It was a rapid ascent. The company was put together in mid-1988 by a group of database engineers who'd begun planning their own venture during meetings in one another's living rooms. Thomas Atwood, now the company chairman, got together Eugene Bonte, now vice-president of strategy and tools; David Stryker, now senior vice-president of engineering; and four other colleagues. The seven worked up a business plan on Macintoshes in their basements and attics.
Object Design's first stab at gaining legitimacy was to search out high-profile financing. Harvard Management Co.'s Aeneas Group (the venture-capital arm of Harvard University's endowment), the Vista Group, and Orient Ventures put up a total of $2.75 million in 1988 to launch the business based on its plan. The venture capitalists had found three things appealing: the object-oriented-database market, Atwood's reputation within the computing industry, and the team of people who had already come together. The financiers brought on Marshall, who had put out word that he was looking for an opportunity to move into a small, growing company.
Object Design missed being first to market but still took an aggressive approach in its pitch. Looking at who would buy the technology, the management team decided to target engineers, narrowing in more specifically on CAD (computer-aided design) engineers, and then aiming even more precisely at the top five CAD-engineering companies in the country. In an attempt to get those companies to incorporate ObjectStore into their own software products, Object Design set out to nail licensing and development agree-ments with them; it succeeded with three.
"Single-minded bulldoglike persistence is what differentiates Object Design," says Natasha Krol, vice-president and service director of advanced information-management strategy at the META Group, a research company in Westport, Conn. "And ambition. This is an extremely, extremely ambitious management team."
The company barreled into the marketplace partly on the basis of personality. "Ken Marshall came from Oracle, which has always been known for its strong marketing and sales strategy," says Krol. (Swearing he's not a type-A personality, Marshall will concede he's usually doing two things at once, either driving and talking on the phone, or going through his electronic mail while taking calls at the office.) And Atwood has a reputation for eloquence. Competitors were targeting the CAD market as well, but, says analyst Krol, "Object Design's team was much more persuasive; it had a vision of where it wanted to go."
The company barreled into the marketplace partly, too, because of its technology. Object Design's early releases came out on time and were well received; they went on to win the Readers' Choice award from the trade magazine DBMS (DataBase Management Systems, for the neophytes) for three years running.
But the company's early success came mostly from its fastidious strategizing. "Everything we did from a product-development standpoint, from a marketing standpoint, and from our sales-and-distribution network was geared toward bringing our product to those top five CAD companies," says Marshall. "Rather than sell to the 27th player in the market, we proactively went after those five."
The reasons were straightforward -- young businesses, especially in the computer industry, are known by the company they keep, and the second wave of sales would follow much more easily if the first wave went to brand names. The first sale, to CAD system designer Computervision, in 1990, was "hard, a killer," says Marshall. "And any first deal is a great one for the customer, because you're willing to do a lot to get it -- discounting, free support. We pretty much said, 'Tell us what you want and we'll do it, as long as you let us use your name.' "
Markets beyond computer-aided-design engineering opened up more quickly than the team expected. "Partly it was because the product was better than we thought," says board member Scott Sperling, a founding partner of the Aeneas Group and now a general partner with the investment firm Thomas H. Lee. "Software development is always late, and it always costs more than anticipated. But this one was on budget and came in in less time than anticipated -- a rare occurrence."
The company was prepared to take advantage of a receptive market. In extraordinarily short order -- about 18 months, between the end of 1992 and the middle of 1994 -- Object Design signed on a truly spectacular array of corporate partners. Intel, AT&T, Olivetti, Kodak, and IBM linked themselves with Object Design not just as customers but as comarketers and equity partners as well. Says Sperling: "Almost every one of our major customers has demanded to become an investor in the company. It's really quite an extraordinary situation."
Each customer had been sought out as an entrée to a specific market sector -- AT&T, for instance, to telecommunications and multimedia services; Kodak to computer-aided publishing; Intel to desktop computing; and IBM, well, to everything. "What IBM is is mainstream," says Marshall. "It's not as safe as it used to be, but clearly it has been a leader in providing management technology to Fortune 1,000 companies for the last 30 years. Our objective in developing a close relationship with IBM is really to make objects safe for the masses."
