Altair CEO Jim Scapa on the Most Loved Workplace Leaders Show

Great to be here with Jim Scappa here. He's the CEO and founder of Altair, and what a pleasure it is to be here with you today. Wow, a founder of Altair, the founder. It's nice to see you, Jim.

Nice to see you as well. You just got quieter than you were before, so now I have to make you louder.

Well, I, I can get really loud, but for different reasons.

Oh, all right.

So, uh, well, this is No, we have to keep emotional regulation, which is exactly what we were just talking about. And Jim and I were talking a little about, about being founders and keeping our emotional regulation and how we can enable that most loved workplace, really. And how being at a most loved workplace and leading in a most loved workplace is one and the same, really, right? We're in it and we're leading it. And as a founder, Jim, I'd love to hear more about your story. As a founder of Allupair. How did it start? How did you get to that level of success where you founded and you had that idea and it germinated and became really truth?

It sounds very exciting, but it's more prosaic than that. But let me give you my story a little bit. So I grew up in New York City. I went to Columbia, came out to Michigan. As an engineer in the auto industry and pretty quickly saw I'm not a really big company guy. I'm very entrepreneurial and got an MBA at Michigan mostly at night and then thought I'd go back east to work in a venture capital firm. I had these notions, I was very young and saw the opportunity. I was involved with a new area of computer simulation and saw an opportunity to start a company. Started a business, $1,500 of startup capital. So nothing like what you see these days, especially on the West Coast. And primarily as consulting business in the beginning. Very quickly was developing some of our own software. I've always been kind of on the software side and had a big, had some failure, failure really important. And then I had a very big success with one product called HyperMesh, and I began to take that internationally and continue to reinvest through the success of that product as I went international as well and continued to bring some new products out. So that's, that's really the story of Altair. You know, little by little, I think I've just brought a lot of great people on the team. It's a culture that I think we just closed on a very small acquirer this morning, tiny company in India, 17 people, almost no revenue. But I had brought my C-team on the call this morning very, very early this morning just to meet the new people that are coming in. And, you know, listening to my own team members, you know, talking about how long they've been with the company and how people don't really leave that often. You know, it's just been a very, very nice ride for many years.

So you mentioned people don't leave. You know, that's huge. Tell me more about what leads people not to leave. Why do they stay?

So I've had kind of the same 4— I'm really boring. So I've had kind of the same 4 key points to our key value points, if you will, to our culture for many, many years. And the first one is we're thinking about the future. I say we envision the future. And then we make our decisions in the context of that longer future, you know, step by step. So I think we're always looking out there and I think that's exciting and fun for people. The second one, you know, I think is that it's— everyone talks about being honest and, you know, you've got to have an honest culture and we are very honest with each other and with customers as well. But one of the things that I really push hard is this idea of broad communications and what that means to me. I've worked in some big companies very early and politics kind of creeps into a company when you have, you know, this, you know, Louis Carter decides I've got some information I want to share with Jim. But Amy doesn't need to know that, so I'll leave her out. And, you know, Gilma, I don't know if she needs to know it. And I really fight that. So I have these broad email groups. We try and really communicate broadly, internationally as well, about what we're doing wrong, about what we're doing right. We cheerlead a little bit broadly as well. We talk about the challenges that we have in the market, all of that in a very broad way. And I think it makes people feel included in what's happening. And so I think that's a very powerful idea as well. We're always looking for new technology and new business models, and we're experimenting a lot. And then the last thing I think in Altair that's pretty powerful is this idea of— everyone talks about diversity today, but I'm telling you, it's over 30 years I've had the same points to the culture. It's to really embrace diversity. I was on several calls just in the last day or two, and even I'm amazed. I'm looking at the leadership of my team, and it's, you know, there's a guy from Germany, a guy from Italy, a guy from France, a guy from India, a guy from China, a guy from Japan. And this is just the solver team leaders, you know, on the tech team. And so we're so broad and international. We're so diverse and it's throughout, it's top-down really. And I think that is super powerful. We weren't as good on the gender side. And I've been— I have all daughters, by the way, two are engineers, one's a lab animal vet. And so I really have pushed this gender aspect of diversity as well in the last 10 years. And I think it's really taking root. And so diversity is big. And then finally, we just take risks. I like to experiment. I'm always reorganizing. I'm always, you know, trying. And there's a lot of resistance internally very often. And sometimes it's quite a failure. But very often these things, we learn from them and just quickly pivot and move on. So that's in a nutshell what I think are my key reasons why this, this business works and why people tend to stay. Not everybody stays, and by the way, we kick people out too. You know, I— we are not afraid if someone isn't fitting or isn't measuring up. It's a very, very, very high-caliber group of people, but we're really nice about it. Even when we're kicking somebody out, You want to treat people with respect and, you know, it wasn't a fit for them. But we're not afraid to do that either. We recognize that we have to do that if people aren't fitting right. So it's all that. So probably more than you wanted to hear.

I love all three concepts. The idea of broad communications, transparent communications, giving people the idea that they can Well, that's just the idea that they can be honest and open and you can help them to know if it's not the right place for them. And the diversity as well that you're describing, not just geographic, but also culture and background, ethnicity, communication. So many different factors come along with, with, uh, with, uh, diversity. And you aspire to have a workforce of 50% female, including C-suite and board. Tell us more about that. That's incredible.

Yeah, I just think it's, it's part of the whole diversity element. You really want the perspectives. It, to some extent, I see it as the power of the U.S. My parents were immigrants from Greece in the early '50s. Um, you know, I see the power of the U.S. historically as this idea of diversity. Actually, I think You know, some people are fighting against it now and whatever, but you know, that is the historical difference. You know, if you go to Japan and it's, you know, fairly monocultural, if you will, of course that's changing too. But, you know, that diversity of thinking is very important. And, you know, having women in that mix, is just so important, I think. And not just tokenized, there's so many amazing, if you go to the very top technical universities, Columbia where I came out of and I'm very active with, but most of the really top technical universities are 50% women at this point. And as you go down, it's less so actually, believe it or not. And as you go down, you see women entering in freshman year and dropping out after a year or two because what's important is that they see the professors, you know, there's the people to aspire to need to be women as well, which is why you need the top-down, bottom-up. And so yes, I'm a huge believer in that gender diversity.

And that's really what you've aspired to here is, is it's C-suite and board. It's both. And like you said, top-down. And the competencies, the behaviors that you have now are inclusive. And that's, that's what you're creating to be a most loved workplace is an inclusive culture. And that respect that you also spoke so much about is such a a critical keystone, really capstone and keystone feature of being a most loved workplace.

Thank you.

Tell me more. I always like to know, especially from founders, you know, sort of how, how is it that sort of, you know, there are things I'm sure you could teach people right now and me as well as a, you know, as a founder. And I'd love to know sort What are there things that you would sort of never do, right? And why? What are those things to help people to know really what should they not do and why is it that they shouldn't do it, right?

I'm not sure I know exactly what you should never do. And I'm quite certain that I'm not, I'm super far from, I make so many mistakes, it's crazy. But I think you want to— certainly when you do make a mistake, you want to be very quick to admit it, to, you know, talk about it in an open way and to just move on from that and to learn from that. So I don't know about what you should never do. I think you need to be listening. A lot to people and listening actively. You know, a lot of people listen, but their own ideas are like rumbling around so fast that they're not really actively listening. And I think it's super important. People want to be heard. You really have to very actively listen, and you're obviously terrific at that. That's what, you know, that's what makes you good at what you do.

I like what you say about active listening, right? And how we're hearing each other and we're responding really to the nature and the sensibility and what we're feeling as well from what you said. And I heard the respect for what I do as well. I'm hearing and understanding too how you're saying that we need to hear and we need to also be mindful that we sometimes need to apologize, say I'm sorry, and say that was— I'm— I take responsibility for that. And that shows leadership. And then next time, I will do this better. Here's what I can do, and follow through on that, really, and saying this is what I can do, will do. And then that accountability, that trust, that respect forms even more next time.

Yep.

Other thing, here's another one that I love asking. This is one I love asking, which is, you know, what is that biggest mistake you made? And how did you correct it? These are not easy questions, by the way, they're hard. And but people really want to know about it, because they, you can really, for, you can really connect to somebody who says, I get it. I've been there. I've done it. I want to know how to do it better, especially from people as successful as you are. Do you have that sort of biggest mistake you made? And how did you correct it? Because mistakes are welcome, aren't they? Right? They're, they're, they're, they're things that help us get better, we improve next time.

I don't know that I want to pick a specific one out. I've made so many— I've made more mistakes than you can imagine because I really am an experimentalist. I've reorganized 100 different ways. And, you know, one of the things that I've found is, you know, something that doesn't work today, very often, you know, we all tend to say, well, I've had that experience because we're products of our experience. I did that. That didn't work. That'll never work. Right. Actually, very often something that's not working today, you need to like take it back out again and look at it again and decide, because in this sort of changed set of circumstances further down the road, that idea actually may have legs now. And so I think that's super important. I mean, most of the mistakes that I've made are around people. Quite honestly, I've opened offices in 26 or 27 countries, and I personally, I used to travel, visit each market, each country, spend a good deal of time there, meet a lot of people, customers and resellers and others. And then I would identify who I wanted to lead that market for me, and I would recruit them and bring them in and raise that whole thing. And I've made some mistakes on some of those and had to correct those. I've had people who stole and cheated us. And, you know, we grew up as a private company and maybe there were some fewer controls, and I've had to remove those people. And, you know, in some cases, but I, in general, I personally, I think I'm a pretty good judge of people, but not always. And people change as well.. But in general, I think you really— I believe I have to trust the people who work for me a lot, and I do, and I trust them with a lot. And I think if you trust people, they give back way more than that. When they violate that trust, I'm pretty firm about it. I'm not good with people who violate that trust, but I don't want to spend my life policing people in any way at all. I'd rather trust them, give them the tools, the power to get out there and innovate and be creative. And usually they just return that in such great ways. So I don't know if that's the answer to your question. It's not, but sorry.

It's a great answer to the question. And I hear this so many times from founders especially. You know, about, uh, you know, we have to find the right people. And then when we do find the right people, we believe they are, and we give them the trust, and then they take away that belief that we can trust them. What do we do now? What do we do now? And we've lost, they've lost, um, and, uh, it's a lose-lose situation. And I really like what you said. It's important to be firm. Important to be firm. And perhaps, you know, I would say a mistake I've made in the past too is the firmness and the inability to, or my inability, I'd say for myself, to say that's not the right person for this. To not know it was coming. And not know the nuances of their behavior. Because we can have people that we knew, maybe, you know, for you, Columbia, back in your days, right, you knew you had your friends and people you knew and you went to class with and you know how they behave by and large, and right, or you had your, you know, Friday nights, Thursday nights when you all went out together and you got to know them. At this, so at this, when you're with 3,000 people and you have a board and you have people all around you, you can't see around the corners as well. It's hard to see around the corners. And having trusted advisors, people who can poll and see what's around you, uh, when you can't, is essential. Uh, sounding boards. Um, and, you know, so important, right? Right, Jimmy? Isn't that— that's really what we're talking about here.

Of course.

Yeah, it's not, it's not easy, an easy place to be. And it's great to hear and see your success. It's wonderful. Success does not come without a price, does not come with a price without the change that you've gone through personally, professionally, deep, deep change. And I don't think a lot of people understand that. They just think, oh, he's the founder, he's done incredibly well, he's successful. Oh, you know, great job. They're jealous in some way. No, Jim worked really hard for this. He worked on himself. He worked on understanding others. He, at times, was unable to trust people because they didn't earn it, right? It's not easy to succeed. It is not easy. It is a painful process.

Well, that is very, very true. I, you know, I've had to change, you know, started basically with a couple of people and we've grown, you know, to a pretty large business, publicly traded. And I personally have had to morph from being you know, a leader in my 20s of a very small team and, you know, up to 50 people, then to 100 people, then to 500 people. And at every stage along the way, the business needs to change and I need to change as a leader. And then, you know, I had a lot of people tell me, don't take the business public, Jim, you'll hate it, you know, all of that. But, you know, I enjoyed that challenge and I enjoy that challenge because I love change. And I, you know, I actually enjoy the aspect that I have to do things differently and trying to keep as much the same, but still respecting the new rules of being a public company. So yeah, absolutely. I'm a really fortunate person though. You know, I mean, I have amazing family. I have 5 daughters and 5 granddaughters and we're very close family and the business is so successful and the culture in the business is very, very warm even at our size. You know, it, I think, would surprise a lot of people. Of course, thank you for the award. So somewhere, somebody noticed. But yeah, I feel very fortunate.

It's important too to have gratitude for our situation, to have gratitude for who we are and where we're at and our family, and to know that we can help others as well in that process, to pay it forward in many ways and to be— to create that culture for others so they themselves can prosper. That's a recipe for success.

Yeah. Within Altair, when we IPO'd, we had about 800 people who had equity in the business. A lot of founders will hold on to all the equity, but I really distributed a lot and we continue to do that. And it was super gratifying to me. I mean, there's many, many millionaires and multimillionaires who have come out of this. And for me, it's such a pleasure that these people who supported me during those years have really been rewarded. And I've had so many tell me it's transformed their lives. And, you know, they— it's a really, really nice feeling. And I am a very fortunate public company because I have controlling interest still, which is not usual in a public company, but it gives me the ability to balance correctly the long view making decisions sort of in the context of that, envisioning the future and not just the short term, but also balancing it against what the shareholders, these new shareholders need. And I think I've been doing that fairly well.

So you have controlling interest and you're on NASDAQ. It's incredible. A lot of founders with controlling interest, you could do a lot with that. There's Twitter, there's social media, right? And it sounds like you're very responsible. CEO, right? And you have social responsibility. You think about your constituents, your shareholders, and that means a lot. It makes a big difference in how people perceive you and how people perceive your company.

I, yep. Well, I'm not, you know, I'm not as famous as some other tech founder leaders for sure. You know, I've been an experimentalist and I had a lot of patents around business models and one of them covered consumer digital content. And it's a model that I used to sell my software very successfully. But I built a platform that was music, books, podcasts, all of that. We called it Wave, an amazing piece of technology with a lot of machine learning. To create playlists and all that. And we had about 15,000 monthly active users and we shut it down. But had I been the guy, you know, Twitter, you know, using Twitter and social media very actively, if I was, let's say, Elon Musk, that thing would have been killer. So maybe I'm doing some things wrong. Maybe I need to be much more out there and visible. But for me, this is my personality, and, you know, it's worked successfully for me.

Well, like you said, there's always room for change if you want it. It's always a— it's like there's a cost-benefit to change, right? So, and so just depends upon, I think, wishes, choices at that point. Especially at the level you're at. So, Jim Schiappa, really nice to meet you. Really great to interview you. Congratulations on being a Most Loved Workplace. Really great, great to talk with you.

Louis, thank you very much. Appreciate the interest in speaking with me and really appreciate the award. Thank you so much.