- Jared Smith is one of the most famous names in the tech industry you’ve never heard of.
- Today he’s the cofounder of Qualtrics, working with his younger brother Ryan Smith, who is founder and CEO. The company was also founded with their father Dr. Scott Smith, a professor at Brigham Young University.
- Over the weekend, the Smith family sold their company to SAP for $US8 billion.
- It’s impossible to know exactly what the Smith family’s take is from this $US8 billion sale, but our back-of-envelope maths, based on some assumptions about the terms of the deal, would put the Smith family’s take at over $US3.6 billion.
- The following is a profile of Jared Smith, the older brother of CEO Ryan, which we originally published in 2016, with some language updated to reflect that timeframe.
While younger brother Ryan has always been the flashy, stylish frontman of Qualtrics, Jared was the behind-the-scenes product genius that built the first version of the product (as well as subsequent versions) that brought the company initial success. He had been working as a successful exec at Google before his brother prodded him into joining Qualtrics instead.
Despite a career full of success, Smith told Business Insider back in 2016 that he doesn’t like to work, “as a matter of principle.” He likes to travel.
Still, he’s so good at what he does – building tech products and managing people – that companies from startups to Google have begged him to work for them, turning him first into a millionaire and, as of Sunday, a billionaire, almost in spite of himself.
Teen tech star
His phenomenal career story began when he was in high school in Utah.
He got an internship at word-processing-software maker WordPerfect, which was bought by Novell. He worked his way up to product manager by age 18.
But Microsoft was killing Novell, so Novell hired Eric Schmidt as CEO. That’s when the teenage Smith first met him.
Although Schmidt didn’t end up saving Novell, he did give it a few years of breathing room. Then Novell began tanking again, and Smith quit his high-paying job to go to college in London, studying economics.
While in London he learned he was a “horrible” driver. So after he graduated, he took a job in a startup called Juice Software in New York, just to live in a city where he wouldn’t have to drive.
Juice was started by Kim Scott (who would later lure him to Google). The company designed software for the financial-services industry.
It launched on September 10, 2001.
The next day was 9/11. New York was in tatters, as was Smith’s apartment, which was near the World Trade Center towers.
Ultimately, the company bounced back and was sold to Microsoft. But as soon as he could – and before it was sold – Smith left New York to decompress. He spent a year hitchhiking around South America.
Having hitchhiked around Africa in college, he was an “incredibly seasoned traveller” who wasn’t afraid of dangerous situations, he said. Still, his trip ended in Caracas, Venezuela, when he got caught in the “oil riots and coup against [then President] Chavez. It was really tense,” he said. “Tear gas in the plazas and everything else.”
It was time to go home to Utah.
A new product and a fistfight
Back home, his dad, BYU professor Dr. Scott Smith, had been diagnosed with cancer. The prognosis wasn’t good. His younger brother, Ryan, had moved home to be with his dad. They were working in the basement “twiddling around on a survey product,” and they asked Smith to help them sell it.
He looked at the product, declared it “worthless” and built them a new version, which would ultimately become the product used by millions of people and lead the company to big profits and a big valuation.
He also convinced Ryan to change the name of the company to Qualtrics, from a variety of product names it was using. “Ryan and I got in a fistfight at a restaurant over that,” he laughed.
The brothers and cofounders are opposites in every way; they disagree often, but they rarely come to blows.
They usually fight, dig in, and then compromise, he said. “Normally, in every argument we’re both right.”
Meanwhile, his dad made a miraculous recovery thanks to the doctors at the Huntsman Cancer Center. (Qualtrics just donated a $US1 million to Huntsman and launched the Five for the Fight campaign.)
With the product built and his dad on the mend, Smith hired the company’s first engineer and told his brother he was leaving again.
He didn’t want to work on Qualtrics. That was “always Ryan’s dream,” he said.
He wanted to travel. He bought a ticket to New Zealand intending to hitchhike through Asia.
Right before he left, Kim Scott called. She was working for Google and was offering him a job that would change his life, and Qualtrics, forever.
Dragged to Google
Smith didn’t want to work there. “I was opposed to work on principal. I was going to go travelling. This tells you how stupid I was,” he said.
This was the end of 2004, right after the IPO when the stock was trading at under $US200 and employees’ stock options sold for far less than that.
Scott wouldn’t give up. She flew him out to Mountain View at Google’s expense, where he reluctantly interviewed.
“I think the only reason I got the job is that I didn’t really want the job and they thought I was so humble,” he says. ‘It was like, ‘How are you at this?’ I was like, ‘I suck at this.'”
For instance, he says of his programming skills, “I’m a hacker at best. I have good design skills, but I would not consider myself an engineer. I’m not a computer scientist. I’m an economist. Compared to Google engineers, I would never make it in the engineering department.”
Scott disagrees, calling him a great coder. He saw Google’s daunting hiring process as a challenge, and did well, she remembers. And after he was hired, he earned the respect of the Google engineers, who even let him code a few things himself, the first non-engineer at Google given that honour, Scott said.
But, according to Kim Scott, Smith’s real gift is guiding engineers to build products that wowed the business side:
I could go to him with an acorn idea and he would go away for a weekend and come back with the whole oak tree, taking conceptually what I meant, making it look beautiful and actually building it. He gets more work done in a 24-hour period than any other human being I’ve ever encountered.
From Google, to quagmire, to Qualtrics
He took the job at Google and discovered he didn’t fit in, he recalled, thanks to his time at Novell.
“I ruffled some feathers,” he said. “Google was straightforward and you had to play no games. You just had to use data and be honest. Novell was much more political and all about fiefdoms.”
With Scott’s help, he learned the Google way and did well. He worked on ad products, then on internal tools for the sales team. He learned how to hire and manage.
He got stock options, which a New York financial-industry friend advised him not to sell off every month like the other employees did. So he held onto them all.
One day, he went to lunch with his friend, Deep Nishar, another well-respected product manager. At the end of lunch, Deep asked him to lead Google’s products in China.
“It didn’t make sense. How do you lead products if you don’t speak the language? So I turned him down. Similarly stupid to turning Kim down,” Smith said.
Deep was also persistent, and eventually Smith was talked into the China job, working under “Kai-Fu Lee, the guy we stole from Microsoft,” he said. (Lee’s resignation caused Steve Ballmer to throw a chair at Lee, and declare war on Google and Eric Schmidt, court documents later revealed.)
Once again, he was scaling an operation from a few people to hundreds, this time in a foreign country.
Under Lee, Google China grew from 9% market share to 30% share – and to about 900 people, Smith said.
Then Google discovered that hackers, presumably from the government, were attacking Google to help track down dissidents. Google went public about it all, but the PR was terrible all the same.
Unhappy with the situation, Google yanked its operations out of China, moving them to Hong Kong.
“I had a front-row seat through all of that,” he remembered. The situation put him, a product manager, in constant contact with some of Google’s most senior executives, including Schmidt.
Meanwhile, Qualtrics was taking off, too. It had customers. It was profitable. Ryan now had 40 employees and he was calling Smith regularly for advice, hounding him to quit Google and come back to help at Qualtrics.
Ryan pressed: How high did Google’s shares have to go before he was willing to sell them all and become wealthy enough to quit Google and come work for his startup? Google had been flirting around the $US600 mark.
“And in a moment of weakness, I gave him the price,” he says. It was a price that would make Smith financially well off for life.
The day the shares hit that price, Ryan called Smith. “I sold all my shares the same day,” he says. Then Ryan flew out, helped him pack and escorted Smith back to Utah.
‘Rude’ to VCs
The truth was the whole China thing had also worn him out. But when he got to the startup, he said, “I was bored. A 40-person operation, it took me about 20 minutes a day to manage.”
But the company “was a sales machine” and growing. Soon he was back to hiring and scaling.
VCs had also found Qualtrics and were calling. Ryan was “rude” to them, Smith said, and Ryan confirmed. He saw investors like predatory lenders. “Why would I want to take on a mortgage?” Ryan Smith remembers telling them. Ryan also turned down a $US500 million acquisition offer.
But eventually Ryan decided that he wanted a board of people who had grown huge tech companies. That meant VCs, and they would want a stake in the company.
Smith hated the idea. “I thought it was silly to sell any part of the company because it was doing so well, profitably, growing 100% year on year,” he recalled.
So the brothers fought. They dug in. They compromised. “The detente was if he could raise $US100 million, for a small percentage of the company, then we would fund raise,” Smith said.
Ryan got the terms that Smith demanded.
And, looking back, Smith said, “Ryan was incredibly right.” The cash and the board pushed Qualtrics to grow in new ways. Without it they would have gotten “fat and lazy,” satisfied with the old product and the profits it generated, Smith admitted.
As for the investors, “They have all done phenomenally well. A dream investment,” he says.
While Qualtrics, a private company, doesn’t release revenue, and is officially valued at a billion as of its last raise – $US150 million in 2014, $US220 million total raised – at one point, Smith told attendees at its annual customer conference last month that it was a “multibillion” company. It claims over 8,000 customers. In any case, it’s still highly profitable.
As Qualtrics grew, Smith implemented all of the employee-management tools he learned at Google, plus he wrote a few new ones.
“I really love building systems that transform organisations,” he said. And since Qualtrics is his company, he’s been known to take liberties. “Imagine Ryan’s surprise when one day he walks in and I’ve coded something that puts all the salespeople on a curve and made it public. That’s radical transparency.”
The company now has closer to 1,000 employees, including seasoned leaders. It just launched a second generation of survey products and a new set of data-analysis products, retiring the original product Smith built in the basement 12 years ago.
And Smith is once again talking about not working.
“I put all the processes, machinery, and management stuff in place to scale the organisation. Ryan is the CEO. I’ve started to slow down and spend more time at my beach house to give execs more space to work. When I left Google, I thought I was retiring, and I’d like to end up there again,” he said.
Then again, if Ryan were to call him and insist he take on something new, he could be dragged in, again. “Everyone knows that eventually I’ll get bored.”