20VC Qualtrics Founder, Ryan Smith on The 2 Hour Decision Whether To Sell Qualtrics for $8Bn in Cash, Why Tying Your Identity To Your Company Will Never Make You Happy and His Relationship To Risk, Wealth and Responsibility as a Result

In this episode of "20 VC," host Harry Stebbings interviews Ryan Smith, founder and executive chairman at Qualtrics. Smith shares his journey from a basement startup to a multi-billion-dollar acquisition by SAP, emphasizing that there was never a singular "aha moment" but rather a continuous push to succeed. Smith discusses the importance of finding happiness outside of work and maintaining a strong identity separate from one's business. He also highlights the necessity of integrating work into one's life sustainably, given the long-term nature of careers. Smith and Stebbings delve into topics such as risk-taking, decision-making, and the impact of significant financial events on personal fulfillment. Smith candidly reflects on his upbringing, the value of hard work, and the influence of his wife and brother Jared on his life and career. He concludes by discussing the legacy he hopes to leave, focusing on integrity, reliability, and the kind of person he wants to be remembered as, beyond his tech achievements.

• Harry Stebbings introduces Ryan Smith, the founder and executive chairman of Qualtrics.
• Qualtrics is a leader in customer experience and the creator of the experience management category.
• Ryan scaled Qualtrics from a basement startup to a global enterprise with over 13,000 customers.
• Qualtrics raised $400 million from Accel, Sequoia, and Insight Venture Partners.
• SAP acquired Qualtrics for $8 billion, the largest private enterprise software acquisition at the time.
• In 2020, plans were announced to take Qualtrics public as an independently operated company.
• Harry thanks Jared Smith and Jeff Lieberman for their amazing questions that made the show special.

"Qualtrics raised 400 million in funding from Accel, Sequoia, and Insight Venture Partners. And three days before the company initially was scheduled to go public, SAP announced its intent to acquire Qualtrics for $8 billion, which was the largest private enterprise software acquisition ever."

This quote highlights the significant milestones in Qualtrics' funding and acquisition history, emphasizing the company's success and impact on the industry.

• Ryan Smith discusses the constant push and drive at Qualtrics, without a singular "aha" moment.
• The team focuses on continuous growth and never feels satisfied or complacent.
• The journey itself is the central experience, not just the milestones.
• Smith reflects on the paradox of aspiring to success and then longing for the simplicity of earlier stages.
• The aim is to appreciate the current success without wishing to return to more challenging times.

"It's been what I would call probably more push than pull the whole way."

This quote encapsulates the continuous effort and drive that has characterized Qualtrics' growth, as opposed to relying on a singular breakthrough moment.

• Ryan Smith advises finding happiness outside of business, as tech is inherently filled with challenges.
• He stresses the importance of having a center of gravity outside of work to maintain happiness.
• Smith notes the issue in tech where personal identity and success are often too closely tied to one's business achievements.

"If your happiness is tied up in your business, you're never going to be happy because it's nothing but problems."

This quote highlights the necessity of separating personal happiness from the inevitable problems that arise in business.

• Ryan Smith discusses the importance of understanding the longevity of one's career.
• He shares an insight from a board member on having a long-term perspective.
• Detachment from business involves integrating work with life rather than letting work define one's identity.
• Smith emphasizes the importance of having roles and identities outside of work, such as being a father and husband.

"You probably need to change your perspective that you're going to be doing this for 60 years."

This quote reflects the advice given to Ryan Smith, encouraging him to adopt a long-term perspective on his career and work-life balance.

• Ryan Smith asserts that one's business or work should not encompass their entire identity.
• He believes in maintaining focus and commitment without letting business achievements define who he is as a person.
• Smith shares his personal approach to balancing his identity as a family man with his professional role.

"I can't be the Qualtrics guy. People are like, 'Oh, you're the Qualtrics guy.' And it's like, that's not who I am. It's what I do. That's not who I am."

This quote encapsulates Smith's philosophy on maintaining a clear distinction between his personal identity and his professional role at Qualtrics.

• Ryan Smith discusses taking over the Utah Jazz and starting the season with a 4-4 record.
• He mentions the importance of pacing oneself and not panicking, as he plans to be involved for 35 years.
• The team's performance improved to having the best record in the league after the initial average start.
• Smith's long-term view altered his perception of the early season performance.

"I'm doing this for 35 years. The last person who ran the team had it for 35 years. I'm doing this for 35 years."

This quote emphasizes Ryan Smith's long-term commitment to managing the Utah Jazz, indicating that he is prepared to face challenges and sees the role as a multi-decade endeavor.

• Ryan Smith reflects on his identity, suggesting that it's almost arrogant to claim to know who one is, especially when one's life has been dedicated to a particular path, such as his in tech.
• He acknowledges the challenge of defining oneself when one's experiences have been narrowly focused on a specific industry or role.

"I don't honestly, I think it'd be arrogant almost to me to say, I have any idea who I am."

Ryan Smith expresses uncertainty about his identity separate from his professional life, recognizing that his career has largely shaped his sense of self.

• Ryan Smith refers to Clayton Christensen's book "How Will You Measure Your Life?" and the idea of not always knowing what one wants to be.
• The pandemic prompted many to reassess their careers and life choices, sometimes leading to rash decisions.
• Smith advises to work hard and stay opportunistic, as unexpected opportunities can arise.
• He shares his experience of selling his company to SAP and then, contrary to expectations, spinning it out and going public during the pandemic.
• Smith's story illustrates that being opportunistic can lead to outcomes that defy common predictions or playbooks.

"I think that you've just got to be opportunistic with what's coming, and you're going to end up in a place of what you want to be is probably not the best way, but you'll be in a place that probably fits what you should be doing."

Ryan Smith emphasizes the importance of being open to opportunities, suggesting that while one may not end up where they initially wanted, they may find themselves where they are meant to be.

• Ryan Smith views himself as opportunistic rather than strictly an entrepreneur.
• He believes in assessing the level of risk associated with opportunities, distinguishing between one-way and two-way doors.
• Smith shares a decision-making framework for evaluating risks and making fast, yet responsible choices.
• He references Tom Brady's attitude towards fear and risk, agreeing that they have no productive place in decision-making.

"A two way door you can run through as fast as you can. And if it's not going well, you just turn around and come back out... But a one way door is a door that you're going through. And, you know, if you don't get it right, you're stuck."

This quote from Ryan Smith provides a metaphor for assessing risks in decision-making, highlighting the importance of recognizing when a decision is reversible (a two-way door) or irreversible (a one-way door).

• Ryan Smith shares that he increasingly leads with his heart or gut in decision-making as he gets older.
• He acknowledges that some of his biggest regrets are from times when he did not trust his instincts.
• The balance between rational thought and emotional intuition is a key aspect of his decision-making process.

"The older I get, I lead with my heart. I just do right or wrong. That's pretty consistent."

This quote illustrates Ryan Smith's reliance on his emotional intuition in making decisions, suggesting a shift towards valuing internal feelings and instincts over purely analytical reasoning.

• Ryan Smith discusses the role of regret in his decision-making process.
• He considers whether he will regret the decisions he makes, especially in high-stakes situations.
• Smith shares a personal anecdote about turning down a significant acquisition offer and the subsequent decision to raise capital to avoid regret.

"You normally know in the moment, can I live with myself? Am I going to regret this?"

Ryan Smith highlights the importance of introspection and foresight in evaluating decisions, focusing on the potential for future regret as a guiding principle.

• Qualtrics raised venture capital due to rejecting an acquisition offer.
• The founders wanted to ensure they would not regret their decision.
• Raising capital was a secondary benefit to affirm their choice.

offer to sell the company and to be able to live with ourselves, we had to raise some capital, and it was secondary to be able to say, hey, look, this is what works. So we didn't regret.

The quote explains that the decision to raise venture capital was influenced by the need to feel secure in their choice to decline an offer to sell the company.

• Selling the company was not as fulfilling as expected.
• The realization of success came from seeing others benefit from the sale.
• Entrepreneurs should have a deeper reason for building a company beyond financial exit.

It was a cash deal. The day that the wires hit...it was probably the most underwhelming day of my entire career...it wasn't until we saw a bunch of other young kids and families and people actually feel the success that it actually meant anything.

This quote illustrates that the actual moment of financial gain from selling the company was underwhelming for the entrepreneur, and the true value came from witnessing the positive impact on others.

• The importance of having a supportive partner who provides honest feedback.
• Balancing work and life is not about perfection but about managing imbalances.
• Family members can be key advisors and mentors in business decisions.

You need someone by you that will tell you the truth... Like, everyone thinks balance is like the wings of the plane flying perfectly parallel... And it's really not like one wing of your plane is always in the water, it's always tipped.

The quote emphasizes the significance of having a partner who can offer truthful insights and help maintain balance, even when life is not perfectly aligned.

• Working with a sibling can provide complementary strengths and weaknesses.
• Open and honest communication about blind spots is crucial.
• A sibling can be both a mentor and a critic in business.

Jared's weaknesses are my strengths and vice versa... Jared is one of the best in the world... He just would tell me the truth. Like, Ryan, let me tell you where your blind spots are.

This quote reveals how the speaker and his brother Jared have leveraged their differing abilities to strengthen their business and the value of candid feedback within their relationship.

• Acknowledging one's weaknesses is essential for growth.
• Self-awareness allows for better team dynamics and leveraging each other's strengths.
• Emotional management and satisfaction levels can be areas for improvement.

Wow. I mean, to be honest with you, there's probably too many to count... sometimes I'm way too emotional. That's a bad thing... I'm probably never satisfied.

The speaker candidly admits to having multiple weaknesses, highlighting emotional reactions and a constant drive for more as areas that can be challenging in a professional setting.

• It's challenging to impart work ethic and values in children raised in different circumstances.
• Education and hard work are prioritized in the family.
• The speaker wants his children to develop grit and the ability to persevere.

It's really hard... I want them to be nice kids... But I also want them to really, really learn how to work... I want my kids to be able to stick with it.

The quote discusses the difficulty of ensuring that children grow up with a strong work ethic and values, especially when their upbringing is vastly different from their parents'.

• Experiencing parental separation and assuming responsibilities at a young age can be formative.
• The long-term consequences of decisions are always present.
• Adversity can shape character and future actions.

My parents split up when I was 13 years old... Jared being a product manager at 16, managing execs at 18, this is quite atypical for a teenager to go through.

This quote reflects on the speaker's challenging childhood experiences and how they influenced his and his brother Jared's approach to responsibility and resilience.

• Ryan Smith reflects on the transformative impact of his experiences from Seoul, Korea to Mexico City during his LDS mission.
• He emphasizes the personal growth that occurred between the ages of 16 and 21, attributing his acceptance into Brigham Young University's business program to these experiences.
• Ryan hopes to provide his children with similarly enriching experiences but acknowledges the challenge of replicating the necessity that drove his own journey.

"And if you look at the kid who was sitting there at 16 versus a kid at 21, and the experiences that had happened to him from Korea to Mexico, that's what I hope my kids can have."

This quote highlights the personal development Ryan attributes to his international experiences during his formative years and his desire for his children to have comparable growth opportunities.

• Ryan Smith discusses the concept of "doubling up" on responsibilities to manage his time effectively.
• He shares a personal anecdote where he combined a visit to his grandmother, a meal with his children, and teaching his daughter to ride a bike into a single, productive event.
• This approach to multitasking has become a staple in Ryan's life, allowing him to fulfill multiple roles simultaneously.

"And so you'll always see me doubling up everything I do."

The quote encapsulates Ryan's strategy for managing various life responsibilities by combining tasks to make the most of his time.

• Ryan Smith identifies honesty, integrity, and wisdom as the three traits he most wants his children to adopt.
• He references Qualtrics' principle that there is no minor lapse of integrity, highlighting the importance of this value in both personal and professional contexts.
• Ryan also emphasizes the importance of being in a learning mode and the attractiveness of wise individuals.

"Jared always says, and we have this thing at Qualtrics, that there's no minor lapse of integrity."

This quote underscores the non-negotiable nature of integrity within Ryan's company culture and his personal life, which he aspires to instill in his children.

• Ryan Smith touches on the unpredictability of the acquisition process, suggesting that preconceived notions about how acquisitions should proceed are often incorrect.
• He implies that the actual experience of being acquired can differ significantly from expectations.

"I think that everyone tells you how it's going to go, and it doesn't go that way. They're wrong."

Ryan's quote conveys the reality that the experience of being acquired is often at odds with what is commonly anticipated or advised.

• Ryan Smith shares his experiences with influential board members, highlighting the value of diversity in their backgrounds.
• He reflects on the lessons learned from Duff Thompson's experiences with Wordperfect and the importance of having board members who have faced both successes and failures.
• The relationship with board members is likened to growing up together, emphasizing the personal and professional growth that occurs over time.

"And Duff, having Duff on our board as our chairman and be able to go through what went wrong and why and what part of the journey I need to enjoy and just the deep care about me personally versus when to step on the gas and how, you never know."

This quote reveals Ryan's appreciation for the wisdom and personal care provided by Duff Thompson, an influential board member with a history in the tech industry.

• Ryan Smith contemplates the attributes he aspires to embody, focusing on reliability and principle-guided actions.
• He stresses the importance of living by principles in the tech industry and the significance of standing for something unique as an individual.
• Ryan expresses a desire for his legacy to be determined by his actions and principles rather than his professional achievements.

"It's really what people are going to say about you at your funeral."

The quote encapsulates Ryan's perspective on legacy and the importance he places on the way he is perceived by others based on his reliability and adherence to principles.

• Harry Stebbings expresses gratitude for Ryan Smith's candidness and vulnerability during the podcast conversation.
• The discussion is described as special and memorable, diverging from the planned schedule in favor of a more genuine and spontaneous dialogue.
• The conversation is praised for its authenticity and the rare openness displayed by Ryan.

"I don't think enough people have the ability to be as real as Ryan was there and have the vulnerability to share like Ryan did there."

Harry's quote commends Ryan for his authenticity and willingness to share personal insights, which contributed to the depth and impact of the conversation.