477: Why Consistency Beats Recessions with Evan Goldberg of Oracle NetSuite

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2:42Hey, Founder fam. Welcome back to another episode of The Founder Podcast. Today, we're sitting down with Evan Goldberg. He's the founder of the very first cloud software company, NetSuite. After his first failed attempt at a tech startup, he invested$2 ,000 into building a cloud accounting software that eventually transformed into the world's leading cloud-based business management software. Today, we're going to be talking with Evan about building trust in an innovative product, growing NetSuite into a publicly traded company, and what he would do if he started a new business today. This guy's an absolute G.

3:18Please welcome to the Founder Podcast, Evan Goldberg. First question I ask everyone that comes on is how did you get your job, aka how did you find yourself doing the work you're doing today? Well, my first job out of college was at Oracle. They hired like half of the graduating class, it seemed, that was doing computer science or I was actually doing applied math. But that year they decided from our college to hire a huge cohort. So I was one of the many that made the trek across the U.S. to Oracle. Yeah, I see. And then how did you find yourself starting NetSuite? Well, the journey to NetSuite, I mean, certainly began with what I learned being at Oracle.

4:09Back when Oracle was a relatively small company, when it started, probably had about 900 people. It was growing really fast. It was providing great technology. but I felt that in others at Oracle, including Mark Banioff, who started Salesforce.com, who I worked closely with, felt that the technology could be made more accessible to ordinary everyday business users. And that's really what I've spent my career doing, trying to take powerful technology and make it more accessible. So after I left Oracle, I did my first internet startup. That one, unfortunately, did not succeed, but that's my, I guess, mandatory Silicon Valley failure.

4:52But out of that and what I learned from that grew NetSuite. And I actually reunited with Larry Ellison, who was thinking a lot about how applications were going to be delivered in the future, i.e. the cloud that wasn't called that. And I was thinking about how to make business systems that small companies could use to sort of run the bulk of their operations, help them run the bulk of their operations. And so the merger of those two ideas, it was really dreamed up in about a five minute phone conversation, became NetSuite, sort of the net, which, you know, or the cloud, plus the suite, sort of everything you need to grow, as we say, all in one place.

5:34Yeah, I see. So how long were you working at Oracle before you started your first startup, which ultimately failed? Eight years. I started at Oracle in 1987, 1995. For those of your listeners that were alive and reading at that stage, the internet was really the explosion, the year that was really the explosion of the internet. And I wanted to be part of that. And I'd always dreamed of starting my own company. And that seemed like a great time to do it. Yeah. And what can you tell us just briefly what that company was, how long you worked on it, what happened? So that the vision there was to make it easier to make your site interactive.

6:16And that was some of the technology that I worked on sort of towards the end of my Oracle career was interactivity of, you know, applications. And so here it was about interactivity of websites. Our main competitor ended up being Flash. Again, for those of your listeners that remember that, that was a technology that really we ran up against the wall when that was bought by a predecessor of Adobe. And that's sort of, even though we had a great following of devoted users, website builders, ultimately we weren't able to achieve market traction basically because of competition. And it was about three years that I worked on that.

6:58And then I was like, you know what? I want to sell software to businesses because I see how hard it is to run a business and that the tools that you have to run a startup company. I imagine that big companies had great tools that may now, you know, with the benefit of hindsight may not have been true even for big companies, but it was certainly not true for small companies. You had to sort of run everything, you know, like with tied together with shoestring and bubblegum and a lot of different applications. And you had five different customer lists and the applications were, of course, running on people's computers.

7:36So if they were using them, you couldn't get access to them. all those things that we try to overcome, both by making the application available on the internet and making it be one system, one application that you use for all of the operations, tracking all the operations of your business, your finance, your sales, your e-commerce, your HR, et cetera. Yeah. Yeah. Look, for some people, it's still a nightmare because there are too many tools to use and merging them together. We call it the hairball. Yeah. You have a ton of different applications, but one part of your company is bought because they thought it would solve the one problem that they had.

8:14And then you have to try to tie them all together. And that's, you know, for a small company is a tall order. Yeah. So was it hard to leave your job at Oracle? Again, as I said, I mean, my dream had always been to have my own software company. I learned a ton at Oracle. It grew tremendously while I was there. So it really wasn't that hard. It really seemed like the right time. I felt like I had the right experience and I had an idea that I thought was a good one. What was the exact vision in 1998 when you started NetSuite and how has it remained the same all these years? So why? Well, as I said, it was really a five minute phone conversation.

8:57I mean, I, as an entrepreneur, was really focused on where's my next deal coming from? What's my pipeline? How are my opportunities doing? Sort of the Salesforce automation portion of running your business. Larry was very excited about accounting. And I wasn't as excited about accounting, but we talked about it and he really emphasized that we wanted to do the back office first before we did the front office. So were going to deliver an application, but run it on the internet. And that was really Larry's focus at that time, was thinking about how you could run applications. And this is several months before Salesforce.com.

9:43My friend Mark started Salesforce.com, which was focused on Salesforce automation. So really it was very, very early or the beginning of the cloud business application era was right then. On that phone call when we said, small companies don't want going to have to deal with operating systems and managing computers and managing backups. And we really should be able to do it for them. And Larry was quite convinced that that was the way applications were going to be delivered for the next thousand years. He said, I don't know what's happening after that, but that's how it's going to be. So, so far, you know, whatever, 20, 25 years in, he's only got 975 years to go to prove that correct.

10:23And I haven't seen a good replacement for cloud applications yet. Yeah. And you, you got married from a, from, from a research, you got married and had a baby all of that same year. It was quite a year. You know, I play a little golf occasionally when I have time. My handicap shows that, that, to be the case that I don't have that much time, but my golf ball, like custom golf ball that I have says 98 on it because that was a very big year. We not only got married, we moved to a new house in a new town. We had a baby. I started NetSuite. A lot of stuff happened. How'd you stay sane? Yeah, it was crazy.

11:09But if you have the singularity of focus, I guess it's really two focuses and you push everything else out, you can do it. And, um, you know, my, my wife, Cindy was incredibly supportive. She was a believer and, and, uh, she would bring, um, our, our young daughter in, in the wagon to our little office, um, above the hair salon next to the liquor store and, and bring us, bring the four of us sandwiches. And, um, it was, and we were just coding away and then I'd go home and play with my daughter and, and go back the next morning. And that was that we did. We did have work at home even back then.

11:47Actually, I was very, you know, you have to work pretty much when you're doing a startup around the clock. So, you know, we were always on. But we, you know, we obviously found time for, you know, family, which is ultimately, I believe, you know, the most important part of life. Yeah. So you probably didn't get much sleep, right? No. No. Okay. Hey, FounderFam, I want to talk to you about something super exciting. We're officially partnered with OmniSend, the email marketing and SMS platform built specifically for e-commerce founders. We've been recommending OmniSend to founder students for a while now because it just works.

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12:57So talk to me, I guess, around like starting the business. Did you raise any money, friends and family? Like how did you get it? Well, we had a good venture funder, which was Larry Ellison. So he helped a lot. But about a year in, we did get a VC firm out of New York, actually, and turned out to be the largest women-owned VC firm. We had an incredible partner there that was a director of our company all the way until we were acquired by Oracle many years later. And that was a great relationship. And those, you know, obviously Larry's great advice and ideas were incredibly important. There was an exciting time in the company when we came up with what really one of the original visions of the company was that there'd be a dashboard in your browser that would show you sort of everything you needed to know and everything you needed to do about your business all in one, you know, in one screen.

13:58And we came out with that feature called the executive dashboard. And we would always manage to get press on this stuff out of proportion to the number of customers we had, mostly because we'd throw Larry's name around. And so probably it said Larry Ellison in the article. And so he got, I guess, an alert, read the article and he said, oh, you have a dashboard now? okay, now I want a login to NetSuite's instance of NetSuite. So I can not only see how you're spending my money, but also I want to help you improve the dashboard. So he basically became a product manager for that part of our product for the next several months.

14:40And he'd call me up and say, Evan, I think you should have this dropdown where you can change all of the comparison ranges of everything on the dashboard to last year or last quarter versus this quarter, et cetera. And I dutifully and my team would dutifully go and program it and we'd push it out into production. It was a lot easier to get things out into production than it is now. I mean, that's probably a good thing, but I'd call Larry back and I'd say, oh, log in now, see if you like it. So that was a very fun time of collaboration. And some of the stuff that he came up with then is still in the product today.

15:15That's cool. A few questions I'm curious around. So you said that you joined Oracle when there are 900 people, right? How did you build that relationship with Larry to even get him on the phone and help you conceive the idea then be a big, big, yeah. He was very, very involved in the hiring and nurturing of the engineers. And I had a personal interview with him and we apparently hit it off. He really, one of the things that happened to me in my career at Oracle, and you have those sort of moments in your career where you have some difficult decisions to make about what you're going to do next.

15:53You mentioned when I left Oracle, but early in my career at Oracle, I had been sort of slotted in the core database team that builds some of the core Oracle database technology. But that turned out really not to be as appealing to me. I liked working more on the experience, what it's like to use the software for everyday users. And that's really been ultimately what I've done the rest of my career. But in order to do that, I had to leave this very prestigious group and joined this upstart group run by Mark Benioff called the Mac Group because it was building how Oracle was going to work on the Mac.

16:32And I was torn, as you might be when you're not sure you should give up something that seems prestigious and maybe you'll never be able to get back again. And Larry passed me in the hall and he said, oh, you know, if I were graduating college right now, I'd want to go work in the Mac group. So of course, you know, then you're like, ah, now I feel comfortable making this leap. So, um, you know, over the years, um, developed a, a great relationship and, uh, he actually did help me with my first company. He would call it my graphic stuff. And in fact, in that five minute phone conversation that I referred to, where we dreamed up NetSuite, he said, how, how's your graphic stuff going?

17:15And I said, not great. I want to build business softer. That's literally, I mean, that's literally pretty much what I, what I said. Yeah. And I have to ask like any critical business lessons you've learned that you could share with our community from working with Larry all these years? Um, well, a consistency, uh, of vision, we often would call him belligerently consistent in a loving way. Uh, and so just really always keeping what is unique about your offering in mind, always staying well ahead in that area in areas where you have to match the competition. You can always sort of sprint to catch up when necessary, but it's really, really critical that, you know, your differentiation and that the, you know, the focus of your efforts is, is improving those differentiated capabilities that really are going to drive your success.

18:18And that consistency of vision and understanding what your B is that's different than everybody else's A. I mean, Larry is definitely an iconoclast. And when everybody's doing A, he definitely thinks, hmm, maybe we should do B. And it is true that if you go with the conventional wisdom, you're going to have a crowd of competitors that are all doing the same thing. If you take a different road, even though on the face of it, maybe it isn't the obvious choice, you have the opportunity to really be a leader if that turns out to be a better way. And talk to me about the acquisition and the merger.

19:02When did you know that was the right time and how did that come about? Well, I don't know that from my perspective, there was ever going to be a time that was the right time, but it certainly seemed, you know, from a, because I loved having my company, it was great. I mean, it's turned out to be fantastic to be part of Oracle too. I think that what really happened is, and what was great about Larry's vision, we were able to build NetSuite as the first, you know, sort of cloud business company without distractions and without trying to work with a legacy of on-premise software and do it in a very, very pure way.

19:43Oracle, on the other hand, had to make a very, very big transition. Despite Larry's confidence that this was how things were going to be done for the next thousand years, it had not yet been proved. As it was proved that cloud was the best model for business software and companies accepted it. Oracle made this tectonic shift to the cloud. At that point, I guess you could say that the host wasn't going to reject the organ. Instead, we could really collaborate and make, like you always want to do in a merger, one plus one equal three, by working together in our separate lanes with the other cloud products at Oracle to really build something that is a complete solution for companies of all sizes, from small startups all the way to mega conglomerates.

20:41Yeah, I see. So when it comes to, I guess, this merger and you said you loved your company, um what's the transition been like as you know you're the evp now you know i we kind of it's kind of like cousins marrying but but second cousins um you know i mean the first one of the first thing that happened is larry came and talked to all of our engineers and they commented to me boy he really seems to understand our business very well like yes he was a co-founder so i think it's a unique situation where you have a founder who's a founder and is able to understand sort of the special sauce that makes NetSuite great, but also the places where the right places to help improve things by collaboration with Oracle.

21:39So Oracle had done a great job with many of its acquisition, you know, generally with all of its acquisitions by figuring out how to keep them independent so that they can still do what they do best and that doesn't get broken, while at the same time, over time, you know, implementing some of the best practices that come from, you know, Oracle's long experience. So I think giving us independence to continue to run the way we were running, also pushing us to do things that maybe as a public company, we weren't as aggressive about doing that were really the right long-term choice. As part of a much bigger company, you have some more freedom to do things, make these relatively sharp turns that you might not do when you're constantly under the scrutiny every quarter.

22:34That was definitely something that allowed us. Oracle has announced how much NetSuite has grown. And every quarter, they pretty much announce how much we grow. And we have a great track record of continuing the growth that we had as an independent company. And I think that's because there's been fantastic continuity. Most of the main players are still there. I'm committed. Seven years I've been here, and I'm really, really excited about the future. And so it still feels entrepreneurial. It still has that culture that we curated over our many years being an independent company. And also, we've massively benefited from being part of the Oracle team.

23:14The curation of the culture. Culture is a very, very interesting one. And often for first-time startup founders, an afterthought. Did you take some lessons from your first company, Embed, or talk to me around that? I mean, you know, I took some of the lessons just from being at Oracle in the heady days when it was, you know, real fast growing, still really felt like a startup. As I said, Larry was still interviewing all the engineers. So I had been in that environment, that exciting environment where the possibilities seem endless. And, you know, inside Oracle, there are great relationships, and there were great relationships back then.

23:59And so I always felt that you, and this is something Larry said a long, long time ago was that we hire people that we wanna go have lunch with. And if it's someone that you can't tolerate, I don't care how good they are. They shouldn't be a member of the team. So we've taken that very seriously, recognizing that we have to have an intensity and that what we do is very serious, but that the hard work needs to be balanced with fun. And we have a lot of great fun traditions that we've continued over many, many years. We have a mascot at our user conference called Sweet Stanley. And we've done all kinds of great things over the years to keep it light in the face of it.

24:50ultimately, you know, we're responsible for these business applications and the operations of these businesses we're very much relied upon by our 36 ,000 plus customers. So it's that balance of that intensity and seriousness with sort of more of a low-key, fun approach to work that I think that's sweet. And I hope all companies are able to, to balance. Yeah. And you talked about your customers. You've had some very big customers now, but we're with them from early days, like GoPro. I'm curious, like what you've learned from customers like them? Well, you know, that's definitely one of the perks of the job is just to talk to lots of other entrepreneurs and hear about their journeys.

25:41And, you know, we definitely collaborate with our customers on various things. We have, for example, some great cybersecurity customers and cybersecurity is a very, very important topic for us. So we've learned, you know, we've collaborated just on best practices and things like that. So that's sort of the business collaboration. But also, you know, just with all the companies we see, we talked about culture. I talked to entrepreneurs and CEOs and founders about how they maintain their culture. And we share that information. The person on my team that's responsible for our communications, external communications with customers and our Our user conference is the same person that's responsible for our internal employee engagement programs and things and sort of our internal sort of culture maintenance organization, for lack of a it's it's it's much better than that.

26:45But and that's, you know, but that allows us to, you know, allows this allows her to do is to see what other companies are doing and bringing it and bringing it into into our company. And therefore, you know, I mean, liberally sort of stealing in a non, you know, in a non-copyrighted way. And I hope they do the same back from us when they go to Sweet World and see how we run our user conference. I hope they go and take that and some of the great things they see there and use it in their user conference. Hey guys, I hope you're enjoying this episode and learning a ton. As you know, in this series, we interview some of the greatest founders of our generation to find out how they did it.

27:25However, if you're thinking of starting your own business and you want to hear from some incredible stories from everyday people like you or I who are actually in the trenches, only been building their business for maybe one year or two years, like they're building right now and they're really in the early stages, but they're getting success. You should come and check out our new podcast from zero to founder hosted by our community manager, Molly Flynn. These are in the trenches stories from our very own successful students that have gone through some of our programs. People just like you who are deep within the process of building their very own successful business.

28:04These are the founders of tomorrow. You can find the From Zero to Founder podcast on all platforms. And remember, it's founder without the E. All right, now let's jump in the show. When did you guys run your first one? Did Salesforce, was that the inspiration? Well, Oracle had had one for a long time. I mean, it's kind of a rite of passage that when you get enough users, you have to bring them together and hire some whatever band or a DJ your budget will allow at that stage of your company's growth. And so we started by bringing first just our partners together. And then a couple of years later, it brought users together.

28:47And it was fantastic. And I think a lot of companies see this for them to collaborate with each other and also for our employees to be able to see, well, what do people actually do with this stuff? And who are these people that we're developing? I mean, we try to do that without having to do it only through a user conference, but that's a great benefit of it. And so we saw immediate benefit, and it's grown every year, and I think it's on its 12th iteration or something like that. So it's been fantastic. Yeah, that's really cool. Thank you for sharing. You talked about competitors before and your lessons or things that you're kind of impressed by from Larry's perspective around kind of when other people going see A, he sees B.