- Founder, Chief Technology Officer, and Chairman of the Board
- President and Chief Executive Officer
Founding in the Cloud
Evan learned from running his own company that there was a dearth of good business software. “I’d imagined that bigger companies had better software,” said Evan – but it turned out that wasn’t the case. The whole company started in a five minute phone conversation. Larry Ellison put in $ 1 million, and Evan put in $2,000.
Its first incarnation was as “NetLedger,” with a more single-minded focus on accounting. Larry Ellison suggested beginning with accounting because that’s the core of a company’s data. In 2001 the company came out with an Executive Dashboard, committing to a suite format.
“It was the first cloud company”… $4.95 a month for customers.” The company was motivated by the idea that “the kind of data you own defines your success.”
In 2002, Netsuite’s revenue in was $3 million. Now, “every company is a cloud company” and Netsuite’s estimated 2014 revenues are $553.2 million.
Growth rates reflect where customers are betting the future.
Evan decided that he wanted to be the inside guy in a company, so he wanted to find an “outside guy” – so he brought in Zach as CEO and President.
Zach was looking for a company that was:
3. Had a Great Development team
He wanted a company where “you could define what you think the future will be and then make it happen.”
Zach said, “The thing I’m personally proudest about is that we built a distributed company really quickly.”
- Selling to the Fortune 5 Million (as opposed to the Fortune 500) requires that you reduce the cost of sale
- This required moving outside Silicon Valley and significantly expanding their personnel
o Now they have 3,300 employees around the world
- Finding people who can manage in that environment is hugely important to their success.
NetSuite After IPO
- They were one of the last IPOs of 2007
§ “In many ways it was good for us to go through the crash quickly”
§ “Many of the investments we made during the downturn are our second and third best sources of growth”
- Shareholders are really important, especially when the people running the company are large shareholders, like at NetSuite.
- You behave in very different ways when you’re personally aligned this closely with the company’s success.
Advice for the Next Generation
- Vision is the most important element in a company’s success
- Evan- We were driven by a “need to help small companies succeed”
Critical question is how do you bring the power of enterprise systems down to something that a normal human can use?
- Now large companies are asking for the agility and flexibility of a small business, which means they need cloud capabilities.
- “Every company is becoming a cloud company”
o This helps disrupt industries like taxi cabs and hotels that nobody would’ve expected were disruptable
“What happens after the cloud?”
- Zach- “I truly believe that the cloud is it.”
- “The question is what innovative businesses will be built on the cloud”
- “It’s going to last much much longer than other architectures, so the question is what you should build on it”
“Do introverts not make good CEOs?”
- Evan thinks he was the right person for early stages of the company. As the company grows, communication internally and externally becomes hugely important… you need to articulate a vision and inspire people. Partners can be huge in combining technical skills with communication.
“What directive did you ignore from Larry Ellison in order to achieve the success you have today?”
- Larry is a font of ideas - he suggested NetLedger Personal, for personal finance
o Evan looked into it “but it was a bridge too far”
“If you went with your initial gut idea about a web sales tool, could you have been Salesforce.com instead?”
- Evan thinks that the Salesforce.com founders were the right people for the job – there are very significant technical challenges in that kind of tool.
“As NetSuite gets bigger and mature, do you think innovation will stifle? How do you keep a startup mentality in a large organization”
- They were initially concerned about not having anyone who’s run a $1B business, but they have the skilled, experienced entrepreneurs, which is something that many huge businesses lack.
- They get great feedback from customers, which keeps them abreast of what businesses need.
- They sponsor a company hackathon too, which brings out ideas that can be used in a business context.
- The culture of their foreign locations can come into NetSuite too
o Experience working in the Czech Republic changed their approach to change – now the company has a series of “musts” that guide priorities.