Evan Goldberg started NetSuite, the global business management software company, with Oracle founder Larry Ellison in 1998. The company was acquired by Oracle itself in 2016 for $9.3 billion, with Goldberg remaining as NetSuite CTO.
At the organisation’s annual SuiteWorld convention in Las Vegas, GrowthBusiness.co.uk caught up with Goldberg to discuss the origins of the company and how it became a global force.
How did your career begin?
I left college and started at Oracle in its core database group. It was a desirable place for an engineer to be, but I found it was distant from the user; I always wanted my career to be about building things that directly put the power of computers into the hands of users.
Then [subsequent founder of Salesforce] Mark Benioff started the Mac group at Oracle which was right up my alley, I loved the Mac and it was inspiring to enable Mac users with powerful database technology and easy-to-use interfaces. Delivering powerful tech to users that don’t necessarily have the technical skills has been a theme of my career.
How was NetSuite born?
I left Oracle and started another company before NetSuite. At the time it was the case that you’re not really anyone in Silicon Valley unless you have at least one failed start-up!
I learnt from that start-up that there was a dearth of good software to run growing businesses; you had to use a smorgasbord of different tools. You could use QuickBooks for accounting, Yahoo Stores to sell, and Act! for your CRM, but none of these worked together and it was hard to figure out where your business stood. I wanted to be able to go to one place and get one consistent view of what was going on in a business.
Larry was approaching it from a slightly different direction; he was really excited about the ability to deliver applications over the internet. He was convinced in 1998 that this was the next model of computing and would be for a long time.
Launched as NetLedger, we started with a focus on accounting, and expanded the product offering from there. We’re focused on the mid-sized companies that are outgrowing some of the small business accounting packages like QuickBooks or Sage but aren’t quite ready for the software for behemoths.
How did you get finance together?
Larry provided most of the funding for NetSuite. He funded us through the 2000 downturn and he was an amazing partner. We did bring on a VC in 1999 but we were able to avoid most of the vicissitudes of venture funding. My advice would be if you can get Larry Ellison to fund your company that ain’t a bad way to go.
How did the company develop?
We built NetLedger with just four people from a little office above a hair salon next to a liquor store; we weren’t spending money hand over fist. When we got the product up and running we started to scale distribution but over time, while the vision stayed consistent, who we were selling to changed.
As we built more features and functions we could address slightly larger companies. It was helpful to have a lot of our success and growth coming from being able to move upmarket. A lot of businesses end up doing that, they’re attracted to the bigger deal, which is totally understandable; you’ve just got to be careful not to get away from what makes you great. Our ‘secret sauce’ was that all the pieces worked together in one system. As part of Oracle we’ve really been able to double down on that and sell it as one system.
What were the breakthrough moments in the early days of the company?
There were two moments I remember. One was the first time I saw our own financials online [on the NetSuite platform]. It was four months in and we finally had the functionality to import a file from QuickBooks and there it was. When I saw it I knew Larry was right and this internet software thing would be the future.
Then the other ‘Aha’ moment came when we were done with the CRM capabilities and the financials and the web store, and we could put it all together in a dashboard; we called it the Executive Dashboard. When I saw that I said, ‘This is why we started the company’. Larry became the product manager of the dashboard for the next few months, telling us how the dashboard should work. Those two moments made us feel like we were onto something.
What have you learnt and what advice can you pass on to scale businesses?
One thing you learn over the course of running a company or being very involved in the direction of a company is how hard change is. I would say be willing to aggressively change and execute it even if there will be short-term pain. I look back at times when we could have more aggressive about making changes that we did eventually make, but we lost a lot of time in dithering.
Looking forward is sometimes psychologically hard. As an example, we completely revamped our analytics; we had analytics that worked pretty well and customers liked aspects of it, so the notion of trying to redo that was daunting. But when we finally made the decision to do it, it paid off.
How important is it for a growth company to have an inspirational figurehead?
Is it the people or the idea that people get behind? Is it the people with the idea? It’s hard to figure out where one starts and the other ends. Clear internal and external communication is hugely important; we had that at NetSuite for many years and continue to have it. When your people see you tell the story externally, that’s inspirational; to know their story is out there and there’s a spokesman for their hard work that they’re proud of, is really helpful. When you’re starting companies it’s super hard work, you’re thinking about it all the time and its easy to burn out. You have to treat it like a marathon, but even then you’re moving fast.
There’s big inspiration and little inspiration. Big with the big idea, little in that you treat your people like family. That’s inspirational too.
How did you approach building a team?
We took a ‘Field of Dreams’ approach to building a sales force: If you build it they will come. But building a team is hard, especially when you haven’t done it before. One of the bumps was realising my limitations and recognising that I’m more of an internally-focused leader that really loves working with the product and designing it. I love coding but my favourite aspect is sitting in design meetings and figuring out how something’s going to work, what’s the best solution for the user, and then saying let’s test it, look at the results and see what people say.
I had to bring in a CEO to build a sales force as I had no experience of it. [Former CEO] Zach Nelson built a great team and that accelerated our growth.
How should a company prepare to be acquired?
Talk to another business that’s been acquired by that company. They probably have a playbook. Maybe ours was somewhat unique but we were Oracle’s 120th acquisition or something, maybe we were the largest.
Some people don’t plan to stay, but for me, that’s alien because if you truly believed in what you were doing I would hope you’d want a situation where you’d stay. The only way you’ll be happy is if you make sure you don’t have any big surprises about how you’re going to be treated [by the acquiring company].
When do you feel fear as an entrepreneur?
You get pressure from investors at every single point and those pressures can lead to fear. That’s when you don’t do things quickly enough; never operate your company out of fear. It’s your company, so explain what you’re doing and why it has long-term value.
When Facebook totally revised the Newsfeed Mark Zuckerberg said, ‘We’re going to have less views, they won’t scroll as much, but people are going to be more engaged and Facebook will be better’. That’s spoken by a true founder who obviously has the power to be able to action change. Not every founder has that power but if you can do that and stay true to your beliefs and sell the long term, and not get caught up in what happens on a day-to-day basis and be worried about investors, you need to do it; take your lumps and do what you believe in.
Overall advice for growing companies?
The number one advice is you’ve got to stay true to your vision, understand what your true differentiation is and work to stay ahead. You have to be the best at what you think you’re the best at, and that takes energy. Make sure your vision is the driving theme on a day-to-day basis.
We did stay true to that and we’re staying true to it now, even as part of a bigger company. It hasn’t been an exit for us, almost all of us are still here. Our focus was never the merger, it was building a great service for businesses and we get the biggest charge out of knowing how it helps them.