Stig Brodersen  1:27  

Upon graduation, you spent 8 years at Oracle. First as a Software Engineer, and then later, served as a Vice President. I think most people would say that you made it. You have to keep climbing that corporate ladder. Why did you start your own company in the first place?

Evan Goldberg  1:41  

There’s a couple of reasons. It was in 1995. It was sort of the advent of the internet. It had only been a couple of years. And since most of us had sort of experienced the internet for the first time, I just saw incredible opportunity there. I mean, it was clear to me that it did sort of change everything. That’s a cliche. But I could tell that there are other amazing opportunities out there. I wanted to take advantage of that. 

It was a time that I’d learned a ton from my first job. I thought I could bring it to bear on solving some interesting problems. 

Stig Brodersen  2:13  

So what do you say? You saw some indications that there was a massive opportunity out there, but what did you say? 

Evan Goldberg  2:19  

Everyone was so connected. It was possible to get information out to people in a new format as easily as possible. And so for me, what I’ve been working on, or the last things I worked on at Oracle was Larry’s interactive television effort. 

A lot of times, he’s right on target with a lot of his ideas about how things are changing the world. He was a little early on this one. I remember watching a video on demand. It was as it were in 2008, which was 15 years later, and going, “Oh, yeah, okay. We were only 15 years off.” 

There was that notion of everybody being connected and being able to control more of what they see. These are the things that we take for granted now. In my generation, when we drove in a car, if we wanted to talk to someone, we had to stop the car. We had to hope that we had change. We had to go to a phone booth and call them, and hope that they were at home. That was the only place you could talk to people, which was via phone. 

It was just that fact that the world was getting way more connected. For me, what was interesting was that my career had been animated by this idea that we could bring powerful capabilities to ordinary end-users. That’s what I sort of saw. 

These powerful applications, business applications, and other types of applications could be brought in a really compelling way to end-users all over the world with the internet. That’s what sort of animated me in thinking that I wanted to do something on my own.

Stig Brodersen  3:52  

Tell us about your very first company. It was very different from NetSuite. 

Evan Goldberg  3:58  

I’ve been involved in this multimedia stuff with interactive television. I wanted to bring more compelling experiences to people. One of the things that caused the internet to take off was that, as legend has it, Marc Andreessen decided to put pictures into HTML pages and brand the browser. 

For me, it was more interactive content. Some of the stuff we take for granted now that you can use in web pages was sort of really popularized by Flash. That was the same kind of thing that we were trying to do. Just make websites more interactive, easier for people to use. Take some of these really powerful systems, use the internet, multimedia, animation and interactivity to make it come alive. 

Unfortunately, there was another company that had that idea. They were called FutureSplash. They were eventually bought by Macromedia at that time, which is now Adobe. It’s great Flash.

Macromedia really had the audience of multimedia and interactive developers. They really took over that market. After about 3 years of running that company, while we had a very devoted following, it was pretty clear to me that it wasn’t going to take off like I hoped.

Stig Brodersen  5:09  

Tell us about that process of doing that pivot. How obvious was it that it was going that route?

Evan Goldberg  5:15  

I learned about running a company. I’ve run a group at Oracle. I’ve been a manager, but it’s a little different when you have to make payroll. You have to raise money. You’re really on your own out there. 

One of the things you hope to do is sort of run your business based on data. You want to know what’s happening, what’s working, what’s not working, and a lot of the things I’ve talked about today. That includes getting that visibility in what’s happening in your company. 

I was running my company. We were sort of a traditional software company. It was not the advent of software as a service had not happened yet. That was sort of what NetSuite tapped into. We were delivering some traditional software, but we were running our operation off of like a smorgasbord of applications such as QuickBooks for finance. 

We were using Yahoo! stores to distribute our package software. We used packaged sales automation tools because we needed an automation tool. It was more of a contact management tool. We did our support in emails.

The data was everywhere. It was not integrated. We had 5 different customer lists. It definitely appeared to me that there had to be a better way. That’s what really caused the pivot. 

I was lucky enough that Larry Ellison actually helped me with this company, even though it was more of my idea. His later job was what we did. Your idea *inaudible*. He’d periodically call and say, “How’s your graphics stuff going?” That’s how he sort of summed it up. 

I said, “Not great. I kind of get clobbered by the competition. But I see this other kind of direction. I really want to get involved in business software.” It was this course of a 5-minute phone conversation that Larry and I decided to go in a different direction. I’d start NetSuite. It was called NetLedger at the time.

It really was his insight. I knew that small businesses needed a bunch of different types of systems that wanted to work together. That was sort of my insight. He has another insight on the best way to start. He said, “If I were to start a company right now, it would be sort of small business accounting, delivered as a web service, or as a web application.” 

I said, “Well, I don’t really know that much about accounting, but I can see that accounting would be important. But I really want to get into sales. That would be sales software delivered over the web.” What I wanted to know as a business owner was, “Where’s my next deal coming from? What does my pipeline look like?” 

And he said, “Oh, yeah, you want to do the front office stuff, but first, we should start with the back office because that includes all your key information about your customers, your products, your employees, etc.”

We’re going to want to have a web store because these businesses are going to run a web source. The most important thing he said is that “We want to run it on the web. They shouldn’t have to manage their own databases, manage their own machines and all that stuff and deal with upgrades, and database software.” 

And so, at least he had the insight that Oracle software wasn’t necessarily easy for the average small business to implement. That sort of was the whole idea of the company in a 5-minute phone call. 

Stig Brodersen  8:37  

It’s amazing. It can all be traced back to such a short phone call. It must have been profound for you at that time. I’m sure you were speaking to different people. Looking back, how much you think, “Wow, this is what shaped everything obviously. It was just business as usual.” 

Evan Goldberg  8:53  

It was a fulfillment that made me want to move into business software, but I didn’t really know whether this was the right approach right away. Starting with accounting, I sort of took that to some degree on faith. I didn’t know anything about accounting. I was a QuickBooks user. The first day we started the company, I had to go out to buy an accounting book. 

Fortunately, I got some other people later in the company that actually knew what they were doing on accounting. It actually came clear to me just a few months later. I was at a party at Larry’s house. Steve Jobs walked up and he said, “Well, Larry’s super excited about this accounting in a browser thing. Does anyone want to do accounting in a browser?” At that point, I was charged. 

I honestly said, “I don’t know. Maybe? I think so. Larry seems to think so.” But it was actually only days later that we actually finished our first iteration of the accounting system. This was NetLedger. We took our financials from QuickBooks. We uploaded them into NetLedger. 

I remember distinctly the first night taking a look at our financials of the company in the browser. That was sort of the aha moment where I recognized, “Yeah, this is going to work.” 

The fact that I can have my finger on the pulse of my business, anytime, anywhere, from my experience running a company, I knew this was going to be huge. It was just a matter of time. 

Of course, Larry never doubted for a second. He used to tell me, “Well, there have been mainframes and client servers, but this sort of web application thing is how applications are going to be run for the next thousand years. I don’t know what’s going to happen after that, but definitely for the next thousand years.” And so he saw it. 

Stig Brodersen  10:18  

You have to give Larry Ellison credit for his foresight. He was thinking about web applications before, I don’t know, if you could spell replication of the time. 

How did you develop a business model around something that a handful of people knew would be the future? You hardly weren’t convinced at the time. How did you develop a business model around that? 

Evan Goldberg  10:58  

It was simple. We charged around $9.99 a month or something. It was kind of flying by the seat of our pants to some degree. Whenever you start a company, you know that it’s a really cool idea. You know there’s going to be some people out there that gravitate to it. But you don’t know who they are, how much they’re willing to pay, and what they’re going to do with us. 

We learned a lot in those first few years. There were certainly a bunch of early adopters that got it. A lot of times those would be companies that were very geographically dispersed that needed lots of people to be able to have access to information, and the fact that you could do it on the web. 

Again, this is only, 4 or 5 years from the advent of the internet. There were definitely a lot of people that got it. Software as a service was definitely popularized by salesforce.com. The whole no software movement. The thing that we had to deal with is that salespeople are a little less risk averse or more risk tolerant than say, CFOs. 

We were starting with accounting. We were ultimately delivering an entire suite, an entire system to run your business. It was definitely starting with financials. CFOs are inherently a more conservative bunch. 

Over the next few years, the challenge was to find those sort of forward-looking CFOs, and CEOs that were willing to take the leap into putting their data on the internet. Now, for me, it was an easy conversation. I don’t know that they always bought it. 

It was pretty easy to convince them that rather than storing their key customer information on a computer under somebody’s desk that anyone can like, stick to, back then it was a disk, a USB, flash drive or whatever, and steal all your business information. They thought that maybe we could run it a little more securely than that. 

It was clear to me that they were going to get an increase in security when they went to software as a service. It really took people getting used to it. Certainly, people are getting more familiar with the internet in their personal lives, and to really start to trust it. After a time, the CFOs did come along. 

Stig Brodersen  13:10  

The story of NetSuite is also the story of hypergrowth. It started out with 4 guys, and then thousands of employees. How do you not only serve the right culture, but also grow the right culture in a company that’s growing so fast?

Evan Goldberg  13:26  

It definitely starts with having a clear vision and mission that you’re consistent with through the history of the company. We were lucky enough that in 5 minutes, we came up with the idea of the company. It really was to have one system to run your business. This includes all aspects of your key business processes, such as your sales, your accounting, your commerce. 

Being able to get people to gravitate around very clear vision and mission. You want to have a vision of how you want things to be. You want people to be able to run their business securely on the web with one application with everybody working from the same *inaudible*. That definitely helps. I mean, certainly, a lot of the culture comes from just alignment. 

We were kind of in an interesting place. A lot of us come from Oracle. Oracle sold to enterprises. I run a small business. I had some understanding of a small business. Our culture was kind of  a mash up. It was more of a consumerist culture that a company like into it needs to reach the millions and millions of the Fortune 5 million as it were of smaller businesses. 

It was also a mix of the culture of Oracle, which is about building this powerful system. Our first ad was a billboard. Everybody in 2000 did a billboard. Our billboard was a baby and a fighter jet. There was this notion of mashing up this ease of use with this incredible power. 

I think our culture really played off of that. We needed to have a culture that was very approachable for smaller companies. They don’t necessarily want this sort of hard driving enterprise culture, but also need to be scalable. We’re obviously planning to build a big company. We wanted to reach tens of thousands, even up to hundreds of thousands, ultimately businesses. 

I think the vision and mission, just kind of staying true to who our customers were, and really sort of mirroring our customers, is what I think led to a great culture that lives on today.

Stig Brodersen  15:17  

Was it difficult to attract the right employees? It’s different today. You’re an established brand. But at that time, no one knew you.

Evan Goldberg  15:25  

There’s always people that want to take a leap. Silicon Valley was immersed in the internet. I think it was easy to explain. It was easier to explain what we were doing. It kind of just makes sense to show someone how it works. They’re like, “Oh, yeah, that’s probably how application should be for at least the next thousand years.” 

That was sort of helpful to attract some amazing people into the organization. And certainly, if you treat your employees right and you make sure that they’re motivated, that they can work the way they want to work, that they’re learning, and that they feel a sense of purpose, it’s just like a product.

Your company is sort of a product in some sense. You want them to recommend it to a friend or colleague, just like you want your product to be recommended. That’s certainly a part of growing your company. It is just the word of mouth they get. Hire great employees. Treat them like the great employees that they are. Make them feel at home and motivated to succeed. That’s how you can build up an organization.

Stig Brodersen  16:27  

You said that one of the most important things you have learned while building NetSuite is how important it is that you can make necessary changes, even though it might be painful. How do you build an organization where the right people have the right information at the right time, and the right authority to make those perhaps painful changes that need to be done?

Evan Goldberg  16:47  

You need visibility, first of all. You need to know what’s happening in your business. I talk about knowing the past, present and future. You have to know what’s happened historically, what’s happening right now, being able to visualize trends, and then indicate what might happen in the future. It starts with that. 

You need to have the visibility into what might happen. And then as you guys see it happening, you have to respond. That’s where agility comes in. Everybody talks about agile software development, agile everything. 

It can’t be emphasized enough that you need to be able to respond to things that are happening that you see out there in the world. There’s a real tension. There’s definitely a tension in making sure you’re staying on mission, on vision, going towards your sort of truenorth. The tension between that and responding to things that you’re seeing in the marketplace. You don’t want to get diverted. 

In growing our company, I think, it’s definitely part of leadership to be able to identify those times that you do need to pivot, and then identifying those times where it’s best not to pivot. It’s just leadership.

Stig Brodersen  17:53  

It’s interesting, you would say that. Nick Smith of Google, he said that the best companies can die from having too many opportunities, instead of too few. How do you see that North Star? How do you see that process of being true to what you want to achieve and not being diverted into shiny new items like all entrepreneurs?

Evan Goldberg  18:12  

It takes some degree of courage because you’ll get some amazing opportunities, huge customers that will come along, and they’ll try to get you going where they want to go. The allure of the big customer and the big deal is one that’s hard to resist. Sometimes it’s the right thing to do. 

A lot of what we had to do in building NetSuite was figuring out how to sort of mitigate the fact that some of our biggest customers could potentially take us into directions that we didn’t want to go. I think, trying to figure out a way that you can be flexible that may involve developing a partner channel or partners that can extend what you have. 

This is not just in software, it could be in anything. Partnerships are incredibly important. Partners can be a critical part of addressing some of these needs that are going to bring a bunch of resources into your company without getting off your path towards what your true North Star is. 

The solution is different in every case. But obviously, that’s the major balance that you have to have. Every company obviously struggles. In order to get funded, they can invest in what they want to do in the long term. But you also want to stay on track and on point. 

I think at the end of the day, the focus is the most important thing. I would always argue that entrepreneurs should ultimately weigh, stay on track, and avoid things that risk of going off track.

Stig Brodersen  19:38  

Could you please elaborate more on your decision making process? By definition, we don’t know what would have happened if we made another decision. Your job today is to make big decisions. How do you use other people as a sounding board? How do you think for yourself about the right solution to a problem that you’re facing?

Evan Goldberg  19:59  

No person is an island. If I look at the growth of NetSuite and what’s made us successful, a lot of it has been that we built a lot of the company by consensus. It’s not by committee. That’s different. You take a vote.

But by consensus, ultimately a leader has to decide. But a leader that does this in a vacuum is going to fail. There’s so many resources out there. I mean, one of the great resources for me was Larry. 

We generally did what Larry said, which is not maybe on the exact timeframe that he said it. But he was always really incredibly supportive. He would say, “You’re there, every day running a business. I don’t see everything that you see. I know it’s terrifically hard to make some of these sort of wrenching changes.” 

At the end of the day, I do think it’s getting all the data in from all the stakeholder. It is being really willing to listen, and knowing when you might be wrong. But also, having that persistence to stick with something that you truly know is right. Again, it comes down to that focus. 

When people try to distract you, or when they give you advice about getting off track, you really have to come back to that center of what you’re really trying to do in the world. This is true for profit companies, for social enterprises, organizations that are trying to do great things in the world. Always come back to why you started in the first place and what you were trying to accomplish. That’s where success comes from.

Stig Brodersen  21:18  

Interesting. If you look at the tech industry, they had some very charismatic leaders, such as Bill Gates, Jeff Bezos, and Larry Ellison come to mind. They’ve taken the company from their humble beginnings into billion dollar companies. You’ve gone through that journey personally and professionally. Which skills would you have to acquire along the way and in which phases?

Evan Goldberg  21:41  

I was only 3 years into running my own company. I was around 30 years old. That’s old for an entrepreneur now. But back then, it was relatively young. There’s so much you learn on the way. And again, a lot of it is about mentors. I had a great mentor, a great board, and people that could advise me. Make liberal use of that.

There’s so much time you have in a day. But the time that you spend with someone who’s seen the type of thing that you’ve seen before is time really well-spent. I think it ultimately devolves on you to make the hard decisions. No one is going to care about it more than you. 

I mean, I’m still at NetSuite because we care about it very deeply. I like working at Oracle, but people say, “Once you’re bought by Oracle, you go off into the sunset.” I truly care about what we do. I really believe in it. I think we have so much more left to do. And that to me is what it’s really all about. I mean, that was our vision. Our vision wasn’t a dollar figure, or number of users, or whatever our vision was changing the world in our own way.

Stig Brodersen  22:49  

What do you think about opportunity cost in the sense that you only have so limited time? There are skills that you would like to acquire. It’s tempting to delegate things because you don’t have time. And again, you need to keep on developing as a human being. How do you see that? 

Evan Goldberg  23:06  

It’s definitely having to figure out the things you’re not going to learn, and that you’re not going to do. One of the things for me is that I programmed for a very large history of NetSuite. It kept me really close to the technology. I loved doing it. It became less of the amount of time I could do it. But that was something that I was not going to easily give up. 

I think in the early days, I had a big impact on the organization with that rule. But at the end of the day, you got to figure out which of the things that someone else should be doing because you can’t do everything. As someone that’s an expert in a particular area, a lot of great entrepreneurs didn’t necessarily grow up as general managers. 

Some have, but a lot of them grew up doing it. They were really being in there seeing what worked, what didn’t work, and having a great idea. If you’re one of those people, like for me, it was probably programming. I started as a programmer when I was a kid. That’s why all my companies really built out of programming. 

When you know something very deeply, I think that helps you recognize other people that know something very deeply. I think you need to identify that talent. You don’t need to necessarily understand everything that they do. But you need to identify that those people are as good at what they do, as what you do. You need to let them go and do their job. It is absolutely critical. Because absolutely, you can’t do everything. You can’t learn everything. 

But then, you need to figure out the areas that you are actually the expert in. And for me, I was an expert in developing NetSuite. Even when I stopped programming, I remained very involved in developing NetSuite because that’s an area that I know so deeply. Ultimately, you build a great team of people that are experts in their area, that you trust and believe in. You let them go and do what they have to do.

Stig Brodersen  24:54  

You’ve been mentored by Larry Ellison. You had fantastic mentors in your career. What would be your piece of advice for the next generation entrepreneur who might also be looking for a mentor?

Evan Goldberg  25:05  

That’s a good question. Obviously, you should be looking for them your whole career from day one. There’s a lot of things that go into that mentorship. You obviously need to have chemistry. It’s like any relationship in your life. You obviously have to have an enormous amount of respect. You have to see that they respect you, and that you kind of grok each other. 

I think it’s just a process of just being out there. You have to get out of your hole, or your cube, or your table, or whatever. Get out in the world. You don’t know where it’s going to come from. It might not even be in the same industry. 

I definitely hear stories of people with mentors in completely different industries. That’s not going to suffice. You’re going to need people that understand very deeply what you do. 

But a lot of times, some of the hardest decisions are people decisions. You might find people in other industries. You might find people in the military. You might find people that are teachers. You might find people who are principals of schools or whatever, what have you to have amazing people experience.

Ultimately, as I said, leadership, so much of it is attracting, retaining great people, getting them to be working towards that same vision and mission, towards that same North Star. Mentorship in that regard can come from a lot of different places.

Stig Brodersen  26:33  

Which piece of advice would you give yourself if you have to go back to 1998 when you founded NetSuite?

Evan Goldberg  26:40  

Chill out. It’s all going to be fine. I look back more, not so much that I wish I hadn’t done, but what I’m happy about what I did. I think this is the most important advice I can give everybody. Success is fantastic, but only because you’re delivering on the sort of promise that you made yourself to make a difference in the world, to make a dent in the universe, what have you. 

I think, staying focused on the little victories. The first customer, the tenth customer, the hundredth customer, in some sense is more important than the thousandth customer. We’ll probably have a bigger impact on you. That first time you see the product that you built make a difference in people’s lives is way more important. 

At the end of the day, it’s a million people. Our brains did not evolve to even understand what a million people are. If a million people use your product, or a billion people use your product, we *inaudible* the numbers all the time. 

But at the end of the day, what’s most satisfying is the one person that you’re with, that you’re seeing is using the product and is telling you how it’s made an impact in their life. The first one that does that, in some sense is the most impactful. 

I guess, appreciating all the milestones along the way. You’re never done. For anybody that’s an entrepreneur, it’s just like the Golden State Warriors. They win a championship and then they celebrate.

I talked to Bob Meyers. He’s like, “Yeah, I celebrated for like an hour, and then what are we going to do next year?” You have to realize that that is going to happen. If you can, take the time especially in the early days to really appreciate those initial victories. That’s as big as anything you’ll ever do, no matter how big your product or service becomes.

Stig Brodersen  28:31  

You are extremely successful. I have worked with extremely successful people. I know I’m just putting you on the spot here. How much is luck and how much is skill in your experience? 

Evan Goldberg  28:40  

Luck has a huge impact. I landed at Oracle. I met Larry Ellison. We hit it off. We had some similar thoughts about what to do. My business was sort of failing at that time when Larry had this idea that we needed to deliver software over the web. I mean, that’s serendipity. 

My business was sort of succeeding. A couple years later, I realized that someone else may have started NetSuite. And so, there’s a ton of luck. Nevertheless, being out there, working hard, and kind of just keeping your eyes open about what’s happening in the world, that’s only going to help you get that luck.

Stig Brodersen  29:21  

Fantastic. Evan Goldberg, thank you so much for making yourself available for The Investor’s Podcast.

Evan Goldberg  29:26  

Thank you very much for having me.

Outro 29:27  

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