Derek Smith: The Idea Guy

With clients such as Netscape, Toshiba, 20^th Century Fox Film, and Meta Platforms (formerly Facebook), Derek Smith has taken a career path most people would describe as non-traditional for an aerospace engineer. He says “moments of exposure” to aerospace topics and a continual undercurrent of math and science contributed to his successful career outside of the aerospace industry.

Smith was born in Chicago, attended elementary school through junior high in Washington, D.C. -- which included numerous visits to the National Air and Space Museum—then returned to Chicago for high school where he was accepted into the Academy at Lincoln Park High School.

He points to several “wow” experiences that led him to major in aerospace engineering at the University of Illinois Urbana-Champaign, one of the first being his dad taking him to O’Hare Airport as a child to watch the planes take off and land. Later, he developed a love for assembling model airplanes and rockets.

“When I launched my first model rocket, I thought it was so real, so lifelike. It had noise and smoke and looked like it was going to space,” Smith said. “Then one day in elementary school, I saw a sign that said, ‘Hobbies make great careers.’ I came home that day and asked my mom, ‘For somebody who makes model airplanes and rockets, what is that career?’ She told me it would be an aeronautical or astronautical engineer. Go look it up. We had an Encyclopedia Britannica, so I did.”

The sign Smith saw at school was an advertisement for an upcoming career fair, which he attended. Although there weren’t any aerospace engineers there, he did find a civil engineer. “I told him what I was interested in and asked him what I needed to do to make that happen. He said to focus on math and science. I also asked if they get paid okay. He said they do.”

Another wow moment came when Smith accompanied his mother on a trip to the Kennedy Space Center in Florida where the Columbia Space Shuttle was being fitted with its external tank and solid rocket boosters in preparation for its first flight.

“I remember looking through the glass, and it was just, wow. Right? Wow.”

When the time came to look at colleges, Illinois was on his list, but so were MIT and Stanford. Because several UIUC professors graduated from MIT and Stanford, Smith said he knew he could get an exceptional education at a top-tier public institution.

Smith earned his B.S. in 1991 and immediately started working on his MBA at Tulane University. His move away from aerospace and toward the business world began with a summer internship in Chicago with the tax company Arthur Anderson. He was part of the IT group there and began learning Fortran and Pascal. At the same time, he took classes in liberal arts subjects at Truman Community College.

“I’d leave my internship and hop on the train to go learn about architecture and art history. I wanted the binary ones and zeros from engineering, but I also wanted to understand the shades of gray from liberal arts,” he said.

Smith eventually took enough classes at Illinois for a minor in economics. An interest in systems engineering started taking shape, but before pursuing it, he asked people questions.

“I learned a lot of people in systems engineering reported to people with MBAs. I didn't want to have a ceiling on myself. I wanted the respect of those making the decisions as well as keeping the door open to me being one of those folks making the decisions.”

While at Tulane, Smith had another internship in a new division of Arthur Anderson where he was introduced to consulting and found he liked it. He moved to California to begin consulting aerospace clients but was soon moved to consumer products and logistics. One of his clients was Burlington Air Express, whose competitors were FedEx and UPS.

“FedEx had come out with barcode scanning, so I developed a barcode scanning program based off of the technology I learned from U of I and the X-based languages I taught myself as an intern.”

From there, Smith volunteered to help build out a new clientele in the entertainment sector. His first big client was Geffen Records.

“I had learned about the Internet at U of I. Marc Andreessen was one year behind me there. I decided to take what I learned in logistics, pick/pack/ship, and figure out how to take a physical supply chain and make a digital supply chain. I built one of the first digital distribution platforms for music. I built it using Beta technology from Microsoft, who said it was the most advanced application they’d ever seen using their technology.”

They began promoting artists on the new platform when rather suddenly Universal acquired Geffen and decided to sell CDs instead of MP3 files.

“They put the program in a closet and Napster showed up two years later. That’s when I transitioned into filmed entertainment and technology.”

Smith became seen as someone at the intersection of content and technology, using his supply chain background for creative ways to solve problems all over the world. Soon he was spending 90 percent of his time launching new digital products in London, Brazil, and India.

As a new husband and parent, Smith wanted to be closer to home. He left consulting and took a job as studio executive at 20^th Century Fox Film and was eventually put in charge of strategy.

“It was about looking at emerging technologies and processes. How can they be applied in new ways? How can we take lessons learned from other sectors and apply them to the work of the studio?”

The first year, Smith saved the studio $45 million and $35 million the second.

“The studio wanted to rebuild the physical vault where film is stored. They were making thousands of copies of films every week and shipping them to screens. I told them I could get rid of that entire process by digitizing it. After that, I was known as the idea guy.”

The idea for digital distribution was recognized in 2015 by Information Week Elite with a feature saying it was in the top five best ideas to steal.

Smith also created an internally managed service that could handle their global film, television, and home entertainment products. After 10 years, he decided to return to consulting entertainment companies at PwC with clients such as Warner Brothers, MGM Studios, and Lionsgate.

The company wanted to develop more clientele in technology and asked Smith to come up to the Bay area to work with Facebook. He was soon tapped to move up and is now responsible for all the technology work globally for Facebook, now Meta.

His other client is HP, for which he manages a strategic relationship.

“If I see something that I think is going to be a challenge or an opportunity for them, I approach it proactively. In other cases, they may come to me with something they’re concerned about and ask me to come in and help. For example, some of our clients are launching products and I can see that they won’t make the holiday window without updating their supply chain strategy. Or they might be trying to cut costs and I need to tell them, ‘It’s not about cost cutting. It's about cost management. If you keep cutting costs sooner or later, you won’t be able to run the business. I’ll show you a way to manage costs and reinvest the savings to drive growth.”

Smith said a scene in the movie “Apollo 13” resonates with him.

“There’s a certain scrappiness that I love about aerospace engineers, like when the Apollo 13 astronauts were stuck and the engineers back in Houston sat around a table with all the stuff the astronauts had available to them and said, we have to figure this out. That’s consulting.”

Smith has served on the department’s Aerospace Alumni Board since 2021. He said he wanted to serve as one way to give back, as well as an opportunity to bring diversity to the board.

“I wanted to bring diversity, but not in just the typical ways of ethnicity, race, and gender. I wanted to bring diversity in thinking.”

As an example, he said he had an idea for a product when he was in grad school but needed some physics to make it work.

“The product used suction cups and I needed to determine the right amount of downforce. When I talked with a physics professor about it, he said the device would only work for about 30 minutes before it would need new cartridges. He said, ‘Son, it won’t work.’ But I told him, ‘Sir, I'm not selling the device. I'm selling cartridges.’

“That’s when I realized my business mind and my engineering mind had kind of caught up to each other. And that’s the kind of thinking I can contribute on the board. I can help explore how we differentiate ourselves from other universities. How can we take it to the next level?”