The High School Dropout Who Made $2B & Bought an NBA Team
This is Ryan Smith, the guy who went from a 1.9 GPA high school dropout to a $2 billion net worth. But this isn't your normal dropout story. At some point you have a conversation with yourself like, okay, I got to make this happen.
Yeah, I got to find a gear that I've never used before.
When he dropped out, he had no plan, no money, and nowhere to live. There's a great story about the early days of Qualtrics and focus.
We were religious about it, and it was actually an incredible forcing function for me.
At some point you get offered $500 million to sell the company. And you turned it down.
Every other person I would talk to about this offer was like, take it and run, right?
You're building it from your family's basement all the way to the end zone, basically sell for $8 billion. You end up going public.
I didn't do anything else when I was doing Qualtrics. I didn't invest, I didn't sit on boards, no side hustles, no side hustles, nothing except for hoops.
What's it like to now own an NBA team?
That's insane. My philosophy was don't blink. Just go. I feel like I can rule the world.
I know I could be what I want to.
I put my all in it like no days off. On the road, let's travel, never looking back.
I want to start with this, like, you know, you've done what kids like me dream of. It's like, I build a successful company with my family, no less, become the super successful guy, billionaire, NBA team owner. You live this really interesting life. What's cool is that if we rewind the clock, you were a guy who dropped out of high school and had a 1.9 GPA in high school. So going from a 1.9 GPA to like, I don't know, a $2 billion net worth, that's a pretty big jump. We hear these stories where it's like Mark Zuckerberg, Bill Gates, they, they were at Harvard and then they dropped out with this big grand idea and it came to fruition. That's not your story at all. So let's do the origin. Can you take us back? You're 14, 15, 16, 17 years old. What was going on in your life at that time?
Yeah, I mean, it's no secret, my parents split up when I was like 14 and the world was rocked. And I was very much like, okay, screw everything. No one can tell me what to do. And I think my parents were trying their hardest to keep us. I mean, we had 5 kids. They were keeping us all kind of afloat. And I think, to be honest with you, you know, I never really developed the skills for, for school, and I didn't think I was really good. I knew I was a good athlete. I knew I was good at golf and could play poker. And like, I, I knew there was something there, but I didn't work hard. I didn't finish anything. And it was really hard, like this concept of finishing., and it just never happened. And so I think the trajectory I was on at 14, 15, 16, 17 was not a very hopeful one. And there was no indication that there was a spark. There was no indication that there was good ideas in there.
Right. So what was your move? So you're not, you're not loving school, not doing that well, no spark there. What was the decision to quit, to drop out, to leave?
Yeah, I mean, It was just kind of forced. It was like, hey, school was like, this isn't working out for you. Like, you don't go to class.
You're like, it's not us, it's you.
You know, there's probably another path for you. And I had an uncle who reached out and said, hey, Ryan, you're 16. We're doing a tech company. It was called iMall. You're not going to just screw off all day. You might as well come work. I'm running a sales team. Come work. And I worked in the mailroom and I worked with 3 older gentlemen. I mean, one was in his 40s, one was there, and the founder had just gotten back, or someone had just gotten back from Seoul, Korea. And I would always say, like, I'm gonna go make money one day. I'm gonna go work on the fishing boats in Alaska because they're paying $20 an hour. I'm gonna go do this. And my parents were like, go do whatever you want, just graduate high school. Like, we don't care. The bar was really low. And like, these guys were like, no, you should go to Korea. And I was like, that sounds good. And my dad was like, if you can pay for it and graduate high school, we'll do it. So I graduated high school. I got a GED when I was 17. I went to like a university and just like cranked it out.
Like a few months.
In like 3 months through like packets. And like, I was with like mothers and like everyone else who would not. And it was like, I was like, okay, I'm gonna crank this thing out. And I did it. And there was a little bit of a moment like, whoa, all right, when I kind of set my mind to something, I can do it. And then I went out, and that's when I went to Seoul.
And so you go to Seoul, you're what, 17 years old at this time? Do you have a plan?
The plan was I communicate— I never left Utah. I'd communicate with someone, and we were supposed to show up, and we had jobs, they had a house for us, they had all these things, and we had talked to them. So I remember getting there and we had limited cash, but we were there. We were there to sign a contract and work for a school and move in. And we get there and we go right to the hotel and we're waiting and we call where we're supposed to meet up and no answer, no answer, no answer, no answer. Next day, no answer, no answer, no answer. And we're like, what in the world? And then finally someone answers and it's a Korean woman who didn't speak any English. And it was like, okay, Well, but this person, like, I thought we were showing up and they were just gonna all be there waiting. Hey, we're so excited to have you. And it was the exact opposite. And like, basically after a week in this hotel, it was like, you have no job, you have no house, you don't have enough money to be staying in this hotel. And so I remember sitting in a coffee shop and, you know, we kind of all called our parents to come home. These guys, all the parents went to the airport, bought them a ticket, and they all jumped on the plane. But like, I sat there, my dad's like, you're not coming home. And I was like, what in the world? He's like, I know what you're going to do here. Like, you got a chance to go do something. And I look back as a parent now, and I was like, what in the world? Like, I would never leave my kid over there. But he was like, the upside is like, way better.
And so what was your dad— was that tough love, or was he just sort of like, look, you just need to look at it this way, hang in there? Like, what was he— what was going through the mind, you think?
I have no idea. I, like, honestly, I've thought about it so much. It's like— and that's just my dad. Like, he's like, fine with his kids failing.
Did you feel like rock bottom at that point?
Oh my word. So homesick. In a country, no Americans, no English, no money, and you just kind of had to go figure it out.
All right, so you meet this guy, crash on his couch. At some point you have a conversation with yourself like, okay, I got to make this happen.
Yeah, I got to find a gear that I've never used before.
And so what'd you do?
Ended up running into someone who needed an English teacher. The school was a ways away. I didn't have a place to stay. So he said he'd pay me $10 an hour, which isn't a lot there. So I teach the kids from, you know, 3 hours a day in the mornings. And I had found out about a place where Koreans go to study called a goshiwon, which is like that locker room we just looked at. It's about that big, but a little bigger. No one ever sleeps there. And I'd convinced the guy that if I could teach him English 1 hour a day, he'd let me sleep there because they had a shower. I found a little stove. I would cook ramen noodles on it because that's all I could afford.
Obviously, it's tough. Obviously, you're sort of— it's like character-building moment because you're on your own for such an extended period of time. But was there like a part of you that was sort of enjoying MacGyvering it a little bit?
Not at all. This was not—
no momentum.
No, like, at the time there was no, like, there was no of, like, myself now looking back going, okay, I'm gonna get crafty, this is an experience, I'm backpacking through Europe.
Didn't have that attitude then.
This was not that. I mean, this was like, I gotta get home, right?
And so you, uh, you're teaching one guy. Did you eventually get more students?
And how'd you do that in Korea? There was, you know, 20 big 15 to 20-story high-rises where everyone lived. And I was like, okay, I'm teaching English, I've got 12 hours in the day. The better— rather than teaching a school, it's way better to do these private lessons. And if I could get into one of the high-rises and get like starting at 4 o'clock in the afternoon, teach every 55 minutes, right? Like, it's going to be great. Well, how do you do that? And I got someone to write— I had a pager at the time. I got someone to write a message in Korean, and I made like 5,000 flyers. And I would go in and they'd have these huge mailbox rows, but there was a security guard there. So I would go in and talk to the security guard, and I was like, hey, man, like, in English or broken Korean? Whatever it took. I would just try to be their friend.
Okay.
And I was like, let me put these here. Let me put these in all of these. And they're like, well. And I was like, come on., and I would normally be pretty successful at it, right? And then my beeper just started hammering and blowing up, and I was like, whoa. Like, this was the first time in my life I was like, actually, there's something in there. Like, you have a good idea and you can execute on it. And then I started getting a schedule and like, literally like a month later, I was making like $8,000 a month as a 17-year-old teaching English. And I was like, how in the world did I go from there to here?
That's amazing. Let's talk about the start of Qualtrics. So you build this company, you build it with Stewart, you build it with your brother, with your dad, and you're building it from your family's basement all the way, you know, to the, you know, to the end zone, basically sell for $8 billion. You end up going public. You have a pretty crazy story over like a 20-something year period where, you know, what's the origin? What was the idea? And, you know, what were the early days like?
Yeah, so I think, I think that the origin, and if you talk to all of us, it's, it's, it's a little different. Like, so it was really my dad and I who started. I was doing an internship at Hewlett-Packard in LA, and I get a call that my father had cancer, and it was terminal, like, or pretty close. I mean, it was like 3 years throat cancer, 3 years to live max, and probably a couple months. And he ended up going through and recovering, you know, and is alive today, which is amazing story. But I kind of had a moment where I just left California. I was working in LA and came back, deferred school and said, I'm spending this whole semester with my dad. My dad was always working on technology. He'd come up with this idea of like collecting research online, and it seems normal now, but at the time it wasn't.
Yeah, they were either doing customer satisfaction paper pencil or not doing it at all.
Okay.
Like the thought of asking your employees feedback or your customer feedback, that seems normal now. Table stakes today. They wouldn't do it. And so they'd have blind spots everywhere. And he would get paid a lot of money to go in there and help companies do this. And it was like a novel thing. We were gonna go put the customer at the table. We were gonna have them part of the decision-making process, and this is what we were gonna come up with. And so he had this idea, but he was always messing around and he never really went commercial with anything. Well, I was in at Hewlett-Packard and I had gotten pretty, I learned some tricks around how to like go to market over the phone with technology. And so I saw what he was working on and I was like, actually, I had just been doing that with like some software and support stuff. What if we applied it here? And so he would come home from his like radiation and chemo and you're just kind of sitting there and I'd be like, let's do a business. Let's, let me take this to the world. He's like, well, I don't have any money. I can't pay you. I said, well, let's just, let's just go 50/50. And you know, by the time he recovered, he couldn't speak. We had 10 customers and like, we, we kept finding people that would believe in what we were doing. And it was a little Jerry Maguire moment where I had to find like one person, right, who was like, then take it to the world. And like, that's kind of how the business started in the basement.
And so he couldn't talk at the time. So even he's what, he's writing, writing on a board, and you're the guy on—
and I'm on the phone and these people are asking like, about deep statistical stuff. I don't know. And I'm like going back and forth and, you know, it was a pretty gnarly time. I wish I had more pictures in that moment, but no one thought it was going to be anything, right? And everyone's like, oh, you started with your, with your dad and it was just great. Like, no one, like my roommates didn't think it was going to be something. Like, I didn't even think it was. He didn't think it was going to be something.
Hey, let's take a quick break for a message from our sponsor HubSpot, who's making this episode possible. Listen, If you're trying to build something big, and I'm talking about $100 million or a billion-dollar company, one of the most important things is to focus on the market. Where is the opportunity? You are like a surfer on a surfboard and you're trying to find the biggest, best wave possible for you to go on. Well, HubSpot has put together a cheat sheet that is studying and sort of reverse engineering what's working today. So they're looking at the top-performing industries that you could be looking at, the funding routes that work the best, and the growth strategies that the fastest-growing companies are using. So if you want a one-pager that is a cheat sheet on the, uh, the big company playbook, you can get it right now. Either scan this QR code that you see on the screen or click the link in the description below. All right, back to the show. There's a great story about the early days of Qualtrics and focus, and I love this. When I was researching it, I guess it was you and your brother, uh, who were talking about like, well, we have this market, we can sell to these people, these people. And you guys at some point decided, no, no, no, we want to narrow down, sell only to universities. And the part I love, because focus is a word anybody can throw around, right? But like, if if you take focus as an action word, what does it mean? It means saying no to a bunch of otherwise believable ideas. And the thing I read in the research was, um, your brother was basically like, you know, if you were talking to him about some other type of customer, he would, you know, he's hanging up the phone. He's like, unless you're talking about these 250 universities, I don't want to hear it. So can you tell me about like how that went down and what that was like?
Yeah, so this is probably 2006, 2007, and we had found some traction in universities. We'd found people like my dad. My first customer was Angela Lee at the Kellogg Business School. She made all of her students use Qualtrics, and then it just kind of went from there. And I can go through every professor and kind of how the whole thing worked. But my brother at the time was at Google. He was an early Googler. And at this time, like, I didn't have very many people to call. And, you know, you know, I didn't know how good he was, but I knew he was like running a big piece of the internet.
Okay.
Right. And Google was kind of having a moment and he had been assigned to go run China for Google. So he was living in Beijing, he was working with Kai-Fu Lee and like running Google China.
Wow.
So for me, I think when I would call him and ask for advice and we started developing this dialogue, he was 4 years older than me. So we were close, but not that close. I think for him it was like, dude, you're all over the place. I don't have time for this. If you're going to call me, stay on script, stay focused, and like actually finish something. And it was a little bit more like, get out of here, right? But he was religious about it. And it was actually an incredible forcing function for me and the team to be like, okay, We're going to go get the top 100 universities and nothing else matters, right?
These forcing functions are so powerful. Yeah. You know, it's like if we play basketball, like if there's a shot blocker, it's like you can't bring that weak stuff in here. You can't show up on the call and be scatterbrained because you know how the other person is going to respond.
It forces you. I know what he's coming at me with.
Even when they're not in the room, you start editing.
Oh yeah.
Yeah.
What am I going to tell him? What's the story on our next call that we have? What progress am I going to show him? Right. Am I, am I, am I actually telling him the same story I told him last week? So what did we actually get done this week?
Right.
I've got to actually come up with a new story. And, you know, ultimately I was able to recruit him out of Google to move back to Utah. And that happened in 2009. So we were 7 years in. And then when we got together, magic started happening.
Why is that? What changed? Just because he's that good or what do you mean?
Yeah, I mean, I didn't— I knew he was good. I didn't know he was a top 5 or 6, whatever, at the time, product person in the world. And there was a dynamic between us. And I'll just be super honest, we were brothers. We had to love each other, and we were just able to push on each other harder than any executive or person I've ever met. Right. You know, with executives, I could probably go, or team, I could probably go 3 or 4 rounds on something really hard before someone said, uncle. With my brother, I could go 15 because we had to wake up and there was no drama, there was no nothing. Like, we spoke each other's language, but we were so different. You know, he was full engineer, I was full, like, business. And we met on the product side and we almost had to grow together to, like, almost like a relationship, like, where, like, my weaknesses, he had to go fill in those gaps. My blind spot and me too. Yeah.
I've read something where you were saying that, you know, he came to you at some point and he's like, hey, here's my weaknesses. What are yours? And you're like, yeah, I had never really thought about it to that level of detail.
Yeah, that's great.
And when we took money in 2011, Sequoia, I remember, was like, we're only doing this if there's a CEO. Which one of you is the CEO?
So it wasn't really even stated until it was just like, we work together.
He said clearly, we are co-founders. I'm not working for my little brother. Right. And like, I remember sitting in the room, I'm looking across from Mike Moritz, who gave Steve Jobs his first dollar and back Larry and Sergey, and like, they're like, we need a CEO or we're not investing.
And like, you guys kicking each other under the table?
Literally, it was just crickets because I knew where this conversation was going. And that— I still remember the silence because we're all just looking at each other. And finally he just stands up and slaps the table and is like, it's him. And he points at me and he goes, I won't do media. And then sat down. And like, if you find a Jared interview, right, it's rare. If you find a Jared Smith interview, it is super rare. And you know, that was a moment where I was like, all right, like, we'll still operate two in the box, we'll divide the world, but like, it's a cool moment. And then it was like, your first time CEO, they're giving you— we're now in the big leagues. Like, we've taken this money from Accel, this is the largest Series A raised in 2000 in, in 12 since 2008 in all of tech. It's outside of the Bay Area, which I mean, Sequoia at the time wasn't even investing there. So we came out of nowhere. The Forbes article was like the biggest company no one's ever heard of, right? And, you know, you look at that prior time, but now the pressure was on us.
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10 years.
You have a sign out there in your office that we walked by. It says Tune out the noise, play the long game. And there's a picture of a guy just sitting there with his ears plugged. And I've had a lot of people on this podcast. I remember when we had Jimmy, MrBeast. He's now the biggest YouTuber in the world. But back then, and I played him a clip of him, like, you know, 10 years prior. And he just said it matter-of-factly. He goes, I started this when I was 12 years old. When I was 12, nobody watched. 13, nobody watched. 14 years old, nobody watched. 15, nobody watched. 16, is anybody ever going to watch? 17, nobody watched. He's like, finally, when I was 19, some people started to watch. And even then it was nothing, you know, just relative to how it grew. And so he was talking about, you know, there's this cliché around the other, you know, sort of this 10-year overnight success, but it's real different when you hear somebody just year after year of just obscurity. What was that like for you, that period?
But you against the world. And, and, you know, I'll never forget once, and I think it was like 2004, we were in a basement and my father was operating. He was in one room on his computer, like deep into like stats stuff. And I was out there and I was having these issues with our website. I was like super frustrated because our competition had just raised a bunch of money. The product was cheaper than ours. They raised $40 million and their product was better than ours.
Better, cheaper, more resources, more funding.
And I'm like, that's hard. So I was frustrated. I was like, pissed. And I was like, are we going to do this? What's going on? And I was almost like argumentative with my father. My father's just sitting there. And finally, it's the only time I ever saw him get mad. And he slams the table, turns around, and he's like, who's stopping you? Who's stopping you from going to do everything you want to go do? And like, in that moment, it was like a ton of bricks. Like, if we're gonna go do this, you're gonna have to do it. Like, you can't blame— there's only two of you, right? Like, you're actually gonna have to go do it. There's not gonna be a shortcut. There's not gonna be an easy button. Like, you're gonna have to go. And from that moment on, I stopped asking him. And, you know, that was kind of that moment. Don't ask for permission.
So I have this photo here. This is, um, Describe the scene.
Oh, wow. So this is, uh, this is me and Stuart. Everything in this photo is bought at a salvage sale from campus. So like the printers were $5. On the board, I'm making a list of customers and like setting goals, like the $25K club. Yeah. And seeing how many we can put.
How many sales calls do you think you did those first couple years?
I was just dialing.
All day.
All day. Like emailing, dialing, going.
You still remember your, your script?
Ring, ring.
What happens?
Oh, yeah. I mean, I would ask people what they're using. Have they ever heard of us or have they ever done anything like this? And telling them the top researchers in the world were using it. If I was calling into Dallas, I would say I was part of the Dallas American Marketing Association and we went to the conference. I would say, hey, can I just walk you through a demo? And at the time there was no Zoom, right? So like I would actually get on the phone, send them a link, and then they would follow along with me, right? And I could do the demo. This is where I've always told our reps, like, do you know your product? I could do the demo on the phone in a car with a link, walking them through, right, without me looking at the screen. And explain to them every single thing that's going on.
What does it take to be great at sales? You were great at sales.
I mean, so I think, I think sales gets a really bad name because people like use it as, okay, the salesperson we don't want to deal with. But I remember a moment a lot of authors would use our software to write books and I remember once Daniel Pink called me. He said, I'm writing a book and I want your help. I said, great. And he's like, I was like, what's the title of the book? And he said, To Sell Is Human. And he basically— it's a great book about how every single person is a salesperson. They're actually trying to get a group of people to go in one direction or another at some point in the day, right? And I think that when it comes to like software, the first of all is you got to believe in it. You've got to actually believe that your product has value and, you know, the person on the other end's life's going to be better if they use it. And so in our case, we wanted them to run their businesses from the outside in instead of from the inside out. We, we believe that their employees and their customers were their biggest assets. And like, getting a pulse on them more than once a year was probably a good idea. And then we said, hey, actually, if your business operated with a cadence, right, of this data, you're going to win more. And so part of it was educating these people that there was a new way. And by the way, it was cheaper, faster, and better. And if you as a user would embrace this, you your personal career inside your organization would skyrocket, right? Because everyone else is guessing and you'll have this massive propensity of being correct all the time.
Wouldn't it be great to know?
Wouldn't it be great to know? You don't have to guess. And so that was the thought. And I was like, oh my word, like, how do we get this to everyone?
Somebody had a great reframe. They were like, sales is the generous act of letting the right person know that you might have a solution to their problem. If you think about it that way, like it's an act of service and you can approach it maybe differently. And so it does start to work and you get it to work. You eventually hit a point where you do something pretty crazy. You start this business in your basement and you're dialing for dollars, and at some point you get offered $500 million to sell the company. An absurd amount of money that sets up you, your team, everybody for life. And you turned it down. What was that like?
So it was hard because no one had ever offered to buy our company. And it's always a reality check where it's like, okay, it's kind of a recommitting point. The gentleman who was doing it ran a company, I'll just be honest, it was called SurveyMonkey at the time. And he was married to Sheryl Sandberg She was running Facebook and like, they were the power couple. Love Dave. Dave was awesome. And I was like, whoa, do I want to— do we want to go? My brother had known him because he worked for Cheryl at Google. Like, it was just this synergy coming together. And he's like, I'll take the business. Like, let's go. We can partner. You can leave and be done. Like, it was like the cleanest moment of all time. And I remember sitting around just like next door from here. And at one of our mentors, Duff Thompson's office. And, you know, this is someone who, you know, as you talk about mentors who had been there at WordPerfect and, you know, every other person I would talk to about this offer was like, take it and run. And Duff's like, we sold WordPerfect too early. You know, we had the market, Microsoft was coming, like we sold too early.. And he was like, I, he was the only person that said, don't take the money. He said, in my mind, you guys are cash flow positive. You're cranking, you're growing at 100%. If you and Jared can get along and do this, it should be interesting. And Jared kind of turned to me and my dad turned to me and said, well, what do you want to do?. And I just said, I'll come back to you. And I literally, I remember getting in the car with my wife and I was like, hey, we got to leave. Like, we just got to drive south. And we get in the car and we're like 40 minutes into a 3.5-hour drive. She was from Vegas, so we were going down there and she's like, if it's going good, just keep it rolling. I was like, you don't worry about passing that up? She's like, no, what are you going to do at home? I don't need you around the house more. And this is the time. If we're going to go for it, this is the time. And it was just one of those moments where we knew we were going to go for it.
Had you pulled out a lot of cash already secondary? Were you basically already—
We were profitable, so we were paying ourselves. And that was a unique thing, like profitability in tech as a young company. So we would distribute the money, but this was a whole new world, right? And so we came back and I remember sitting down, you know, it was funny, Dave, you know, rest in peace. Like, he, he, he was an amazing human. And he's like, I just want to do what's best for you. But I remember he flew into town and I was like, I knew that. I think I was going to tell him that we were going to turn it down. And I knew how crazy that was, but I also needed to hear him out a little. So we met at the office and I wanted to walk him through our culture and our company because I wanted him to see, you know, maybe things change, maybe comes back for more. I don't know.
Yeah.
So I was like, all right, we can be recognized. I was like, put on that hat, like, let's go in. And so like, we did this whole tour. We come back, we go to a different office, we sit down. And I was like, I just, I think we're going to go for it. And he's like, huh, what makes you think you can do it? And like, I didn't know what to say. And I was like, well, I just got you to put on a Qualtrics hat and walk through our building. I didn't know what else to say. And it was like, we're just going to do it. And he really respected that. And we'd have lunch every week I was out there. And like, you know, we ultimately ended up talking about joining forces later on, actually the week before he passed away. And then that was kind of it. It was cool. Like, things happen for a reason. And, you know, we went for it. And then we decided, like, if we're going to turn that down, that means we got to get serious. We can't be running this thing on our own personal credit cards and in the credit union bank and all this stuff. Like, we've got to actually put all the money back into the business. And then, you know, we decided to go raise money from Sequoia and Accel. And at the time it was like taking money from the Red Sox and the Yankees. Accel had just done Facebook, you know, obviously Sequoia had done Google and, you know, Apple. And they were the forefront of everything. And the goal was, hey, you guys like watch our back in the tech industry. We're going to sit in Utah and we're going to make money and put our heads down and go. Right. And like, we got the world covered. That's what we need you for. It was, it was a pretty cool partnership.
I want to learn from you more on the business side, how you think, how you operate. One of the things I liked is you talked about like working backwards. This is one way just to work forward. You're just, I don't know, we'll figure it out as we go. And of course there's, there's that. But a very useful exercise is to like, you know, start with the end in mind and then just reverse engineer. Well, if that's true, then what needs to be true underneath that? And you sort of go back. Can you explain maybe How you do that or an example?
Yeah, I mean, I think it's different from where we are today to where we were then, but I learned something by accident once. You know, when we did announce the fundraising, I remember getting on the phone with a journalist from Business Insider, Julie Bourque, and I'll never forget this. I had never really done an interview. I'd done one interview with Forbes, and she comes up. I mean, we're 10 years in and, you know, No one even knows who we are. And she goes, I heard you just turned down $500 million. I was just flustered. So she writes this headline, the kid who turned down $500 million with my picture is excited about it. And I'm like, oh my gosh, because it looked like I went to the media with this story and slammed the story back into Dave's face.. And I was so embarrassed. But I knew at that moment that Dave wasn't coming back, right? It was a burn the boat moment. She burned the boat for us on a possible acquisition, the first one in 10 years, right? And I was so mad, and I never forgot about that. And so We operated for 2 more years and we went to raise money and everyone's like, well, when are you going to raise money again? Because kind of when you start, you're on that path, right? And what's the dollar amount and everything? And, you know, my entire thing was, well, we're going to raise it $1 billion because that'll show that we've doubled. That's a new mark. We're giving away stock to employees. This is where it's going to be at. So when we got down to it, Accel and Sequoia and we brought Insight in, they agreed to that and they said, all right, we're going to— how do you want to announce this? I was like, there's only one person I want to talk to. So I called Julie Board and I was like, hey, you might not remember me, but you wrote that article that said I turned down $500 million. I was happy about it and raised $70 million, da da da. And just so you know, like, we're raising at a billion. Do you want this story? And she's like, yes. And so she basically took the exact same article, the exact same picture, and put the folks that turned down $500 million just raised it a billion. New headline. New headline. You have— they look the exact same.
You have both of those framed in the office.
I have both of those framed. And then I remember sitting there one day after we had done that, and there was a lot of our employees that were like, okay, wow, we made it, we're here. And I was like, no, no, no, no. What's her next article? Article?
Work backwards.
What's, what's her next article? Like, what is she putting up next? And 2 years later, it's like the group that turned down $500 million just raised it $2.5 billion. And, you know, we knew that that wasn't the goal. We knew we had our own mission and the Qualtrics story and everything, but it was very clear from a directional standpoint. We raised it $2.5. What's the next article? A year later, it says the group, you know, or 2 years later, it says the group that raised $2.5 or turned down $500 just sold for— and she literally put 4 of those together with the same headline, the same page. So I'm grateful for it because it fired us up to go and say, well, that next one isn't interesting. Like, we actually need to go bigger. We need to push harder. Like, we need to go more global. Like, every decision came to like, okay, what's the story we're going to be able to tell when we're done with all this? Right. And, you know, it's kind of a weird thing because at the end, like, if you meet sports stars at the end of the world, like, where they're done playing, you know what they do? They sit around and tell stories. They tell stories about what the world was like., and you get them together and all they do is just sit and tell stories. And you hear Bird tell stories, you hear Ainge tell stories, you hear Dwyane Wade tell stories. Like, it's awesome. And it's kind of like, all we have are going to be these stories that we're going to be able to tell. And when Qualtrics sold, it was probably one of the most underwhelming days of my life.
So when the money hits the bank?
Yeah. We were at a kind of a President's Club type deal with about 100 of our people. And the deal had closed but hadn't funded. And I remember sitting there by the pool with like our whole company who had leadership, who had like made President's Club. And I could tell when the money— I knew when the money was going to hit and it like lands and then just hits to everybody.. And I, I could see over the next 2 hours, like, this reaction. And I remember turning to my wife, like, handing my phone, and she's like sitting there reading a book. And, you know, there's a lot more zeros there. And she's like, uh, scary. And I was like, okay, we've been grinding for 20 years and you were a Ponzi—
you're not the line in the movie.
Scary. Like, uh, And then I started watching our people, like, it was like, we just paid off our home. We just did that. Like, and then there was a little bit more joy, but it became clear to me that it is about the journey because even after all that, it wasn't a eureka moment. Right. And so knowing that I'm gonna work till I'm 80, I'm never going to stop working. I already know that about myself. And every young person should ask themselves that question right now. I don't know that anyone knows exactly what they're going to do. No one has figured it out. Like, I still don't know what I want to be when I grow up, right? But what I do know is I'm going to work till I'm 80 because I'm not going to check out. If I was going to do that, I would have done it already.
All right, let's take a quick break because I got to tell you a story. Let me tell you about the first time I tried to run payroll for my team. I was using a traditional bank and you know the type. It's got a janky interface, it's built like a 2002 tax form, and it was open only during business hours. And I hit send and it froze. They flagged the transaction, they locked my account, they put me on hold for 45 minutes, and then they told me I gotta visit my local branch. And that was the day I started looking for a new banking solution. Uh, after asking a few founders what they were using, I found out about Mercury. And so now my payroll is 2 clicks. I can wire money, I can pay invoices, I can reimburse the team all from one clean dashboard. That's why I use it for all of my companies, and so do 200,000 other startup founders. And so if you're looking to level up your banking, head to mercury.com and apply in minutes. Mercury is a financial technology company, not a bank. Banking services are provided through Choice Financial Group, Columbine, and Evolve Bank and Trust, members FDIC. So we played basketball this morning, and it's clear you've been playing basketball since you were a kid. And so what's it like to now own an NBA team? That's insane.
So it's weird when we are on the roadshow to go public, like, you normally go like one day in San Francisco, two days in New York, one day in Boston, one day in Maryland, then back to New York. And I had organized our road show to go three days in New York, one, and then to Boston. And like no one had really done that the way they were doing it. And they're like, why are you doing that? I was like, 'Cause I'm going to the Celtics game. I'm gonna go sit with Ainge. And like, I'll never forget like sitting in the locker room with Ainge, like, it's, it's the only thing outside of Qualtrics. I didn't do anything else when I was doing Qualtrics. I didn't invest, I didn't sit on boards, I didn't buy real estate. I was literally like Qualtrics for 20 years, heads down. When I— when we say like intense focus, it was like everything else was no side hustles, no side hustles, no angel investing. No. Yeah, nothing. And like, it probably 22 years. Yeah. Like it was like nothing. Except for hoops. I would go down to summer league and sit there with Ainge, and he, like, he was cool enough to let me, like, I mean, he's running the Celtics, and it was like I could see how this all—
And you were plotting? You were thinking, like, I wanted to get into this?
No, it just happened. I was like, I am so intrigued by this. I love the NBA. I love hoops. Like, I love the business side of it. And, you know, when we did sell, like, my brother was like, what are you going to do? And I was like, I'm going to I'm going to go be part of the NBA. You know, with SAP, I, I'd gotten to know Adam. I was working on a tech council for the NBA and through SAP and Bill McDermott had connected us. And, you know, he was like, hey, and I let him know. I was like, I'm, I'm going to be part of this one way or another. Like, and he was like, oh, we'd love it. Like, too bad Utah's not for sale. Da da da da. And, you know, he called me. I was like, hey, you know, and someone else, like, I hear Minnesota's for sale. And so I went down that entire road and that story's pretty famous where Ash was like, we're Jazz fans. Well, do we have to give up our season tickets at the Jazz? I was like, yeah, that's probably part of it. And it was like, no, we grew up Jazz fans. And I was like, oh yeah, like.
And you just thought the Jazz would not come up for sale. The Miller family was like.
Yeah, they weren't. And like I had approached.
You could try, yeah.
Yeah, I had approached Gail Miller, Larry and Gail had purchased it for years, and they owned it for 30, 35 years. It was in a legacy trust for the family that could never be sold.
Oh, like it literally could never be sold.
It was a pretty locked door. At least that's what we thought. Right.
And you got a Jazz hat on, so something changed.
What happened? Yeah, I think I'd approach her and the answer was no.
So you got a call back years later after the first—
No, about 6 months later saying, hey, after we turned down Minnesota, saying, are you still interested? I was like, are you serious? Yes, we're in. Right.
And how'd you negotiate the value? Or how'd you figure it out?
It was literally a meeting where it was like, well, are you serious? Make us an offer. And we pulled up the Forbes valuation on the phone, and I said, well, how's this? Because I didn't know this team of scientists, economists. This was like a year before all this madness. And I was like, does that work? It seems fair, right? And to her credit, it wasn't a big auction or anything in that case. No, there was no one else. Yeah. I think she had sat across the court from Ashley and I. She knew what we were about. She cared about it being in Utah, and that was important. They had had 35 years. I think they bought it for $22 million.
Right. And would you buy for 1.6?
Yeah, 1.6. And it was like, okay, I've gotta— this looks like about as clean as it could get, right? I mean, it's not all gold when you're running an auction.
So how does it work? You buy a franchise, you're not buying the whole thing, so that's the franchise value. You're buying a part, like a majority stake. Yeah, you just got to send a wire one day? Like, how does it sound?
I mean, pretty much. I mean, we did. Yeah, like, yeah, that's pretty much how it works.
Let's double-check the numbers.
Like a car, you got, you got to go figure it out because you can't put a lot dead on these. And, you know, my philosophy was don't blink. These chance— there's 30 of these things in the world, just go, right? And, you know, Ash and I had a lot of conversation about like, why? Life's pretty good at this point. Why are we literally going, hey, we're on this 20-year journey of sacrifice and travel and all of this, and literally grinding at a level that most people could never comprehend? You interview I tell founders all the time, like when we're all in, it's like a different level. And then going and signing up for a level where there's a lot of pressure, there's a lot of responsibility, everything's public, and you're taking the hopes and dreams of a whole nation here and putting them on your shoulders to go do something. And you're also impacting the children. Our kids, like, Equaltrix was a relatively normal life, even though it was worth on paper, like, a lot more than an NBA team. The NBA team is very different.
Yes.
Right? And so—
You didn't take it lightly.
No. And there was a lot of personal discussions about what's this for? Is this for ego? Is this for us? Is this for helping Utah? And it really came down to, like, Utah.
I want to finish with a couple of rapid-fire, almost like, life-isms, this idea of the 9 most important minutes of the day. What are the 9 most important minutes of the day?
3, 3, 3. And you show up for those.
Or you just try to hit one, right? I mean, a lot of times, like, you're planning a trip, you're doing this, and like, you have an option to like be at one of those, right? And so I think that as you schedule, as you plan, as you optimize, those are important moments. Not all 3 maybe, but like, if I can schedule a call, I'm not doing it in one of those moments.
Right. Another one is, you know, if you don't know what to do, if you don't know what you want to do, go figure out what you don't want to do. Use the inversion, use the contrast. Yep. What's that? Unpack that a little bit.
I just, you know, we teach a class at BYU, we teach a business school class, and, you know, it's every fall. And it's, it's around leadership and decision-making and watching all these kids. It's like, this is what I want to go do. I didn't know what I wanted to do. And I think that's why Qualtrics worked, because if I had a picture in my head of what it's supposed to look like, I don't think I would have done Qualtrics. I would have been so focused on that. The opportunity— or Zuckerberg could have been sitting next to you starting a business and you're like, you didn't even see it and you're like kicking yourself, right? But what I did know is there was some attributes that I believed in. I knew I wanted to be able to have a job where the sky was the limit. My age wasn't going to limit me to what my potential could be. I didn't want to be like, well, when you're 22, you can make up to $80,000 a year, and you're 24, you get to $120,000. I didn't want to be capped. I want to be like, if I work harder than everyone else, I'm more creative, my ideas hit, like, they can go somewhere, right? I knew I wanted to be like in leadership and I could lead, right? I knew I wanted to see a lot of businesses very quickly, a lot of industries. I wanted to know the world and know every industry, okay? I wanted something that was kind of not old school. And so like when I started looking at opportunities, like I never thought Enterprise Software, but I was like, okay, I look at it and I kind of put the opportunity right here and I'm like, wait, sky's the limit. I can be a founder, I can create. I'm not really capped. It's a new school, it's a new part of technology. It can go for a long time. Like, I'm not going to get the legs pulled out from under me if I start doing well. And like, I think those attributes is where I would advise kids and younger people or entrepreneurs to say, okay, don't be so caught up on what this looks like. See if it fits and you'll be blown away that it's like, oh, the auto industry actually works really well for me, right? Never would have thought about that. And that's all that really matters. And so I think that's kind of how we look, you know, and now I've got a lot more roles and things that I care about, but it has to fit into that. You ask like, what do we do? Does it fit? And You know, you kind of go through that rubric.
It's great. Well, listen, man, thank you for doing this.
I appreciate it. Thanks for coming out to Utah.
I mean, it's great out here.
All right.
I love it. Let's go. All right, man. Thank you so much. I feel like I could rule the world.
I know I could be what I want to. I put my all in it like no days off. On the road, let's travel, never looking back.
Hey, let's take a quick break. I want to tell you about a podcast that you could check out. It is called The Science of Scaling by Mark Roberge. He was the founding CRO of HubSpot, and he's a guest lecturer at Harvard Business School. The guy's smart and he sits down every week with different sales leaders from cool companies like Klaviyo and Vanta and OpenAI, and he's asking about their strategies, their tactics, and how they're growing their companies as, you know, head of sales or chief revenue officer. If you're looking to scale a company up, if you're a CRO or head of sales that's looking to level up in your career, I think a podcast like this could be great for you. Listen to The Science of Scaling wherever you get your podcasts.