West Virginia’s Richest Billionaire Plans To Level The Educational Playing Field In Appalachia

Forbes

Brad D. Smith was six years old when a plane carrying the 1970 Marshall University football team crashed a mile from his home near campus in southern West Virginia, killing all 75 people on board. His cousins rushed to aid their dying neighbors as volunteer firefighters. “I watched the flames burn outside my window,” Smith remembers. “And then I watched this community rise from the ashes.”  Half a century later, the recently retired Intuit CEO’s community is waging new battles, with an opioid epidemic raging and the coal economy that once made Governor Jim Justice a billionaire on the verge of extinction. So, after 36 years away, Smith decided to take the country roads back home to West Virginia, the place he belongs—and into the President’s House at Marshall, his alma mater, which he took over in January 2022. He brought back with him a sizable fortune, accumulated over nearly four decades in business. According to Forbes’ ranking of the richest person in each state, released Thursday for the first time since 2019, he’s West Virginia’s wealthiest resident, worth $700 million.  Forbes estimates that roughly half of his fortune is comprised of 943,000 Intuit shares and options he still holds. That’s after selling 2.4 million shares during his tenure as CEO from 2008 to 2018 (and as chairman until January 2022), netting him about $300 million (after taxes and the cost of option exercises). He takes the mantle as the state’s richest from Jim Justice, whose wealth has been weighed down by debt. Smith is worth some $250 million more than the governor, who dropped from the ranks of the world’s billionaires in 2021, when it was revealed that he’d personally guaranteed $850 million of loans to his coal businesses by Credit Suisse via a now insolvent intermediary, Greensill Capital. (Justice also owns the iconic Greenbrier Resort in White Sulphur Springs, West Virginia, and other real estate assets in Appalachia; he disputes Forbes’ estimate of his fortune.) Smith declined to comment on Forbes’ estimate of his net worth.

Transcript

00:00 [Music]

00:18 I was six years old when the plane crashed in 1970.

00:23 I was sitting at home with my brothers watching television with my mom and dad.

00:26 We heard the sirens blaring.

00:28 My mother's nephews were actually first responders,

00:31 so we were always very attentive when we heard a siren.

00:34 So the phone calls began to be made.

00:36 There were CB scanners, which were basically radio scanners

00:39 to see where the police or the fire trucks were being dispatched.

00:42 All the neighbors were talking about there had been a plane crash.

00:45 And so I ran to the back window, and I looked out,

00:47 and I could see the haze and the sky glowing red.

00:50 And you could see that that fire basically was happening.

00:53 And at that moment in time, I started to see the beginning of a life lesson,

00:57 which is that we're all born angels with one wing,

01:00 and the way we fly is by holding on to one another.

01:02 So I'll never forget how that community came together

01:05 and helped each other rise from the ashes.

01:07 [Music]

01:12 Brad Smith is the former CEO of Intuit,

01:15 which is the company behind QuickBooks and TurboTax.

01:17 And since January of 2022, he's been the president of his alma mater,

01:21 which is Marshall University in West Virginia.

01:23 Smith grew up in a small town of about 3,000 people called Canova, West Virginia,

01:27 which is right next to Marshall.

01:29 And back in 1970, there was a plane crash near campus that killed 75 people,

01:33 including the school's whole football team.

01:35 Viewers probably know these events for later depicted in the Matthew McConaughey movie,

01:40 "We Are Marshall."

01:41 He and his brothers were the first in their family to go to college,

01:44 and he initially went to West Point.

01:45 But he ultimately decided to go back home to Marshall after a semester,

01:49 and he still wears the Marshall-class ring that his dad gave him

01:52 right before he had a heart attack a few days later.

01:55 After receiving his master's degree in management from Aquinas College of Michigan,

01:59 Brad took a sales job at PepsiCo initially.

02:02 Despite an early boss's insistence that he attend corporate communications courses

02:06 to rid himself of his West Virginia twang,

02:09 Smith quickly climbed the corporate ladder at 7-Up and direct-mail marketer Advo,

02:14 with the inherent flaw of his accent proudly intact.

02:17 My dad taught me servant leadership.

02:19 My dad became the mayor of that hometown of 3,000 in Canova,

02:22 and he became known as something that other mayors hadn't done.

02:26 He rode the sanitation trucks every week.

02:29 He would ride with the drivers as they picked up the trash in the city.

02:33 And I asked him one day, I said, "Dad, why do you ride the sanitation trucks?

02:36 Why are you not in the office?"

02:38 He said, "Son, first of all, this is the best way to get to know your team.

02:41 You ride eight hours in a truck with someone, you learn about their family,

02:44 the things that keep them awake at night, and you learn about how you can help them.

02:47 And the second is there's no better way to know your city

02:50 than to go down the back of the alley, not in the front where everyone has it all spruced up.

02:54 So I know where the real problems are that we can help solve."

02:57 So when I got to Pepsi, I became known as the young district sales manager

03:01 that rode the routes with the drivers.

03:03 And when they called in sick, I delivered the soft drinks in the snow.

03:07 And at the end of the day, they always remembered that I was willing to work with them.

03:10 And so when we had sales contests, we won every time.

03:13 Not because of me, but because the drivers knew that I was in it with them,

03:17 and it ended up helping my career because I simply served them.

03:20 And in return, they did great work.

03:23 After rising to the role of Senior Vice President of Marketing and Business Development

03:29 over seven years at ADP, Smith joined Intuit in 2003

03:33 as Vice President and General Manager of its Accountant Central and Developer Network.

03:38 Just five years later, he was running the entire company.

03:41 Smith inherited a 25-year-old business with really tremendous brand equity

03:46 whose TurboTax and QuickBooks software products were beloved by individuals and small businesses alike.

03:52 But few could have foreseen its radical transformation over the next decade.

03:57 Its market capitalization soared almost sevenfold to $51 billion,

04:01 and revenues nearly doubled to $6 billion by 2018.

04:10 So when I joined Intuit, I had the opportunity to join the accountants' business

04:14 in Dallas, Texas, and Plano, Texas.

04:16 The company was known as a leadership development factory

04:19 and started out in the accountant business.

04:21 Then I was asked to go to TurboTax and lead that business in San Diego.

04:25 And then I was asked to move up to QuickBooks, the small business division,

04:28 and lead that business.

04:29 So over a five-year period, I'd had a chance to see all the corners of the company at that time.

04:34 When I was then asked to step in as CEO, and they announced it in August of 2007,

04:39 that I would take the role in January 2008,

04:41 I knew that I had the privilege to serve an iconic company that had a strong foundation.

04:46 But candidly, in 2008, there were a few things happening.

04:49 The first was we had started to see social platforms like Facebook

04:53 move off of the education campuses and move into the dot-com world.

04:57 So you had this notion of social.

04:59 The second is Steve Jobs had just released the iPhone.

05:02 So this move to mobility and mobile became big.

05:05 And then ultimately, because of the cloud, we were starting to see local markets become global.

05:10 So we stepped back and said, "We're going to be the same great company we are,

05:14 but we're going to lean in to being more of a connected services company."

05:18 An analyst told me Brad understood the power of the cloud early on

05:21 and not just on the application side for their tax and QuickBooks businesses.

05:26 He also shut down all their own data centers

05:28 and moved their data to Amazon Web Services and Google Cloud,

05:32 which really positioned them well to take advantage of AI now.

05:35 Intuit's billionaire founder, Scott Cook,

05:38 told me that Smith's impact on the company goes beyond business results.

05:42 Cook called Brad "the ultimate servant leader"

05:46 and told me that Brad had changed the lives of the company's customers and employees' lives forever.

05:52 When Smith left Intuit in January 2022, at the height of his career,

05:56 the company etched his signature phrase, "Work hard, be kind, take pride"

06:00 in stone on the face of its headquarters, which was recently renamed for Smith.

06:04 We had developed a balance scorecard where it was employees first,

06:08 customers and our community second, our shareholders third.

06:11 And I began to tell the stories about why, because everyone saw it clinically,

06:15 but I don't think they really understood it ideologically.

06:18 So we said, "If we were a human body, the employees are the oxygen, they're the air.

06:23 The body can only make it about three minutes without air and it begins to shut down.

06:27 And then they go to customers and communities. They are the water.

06:31 You can make it about three days, but then the body starts to shut down.

06:34 Then ultimately you have the shareholders as a public company.

06:36 They own the company, but they're the food.

06:38 You can make it two or three weeks and the body shuts down.

06:40 So you have to serve all of them.

06:42 But it begins with employees first who are there with one purpose in mind,

06:45 to do amazing things for customers and their community.

06:48 If you have great employees who are fired up and you've supported them and you've taught them,

06:52 they'll do unbelievable things for customers and communities,

06:55 and as a result, the shareholders will win.

06:57 So we became an employee-centric company with a purpose.

07:01 And our purpose was the power of prosperity, to fight for the overlooked and the underserved,

07:06 to help those who struggle to make it paycheck to paycheck,

07:08 which was a story that many of us grew up with.

07:11 And we could be the ones that could be their champion.

07:13 And that's what really bonded us together.

07:21 Brad's sudden move from Mountain View to the Mountain State really shocked many in the industry.

07:27 But to those who knew him, it really made sense,

07:30 because they'd heard him reminisce about West Virginia over the years.

07:34 Smith and his wife, Elise, a lawyer from Ohio with a shared love for Appalachia,

07:39 founded their education, entrepreneurship, and environment-focused

07:42 Wing to Wing Foundation in 2019.

07:45 But their philanthropy in the region goes back even further.

07:48 Just since 2015, they've donated $35 million to Marshall to establish a scholarship

07:53 that gives preference to first-generation students from West Virginia and Ohio

07:57 and to transform its recently renamed Brad D. Smith Schools of Business.

08:01 So first of all, when he stepped down, we thought,

08:08 "Wow, we'll finally have an opportunity to spend a little more family time."

08:12 Well, that's just not the case, because Brad is a workhorse.

08:16 He's wired to work. He would do coaching, executive coaching.

08:21 He would coach entrepreneurs, and he would do that 12 hours a day.

08:26 But he was unfulfilled.

08:28 And then he got a call from several people, actually, saying,

08:32 "Hey, would you be willing to consider becoming the president of Marshall University?

08:36 You know, the job's going to open up."

08:38 And at first, he thought, "Oh, no, no, no. This is not something I'm interested in."

08:44 So he mentions it to me when we're in South Carolina.

08:48 We're taking a walk on the beach, and he mentions it.

08:52 And I immediately said, "Oh, no. I'm not going to West Virginia.

08:57 I mean, I love California."

08:59 And then we decided to go through the whole pro/con thing.

09:03 We decided, "You know what? Let's give this opportunity a real shot."

09:08 And ultimately, we just decided, "You know what?

09:11 You're not happy doing what you're doing, Brad.

09:14 I've been looking for something that makes me feel that I'm doing what I was meant to do,

09:21 and here's that opportunity. Let's just do it."

09:24 The couple also has an outdoor economic development collaborative named after them

09:28 at rival West Virginia University, thanks to a $25 million gift in 2020

09:33 that's being used to recruit and retain talented out-of-state workers

09:37 and to develop outdoor recreation resources in the area.

09:40 Clearly, we want to focus on Appalachia because Appalachia is both overlooked and underserved.

09:48 And that is the community that we want to focus on because very few others do.

09:53 You know, all the VC firms in the country focus most of their money on California, New York, and Boston.

10:01 And the people in Appalachia are every bit as bright and talented as anybody in those locations.

10:09 We can do everything that they can do, and quite honestly, maybe better.

10:14 And so we decided that we would focus our energy and our money

10:19 on helping people in Appalachia have greater opportunity.

10:23 And we chose these three areas because we think they're the great equalizers, particularly education.

10:29 It's by far the great equalizer.

10:32 It can raise anyone up to do whatever they dream of in their lives.

10:37 [Music]

10:43 There is a period of reinvention happening at higher ed right now.

10:46 You have the enrollment cliff coming.

10:48 Fewer high school seniors will be graduating starting in 2025.

10:52 That number is going to go down 15% a year across the country.

10:55 You have fewer high school seniors who are now also less likely to go to college.

11:00 And so the number of those that want to go to college is decreasing by 12%.

11:04 You've got digital transformation.

11:06 You have all these amazing things like ChatGPT, or you have Khan Academy, or you have Coursera or YouTube.

11:13 So all these alternatives to learning.

11:15 And so it was a chance to step back and say, "How can we as Marshall University

11:19 hold on to the 186 years of things that we've done,

11:23 but embrace the new ways and be the platform for the 21st century?"

11:27 And so when I stepped in, we facilitated a process across the campus.

11:32 38 listening sessions, 1,000 people, 1,200 ideas.

11:36 We engaged with two outside firms, and we began to explore the best practices all around the globe.

11:42 And we developed a strategy that we're now following called Marshall for All, Marshall Forever.

11:48 Marshall for All, Marshall Forever is focused on a value proposition that has three components.

11:52 Affordability, flexibility, and achievement.

11:58 Since 2007, the average college tuition has gone up 10% a year, and student loan debt has grown 45%.

12:07 That's become a barrier to a lot of people who need access to a college degree.

12:11 So we're tackling affordability. I'll talk about how in a minute.

12:15 The second is flexibility. Many students today are non-traditional students.

12:19 They're working adults. They may have dropped out for a period of time.

12:22 They may have a kid. They may have a full-time job.

12:24 They can't come to class in the middle of a work shift.

12:28 So you need to basically be able to have a flexible work schedule and a flexible class schedule.

12:32 And then the third is achievement.

12:34 They want to know that they're going to have the ability to get a degree or to get a certificate

12:38 and then have that translate into some sort of earnings potential.

12:42 So Marshall for All, Marshall Forever is that we're going to have an in-demand curriculum

12:47 that teaches on-demand classes.

12:49 So you can take them online, you can take them in a classroom, or you can take them in a hybrid environment.

12:54 And we've chosen where we're going to be distinctive.

12:56 Our goal is for individual success, 100% of our students will graduate.

13:01 They will get the career of their choice, and 0% will have student loan debt.

13:06 So our first promise is 100% placement, zero debt.

13:10 The second promise is we're going to take our research, our grants and contracts

13:14 that advance innovative ideas from today's $65 million to $150 million.

13:20 And in doing that, we want to increase the number of small businesses getting started in our state by 3x.

13:25 And then economic impact.

13:27 Today, Marshall, for every dollar the state invests in Marshall, we give them a 14x return.

13:32 Our goal is to make it 30x. That's $2.5 billion.

13:36 So we've set those True North goals, and everyone here is fired up.

13:40 And to let you know it can be real, we just admitted the first 100 students this fall

13:45 on the guarantee that they will have a job and no student loan debt.

13:49 The thing I was most struck by in talking with Brad and doing my reporting

13:58 was just how personal it is to him, and it comes across as totally authentic.

14:05 He talks about believing there are as many geniuses there in West Virginia

14:11 as there are in Silicon Valley, and he gave up a lot to go back and do what he's doing.

14:18 West Virginians have always answered the call.

14:22 We've mined the coal. We've forged the steel.

14:25 We've built the roads. We've built the trucks. We've fought the wars.

14:28 When our president said we want to have a man on the moon,

14:31 we produced Homer Hickam and the boys in October Sky that built the first NASA rockets.

14:35 And then when we needed that astronaut home,

14:37 we produced Katherine Johnson and the Hidden Figures and brought them home.

14:40 And for a while, people told us we didn't belong, and we believed them.

14:45 I don't. We do belong.

14:47 We've got another chapter, and we're showing the world who we are.

14:50 [Music]

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