How the founder of advanced analytics company SAS went from being a mathematics lecturer to become a successful entrepreneur.
Nowadays you will hardly find any major company that does not try to draw benefits from analysing data on itself, its customers and its competitors. And while it is widely supposed that the trend towards (big) data analysis arose from the surge in Internet use, Jim Goodnight, a mathematics lecturer from Cary, North Carolina – a small city in the middle of nowhere, you might say – had already anticipated this revolution forty years ago and set up a firm called Statistical Analysis System (SAS), specialising in data analysis. This analytics pioneer built up his company without ever leaving North Carolina and without bringing in any outside investors. SAS now has an annual turnover worth $3 billion, employs 14,000 people worldwide, and has customers in 148 countries.
Now North Carolina’s richest man, Jim Goodnight has put his small corner of this state located on the southern stretch of the US Eastern seaboard on the world map. The area which hosts the SAS headquarters today boasts an international airport and is home to a number of technology firms, inter alia the US headquarters of Chinese multinational computer manufacturer Lenovo, which is the world’s third largest producer of mobile devices. How did all this come about?
North Carolina’s own ‘Silicon Valley’…
An American dream-come-true, with a difference
Everything began back in 1976, when Jim Goodnight was working on productivity surveys in crop-growing fields. This was in fact a task traditionally undertaken by the university mathematics faculty but Goodnight realised that real added value could be obtained by industrialising the process and suggested to the University of North Carolina that they should offer to provide this type of survey service to all farm businesses. However, the university authorities felt this was not appropriate and they simply suggested that Goodnight himself set up a company of his own to exploit this analytical work.
The 30-something university mathematician thus became an entrepreneur, founding his own company over fifteen years before the advent of the World Wide Web and the subsequent emergence of Big Data. This story of the maths teacher working in a farmer’s field can hold its own alongside the famous tales of iconic US entrepreneurs who started their businesses in their parents’ garage in California or their dormitory at Harvard before they had turned twenty. Here is yet another powerful American dream-come-true but this one happened in the heartland of the US, in a southern state far from Silicon Valley, Wall Street or Massachusetts.
One of the 23 buildings on the SAS campus in Cary, North Carolina
A pioneer in the Big Data ‘gold rush’
It is often said that during the famous California gold rush, those who became rich were not the people digging for gold, but those who sold spades. This may be a fitting analogy for Jim Goodnight, who creates the data analysis tools with which some 80,000 companies, governments and universities worldwide are now equipped. And he is now doing better than ever with the surge in the volumes of data being produced by digital tools and the general awareness of just how valuable data can be for companies.
Jim Goodnight nevertheless takes a rather sceptical attitude to the notion of Big Data, pointing out that the data takes on value only when it has been analysed, not from the fact of being ‘big’. Meanwhile, on the back of the growth achieved by SAS in Cary, the state of North Carolina has created a technology park designed to attract technology and pharmaceutical firms, including international giants such as Lenovo. Interestingly, at the entrance to Lenovo HQ in North Carolina, there is a photograph of a former church which now houses a data centre complete with servers, almost as if computing were a new religion, whose prophet is the SAS boss.
A Data Centre housed in a former church. Is data analysis the new religion in North Carolina?
North Carolina has developed the Research Triangle Park inter alia with a view to providing local opportunities to graduates of the three major universities in the area – the highly-reputed Duke University, the University of North Carolina at Chapel Hill, and Campbell University. Just as Silicon Valley owes a lot to Stanford and, to a lesser extent, (the University of California) Berkeley, the purpose of the North Carolina technology triangle is to create synergies between the academic and business worlds. In fact SAS ploughs close to a quarter of its profits back into research and development.
A ‘utopian’ company
The SAS founder, now 73 years old, is unusual in that he is still personally running his company. Moreover he manages his company in a very distinctive manner. At Cary he has created a campus which is just as impressive as those at Apple, Google and Facebook, with 23 buildings, accommodating 6,500 people, schools, a nursery school, gyms, canteens, a hospital, a pharmacy, health insurance, bus routes and even a solar power farm which produces 10% of the campus’ energy needs, plus a flock of sheep deployed to munch-mow the lawns.
The new buildings are all constructed with energy economy in mind and such ecological features as green walls and planted roofs. This is a sort of city within a city, based on utopian ideals, a modern American version of the workers’ housing estates once in vogue in several European countries but this time for white-collar computer engineers and statisticians.
The SAS campus is equipped with solar panels to provide power for the offices, plus sheep to mow the lawn ©SAS
The ‘community’: an American ideal
Patrick Xhonneux, SAS Vice President, Marketing for EMEA, explains that the company’s whole social strategy, e.g. the schools, and having a hospital onsite on the campus, has been inspired and driven by Ann Goodnight, the wife of the SAS founder.
A multifunctional campus of this kind might make some people uneasy, or even give them the uncomfortable feeling that it is home to some sort of cult. However, this idea of a community is something that is dear to the hearts of many US entrepreneurs. Moreover, the community ideal stresses ‘togetherness’ and ‘unity’ rather than being narrow, divisive or exclusive. It is this thinking that enables Mark Zuckerberg to say that Facebook members are “part of a community of a billion and a half people”.
SAS staff in action – during aquatic gym courses offered by the company ©SAS
The United States also has a strong tradition of successful ‘captains of industry’ wishing to ‘give something back to the community’ – a notion of personal philanthropy which contrasts with the social and political philosophy prevalent in many European countries. Europeans tend to believe that the firm and its boss should ‘give back to the community’ by paying their taxes, in subservience to the power of the state which is the main guarantor of equality among citizens. In the United States, however, a land of pioneers whose primary value is ‘liberty’, the mainstream thinking is that wealthy people should give back to the community through their own private and personal initiatives.
This dichotomy can be seen in the approach Facebook takes to its tax obligations. The company has been much criticised in European countries for the steps it has taken to optimise its tax liabilities while at the same time founder Mark Zuckerberg has promised to give virtually his entire fortune away to charity.
In the same vein, SAS and its founder have been criticised by some European observers for intervening in the private lives of company staff and for its closely-entwined relations with the local authorities – there is for example a street named SAS and City Hall uses SAS software to optimise its energy spending.
Jim Goodnight v. Steve Jobs
Unlike Steve Jobs, Jim Goodnight has never been fired by the company he created, one reason being that he has always kept a controlling stake in the company. Nor is he known to have a Jobs-like tyrannical management style or to have actively promoted a personality cult. There are no portraits of Mr Goodnight on the walls at SAS, no biographies have been written or biopics made. In contrast to Steve Jobs, his genius does not stem from intuition or design sense but from his powers of reasoning and his firm belief in the value of data analysis. However, rather like Steve Jobs, he apparently had an entrepreneurial revelation in an apple orchard. Like Steve Jobs, Jim Goodnight is also a visionary pioneer who succeeded in reinventing his industry, although his business, a B2B venture, does not operate in the full glare of the spotlight.
Steve Jobs (l), Jim Goodnight (r)
Nevertheless, just as Silicon Valley owes a lot to Steve Jobs and Apple, North Carolina’s Research Triangle Park owes much to SAS and the almost-unknown entrepreneur who founded it. Moreover Jim Goodnight also serves as a counter example to the modern myth of the young startup entrepreneur who sets out to change the world by raising billions in capital before making a dime of profit – or even sometimes without seeing any turnover. This former university teacher-turned-entrepreneur, now well over 70, has been running his business in a highly responsible manner for decades without having to put the brakes on growth and is the leading pioneer in an innovative field – data analysis – which has now become an unstoppable trend.