Robert Smith’s Expertise:
Smith emphasizes the value of expertise gained through experience and knowledge in business. He brings intellectual property into companies to improve design and compensation plans, leading to more stable revenues and earnings. Smith’s expertise is often more valuable than capital, as it provides insights that may not be available to those lacking the experience.

Robert Smith’s Philanthropy:
Smith’s commitment to giving back to the community is evident through his involvement in various philanthropic initiatives. He chose to educate and raise awareness about prostate cancer in the Wagner projects in Harlem, a community-based initiative. Smith’s humility and infectious personality make him a respected figure in the community. His charitable efforts are extensive and aim to uplift and empower the community.

Media’s Role in Community Upliftment:
Patrick Bet-David highlights the importance of media in championing and telling the stories of individuals making a positive impact in the community. Media plays a crucial role in educating the community about its own history and culture, fostering a sense of unity and understanding. It helps the community understand how to uplift each other and address the challenges it faces.

Growing Up in a Diverse Community:
Robert Smith grew up in Denver’s Five Points, known as the “Harlem of the West,” a historically African-American neighborhood.

Resilience and Creativity of African-Americans:
Smith emphasizes the resilience and creativity of African-Americans, highlighting the significant contributions they have made to American culture, particularly through music.

Beloved Community and Community-Driven Support:
Smith describes his upbringing in a beloved community where adults provided love, guidance, and instruction to children, fostering a sense of wholeness and support.

Community Defense and Progress:
The Five Points area was one of the first African-American settlements in Colorado. Smith’s family tree includes members who owned businesses in Greenwood, Oklahoma, before the infamous massacre forced them to relocate.

Generations of Educators and Professionals:
Smith’s family history includes generations of teachers, educators, nurses, and doctors, demonstrating their commitment to education and community advancement.

Importance of Education:
Smith highlights the importance of education as a means of advancement and defense against attacks on the African-American community. His family’s dedication to higher education serves as an example of their commitment to progress.

Education and Civic Engagement:
Robert Smith’s parents were both teachers who obtained doctorates in education and became principals. His father led a civic association to campaign for snow plows in their neighborhood, addressing the issue of unequal access to basic services.

Economic Disadvantage and Systemic Oppression:
Smith’s community faced economic disadvantage, with many wage workers relying on daily income. Snowstorms affected their ability to get to work and earn a living.

Community Projects and Self-Determination:
Smith’s community came together to raise funds and build a gym for recreational activities, demonstrating a spirit of self-determination.

Rich Community Life:
Smith fondly remembers vibrant community life, including Friday night fish fries, potlucks, slide projector presentations, music, and social gatherings.

The Importance of Resources and Guidance:
Smith highlights the importance of resources and guidance in a community, especially in the context of the civil rights movement.

Busing for School Desegregation:
During the desegregation of schools, busing was implemented in Denver. Racists burned buses, limiting the number of people who could be bused across town.

Inequality in Education:
Smith’s neighborhood school had fewer resources compared to schools in wealthier areas, highlighting the inequality in education.

Education and School Desegregation:
Robert Smith’s neighborhood had only one bus stop, which resulted in him and his neighbors being the first to attend desegregated schools. The schools with better resources led to a higher percentage of students pursuing professional careers, including Ivy League education and careers in medicine, academia, and science. The contrast in education between the desegregated schools and the local neighborhood schools was stark due to differences in teaching quality, capacity, and care. Phenomenal teachers like Mrs. Olivier, who looked out for students of color, played a crucial role in the educational success of students from marginalized communities.

Transition from Engineering to Investment Banking:
Robert Smith’s engineering background at Kraft and Goodyear informed his approach to building a scalable and sustainable enterprise. The transition from engineering to investment banking at Goldman Sachs was facilitated by the role of media. The details of this transition and the importance of media will be discussed later in the presentation.

Exposure to Black Enterprise Magazine:
Robert Smith, an engineer at Goodyear Tire and Rubber Facility, was introduced to Wall Street through a Black Enterprise magazine article featuring successful African Americans in the field.

Ignorance about Wall Street:
Initially, Smith had limited knowledge about Wall Street and the opportunities it offered.

Inspiration from Successful Individuals:
The profiles of John Newton doll, Ray McGuire, Stan O’Neill, and George Van Ansem sparked Smith’s interest in exploring a career in investment banking.

Decision to pursue Graduate Studies:
Smith realized that there was a wider world beyond engineering and decided to pursue graduate studies to expand his career horizons.

Choice of Columbia Business School:
Smith chose Columbia Business School for his graduate studies, impressed by its reputation and location near Wall Street.

Academic Excellence:
Smith excelled in his first year at Columbia, earning recognition as the top student in his class.

Meeting John Utendahl:
During a summer graduation ceremony, Smith met John Utendahl, a prominent investment banker, who became the keynote speaker.

Invitation to Consider Investment Banking:
Utendahl, intrigued by Smith’s engineering background, invited him to explore a career in investment banking.

Negative Perception of Investment Bankers:
Smith initially held a negative perception of investment bankers, viewing them as arrogant and lacking knowledge.

Lunch Meeting with Utendahl:
Utendahl arranged a lunch meeting with Smith to discuss potential career opportunities in investment banking.

Extensive Conversation and Mutual Interest:
The meeting exceeded expectations, with Smith sharing his experiences and Utendahl showing genuine interest in Smith’s background.

Introduction to Industry Leaders:
Utendahl facilitated introductions to several prominent investment bankers, including Ray McGuire, George Van Ansem, and Stan O’Neill.

Scientific Approach to Decision-Making:
Smith’s scientific background influenced his methodical approach to understanding the investment banking industry.

Introduction:
Robert Smith’s career path took an interesting turn when he discovered his passion for mergers and acquisitions (MNA) while interviewing for various Wall Street firms.

MNA as a Board-Level Business:
MNA involves discussions at the board and CEO levels, focusing on the movement of assets across the globe.

Apprenticeship and Hands-on Experience:
Smith emphasizes the importance of hands-on experience and apprenticeship in MNA. Simply reading books is not enough; one needs to practice and develop honed skills through real-world interactions.

Choosing Goldman Sachs for MNA Training:
At the time, Goldman Sachs was considered one of the top MNA firms, known for its teamwork dynamic. This provided an opportunity to work with multiple partners and gain diverse experiences.

Concern about Lack of Diversity:
Smith acknowledges the lack of diversity in MNA departments at the time and wonders if he would receive equal opportunities at Goldman Sachs.

Goldman Sachs’ Teamwork Approach:
Goldman Sachs’ teamwork approach allowed associates to work with various partners and vice presidents on different deals, providing a broad range of experiences.

Seeing the Potential of Technology:
Smith had a keen eye for spotting the potential of technology companies like Apple, Microsoft, eBay, and Yahoo before they gained widespread popularity.

Challenges in Convincing the Banking Side:
Smith faced the challenge of convincing the investment and banking side of the firm to recognize the potential of technology companies.

The Dawn of Technology in Industrial Environments:
Introduction of technology into industrial environments began during the speaker’s time in New York. Companies lacked the investment resources to implement computing capacity. Digital natives (younger generations) had easier access to technology compared to digital immigrants (older generations).

Limited Access to Computers in the Past:
Using a computer cost a thousand dollars for half an hour. Users had to sign up and wait for their turn. Scarcity of computing resources led to episodic observation and intervention in industrial processes.

Analog Control Systems and Human Engagement:
Before computer systems, industrial processes were controlled by analog systems. Operators manually adjusted the process based on observations, leading to inconsistent control dynamics.

The Role of Computer Systems in Industrial Control:
Computer systems brought consistency and precision to industrial processes. They eliminated the need for episodic observation and intervention. Computer control systems improved efficiency, safety, and quality in industrial operations.

Understanding the Impact of Software on Productivity:
Software has revolutionized control dynamics by enabling thousands of observations and interventions per second, leading to significant productivity gains. Implementing control systems in a plant increased productivity by 26%, demonstrating the potential of software to transform industries.

Software in the Insurance Industry:
Traditional insurance claim management was inefficient due to manual processes, delays, and errors. Introducing computers and mobile technology streamlined the process, allowing adjusters to assess damages remotely and quickly estimate repair costs. This resulted in improved efficiency and customer satisfaction.

Software as a Productivity Tool:
Software is the most productive tool introduced in the business environment in the last 50 years and is likely to remain so for the next 50 years. Consolidation of spreadsheet programs like Lotus, Multiplan, and Excel improved efficiency by eliminating the need to move projects between different platforms. This led to increased collaboration and reduced duplication of work.

Recognition of Efficiency through Consolidation:
Common stock comparisons were a time-consuming and repetitive task that was often duplicated across teams. Computer systems enabled the sharing of work and collaboration, leading to greater efficiency and productivity in processing deals and applications.

Understanding Private Equity and Venture Capital:
Private equity and venture capital play crucial roles in providing funding for various stages of company growth. Venture capital typically supports companies in their early stages, providing capital and expertise to help them grow. Private equity, on the other hand, focuses on more mature companies, assisting them in expanding, restructuring, or improving operations.

Capital Access Challenges:
Many communities face limited access to traditional bank financing, hindering entrepreneurs from obtaining loans to grow their businesses. The lack of hard assets, such as physical property, can make it challenging for entrepreneurs to secure loans from banks.

Venture Capital: A Bridge to Growth:
Venture capitalists assess the potential of businesses and provide funding, along with expertise and resources, to help them grow. They offer guidance on efficient business practices, such as building a platform for streaming instead of relying solely on advertising.

Private Equity: Engineering Efficiency:
Private equity firms aim to improve the efficiency of software companies by implementing best practices and eliminating waste. They bring an engineered system to the management and operations of these companies, leading to increased efficiency and profitability.

Venture Capital:
Venture capitalists invest in companies with high growth potential but often lack resources. They typically provide funding in exchange for a percentage of the company’s ownership. The goal is for the company to eventually be sold or go public, providing a return on investment for the venture capitalist.

Private Equity:
Private equity firms invest in more established companies with steady cash flow. They typically seek control of the company in exchange for their investment. The goal is to improve the company’s profitability and eventually sell it for a profit.

Private Equity Value-Add:
Private equity firms often bring expertise and resources to the companies they invest in. This can include improving operational efficiency, implementing best practices, and expanding into new markets. The goal is to increase the value of the company and generate a return on investment.

Entrepreneurship and Capital:
Entrepreneurs can use different forms of capital to start and grow their businesses. Venture capital and private equity can provide funding and expertise to help entrepreneurs achieve their goals. The choice of funding depends on the stage of the business and the entrepreneur’s goals.

Robert Smith’s Journey:
Robert Smith started his career as an engineer at Kraft General Foods. He later worked in investment banking and private equity before founding his own private equity firm, Vista Equity Partners. Smith’s journey demonstrates how entrepreneurs can use capital and expertise to create successful businesses.

Disturbing Statistics on Diversity in Asset Management:
Out of the total assets under management in the US, only 1.4% are managed by diverse-owned firms, which includes women and people of color. This disparity is despite the fact that people of color and women make up a significant portion of the population and contribute to pension plans.

Pension Funds and Fair Share:
Many people of color contribute to pension plans, such as teachers, civil service workers, and federal government employees. However, they do not have proportional control over the assets in these pension plans, despite their contributions. This lack of control prevents capital from flowing back into their communities at higher rates.

Driving Pension Plans to Distribute Fair Shares:
It is crucial to raise awareness among pension plans and ensure that they distribute their assets fairly among the constituency base that contributes to them. This fair distribution should be based on the contributions made and the performance of the firms managing the assets.

Performance of Diverse-Owned Firms:
Studies have shown that diverse-owned firms, particularly in the private equity business, have consistently outperformed majority white firms. These firms have generated higher returns, had fewer losses, and exhibited lower loss ratios compared to their white counterparts.

Addressing the Disparity:
Despite their superior performance, diverse-owned firms continue to receive less than 1.4% of the allocation of capital. This disparity is a problem that needs to be addressed to create a more equitable and inclusive asset management landscape.

Philanthropic Efforts:
Robert Smith’s philanthropic efforts have been well-documented, particularly his contributions to Morehouse College, including giving back to the senior class and eliminating student loan debt for parents of students.

Broadband Deserts and HBCUs:
Smith highlighted the disproportionate impact of broadband deserts on HBCUs, affecting students and communities long-term. He emphasized the importance of addressing this issue to enable HBCUs to participate in the digital economy.

Fourth Industrial Revolution:
Smith discussed the ongoing fourth industrial revolution, where every industry is being digitized, transforming the economic landscape. He noted that 80% of HBCUs are located in broadband deserts, limiting their access to the principal tool of progress in today’s economy.

Participation in Economic Opportunity:
Smith emphasized the need to enable all citizens to participate in the next generation of economic opportunities. He pointed out that the US is essentially not importing labor due to immigration laws and political conflicts, making it necessary to develop the existing workforce.

Importance of Education and Skills:
Smith stressed the importance of education and skills development to prepare individuals for the digital economy. He believes that everyone needs to acquire the skills necessary to participate in the digital economy and contribute to society.

Economic Participation in the Digital Age:
There is a significant shortage of software programmers globally, with only 26 million out of 8 billion people working in the field. Historically black colleges and universities (HBCUs) face a lack of broadband access, hindering students’ ability to learn digital skills and participate in the digital economy. Smith emphasizes the importance of equipping communities with the tools and skills needed to participate in the digital economy and urges viewers to demand broadband access for HBCUs.

Student Loan Debt and Wealth Inequality:
Smith highlights the disproportionate burden of student loan debt among African Americans, with over 60% of their wealth going towards servicing these loans. He criticizes the current system, which often leads to decades of debt payments and inhibits wealth accumulation. Smith introduces the Student Freedom Initiative, a fund that provides loans to students with favorable terms, including lower interest rates and the ability to pause payments during life interruptions. The fund is designed to promote a virtuous cycle where students can pay back their loans and contribute to the fund, enabling future generations to benefit from it.

The 2% Solution for Equitable Opportunity:
Smith proposes the “2% solution,” encouraging corporations to allocate 2% of their earnings or profits towards enabling equitable opportunities in the communities they serve. This initiative aims to address disparities in access to essential services and resources, such as telemedicine, digital banking, and affordable food options, in underserved communities. Smith emphasizes the importance of using corporate resources and expertise to create tangible opportunities for individuals to participate fully in the economy.

Financial Literacy and Empowerment:
Smith encourages individuals to expand their financial literacy and develop skills that enable them to achieve their financial goals, such as financial independence and freedom. He commends the platform’s efforts in promoting financial literacy and urges them to continue scaling their impact to reach a broader audience. Smith emphasizes the importance of building systems that help people become more financially literate and empowered to make informed decisions about their finances.