[Auren Hoffman] Welcome to World of DaaS show for data enthusiasts. I'm your host, Auren Hoffman, CEO of SafeGraph. For more conversations, videos and transcripts, visit safegraph.com/podcast.
My guest today is Jack Dangermond. Jack is the CEO of Esri, the biggest GIS software company with over 1.3 billion in yearly revenues. Welcome Jack to the podcast. Now I have a lot of questions about data. But before we get in there, I think it'd be really great for our listeners to really understand Esri itself because every it might be the most unique company, at least large company in the world that I know. And so you and your wife, Laura founded Esri, in 1969, which is 52 years ago, which is amazing. And the company has been around longer than than really a lot of other well known tech giants -- longer than Microsoft, longer than Apple longer than Oracle, even longer than SAP. Is there some, like some sort of non obvious endurance lesson that other companies can learn from Esri?
[Jack Dangermond] Well, I don't know, I'm not quite sure how to answer that question. Were you born 50 years ago? Auren, that's what I want to ask.
[Auren Hoffman] I was not yet. I am pretty old. I was not yet born, no.
[Jack Dangermond] Well, I think we started very humbly, just as a little professional consulting practice out when when we left Harvard. We were really quite scared about what we were doing. We started doing little projects, and we didn't borrow money. So we kept it quite simple. We continue to own it. And we grew what I guess I'd call a sustainable company with a sustainable business model where you know, we do work, work like hell, then get paid. And spend the money. It's simple, like running your own household. And as we've continued working over the years, we kept some basic principles of never borrow money, don't go into debt, don't take venture capital, those sorts of things largely out of just feeling uncomfortable with doing that.
[Auren Hoffman] Esri today is still 100% owned by you and Laura, which is really extremely rare for like a company does over a billion in revenues, like and there's no outside investors, no liquidity events, no going public, no things like stock options and stuff. Is there advice you would give to people starting their companies today are thinking about their companies today that is maybe different from the conventional advice, you know, raise $100 million, go fast, you know, etc?
[Jack Dangermond] Well, it depends upon what you really want to do, what your intentions are. Our intention was really to be, I guess, mission focused. We were interested in applying quantitative tools to environmental problem solving and land use planning. And out of that intention came the development of tools, analytic tools, mapping tools. And so it's all about intention, you know, I don't want to get into what we do so much, but I think young people who are wanting to start a business have to understand what they intended to do, if it's about making money, probably the formulas that are popular in the Silicon Valley of, you know, taking venture capital, going round one, round two, selling out all that kind of stuff, is probably the way to do it. But for us, that was not so interesting, what was interesting is taking what we had developed and learned in the academy, and seeing if we could really make a difference with it. So that that's maybe one thought that I have is make sure you're clear on what you really intend to do in your life.
[Auren Hoffman] It's hard to, you know, as a young person in their 20s, it's kind of hard to know what you want to do in your life, or do you think people can, like, should they first figure that out?
[Jack Dangermond] I don't know. It's hard to say because everyone, everybody's different, you know. They have different intentions. So I'm not saying that my route or what we did is some rule book that everybody should follow. But we've been quite successful by remaining focused on our main purpose, which initially it was about doing projects ourself. And later as we built software tools, and sold the software tools, it was shifted over to supporting our users, helping them do their work better. That's really the fundamentals of it. And the organization changed in a way in its culture to be user focused and purpose focused about the same time, and also have a kind of a culture of service. My my parents were in service. So my mother was a maid, my father was a gardener. And we all grew up in a family of being in service, they started a little business, a nursery doesn't send that culture, I think, carried over to us, years later, and it's embedded here. So we have, you know, we have about 5000 employees in our US business, but we have about 12,000 employees around the world. And these little companies that we helped spawn off, Esri France, Italy, Germany, Austria, Australia, they also have embraced the same culture that we have, which is, of course, to be a strong business. But also to focus on really wanting to make the world a better place through the actual technology that we create and support.
[Auren Hoffman] I've met, I met, I mean, a lot of Esri employees have had a really long tenure. I've worked with a lot of different people at Esri that have been there for 30 years. But the company has changed dramatically in those 30 years. How have you worked with your own employees to help them grow and help those employees change as the company changes?
[Jack Dangermond] Well, when we, I said that we are user focused and customer focused. I suppose that's something that everybody says, you know, we're user focused customer focus, but we actually mean it. The purpose of the company is actually to make them do their work better in all of these geographic application fields. The second purpose of the company is really to be a great place to work. So people would come to work here, and they'll, I mean, we have a very, very low turnover rate. And it's hard to get in, I have to say, it's not just apply for a job. And we screen people a lot. And once they're in, we really work on growing them as individuals. So we have heavy, you know, subsidies on education programs. And we really want to be a kind of people, we can say these words, nowadays, it's kind of irritating, but that kind of learning organization. We are a learning organization. So all of us keep, including myself, I mean, I studied like hell, I work like hell, and keep trying to do better. That's sort of our culture. It's a culture of also seeing things, wanting to see things holistically and systematically. And we apply our, our science, the science of geography, and GIS tools to really support that purpose. So people get all in here, including me, you know, you're getting excited about it. And it's hard to, I mean, a lot of people don't find a cool thing to really work on. So you can have a lot of philosophy, but you don't really have something that's really as neat as this to work on. So we're lucky in that sense.
[Auren Hoffman] One of the things I find, like really fascinating about Esri is you go to most companies, successful companies, and you go to the About Us page on their website, and it lists like their management team. And it goes through and talks about the different people -- this person runs sales, this is the CFO. Esri doesn't have that. In fact, it's somewhat opaque. Like, it's kind of hard to know who's running what. There's no like executives that are listed. There's non obvious titles for leaders, like someone's called, like a director, and sometimes like a director actually is like the third most important person in the business or something. that might be like an EVP at most companies. Like, is there some intentionality around that? Like, is it like the economist, which doesn't list the byline on people's articles? Like, have you thought that the is there some sort of like specific reason you've designed the organization like that?
[Jack Dangermond] The intention is really to run an organization where everybody's respected. And there's lots of teams. So how we run it is in a collection of teams. So it's a network of teams that are collaborating. And the more you know, we don't incentivize our salespeople. For example, there's no incentives to try to take advantage of our customers through selling or something else.
[Auren Hoffman] You just get paid a base no commission.
[Jack Dangermond] Yeah. People are paid on the on the hours that they work. Which is very fair, people work more hours, they get paid more.
[Auren Hoffman] Ah, you pay hourly rather than like, like a salary or something?
[Jack Dangermond] Yeah. Not all, not all employees, but most of them.
[Auren Hoffman] Okay, interesting.
[Jack Dangermond] If people are very respectful of that, so it's a flat organization, as they say. And it's a flat network of teams, and some people take leadership positions, and some are, yeah, like you said, they're really senior. And there's about 16. I think there's 16 directors that run the major operations. And they are both our board. We don't have an outside board, we have actually operating board internally. And these people help each other across the organization. And you know, they're their own critics. And we have outside influences as well, especially with our users, but I don't have a clear way to answer you. If you wanted me to go to a whiteboard and write out and lay out the organizational structure of the company, I could do so. It's really all about who takes leadership responsibility for different segments of the organization. So I suppose we could expose ourselves better to the world in that sense, but by not paying attention to, you know, position, what occurs is that people are more open and interactive and sharing with each other. And we try to minimize the sort of incentives for self identification. Now, I really don't like that, as a culture, I like really more of a collegial style of culture. And that tends to what tends to be more healthy and friendly as an organization. I suppose that it's more organized, you could go drive, drive, drive, drive, and maybe, maybe it is more efficient. But in terms of a place to work, it's not some not so much fun.
[Auren Hoffman] The hourly thing is interesting, too. So your most, let's say technology companies, they just pay people like a yearly salary, somebody makes X dollars per year, maybe there's a bonus or something like involved or something like that. And some sometimes they're working well, you know, sometimes they may be working under 40 hours a week, sometimes they're working way more than 40 hours a week. And maybe their salary goes up, you know, year by year based on like, their performance and stuff. The the hourly thing is pretty interesting. So you know, someone, you might have someone who maybe needs more of a flex hour or something like that, and you are someone they may have the ability, for whatever reason, their lifestyle to work more than 40 hours a week, and then they basically get the advantage of that. Is that the way you think about it?
[Jack Dangermond] Yeah, there's exempt employees, you know, that have caps and non exempt. Non exempt employees have caps of how many hours they can work. And we know, we pay very strict attention to all of the labor laws and regulations on that. When I was a student at Harvard, I worked in a basement, they paid me $5 an hour. And I thought it was really fantastic. Because I actually can put my way through school by working all night and then going to school in the daytime. And the more I would work, the better off I was able to be. And it was, you know, they trusted me. And I had to have integrity with the university. But it was it was really neat. And it sort of lifted some of the burden of, you know, check in check out sorts of operations. So that has sort of permeated here from the very beginning. And it has created a stable workforce. You know, it's very fair, because sometimes you have to work 80 hours a week. Yeah, I do it still. And, you know, your spouse gets mad at you. And you say, well, yeah, but by the way, the paycheck is twice. It really is neat, because people can really work hard. And they're rewarded in that sense. In real time. Rather than a year later, if you did good, Johnny, you know, you might get a raise. So and I can you know, what it does for me as a manager, I can ask people things like, would you help me, you know, on this thing, and turns out, we have to stay up all night. And people are absolutely not disincentivized from it, right? Takes all that negativities that normally in normal companies away, and I think people are very respectful of the privilege of having that, you know, it, they really are. And it takes time, but it's, it's very important.
[Auren Hoffman] I think that's super fascinating. You know, another thing I'm super fascinated by Esri, is that how flat the org is. You personally seem to be extremely accessible with have 1000s and 1000s of employees. And my anecdote was the first time I was on the Esri campus, I was meeting with a BD person at the company. And we're having a good conversation. This is just when we're starting SafeGraph. And the person's like, hey, do you want to meet Jack? And I was like, oh, yeah, one day, I would love to meet him, you know, someone I admire, I would love to meet him. And then he actually just, like, took me out of the conference room and walked me into your office. You were just there working, you're working at you standup desk. I still remember just like, in the middle of working on something, he somehow felt like he had the right to interrupt you. And just like walk me in there. And do that, like, I don't even know that most like 100 person companies would be run that way. But even in 1000s of people, it was flat enough where he felt like he could do that. How do you even like figure out how to protect your time? Obviously if employees were always interrupting you, you would never be able to get anything done. How do they even know like when they could do that? And this was not like a high level person I was meeting with. This was a you know, a mid level person in the organization. Like if that person has the ability than almost anyone can do it. So how do you manage that?
[Jack Dangermond] I don't know. People become respectful. Okay. I mean, if they're wasting your time, I don't make them feel guilty or anything, but they somehow they figure it out that that's not a good use of their time. I mean, or of my time. So it just, that's just the way it is. I, I had the great privilege of spending some time last week with President Obama. Now, I'm really nervous, because, you know, I'm wasting his time, he has a lot of really important things he's doing. He's doing just amazing work, by the way, in his so called retirement. Anyone would feel that way. You know, there's an emotion of, of being in the presence of the kind of God. But then there's also just, I don't want to waste his time. And I think if you make yourself accessible people go that way. In this in this organization, and also, I'm very respectful of their time. And the ability to support them is important. And I think a characteristic of great managers is to support the employees. It's not to be the boss. Yeah, yeah. Well, ya know, that maybe make some people ego happy. But it's really, I don't think it's very productive. Be humble, be supportive, at your job, figure out how you can help them do their work better.
[Auren Hoffman] That's really interesting. You mentioned earlier another thing that's different about Esri is you have this kind of like, in some ways, a franchise model. You mentioned like, Esri, France, Esri Australia. Is there a history of how that happened? And how do you think about these, like sister companies?
[Jack Dangermond] You know, we sort of invent a lot of things here ourself, and working with another software, small software company at the time in the early 80s. This fellow, Henry Cochran told me about how he distributed his software overseas, and it was through so called distributors. That's the name that he said, we didn't really call it a franchise model. But ultimately, it becomes that where we either independent of us or we make a small investment in a international organization.
[Auren Hoffman] It's kind of like a JV between like a parent and a team on the ground or something.
[Jack Dangermond] And it really is important, I think, for our work, because our partners in each country are exclusive in the country. They're really part of the culture, they take our tools. And they really, they care about their own country, they languagize, the tools, they you know, internationalize the tools, they support the customers passionately because it's their country. And they're my partners. So almost none of them have changed over the roughly 40 years that we've done this, and they've grown to be, you know, 100 million dollar operations in their respective countries. And so actually, Esri is a much larger company than it shows. Financially, we have a huge financial footprint, but it's all through partnerships. And that's really been very stable. It's allowed us to be able to come up with high quality standards here, and then transfer them over, whether it's in marketing, or in how we do, you know, business development, or how we do training or how we do tech support. Or we have something called Esri University where we bring these people together, we all learn together, they share also how it's going in different markets and where we're being strong and where we're not. So it's a family, like a global family. And I have so many things to tell you about that, that we don't have time to do. But it I think it's created a kind of mini UN, in terms of friendship, and business collaboration around the world.
[Auren Hoffman] Usually these like when you have these parents, and then you have franchises. It's both a collaboration. But you know, if you think of like, McDonald's or something, there's also this tension that exists. In your case is one of the reasons you have maybe less tension because you just have these long relationships with these people. And they've built the partnerships and friendships from it, or how do you manage that?
[Jack Dangermond] Yeah, I don't know the reason why it all works so well. Friendship is most important, I think, and this philosophy of wanting to help them do a great business in their country. And, you know, businesses go up and down in different countries, you know, inflation, rapid inflation in Argentina, how do you get through? Carrying through and helping them cover and helping our users in a country like that, when they're in deep trouble giving them continuity. Okay, those are the bad times and then, but they come back, you know. The world economy over the years, the money doesn't actually disappear, it just moves around. So by being able to have a flexible network, around the world, we're able to support these partners and they can do their best. And we try to teach them and support them doing their best and growing their own business and where software, you get returns out of it over time, some years, good years, sometimes bad years, some markets good, some years markets bad, you know, by vertical industry. So it's a lot of fun, actually. Building an international network is very stabilizing for a business, it's very impactful in terms of spreading it out. And it's not just the classic, the classic, you know, globalization company with franchises, is all how you squeeze, squeeze, squeeze. We're all how you support, support, support. And people by owning the companies in various businesses in various markets. They're incentivized by themselves, you know. They're entrepreneurs. You know, these people are so cool. Because they just grow and grow with us. And we learn from them too, I mean, different approaches in different settings.
[Auren Hoffman] And Esri it really kind of invented a category, this GIS this, you know, geographic information system space.It's the dominant software company in the space. There are a lot of listeners here who are kind of working on inventing a space or kind of pioneering in a specific space, whether that, you know, it could be in a lot of different types of areas. What advice would you give to, you know, an up and coming company that is trying to invent a space or even just like invent a word? I think you guys invented this kind of word GIS in a way. Right? So how do people like think through that that kind of branding kind of event, as they're as they're putting their stamp on a space?
[Jack Dangermond] Well, I think having an eye for what's needed and wanted is very important. And so when you're so called inventing something, a lot of people invent things that are, you know, that have no meaning. But from my perspective, figuring out something that really serves the market, or really helps somebody do something better, or improve, or make a difference with a technology and innovation is the key. And so be focused and grounded on something that's needed and wanted. That's been, that's been the secret of my successes. I don't, I don't try to be interesting. I try to be interested.
[Auren Hoffman] Yeah. That's probably good advice.
[Jack Dangermond] Yeah. I mean, yeah. Anybody can be interesting. You can buy a Ferrari, you know, certain clothes, certain houses, on your shoes, or whatever, but it doesn't, doesn't necessarily result in a successful business. It may look good, make you feel good. But the good businesses really deliver great services that people need and want. And so I had a friend once who, you know, he, almost everything he touched was successful. And I finally ask him, what the hell is it? He says, well, you know, I don't try to be interesting, I try to be interested, I do what is needed. And, man, that's, that's the best advice I can give anybody.
[Auren Hoffman] Yeah, probably means you need to like get off Twitter or something then.
[Jack Dangermond] I don't know. The other element is, for us here is I mentioned that we're continuously learning all of us as individuals, but in our teams. And as an organization, we're learning from our customers, they're telling us what we need to do in order to be relevant. And one of the things we do is we spend all of our money. We have great revenues coming in here and in a public company to pay out dividends and all kinds of stuff. Yeah. I mean, we pay our, our employees well, and we share 20% of our profits with our employees every year goes right into their profit sharing program. But mainly, our money goes into new innovation, about 30% of our revenue is spent on more innovation. And when we do that innovation, that's of course, guided by what's happening technically, in the world, we have to stay current, you know, from mainframes, to minis to workstations to PCs to the cloud. We have to stay current, and then the other big, the other big direction is from our users. They say okay, Jack, we need to do this or, you know, Sud we need to do that. And they're cleverly I mean, we have some really, really mean we just don't want to say this humbly. And we have incredibly gifted engineering talent here. And they engineer things in holistic ways with first principles. And we are, we're really blessed because we can do so because we do have revenue stream, because of all the customer relationships that we have. And we take care of the customers. Well, I mean, our marks are very high on service and support, but also we take care of them, trying to have insight into what's needed and wanted generically for them. So that as we evolve our tools every year, and we come out with releases of tools every year, it's relevant for them. It's not just some shiny object or looks cool. No, it really ultimately makes a difference.
[Auren Hoffman] Let's spend time diving into like the data side of it, you know, as a software company, but it is basically built on top of data, you have kind of external data, you've got public data, obviously, people bring in their own data into Esri, and Esri, like kind of takes that data and makes it shine, whether it's ArcGIS, or business analysts, or the different tools that you have. Like, how do you think about like the data ecosystem? And how, how important is that to like the success of the company?
[Jack Dangermond] Yeah, well, people have often said data fuels GIS and its success. Most of our customers in the government space, create their own data, you know, parcel boundaries, that you have to tie them in, they serve them, or forest inventories, or, you know, road inventories or utility. They're all about creating and managing their systems of record. That's their database, you know, it's not financial data, it's geographic data. Often they'll fly aircrafts, and they'll store pictures that they interact with these sorts of things. And but in the private sector, it's a very different game, they usually want us to provide data for them to be able to, they're not about systems of record keeping public records or so. So we often pull public information together and then package it in our, in our cloud environments. So they can, this data can be made available to our customers freely. And a lot of it is open data, we actually take all the government's open data and try to organize it into application ready data services that people can sort of mash together and use. So in the beginning, it was a big segment between private sector and public sector data, and users. Now it's starting to mishmash that, you know, public sector users are wanting to buy or access private datasets freely. So your question really is getting at what is Esri doing in the data space, right? I mean, we build these great tools. And then we create this cloud environment, which is references, our customers data all over the world. And we have like, I think it's over 40 million data sets that we referenced in our catalog and ArcGIS Online, yeah, we can access that data. But in that same space, increasingly, by the way, people like yourselves have made your data offerings available in an affordable way to our customers, and they're subscribing to your service. And it's enriching, you know, both the public sector and the private sector. So we are sort of facilitators of getting great data to our customers. Imagery, data, street data, your dynamic data, these are all, you know, POI data. They're all great things that our customers now are figuring out, they don't have to maintain them in their own system of record like we did 30 years ago.
[Auren Hoffman] The way I kind of see with Esri be interesting is kind of like a flywheel. Like, the more kind of different geographic data there is, the more is important to have a tool like Esri, the more people have a tool like Esri, the more people create geographic data, and there's this kind of flywheel that that keeps going, which is a virtuous circle. Do you see it in some in a similar way?
[Jack Dangermond] Yeah, I think so. I'm grounded in geography, the signs of our world. Yep. I mean, that's really the basis for it all. So how do you abstract geography? Well, I think of it as abstracting geographic knowledge. And some of those are datasets. So, you know, whether it's vectors or rasters, or surfaces or digital twins, it's basically GIS creates these datasets. And then GIS also applies these datasets and modeling and analytics things. And those models are also part of the geographic knowledge. So there's data knowledge, there's modeling knowledge, there's map cartography, representation knowledge. Yeah, there's, there's reporting knowledge like that great map from Johns Hopkins. They that has been viewed 2 trillion times. And what those guys did is they pulled data from all over the internet. They aggregated and made the data useful, and then support this interactive dashboard that has informed the world about what's going on. And that's very common with our users, they are sort of like, they hoover up, or vacuum cleaner up data from wherever they could get it, as well as they maintain their own data. And sometimes they buy data, and they bring it together, integrated, and then a great build great applications.
[Auren Hoffman] And the value of the data kind of like it grows, as the more the data is getting joined together. Yeah, you know, it's like, two data sets by themselves have interesting value, but when you put them together, it's sometimes has 3x the value or, you know, it's like one plus one equals three adds up, how do you think about things like join keys to join the data together?
[30:46 Jack Dangermond] Yeah, keys, keys are are fantastic join keys. And I think the work that you're pioneering, actually, in this idea of having common keys that are relate keys are really important. From my perspective, one of the big relate keys is geography itself. You know, the XY location, yeah, but also these new these new adventures of having the ability to enter great data with keys.
[Auren Hoffman] I know, Esri and SafeGraph, we've been involved in this like Placekey to figure out like, for a specific place, but they're there obviously, you can, you can join on longitude, latitude, there are many different other ways to potentially join data. You know, a lot of this data is is is represented differently, the more that it can be easy to join together, you don't need less like incredible engineering team. I'm sure like Johns Hopkins. Yeah, they they put a lot of data in, but they probably also put a lot of effort and all this like great engineering to actually join it all together.
[Jack Dangermond] To pull all together exactly. A lot, a lot of it in that case was just tabular data. You know, the reporting structure of counties and countries and zip codes, these are, these are kind of common geographic keys that can pull data from different sources and then visualize it. Or in the case of GIS. The spatial analytics that can go on are the big data query sorts of operations that can go on using location as a key is kind of a miraculous thing. And the world is getting better and better at doing this being able to use these big data warehouses, and then going in with spatial queries and pulling information out for analytics and representation. And we're working on that we've been working on it for for many years, obviously. But it goes from simple map overlay where you're intersecting using geometry and taking relational data, and bringing it together doing joins and relates either dynamically or fixed, to the idea of stuffing it into a trillion, you know, feature database, and then asking questions. These are all on the frontiers. Well, they're all part of this, what a GIS system really does. And it's tools. And it's the data. So you're right, there's this, there's this natural, exciting synergy about wanting to know what's going on, understand the world. And GIS tools or geospatial tools and mapping tools and databases with either fixed data or real time data is going to be brought together. And by the way, you know, this is what's necessary to create understanding, and in our complex world, I mean, holistic approaches, which we're going to have to deal with, with big issues of climate and big issues of biodiversity, big issues of, you know, making smarter cities. You've got to bring the information together, so we can understand it, so that we can act in more intelligent ways.
[Auren Hoffman] Esri is an interesting company. You have this huge partner ecosystem, as you said earlier, and I've had, I've had the pleasure of going to a few of your big partner summits, especially in the pre COVID days. We're all in person. There's 30,000 people there interacting in person. How do you decide, okay, this particular thing in all these different partners are providing important things to help your customers do a better job. And so there are some new things that you might want to do yourself as part of Esri Inc. And there are some things that actually might be better for partners to do. How do you how do you like think internally as to like, what should we do internally versus you know, we have what should we rely on all these partners to do?
[Jack Dangermond] That's a good question. Here in the US. I think we're like you said 1.3 million billion in revenue, but we drive about a 27 or $28 million ecosystem around us that builds on top of us are and some of that.
[Auren Hoffman] Which is a true definition of a platform, right? It's 20x
[Jack Dangermond] Yeah, a platform. We're a little tiny, you know, tail wagging a huge footprint of technologies and solutions. And our approaches that were now, earlier this year, you may know, we opened up the hood of Esri, with open source API's that can actually access our fundamental platform capabilities. And we've had actually, just in these few couple months, 1000s and 1000s of developers who are doing startups that are actually embedding a very simplified API, and you know, putting maps in there.
[Auren Hoffman] I play with it amazing. It's incredible what you're doing.
[Jack Dangermond] This is kind of a cool thing. But ultimately, there can be tension between what we're building here in core, versus what people want to build as distinctions for their various businesses. And it hasn't really been as big of a problem as you might think, partly because our main focus is to build focused core first principles, technology, and let other people exploited in the area of application business. And we've had a couple of application, we call them geo enabled systems that we've had to build, because there were no partners that really wanted to develop it. But generally speaking, I'd rather not do that. The one that we did that we did in partnership, and part with you as business analysts. And this is all about, you know, picking retail sites, or manufacturing sites, bringing all the data together in a pre packaged form. And that's used by everybody from Starbucks to Walgreens to show hundreds and hundreds and hundreds of commercial organizations. But generally speaking, and again, I'll just emphasize nobody, we tried to get, you know, people that were doing this stuff to be able to build on our platform, they didn't do it. So we simply sat down and did it. But it was a reluctant reluctant thing.
[Auren Hoffman] The way I see it, as a partner who works with Esri, I think you do such a great job with partners in my theory, and you could tell me, if I'm right or not, but my theory about why you do such a good job is is goes back to those some of those original things that we talked about, in some ways, you're run, with a very long term view, you're not public. So you don't have this, like worry about your stock price. It's like, oh, we're gonna, you know, we need to juice the next quarter. So you know, what other companies do is they start squeezing the partners a little bit more, they get a little bit extra percentage out of the partners and stuff. You have the ability to take a much longer term view. Because you don't have to, like think in like in these kind of quarter to quarter. So this is my theory, I don't know, what do you what do you think of this?
[Jack Dangermond] I think you're right. I mean, when we assess going into a particular market segment, we have partners, like in utilities, we have over 100 partners. Everybody from Snyder, Electric, and, you know, Siemens, to little small mom and pop shops that do various work. But if I wanted to say I'm going to build the complete system for utility companies, I don't need to do that I'd rather serve those markets with great tools. They're our customers, big ones, PG&E or Edison or others ConEd. But they're, they're really, I don't know, I can, I can sleep at night and really do a great job and make breakthroughs by not having to eat all of that, you know, 10x stuff.
[Auren Hoffman] Now, in the last year has been really interesting. It's kind of COVID year that we've just kind of gone through. And there's kind of this increasing need to understand what's happening in the physical world. And, you know, at SafeGraph, we've made our data available more like academics and researchers and journalists, and also a lot of government organizations for non commercial purposes. And Esri's really kind of like all the kind of supercharged that mission as well. You really like, you know, did a lot of stuff to make your software and available for free to all these different organizations. Like how did you like just think about making that decision? Because, you know, it probably has some sort of at least near term financial costs you to serve these things as as the as the world's a little bit in crisis?
[Jack Dangermond] Yeah, well, we have a disaster response team. It's kind of a virtual team that comes together during any disaster. And this really started way back in the Northridge earthquake back in the early 90s. Where and in the Mississippi floods in the Missouri floods and where we would stand up a policy set of getting our software to the, to the first responders or to the NGOs, or the or the agencies that were being impacted by the disaster. And so now, there's like 20 people that work in that sort of, sort of turn on anytime a crisis happens. And whether it's an Indonesia with the This or, you know, in Alaska with that. So that's kind of in our DNA, we sort of cover it with our, our overall ecosystem costs. And when COVID hit, I mean, it scared the hell out of all of us, I'm sure. We said, What can we do to really support it? So we started to build templates, and then provide our software to all the ministries around the world. You know, worked closely with CDC, worked closely with who, who are our customers, but all these other ones who wanted to see what's what's going on on there. And they're, you know, citizens and their agencies and so on, really wanted to know, what the heck is going on. So, I'm being a little abstract here.
[Auren Hoffman] I mean, I remember in March April 2020, constantly being on the phone with all these different folks at Esri. And we're doing all these different things to help the government, to help them out. There were so many other companies that we were trying to get to help. To donate data or some other types of things. In part because they were larger public companies. It wasn't they didn't want to help. Even though Esri is this massive company. You just dove in. You didn’t even have a lawyer in the room. You could just do something. Is that because even though it’s a huge company, it’s also a small company? Like how did you just dive in and do it without worrying about the lawyers and stuff?
[Jack Dangermond] Well, I don’t want this to sound self-serving. It’s just part of our DNA. We jumped in. Look, we did it mostly through users and with partners. By the way, thank you for all the donation work you and your team put together. I mean your data was amazing. It was the first data that allowed people to see that the Executive Order here in California by the Governor actually was working.
[Auren Hoffman] Thank you.
[Jack Dangermond] When I called you up. It was amazing. The governor himself understood who was staying home and listening and who was not. We could see that very clearly on the maps that you had overlaid with the actual infections that were occurring. I don’t think it’s unique to us. Everybody wants to help, and I think that’s the spirit that we have to encourage entrepreneurs and large companies all over the world to really buy into. As the Covid wave of catastrophe was only the beginning of a series of other global challenge and issues, like climate and the loss of biodiversity. And we have to figure out how we can volunteer and run a business, how we can contribute on these big challenges that are facing us. That’s going to be a very personal thing. We are not wrestled with the need to have short-term gain on everything. Having a private company that is sustainable based on support of all of our users is really a privilege that I don’t take lightly. We had to take a long time to build the damn thing.
[Auren Hoffman] 50 plus years, yeah.
[Jack Dangermond] It does allow us to really focus on the things that we really care about as humans. So I encourage all of the listeners here to think about what your real purpose is in life and see if you can build an organization that really is responsive. I know getting money and capital is a necessity to growing and supporting your business. Except I am here to tell you that it isn’t absolutely necessary. You can do it if you are patient, slow, stick to your values, keep integrity, keep your agreements, and continue working like crazy. This doesn’t just happen. Just show up become an executive. I got to tell you, the people here work their ass off. We still do day and night. We don’t take that as a casual thing. It’s a privilege to be able to be in this organization and do what we do.
[Auren Hoffman] Before we leave, just a couple of personal questions. So, I often say to SafeGraph employees, the only job I’d rather have than being the CEO of SafeGraph is the CEO of Esri. It must be the best job in the world. Do you ever just pinch yourself or write a gratitude journal? You get to do all of these amazing things every day.
[Jack Dangermond] I do have a privileged position because I can see the amazing work and dedication, particularly in the public sector, the public service work that’s going on is just amazing. So I appreciate my job. Are suggesting that I step aside and you’ll take it over?
[Auren Hoffman] Definitely not. I don’t think I could do it better than you.
[Jack Dangermond] Now I’m worried.
[Auren Hoffman] Do you write gratitude? Is there some way that you’re like this is amazing? How do you think about it? You get to do all of these amazing things every day.
[Jack Dangermond] I think I appreciate the work that I get an opportunity to do. I also believe that you get there by working hard and creating your situation. Everyone creates their own situation. And everybody has to figure out who they serve in life, that’s a big thing. Do you serve your family, do you serve your spouse, do you serve your community, do you serve the public market, do you serve your stockholders? Who do you serve? By keeping life quite simple from the business perspective, I get a chance to serve on the big issues that I think I really care about, which is conservation, education of kids. And then also building cool tools that empower our users to really do a better job. That’s thrilling, and I don’t take it lightly. Competition is here. Technology is changing. The world is in crisis. But in our little world, I get to play hard. Not everybody can drive a racecar. It’s tough to drive a racecar. You come into the corners, how much do you let off the gas so you can make it around the corners, how much do keep your foot on the gas so your competitor doesn’t pass you up. Life is in a way. If you’re playing at 100%, life is like driving a racecar. And I like to play at 100%. And I like my colleagues to play at 100%. Building an organization where you have an opportunity to play at 100% without some of the constraints of this or that. It takes time, but it’s totally doable. Life is too short to not play at 100%. That’s my view.
[Auren Hoffman] I love that. Alright, last question we ask all of our guests. What would you tell yourself back in high school, college to save yourself time or money or emotional wellbeing today? Like if you could go back in time and tell the young Jack, what advice would you give youself?
[Jack Dangermond] Well, the thing that was always in the back of my head was just make it through this one. I didn’t have any grand vision of being some place. It was just finish this quarter at university. I wasn’t a very good student. But I learned how to learn at university. Before that, with dyslexic problems that I had, it was hard for me to read and do a lot of things. But overcoming that was intensive work at university to learn how to learn. My phrase was always just make it through this quarter, just make it through one year of college and your life will be better. Or just make it through college, get a degree and you’ll be ok. Just make it through this quarter.
[Auren Hoffman] It’s almost like the Woody Allen advice, just show up.
[Jack Dangermond] Some of it is showing up. Some of it is working with a sense of purpose and keep learning from it. I don’t have any great single mentors. I am learning from everybody. And everybody seems to help. I love that idea. And they do, if you’re willing to be open and not so egotistical, the world really wants to help you. I think that’s true with all entrepreneurs. People don’t like ego and I’m something and I’m great. They’re sort of like I guess I don’t need to help that person. But if you really are open and intentional about doing good. The world opens up to you.
[Auren Hoffman] Well this has been amazing. Thanks so much for being our guest today. This has been really helpful, and I’ve learned a lot today.
[Jack Dangermond] You’re a great guy. I greatly admire you. I am so glad that person opened my office and that I got a chance to meet you. It was a good thing actually. I am very sincere about that. Any way, good luck to you and good luck to all of your listeners.
[Auren Hoffman] Thank you so much.
[Jack Dangermond] You bet.
[Auren Hoffman] Thanks for listening. If you enjoyed this show, consider rating this podcast and leaving a review. For more World of DaaS (DaaS is D-A-A-S), you can subscribe on Spotify or Apple Podcasts. Also check out YouTube for the videos. You can find me on Twitter at @auren (A-U-R-E-N). I’d love to hear from you.
Auren talks to Jack Dangermond, CEO of Esri, about his philosophies for building and running the world’s most successful geospatial software company. The two also discuss how software can be used to store, represent, create, and share geographic knowledge for solving problems more holistically.
Welcome to World of DaaS, a podcast tailor-made for people in the data industry, curated by data professionals. Hosted by SafeGraph’s CEO, Auren Hoffman, the podcast invites leaders in business, science, and academia to share their insights on the latest developments in running data organizations.
In the inaugural episode, Auren asks Jack Dangermond about how he built Esri, the world’s largest software company dedicated to geographic information systems (GIS). The two discuss Esri’s unorthodox business model, innovative leadership structure, and pioneering software tools. They also talk about building the Esri community of international data partners, and what Jack sees Esri’s role as in terms of building and expanding access to geographic knowledge. Here are a few quick things to know about Jack and Esri:
We’ll start by going into a bit more detail regarding the question “What is Esri?”
Esri is the world’s largest GIS software company. Jack Dangermond, the founder of Esri, started the company to use computers for solving land use planning and environment conservation issues. Esri’s software tools continue to aid many different organizations with geography-based problem-solving.
Throughout this episode, Jack explains some of his philosophies behind how to use computers, software, and technology in general to represent – or even create – geographic knowledge. He even goes beyond that into using software as a way to integrate geospatial data with other forms of data to enable more holistic approaches to problem-solving. Here are 5 highlights:
Time in Podcast: 2:55
Jack says of Esri’s history: “We were interested in applying quantitative tools to environmental problem-solving and land use planning. And out of that intention came the development of tools: analytics tools, mapping tools. And so it’s all about intention.”
Time in Podcast: 22:00
Jack Dangermond quotes here the best advice he ever received from a friend: “I don’t try to be interesting. I try to be interested.” What he means by that is “figuring out something that really serves the market or really helps somebody do something better, or improve, or make a difference with technology and innovation is the key.” He contrasts this with many an invention that’s “just some shiny object or looks cool”; it can make people feel better, but doesn’t help with a problem that anyone actually wants or needs to solve.
Time in Podcast: 26:05
Jack notes that many of Esri’s public sector clients create their own geospatial data, e.g. government records of land parcels, road inventories, utilities maps, and so on. So in the beginning, Esri’s business was mainly focused on organizing this public data into formats that private sector customers could use. But now public sector organizations are looking for the same thing regarding private sector data. So Esri aims to facilitate these data acquisitions in ways where both public and private clients “don’t have to maintain them in their own system of record like we did 30 years ago.”
Time in Podcast: 28:58
Jack sees Esri’s primary function as abstracting geographic knowledge into data via GIS software. Then clients use GIS software to perform analyses on, and build models with, this data relevant to their own purposes. And then those analyses and models become part of geographic knowledge as well, for others to reference and build off of. So Jack sees Esri and its clients as part of a virtuous circle that expands geographic knowledge and access to it.
Time in Podcast: 31:49
Another part of GIS software’s role, as Jack sees it, is to be able to process various different types and formats of data so that they can be queried and joined together. As advances in technology allow for it, this will help people to more holistically visualize and solve problems. Jack believes this will be necessary for tackling complex issues such as climate change, biodiversity, and building smart cities.
Esri was founded in 1969 by Jack Dangermond and his wife Laura. As Jack tells it, the company “started very humbly, just as a little professional consulting practice when we left Harvard.” And they kept it that way, starting slowly and with building small software projects themselves so that they wouldn’t need to borrow money. It was a sustainable business model that Jack describes as: “We do work, work like hell, then get paid. And then spend the money. It’s simple, like running your own household.”
Over the 50+ years it has been in business, Esri has stuck to that principle of never going into debt. It has never needed to borrow money or raise venture capital. This has allowed the company to stay completely owned by Jack and Laura. Meanwhile, it has become the largest geospatial software company on the planet, with billions of dollars in revenue and offices across the US (and in many other countries worldwide). That’s a very rare achievement for a company that has never had any outside financing. But Jack says he prefers running the business this way, as it allows Esri to remain “mission-focused” on what its customers want.
Our next section will be a short Jack Dangermond bio to help you understand a little more about the man behind Esri.
Jack Dangermond was born in Redlands, California, in 1945. His mother was a maid and his father was a gardener, so “we all grew up in a family of being in service.” He attended Harvard in his 20s, where he met his wife and business partner Laura. After he graduated, he moved back to Redlands with Laura, where they started Esri in 1969.
Over 50 years later, Jack and his wife still maintain full ownership of Esri. He feels privileged to be able to continue to direct his company towards causes he’s passionate about. These include “conservation, education of kids, and building cool tools that empower our users to really do a better job.”
Hilary Mason, co-founder of Hidden Door and data scientist in residence at Accel Partners, talks with World of DaaS host Auren Hoffman. Hilary previously co-founded Fast Forward Labs, which was acquired by Cloudera, and served as the Chief Scientist at bit.ly. Auren and Hilary explore how data science has progressed in the past decade, the role of data science in an organization, and data ethics.
Stephen Orban, GM of the AWS Marketplace, talks with World of DaaS host Auren Hoffman. Stephen previously served as the GM of the AWS Data Exchange and CIO of Dow Jones. He’s also the author of Ahead in the Cloud: Best Practices for Navigating the Future of Enterprise IT. Auren and Stephen cover the launch of AWS Data Exchange, Amazon’s role as an industry-wide innovator, the advantages of Amazon’s leadership principles, and what the future of data discovery could look like.