Transcript for:
Insights from Robert Smith on Investing and Technology

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. Yeah. 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. Yeah. Okay. And so, you had these McDonald's brothers. Yeah. 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. Yeah. 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. 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. Yeah. 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. Yeah. 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. Yeah. 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. Yeah. 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. Yeah. 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. Yeah. 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. Yeah. 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. Yeah. 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 yeah, 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. Yeah. 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.