Unorthodox Ventures

PE let him spin out the R&D team because R&D 'doesn't make money'

At sale, the PE buyer let Smith take the business-development R&D team out of the company because, to a finance firm, R&D only costs money. He took eight young employees (aged 19-30) and relocated them to Austin to start Unorthodox Ventures.

“the firm that purchased it allowed me to basically take a department out of the company, which was the R&D, the business development, not the mechanical or the electrical R&D, but more of the business business development, R&D, and because they don't make any money. I mean, you know, if you're a PE firm, you're a financial guy, you understand business like, you know, like, like crazy. You're so good at it that R&D is like, why would you need something like that?”

The contrarian path holds the most opportunity

Smith's operating philosophy: always take the path least traveled. He manufactured in the US (and Malaysia) rather than China for quality and impact, and named his fund Unorthodox Ventures around the idea that going left while everyone goes right pays off.

“I think that it's always the path least traveled that offers the most opportunity. I will always go to the more contrarian— I mean, if there's a decision to be made that you have to look at the decision that most people wouldn't make.”

Steal thisWhen a decision is obvious to everyone, deliberately weigh the choice most people won't make.