36 If you find a Jared Smith interview, it is super rare.
0:19:40 And, you know, that was a moment where I was like, all right.
0:19:44 Like, we’ll still operate two in the box.
0:19:44 We’ll divide the world.
0:19:46 But, like, it’s a cool moment.
0:19:49 And then it was like, you’re a first-time CEO.
0:19:51 They’re giving you, we’re now in the big leagues.
0:19:53 Like, we’ve taken this money from Excel.
0:20:01 This is the largest Series A raised in 2012 since 2008 in all of tech.
0:20:06 It’s outside of the Bay Area, which, I mean, Sequoia at the time wasn’t even vesting there.
0:20:07 So we came out of nowhere.
0:20:11 The Forbes article was, like, the biggest company no one’s ever heard of.
0:20:12 Right.
0:20:16 And, you know, you look at that prior time, but now the pressure was on us.
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0:20:43 So wait, what year did you start the company?
0:20:44 2002.
0:20:44 2002.
0:20:46 Now we’re talking about 2012.
0:20:46 10 years.
0:20:47 10 years.
0:20:49 You have a sign out there in your office that we walked by.
0:20:53 It says, tune out the noise, play the long game.
0:20:56 And there’s a picture of a guy just sitting there with his ears plugged.
0:20:58 And I’ve had a lot of people on this podcast.
0:21:01 I remember when we had Jimmy, Mr. Beast.
0:21:02 He’s now the biggest YouTuber in the world.
0:21:06 But back then, and I played him a clip of him like, you know, 10 years prior.
0:21:09 And he just said, matter of fact, he goes,
0:21:11 I started this when I was 12 years old.
0:21:12 When I was 12, nobody watched.
0:21:13 13, nobody watched.
0:21:15 14 years old, nobody watched.
0:21:16 15, nobody watched.
0:21:17 16, is anybody ever going to watch?
0:21:18 17, nobody watched.
0:21:22 He’s like, finally, when I was 19, some people started to watch.
0:21:25 And even then, it was nothing, you know, just relative to how it grew.
0:21:27 And so he was talking about, you know,
0:21:31 there’s this cliche around the, you know, sort of this 10-year overnight success.
0:21:36 But it’s real different when you hear somebody just year after year of just obscurity.
0:21:38 What was that like for you, that period?
0:21:40 But you against the world.
0:21:44 And, and, you know, I’ll never forget once.
0:21:46 And I think it was like 2004.
0:21:48 We were in our basement.
0:21:50 My father was operating.
0:21:54 He was in one room on his computer, like deep into like stat stuff.
0:21:59 And I was out there and I was having these issues with our website.
0:22:04 I was like super frustrated because our competition had just raised a bunch of money.
0:22:06 The product was cheaper than ours.
0:22:12 They raised $40 million and their product was better than ours.
0:22:15 Better, cheaper, more resources, more funding.
0:22:17 And I’m like, that’s, that’s hard.
0:22:20 Like, so I was, I was frustrated.
0:22:21 I was like pissed.
0:22:23 And I was like, are we going to do this?
0:22:23 What’s going on?
0:22:27 And like, I was almost like argumentative with my father.
0:22:28 My father’s just sitting there.
0:22:31 And finally, like, it’s the only time I ever saw him get mad.
0:22:35 And he like slams the table, turns around and he’s like, who’s stopping you?
0:22:38 Like, who’s stopping you from going to do everything you want to go do?
0:22:41 And like in that moment, it was like a ton of bricks.
0:22:46 Like, if we’re going to go do this, you’re going to have to do it.
0:22:49 Like, you can’t blame, there’s only two of you.
0:22:50 Right.
0:22:52 Like, you’re actually going to have to go do it.
0:22:54 There’s not going to be a shortcut.
0:22:55 There’s not going to be an easy button.
0:22:57 Like, you’re going to have to go.
0:22:59 And from that moment on, I stopped asking him.
0:23:03 And, you know, that was kind of that moment.
0:23:04 Don’t ask for permission.
0:23:05 So I have this photo here.
0:23:07 This is, describe the scene.
0:23:08 Oh, wow.
0:23:12 So this is, this is me and Stuart.
0:23:19 Everything in this photo is bought at a salvage cell from campus.
0:23:21 So like, the printers were $5.
0:23:28 On the board, I’m making a list of customers and like setting goals, like the 25K club.
0:23:29 Yeah.
0:23:31 And seeing how many we can put.
0:23:33 How many sales calls do you think you did those first couple years?
0:23:34 It’s just dialing.
0:23:35 All day.
0:23:35 All day.
0:23:37 Like emailing, dialing, going.
0:23:39 You still remember your script?
0:23:40 Ring, ring.
0:23:40 What happens?
0:23:41 Oh, yeah.
0:23:43 I mean, I would ask people what they’re using.
0:23:44 Have they ever heard of us?
0:23:46 Or have they ever done anything like this?
0:23:49 And telling them the top researchers in the world were using it.
0:23:54 If I was calling into Dallas, I would say I was part of the Dallas American Marketing Association.
0:23:57 And we went to the conference.
0:24:01 I would say, hey, can I just walk you through a demo?
0:24:03 And at the time, there was no Zoom.
0:24:04 Right.
0:24:09 So like, I would actually get on the phone, send them a link, and then they would follow along with me.
0:24:09 Right.
0:24:11 And I could do the demo.
0:24:16 This is where I’ve always told our reps, like, do you know your product?
0:24:30 I could do the demo on the phone in a car with a link, walking them through without me looking at the screen and explain to them every single thing that’s going on.
0:24:31 What does it take to be great at sales?
0:24:33 You were great at sales.
0:24:45 I mean, so I think sales gets a really bad name because people, like, use it as, okay, the salesperson we don’t want to deal with.
0:24:52 But I remember a moment, a lot of authors would use our software to write books.
0:24:55 And I remember once Daniel Pink called me.
0:24:58 He said, I’m writing a book, and I want your help.
0:24:59 I said, great.
0:25:01 And he’s like, what’s the title of the book?
0:25:03 And he said, To Sell as Human.
0:25:11 And he basically, it’s a great book about how every single person is a salesperson.
0:25:20 They’re actually trying to get a group of people to go in one direction or another at some point in the day.
0:25:21 Right.
0:25:27 And I think that when it comes to, like, software, the first of all is you’ve got to believe in it.
0:25:30 You’ve got to actually believe that your product has value.
0:25:35 And, you know, the person on the other end’s life’s going to be better if they use it.
0:25:44 And so, in our case, we wanted them to run their businesses from the outside in instead of from the inside out.
0:25:48 We believe that their employees were their biggest assets.
0:26:01 And, like, getting a pulse on them more than once a year was probably a good idea when we said, hey, actually, if your business operated with a cadence of this data, you’re going to win more.
0:26:06 And so, part of it was educating these people that there was a new way.
0:26:09 And, by the way, it was cheaper, faster, and better.
0:26:17 And if you as a user would embrace this, your personal career inside your organization would skyrocket.
0:26:18 Right.
0:26:26 Because everyone else is guessing, and you’ll have this massive propensity of being correct all the time.
0:26:27 Wouldn’t it be great to know?
0:26:29 Wouldn’t it be great to know?
0:26:29 You don’t have to guess.
0:26:32 And so, that was the thought.
0:26:33 And I was like, oh, my word.
0:26:34 Like, how do we get this to everyone?
0:26:36 Somebody had a great reframe.
0:26:41 They were like, sales is the generous act of letting the right person know that you might have a solution to their problem.
0:26:46 If you think about it that way, like, it’s an act of service, and you can approach it maybe differently.
0:26:49 And so, it does start to work, and you get it to work.
0:26:52 You eventually hit a point where you do something pretty crazy.
0:26:56 You start this business in your basement, and you’re dialing for dollars.
0:27:00 And at some point, you get offered $500 million to sell the company.
0:27:01 An absurd amount of money.
0:27:04 That sets up you, your team, everybody for life.
0:27:06 And you turned it down.
0:27:09 What was that like?
0:27:16 So, it was hard because no one had ever offered to buy our company.
0:27:21 And it was, it’s always a reality check where it’s like, okay, it’s kind of a recommitting point.
0:27:28 You know, the gentleman who was doing it ran a company, I’ll just be honest, it was called Survey Monkey at the time.
0:27:28 Yeah.
0:27:35 And, you know, he was married to Sheryl Sandberg, and she was running Facebook, and like, they were the power couple.
0:27:36 Love Dave.
0:27:37 Dave was awesome.
0:27:43 And I was like, whoa, do I want to, do we want to go, my brother had known him because he worked for Sheryl at Google.
0:27:46 Like, it was just this synergy coming together.
0:27:48 And he’s like, I’ll take the business.
0:27:49 Like, let’s go.
0:27:50 We can partner.
0:27:52 You can leave and be done.
0:27:54 Like, it was like the cleanest moment of all time.
0:28:01 And, you know, I remember sitting around just, like, next door from here, and one of our mentors, Duff Thompson’s office.
0:28:07 And, you know, this is someone who, you know, as you talk about mentors, who had been there at WordPerfect.
0:28:13 And, you know, every other person I would talk to about this offer was like, take it and run.
0:28:13 Right.
0:28:19 And Duff’s like, like, we sold WordPerfect too early.
0:28:21 You know, we had the market.
0:28:22 Microsoft was coming.
0:28:24 Like, we sold too early.
0:28:29 And he was like, I, he was the only person that said, don’t take the money.
0:28:35 He said, in my mind, you guys are cash flow positive.
0:28:36 You’re cranking.
0:28:37 You’re growing at 100%.
0:28:44 If you and Jared can get along and do this, it should be interesting.
0:28:50 And Jared kind of turned to me and my dad turned to me and said, well, what do you want to do?
0:28:54 And I just said, I, I’ll come back to you.
0:29:00 And I, I literally, I remember getting in the car with my wife and I was like, hey, we got to leave.
0:29:01 Like, we just got to drive south.
0:29:06 And we get in the car and we’re like 40 minutes into a three and a half hour drive.
0:29:07 She was from Vegas.
0:29:15 So we were going down there and she’s like, like, if it’s going good, just keep it rolling.
0:29:19 And I was like, you don’t worry about like passing that up.
0:29:22 She’s like, no, like, what are you going to do at home?
0:29:25 Like, I, I don’t need you around the house.
0:29:28 And like, this is the time.
0:29:30 Like, if we’re going to go for it, this is the time.
0:29:35 And it was like, it was just one of those moments where we knew we were going to, we were going to go for it.
0:29:37 Had you pulled out a lot of cash already?
0:29:38 Secondary?
0:29:40 Were you like, were you basically already stable and made?
0:29:43 We were profitable, so we were paying ourselves.
0:29:43 Yeah.
0:29:48 And that was a unique thing, like profitability and tech as a young company.
0:29:50 So we would distribute the money.
0:29:52 But this was a whole new world.
0:29:53 Right.
0:29:59 And so we came back and I remember sitting down, you know, it was funny.
0:30:04 Dave, you know, rest in peace, like he, he, he was an amazing human.
0:30:06 And he’s like, I just want to do what’s best for you.
0:30:13 But I remember he flew into town and I was like, I knew that I think I was going to tell him that we were going to turn it down.
0:30:16 And I knew how crazy that was.
0:30:19 But I also needed to hear him out a little.
0:30:32 So we met at the office and I wanted to walk him through our culture and our company because I wanted him to see, you know, maybe things change, maybe comes back for more.
0:30:32 I don’t know.
0:30:33 Yeah.
0:30:36 So I was like, all right, we can’t be recognized.
0:30:38 I was like, put on that hat, like, let’s go in.
0:30:41 And so like, we did this whole tour, we come back, we go to a different office, we sit down.
0:30:48 And I was like, I just, I think we’re going to go for it.
0:30:54 And he’s like, huh, what makes you think you can do it?
0:30:57 And like, I didn’t know what to say.
0:31:03 And I was like, well, I just got you to put on a Qualtrics hat and walk through our building.
0:31:06 I didn’t know what else to say.
0:31:08 And it was like, we’re just going to do it.
0:31:10 And he really respected that.
0:31:11 And we’d have lunch every week.
0:31:19 I was out there and like, you know, we ultimately ended up talking about joining forces later on, actually the week before he passed away.
0:31:21 And then that was kind of, it was cool.
0:31:24 Like things happen for a reason and, you know, we went for it.
0:31:29 And then we decided like, if we’re going to turn that down, that means we got to get serious.
0:31:33 We can’t be running this thing on our own personal credit cards and in the credit union bank and all this stuff.
0:31:38 Like we’ve got to actually put all the money back into the business.
0:31:43 And then, you know, we decided to go raise money from Sequoia and Excel.
0:31:46 And at the time, it was like taking money from the Red Sox and the Yankees.
0:31:48 Excel had just done Facebook.
0:31:53 You know, obviously Sequoia had done Google and, you know, Apple.
0:31:54 And they were the forefront of everything.
0:31:58 And the goal was, hey, you guys like watch our back in the tech industry.
0:32:01 We’re going to sit in Utah and we’re going to make money and put our heads down and go.
0:32:01 Right.
0:32:03 And like we got the world covered.
0:32:04 That’s what we need you for.
0:32:06 It was a pretty cool partnership.
0:32:10 I want to learn from you more on the business side, how you think, how you operate.
0:32:13 One of the things I liked is you talked about like working backwards.
0:32:15 This is one way just to work forwards.
0:32:17 You’re just, I don’t know, we’ll just figure it out as we go.
0:32:19 And of course there’s that.
0:32:25 But a very useful exercise is to like, you know, start with the end in mind and then just reverse engineer.
0:32:27 Well, if that’s true, then what needs to be true underneath that?
0:32:28 And you sort of go back.
0:32:30 Can you explain maybe how you do that or an example?
0:32:36 Yeah, I mean, I think it’s different from where we are today to where we were then.
0:32:38 But I learned something by accident once.
0:32:46 You know, when we did announce the fundraising, I remember getting on the phone with a journalist from Business Insider, Julie Bort.
0:32:49 And I’ll never forget this.
0:32:51 I had never really done an interview.
0:32:53 I’d done one interview with Forbes.
0:32:55 And she comes up.
0:32:57 I mean, we’re 10 years in and no one even knows who we are.
0:33:01 And she goes, I heard you just turned down $500 million.
0:33:03 I was just flustering.
0:33:06 So she writes this headline.
0:33:11 The kid who turned down $500 million with my picture is excited about it.
0:33:13 And I’m like, oh, my gosh.
0:33:16 Because it looked like I went to the media.
0:33:18 With this story.
0:33:21 And slammed the story back into Dave’s face.
0:33:26 And I was so, I was so embarrassed.
0:33:31 But I knew at that moment that Dave wasn’t coming back.
0:33:33 It was a burn the boat moment.
0:33:37 She burned the boat for us on a possible acquisition.
0:33:39 The first one in 10 years.
0:33:39 Right.
0:33:42 And I was so mad.
0:33:47 And I never forgot about that.
0:33:50 And so we operated for two more years.
0:33:51 And we went to raise money.
0:33:55 And everyone’s like, well, when are you going to raise money again?
0:33:56 Because kind of when you start, you’re on that path.
0:33:57 Right.
0:33:59 And what’s the dollar amount and everything?
0:34:06 And, you know, my entire thing was, well, we’re going to raise it a billion dollars.
0:34:08 Because that will show that we’ve doubled.
0:34:09 That’s a new mark.
0:34:10 We’re giving away stock to employees.
0:34:11 That’s where it’s going to be at.
0:34:15 So when we got down to it, Excel and Sequoia, and we brought Insight in.
0:34:17 They agreed to that.
0:34:20 And they said, all right, we’re going to, how do you want to announce this?
0:34:22 And I was like, there’s only one person I want to talk to.
0:34:24 So I called Julie Bort.
0:34:27 And I was like, hey, you might not remember me.
0:34:32 But you wrote that article that said, I turned down $500 million.
0:34:35 I was happy about it and raised $70 million, da, da, da.
0:34:40 And just so you know, like, we’re raising it a billion.
0:34:41 Do you want this story?
0:34:43 And she’s like, yes.
0:34:53 And so she basically took the exact same article, the exact same picture, and put the folks that
0:34:55 turned down $500 million just raised it a billion.
0:34:56 New headline.
0:34:57 New headline.
0:34:58 You have, by the way.
0:34:59 And they look the exact same.
0:35:01 You have both of those framed in the office.
0:35:02 I have both of those framed.
0:35:06 And then I remember sitting there one day after we had done that, and there was a lot
0:35:10 of our employees that were like, okay, wow, we made it.
0:35:10 We’re here.
0:35:11 And I was like, no, no, no, no.
0:35:12 What’s her next article?
0:35:14 Work backwards.
0:35:15 What’s her next article?
0:35:18 Like, what is she putting up next?
0:35:25 And two years later, it’s like, the group that turned down $500 million just raised it $2.5
0:35:25 billion.
0:35:28 And, you know, we knew that that wasn’t the goal.
0:35:32 We knew we had our own mission and the Qualtrics story and everything.
0:35:35 But it was very clear from a directional standpoint.
0:35:36 We raised it $2.5 million.
0:35:38 What’s the next article?
0:35:44 A year later, it says the group, you know, or two years later, it says the group that raised
0:35:51 $2.5 million or turned down $500 million just sold for, and she literally put four of those
0:35:53 together with the same headline, the same page.
0:36:00 So I’m grateful for it because it fired us up to go and say, well, that next one isn’t
0:36:04 interesting, like, we actually need to go bigger.
0:36:05 We need to push harder.
0:36:08 Like, we need to go more global.
0:36:13 Like, every decision came to, like, okay, what’s the story we’re going to be able to tell when
0:36:14 we’re done with all this?
0:36:14 Right.
0:36:20 And, you know, it’s kind of a weird thing because at the end, like, if you meet sports stars,
0:36:26 at the end of the world, like, where they’re done playing, you know what they do?
0:36:27 They sit around and tell stories.
0:36:31 They tell stories about what the world was like.
0:36:34 And you get them together, and all they do is just sit and tell stories.
0:36:36 And you hear Bird tell stories.
0:36:38 You hear Ainge tell stories.
0:36:39 You hear Dwayne Wade tell stories.
0:36:40 Like, it’s awesome.
0:36:46 And it’s kind of like all we have are going to be these stories that we’re going to be able
0:36:46 to tell.
0:36:53 And when Qualtrics sold, it was probably one of the most underwhelming days of my life.
0:36:55 So, when the money hits the bank.
0:36:56 Yeah.
0:37:02 We were at a kind of a president’s club type deal with about 100 of our people.
0:37:05 And the deal had closed but hadn’t funded.
0:37:10 And I remember sitting there by the pool with, like, our whole company who had leadership who
0:37:13 had, like, made president’s club.
0:37:19 And I could tell when the money, I knew when the money was going to hit.
0:37:23 And it, like, lands and then just hits to everybody.
0:37:29 And I, I could see over the next two hours, like, this reaction.
0:37:33 And I remember turning to my wife, like, handing my phone.
0:37:36 And she’s, like, sitting there reading a book.
0:37:39 And, you know, there’s a lot more zeros there.
0:37:43 And she’s, like, uh, scary.
0:37:46 And I was, like, okay.
0:37:49 We’ve been grinding for 20 years.
0:37:50 And your response is scary.
0:37:51 That’s not the line in the movie script.
0:37:53 Scary.
0:37:54 Like, uh.
0:37:56 And then, and then I started watching our people.
0:38:00 Like, it’s, like, we just paid off our home.
0:38:04 We just did the, like, and then there was a little bit more joy.
0:38:10 But it became clear to me that it is about the journey.
0:38:15 Because even after all that, it wasn’t a eureka moment.
0:38:16 Right.
0:38:23 And so, knowing that I’m going to work till I’m 80, I’m never going to stop working.
0:38:24 I already know that about myself.
0:38:27 And every young person should ask themselves that question right now.
0:38:30 I don’t know that anyone knows exactly what they’re going to do.
0:38:33 No one has figured it out.
0:38:35 Like, I still don’t know what I want to be when I grow up.
0:38:35 Right.
0:38:38 But what I do know is I’m going to work till I’m 80.
0:38:42 Because I’m not going to check out.
0:38:44 If I was going to do that, I would have done it already.
0:38:46 All right.
0:38:48 Let’s take a quick break because I’ve got to tell you a story.
0:38:50 Let me tell you about the first time I tried to run payroll for my team.
0:38:52 I was using a traditional bank.
0:38:53 And you know the type.
0:38:54 It’s got a janky interface.
0:38:56 It’s built like a 2002 tax form.
0:38:58 And it was open only during business hours.
0:38:59 And I hit send.
0:39:00 And it froze.
0:39:01 They flagged the transaction.
0:39:02 They locked my account.
0:39:03 They put me on hold for 45 minutes.
0:39:06 And then they told me I got to visit my local branch.
0:39:08 And that was the day I started looking for a new banking solution.
0:39:11 After asking a few founders what they were using, I found out about Mercury.
0:39:14 And so now my payroll is two clicks.
0:39:15 I can wire money.
0:39:16 I can pay invoices.
0:39:17 I can reimburse the team.
0:39:18 All from one clean dashboard.
0:39:20 That’s why I use it for all of my companies.
0:39:23 And so do 200,000 other startup founders.
0:39:27 And so if you’re looking to level up your banking, head to Mercury.com and apply in minutes.
0:39:30 Mercury is a financial technology company, not a bank.
0:39:34 Banking services are provided through Choice Financial Group, Column 8, and Evolve Bank & Trust, members FDIC.
0:39:36 So we play basketball this morning.
0:39:38 And it’s clear you’ve been playing basketball since you were a kid.
0:39:42 And so what’s it like to now own an NBA team?
0:39:43 That’s insane.
0:39:44 So it’s weird.
0:39:49 When we’re on the roadshow to go public, like you normally go like one day in San Francisco,
0:39:52 two days in New York, one day in Boston, one day in Maryland, then back to New York.
0:40:01 And I had organized our roadshow to go three days in New York, one, and then to Boston.
0:40:04 And like no one had really done that the way they were doing it.
0:40:05 And they’re like, why are you doing that?
0:40:08 I was like, because I’m going to the Celtics game, I’m going to go sit with Ainge.
0:40:08 Yeah.
0:40:11 And like I’ll never forget like sitting in the locker room with Ainge.
0:40:14 Like it’s the only thing outside of Qualtrics.
0:40:16 I didn’t do anything else when I was doing Qualtrics.
0:40:17 I didn’t invest.
0:40:18 I didn’t sit on boards.
0:40:20 I didn’t buy real estate.
0:40:24 I was literally like Qualtrics for 20 years heads down.
0:40:29 And I, when we say like intense focus, it was like everything else was.
0:40:30 No side hustles.
0:40:31 No side hustles.
0:40:32 No angel investing.
0:40:33 No.
0:40:33 Yeah.
0:40:33 Nothing.
0:40:34 And like it probably.
0:40:35 22 years.
0:40:35 Yeah.
0:40:39 Like it was like nothing except for Hoops.
0:40:44 I would go down to Summer League and sit there with Ainge and he like, he was cool enough
0:40:48 to let me like, I mean, he’s running the Celtics and it was like, I could see how it was all.
0:40:50 And you were plotting, you were thinking like, I wanted to get into this?
0:40:51 No, it just happened.
0:40:53 I was like, I am so intrigued by this.
0:40:54 I love the NBA.
0:40:55 I love Hoops.
0:40:58 Like I love the business side of it.
0:41:03 And, you know, when we did sell, like my brother was like, what are you going to do?
0:41:06 And I was like, I’m going to, I’m going to go be part of the NBA.
0:41:09 You know, with SAP, I, I’d gotten to know Adam.
0:41:15 I was working on a tech council for the NBA and through SAP and Bill McDermott had connected us.
0:41:18 And, you know, he was like, Hey, and I, I let him know.
0:41:21 I was like, I’m, I’m going to be part of this one way or another.
0:41:24 Like, and he was like, Oh, we’d love it.
0:41:26 Like too bad Utah is not for sale.
0:41:33 And, you know, he called me and was like, Hey, you know, and someone else, like I hear Minnesota’s for sale.
0:41:39 And so I went down that entire road and that story is pretty famous where Ash was like, we’re jazz fans.
0:41:43 Well, do we have to give up our season tickets at the jazz?
0:41:44 I said, yeah, that’s probably part of it.
0:41:49 And, you know, it was like, no, we grew up jazz fans.
0:41:49 And I was like, Oh yeah.
0:41:52 Like, and you just thought the jazz would not come up for sale.
0:41:54 The Miller family was like, yeah, they weren’t.
0:42:05 And like, I had approached, yeah, I had approached, uh, Gail Miller who, you know, Larry and, and Gail had purchased it for years and they owned it for 30, 35 years.
0:42:08 It was in a legacy trust for the family that could never be sold.
0:42:10 Oh, like it literally could never be sold.
0:42:12 Yeah, it was, it was, it was a pretty locked door.
0:42:14 At least that’s what we thought.
0:42:15 Right.
0:42:17 And, um.
0:42:18 And you got a jazz hat on.
0:42:18 So something changed.
0:42:19 What happened?
0:42:19 Yeah.
0:42:22 I think, I think, you know, I had approached her and the answer was no.
0:42:22 And then.
0:42:24 So you got a call back.
0:42:24 Yeah.
0:42:25 I got a call back.
0:42:30 No, about six months later saying, Hey, after we turned down Minnesota saying, are you still interested?
0:42:32 I was like, are you serious?
0:42:34 Um, yes, we’re in.
0:42:34 Right.
0:42:36 And.
0:42:38 How’d you negotiate the value or how’d you, how’d you figure it out?
0:42:43 It was literally a meeting where it was like, well, are you serious?
0:42:43 Make us an offer.
0:42:50 And we pulled up the Forbes valuation on the phone and I said, well, how’s this?
0:42:51 Cause I didn’t, I didn’t know.
0:42:52 I assume there’s a team of scientists.
0:42:53 This was before.
0:42:54 Economists.
0:42:56 This was like a year before all this madness.
0:42:58 And I was like, is that work?
0:43:00 I was like, it seems fair.
0:43:00 Right.
0:43:03 And like, to her credit, like.
0:43:05 And it wasn’t a big auction or anything in that case.
0:43:06 No, there was no one else.
0:43:06 Yeah.
0:43:09 I think she had sat across the court from Ashley and I.
0:43:10 She knew what we were about.
0:43:14 She, she cared about it being in Utah.
0:43:18 And that was important.
0:43:19 They had had 35 years.
0:43:21 I think they bought it for $22 million.
0:43:22 Right.
0:43:22 And.
0:43:24 Would you buy for 1.6?
0:43:25 Yeah.
0:43:25 1.6.
0:43:31 And it was like, okay, I’ve got a, this looks like about as clean as it could get.
0:43:32 Right.
0:43:34 I mean, it’s not all gold when you’re running an auction.
0:43:34 So how does it work?
0:43:37 You buy a franchise, you’re not buying the whole thing.
0:43:38 So that’s the franchise value.
0:43:40 You’re buying a part, like a majority stake.
0:43:40 Yeah.
0:43:42 You just got to send a wire one day.
0:43:43 Like, how does this actually go down?
0:43:45 I mean, pretty much.
0:43:45 I mean, we did.
0:43:46 Yeah.
0:43:48 Like, yeah, that’s pretty much how it works.
0:43:49 Like, let’s double check the numbers.
0:43:50 It’s like a car.
0:43:54 You got, you got to go figure it out because you can’t put a lot of debt on these.
0:43:57 And, you know, my philosophy was don’t bling.
0:43:59 These chance, there’s 30 of these things in the world.
0:44:00 Just go.
0:44:00 Right.
0:44:05 And, you know, Ash and I had a lot of conversation about like, why?
0:44:07 Life’s pretty good at this point.
0:44:20 Why are we literally going, hey, we’re on this 20-year journey of sacrifice and travel and all of this and literally grinding at a level that most people could never comprehend?
0:44:22 You interview founders all the time.
0:44:26 Like, when we’re all in, it’s like a different level.
0:44:34 And then going and signing up for a level where there’s a lot of pressure, there’s a lot of responsibility.
0:44:42 Everything’s public and you’re taking the hopes and dreams of a whole nation here and putting them on your shoulders to go do something.
0:44:45 And you’re also impacting the children.
0:44:51 Like, you know, kids, our kids, like, at Qualtrics was a relatively normal life.
0:44:52 Right.
0:44:56 Even though it was worth, on paper, like a lot more than an NBA team.
0:44:57 The NBA team is very different.
0:44:58 Yes.
0:44:58 Right?
0:44:59 And so—
0:45:00 You didn’t take it lightly.
0:45:01 No.
0:45:05 And, you know, there was a lot of personal discussions about what’s this for?
0:45:06 Is this for ego?
0:45:06 Is this for us?
0:45:07 Is this for helping Utah?
0:45:10 And it really came down to, like, Utah.
0:45:15 I want to finish with a couple of rapid fire, almost like life-isms.
0:45:18 This idea of the nine most important minutes of the day.
0:45:20 What are the nine most important minutes of the day?
0:45:23 When your kids wake up, when they get home from school, and when they go to bed.
0:45:25 3-3-3.
0:45:27 And you show up for those.
0:45:29 Or you just try to hit one.
0:45:30 Right?
0:45:34 I mean, a lot of times, like, you’re planning a trip, you’re doing this, and, like, you have
0:45:37 an option to, like, be at one of those.
0:45:37 Right.
0:45:44 And so, I think that as you schedule, as you plan, as you optimize, those are important moments.
0:45:45 Not all three, maybe.
0:45:49 But, like, if I can schedule a call, I’m not doing it in one of those moments.
0:45:50 Right.
0:45:54 Another one is, you know, if you don’t know what to do, if you don’t know what you want
0:45:56 to do, go figure out what you don’t want to do.
0:45:57 Use the inversion.
0:45:58 Use the contrast.
0:45:58 Yep.
0:45:59 What’s that?
0:46:00 Unpack that a little bit.
0:46:05 I just, you know, we teach a class at BYU.
0:46:06 We teach a business school class.
0:46:09 And, you know, it’s every fall.
0:46:11 And it’s around leadership and decision-making.
0:46:13 And watching all these kids, it’s like, this is what I want to go do.
0:46:16 I didn’t know what I wanted to do.
0:46:18 And I think that’s why Qualtrics worked.
0:46:22 Because if I had a picture in my head of what it’s supposed to look like, I don’t think I
0:46:23 would have done Qualtrics.
0:46:28 I would have been so focused on that, the opportunity, or Zuckerberg could have been sitting next to
0:46:31 you starting a business, and you’re like, you didn’t even see it.
0:46:32 And you’re, like, kicking yourself.
0:46:32 Right?
0:46:38 But what I did know is there was some attributes that I believed in.
0:46:42 I knew I wanted to be able to have a job where the sky was the limit.
0:46:46 My age wasn’t going to limit me to what my potential could be.
0:46:50 I didn’t want to be like, well, when you’re 22, you can make up to $80,000 a year.
0:46:52 And you’re 24, you get to 120.
0:46:53 I didn’t want to be capped.
0:46:57 I want to be like, if I work harder than everyone else, I’m more creative.
0:46:58 My ideas hit.
0:46:59 Like, they can go somewhere.
0:47:00 Right?
0:47:04 I knew I wanted to be, like, in leadership and I could lead.
0:47:05 Right?
0:47:08 I knew I wanted to see a lot of businesses very quickly.
0:47:09 A lot of industries.
0:47:12 I wanted to know the world and know every industry.
0:47:13 Okay?
0:47:17 I wanted something that was kind of not old school.
0:47:24 And so, like, when I started looking at opportunities, like, I never thought enterprise software.
0:47:28 But I was like, okay, I look at it and I kind of put the opportunity right here.
0:47:30 And I’m like, wait, sky’s the limit.
0:47:31 I can be a founder.
0:47:33 I can create.
0:47:34 I’m not really capped.
0:47:36 It’s a new school.
0:47:37 It’s a new part of technology.
0:47:38 It can go for a long time.
0:47:43 Like, I’m not going to get the legs pulled out from under me if I start doing well.
0:47:55 And, like, I think those attributes is where I would advise kids and younger people or entrepreneurs to say, okay, don’t be so caught up on what this looks like.
0:48:02 See if it fits and you’ll be blown away that it’s like, oh, the auto industry actually works really well for me.
0:48:03 Right.
0:48:04 Never would have thought about that.
0:48:07 And that’s all that really matters.
0:48:11 And so, I think that’s kind of how we look.
0:48:15 You know, and now I’ve got a lot more roles and things that I care about.
0:48:17 But it has to fit into that.
0:48:18 You ask, like, what do we do?
0:48:19 Does it fit?
0:48:23 And, you know, you kind of go through that rubric.
0:48:24 That’s great.
0:48:26 Well, listen, man, thank you for doing this.
0:48:26 I appreciate that.
0:48:27 Yeah, thanks for coming out to Utah.
0:48:29 I mean, it’s great out here.
0:48:29 All right.
0:48:30 I love it.
0:48:30 Let’s go.
0:48:31 All right, man.
0:48:31 Thank you so much.
0:48:31 Okay.
0:48:43 Hey, let’s take a quick break.
0:48:45 I want to tell you about a podcast that you could check out.
0:48:48 It is called The Science of Scaling by Mark Roberge.
0:48:53 He was the founding CRO of HubSpot, and he’s a guest lecturer at Harvard Business School.
0:48:54 The guy’s smart.
0:48:58 And he sits down every week with different sales leaders from cool companies like Klaviyo and Vanta
0:49:03 and OpenAI, and he’s asking about their strategies, their tactics, and how they’re growing their
0:49:06 companies as, you know, head of sales or chief revenue officer.
0:49:10 If you’re looking to scale a company up, if you’re a CRO or a head of sales that’s looking
0:49:13 to level up in your career, I think a podcast like this could be great for you.
0:49:16 Listen to The Science of Scaling wherever you get your podcasts.
0:00:05 a guy who went from a 1.9 GPA high school dropout
0:00:07 to a $2 billion net worth.
0:00:09 But this isn’t your normal dropout story.
0:00:10 At some point, you have a conversation with yourself,
0:00:12 like, okay, I gotta make this happen.
0:00:15 – Yeah, I gotta find a gear that I’ve never used before.
0:00:17 – When he dropped out, he had no plan,
0:00:18 no money, and nowhere to live.
0:00:20 There’s a great story about the early days of Qualtrics
0:00:21 and Focus.
0:00:23 – We were religious about it,
0:00:26 and it was actually an incredible forcing function for me.
0:00:28 – At some point, you get offered $500 million
0:00:29 to sell the company.
0:00:30 And you turned it down.
0:00:32 – Every other person I would talk to about this offer
0:00:34 was like, take it and run.
0:00:37 – You’re building it from your family’s basement
0:00:39 all the way to the end zone, basically.
0:00:41 Sell for $8 billion, you end up going public.
0:00:43 – I didn’t do anything else when I was doing Qualtrics.
0:00:45 I didn’t invest, I didn’t sit on boards.
0:00:46 – No side hustles.
0:00:47 – No side hustles.
0:00:50 Nothing except for hoops.
0:00:52 – What’s it like to now own an NBA team?
0:00:53 That’s insane.
0:00:56 – My philosophy was don’t bling, just go.
0:01:01 – I feel like I can rule the world.
0:01:04 I know I could be what I want to.
0:01:07 I put my all in it like no days off.
0:01:09 On the road, let’s travel, never looking back.
0:01:10 – I want to start with this.
0:01:14 Like, you know, you’ve done what kids like me dream up.
0:01:18 It’s like, build a successful company with my family, no less.
0:01:20 Become the super successful guy, billionaire,
0:01:21 NBA team owner.
0:01:22 You live this really interesting life.
0:01:26 What’s cool is that if we rewind the clock,
0:01:29 you were a guy who dropped out of high school
0:01:32 and had a 1.9 GPA in high school.
0:01:36 So going from a 1.9 GPA to like, I don’t know,
0:01:38 a $2 billion net worth, that’s a pretty big jump.
0:01:41 We hear these stories where it’s like,
0:01:44 Mark Zuckerberg, Bill Gates, they were at Harvard
0:01:46 and then they dropped out with this big grand idea
0:01:48 and it came to fruition.
0:01:49 That’s not your story at all.
0:01:50 So let’s do the origin.
0:01:54 Can you take us back, you know, you’re 14, 15, 16, 17 years old.
0:01:56 What was going on in your life at that time?
0:01:59 Yeah, I mean, it’s no secret, like my parents split up
0:02:02 when I was like 14 and the world was rocked.
0:02:07 And, you know, I was very much like, okay, screw everything.
0:02:10 No one can tell me what to do.
0:02:12 And, you know, I think my parents were trying their hardest
0:02:14 to keep us, I mean, we had five kids.
0:02:16 They were keeping us all kind of afloat.
0:02:21 And I think to be honest with you, you know, I never really developed the skills for,
0:02:24 for school and, and I didn’t think I was really good.
0:02:26 I knew I was a good athlete.
0:02:29 I knew I was good at golf and could play poker.
0:02:35 And like, I, I knew there was something there, but I didn’t work hard.
0:02:37 I didn’t finish anything.
0:02:45 And it was really hard, like this concept of finishing and it just never happened.
0:02:53 And so I think the trajectory I was on at 14, 15, 16, 17 was not a very hopeful one.
0:02:56 And there was no indication that there was a spark.
0:02:59 There was no indication that there was good ideas in there.
0:02:59 Right.
0:03:01 So what was your move?
0:03:05 So you’re not, you’re not loving school, not doing that well, no spark there.
0:03:09 What was the decision to, to quit, to drop out, to, to leave?
0:03:09 Yeah.
0:03:11 I mean, it was just kind of forced.
0:03:14 It was like, hey, school was like, this isn’t working out for you.
0:03:15 Like you don’t go to class.
0:03:16 You’re like, it’s not us.
0:03:17 It’s you.
0:03:20 You know, there’s probably another path for you.
0:03:25 And I had an uncle who reached out and said, hey, Ryan, you’re 16.
0:03:26 We’re doing a tech company.
0:03:28 It was called iMall.
0:03:31 You’re not going to just screw off all day.
0:03:32 You might as well come work.
0:03:33 I’m running a sales team.
0:03:33 Come work.
0:03:37 And I worked in the mailroom and I worked with three older gentlemen.
0:03:39 I mean, one was in his 40s.
0:03:40 One was there.
0:03:44 And the founder had just gotten back or someone had just gotten back from Seoul, Korea.
0:03:47 And I would always say like, I’m going to go make money one day.
0:03:49 I’m going to go work on the fishing boats in Alaska because they’re
0:03:51 paying 20 bucks an hour.
0:03:52 I’m going to go do this.
0:03:54 And my parents were like, go do whatever you want.
0:03:56 Just graduate high school.
0:03:57 Like we don’t care.
0:03:59 The bar was really low.
0:04:02 And like these guys were like, no, you should go to Korea.
0:04:05 And I was like, that sounds good.
0:04:09 And my dad was like, if you can pay for it and graduate high school, we’ll do it.
0:04:09 So I graduated high school.
0:04:11 I got a GED when I was 17.
0:04:15 I went to like a university and just like cranked it out.
0:04:16 Like a few months.
0:04:18 Like three months through like packets.
0:04:22 And like, I was with like mothers and like everyone else who would not.
0:04:25 And it was like, I was like, okay, I’m going to crank this thing out.
0:04:27 And I did it.
0:04:29 And there was a little bit of a moment like, whoa.
0:04:31 All right.
0:04:33 When I kind of set my mind to something, I can do it.
0:04:36 And then I went out and that’s, that’s when I went to Seoul.
0:04:39 And so you go to Seoul, you’re what, 17 years old at this time?
0:04:40 Do you have a plan?
0:04:42 The plan was I communicate.
0:04:43 I’d never left Utah.
0:04:48 I, I’d communicate with someone and like, we were supposed to show up and like, we had jobs.
0:04:49 They had a house for us.
0:04:50 They had all these things.
0:04:53 And, you know, we had talked to them.
0:04:57 So I remember getting there and like, we had limited cash, but we were there.
0:05:01 We were there to sign a contract and work for a school and move in.
0:05:07 And we get there and we, we go right to the hotel and we’re waiting and we call where we’re
0:05:11 supposed to meet up and no answer, no answer, no answer, no answer.
0:05:13 Next day, no answer, no answer, no answer.
0:05:15 And we’re like, what in the world?
0:05:17 And then finally someone answers.
0:05:19 And it’s a Korean woman who didn’t speak any English.
0:05:25 And it was like, okay, well, but this person, like, I thought we were showing up and they
0:05:27 were just gonna, I’ll be there waiting.
0:05:29 Hey, we’re so excited to have you.
0:05:30 And it was the exact opposite.
0:05:36 And like, basically after a week in this hotel, it was like, you have no job.
0:05:37 You have no house.
0:05:40 You don’t have enough money to be staying in this hotel.
0:05:47 And so I remember sitting in a, in a coffee shop and, you know, we kind of all called our
0:05:48 parents to come home.
0:05:54 These guys, all the parents went to the airport, bought them a ticket and they all jumped on the
0:05:57 plane, but like, I sat there and my dad’s like, you’re not coming home.
0:05:59 And I was like, what in the world?
0:06:02 He’s like, I know what you’re going to do here.
0:06:06 Like, you got a chance to go do something.
0:06:09 And I, and I look back as a parent now and I was like, what in the world?
0:06:16 Like, I would never leave my kid over there, but he was like, the upside is like way better.
0:06:21 And so what was your dad, was that tough love or was he just sort of like, look,
0:06:23 you just need to look at it this way, hang in there.
0:06:26 Like what, what, what was he, what was going through the mind?
0:06:28 You think I have no idea.
0:06:31 I like, honestly, I’ve thought about it so much.
0:06:32 It’s like, and that’s just my dad.
0:06:35 Like he, he’s like fine with this kid’s failing.
0:06:37 Did you feel like rock bottom at that point?
0:06:38 Oh my word.
0:06:46 So homesick in a country, no Americans, no English, no money.
0:06:50 And you just kind of had to go figure it out.
0:06:51 All right.
0:06:52 So you meet this guy, crash on his couch.
0:06:56 At some point you have a conversation with yourself like, okay, I got to make this happen.
0:06:56 Yeah.
0:06:59 I got to find a gear that I’ve never used before.
0:07:01 And so what’d you do?
0:07:04 Ended up running into someone who needed an English teacher.
0:07:07 The school was a ways away.
0:07:10 I didn’t have a place to stay.
0:07:13 So he said he’d pay me $10 an hour, which isn’t a lot there.
0:07:19 So I teach the kids from, you know, three hours a day in the mornings.
0:07:26 And I had found out about a place where Koreans go to study called the Goshiwon, which is like
0:07:28 that locker room we just looked at.
0:07:29 It’s about that big, but a little bigger.
0:07:31 No one ever sleeps there.
0:07:36 And I’d convinced the guy that if I could teach him English one hour a day,
0:07:39 he’d let me sleep there because I had a shower.
0:07:40 I found a little stove.
0:07:43 I would cook ramen noodles on it because that’s all I could afford.
0:07:45 Obviously, it’s tough.
0:07:49 Obviously, you’re sort of it’s like character building moment because you’re on your own for
0:07:51 such an extended period of time.
0:07:57 But was there like a part of you that was in sort of enjoying MacGyvering it a little bit?
0:07:57 Not at all.
0:07:59 This was not…
0:08:00 No momentum.
0:08:02 No.
0:08:02 No.
0:08:07 Like at the time, there was no like, there was no of like myself now looking back going,
0:08:08 “Okay, I’m gonna get crafty.
0:08:09 This is an experience.
0:08:10 I’m backpacking through Europe.”
0:08:11 Didn’t have that attitude then.
0:08:12 This was not that.
0:08:15 I mean, this was like, I gotta get home.
0:08:15 Right.
0:08:18 And so you’re teaching one guy.
0:08:20 Did you eventually get more students?
0:08:20 And how’d you do that?
0:08:28 In Korea, there was, you know, 20 big 15 to 20 story high rises where everyone lived.
0:08:30 And I was like, “Okay, I’m teaching English.
0:08:32 I’ve got 12 hours in the day.
0:08:37 The better, rather than teaching a school, it’s way better to do these private lessons.
0:08:45 And if I could get into one of the high rises and get like starting at four o’clock in the
0:08:50 afternoon, teach every 55 minutes, like it’s going to be great.
0:08:51 Well, how do you do that?”
0:08:53 And I got someone to write.
0:08:54 I had a pager at the time.
0:09:00 I got someone to write a message in Korean and I made like 5,000 flyers.
0:09:06 And I would go in and they’d have these huge mailbox rows, but there was a security guard there.
0:09:08 So I would go in and talk to the security guard.
0:09:09 And I was like, “Hey, man.”
0:09:11 In English or a broken Korean?
0:09:12 Whatever it took.
0:09:14 I would just try to be their friend.
0:09:15 Okay.
0:09:17 And I was like, “Let me put these here.
0:09:17 This is it.
0:09:19 Let me put these in all of these.”
0:09:20 And they’re like, “Well.”
0:09:21 And I was like, “Come on.”
0:09:24 And I would normally be pretty successful at it.
0:09:25 Right.
0:09:27 And then my beeper just started hammering and blowing up.
0:09:28 And I was like, “Whoa.”
0:09:30 Like this was the first time in my life I was like,
0:09:32 “Actually, there’s something in there.
0:09:35 Like you have a good idea and you can execute on it.”
0:09:39 And then I started getting a schedule.
0:09:43 And like literally like a month later, I was making like $8,000 a month
0:09:47 as a 17-year-old teaching English.
0:09:50 And I was like, “How in the world did I go from there to here?”
0:09:52 That’s amazing.
0:09:53 Let’s talk about the start of Qualtrics.
0:09:58 So you build this company, you build it with Stuart, you build it with your brother, with your
0:10:06 dad, and you’re building it from your family’s basement all the way to the end zone, basically.
0:10:11 Sell for $8 billion, you end up going public, you have a pretty crazy story over like a 20
0:10:12 something year period.
0:10:14 What’s the origin?
0:10:16 What was the idea?
0:10:18 And, you know, what were the early days like?
0:10:24 Yeah, so I think that the origin, and if you talk to all of us, it’s a little different.
0:10:27 Like, so it was really my dad and I who started.
0:10:30 I was doing an internship at Hewlett Packard in L.A.
0:10:36 And I get a call that my father had cancer, and it was terminal, like, or pretty close.
0:10:42 I mean, it was like three years to live, max, and probably a couple months.
0:10:48 And he ended up going through and recovering, you know, and is alive today, which is an amazing
0:10:48 story.
0:10:55 But I kind of had a moment where I just left California, I was working in L.A., and came
0:10:59 back, deferred school, and said, “I’m spending this whole semester with my dad.”
0:11:03 My dad was always working on technology.
0:11:10 He’d come up with this idea of, like, collecting research online, and it seems normal now, but
0:11:12 at the time, it wasn’t trusted.
0:11:13 Right.
0:11:13 And it definitely-
0:11:15 What were companies doing before Qualtrics?
0:11:22 Yeah, they were either doing customer satisfaction, paper, pencil, or not doing it at all.
0:11:23 Okay.
0:11:28 Like, the thought of asking your employees feedback or your customer feedback, that seems
0:11:28 normal now.
0:11:29 Table stakes today.
0:11:30 They wouldn’t do it.
0:11:33 And so, they’d have blind spots everywhere.
0:11:36 And he would get paid a lot of money to go in there and help companies do this, and it was like
0:11:38 a novel thing.
0:11:41 We were going to go put the customer at the table, we were going to have them part of the
0:11:45 decision-making process, and this is what we were going to come up with.
0:11:51 And so, he had this idea, but he was always messing around, and he never really went commercial
0:11:52 with anything.
0:11:59 Well, I was in Hewlett Packard, and I had gotten pretty, I learned some tricks around how to,
0:12:02 like, go to market over the phone with technology.
0:12:07 And so, I saw what he was working on, and I was like, “Actually, I had just been doing that
0:12:09 with, like, some software and support stuff.
0:12:13 What if we applied it here?”
0:12:18 And so, he would come home from his, like, radiation and chemo, and you’re just kind of
0:12:21 sitting there, and I’d be like, “Let’s do a business.
0:12:22 Let me take this to the world.”
0:12:23 He’s like, “Well, I don’t have any money.
0:12:24 I can’t pay you.”
0:12:29 I said, “Well, let’s just go 50-50.”
0:12:33 And, you know, by the time he recovered, he couldn’t speak.
0:12:40 We had 10 customers, and, like, we kept finding people that would believe in what we were doing.
0:12:46 And it was a little Jerry Maguire moment where I had to find, like, one person who was, like,
0:12:47 then take it to the world.
0:12:50 And, like, that’s kind of how the business started in the basement.
0:12:52 And so, he couldn’t talk at the time.
0:12:53 So, even, he’s what?
0:12:53 He’s writing down?
0:12:55 He’s writing on a board.
0:12:56 And you’re the guy on the phone.
0:13:00 And I’m on the phone, and these people are asking, like, about deep statistical stuff.
0:13:01 I don’t know.
0:13:07 And I’m, like, going back and forth, and, you know, it was a pretty gnarly time.
0:13:11 I wish I had more pictures in that moment, but no one thought it was going to be anything.
0:13:11 Right.
0:13:16 And everyone’s like, “Oh, you started with your dad, and it was just great.”
0:13:16 Like, no one.
0:13:19 Like, my roommates didn’t think it was going to be something.
0:13:20 Like, I didn’t even think it was.
0:13:22 He didn’t think it was going to be something.
0:13:27 Hey, let’s take a quick break for a message from our sponsor, HubSpot, who’s making this
0:13:28 episode possible.
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0:14:05 All right, back to the show.
0:14:10 There’s a great story about the early days of Qualtrics and Focus, and I love this when
0:14:12 I was researching it.
0:14:15 I guess it was you and your brother who were talking about like, “Well, we have this market.
0:14:17 We can sell to these people, these people.”
0:14:19 And you guys at some point decided, “No, no, no.
0:14:20 We want to narrow down.
0:14:21 So, only the universities.”
0:14:25 And the part I love, because focus is a word anybody can throw around, right?
0:14:28 But like, if you take focus as an action word, what does it mean?
0:14:31 It means saying no to a bunch of otherwise believable ideas.
0:14:36 And the thing I read in the research was, your brother was basically like, you know, if you’re
0:14:40 talking to him about some other type of customer, he’s hanging up the phone.
0:14:44 He’s like, “Unless you’re talking about these 250 universities, I don’t want to hear it.”
0:14:47 And so, could you tell me about like, how that went down and what that was like?
0:14:53 Yeah, so this is probably 2006, 2007, and we had found some traction in universities.
0:14:55 We’d found people like my dad.
0:14:57 My first customer was Angela Lee at the Kellogg Business School.
0:15:03 She made all of her students use Qualtrics and then it just kind of went from there.
0:15:06 And I can go through every professor and kind of how the whole thing worked.
0:15:09 But my brother at the time was a Google.
0:15:16 He was an early Googler, and at this time, like, I didn’t have very many people to call.
0:15:24 And, you know, I didn’t know how good he was, but I knew he was like running a big piece of the internet.
0:15:25 Okay.
0:15:25 Right?
0:15:33 And Google was kind of having a moment, and he had been assigned to go run China for Google.
0:15:38 So, he was living in Beijing, he was working with Kai-Fu Lee and like running Google China.
0:15:39 Wow.
0:15:45 So, for me, I think when I would call him and ask for advice and we started developing this dialogue,
0:15:47 he was four years older than me, so we were close, but not that close.
0:15:52 I think for him, it was like, dude, you’re all over the place.
0:15:55 I don’t have time for this.
0:16:02 If you’re going to call me, stay on script, stay focused, and like actually finish something.
0:16:04 And it was a little bit more like, get out of here.
0:16:04 Right.
0:16:07 But he was religious about it.
0:16:13 And it was actually an incredible forcing function for me and the team to be like,
0:16:18 okay, we’re going to go get the top 100 universities and nothing else matters.
0:16:18 Right.
0:16:18 Right.
0:16:20 These forcing functions are so powerful.
0:16:21 Yeah.
0:16:22 You know, it’s like we play basketball.
0:16:25 Like if there’s a shot blocker, it’s like you can’t bring that weak stuff in here.
0:16:30 You can’t show up on the call and be scatterbrained because you know how the other person is going to respond.
0:16:32 I know what he’s coming at me with.
0:16:34 Even when they’re not in the room, you start editing.
0:16:34 Oh, yeah, yeah.
0:16:35 What am I going to tell him?
0:16:37 What’s the story on our next call that we have?
0:16:39 What progress am I going to show him?
0:16:39 Right.
0:16:43 Am I actually telling him the same story I told him last week?
0:16:45 So what did we actually get done this week?
0:16:45 Right.
0:16:49 I’ve got to actually come up with a new story.
0:16:55 And, you know, ultimately, I was able to recruit him out of Google to move back to Utah.
0:16:58 And that happened in 2009.
0:16:59 So we were seven years in.
0:17:05 And then when we got together, magic started happening.
0:17:06 Why is that?
0:17:07 What changed?
0:17:08 Just because he’s that good?
0:17:09 Or what do you mean?
0:17:09 Yeah.
0:17:10 I mean, I knew he was good.
0:17:16 I didn’t know he was a top five or six, whatever at the time, product person in the world.
0:17:19 And there was a dynamic between us.
0:17:21 And I’ll just be super honest.
0:17:21 We were brothers.
0:17:22 We had to love each other.
0:17:29 And we were just able to push on each other harder than any executive or person I’ve ever met.
0:17:29 Right.
0:17:34 You know, with executives, I could probably go, or teams, I could probably go three or four rounds
0:17:38 on something really hard before someone said uncle.
0:17:40 With my brother, I could go 15.
0:17:44 Because we had to wake up.
0:17:45 And there was no drama.
0:17:46 There was no nothing.
0:17:48 Like, we spoke each other’s language.
0:17:50 But we were so different.
0:17:52 You know, he was full engineer.
0:17:54 I was full, like, business.
0:17:56 And we met on the product side.
0:18:02 And we almost had to grow together to, like, almost like a relationship.
0:18:07 Like, where, like, my weakness is he had to go fill in those gaps.
0:18:07 Right.
0:18:08 My blind spot.
0:18:08 And me too.
0:18:10 Yeah.
0:18:13 I’ve read something where you were saying that, you know, he came to you at some point.
0:18:15 And he’s like, hey, here’s my weaknesses.
0:18:17 What are yours?
0:18:21 And you’re like, I had never really thought about it to that level of detail.
0:18:21 I’m great, right?
0:18:22 No.
0:18:24 He’s like, hey, I suck at these five things.
0:18:24 What do you suck at?
0:18:26 I was like, I don’t suck at anything, bro.
0:18:29 And he was like, oh, boy.
0:18:35 And I’ve heard him say this, like, my job is to develop my younger brother.
0:18:36 Who does that?
0:18:37 Yeah, that’s great.
0:18:45 And when we took money in 2011, Sequoia, I remember, was like, we’re only doing this if there’s a CEO.
0:18:47 Which one of you is the CEO?
0:18:49 So it wasn’t really even stated.
0:18:50 No.
0:18:51 We worked together.
0:18:52 He said clearly, we are co-founders.
0:18:55 I’m not working for my little brother.
0:18:58 And, like, I remember sitting in the room.
0:19:03 I’m looking across from Mike Moritz, who gave Steve Jobs his first dollar and back Larry and Sergey.
0:19:06 And, like, they’re like, we need a CEO or we’re not investing.
0:19:08 And, like.
0:19:09 You guys kicking each other under the table?
0:19:11 Literally, it was just crickets.
0:19:13 Because I knew where this conversation was going.
0:19:17 And I still remember the silence.
0:19:20 Because we’re all just looking at each other.
0:19:24 And finally, he just stands up and slaps the table and is like, it’s him.
0:19:26 And he points at me.
0:19:29 And he goes, I won’t do media.
0:19:30 And then sat down.
0:19:33 And, like, if you find a Jared interview, it’s rare.
0:19:36 If you find a Jared Smith interview, it is super rare.
0:19:40 And, you know, that was a moment where I was like, all right.
0:19:44 Like, we’ll still operate two in the box.
0:19:44 We’ll divide the world.
0:19:46 But, like, it’s a cool moment.
0:19:49 And then it was like, you’re a first-time CEO.
0:19:51 They’re giving you, we’re now in the big leagues.
0:19:53 Like, we’ve taken this money from Excel.
0:20:01 This is the largest Series A raised in 2012 since 2008 in all of tech.
0:20:06 It’s outside of the Bay Area, which, I mean, Sequoia at the time wasn’t even vesting there.
0:20:07 So we came out of nowhere.
0:20:11 The Forbes article was, like, the biggest company no one’s ever heard of.
0:20:12 Right.
0:20:16 And, you know, you look at that prior time, but now the pressure was on us.
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0:20:43 So wait, what year did you start the company?
0:20:44 2002.
0:20:44 2002.
0:20:46 Now we’re talking about 2012.
0:20:46 10 years.
0:20:47 10 years.
0:20:49 You have a sign out there in your office that we walked by.
0:20:53 It says, tune out the noise, play the long game.
0:20:56 And there’s a picture of a guy just sitting there with his ears plugged.
0:20:58 And I’ve had a lot of people on this podcast.
0:21:01 I remember when we had Jimmy, Mr. Beast.
0:21:02 He’s now the biggest YouTuber in the world.
0:21:06 But back then, and I played him a clip of him like, you know, 10 years prior.
0:21:09 And he just said, matter of fact, he goes,
0:21:11 I started this when I was 12 years old.
0:21:12 When I was 12, nobody watched.
0:21:13 13, nobody watched.
0:21:15 14 years old, nobody watched.
0:21:16 15, nobody watched.
0:21:17 16, is anybody ever going to watch?
0:21:18 17, nobody watched.
0:21:22 He’s like, finally, when I was 19, some people started to watch.
0:21:25 And even then, it was nothing, you know, just relative to how it grew.
0:21:27 And so he was talking about, you know,
0:21:31 there’s this cliche around the, you know, sort of this 10-year overnight success.
0:21:36 But it’s real different when you hear somebody just year after year of just obscurity.
0:21:38 What was that like for you, that period?
0:21:40 But you against the world.
0:21:44 And, and, you know, I’ll never forget once.
0:21:46 And I think it was like 2004.
0:21:48 We were in our basement.
0:21:50 My father was operating.
0:21:54 He was in one room on his computer, like deep into like stat stuff.
0:21:59 And I was out there and I was having these issues with our website.
0:22:04 I was like super frustrated because our competition had just raised a bunch of money.
0:22:06 The product was cheaper than ours.
0:22:12 They raised $40 million and their product was better than ours.
0:22:15 Better, cheaper, more resources, more funding.
0:22:17 And I’m like, that’s, that’s hard.
0:22:20 Like, so I was, I was frustrated.
0:22:21 I was like pissed.
0:22:23 And I was like, are we going to do this?
0:22:23 What’s going on?
0:22:27 And like, I was almost like argumentative with my father.
0:22:28 My father’s just sitting there.
0:22:31 And finally, like, it’s the only time I ever saw him get mad.
0:22:35 And he like slams the table, turns around and he’s like, who’s stopping you?
0:22:38 Like, who’s stopping you from going to do everything you want to go do?
0:22:41 And like in that moment, it was like a ton of bricks.
0:22:46 Like, if we’re going to go do this, you’re going to have to do it.
0:22:49 Like, you can’t blame, there’s only two of you.
0:22:50 Right.
0:22:52 Like, you’re actually going to have to go do it.
0:22:54 There’s not going to be a shortcut.
0:22:55 There’s not going to be an easy button.
0:22:57 Like, you’re going to have to go.
0:22:59 And from that moment on, I stopped asking him.
0:23:03 And, you know, that was kind of that moment.
0:23:04 Don’t ask for permission.
0:23:05 So I have this photo here.
0:23:07 This is, describe the scene.
0:23:08 Oh, wow.
0:23:12 So this is, this is me and Stuart.
0:23:19 Everything in this photo is bought at a salvage cell from campus.
0:23:21 So like, the printers were $5.
0:23:28 On the board, I’m making a list of customers and like setting goals, like the 25K club.
0:23:29 Yeah.
0:23:31 And seeing how many we can put.
0:23:33 How many sales calls do you think you did those first couple years?
0:23:34 It’s just dialing.
0:23:35 All day.
0:23:35 All day.
0:23:37 Like emailing, dialing, going.
0:23:39 You still remember your script?
0:23:40 Ring, ring.
0:23:40 What happens?
0:23:41 Oh, yeah.
0:23:43 I mean, I would ask people what they’re using.
0:23:44 Have they ever heard of us?
0:23:46 Or have they ever done anything like this?
0:23:49 And telling them the top researchers in the world were using it.
0:23:54 If I was calling into Dallas, I would say I was part of the Dallas American Marketing Association.
0:23:57 And we went to the conference.
0:24:01 I would say, hey, can I just walk you through a demo?
0:24:03 And at the time, there was no Zoom.
0:24:04 Right.
0:24:09 So like, I would actually get on the phone, send them a link, and then they would follow along with me.
0:24:09 Right.
0:24:11 And I could do the demo.
0:24:16 This is where I’ve always told our reps, like, do you know your product?
0:24:30 I could do the demo on the phone in a car with a link, walking them through without me looking at the screen and explain to them every single thing that’s going on.
0:24:31 What does it take to be great at sales?
0:24:33 You were great at sales.
0:24:45 I mean, so I think sales gets a really bad name because people, like, use it as, okay, the salesperson we don’t want to deal with.
0:24:52 But I remember a moment, a lot of authors would use our software to write books.
0:24:55 And I remember once Daniel Pink called me.
0:24:58 He said, I’m writing a book, and I want your help.
0:24:59 I said, great.
0:25:01 And he’s like, what’s the title of the book?
0:25:03 And he said, To Sell as Human.
0:25:11 And he basically, it’s a great book about how every single person is a salesperson.
0:25:20 They’re actually trying to get a group of people to go in one direction or another at some point in the day.
0:25:21 Right.
0:25:27 And I think that when it comes to, like, software, the first of all is you’ve got to believe in it.
0:25:30 You’ve got to actually believe that your product has value.
0:25:35 And, you know, the person on the other end’s life’s going to be better if they use it.
0:25:44 And so, in our case, we wanted them to run their businesses from the outside in instead of from the inside out.
0:25:48 We believe that their employees were their biggest assets.
0:26:01 And, like, getting a pulse on them more than once a year was probably a good idea when we said, hey, actually, if your business operated with a cadence of this data, you’re going to win more.
0:26:06 And so, part of it was educating these people that there was a new way.
0:26:09 And, by the way, it was cheaper, faster, and better.
0:26:17 And if you as a user would embrace this, your personal career inside your organization would skyrocket.
0:26:18 Right.
0:26:26 Because everyone else is guessing, and you’ll have this massive propensity of being correct all the time.
0:26:27 Wouldn’t it be great to know?
0:26:29 Wouldn’t it be great to know?
0:26:29 You don’t have to guess.
0:26:32 And so, that was the thought.
0:26:33 And I was like, oh, my word.
0:26:34 Like, how do we get this to everyone?
0:26:36 Somebody had a great reframe.
0:26:41 They were like, sales is the generous act of letting the right person know that you might have a solution to their problem.
0:26:46 If you think about it that way, like, it’s an act of service, and you can approach it maybe differently.
0:26:49 And so, it does start to work, and you get it to work.
0:26:52 You eventually hit a point where you do something pretty crazy.
0:26:56 You start this business in your basement, and you’re dialing for dollars.
0:27:00 And at some point, you get offered $500 million to sell the company.
0:27:01 An absurd amount of money.
0:27:04 That sets up you, your team, everybody for life.
0:27:06 And you turned it down.
0:27:09 What was that like?
0:27:16 So, it was hard because no one had ever offered to buy our company.
0:27:21 And it was, it’s always a reality check where it’s like, okay, it’s kind of a recommitting point.
0:27:28 You know, the gentleman who was doing it ran a company, I’ll just be honest, it was called Survey Monkey at the time.
0:27:28 Yeah.
0:27:35 And, you know, he was married to Sheryl Sandberg, and she was running Facebook, and like, they were the power couple.
0:27:36 Love Dave.
0:27:37 Dave was awesome.
0:27:43 And I was like, whoa, do I want to, do we want to go, my brother had known him because he worked for Sheryl at Google.
0:27:46 Like, it was just this synergy coming together.
0:27:48 And he’s like, I’ll take the business.
0:27:49 Like, let’s go.
0:27:50 We can partner.
0:27:52 You can leave and be done.
0:27:54 Like, it was like the cleanest moment of all time.
0:28:01 And, you know, I remember sitting around just, like, next door from here, and one of our mentors, Duff Thompson’s office.
0:28:07 And, you know, this is someone who, you know, as you talk about mentors, who had been there at WordPerfect.
0:28:13 And, you know, every other person I would talk to about this offer was like, take it and run.
0:28:13 Right.
0:28:19 And Duff’s like, like, we sold WordPerfect too early.
0:28:21 You know, we had the market.
0:28:22 Microsoft was coming.
0:28:24 Like, we sold too early.
0:28:29 And he was like, I, he was the only person that said, don’t take the money.
0:28:35 He said, in my mind, you guys are cash flow positive.
0:28:36 You’re cranking.
0:28:37 You’re growing at 100%.
0:28:44 If you and Jared can get along and do this, it should be interesting.
0:28:50 And Jared kind of turned to me and my dad turned to me and said, well, what do you want to do?
0:28:54 And I just said, I, I’ll come back to you.
0:29:00 And I, I literally, I remember getting in the car with my wife and I was like, hey, we got to leave.
0:29:01 Like, we just got to drive south.
0:29:06 And we get in the car and we’re like 40 minutes into a three and a half hour drive.
0:29:07 She was from Vegas.
0:29:15 So we were going down there and she’s like, like, if it’s going good, just keep it rolling.
0:29:19 And I was like, you don’t worry about like passing that up.
0:29:22 She’s like, no, like, what are you going to do at home?
0:29:25 Like, I, I don’t need you around the house.
0:29:28 And like, this is the time.
0:29:30 Like, if we’re going to go for it, this is the time.
0:29:35 And it was like, it was just one of those moments where we knew we were going to, we were going to go for it.
0:29:37 Had you pulled out a lot of cash already?
0:29:38 Secondary?
0:29:40 Were you like, were you basically already stable and made?
0:29:43 We were profitable, so we were paying ourselves.
0:29:43 Yeah.
0:29:48 And that was a unique thing, like profitability and tech as a young company.
0:29:50 So we would distribute the money.
0:29:52 But this was a whole new world.
0:29:53 Right.
0:29:59 And so we came back and I remember sitting down, you know, it was funny.
0:30:04 Dave, you know, rest in peace, like he, he, he was an amazing human.
0:30:06 And he’s like, I just want to do what’s best for you.
0:30:13 But I remember he flew into town and I was like, I knew that I think I was going to tell him that we were going to turn it down.
0:30:16 And I knew how crazy that was.
0:30:19 But I also needed to hear him out a little.
0:30:32 So we met at the office and I wanted to walk him through our culture and our company because I wanted him to see, you know, maybe things change, maybe comes back for more.
0:30:32 I don’t know.
0:30:33 Yeah.
0:30:36 So I was like, all right, we can’t be recognized.
0:30:38 I was like, put on that hat, like, let’s go in.
0:30:41 And so like, we did this whole tour, we come back, we go to a different office, we sit down.
0:30:48 And I was like, I just, I think we’re going to go for it.
0:30:54 And he’s like, huh, what makes you think you can do it?
0:30:57 And like, I didn’t know what to say.
0:31:03 And I was like, well, I just got you to put on a Qualtrics hat and walk through our building.
0:31:06 I didn’t know what else to say.
0:31:08 And it was like, we’re just going to do it.
0:31:10 And he really respected that.
0:31:11 And we’d have lunch every week.
0:31:19 I was out there and like, you know, we ultimately ended up talking about joining forces later on, actually the week before he passed away.
0:31:21 And then that was kind of, it was cool.
0:31:24 Like things happen for a reason and, you know, we went for it.
0:31:29 And then we decided like, if we’re going to turn that down, that means we got to get serious.
0:31:33 We can’t be running this thing on our own personal credit cards and in the credit union bank and all this stuff.
0:31:38 Like we’ve got to actually put all the money back into the business.
0:31:43 And then, you know, we decided to go raise money from Sequoia and Excel.
0:31:46 And at the time, it was like taking money from the Red Sox and the Yankees.
0:31:48 Excel had just done Facebook.
0:31:53 You know, obviously Sequoia had done Google and, you know, Apple.
0:31:54 And they were the forefront of everything.
0:31:58 And the goal was, hey, you guys like watch our back in the tech industry.
0:32:01 We’re going to sit in Utah and we’re going to make money and put our heads down and go.
0:32:01 Right.
0:32:03 And like we got the world covered.
0:32:04 That’s what we need you for.
0:32:06 It was a pretty cool partnership.
0:32:10 I want to learn from you more on the business side, how you think, how you operate.
0:32:13 One of the things I liked is you talked about like working backwards.
0:32:15 This is one way just to work forwards.
0:32:17 You’re just, I don’t know, we’ll just figure it out as we go.
0:32:19 And of course there’s that.
0:32:25 But a very useful exercise is to like, you know, start with the end in mind and then just reverse engineer.
0:32:27 Well, if that’s true, then what needs to be true underneath that?
0:32:28 And you sort of go back.
0:32:30 Can you explain maybe how you do that or an example?
0:32:36 Yeah, I mean, I think it’s different from where we are today to where we were then.
0:32:38 But I learned something by accident once.
0:32:46 You know, when we did announce the fundraising, I remember getting on the phone with a journalist from Business Insider, Julie Bort.
0:32:49 And I’ll never forget this.
0:32:51 I had never really done an interview.
0:32:53 I’d done one interview with Forbes.
0:32:55 And she comes up.
0:32:57 I mean, we’re 10 years in and no one even knows who we are.
0:33:01 And she goes, I heard you just turned down $500 million.
0:33:03 I was just flustering.
0:33:06 So she writes this headline.
0:33:11 The kid who turned down $500 million with my picture is excited about it.
0:33:13 And I’m like, oh, my gosh.
0:33:16 Because it looked like I went to the media.
0:33:18 With this story.
0:33:21 And slammed the story back into Dave’s face.
0:33:26 And I was so, I was so embarrassed.
0:33:31 But I knew at that moment that Dave wasn’t coming back.
0:33:33 It was a burn the boat moment.
0:33:37 She burned the boat for us on a possible acquisition.
0:33:39 The first one in 10 years.
0:33:39 Right.
0:33:42 And I was so mad.
0:33:47 And I never forgot about that.
0:33:50 And so we operated for two more years.
0:33:51 And we went to raise money.
0:33:55 And everyone’s like, well, when are you going to raise money again?
0:33:56 Because kind of when you start, you’re on that path.
0:33:57 Right.
0:33:59 And what’s the dollar amount and everything?
0:34:06 And, you know, my entire thing was, well, we’re going to raise it a billion dollars.
0:34:08 Because that will show that we’ve doubled.
0:34:09 That’s a new mark.
0:34:10 We’re giving away stock to employees.
0:34:11 That’s where it’s going to be at.
0:34:15 So when we got down to it, Excel and Sequoia, and we brought Insight in.
0:34:17 They agreed to that.
0:34:20 And they said, all right, we’re going to, how do you want to announce this?
0:34:22 And I was like, there’s only one person I want to talk to.
0:34:24 So I called Julie Bort.
0:34:27 And I was like, hey, you might not remember me.
0:34:32 But you wrote that article that said, I turned down $500 million.
0:34:35 I was happy about it and raised $70 million, da, da, da.
0:34:40 And just so you know, like, we’re raising it a billion.
0:34:41 Do you want this story?
0:34:43 And she’s like, yes.
0:34:53 And so she basically took the exact same article, the exact same picture, and put the folks that
0:34:55 turned down $500 million just raised it a billion.
0:34:56 New headline.
0:34:57 New headline.
0:34:58 You have, by the way.
0:34:59 And they look the exact same.
0:35:01 You have both of those framed in the office.
0:35:02 I have both of those framed.
0:35:06 And then I remember sitting there one day after we had done that, and there was a lot
0:35:10 of our employees that were like, okay, wow, we made it.
0:35:10 We’re here.
0:35:11 And I was like, no, no, no, no.
0:35:12 What’s her next article?
0:35:14 Work backwards.
0:35:15 What’s her next article?
0:35:18 Like, what is she putting up next?
0:35:25 And two years later, it’s like, the group that turned down $500 million just raised it $2.5
0:35:25 billion.
0:35:28 And, you know, we knew that that wasn’t the goal.
0:35:32 We knew we had our own mission and the Qualtrics story and everything.
0:35:35 But it was very clear from a directional standpoint.
0:35:36 We raised it $2.5 million.
0:35:38 What’s the next article?
0:35:44 A year later, it says the group, you know, or two years later, it says the group that raised
0:35:51 $2.5 million or turned down $500 million just sold for, and she literally put four of those
0:35:53 together with the same headline, the same page.
0:36:00 So I’m grateful for it because it fired us up to go and say, well, that next one isn’t
0:36:04 interesting, like, we actually need to go bigger.
0:36:05 We need to push harder.
0:36:08 Like, we need to go more global.
0:36:13 Like, every decision came to, like, okay, what’s the story we’re going to be able to tell when
0:36:14 we’re done with all this?
0:36:14 Right.
0:36:20 And, you know, it’s kind of a weird thing because at the end, like, if you meet sports stars,
0:36:26 at the end of the world, like, where they’re done playing, you know what they do?
0:36:27 They sit around and tell stories.
0:36:31 They tell stories about what the world was like.
0:36:34 And you get them together, and all they do is just sit and tell stories.
0:36:36 And you hear Bird tell stories.
0:36:38 You hear Ainge tell stories.
0:36:39 You hear Dwayne Wade tell stories.
0:36:40 Like, it’s awesome.
0:36:46 And it’s kind of like all we have are going to be these stories that we’re going to be able
0:36:46 to tell.
0:36:53 And when Qualtrics sold, it was probably one of the most underwhelming days of my life.
0:36:55 So, when the money hits the bank.
0:36:56 Yeah.
0:37:02 We were at a kind of a president’s club type deal with about 100 of our people.
0:37:05 And the deal had closed but hadn’t funded.
0:37:10 And I remember sitting there by the pool with, like, our whole company who had leadership who
0:37:13 had, like, made president’s club.
0:37:19 And I could tell when the money, I knew when the money was going to hit.
0:37:23 And it, like, lands and then just hits to everybody.
0:37:29 And I, I could see over the next two hours, like, this reaction.
0:37:33 And I remember turning to my wife, like, handing my phone.
0:37:36 And she’s, like, sitting there reading a book.
0:37:39 And, you know, there’s a lot more zeros there.
0:37:43 And she’s, like, uh, scary.
0:37:46 And I was, like, okay.
0:37:49 We’ve been grinding for 20 years.
0:37:50 And your response is scary.
0:37:51 That’s not the line in the movie script.
0:37:53 Scary.
0:37:54 Like, uh.
0:37:56 And then, and then I started watching our people.
0:38:00 Like, it’s, like, we just paid off our home.
0:38:04 We just did the, like, and then there was a little bit more joy.
0:38:10 But it became clear to me that it is about the journey.
0:38:15 Because even after all that, it wasn’t a eureka moment.
0:38:16 Right.
0:38:23 And so, knowing that I’m going to work till I’m 80, I’m never going to stop working.
0:38:24 I already know that about myself.
0:38:27 And every young person should ask themselves that question right now.
0:38:30 I don’t know that anyone knows exactly what they’re going to do.
0:38:33 No one has figured it out.
0:38:35 Like, I still don’t know what I want to be when I grow up.
0:38:35 Right.
0:38:38 But what I do know is I’m going to work till I’m 80.
0:38:42 Because I’m not going to check out.
0:38:44 If I was going to do that, I would have done it already.
0:38:46 All right.
0:38:48 Let’s take a quick break because I’ve got to tell you a story.
0:38:50 Let me tell you about the first time I tried to run payroll for my team.
0:38:52 I was using a traditional bank.
0:38:53 And you know the type.
0:38:54 It’s got a janky interface.
0:38:56 It’s built like a 2002 tax form.
0:38:58 And it was open only during business hours.
0:38:59 And I hit send.
0:39:00 And it froze.
0:39:01 They flagged the transaction.
0:39:02 They locked my account.
0:39:03 They put me on hold for 45 minutes.
0:39:06 And then they told me I got to visit my local branch.
0:39:08 And that was the day I started looking for a new banking solution.
0:39:11 After asking a few founders what they were using, I found out about Mercury.
0:39:14 And so now my payroll is two clicks.
0:39:15 I can wire money.
0:39:16 I can pay invoices.
0:39:17 I can reimburse the team.
0:39:18 All from one clean dashboard.
0:39:20 That’s why I use it for all of my companies.
0:39:23 And so do 200,000 other startup founders.
0:39:27 And so if you’re looking to level up your banking, head to Mercury.com and apply in minutes.
0:39:30 Mercury is a financial technology company, not a bank.
0:39:34 Banking services are provided through Choice Financial Group, Column 8, and Evolve Bank & Trust, members FDIC.
0:39:36 So we play basketball this morning.
0:39:38 And it’s clear you’ve been playing basketball since you were a kid.
0:39:42 And so what’s it like to now own an NBA team?
0:39:43 That’s insane.
0:39:44 So it’s weird.
0:39:49 When we’re on the roadshow to go public, like you normally go like one day in San Francisco,
0:39:52 two days in New York, one day in Boston, one day in Maryland, then back to New York.
0:40:01 And I had organized our roadshow to go three days in New York, one, and then to Boston.
0:40:04 And like no one had really done that the way they were doing it.
0:40:05 And they’re like, why are you doing that?
0:40:08 I was like, because I’m going to the Celtics game, I’m going to go sit with Ainge.
0:40:08 Yeah.
0:40:11 And like I’ll never forget like sitting in the locker room with Ainge.
0:40:14 Like it’s the only thing outside of Qualtrics.
0:40:16 I didn’t do anything else when I was doing Qualtrics.
0:40:17 I didn’t invest.
0:40:18 I didn’t sit on boards.
0:40:20 I didn’t buy real estate.
0:40:24 I was literally like Qualtrics for 20 years heads down.
0:40:29 And I, when we say like intense focus, it was like everything else was.
0:40:30 No side hustles.
0:40:31 No side hustles.
0:40:32 No angel investing.
0:40:33 No.
0:40:33 Yeah.
0:40:33 Nothing.
0:40:34 And like it probably.
0:40:35 22 years.
0:40:35 Yeah.
0:40:39 Like it was like nothing except for Hoops.
0:40:44 I would go down to Summer League and sit there with Ainge and he like, he was cool enough
0:40:48 to let me like, I mean, he’s running the Celtics and it was like, I could see how it was all.
0:40:50 And you were plotting, you were thinking like, I wanted to get into this?
0:40:51 No, it just happened.
0:40:53 I was like, I am so intrigued by this.
0:40:54 I love the NBA.
0:40:55 I love Hoops.
0:40:58 Like I love the business side of it.
0:41:03 And, you know, when we did sell, like my brother was like, what are you going to do?
0:41:06 And I was like, I’m going to, I’m going to go be part of the NBA.
0:41:09 You know, with SAP, I, I’d gotten to know Adam.
0:41:15 I was working on a tech council for the NBA and through SAP and Bill McDermott had connected us.
0:41:18 And, you know, he was like, Hey, and I, I let him know.
0:41:21 I was like, I’m, I’m going to be part of this one way or another.
0:41:24 Like, and he was like, Oh, we’d love it.
0:41:26 Like too bad Utah is not for sale.
0:41:33 And, you know, he called me and was like, Hey, you know, and someone else, like I hear Minnesota’s for sale.
0:41:39 And so I went down that entire road and that story is pretty famous where Ash was like, we’re jazz fans.
0:41:43 Well, do we have to give up our season tickets at the jazz?
0:41:44 I said, yeah, that’s probably part of it.
0:41:49 And, you know, it was like, no, we grew up jazz fans.
0:41:49 And I was like, Oh yeah.
0:41:52 Like, and you just thought the jazz would not come up for sale.
0:41:54 The Miller family was like, yeah, they weren’t.
0:42:05 And like, I had approached, yeah, I had approached, uh, Gail Miller who, you know, Larry and, and Gail had purchased it for years and they owned it for 30, 35 years.
0:42:08 It was in a legacy trust for the family that could never be sold.
0:42:10 Oh, like it literally could never be sold.
0:42:12 Yeah, it was, it was, it was a pretty locked door.
0:42:14 At least that’s what we thought.
0:42:15 Right.
0:42:17 And, um.
0:42:18 And you got a jazz hat on.
0:42:18 So something changed.
0:42:19 What happened?
0:42:19 Yeah.
0:42:22 I think, I think, you know, I had approached her and the answer was no.
0:42:22 And then.
0:42:24 So you got a call back.
0:42:24 Yeah.
0:42:25 I got a call back.
0:42:30 No, about six months later saying, Hey, after we turned down Minnesota saying, are you still interested?
0:42:32 I was like, are you serious?
0:42:34 Um, yes, we’re in.
0:42:34 Right.
0:42:36 And.
0:42:38 How’d you negotiate the value or how’d you, how’d you figure it out?
0:42:43 It was literally a meeting where it was like, well, are you serious?
0:42:43 Make us an offer.
0:42:50 And we pulled up the Forbes valuation on the phone and I said, well, how’s this?
0:42:51 Cause I didn’t, I didn’t know.
0:42:52 I assume there’s a team of scientists.
0:42:53 This was before.
0:42:54 Economists.
0:42:56 This was like a year before all this madness.
0:42:58 And I was like, is that work?
0:43:00 I was like, it seems fair.
0:43:00 Right.
0:43:03 And like, to her credit, like.
0:43:05 And it wasn’t a big auction or anything in that case.
0:43:06 No, there was no one else.
0:43:06 Yeah.
0:43:09 I think she had sat across the court from Ashley and I.
0:43:10 She knew what we were about.
0:43:14 She, she cared about it being in Utah.
0:43:18 And that was important.
0:43:19 They had had 35 years.
0:43:21 I think they bought it for $22 million.
0:43:22 Right.
0:43:22 And.
0:43:24 Would you buy for 1.6?
0:43:25 Yeah.
0:43:25 1.6.
0:43:31 And it was like, okay, I’ve got a, this looks like about as clean as it could get.
0:43:32 Right.
0:43:34 I mean, it’s not all gold when you’re running an auction.
0:43:34 So how does it work?
0:43:37 You buy a franchise, you’re not buying the whole thing.
0:43:38 So that’s the franchise value.
0:43:40 You’re buying a part, like a majority stake.
0:43:40 Yeah.
0:43:42 You just got to send a wire one day.
0:43:43 Like, how does this actually go down?
0:43:45 I mean, pretty much.
0:43:45 I mean, we did.
0:43:46 Yeah.
0:43:48 Like, yeah, that’s pretty much how it works.
0:43:49 Like, let’s double check the numbers.
0:43:50 It’s like a car.
0:43:54 You got, you got to go figure it out because you can’t put a lot of debt on these.
0:43:57 And, you know, my philosophy was don’t bling.
0:43:59 These chance, there’s 30 of these things in the world.
0:44:00 Just go.
0:44:00 Right.
0:44:05 And, you know, Ash and I had a lot of conversation about like, why?
0:44:07 Life’s pretty good at this point.
0:44:20 Why are we literally going, hey, we’re on this 20-year journey of sacrifice and travel and all of this and literally grinding at a level that most people could never comprehend?
0:44:22 You interview founders all the time.
0:44:26 Like, when we’re all in, it’s like a different level.
0:44:34 And then going and signing up for a level where there’s a lot of pressure, there’s a lot of responsibility.
0:44:42 Everything’s public and you’re taking the hopes and dreams of a whole nation here and putting them on your shoulders to go do something.
0:44:45 And you’re also impacting the children.
0:44:51 Like, you know, kids, our kids, like, at Qualtrics was a relatively normal life.
0:44:52 Right.
0:44:56 Even though it was worth, on paper, like a lot more than an NBA team.
0:44:57 The NBA team is very different.
0:44:58 Yes.
0:44:58 Right?
0:44:59 And so—
0:45:00 You didn’t take it lightly.
0:45:01 No.
0:45:05 And, you know, there was a lot of personal discussions about what’s this for?
0:45:06 Is this for ego?
0:45:06 Is this for us?
0:45:07 Is this for helping Utah?
0:45:10 And it really came down to, like, Utah.
0:45:15 I want to finish with a couple of rapid fire, almost like life-isms.
0:45:18 This idea of the nine most important minutes of the day.
0:45:20 What are the nine most important minutes of the day?
0:45:23 When your kids wake up, when they get home from school, and when they go to bed.
0:45:25 3-3-3.
0:45:27 And you show up for those.
0:45:29 Or you just try to hit one.
0:45:30 Right?
0:45:34 I mean, a lot of times, like, you’re planning a trip, you’re doing this, and, like, you have
0:45:37 an option to, like, be at one of those.
0:45:37 Right.
0:45:44 And so, I think that as you schedule, as you plan, as you optimize, those are important moments.
0:45:45 Not all three, maybe.
0:45:49 But, like, if I can schedule a call, I’m not doing it in one of those moments.
0:45:50 Right.
0:45:54 Another one is, you know, if you don’t know what to do, if you don’t know what you want
0:45:56 to do, go figure out what you don’t want to do.
0:45:57 Use the inversion.
0:45:58 Use the contrast.
0:45:58 Yep.
0:45:59 What’s that?
0:46:00 Unpack that a little bit.
0:46:05 I just, you know, we teach a class at BYU.
0:46:06 We teach a business school class.
0:46:09 And, you know, it’s every fall.
0:46:11 And it’s around leadership and decision-making.
0:46:13 And watching all these kids, it’s like, this is what I want to go do.
0:46:16 I didn’t know what I wanted to do.
0:46:18 And I think that’s why Qualtrics worked.
0:46:22 Because if I had a picture in my head of what it’s supposed to look like, I don’t think I
0:46:23 would have done Qualtrics.
0:46:28 I would have been so focused on that, the opportunity, or Zuckerberg could have been sitting next to
0:46:31 you starting a business, and you’re like, you didn’t even see it.
0:46:32 And you’re, like, kicking yourself.
0:46:32 Right?
0:46:38 But what I did know is there was some attributes that I believed in.
0:46:42 I knew I wanted to be able to have a job where the sky was the limit.
0:46:46 My age wasn’t going to limit me to what my potential could be.
0:46:50 I didn’t want to be like, well, when you’re 22, you can make up to $80,000 a year.
0:46:52 And you’re 24, you get to 120.
0:46:53 I didn’t want to be capped.
0:46:57 I want to be like, if I work harder than everyone else, I’m more creative.
0:46:58 My ideas hit.
0:46:59 Like, they can go somewhere.
0:47:00 Right?
0:47:04 I knew I wanted to be, like, in leadership and I could lead.
0:47:05 Right?
0:47:08 I knew I wanted to see a lot of businesses very quickly.
0:47:09 A lot of industries.
0:47:12 I wanted to know the world and know every industry.
0:47:13 Okay?
0:47:17 I wanted something that was kind of not old school.
0:47:24 And so, like, when I started looking at opportunities, like, I never thought enterprise software.
0:47:28 But I was like, okay, I look at it and I kind of put the opportunity right here.
0:47:30 And I’m like, wait, sky’s the limit.
0:47:31 I can be a founder.
0:47:33 I can create.
0:47:34 I’m not really capped.
0:47:36 It’s a new school.
0:47:37 It’s a new part of technology.
0:47:38 It can go for a long time.
0:47:43 Like, I’m not going to get the legs pulled out from under me if I start doing well.
0:47:55 And, like, I think those attributes is where I would advise kids and younger people or entrepreneurs to say, okay, don’t be so caught up on what this looks like.
0:48:02 See if it fits and you’ll be blown away that it’s like, oh, the auto industry actually works really well for me.
0:48:03 Right.
0:48:04 Never would have thought about that.
0:48:07 And that’s all that really matters.
0:48:11 And so, I think that’s kind of how we look.
0:48:15 You know, and now I’ve got a lot more roles and things that I care about.
0:48:17 But it has to fit into that.
0:48:18 You ask, like, what do we do?
0:48:19 Does it fit?
0:48:23 And, you know, you kind of go through that rubric.
0:48:24 That’s great.
0:48:26 Well, listen, man, thank you for doing this.
0:48:26 I appreciate that.
0:48:27 Yeah, thanks for coming out to Utah.
0:48:29 I mean, it’s great out here.
0:48:29 All right.
0:48:30 I love it.
0:48:30 Let’s go.
0:48:31 All right, man.
0:48:31 Thank you so much.
0:48:31 Okay.
0:48:43 Hey, let’s take a quick break.
0:48:45 I want to tell you about a podcast that you could check out.
0:48:48 It is called The Science of Scaling by Mark Roberge.
0:48:53 He was the founding CRO of HubSpot, and he’s a guest lecturer at Harvard Business School.
0:48:54 The guy’s smart.
0:48:58 And he sits down every week with different sales leaders from cool companies like Klaviyo and Vanta
0:49:03 and OpenAI, and he’s asking about their strategies, their tactics, and how they’re growing their
0:49:06 companies as, you know, head of sales or chief revenue officer.
0:49:10 If you’re looking to scale a company up, if you’re a CRO or a head of sales that’s looking
0:49:13 to level up in your career, I think a podcast like this could be great for you.
0:49:16 Listen to The Science of Scaling wherever you get your podcasts.
Get the guide to build your own unicorn billion dollar biz: https://clickhubspot.com/fgk
Episode 761: Shaan Puri ( https://x.com/ShaanVP ) sits down with Ryan Smith ( https://x.com/ryanqualtrics ) – the high school dropout who built an $8B company and bought an NBA team.
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Show Notes:
(0:00) 1.9 GPA to $2B
(9:47) Starting Qualtrics
(14:02) Focus
(24:00) How to be top 1% at sales
(26:17) Turning down $500M
(31:37) Working backwards
(3814) Buying an NBA team
(43:51) The 9 most important minutes of the day
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Links:
• Qualtrics – https://www.qualtrics.com/
• Utah Jazz – https://www.nba.com/jazz/
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Check Out Shaan’s Stuff:
• Shaan’s weekly email – https://www.shaanpuri.com
• Visit https://www.somewhere.com/mfm to hire worldwide talent like Shaan and get $500 off for being an MFM listener. Hire developers, assistants, marketing pros, sales teams and more for 80% less than US equivalents.
• Mercury – Need a bank for your company? Go check out Mercury (mercury.com). Shaan uses it for all of his companies!
Mercury is a financial technology company, not an FDIC-insured bank. Banking services provided by Choice Financial Group, Column, N.A., and Evolve Bank & Trust, Members FDIC
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Check Out Sam’s Stuff:
• Hampton – https://www.joinhampton.com/
• Ideation Bootcamp – https://www.ideationbootcamp.co/
• Copy That – https://copythat.com
• Hampton Wealth Survey – https://joinhampton.com/wealth
• Sam’s List – http://samslist.co/
My First Million is a HubSpot Original Podcast // Brought to you by HubSpot Media // Production by Arie Desormeaux // Editing by Ezra Bakker Trupiano
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