Larry's Kids

Tweet

In advance of an IPO planned for late 2005 or early 2006, they're on a tear to grab market share, and their confidence is riding high. "This is a CEO's fantasy product," says Nelson, a nearly evangelical promoter of NetSuite. As he demos the software, his enthusiasm is infectious. When it comes to competitors, he patently dismisses them, regardless of their size (like Microsoft and its Great Plains product) or market share (Intuit's QuickBooks, the 800-pound gorilla of small-business software). Nelson is, rather boldly, even dismissive of Oracle's ability to move into the smaller market space. And yes, that's his boss's other company he's talking about. NetSuite is like the Chihuahua that thinks it's a German shepherd.

But it's a fast-growing Chihuahua, and NetSuite has one big advantage. While its competitors targeted specific slices of the market (QuickBooks focusing on accounting, SalesForce.com on sales-force automation), NetSuite was first out of the gate with all-in-one business software delivered over the Web. Is there even anyone else in the race? "No, believe it or not," says Yankee Group analyst Sheryl Kingstone. "Not the way they do it."

Ultimately, the company's greatest challenge may be its ability to retain its small-business focus. Can a company that's owned by one of the wealthiest men on the planet, a company that's growing spectacularly, expanding globally, and competing against the likes of Microsoft and Intuit, stay close enough to the small-business mentality of its customers to truly understand them? Goldberg says that one of the company's advantages is that it's run entirely on NetSuite software, which forces it to evaluate its own product daily in a real-life setting. But will NetSuite be a candidate for its own software if it keeps up this pace? "It's an interesting question that we think about," says Goldberg. "Will we still be using NetSuite when we have 10,000 employees?"

Early in his career, Goldberg's own focus was on big business. He went to work for Oracle as a database architect in 1987, right after earning his degree in applied mathematics at Harvard. Then, after eight years, Goldberg -- with the blessing and backing of Ellison -- set off with three other Oracle employees to create his own multimedia software start-up in San Francisco. An early, ill-fated competitor to Macromedia Flash, the company was called mBed. It never connected, but as Goldberg struggled with managing his fledgling operation, he began to sense a greater opportunity. He had gone straight from software genius to CEO and was now dealing with employees, sales, and all sorts of start-up issues. And he needed help. "The main thing I learned," says Goldberg, "is that, if you were a small or growing business, the tools that were available to you were extremely limited."

Goldberg called Ellison in 1998 to suggest that they create small-business applications. Ellison encouraged Goldberg to focus on accounting but to do it, unlike QuickBooks, over the Web. "Larry really was, even at that point -- and this is in 1998 -- sure that this was how all software was going to be delivered," says Goldberg. "And he was trying to transition Oracle to do that for big companies." Goldberg wanted to pursue sales-force automation, but Ellison pushed for accounting first, arguing that that's the core of all small businesses. Accounting it was. "The entire vision of the company," says Goldberg, "came together in about five minutes."

Thus, NetLedger was born in late 1998 in a small office south of San Francisco above a hair salon and an Indian restaurant. Goldberg says that while the first four employees were all ex-Oracle, the next 50 were deliberately not. "We really knew," he says, "that because we were delivering software for small and midsize businesses, we needed a different culture at the company. We needed different blood." The company was launched on QuickBooks and stuck with the Intuit product -- for the first two months. "I remember that day when we imported the QuickBooks file [to NetLedger's nascent online software program], and our business was sitting there, right on the Web," he says. "We could see everything that was happening. That was a great moment."

The first product, also called NetLedger, debuted in 1999 at a cost of $4.95 per month. At that price, Goldberg got NetLedger in a lot of hands, which was the goal. One of those early customers was Rene Vandockum, a small-business man running a San Diego company called Racebolts.com, which imports and sells titanium nuts and bolts for motorcycles and racecars. Vandockum dropped QuickBooks because of NetLedger's integration, tying together the front and back offices. But the software was hardly perfect. "Back then," he says, "it was down a lot, awfully slow, and every time a new version came out, the whole thing crashed." But it was cheap, offered good (and free) customer service, and was constantly improving and adding features.

 PREV  1 | 2 | 3 | 4 | 5  NEXT 

Read more:

Sign-up for our Technology Newsletter

Email Address: