welcome to the Holy Grail Investing podcast our guest today is the founder and CEO of Vista Partners hundred billion dollar company that is mastered enterprise SAS the ROI today is 625% genai takes that to an order of magnitude wow you know more about this industry than anybody alive but what does a person do so that they can become more valuable that is all going to get disrupted i'm going to help the audience out here a little bit they're like that's what I want to invest in but I don't know how to do any of that well what do you tell your kids to study three skills that they have to learn pattern recognition once you recognize patterns there's no fear because you know it's not random then they got learn now hang on you got to save the punch line you go from this control paradigm to this control paradigm you succeed at a level most humans will never dream of when you begin you saw something no one else saw here's where it all [Music] started hello everyone and welcome to the Holy Grill of Investing podcast with Tony Robbins and Christopher Zurk we're thrilled that you've tuned in because over the next couple of sessions we're going to talk about some of the most interesting things in all of the world of investing from GP stakes to professional sports to energy to disruptive technology and what our job is to add as much value to you as we can and to give you some things that will really be valuable to you as you go about your businesses and your investing i'm Christopher Zuk i'm the founder and chief investment officer of Cass Investments and I'm thrilled to be able to co-host today with the one and only Tony Robbins tony thank you for being here thanks Christopher listen I'm very excited for you to join us as well because our guest today has a very special individual this is a person who's an unbelievable investor incredible entrepreneur uh there's a person that you would think of if you said who is the best in private equity he's got to be in the top three or four or five he's a philanthropist he's an engineer and most importantly uh Robert Smith of course is the founder and CEO of Vista uh I think you're going to find enormous amount of value out of this session and this is a man who give you an idea has built a hundred billion dollar aum company he's done it by literally developing over 600 private equity you know transactions over 300 billion dollars he's got 80 companies with over 90,000 employees now across 180 countries he's Forbes called him one of the hundred great business mind in history uh he's been on the times 100 list uh what I'm really touched by as a founder is that you've also been found for four years in a row is you know the founder friendly investor for Inc magazine for four years in a row but it's such a pleasure to be with you and a pleasure and a privilege that we have the chance to invest directly in your company with you so thank you for being with us Robert good to see you again so great to be here good to see you and Christopher good to see you as always i'm excited to be here and and uh advance you what is I think an important topic uh for all investors to understand different aspects of the alternative space and investors who are doing unique things that actually make a difference and bring alpha to their portfolio so thank you all for doing this well we're we're thrilled absolutely um so let's start out you have quite an amazing background i I I come from early roots challenging roots i understand that your family was not super well to do either kind of humble roots for you and yet you've risen to a level that most people would never dream of in a lifetime and added so much value to so many people's lives tell us a little bit if you would just about your kind of your origin story how this all started if you don't mind yeah and thank you for saying that i mean um we we all I think in many cases come back to you know what our household was like when we grew up i was fortunate in that I grew up uh in a household of two teachers two school teachers elementary school teachers both of which were were really uh inclined to think about how they could change the condition of their community at large and they knew education was a fundamental part of that work um my mother grew up in Washington DC she has a very interesting background we can talk about that a bit later in terms of her great great grandfather and the work that he did and the and the towns that he built uh way back actually at during reconstruction and my father who is third generation from Colorado i'm fourth generation and you know his family being moved out of Tulsa Oklahoma and they converging my mother found that she was interested in teaching wanted to get a master's degree uh went to Colorado and got her master's degree met my father and then you know produced uh my brother and I but I think what was important was you know they they created a bedrock in our community of educators and focused on building uh call it the skill set and the capabilities of the children in our neighborhood this was a time of course during segregation and so we had to rely a lot on the infrastructure of our own community if you wanted to learn carpentry you went down the street to learn it from you know Mr robinson if you wanted to learn piano you went and got piano lessons from Mrs buckner so it's a very rich community where people looked out for each other fundamentally education and community and those are the things that kind of you know create the bedrock of who you are and from that you know a curious mind hopefully leads to you know interesting ventures and I had the great opportunity to go to I went to a public high school same high school my father went to and I had a teacher there uh who was they brought computers in for the first time so you know introducing this new technology what year would that have been so that was 1980 wow okay great and uh you know I'm taking this computer class I said wow this is really interesting I asked the teacher I said well Hey how does this thing actually work and he said well it's run by this thing called a transistor and I said well who invented that and he said well these people at this place called Bell Laboratories and I said huh I wonder if there's a Bell Laboratories in Colorado so I went downstairs to the career center and talked to the career person said we you looked in the you know in the book said "Yeah there's one in in in Broomfield." So I called them i literally called them i said "Hey you know I'm I'm interested in the summer internship uh do you have any summer internships?" And they said "Yeah if you have if you're between your junior and senior year in college." I said "Well that's great i'm a junior in high school i'm getting A's in my AP classes it's the same thing so where do I sign up junior high school junior college same thing same thing i take AP class same thing she's like well you know listen you know you need to come back when you're junior in college so this was in about January so I literally called her every day for two weeks and she stopped taking the call back then there were no answering machines that sort of a thing and I'd have to leave a message so then I called her every Monday okay I had a calculus cuz I called her every Monday for five months oh my god and she called me back in June and she said "Listen," she called you know my house and you know my dad just happened to be home because they were out of school she was in elementary school i was still in high school he's like he's like "Some woman called from Bel Laboratory." So I called her back she said "Hey listen a student from MIT didn't show up you you know we haven't met you we're not offering you a job but you can come and interview." So you know I had a 69 Plymouth satellite i put $2 worth of gas in i had one suit my Sunday suit and drove out there and got the job uh but was what was most fascinating about 17 years old so I'm working at Bell Labs i'm 17 and the world just opens up to me at that point my mentor this is the importance of mentors my mentor is a guy by the name of Vic Hower you know distinguished member of technical staff like 35 patents under his name PhD in solid state physics undergraduate chemical engineer brilliant guy and I shared an office with him wow okay so this wasn't you know sitting in a cube so I shared an office with him and I walk in the first day he kind of looks me up and down and he's like "Well look we've got this called a you know an operational amplifier uh it's failing in our Merlin systems out in the field you know your summer job is to now figure out why and he says you got the full resources Bell Laboratories at your disposal i'm here to answer any question let me know when you want to talk and he turns his chair around so now I'm like shocked i'm like this is rudest guy I've ever known right uh but I finally understood what he was doing so I marched myself down to the library and I talked to the librarian i said this thing called an operational amplifier do you have any information on it so he pulls out some books and I start going through them and I write down a bunch of questions and I go back you know sheepishly into the mentor into Vic i said "Hey Vic." I said "I've got a couple questions." He turns around and says "What are they?" And I ask a question he gets on the whiteboard for two hours wow as I ask questions and he says "You got any more questions?" I said "Nope i'll be back tomorrow." And so it created a whole process for me and it's something I said I tell my kids I'm going to leave them three things the second thing is I hope they discover the joy of figuring things out yes because what he did for me was help me understand how to figure out problems not give me the answer but how to take big complex problems and break them into small increments and it was from that that I learned the joy of engineering and problem solving and creating what I call elegant solutions to complex problems so into the summer I'm 17 years old i win the best prize the best project for the summer with all these college kids wow and it's because I had the right mentor with the right attitude and you know with a curious mind so all those are what I call the f you know the the the origin story it's and I think I approached my life that way today i'm always interested in learning new things and and bringing you call it new solutions to to complex problems well you were also relentless yeah there's that too there's that too it's so often it's overused but people just don't realize how important persistence is when you know we interviewed 13 of the biggest players in the on earth in private equity you being obviously one of them we got a chance to visit with before that theme comes up over and over again in my own life and I know your life as well Christopher the the willingness to never give up and just keep going no matter what the obstacle i don't think there's a replacement for that but I'm curious when you look at your success in business and in life um besides your ability to solve problems what do you think has caused you to to raise to such a high level is it that persistence you know that that relentlessness is it that the fact that you have both the financial and the technical you're engineer and you had a brilliant financial mind and training is it focusing on the sector you did because no one was into SAS in the beginning right or SAS they were they didn't think it was worthwhile i think when you started in 2000 what what do you think has been the most important elements that have helped you to succeed i know you're very humble but pretty obvious you've succeeded at a level most humans will never dream of i I think it's a lot of what you said and you know that that that relentless curiosity the curiosity and I bet if you talk to you know I know you do talk to you know thousands of people a year you will find those who are successful in their field remain curious i agree uh they are those who know they don't always have the answer and they ask the next set of questions and from that they get informed and and they and it brings insights and then they can bring their own intention and their energy against that to solve whatever problem they may may may be focused on or say hm this is another problem that I can solve and it'll be interesting to solve it so it's that I think it's that curious nature which is essential but that curious nature is so unusual because most people they give it up they get to that first you know wall if you will and they just stop so how do you coach people to get through that wall and to just continue to persist even when it gets frustrating or do or question or do you work to find people that just don't have that in their nature i think so so it's a great question being a father you want all your kids to have that yes yes not all of them do yes and you have to think about what is it that I can do and to me there are things like sports yes okay sports in some respects you know you know you when you have a child who's doing something or my my kids are you know play chess right and you see them and so you can tell them the answer or you can help them discover how they go about solving that problem and that gives them a little more confidence and each time they get a little more confidence they get a little more confident right and I think that's a big part of it um and we as parents as you know you know part of our our job is to prepare that child for that journey not prepare that you know the the path for them and it's a hard thing to do but but when you find students you know employees who have that and you can recognize it you ask the right questions you figure out you know a lot of it is tell me about your origin story tell me how you grew up and you listen to how they describe what it is that got them to that place that's when you start identifying okay here's somebody with that spark who's not going to take no for an answer we we call it a lot in in our firm we call it grit right right it's that grit it's really hard to identify but when you find somebody with grit they usually will persist and they usually will figure it out yeah yeah i agree and and so part of it is you know what are the thing and where where do you need that grit in certain circumstances look when when all boats are rising in a marketplace yeah everybody's making money and you think everybody thinks they're genius they're brilliant right okay grit is when you see downturns okay and when you see changes in market conditions and when you see the introduction of new technologies into the theater in which you have been operating and do you ignore it do you embrace it do you do you do you make it a part now of your DNA and how do you do that and so when when you talk about okay what has made you successful it's we we have built and I will say we have built an institution that evolves technology enterprise software it evolves the early days of this all on premise okay and then we saw the recognition of SAS or hosted and I said okay there's a couple things you can do you can ignore what is going to be the reality or you can build an infrastructure so what we did we built a factory we built a conversion factory to convert from onremise to cloud and as far as I know today we have converted more businesses from on premise to cloud than any institution on the planet well now we have a new technology don't we this new general purpose technology we're calling you know artificial intelligence or generative artificial intelligence so guess what we're doing now we are building a factory okay to go from SAS we're hosted to agentic wow and so we have 89 of our companies pivoting in that direction all of them okay certain will become agentic some will I call what I call genai enabled But that has been the last two years of pivot understanding that this new technology changes everything again but you've got to have an an institution that can evolve but you know I'm going to help the audience out here a little bit because most people have no idea what agentic means so walk us through that and explain that sure that's good and how important is the adoption of AI for small businesses as well as big largeiz businesses right yeah it it's critical so the way to think about so artificial intelligence there's kind of what we'll call traditional AI so for instance when you know a few years ago we would go and say oh I want to take a trip and I want to go to Paris and I want to go on a restaurant tour and go to museums and you could go online and a what you would have is an artificial intelligence agents would actually identify places where you could go great okay now it'll do it for you now not only will it do it for you it will book it and it will make changes uh and adjust for you so that's kind of the modern AI that's agentic these agents now can do something they do stuff actually they replace employees and I was talking to Mark Manaf about this he called me in the middle of the night about a year ago and said "This is it this is the piece i can't believe what this will do i can take companies and they can have 500 new employees and doing things really effectively with this technology." So how are you using that in your companies right now if you think about it again we have now this is an interesting math so this is what we're working against we have 750 million users of our software globally wow okay so if you think about 89 software companies operating 180 countries we're in 70 different industries 750 million users of our software initially there will each of those users will have two to five agents ultimately they'll have 10 to 12 agents per user so think about it we're going from having 750 million users of our software to 8 to 10 billion agents wow okay now these agents work 24/7 365 if you tune them properly they stay and they stay fully engaged fully engaged all the time they don't have to you know go and you know pick up kids from school and all that sort of stuff but which creates a whole another set of issues that we're all going to have to think about i know that but you know as a fiduciary my job is to bring maximum efficacy to the assets that we control and that we own and so what our factory is doing is building all the infrastructure and the components to make to convert users in essence to agentic solution so each agent will have specific tasks associated with it and even within that construct you have to have an agent that each agent has to be protected you have to have cyber security around it it has to operate in an envir in the enterprise consumer is very different okay cuz you know the three of us after this we could say hey let's go to a tie place right and we could go online and send an agent and they'll find 10 of them nine of them will be open one have been one has been closed for three years right and that just kind of is booked the appointment all that in the enterprise no you need a 100% certainty right because we have to go and say I'm sure you wouldn't want your your your you know your check get wire transferred to someone else at 99.5% efficiency you want 100% so there's aspects that enterprise software brings to an agentic world that Agentic can't do on its own remember the enterprise software are the trusted are the trusted providers of the infrastructure the workflows and the data today yes so you know bid off and we we talk about this we laugh about this a little bit you know people say "Oh is AI going to eat software?" No ai is going to feed software enterprise software okay that's what Mark said mark from Salesforce this will transform Salesforce as powerful as the company is to a different level in terms of servicing their customers absolutely let's do this explain how it's going to feed software how is that going to feed and actually help build software because I think people get really confused about the two sure there are aspects of it so let's talk about just one aspect one of the most important parts of running an enterprise software coding company is writing code yes okay we already have deployed you know code generation across 100% of our companies so the e how much faster is it by the way and how much effective more effective is 40% more effective today but that's today next week it's probably going to be 80% that's just one aspect where AI feeds software that's just on a cost side okay on a revenue side you think of we we have some solutions today where we have in an orchestration agent with nine separate agents that do the work of a customer service person or a salesperson with 247 365 efficacy so if you have a customer service person who's trying to understand some changes in their customer base i.e somebody changed jobs and it was posted on LinkedIn that that job got changed well your customer service agent may have three 400 clients that he's covering has no idea our agents know immediately okay and create an activity so another set of agents now start kicking in and doing work in and around what it takes to support not only that client but the impact and implications of whoever is moving in into that role and what the impact is on the companies that it serves okay this works today this works today so that's part of and that's why we partner with Microsoft we want the foundry aspects you've got to create environments you've got to create cyber security you've got to create telemetry you've got to create all the aspects associated with ensuring that these agents do exactly what you want and not anything you don't want it to do okay so that's an important part of this whole transformation so that's what we've been doing the last couple of years al is building this factory and so I'm really excited about it if you look I can feel your energy first of all you look like a million dollars you've taken care of your body at a different level too what have you done with your body i mean you've really trans a lot of it like all things i've got actually a wonderful service that actually has an AI engine we've been using I've been using it for now 8 years wow okay and the supplements and I mean it's an amazing service and these people are great you know they cost But did you also as great as your business is it seems like when you began you saw something no one else saw yeah i mean what did you see back then was it recurring revenue and you saw the direct what was you saw but also I see you like the level of animation you're always excited but it feels like a whole another level i can see why yeah um tell me about what you saw in the beginning and then relate that to what other people need to be looking for in their own businesses as well sure here's where it all started for me i started again I was a chemical engineer Cornell University i finished there and then I started working in a process plant right and my one of my first jobs is to actually automate one of the processes in the plant so my generation of chem of course developing different unit operations but we were bringing in process controls for the first time okay so compute was still very expensive it could only be you know could only be you know really afforded by the largest corporations US government and and universities well I worked for a very large corporation and we had a plant that was built in the 40s i want you to think about this built in the 40s that made components for tire making and plastic pipes said "All right implement this Honeywell TDC 3000 PLC okay programmable logic controller." So implementing control system so the way to think about it before then processes were controlled by operators you know you had Yeah you had somebody sitting there watching the reactions occur looking at pressure and temperature and rates and flows and it would go through some dynamic and then they would observe it episodically when you weren't talking about who got drafted that week in football okay and then you would you would episodically intervene and say "Oh I need to change this i need to add more of this take more of this away." and and the reaction would move in this sort of a form yeah okay introduce compute now you go from episodic observation you know 60 now you're observing 60 times a second now I can observe 60 times a second whether or not you're talking about football at all and the flag shows up to let you know you got it oh not just let you know you can now intervene right so the second part of that was now make an intervention do the calculus do the math and what is the proper intervention so you go from this sort of a control paradigm to this type of a control paradigm everything under the curve is waste and so in that first exper experience that I had increased the productivity of that plant by 26% a plant built in the 40s wow increased the productivity by 26% so you say what should people look for they should look for implementing solutions that create productivity output so that's point one now if you look at today and I'm going to fast forward to today okay we measure the ROI of the products that our companies sell to our customers every day we're in freight we're in shipping we're in automotive we're in healthcare we're you know 70 different industries the average ROI today that we measure is 625% that's the products that our pro our companies sell to our customers 625% ROI there i don't know if any other business or product gives you that high fantastic gen AI takes that to an order of magnitude oh my god no wonder Nobody having a hard time sitting in your chair that's the impact okay but the key is get there fast first get there fast first yes that's what we're doing well I mean what you said is everything under the curve is waste i mean that's a fantastic you know analogy for basically how do we streamline things and to eliminate all that waste and with Gen AI what I hear you saying is it it just allows that pulse to be faster to where it's that much more responsive and it can make those adjustments that much quicker and also be much more effective and so you know everybody gets that generally speaking right but how do you stay ahead of it how do you make sure that others don't just take the place of what you're trying to accomplish so that's an important part of the enterprise software okay if you did enterprise software right in the past you have sovereignty and dominion over workflows and data sets you don't have to own them but you have to have sovereignty on them okay where you are protecting a unique set of workflows that happen in an industry or in a company and you have dominion over the data because that data will inform you as to what activities should be done and what are the outputs and then of course the outputs from that data to now circle back in a feedback or feed forward loop depending upon what you're doing okay for the next activity or the next task or the next agentic action okay you see the system right so part of what you have to do in an enterprise world is understand the workflows and the sovereignty and the dominion and what creates the outcomes that you want and have those agents identify those aspects and act according to what the outputs are because every business is different every customer is different and how do you ensure that you are delivering to that customer and you have to you have to tune these models and these agents what it is that they're either expecting or when you do it really do it well you give them more than they're expecting and they're saying wow that actually is delighting me so if someone is asking for a certain amount of information lock into our investors I want this information about the performance of your fund here it is by the way people like you have asked these four other questions so let me give you that as well then they're like oh wow that is a good set of questions to ask that is a good narrative for me to evaluate and so now they get more delighted because it makes their work easier and what is the most efficient thing we're bringing to them their time back okay and then from there insights i mean this right this is our I've got my own agent right yes and uh we update it regularly frequently so we just had our annual general meeting and so this is my agent's perspective of our annual general meeting so now I am going through this okay line by line okay what is their perspective my agent's perspective it's me right if you think about it because it's informed by me yes right how did you load that data in of your insights your history your distinctions your set of curiosities so first you have to create your data set your data constructs those companies do that and then we went through literally 25 years of the presentations I've done i figured all your reports and you load it all in there you know this conversation will then go into it next okay and then and then it when I when I'm about to have another conversation like this or talk to an investor I can literally go in and type in okay here's here's the questions you're going to ask and it basically said Robert here's how you answer that here's how you should answer that and you look at that and you say okay is this actually now I know something more i want to do it differently right or bring this out okay and then you can say well this and then you can start to load in what was effective yes okay like certain artists have tell me okay these words that you use are effective these words you use are a little too engineering and they aren't effective right i'm like oh okay so I get that but those are the things that are important for for me to continue to load as this evolves as my AI agent well I mean you when I think about our audience right now A they're amazed b they're like "That's what I want to invest in because it's clearly going to change the world." But C I don't know how to do any of that so where do they start how do they even begin to you know we talked to so many small business owners and they're like I know I need to do this but I don't have the ability to you know go hire a consultant for a lot a lot of money every single year where do they start so this is where the enterprise is important again okay because the enterprise software vendor that they're currently using for any aspect of their business right sure should be if they're thinking about it creating which is why we we're doing this creating agents that actually deliver that to them i've got agents for our business and MindBody and Class working at gyms okay how do you make that more effective how do you make it effective so that oh gee you know you we okay we're going to go work out we're go we're going to New York we're going to go work out tomorrow we you and I do you know some spin class or whatever it is but now we want to go do Pilates so we sign up and we go yeah well we're late cuz you know you want to get a last cup of coffee and we're late and so the instructor gives the seat our seats away to his friends now we're upset okay we want our money back or something our agents will say "Hey you guys are already dressed here's four other places you can go within walking distance and you'll get there on time and I already booked it for you do you want that?" Or the agents say "Well do you want your money back?" Okay or guess what you got you know get you out a hard stop at 10:15 you could finish this at 10:10 and be back in time and all that sort of those are the things that we are we have built today okay so that's you know think about it that's a gym okay so small to medium businesses all have the capacity okay if they have the right vendors to utilize let me ask you about that you're going around one you have so many companies but for some of these small to mediumsiz businesses what types of firms have enterprise software that you think would be a good match for those types of business i know it's different for every industry but if you're talking about subund million businesses or even 150 in that range up to 150 what are some of the companies that you represent or that you would recommend that they take a look at that are on top of agents at this point yeah I mean things like our company's gains customer service management it doesn't matter if you're doing wealth management or if you are you know ma managing a telecommunications business it's how do you manage customers and what do these agents actually do and it's a matter of what you know you training them for the specific ones which is why we partner with Microsoft right it's like okay listen we can enable a whole set of vertical markets that they don't and make those available to their customers so you know again we're not using our Salesforce they're using theirs to basically say ah we can support that and so we can do that across multiple different channels because we're in so many different industries yes so that's kind of that's the point so each of the ind you know we have one you know sales off drift right that's for sales yes okay customer support you can think about you know code development aspects or you know or low code no code environment so all of those have different aspects that we're bringing inter agentic enterprise software solutions into those theaters and into the and into the vendor the vendor can guide them and gain sight would be one place they could look one place yeah for customer support and that kind of covers everyone right everyone needs some customer support you may not have you may have two customer support people well we can give you agents so it feels like 40 right that's wild yeah i mean that's really one of the things that is is amazing about this at the same time that we hear about it it's you know the typical thing that it feels like it's progressing but it's progressing very very quickly in some ways and slowly in others because the average company is like wanting to do this but is not able to actually do it as effectively as the larger companies right so by bringing it more to the mass if you will how are you going about doing that i know you have the partnership with Microsoft is that the goal there because it's not for one company it's for basically all of the companies it's for all companies the the the key is to have all of our companies move through this factory and become agentic of course you know you think about the concept of a fac before agentic AI you know you really did something different than everybody else you built as you say your factory the system so you know in the old days of private equity a lot of people still think of it as you know buying things tearing it apart right one of the things I love about private equity today is you don't succeed that way for the most part you got to add value and your whole thing is take companies that add massive value so you'd bring new technology bring new leadership tell us a little bit about those elements before you even got to Aentic AI about how you take care of a company and grow a company as a whole so people understand how you've added so much value to it sure it it goes back to again a fundamental factory approach what are you doing you're taking you know some raw material in this case it's a company that company may not necessarily know how to scale may may not know how to develop code efficiently may not be able to use more efficient methods for writing code or customer support and so because of the way our ecosystem works we have a whole series of best practices that constantly evolve and so we'll go into a company and say "Oh okay so here's actually how you're doing code development." For instance you're hiring all your engineers from one place in one environment and you've kind of tapped out of what we call the the great engineers out of that environment you actually need two or three other places we call them centers of excellence so we will stand those centers of excellence up for them that's right okay and then we'll do the transfer you know we get transference of knowledge in some cases and wherewithal and oh by the way here's how here's how we're going to use different development systems so you can develop code faster 24/7 365 so you have the ability to actually eliminate what we call technical debt and actually push forward with new products faster so there's that aspect and then you have places around retaining customers because in your business that's absolutely right so you know there's this whole ARR dynamic and gross retention and net retention well why are you losing customers well they're not getting customer support properly well why you all know this well it's one of those things sales people sell sometimes what they have and sometimes what they don't have right they basically sell what they get commissioned to sell but often once it's sold they toss it over and somebody else has to support it and often the support department doesn't necessarily know what the premise on which this was sold promises yes yeah and it's and then so as a CEO you get the calls from the client i thought I was going to get this i'm getting this fix it okay now you got to get not only your support people on but sometimes your best developers to go solve this problem so they stop calling the CEO well when that happens you're now losing productivity from your best developers okay so there's all of these we got over a hundred of these little best practices from you know contract administration to the way that we actually approach you know code development to go to market to territory management to pricing all those sorts of things make up these aspects and so we deliver across our organization of value creation team which is which is really our factory underpinnings these aspects of companies there are certain things that a $500 million company needs that a $30 million company can't handle so here's the things that the $30 million company needs and we'll and we'll go through this this process and drive them uh forward on the chain here's what's interesting 97% of software companies are private the vast majority are small and medium size wow okay so if you think about it if you are the average investor you don't have access to what is the most productive tool introduced in our business economy in the last 50 years okay and as that most productive tool enter in impacts with the most transformative technology of our generation you've got to figure out a way to play it you've got to figure out a way to get invested in it which is why you go to private organizations now rais those sort of things we've launched a whole product to do that because we want to provide access to democratization in some respects of access to what is this fifth generation industrial revolution which is genai enabling enterprise software there's there's a side also of what you do as a firm for investors obviously who invest in your company last time we've talked to you about four times you talked about investing you haven't said it once this time but I want to point it out because obviously we've been blessed to be investors in your company but your fundamental formula I understand it's going back to the factory it's like what does this factory do and how do we make every aspect more productive and then we're going to multiply the value and we're going to sell it for a multiple and we're going to continue to grow right um so can you share I don't know if it's appropriate if you can share with us oh generally the kinds of numbers I mean I know the kinds of numbers you've done over what 25 years i'll give you our three our latest three mature funds great okay cuz this funds investing and all say the three this was astounding because we just went through it it wasn't astounding you know by design but anyway all right just give you a sense okay foundation fund three okay last mature fund there okay that one was a uh call it you know two and a half a $3 billion fund of the $2.5 billion funds okay there's only 5% of them that have returned over two times TVPI and over one times DPI think about that yes we're in the 98th percentile okay so TVPI total value DPI means cash in your pocket right i'm all about cash in the pocket all about cash in the pocket you can't spend IRRa no can't eat it fund five okay $6 billion fund so again only 259 funds over $5 billion in the last since 2016 okay this one's on the top 5% okay there's only 5% of those who've actually got TVPI over two times and it is a 97th percentile in TVPI 94th percentile in DPI now hang on hang on of course you got to save the punchline okay fund six 11 billion fund okay there's only 13010 billion dollar funds raised in the history of private equity it is number one for TVPI and number one for DPI oh by the way it's the smallest it's 11 billion and of the top five it you know in terms of returns it has returned more capital than all the others well that's unbelievable congratulations like I said you know for me it's all about So but that's a factory that's an engine that is doing what we say it's going to do what is it supposed to do it's supposed to return money not marks on pieces of paper but return money in your pocket well that's one of the things that that just has always impressed us about Vista is the fact that not only is it the factory mentality and it's the engineering mentality no single points of failure you know those kinds of things but it's how you take those best practices and you put them in a way that's digestible for the companies once you make the acquisition to where you can overlay whatever they need that's really unusual even in the world we live in today where there's a lot of value ad and a lot of you know trying to make companies better y'all do such a great job of that what was the initial reason to create that i know it comes from your engineering background but for the audience benefit why did you decide to build this playbook that is so famous so here's the thing you know you all probably saw that movie The Founder sure of course right okay and so you had these McDonald's brothers they built the most efficient fast food restaurant on the planet but they didn't scale that's right it was Ray Croc that's right who actually said hm how do I take what they have done and put it in a form of replication so if you think about it it's principles of self-replication you cannot as an engineer you got remember I'm a chemical engineer our job is to do things in process on the one hand at scale and with minimal you think about it minimal waste and so the best way to do that is to think about what are the fundamental elements that create value in this case in a software company that's why we only do enterprise software i'm not smart enough to do anything else okay i love that by the way your concentration of power so many people try to two so many things they never get the depth you have that's what I think yeah i Yeah now some guys are brilliant out there they can run seven businesses at a time i'm not that guy okay i can run enterprise software companies because they're all organized the same way deep yes and you say "Okay." And guess what when we learn something here we can now go apply it 15 other places let me give you an example in AI okay last 18 in the last 18 months we've already had four what we call hackathons well what do we mean by hackathons okay we bring our engine each one of the companies you can bring one or two teams okay okay and so the companies bring you know we have 30 40 teams go to these hackathons one or two teams okay then we bring the folks from all our partners yeah okay and they bring their scientists and engineers and they write code and they do it over a weekend or a couple of days and then they then they judge and grade each other okay who wins we give away you know prizes and steak dinners and all that kind of stuff right stuff engineers like well guess what we'll find out man that's a great application that application we work in these four other companies these 15 other companies these 20 other companies so now we take that application all right do we need to put on a different platform boom yes we do you see what I mean so you do that and value add is just geometric it's absolutely okay and it's a process and so the next one is next month and then the next one is two months after that right so if you think about it over a three-year cycle two and a half threeear cycle we would have six of these hackathons with 180 of our top engineering teams with the top development teams who were developing this code we get early releases of stuff from some of these players and our people like "Wow here's what it is." Okay and and then from that you can now say "Okay now take this scrum team and go deliver them to these five other companies here's how you do that." Then we have our CEOs all get together and our CXOs all to get together and share in exchange and and talk and have Slack channels and all the sorts of things that enable them to think about how do they advance each one of the little aspects of what makes their business can makes their business run and can be more successful that's how we do it well I mean you refer to it as constant never- ending improvements so you know what's what's I've got to ask for the audience cuz they're going to be wondering you said hackathon normally hackathon means you're trying to break into stuff in this situation you're talking about building stuff it's not really a hacking yeah no it's hacking it's just we hacking just you know tapping out i want to clarify something so so you said something earlier that I know a lot of people get panicked about and I think it's I remember I sat down with you know President Obama and I was asking him 10 years ago or eight years ago i said you know you look at the productivity that's happening already and then we're just talking about let's say things like self-driving cars you know things of that nature that'll that'll no one's going to buy have a hire a truck driver a truck when I can have a self-driving truck that works 24 hours a day versus eight hours a day i don't have the healthcare issues i don't have complaints right i probably less insurance and I get to write down the asset right so all those Uber drivers taxi drivers truck that's 5 million jobs in the United States that's how many jobs we lost in 2008 that made the economy go crazy so all this productivity you know we've seen going from let's say farmers 150 years ago where 80% of the population is farmers to now it's 3% we we take care of the world because of productivity right that change was slow this change is fast and I asked Obama I said you know is anybody getting these people ready for their new jobs their new direction he said well we don't think it's going to happen that fast and I said my experience if you study history is like it goes and this is it right you know we're geometric it's not it's not like anything in the past that you prepared for so I know this isn't your job but I'm curious two questions there's going to be so many jobs disrupted by that but what does a person in that position do so that they can use AI and become more valuable in a company do you still see is there a stage in which you don't need human beings to that at all that the AI is designing at all i assume there is i I think that it will be an evolutionary process to your point will be evolution or revolutionary no I think I think it's going to be evolution it's just going to the speed of change is going to be more rapid no I agree no I agree right so look that's not your responsibility but I'm saying what what do you think is real so they hear because you know more about this industry than anybody probably alive i'm not blowing smoke your way it's true um what what would somebody in that position do and then what do owners think about in that area so there's layers okay the first layer let's start here there are 1 billion knowledge workers out there which developers are now if had we sat three years ago four years ago and we sat in these tables we said "Robert what's your biggest problem?" I said "My biggest problem is there are five we need we have five million open wrecks in software development jobs around the world." That many not us the world okay we were always running a deficit 5 8 10,000 you know and like we're constantly trying to find developers constantly trying to Well guess what that the tide has shifted so anyone you know I apologize anyone I said send their kid to become a computer science well that was my next question yeah so we'll come back to that because now now things have all changed right things have changed so now so that's one layer that1 billion knowledge workers provided $40 trillion you think about it today of global GDP what they're getting in salaries and they're taking care of families that is all going to get disrupted at some rate and and stage there my my sense is I mean I know it depends i think there's going to be a regulatory overlay on this where it's going to be try and slow it down i think so but different jobs are going to be you know affected so fast I think so look I think it's above my pay grade as to who makes those decisions but I think that's will happen okay so in certain environments going to happen quite rapidly in others not so much okay so second layer yeah so the second layer is okay within each portfolio company so what's the point I said listen guys and and gals we have to pivot everyone everyone in our organizations has to now think about how to make what they do more effective utilizing AI and genai that's how you become valuable Absolutely and that's AC across every one of our portfolio companies again I've got a 100% of these companies now pivoted in one way shape form or another i think there will be a group of companies that become agentic in their nature okay and I think there'll be a group of companies what I call genai enabled that can you guys are familiar with the rule of 40 okay okay which is a a a combination of ibida margin plus growth rates rule of 40 25% Iboda margin 50% growth rate everybody oh it's a good software company i think you can run these companies at rule of 70 and rule of 80 yes wow okay that's where that's going these things become wildly profitable if you run them well and you actually leverage GI across all the aspects of running an enterprise software company which means it can grow ridiculously fast or you're going to reduce the headcount of people in those organizations who gets reduced well if you aren't embracing these solution sets you know this is a new technology just like you know at some point in time someone said guess what railroads aren't as efficient right and now we went from you know million railroad workers to I don't know how many there are today but a fraction of what it is so every one of these industrial revolutions this is the next revolution and and and it's here and it is here and it is now yeah that's right constraints to that growth we talked about it before the the the broadcast power okay inference all right all those things now of course what we're figuring out and you know the the the cost of inference is coming down dramatically we saw you know a you know Deep Seek come out for instance people oh my goodness well if you look at our cost curve estimates it's exactly on the curve i can show you exactly on the curve the thing that surprised people is where it came from okay so that's kind of point one but then you also and we don't know if those numbers are real anyway yeah we don't right but you can actually start to tune now call it the enterprise inference uh requirements that actually are lower power okay and depends some can handle different you know levels of latency yes okay and so now you think about okay where's the inference coming from what's the cost of that inference the capability of it and how do you make it so that it can operate in an enterprise environment in our enterprise environment which is part of the factory build if you think about it so it will happen fast and then then you've got what I call the the the grandmother question okay where the grandmothers come to me my mother shout out to mom just turned 90 today happy birthday Mark happy birthday i know right she's like "Okay well what do you tell your kids to study?" Yes that was my next question we're on the same page yeah i don't know you know but but I will tell you I will tell you it's important they understand the impact that AI is having in their world so they've got to have get have some familiarity with it you've got to teach them to be critical thinkers and to be curious they may not have to rely on data recall the way that we all did right okay because it'll be there right it'll be there but so then it's okay what's the next generation or iteration of the value that they create in the environments in which they serve yes okay so I think that's that's part of it that's that that's that generation's challenge like we as parents we talked about this before we as parents part of our job is equip them to be successful but they have got to go navigate their way as well to be successful in a world that is going to constantly change cuz their generation when they're our age hopefully we're all still around but Okay all right all right when they're our age their children are going to have a similar or a different probably undoubtedly set of technologies that they're dealing with that says "Oh wow our world is changing again." So so you know this is such an important distinction and I hope people watching cuz so there's a lot of fear out there about this and when I tell people I have five kids and five grandkids i have a thanks to well I have a 50-year-old daughter and I have thanks to the shutdown that we had for a period of time i have a five or four-year-old daughter now i love it yeah i've got I've got 5-year-old and my youngest okay so we're the same i got five grandkids so I think what do I want them to have knowing the world is changing this fast and to me I look at the common denominator even you myself all the people that we know it's like three skills that they have to learn they have to learn pattern recognition right because it's really the ability to learn right once you recognize patterns there's no fear because you know it's not random right then they got to learn pattern utilization that's where the power is right and so you look at someone as great musician a great businessman somebody great they they know how to and then the third level I've tried to teach my kids it's like if you play the piano somebody else's pattern long enough then there's a point in which you come about and now you become a pattern creator now you now your value explodes geometrically regard and you're using technology to do it using whatever you use to do it would you agree with those patterns is there any I'm missing in that area i would agree i I teach my kids one other thing is that make sure you take care of your dad in his old age i I like to be a little self- serving but but in a serious I I I think I think those are the the for our generation those are the right things to deliver to them okay and how you understand this and I tell my kids I said "Listen you know there's there's there's I give them there there's like I said there's three lessons that I that I teach them the first one is that you are enough." And that really sums up some of that it's like "Okay you are enough you are enough to be the person you want to be you don't necessarily need you know some accolade or acknowledgement or recognition from someone else if you want to go be a musician you want to be a luier whatever it might be uh you have the power and capacity to do that and to change the condition of you and your family and a community that you care about you are enough to do that." So there's a there's a part of you know that learning and and the lack of fear and the confidence to to get them that the second thing is discover the joy of figuring things out okay so we walk through that that's what the pattern recognition utilization is all about exactly right okay that's what you've done your whole life absolutely and the third thing I tell them love is all that matters okay so that's what I tell look I hope that they take that all in uh cuz I'm not leaving them anything else but those are the three things I think are important for me to impart upon them as a father that's beautiful well those are those are beautiful things for everyone to understand and to know and when you think about you know what you want to be remembered for and what people 100 years from now when they think about Robert Smith what do you want them to say about you yeah man that's a great question i want them to say that I was a great father uh a a great husband a great community leader a member of you know the American fabric and I made a contribution while I was here and the contribution helped people it helped institutions and it helped us progress to become a better nation i want them also to say that he builds some great friendships with people all over the world that's beautiful uh I am touched sometimes when I travel and you know with some of my you know investors and friends we've been friends for 20 years and and we our families know each other and you know I know their children they know my it's it's a neat thing man it's just I feel so blessed to just be in this position to do what I'm doing and and to do it in a way I think I think that is unique uh is a lot of fun and adds a lot of value so I'm I'm I'm hopeful that I'm they look back on my life at some point in time and say "All right this guy did okay and was a good guy and did stuff the right way." So Well I think I think you're most importantly your parents must be proud you've done them well the values they instilled in you you then expanded upon and used you still you had expanded you brought you to it yeah and you've done something yeah and I think that's what we want our kids to do too right you're standing on your parents shoulders and then you've taken to that level but they provided that foundation it's it's quite beautiful Robert you're a beautiful man i I want to touch one other thing uh you're 62 63 yeah yeah you have to tell everybody that when I walked in the makeup artist said "Wow this guy looks 35." So I was like I was riding high riding high now you just just Well I just turned 65 myself and nobody tells I shouldn't tell them either right but one of the things I found and I want other people to know is what this stage of life is like if you've focused your life on contribution in some form and you taken care of your health those are the two elements right if you have love in your life you've contributed and you've grown you've made a difference this stage of life I don't think a lot of people think this is going to be old i mean you and I I can feel it i know you can feel it you're not the same age but it's like this feels like the beginning and and the level of joy and happiness and everyday fulfillment and I think a lot of people you know in their 20s and 30s in their 20s trying to prove yourself maybe 30s 40s hopefully you've proven yourself enough to yourself you know who you are a bit you start to grow you start to really master things you can move more with your pinky than you used to do working 12 hours a day and then you if you really love what you do you work 15 hours a day anyway but this stage of life is my happiest stage and I don't know you long enough to know if it is for you but would this would this be the happiest stage i would agree and I'd sum it up in two words grace yes and gratitude i 100% agree 100% agree you know I I am grateful for every person along this journey me too who taught me so much okay some taught me great wonderful lessons and some taught me some lessons about humanity that I'm like okay I don't I don't like those kind of people right okay and there's and there's an important part of that and then the grace that comes with what we what we are able to deliver to communities that we care about yes okay i mean it's it's interesting i've I've got a a a good friend of mine who's part of my my Bible study class and we he and I talk about he's like you know you should feel blessed to be a blessing and that's one of the greatest things to feel blessed to be a blessing because the three of us have the opportunity to to to be blessings for people to improve their condition in retirement improve their opportunity to create for their families to improve their outlook on themselves their lives I mean I mean what you do improves people's view of themselves and what they can go accomplish look you okay we we do a lot of things and we create a lot of value and you know I I have a bunch of school I think 50% of the school teachers and police officers you know we we manage money for in the US which is great and that's an important part of our job yes as important it is to create an environment where my people know that they have the capacity beyond that to change the communities that they live in a 100% that is so important so that's the grace part of this yeah my I I wear these hats that say continue outside i get people to wear them that says be a blessing and you'll be blessed that's that's to me that's the whole game of life that's it that's it that's all you have to do focus on being a blessing and you will be blessed you don't have to worry about being blessed you don't have to worry about doing that if you're being a blessing when did that come to you i mean cuz I look at my kids now my older kids and I I don't think they they get that quite yet yeah when did that come to I got it at an early age but I think I got it because we suffered so much and you got nervous you got I was I was very lucky i I think I think very early on seeing people suffering I never could separate from that i suffered but you know I suffered less because I was focused on taking care of other people my mom used to people I interviewed my mom when she was still alive and they'd say he always been like this and she said I'll tell you when he was four years old you know my mom couldn't move she was you know depressed and also pregnant and so I'd go I had to be responsible four years old go to liquor store and buy stuff she said I gave him money to go buy milk and bread and he's gone forever and she said he came back and I had no milk or bread she goes where's the milk and bread i said well there's a poor boy there so I gave her money she goes "We're poor." Right right right i want to ask you something just I'd love just to capture i'm working a book on decisions right now and uh just real quickly I'm I believe it's your decisions more than your conditions that shape your life yeah you know we all have horrible conditions at times ridiculous sometimes unjust conditions but it's the decisions we make I think that ultimately shape our destiny and I think grace can help shape that there's zero question in my mind i believe in grace but I'm curious if you look back on your life and I know this is a big question i'm not looking for the exact answer but are there two or three decisions that you can look back on and say "If I would have made a different decision my life would be completely different today that you're grateful that you made." Mhm yeah I would say so I had the great fortune last year i decided to go on a commamino okay so it you know I didn't do the 34 day I did the six day cuz you know finding 34 days of my life ah great but six days was wonderful um you know my cousin who had just just you know recovered from cancer he said I'd like you to come with me yes i said okay and so you know at least he's smart enough to ask me a year in advance so I can like a year ask me to do something a year from Yeah let's do it right they was like oh my gosh right and my wife and we're getting she's like have you trained for this i said I don't need to train for this she's like you know you're walking 8 to 10 hours a day i said I got this i went and walked the other day in Manhattan i'm good man yeah all that stuff that's why I wear sandals it just helps my feet now but but I will tell you I had a chance to replay my life um and it's I call it the tape of my life my my my cousin love him dearly i've grew up my dad was eldest of eight big family you know 22 kids at your birthday party you can invite one friend cuz 21 were your cousins it was that kind of a family right and it was wonderful and all that but he's a little he's a little chatty so he likes to talk and so the first day I'm like okay so I have a little speaker on my backpack i say listen when the when the music's on that means I'm kind of in my thought so so I kept the music playing for 5 days straight but what that had gave me a chance to do was really reflect on exactly that decisions okay there was one major decision to go away to school to go to Cornell so I gave you a little bit of the construct of my family my dad eldest of eight took care of all the six sisters you know one of his brothers died um and their kids and so I remember he was a he was an elementary teacher and then became a school principal and so when he got his check that was like everybody you know was able to now feed their kids my cousins right i mean that was what was happening because a lot of them were on you know different forms of assistance and all that sort of stuff and I saw that and you know I got scholarships to play you know football and all that sort of stuff in different places but in in in Colorado I got scholarships to you know school of mines and Colorado state and see but I realized that if I stayed in town I would just be taking over my father's place okay and that was to provide for that community in a way how old were you when you made this realization 17 years old i was going to say that's such a young age to make that decision okay so remember while I'm working at Bell Labs now for the first time I met somebody who went to an Ivy League school okay vic Hower in my you know okay he went to Brown okay stanford i was like wow brilliant c MIT i mean just right and so he started telling me about what these schools were about and of course you know I would go visit CU and CSU and school of minds and Yeah that was wild for me i was like "Wow this is pretty." My dad went to Denver University you know my mom went to DCT you know DC Teachers College and then University of Northern Colorado well I didn't know anybody who went to these Ivy League schools and so as a result of you know that experience I got a chance to now go visit Cornell right and I went to go visit you know got there had $235 and I was like "Oh for a summer program." And that was one of those wow I need to go to a place like that so decisions about and this kind of leads to the next one who you spend your time with yes absolutely yes okay like they say if you spend your time with five fit people you'll be fit okay it's the same sort of dynamic so when you go to a place where these people who are focused on you know doing something different doing you know doing making changes in the world solving complex problems making a difference in the world that's why the school was so important for me there okay don't get me wrong i'm still very close with the guys I went to high school with oh that's beautiful oh dude we hang out every year we have a big thing every summer all that so I mean the kids I'm Uncle you know it's all of that they're in different places in life okay different stations like all are driving themselves forward in the best that they know how i just had a different aperture earlier so I can make a different set of decisions yes okay so there's that the larger reference base yeah okay so proximity with power right right proximity is power one of the other things that was interesting I'll call it and this I'll I'll stop after this but another unique well there's a few but another unique moment remember I graduated degree chemical engineering I got my first job I was making $32,000 a year okay this was more than my father made at the peak of his career I didn't think you made more money than that okay I didn't think this was you know 198 right how could you make more money than that was just you know insane amount of money and then I read this magazine about these guys on Wall Street okay and I started what is Wall Street i had no idea i was an engineer i'm writing code and nobody can write the I'm writing machine language yeah machine man i'm not writing high level i'm writing machine language assembly language building assemblers to assemble that code to actually control this i'm I'm at that level wow okay and which is kind of cool i mean you know you like that's like some cool stuff and I'm reading about these guys at Wall Street i met some guys i was in in uh actually in upstate Buffalo New York and they're telling me about stocks i'm like what are stocks cuz I didn't know what they what are bonds what all this all this sort of stuff and so we I had a little book club we'd get together and and then so I started understanding the difference between labor and capital and so the decision let me go let me go back cuz I was thinking about going back to med school or something going to okay and I'm talking to my granddad at the time and I said dad granddad I think I'm going to leave this job and go back uh back to school he said well why would you ever leave a job like that you know cuz my granddad you know he was running three had three post office is retired all you know what I mean this was a big deal for I'm making $32,000 a year are you kidding me why son what are you doing right and I said there's a whole different thing they value in this country the ability to manage capital more than call it you know a little different now but you know labor okay i'm smart labor is what I am so that was one of those decisions yes okay now I'm you know chugging through you know I did well first year of of business school you know top student so I got an award had to come back for the summer and the guy's keynote speaker good friend of mine John Newton Doll you know he had to give it he said they you know do do my award and all that sort of stuff top grades all that and he's like have you ever thought about a career in investment banking and I'm like look there's a bunch of ex-investment bankers in my class at business school i said but I don't like any of them and he's like he's kind of looking at her he's like "Well why not?" I said "Well I" I said "They think they know everything they're pretty arrogant you got to understand I'm an engineer we do know everything it bothers us right?" So I said "But in all honesty John," I said "I don't know what they do for a living i don't understand what they do." Nobody had actually explained it to me yes and so he said "Why don't you come down to my office?" I was at Columbia right said "Why don't you come down to my office?" And I had lunch with him and was what was going to be a 30-minute lunch went you know two and a half hours at the end of that lunch he called like he was a CFO of Morgan Stanley the CFO of Maril Lynch you know Goldman S all all and said "You got to you're just going to you know you got to interview you got to talk to this kid right?" And so I talked to these guys so I ended up getting a job actually from every major investment bank and I went to Goldman Sachs right because Goldman was the only one that actually had um a teamwork orientation everybody else this was the guy you worked for him but I'm like "Okay everybody around that guy's been around him six years." And here I am as some newcomer not being in investment banking having worked for six years it's like no way I'm gonna get an inside track on that so yeah decisions right so I'm like let me go to Goldman Teamwork orientation go there start really work do that where your merit would be rewarded yeah well I didn't know it was going to be rewarded but what would happen is I could get exposed to it i get it okay where you'd actually get to work on deals just like you did with your engineering friend back at the Bell right same thing yeah right you get to see things okay so I'm doing that by the way that's why the people don't understand why this whole idea of distant work you know doesn't work cuz you miss the mentoring you miss everything you're missing the chance to grow geometrically by being around wisdom that you're you're never going to absorb by just joining it's crazy so I built so I'll tell you so I built what was called real life training because I realized oh man this is a fact pattern based business yes okay so you got six you know partners and remember gold at that time we had like six M&A partners that was it right and you know VPs I said every Friday if you're not out of town I want you to we'll put the books together you come and just walk through with the elements of a deal and so for an hour and a half for lunch and that's what we do so I created that little program all so then Meler asked me to come what was called the you know the business unit manager there and then I started evaluating so here's one of those decision points and we had to evaluate people and process and all that and then there was this thing called technology that was happening we advised this company called IBM and this company called Microsoft we took public but every other investment bank was sending guys out to the left coast so I I called Jean Jean Sykes i said "Jean we need to start a tech group." He's like "What do you mean?" I said "Look you got all He's like "Well I'm in LA and he's doing our idea was tech was North of Grumman you know General Dynamics." Okay weary basically all that stuff and so I do an analysis i said at that time Frank Quatron and all that i said "Listen they're in Hamburg and Quist and Alex Brown and Robbie Stevens Montgomery they got you know Morgan Stanley and all these guys out there we were just running around." So Jean calls me said "Okay let's start a tech group why don't you come on out come out to LA." I said "Jean it's in San Francisco." Proximity again yeah okay is it San Francisco that's a huge decision yeah and I said Sounds like a little one but it was a huge decision so we talk about decisions and Jean's like "I don't know la is much better weather." And he's like "Okay why don't you come?" Remember Atlanta's blind one eye man's king i'm like an engineer the only engineer running around to actually spell software right so I go out and I said Gene the only way I'll do it is if you if you actually spend time with me in San Francisco because I'd worked with every other partner by then in M&A yes so I go out San Francisco okay jean you know buys a house spends eight days every year but you know those eight days he spent with me kind of teaching and training which was great and I advised a little company called Apple wow right little company called Hula Packard what years would this be 1997 wow okay hula Packard this little company called eBay little company called Yahoo okay hula Packard Texas Instruments right and so that's one of those decisions and oh by the way when I went out they're like "We're not sure this tech thing is going to be big." So keep I had uh Unilver as one of my clients i had I'm telling you I had I had uh Ben just in case right i had uh uh Earth Best Baby Food i mean it's like "Okay." They're like "Well they got some organic farms out in California you keep covering them." I'm like "All right no burn the boats we're not sure this tech thing is gonna work out for us right?" Literally right so decision so point is yeah and so that's and I'm just curious philosophically sounds like we're very aligned that you look at those things and you certainly played an important role you made those tough decisions you made risks but a lot of grace and all that isn't there a lot of grace unbelievable amount of grace you know like all things had I not be prep had been prepared with an understanding i remember they you said "You know what you've got a unique set of attributes one you're an engineer so you in process two you spent time at Goldman Sachs so you actually understand you know capital markets and three you actually understand software he's like I haven't met anyone four you're a hungry son of a [ __ ] and you're relentless yeah all right like okay all right i work with that it's it goes back to the same point of being prepared when call right it just you have to be ready because you don't know when that call is going to come and that call was obviously and you know how this works when you're the first in and you know I I I always um even today you know I'm still when I go in the office usually I'm the first one there 6:30 7 o'clock that's awesome I'm not necessarily the last one leaves because I'm usually going to jump on a plane go somewhere else but that's a dynamic that again I don't no matter what age you are I don't think it's just who you are that's your hunger that hunger pot I was talking about it's like people ask me what is the difference I love insanely wickedly intelligent people I'm a fairly smart person myself but what I found more important is hunger right cuz you're going to maximize it and but I mean a hunger that doesn't go away a hunger to be more to do more to give more to create more that kind of hunger is I was curious when you look for people and last question because I'm conscious of your time here when you're looking for people what are your non-negotiables for leaders that you're looking for like when you think about leaders because that's what you do right you're recruiting leaders you recruit people what are the leadership qualities you're looking for that you think are lasting and have duration and one of the most important there's a balance always I've been saying this for years you don't always get it All right it's it's intelligence and it's loyalty okay right there's that balance and then you have this thing and it's that that grit and that tenacity can they actually And look sometimes you can't determine that cuz you know our so you've been around somebody and put under pressure in different situations yeah and our environment produces people who can say that they were that yeah i understand you see what I mean and then you're like well they weren't really that okay or they weren't you know and so there's there's part of it and look there's utility too you know certain people are you know we've learned because you know our companies right yeah a person who did you know took a business from zero to 20 million in ARR isn't necessarily the right person from 20 to 50 or 50 to 200 or 200 and so you know starting to now discern what actually is the right quality for that for that period of time but so much of it is is so hard to find because of the fact that the individuals know how to fake their way through an interview and so how do you try to discern which of them are real yeah and which of them are just good actors build from the draft and not from the trade okay from the draft yeah but not from the trade if you look at my senior people they all started as associates and so you have years and years of observation and you can test and build their metal to see okay are they that or are they something else and I and I you know every now and then you see people flame out i I will tell you I've had some senior people flame out just they got tired well or they just they hit their utility they hit the utility and some are just they just don't you know they they can't handle the pressure they can't do hard things you know you kind of see I always crack up cuz there back in the day I look at people okay we're about to get into involvement deal now this person has to go out on vacation has I'm like okay so you really don't want to get in the fight and make this happen and so those who don't have that metal who haven't been able to to to really you know hone their own metal okay they they flame out so you know the the interesting thing about that though is when you're running a software company that you've acquired you have a situation to where you need to literally but but here's the thing you got to get there fast because you can't hold the company for 22 years or for 25 years like Vista's been you got to be able to make this business really really valuable in four five six or seven so you can't necessarily do it from the draft instead of the those are because so so as a portfolio company so that's why we do aptitude test and personality profile okay and we look at those and every quarter we're looking at we got a nine box that we look at and not I laugh with some of my senior executives go native what do you mean okay my my my people not the operator like oh we can change them they'll be I'm like okay and then you got to go through the Okay well how often have you said that that has actually happened yes okay and that's always a challenge yes it is right and so in driving that look we don't always get it right not surprising right but we get it right most of the time more often than not right which is kind of what you have to drive when you have 89 companies and you're adding a bunch in add-ons and all that sort of stuff i mean you're playing more probability but in the big companies you have to get really really right really really early sure and then you have to when when you're going through IC on the small companies you got to look those color heads tell me about the nature of that CEO mhm i need to understand the nature of who they are are they a problem solver are they an early stage person are they a quitter are they going to be able to deal with that if they lose their top 10 customers what happens right and they don't get it right but what happens is well look remember my my co-heads have been around forever now right but if you look at them what happens is they've learned from the lessons of the past now and so they're more valuable today sure now the question the the real issue you have with some of them not the ones that you know they they start making a little too much money and now they lose their hunger exactly some people are doing it for the money only right it's great to have the money as well some are doing it for the money yeah and then it doesn't last you can't necessarily tell that coming in you always want them poor smart and hungry well you also see that with founders too right yeah yeah they get a little money and then all of a sudden lose their focus it's not that I want to go related i want to punch him in the head yeah yeah like it's like what's the matter with you you're not going to be fulfilled by that anyway right you just got to keep growing and giving those are the two things that make it work right exactly but they don't necessarily get that right well but it's so hard to find those people that truly are not doing it for the money they grew up you know hungry and then they achieve it and they just go you know that's what it's all about and then they coast and unfortunately we know that they're not going to be fulfilled they're not going to be happy because we're not growing we're dying but it's really hard to see that until they've had that taste of it if they're really going to stick with it yeah and then and and when you see it it's it's it's it's disappointing to me you're like "Ah okay so you were just in this for the money right okay all right you can make a choice i get choice." And everybody's got to you know some people cuz people like "Oh man what's your number?" I remember in the early days "What's your number?" And I remember one guy who we got rid of early and I So I remember flying back so we just had one of our major big big sales and I'm on that early morning flight from uh New York to San Francisco okay and I'm sitting in whatever business class or something and he comes on you can tell he's been out all night and you know been been tying on celebrating tying on one he says "Man I hit my number." I'm like "What?" Okay no cuz I he still like I said "Man I called my mom and I sent her a picture or you know showed him what I had in my bank account and it was like you know $10 million." He's like "I hit my number." And I knew at that point he's done he's done okay because there was in you know in in Veno Veritas right okay right i'm like "Oh okay." And I got rid of him within the next year so anyway well blessed to be a blessing is a great way to look at life and it is something that helps us be impactful and we're blessed to have you as a guest Tony blessed to have you as a co-host here brother and I got to tell you this has been a lot of fun and I said at the beginning we could just go as fast as we wanted and everybody in the audience you can play it in slow motion if you need to cuz we covered a lot of ground and it was packed thank you Robert for being here we appreciate it and everybody thank you for joining us we're so glad that you that you decided to listen and we look forward to seeing you next time thank you