In Focus

Legendary Larry

by Chick Cheryl

Is he a legend in his own time, in his own mind, or was Chick Cheryl just looking for a rhyme? Maybe a little of all three! One thing is for sure, Larry Ellison, founder and CEO of Oracle Corporation (Nasdaq: ORCL), definitely has the stuff legends are made of. Should we care? (Don't answer that, Chicks Julie and Jeanette!) Heck yes, we should care. There is much to be learned from a company's leader. Obviously, management style is dictated by the man -- or woman -- on top, and we Chicks think management is an extremely important factor in finding a worthy stock purchase (see Chicks Dozen #11). Okay, even if you think the actual CEO is not the most relevant factor in a company's greatness, certain CEOs are as fascinating as any celebrity you might see in the tabloids.

Larry Ellison is definitely a character with quite a reputation. In fact, Mike Wilson's biography of the man is titled "The Difference Between God and Larry Ellison." The punchline? God doesn't think he's Larry! Who wouldn't want to learn more about this jet-setting billionaire playboy? I mean, just how does a kid growing up in a bad neighborhood on the south side of Chicago end up in Silicon Valley with a net worth of over 50 billion dollars? Pretty amazing, and I didn't even mention the fact that he dropped out of college and has never taken a computer science course!

I think I'll start by giving you a visual. a necessity for any Chick describing a man. I find it interesting that we all are more than familiar with that other software billionaire. You know, the bespectacled one wearing Mr. Rogers' cardigans? Although Mr. Gates and Mr. Ellison may be battling it out for the "richest man in the world" title, there certainly is no contest in the fashion department. Larry Ellison is a stand-out among the techno-geek crowd, donning European designer garb, custom fit by his personal tailor. At 56, he's a better-than-average-looking guy, and put that many zeros behind any fella's name and he's bound to get even more attractive! This very eligible bachelor is known for his parties, beautiful women, and death-defying hobbies (yacht racing, piloting fighter jets, etc.). Actually, this competitive, risk-taking spirit not only permeates his personal life, but has really been the force behind his professional life as well. He has always felt that taking the bigger risk is not taking any risk at all.

Oracle was founded in 1977. In 1976, IBM Research published a landmark paper in which, for the first time, "a mathematically consistent and complete way of managing and retrieving information" had been suggested. Conventional wisdom believed that such a "relational database" would never be of any commercial use because it was just too slow. Larry and three associates felt differently. Since they were bucking the trend of traditional thought, these mavericks were given a real head start by being the only salmon swimming upstream. This became the goal of the company: to build and deliver the first commercial relational database. Believe it or not, this was the beginning of Oracle -- four guys chipping in $2000 dollars apiece, trying to eke out a living until they could come up with some product. Mind you, at that time, "software" was still sort of a vague notion, so outside funding wasn't really an option. All the venture capital money was still going into hardware. Luckily for them, software didn't require huge capital.

The first version of Oracle was sold and installed in November of 1979. And guess who the trainer and installer was? Larry himself! Boy, has he come a long way, baby! And so has the company -- they have been profitable since day one. In 24 years they have lost money in only one quarter (in 1990) and, according to Ellison, that's one quarter too many! Today Oracle is the world's leading supplier of software for information management and the world's second largest independent software company, with revenues north of $9.7 billion! Although some of Ellison's business tactics have been deemed questionable at best, this CEO might argue that his methods have been distorted in the media and, thus, misunderstood.

Perhaps one of the greatest influences on his business practices has been his experience with Japanese culture. Replicating their extreme aggressiveness with unbelievable humility has been a primary goal for him at Oracle. Another goal has been market share, market share, market share. A company can never have enough! And as for the competition? Destroy 'em! (Hmmm, sounds like Bill Gates and Larry Ellison may have been reading the same books!)

Early on, Ellison really only had two goals for his professional life, and they weren't about heading up a company or making a lot of money. He simply wanted to work in a company where he could build things with people he enjoyed. In fact, at one point, Oracle personnel directors were instructed to only hire those applicants that they'd enjoy having lunch with three times per week.

Larry Ellison and Oracle have pretty much become synonymous. It's rare these days to find a successful CEO who has been with a company since day one. I think that has been one of the most troubling issues for Oracle lately. Top-management tends to leave once it becomes clear there's no place to rise, as Larry's not going anywhere. At least investors hope he's not going anywhere. with his wildly dangerous personal pursuits, many worry he may be going six feet under! Perhaps when you're single, worth 50 billion and life has become somewhat surreal, you need to keep pushing the boundaries of your own mortality. It's pretty much a life I can't imagine. With a family and fifty bucks in the bank, life is very real at that 6am Sesame Street wake up call!

Ellison encourages any child to get involved in the act of creation. the creation of products, art, buildings and ideas. This is what he believes will change the world, along with the global economy we're heading towards. Hey -- if building blocks can really lead to billions, I think my kids are onto something!