#124 Larry Ellison and Oracle

What I learned from reading Softwar: An Intimate Portrait of Larry Ellison and Oracle by Matthew Symonds. ---- [0:01] Although much of my time with him coincided with a period of adversity for Oracle, I never once saw Ellison downcast. His unquenchable optimism and almost messianic self belief never faltered. [5:06] The single most important aspect of my personality is my questioning of conventional wisdom. My doubting of experts just because they are experts. My questioning of authority. While that can be very painful in terms of your relationships with your parents and teachers it is enormously useful in life. [12:19] People — teachers, coaches, bosses — want you to conform to some standard of behavior they deem correct. They measure and reward you on how well you conform — arrive on time, dress appropriately, exhibit a properly deferential attitude — as opposed to how well you do your job. Programming liberated me from all that. [16:34] I had always believed that at the top of these companies there must be some exceptionally capable people who make the entire technology industry work. Now here I was, working near the top of a tech company, and those capable people were nowhere to be found. The senior managers I saw were conformist, bureaucratic, and very reluctant to make decisions. [23:08] Oracle’s first product reflected Larry Ellison’s desire to do something no one else was doing: The opportunity was huge. We had a chance to build the world’s first commercial relational database. Why? Because nobody else was even trying. The other relational database projects were pure research efforts. If we could build a fast and reliable relational database, we would have it made. I thought that relational was clearly the way to go. It was very cool technology. And I liked the fact it was risky. The bigger the apparent risk, the fewer people will try to go there. We would surely lose if we had to face serious competition. But if we were all alone in pursuit of our goal of building the first commercial relational database system, we had a chance to win. [26:03] Larry is a sprinter. Not a grinder: Although he always talked about technology and Oracle with passion and intensity, he didn’t have the methodical relentlessness that made Bill Gates so formidable and feared. By his own admission, Ellison was not an obsessive grinder like Gates: “I am a sprinter. I rest, I sprint, I rest, I sprint again.” Ellison had a reputation for being easily bored by the process of running a business and often took time off, leaving the shop to senior colleagues. [30:55] If you speak out in support of small, unimportant innovations that fly in the face of widely held beliefs—I do it all the time—you are likely to be dismissed as stupid or arrogant, and that’s pretty much the end of it. However, if you defend a really big idea that challenges widely held beliefs, you’re likely to generate a mass of hatred, and you just might pay for it with your life. When Galileo defended Copernicus, he was ridiculed, imprisoned, and then threatened with death unless he recanted. Charles Darwin cautiously postponed publishing On the Origin of Species and The Descent of Man for more than twenty years, but that judicious delay did not save him from vicious personal attacks coming from all ranks of contemporary society. [37:09] Ellison on mistakes he made before the near death experience of Oracle: I was interested in the technology. I wasn’t interested in sales or accounting or legal. If I wasn’t interested in something, I simply ignored it. I just wasn’t paying proper attention to my job. I was doing only the things that interested me. It was the same problem I had in school. But this happened in my forties. I wasn’t a kid anymore. [38:40] Surviving Oracle’s near death experience made Larry Ellison stronger. It made him happier: After Oracle’s crisis, looking into the abyss and surviving, I felt emotionally strong enough to take a more realistic look at myself. I was tired of striving to be the person I thought I should be. If I was to have any chance at happiness, I had to understand and accept who I really was. [42:12] Larry Ellison’s core business philosophy: Larry Ellison says he’s happy only when everyone else thinks he’s wrong. The core of his business philosophy is that you can’t get rich by doing the same thing as everyone else. “In 1977, everyone said I was nuts when I said we were going to build the first commercial relational database. In 1995, everybody said I was nuts when I said that the PC was a ridiculous device — continuously increasing in complexity when it needs to become easier to use and less expensive.” [50:56] Larry’s great story about how duplication of effort costs Oracle a ton of money. [53:13] Never, ever, think about something else when you should be thinking about the power of incentives. —Charlie Munger: One of the worst ideas I can remember was when Ray decided we didn’t do enough selling through partners. The sales force convinced him that the way to fix this was to pay more money to the sales force if the deal went through a partner than if the deal came directly to Oracle. For example , if you sold a million - dollar deal directly, Oracle would get a million dollars and you would get a $ 100,000 commission. But if you sold a million - dollar deal through a partner, Oracle would get $ 600,000 and you would get a $ 120,000 commission. Needless to say, our sales force pushed as many deals as they could through partners that year, so the partners were happy. The sales force got higher commission payments for going through partners, so they were happy. The only loser was Oracle. [57:57] Ellison’s strategy: 1. Pick a fight. 2. Burn the boats: Once I’m finally certain of the right direction, I pick a fight, as I did with Gates. It helps me make my point, and it makes it impossible to do an about—face and go back. Once a course has been plotted, I sail a long way off and burn my boats. It’s win or die. [1:01:20] Larry Ellison on Bill Gates: Bill and I used to be friends, insofar as Bill has friends. Back in the eighties and early nineties , all the people in the PC software industry hated Bill because they feared Bill. But Oracle didn’t compete with Microsoft very much back then , so we got on pretty well. As I got to know Bill, I developed a great respect for the thoroughness of his thinking and his relentless, remorseless pursuit of industry domination. I found spending time with Bill intellectually interesting but emotionally exhausting; he has absolutely no sense of humor. I think he finds humor an utter waste of time — an unnecessary distraction from the business at hand. I don’t have anything like that kind of focus or single mindedness. [1:06:13] Larry Ellison on why Larry Ellison does what Larry Ellison does: My sister told me that whenever I got too close to a goal I’d raise the bar for fear of actually clearing it. We’re endlessly curious about our own limits. The process of self—discovery is one of testing and retesting yourself. I won the Sydney—to—Hobart. Can I win the America’s Cup? I’ll find out. The software business is a more difficult test; it’s a much higher stakes game; there are more people playing this game; it’s a lot more interesting game; and it’s a lot more exciting. If I wasn’t doing this, I’m not sure what else I would be doing with my life. ---- Founders Notes gives you the ability to tap into the collective knowledge of history's greatest entrepreneurs on demand. Use it to supplement the decisions you make in your work. Get access to Founders Notes here. ---- “I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested so my poor wallet suffers. ” — Gareth Be like Gareth. Buy a book: All the books featured on Founders Podcast

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00David Senra?

  And what of Larry Ellison, the man? Although much of my time with him coincided with a period of adversity for Oracle, I never once saw Ellison downcast. His unquestionable optimism and almost messianic self-belief never faltered. It is this aspect of Ellison that many people who either don't know him, or know him only a little, find most objectionable. For them, he is at best a bombastic showman, and at worst, a false prophet, and even a self-serving liar. Yet I am more convinced than I was at the beginning of my journey with him, that Ellison is an extraordinary person. Quite different from, and infinitely more interesting than, the caricature beloved of the media.

• 0:45David Senra?

  He's funny and entertaining, but also highly serious, always interested in ideas and eager for new ones. Above all, Ellison is intense. There's a restlessness about him. Much about Ellison is paradoxical, even contradictory. He's enormously vain, intellectually dominating, and irrepressibly extroverted. But he's also shy, has relatively few close friends, and is in constant need of the emotional reassurance that much of his life had been lacking. He is determinately youthful, but he is never far from thoughts of mortality. He detests vulgarity and yearns for simplicity and naturalness.

• 1:28David Senra?

  But he also derives straightforward pleasure from owning hugely expensive material status symbols. He desperately wants his wealth to do some good in the world, but he recoils at the very idea of altruism. He is ultra-confrontational in business, but he goes to almost any lengths to avoid confrontation on a personal level. He either delegates to the point of detachment, or is obsessively controlling down to the last detail.

• 1:57David Senra?

  He prides himself on never losing his temper, but he is manifestly driven by overwhelming passions. Ellison is nothing if not complicated. Aren't we all? All right, so that is an excerpt from the book that I'm going to talk to you about today, which is Soft War, an intimate portrait of Larry Ellison, an oracle, and is written by Matthew Simmons. So the idea to study Larry Ellison actually came from a misfit, and I found him so interesting that I'm going to do a two-part series on him. Now, I am still in the middle of this multiple-part series on the early automobile pioneers, but I'm waiting on two books to arrive. So in the meantime, I figured, hey, let's see what Larry Ellison has to teach us.

• 2:40David Senra?

  So let me tell you right up front, this is not like a typical biography. It's like Larry annotated this book, and so this is what the author has to say. He says, "An innovative twist was that Ellison would have the right of reply or commentary within the book, which he could either use to express a counterpoint to any of my conclusions that he disagreed with, or to amplify things that he thought were important. Neither of us would be able to alter the words of the other." So at the end of every chapter, there's a series of footnotes written directly by Larry Ellison. So I think you're going to enjoy this podcast because the bulk of the highlights come from Larry talking directly to us, which I think is an interesting and unique idea. So I'm going to start with his early life.

• 3:25David Senra?

  This is Larry telling us the difference between him and his much older adopted father. Some background for you to know, his father probably didn't want to adopt him. So his name is Lou Ellison. Lou's second wife was Larry's biological mother's aunt. I know that's a little confusing. And we're going to see the contrast between him and his adopted father. And right from the very beginning, we see that Larry is a misfit for real. So it says, "Part of the problem was that Larry and Lou had very different attitudes towards authority." Ellison says, "He believed that our country's officials and authority figures in general were always right and should be obeyed without question.

• 4:05David Senra?

  The governor, the mayor, the police, they're in their jobs for a reason, he'd say. They know things you don't."

• 4:14David Senra?

  I couldn't accept his blind faith in authority figures. I had the opposite point of view. I question everything. It's like Mark Twain says, what is an expert, anyway? Just some guy from out of town. This lack of respect for authority made it just about impossible for me to get along with my father. So I have a theory. Larry, as you'll come to know today, is extremely competitive. And I have an idea where this competitive nature came from. And I think it's because of the abuse that he suffered from his adopted father. As I was reading the book, I also watched a few documentaries on Larry Ellison. And there's a quote from that documentary, I was taking notes on it. There's a quote from that documentary that I think I should tell you right up front,

• 4:58David Senra?

  because it's so important to understanding why Larry makes the decisions he makes. So this is a direct quote from Larry talking. He says, "The single most important aspect of my personality is my questioning of conventional wisdom. My doubting of experts just because they're experts. My questioning of authority." Now, this is very interesting words he's going to use here. "While that can be very painful," those are two interesting words, "in terms of your relationship with your parents and teachers, it is enormously useful in life." Okay, so that leads me to this theory that this might be the root cause of Larry's extreme competitiveness. And that is not an understatement.

• 5:41David Senra?

  It says, "Lou Ellison concluded early on that Larry's failure to comply with authority would be his undoing." He couldn't, and this is Larry saying, or, excuse me, this is the author describing this. "He could never resist any opportunity to remind his son that he would amount to nothing." So first of all, what a terrible thing to say to a kid. What kind of monster tells their, the person they're raising, whether it's their biological son or not, hey, you're going to be a loser, kid. You're never going to amount to anything. And then the second thing I was thinking, we talk about this idea that Charlie Munger talks about, how knowledge compounds, just like money can compound, right? And while I'm reading this book, I'm also watching, when I was a kid, I was a huge Michael

• 6:26David Senra?

  Jordan fan. So there's this documentary that's occurring at the time I'm recording this, and it's called The Last Dance. And it's a multiple art series on Michael Jordan. And when you study the life of Michael Jordan, you realize, you know, he's Extremely competitive. He says something, it's something that he cannot, he cannot turn off. In the documentary, he talks about, hey, do you have a gambling problem? He's like, I don't have a gambling problem. I have a competitive problem. And so as I'm watching, I'm reading this book on Larry Ellison and I'm watching this documentary on Michael Jordan, I realize if Michael Jordan sold enterprise software, he'd be Larry Ellison. There's a lot of similarities that we'll see. And it's interesting, I had that thought multiple times. And towards the end of the book, he makes the comparison to extreme competitiveness of Michael Jordan.

• 7:11David Senra?

  He's actually comparing, he's best friends with Steve Jobs. And he actually compares that to Steve Jobs. But I think he could also, it definitely also applies to Larry. So let me continue this, this idea that he has that's spread throughout the book. And this is Larry on confusing obedience with intelligence. Or another way to put this is why he'd rather be a cat than a dog. So first, there's the, this quote, and he says, "I always thought it was, it was interesting how teachers, coaches, and other authority figures value obedience more than knowledge or skill, and effort more than results. They just love being the boss." So in this section, he adds the following footnote, which I thought was very interesting. So I'm going to read that to you.

• 7:53David Senra?

  He says, "People regularly mistake obedience for intelligence." He could also be saying, "My, my adopted father mistook obedience for intelligence." "That's why we think that dogs are more intelligent than cats. We measure intelligence as the speed at which animals learn to do what we want them to do. A dog will fetch a stick every time you throw it. A cat will look at you and wonder, if you wanted the stick, why'd you throw it in the first place? Get it yourself, idiot. In reality, cats and dogs have similar intelligence levels, but different survival strategies." And this is the most important part of his whole, this whole section here. "The dog is dependent and must please to get regular meals. The cat will mooch off his human roommates, but if the food runs out, the cat can survive

• 8:38David Senra?

  on its own." I love golden retrievers, but I don't want to be one. I'd much rather be a cat. So right from the very beginning, we're seeing a huge aspect of his personality. And this continues, it's going to be applied later on with Ellison. Like, I would say the majority of the people that we study on this podcast are not fans of formal schooling. If you make them sit down and try to learn something they are not interested in, they will rebel. But if they have the freedom to learn something they're genuinely curious about, then there's no stopping how much time or effort they will dedicate to learning. I think it's very important to separate the idea of formal schooling from your own like personal curriculum or your own personal research and development.

• 9:22David Senra?

  So we see Ellison in college saying, hey, this is, he's a college dropout. He says, "I didn't like exams. I recall one exam where I just sat there for an hour, unable to begin because I was so angry that I had to spend the next three hours writing answers to questions I cared nothing about. I never had the discipline to do things I didn't like. I had such a short attention span that it was simply impossible for me to finish anything." So continue on this dislike of formal schooling. Ellison's insistent questioning of authority was that his, was, was the reason that his grades at school were usually poor. So he explains this. "I didn't have, I didn't respect or like most of my teachers. I didn't think they were very smart, and half the time, they didn't seem to know what they were talking about.

• 10:05David Senra?

  They constantly made mistakes, and I enjoyed pointing them out." So again, this is a young, brash Ellison. He learns over time, he's an extremely smart person, obviously. He learns over time to not do this because he's, he's very interested in getting along with, with his fellow humans, except his enemies. He's like, "I'm going to be nice to everybody, but I don't think it's smart for me to be nice to my enemies." He says, "They didn't like that at all, but I did." When somebody told him, think about how extreme his distaste for this is. He says, "When somebody told him that he would look back on his school days as being the best years of his life, he replied, 'If that's true, I'm going to kill myself right now.'"

• 10:44David Senra?

  Now, that's dislike of formal schooling. That doesn't mean he's very passionate about, and it's very obvious, like how deep his knowledge is on a broad range of subjects when you hear him speak. So it took trial and error of realizing, hey, there's a bunch of subjects I'm not interested in, and then he found two that he was extremely interested in, and that was physics and programming. So this is on his love of physics, and then his desire, he wanted to be judged on his work, not his education, or how long it took him to do his work. So he says, "I was intrigued by physics because it seemed to answer the most basic questions about our world. Like a lot of young people, I was looking for answers." As part of a physics course, he had to learn basic programming. So now he's talking about how did he learn programming?

• 11:29David Senra?

  "I just read the book. It was logical, and I was good at logic. I started doing contract programming." So this is some of his early jobs and how he was able to feed himself. "My short attention span didn't work against me because I could get programs written very quickly. I ended up making quite a lot of money, and I only had to work a few days a week. It was fun, and it was easy, and nobody cared if you were a PhD or you'd never finished high school. Either you could do the job, or you couldn't. I love that." And now we're going to see more examples of Ellison the misfit. I would say, as a general rule, he has an extreme repulsion against conformity, and extreme desire to be able to live with the results of his own thinking. So it says, "For Ellison, discovering that he was good at programming was with a validation

• 12:14David Senra?

  of his intelligence and liberation from what he regarded as absurd conventions." This is a quote from Ellison. "People, teachers, coaches, bosses," he repeats this over and over again throughout the book, by the way, "want you to conform to some standard of behavior they deem correct. They measure and reward you for how well you conform. If you arrive on time, you dress appropriately, you exhibit a properly deferential attitude, as opposed to how well you do your job. Programming liberated me from that. I could work in the middle of the night. I could wear jeans and a t-shirt. I could ride my motorcycle to work. And I'd make more money if I could solve the problem faster and better than anyone else."

• 12:55David Senra?

  Now, something to know about Ellison, there's like, in many different domains, there's two, his life is divided into two parts. And at the beginning, he's optimizing just for freedom. He doesn't want anybody else to tell him what to do. He wants free time. He wants to work as little as possible, be able to pay his bills. I don't think he was really set out to be rich at that time. And just do, and basically work as he sees fit and spend his time as he desires, right? And then the second half is when he's running Oracle and he realizes, it's like a switch that flips, where he dedicates almost every waking hour to this extreme competitive goal

• 13:38David Senra?

  of his, which is, I want to have the number one software company in the world. And we're going to talk a lot about that today. All right, so in this, in this part of the story, though, we're still in his early jobs. And this is when he's optimizing for freedom. Okay, so he says, "Basically, programming gave me the freedom to screw around through my twenties. All I knew, all I knew was I was capable of short bursts of energy. So I found jobs working on weekend, on the weekends as an IBM Systems Programmer. Most people didn't want to work weekends, so I had no trouble getting these jobs. Monday through Friday, I'd be hiking, or rock climbing in Yosemite, kayaking, or on a long bike trip down the California coast. I was having fun." Also, he mentioned something, I'm going to go into more detail later, about he's only capable of short bursts of energy.

• 14:23David Senra?

  I would want to compare and contrast for a second Ellison's approach to work with the approach that we've seen with most of the people I covered for the early automobile pioneers. I would describe, Ellison describes himself as a sprinter. So he works really hard, then he rests, takes a break. Works really hard, then he rests, takes a break, right? And actually, he applies this like, this barbell strategy, this no messy middle strategy, which I'll talk about in a little bit, to a lot of different domains. But I would say that's, that's in- Direct contrast to most of the early automobile pioneers, they're grinders. They wake up in the morning, like we just went over Albert Champion. Like, he wakes up, he works out, he works till after that, and then he comes home and has dinner,

• 15:06David Senra?

  works some more, goes to sleep. So, again, it's just another way to, there's no one right way to accomplish what you want to accomplish. It's really, it has to be tailor fitted to who you are as a person and where you feel you're the, like, what route is the best for you. Okay, so, now, it's very fascinating that he actually gets married really young, early twenties, and he gets divorced. And his wife leaves him because he's, she kind of describes him as lazy. So, it says, "The breakup triggered all sorts of feelings of self doubt in Ellison. My father told me that I would never amount to anything, and now he seemed to be right. I knew I could earn a living as a computer programmer, but where was my life going?" And he's in his early to mid twenties when this is happening. I think it's very natural, especially

• 15:51David Senra?

  at that age, to question, like, what is, like, if, assuming that, you know, nothing tragic happens to you at that age of your, and stage in your life, you have a lot more life ahead of you than behind you. And so, there's a great degree of uncertainty, and I think what he's experiencing is just universal to almost all humans. Like, what is my life going to be? So, he said, "I wondered if I could ever be disciplined enough to be anything more than a technology piece worker."

• 16:19David Senra?

  Now, so he starts trying to take work a little more seriously. He gets a formal job, and it's really important what happens at this job, because Ellison comes to the realization, you know, he's, he's raised by a person that says, "Respect authority," even if his natural inclination is like, "No, I'm not going to do that." But, once he gets a real, serious job at a quote-unquote "serious" company, he realizes, "Oh, there's no such thing as adults. No one knows what they're doing, so if no one knows what they're doing, I might as well do what I feel is best." So, he says, "For the first time, Ellison had a title, Vice President of R&D and some seniority." And this is Ellison describing the experience. "I'd always believed that the top of these companies, there must be exceptionally capable people who make the entire technology industry work. Now, here I was, working near the top of a tech company,

• 17:03David Senra?

  and those capable people were nowhere to be found." So, let me interrupt my own point here. Later on, I'm going to tell you many examples where he discovers the same exact thing in his own company, in Oracle. There's a, there's a lot of examples in the book. There's just a silliness to the way large corporations and large companies and large anything operate. And to me, I think that's extremely inspiring because it's like, remember that scene from Wizard of Oz where they finally revealed a curtain, like the man behind the curtain? That's everything. You'd be surprised how much stuff is really just held together with duct tape. Or from the outside, you're like, wow, how, look at these geniuses doing all this stuff. And the more you read biographies, the more you expose yourself to a multitude of experiences in life, like, oh, there's no adults, there's no adults.

• 17:48David Senra?

  And he's realizing that right now. So let me go back to this point. "The senior managers I saw there were conformist, bureaucratic, and very reluctant to make decisions. I gradually became convinced that I was better at solving problems and making decisions than they were. Or at the very least, I was willing to make a decision to do something, while they seemed paralyzed by the endless analysis and fear of making the wrong decision. Ellison suddenly began to think that maybe he could run a company. But he wasn't motivated," now this is a crazy sentence, because you think about, you know, today, Oracle's one of the largest companies in the world. It's successfully survived for what, 42, 40 something, over 40 years? But he says, "But he wasn't motivated by either great ambition or the vision to do anything in particular."

• 18:32David Senra?

  And what's crazy is we're going to learn Oracle started out as a side job, a side hustle. "Having his own company would simply allow him to go on with his life, but with more control over it and better rewards." So this is, he's starting to get this idea as he's working at this company. This is like, if I ever started my own company, like, I could probably do this, what would I want it to look like? And so, his first idea for his own company is like, well, it had to be small, right? I don't want to manage people, I don't, he says over and over again in the book, "I never wanted to run a company." He doesn't really like running a company, which is also very, he's a very intriguing person. This is why I'm going to read another book on him. Bizarre in a good way. But anyways, his first idea is, I'm going to have, it's going to be small, I'm only going to hire smart people, and we're only going to work on things that won't take much

• 19:17David Senra?

  time, which is really gives us an indication of his preferred method of working. So it says, "The ideal hard job is the one as generally perceived as being difficult, but can quickly succumb to a bit of cleverness. All we really needed were a few smart people who could do these so-called hard jobs quickly, and we'd make a lot of money while not working all that hard. That had been my favorite approach to work from the beginning."

• 19:40David Senra?

  Now, around this time, he hasn't started Oracle. Now, Oracle goes through a series of names. The names aren't important, but this is really the beginning of Oracle. He's working at this place called Omex. The job at Omex gave him his opportunity. Omex was preparing to put a contract out for writing the software for its mass storage system. So they're releasing this contract and you could bid on it, right? So he tells the CEO, "Hey, I know some super programmers who could save the company a lot of time and money. Do you want me to ask them to put together a bid on the contract?" The CEO says, "Sure." The team included him and two of his former colleagues. The three of them formed a company, so it's called Software Development Laboratories. That's really going to be Oracle, okay? And they won the contract from Omex. Now, here's what I found was very fascinating.

• 20:25David Senra?

  Ellison would stay at Omex to design and oversee the project while Minor and Oats, those are the people he's working with, wrote the software. So in other words, Oracle started out as a side hustle. And now we go over what motivated Ellison to start Oracle. He says, "When 34-year-old Larry Ellison found it a little firm, his ambition was pretty much in line with his thus far fairly modest achievements, namely to avoid having to do unrewarding work for people he didn't respect. What motivated me was the desire to control my environment so I wouldn't have to do things I didn't want to do or spend time with people I didn't enjoy working with." So then for a while, he starts thinking, like he begins thinking about what kind of company do I want Oracle to be? And so he says, "I wanted to get out of the consulting business." So that's what they're doing.

• 21:10David Senra?

  They're bidding on contracts, they're doing work for other companies. And he thought this is like, you know, we're super smart, we'll do it really fast, and then we'll go hiking, or we'll go kayaking, we'll do whatever we want, right? He realizes, oh, this is the exact opposite. Like, I'm making a lot of money, but I'm spending way too much time. So he says, "I wanted to get out of the consulting business. Consulting proved to be much more work than I'd ever imagined." My hard problems cleverly solved business model did not scale up beyond a few people, proving I was not nearly as clever as I thought. So I need to stop right there, too. Something that makes this book refreshing to read is Larry's constantly saying, "Yeah, yep, oh, this happened in the 90s. I was stupid. I didn't know what I was doing. Oh,

• 21:48David Senra?

  yep, that's my mistake. Yep, I was an idiot." And he's very honest about his imperfections, which I think is, it's just, it's very refreshing to read as opposed to people that feel like, "I have to keep this air of perfection about me." So he says, "We were making a lot of money, but we were working insanely long hours. The closest I got to Yosemite was the Ansel Adams poster on my office wall. So we decided to abandon the consulting business and go into the software product business. A software product offered the ultimate leverage: build it once and sell it over and over again." Now, he comes up, the first product of what, of Oracle is going to be this idea of a relational

• 22:33David Senra?

  database, which at the time was just written about as theory in research. So they read a paper, they're like, "We want to build software. We don't know what the product to build," right? So him and his partners, they start reading like research papers. And there was one guy at IBM at the time, and he was writing like theoretical papers on why relational databases could be commercially viable, right? But they're only doing the research. And the reason I bring this up is because I think Ellison hits on a point that is so important that we've talked about over and over again, that he wants his first product. He wants his product, in the design of his first product, it reflects Ellison's desire to do something that no one else is doing. And this is very counterintuitive

• 23:18David Senra?

  for humans. People say, "Oh, that's really hard. No one's ever done it before, so let me go do something easier." But the problem is, You're not the only one that arrived at that conclusion. So if it's easier, it's gonna be very crowded. And then you have a lot of competition. You can't really stand out. Ellison's like, we're gonna do something that's extremely hard because no one else is gonna do something extremely hard and we'll be the only one doing it. So it says, "The opportunity was huge. We had a chance to build the world's first commercial relational database." This is in the 1970s, by the way. Why? Because no one else was even trying. The other relational database projects were pure research efforts. If we could build a fast and reliable relational database, we would have it made. At the same time, I thought it'd be smart to avoid the very competitive and highly conservative IBM mainframe market.

• 24:03David Senra?

  So we decided to build our database for the mini-computer market. I thought that relational was clearly the way to go. It was a very cool technology and I liked the fact that it was risky. Here's another aspect of his personality. The bigger the parent risk, the fewer people that will try to go there. We would surely lose if we had to face serious competition. But if we were all alone in our pursuit, all alone in the pursuit of our goal of building the first commercial relational database system, we had a chance to win. So they wound up succeeding, obviously. I'm gonna fast forward. And this is where we see Ellison had severe deficiencies in the early days as the CEO of Oracle. He did not know what he was doing. He talks about it openly. He had to learn.

• 24:48David Senra?

  And the process of learning is making a series of mistakes. So he says, "Ellison thought that the most important contribution he could make to Oracle's success was to concentrate on making the product better. He simply didn't regard himself as competent to concern himself with all the other things that a CEO is supposed to be responsible for." And so, a huge part of what I'm gonna... of understanding Larry Ellison's life is that Oracle had a near-death experience. It almost went out of business in the early 90s and it was a direct result of the incompetence of his abilities as a CEO. Which makes it so fascinating that he had to learn to survive and then that, going through that hard experience allows him to build a company that is stronger on the other side of that.

• 25:32David Senra?

  Before I get there, I wanna, I wanna pause and talk to you about his... There's a lot of quotes and anecdotes throughout the book about his personality. And I think, knowing that before we get into not only the hard times Oracle has, but then all of his... The end here is essentially just Larry telling us all the ideas he has that he learned through multiple decades of ups and downs building Oracle. All right, so here's his personality, sprinter, not grinder, I mentioned earlier. Although he always talks about technology in Oracle with passion and intensity, he didn't have the methodical restlessness that made Bill Gates so formidable and feared. By his own admission, Ellison was not an obsessive grinder like Gates.

• 26:17David Senra?

  I am a sprinter. I rest, I sprint, I rest, I sprint again. Ellison had a reputation for being easily bored by the process of running a business and often took time off, leaving the shop to senior colleagues. Ellison is also his own harshest and most unrelenting critic. More about his personality. What Ellison does best is inspire, flatter, amuse, and finally, steamroller skepticism with his own massive certainty. When you're around him, you cannot escape being evangelized. He can't help it. The ideas come bubbling out, and he's so excited about them that he has to share them.

• 27:01David Senra?

  I have begun to think that selling software is a secondary objective for Ellison. What is more important to him is to recruit believers. This is Ellison talking about his preferred desire to go after high-risk situations. It is my nature to go for the high-risk, high-reward option. That's my cross to bear. When you're reading this book, you realize, hey, he's a little nutty. Definitely a little nutty. So he says, when Larry Ellison says that he honestly thinks Oracle has within its graphs to become the most important company in the world, he believes it. It's as if he knows that he shouldn't say such things, but keeping something so exciting and so wonderful to himself would be unbearable.

• 27:45David Senra?

  Yet, when Ellison makes these statements, it confirms the opinion of many people and their belief that he's slightly crazy, someone who has become so addicted to hyperbole that he inhabits an alternate reality.

• 27:58David Senra?

  More about his personality, I think it's really important to understand why he does the things he does. Larry has to have an enemy. Larry's the most focused individual I have ever seen when he has something to beat. So that's why I tell you, he reminds me of Jordan, Michael Jordan. Watching these documentaries on Larry Ellison. And he says, like, you know, most people say, hey, you know, the company goal is to build the best products in the world. He says, "The company goals to be the number one company in the world." Right now, at the time in the documentary, he was the number two. And he's like, "It's my job to become the number one. That's my sole focus. Like, that's what I'm trying to do." And so he definitely looks at it as like this almost zero-sum competition.

• 28:43David Senra?

  Now, his second marriage also fails. He's been married, I don't know, like, four times, something like that. But Ellison's reflecting on why his second marriage fails, or why it didn't work out. And it tells us a lot about his personality. And again, this is just refreshing to say, hey, I was self-absorbed. He says, "Self-absorption will crush a young marriage, and I was completely absorbed by my own ambition." So he's running his own business at the time. "I was totally immersed in making the business succeed. I neglected everything else. I'd arrive home around midnight most evenings. Nancy eventually tired of this routine and left. She was the second wife I managed to drive away. The first left because I refused to work enough. The second left because I worked too much.

• 29:28David Senra?

  Both cases were caused by my self-indulgent without compromise mode of living." That's a really interesting sentence. "My self-indulgent without compromise mode of living." At least he's honest. "My personal life had fallen apart, and work was the only thing left that mattered. So I worked even more until the hours of the day ran out." Another description of his personality. "Larry Ellison is relentlessly optimistic, calculated contrarian, and shamelessly devoted to hyperbole." That's an employee describing Larry. Larry was a lunatic, but a lunatic with a vision. I know I myself, this is more Jordan-like personality.

• 30:11David Senra?

  Jordan says in the documentary, The Last Dance, that he has a competition problem. He's addicted to it. He says, Larry, Larry says, "I just can't accept defeat until I've been carried dead from the field." More about his nutty personality. He likes to be, he says, "I like to be doubted, but if you're, like, if people say you're nutty, you just might be nutty." So he says, "I always feel good when everybody says I'm nuts because it's a sign that we're on, we're doing something innovative, something truly new and different. On the other hand, when people say you're nuts, you just might be nuts. You gotta constantly guard against that possibility. You don't want people saying you're nuts too often. Once every three or four years is good. Any more than that and you should be worried because no one's smart enough to have a good idea more than once every three or four years." Personality.

• 30:56David Senra?

  He reads history voraciously and tries to learn from it. There's a lot in the way Larry speaks that I think reminds me of Ben Franklin, his autobiography. Ben talks about that he had a lot of opportunities in life that opened up for him because his mind and conversation had been improved by reading. So there's a lot, Ellison has this habit of supplementing his point with historical references, which I find very amusing, and it's also a good way to sell like the point you're trying to make, right? So let me, let me give you an example of that. I'm gonna read a section from the book, but I'm gonna tell you then, and then I'm gonna read his, Larry's footnote about this, and you'll see an example of how he is constantly supplementing his points with historical references.

• 31:37David Senra?

  So first, the author says, "A common criticism of Ellison is that everyone is wrong except him." And then Ellison responded, he says, "Sure, if you're the first to say something or do something that conflicts with popular conventional wisdom, then what you're saying is, in effect, I'm right and everyone else is wrong. That's what innovation means, being first. People never forgive you for being right too early." So that's in the book. Now, this is his footnote that he adds to this section. So he says, "If you speak out in support of small, unimportant innovations that fly in the face of widely held belief," I do it all the time, "you are likely to be dismissed as stupid or arrogant, and that's pretty much the end of it. However, if you defend a really big idea that challenges widely held beliefs, you're likely to generate a

• 32:18David Senra?

  mass of hatred, and you just might pay for it with your life. When Galileo defended Copernicus, he was ridiculed, imprisoned, and then threatened with death unless he recanted. Charles Darwin cautiously postponed publishing on the origin of species and the descent of man for more than 20 years, but that judicious delay did not save him from vicious personal attacks coming from all ranks of contemporary society." So, obviously, I'm a huge fan of history. I found this one of the most appealing aspects of reading the words of Larry Ellison. I thought it was very interesting that he... I think that's the right way to do it. Learn from history and compare and contrast to what's going on in your own life now. Adds a depth that I think is lacking with most people.

• 33:01David Senra?

  And I already said this, but this is the last section of the personality, and then we'll get into the early days of Oracle and Oracle's near-death experience. Ellison, by his own admission, had never really wanted to be a CEO. He never really wanted to run a company. So, once Oracle gets up and going, his goals in life change. Remember, the original idea of Oracle was being a vehicle to provide him with a nice life, a reasonable amount of money, and plenty of time to goof off whenever he felt like. That had quickly evaporated. In his early 40s, Ellison was willing to say and do what was necessary to defeat Oracle's rivals. So, there's a lot of back and forth, because a lot of people that went through this near-death experience of Oracle, Larry winds up firing. So, everybody has different

• 33:45David Senra?

  opinions about what happened. I'm going to talk about the stuff that everybody agrees on. Okay, so Oracle almost runs out of cash. As far as we can tell, that's due to rising costs and late-paying or non-paying customers. So, there's a lot... In this section, I want you to think about what we learned about Billy Durant and why he was eventually removed from GM, okay? So, it says, "Oracle had a serious cash crisis, an ultra-fast-growing company that suddenly hit a wall, and this turned to a painful reverse that... a painful reverse into something almost terminal." Now, I'm just going to list off some of the things that were occurring inside the company that people seemed to agree about. There was accounting irregularities as a consequence of rapid growth.

• 34:27David Senra?

  Some believe it's because he promoted a CFO that had never been a CFO, didn't know what he was doing. Okay. Lack of central control. But all the things I'm listing, think about this is GM under Billy Durant. This is history repeating itself. Or here, I guess you say, human nature repeating itself. So accounting irregularities is a consequence of rapid growth. Lack of central control. A far-flung empire of somewhat autonomous organizations. If the company had adequate cash at the time, it would have been nothing more than a blip. What made it a near-death experience was the lack of cash. So that I think every single one of those characteristics was also present under GM, uh, excuse me, GM under Durant. And we're also going to see Ellison makes the same mistakes that Durant is.

• 35:12David Senra?

  So it says, "For Ellison, a personal as well as professional disaster was unfolding. He had borrowed heavily against his shares that had slumped to a point where he had faced the equivalent of a margin call. And a great many people were only too happy to see him getting his comeuppance. His marriage to Barbara had broken up. So this is the third wife now. And Bob Minor, this is his co-founder, who should have been his closest friend, wanted out. It was personal in another way for Ellison. His adoptive father had always told him that he would never amount to anything. I think this is the third time I've told you this. This is over and over in the book. It's clearly very important, understanding what is driving this like psychopathic intensity that Larry Ellison has. His adopted father had always told him that he would never amount to anything.

• 35:56David Senra?

  My father said I would never succeed. He seemed that he might be right after all. But this is the most important point about this whole section, the reason I included it with you, or for you, rather. Although he was clearly shaken and depressed, it didn't occur to him to give up. Yes, let's go. All right. Ellison's elaborating more in this time. And again, this is what's refreshing. He says, "What kind of CEO lets salespeople write their own contracts? I just didn't know better." So why would that be a problem? Well, he says, "I was an idiot. I ignored sales, just worked on product." Right? He says, "Sales was now responsible for oversight of its own deals, reviewing contracts and booking revenue without any interference from the corporate center. The consequences were myriad." This is such, so bizarre.

• 36:41David Senra?

  "Huge discounts were offered to induce customers to buy software they wouldn't need for years. Risks were taken in selling to companies that didn't have the money to pay their bills. So they'd book it. The accounting thinks, oh, look, look, we're doing so well, but there's no money coming in." This is insane. Listen to this. Exotic barter deals were entered into. In one, Oracle was given a couple of jets by an Israeli aircraft company in exchange for software. What the hell are they gonna do with the jets?

• 37:09David Senra?

  And Ellison commenting, going back, looking back, of like, more mistakes that he made. "I was interested in technology. I wasn't interested in sales or accounting or legal. If I wasn't interested in something, I simply ignored it."

• 37:25David Senra?

  He continues, "I just wasn't paying proper attention to my job. I was doing only the things that interested in me. It was the same problem I had in school, but this happened in my 40s. I wasn't a kid anymore." The truth is that Ellison found almost everything about running a company, other than creating a vision of what Oracle's technology could do and driving product development to achieve it, boring.

• 37:50David Senra?

  Now, this is the results of surviving a near-death experience. Ellison's claim that he was incompetent is only half true. He combined arrogance and recklessness. So he was incompetent, arrogant, and reckless, to a degree that was very nearly lethal for Oracle. But, just the important part, he learned. He's extremely intelligent. Now, there's two sentences that are extremely important. Let me read you the first one, and then we'll get to the second one. "But against that, he built something so inherently resilient and valuable that both he and Oracle would have a chance to reinvent themselves. He had to go through this, and as a result, anything that doesn't kill you only makes you stronger. It made him stronger." Now, here's the second, most important part. How was he able to make the company stronger? He learned.

• 38:31David Senra?

  If you take a brilliant compulsive personality and you subject them to a learning experience, they learn brilliantly and compulsively.

• 38:40David Senra?

  It's also gave him more confidence. Going through and surviving Oracle's near-death experience made him stronger. It made him more confident that he could deal with challenging and uncomfortable situations in the future, which of course, there was gonna be more of these kind of situations in the future, as it says. "After Oracle's crisis, looking into the abyss and surviving, I felt emotionally strong enough to take a more realistic look at myself." This is what I meant about dividing his life in two parts. "I was tired of striving to be the person I thought I should be. If I was to have any chance at happiness, I had to understand and accept who I really was. That required me to ask some questions about my past and live with answers regardless of what it turned out to be." I can divide my life into two phases.

• 39:23David Senra?

  The first, where I was desperately trying to be the person I thought I should be. And the second, where I finally accepted the person that I really am. The second phase has been much happier than the first. And this is the author's explanation of this section. In other words, to be capable of accepting the love of others, you have to first love yourself. Okay, so this part, I would describe as Oracle AD. After almost death, or AD, I guess. And really, in this section, I'm going to be highlighting just Larry's business philosophy. This is, the book is written in the early 2000s. I think they were together from like 2001 to 2003, thereabout. And this is where Ellison is forced to reorganize Oracle again.

• 40:05David Senra?

  And he realizes like the internet is where he's, he's burning the boats, which is something that he recommends we do constantly. He's burning the boats and he's reorganizing Oracle around the internet. He thinks that, he has an insight that, you know, at the time, people think, oh, the internet's gonna be great. We're gonna be able, you know, maybe watch some videos, maybe go shopping. And so Ellison's like, no, no, the internet's gonna exponentially increase the amount of, the importance of databases. And that's exactly the main product of Oracle, right? And what I would say is his edge here is that he was knowing what could, what could be true before anybody else. So let's go to the book for that. What happened was that Ellison had understood better than anyone

• 40:47David Senra?

  the potential impact of the internet on the enterprise computing in general and on Oracle in particular. While the technology analysts confidently predicted the maturing of the database market, meaning, oh, it's saturated, right? Ellison, Ellison's like, no, you're out of your mind. The market's gonna be 10x larger than it even is now. Maybe 100x, whatever the number is. Ellison realized that the internet would exponentially increase both the number of database transactions and the number of people who would interact with Oracle's databases. That would mean more license growth than the analysts had ever dreamed of. This is a way of thinking about his goal for Oracle at the time and why he went all in on the internet. His rationale was simple. Oracle could never be hoped to be the number one in enterprise applications as long as client server prevailed.

• 41:30David Senra?

  It was always fated to play second fiddle to SAP, which is a larger competitor at the time. By getting to the internet first, Ellison would force Oracle competitors to become followers. So he winds up, we live in the world that Ellison's predicting. He's like, the software's not going to run on your computer. It's going to run in the cloud. And so SAP, you're installing it on your computer. But what happens is companies have thousands, maybe tens of thousands of computers. He's like, this is stupid. It's clearly better to put all that complexity hidden from customers' view and let us manage it. So he winds up being correctly, correct, but at the time it was extremely controversial. And so he's gonna, and he gets a lot of pushback on this, but then we see Ellison.

• 42:13David Senra?

  Ellison tells us his core business philosophy and he says, you can't get rich by being like everyone else. So he says, Larry Ellison says he's happy only when everyone else thinks he's wrong. The core of his business philosophy is that you can't get rich by doing the same thing as everyone else. In 1977, everyone said I was nuts when I said we were going to build the first commercial relational database. In 1995, everybody said I was nuts when I said the PC was a ridiculous device that was continuously increasing in complexity when it needs to become easier to use and less expensive. So there is a lot of overlap between Ellison and his best friend, Steve Jobs. Including Ellison picks a huge fight with Microsoft. So he's really big on that you need to pick a fight. There needs to be, you have to have a clear point of view and you have to compare and contrast that view with,

• 42:59David Senra?

  yeah, in his case, in his opinion, like the biggest and baddest bully you can find. We'll get there and I'm going to tell you more about that in a second. But first, why, like, how did he arrive at this decision, right? Now, again, this, we're 15 years, we're living 15, 20 years later, you know, after this happened. It's obvious that he was right to us, but at the time it wasn't. So he explains this, and again, he does so in a very interesting way. So his belief at this time, this is in 2001 when he's saying this, that the internet is the final, the final form of computing. So he says, "The internet model is the last model of computing. This is it." What distinguished Ellison's take on the internet was that he saw it not just as a great way to get information and go shopping, but as a platform for a completely different and

• 43:43David Senra?

  infinitely superior kind of computing. Right from the outset, he believed that the internet really did change everything. This is what he says, "Internet computing is the last architecture. There will be no new architecture for computing, not in a thousand years, not ever. I know it sounds crazy, but with the internet, computing has adopted the same architecture as all other major networks." So this is, again, him pulling from history. He's going to compare the architecture of the internet now to the hundred, he says, "the hundred-year-old telephone and electric power networks and the 2,000-year-old aqueduct network." "Internet computing centralizes data storage in huge databases and processing on large

• 44:25David Senra?

  servers while distributing information on demand across a global network. Internet computing hides complexity, provides economies of scale, and delivers information faster."

• 44:39David Senra?

  So that was his idea, that's what he built his entire, his strategy around.

• 44:45David Senra?

  And he had, he's pulled into a meeting and his, his employees are mad. They're like, "You're ruining, you're pivoting almost 180 degrees of where from what, how we've been making money, you're gonna, you're gonna put the company in danger." And so, in this section I'm about to read to you, this is Larry on not, not making the mistake, "Don't mistake the present for the future." Okay, so it says, "Can you guys tell Larry that what he's doing is crazy? He's putting the entire company in danger." This is Larry's response in this meeting. "I had heard it all before. Relational databases will never be commercially viable. The customers want client, client server. Blah, blah, blah, blah. They were mistaking the present for the future. It's the worst mistake a tech company can make.

• 45:27David Senra?

  Client server was dead, and the people in the room would figure that out at the funeral. But by then, it would be too late for Oracle to change course. We had to change to the internet applications now, before the rest figured it out."

• 45:42David Senra?

  He's also eliminating huge parts of his company because it conflicts with his new belief, right? And what's going to happen here is really something that I've never forgotten by studying and reading all these books about Steve Jobs. Steve Jobs would tell you that the further you get away from one, the more complexity you are inviting in. And so Ellison, just like Jobs, had an extreme distaste for complexity. It infuriated him. So it says, "In shifting the emphasis away from client server to the Internet was controversial within Oracle, the issue reached boiling point with Ellison's decision to halt all further work on client server in early 1998." So it's like, listen, we're all in on the Internet. We're not going to keep servicing.

• 46:25David Senra?

  They're running multiple versions of the same application. So let me tell you, this is how it relates to getting further away from one. It says, "One of the problems was that Oracle was now trying to support three different versions of its application suite. Ellison says, 'We were the only vendor supporting three different modes of operation: terminal, client server, and Internet. Life isn't hard enough that we had to have three fucking versions? It was unnecessarily complex and I wanted to dump it.'" So he wants the entire company oriented around and focused on one. "We're not doing terminal. We're not doing client server. I don't care if you disagree. We're doing the Internet. If you're staying at Oracle, you're going to focus on the Internet. You don't like it, leave."

• 47:07David Senra?

  That's my interpretation of what Larry's saying right there. And then this is Larry on change. He says, "It has been my experience that people reflexively resist change. Change requires people to rethink the way they work and the way they are organized. When people write down their current processes and the reason why those processes cannot be simplified." So that's interesting. That's actually really smart for all of us to do. Write down what you're doing and why you're doing it. So he's saying it forces them to carefully and methodically rethink their business. In many cases, and I'm not immune to this by any means, we do things without thinking them through.

• 47:43David Senra?

  Thinking is laborious and we can't do it for every single thing that we're doing in life, but the important thing is you really should write them down like this is why, this is what I'm doing and this is why. And you're going to expose a lot of things and I'm going to get into like how Oracle was operating. They weren't even thinking through a lot of things that we're doing. So he says, "This usually results in business processes being changed as opposed to our software. Simplified, modernized business processes are at least as important as good business software in delivering efficiencies to the enterprise." So to that point, Ellison doesn't see what he, the problem he's trying to solve as a, it's a human problem. It's not a software problem, right? So he says, "People are willing to automate their current processes but not change them." And here's the main message

• 48:24David Senra?

  here. They think they're already doing it the right way. You cannot strive for constant self-improvement if you think you're already right. You just can't. Big companies have to standardize their processes across all different locations if they want to automate efficiently. That requires a lot of change and a lot of resistance to that change is inevitable. Okay. So this also applies to Oracle. And this is, I think, like a cheat code of life. If you just ask why repeatedly, it's a great way to quickly identify things that are poorly thought out, either in others or in yourself. And so Ellison's seeing this in his own company because he's got a, not only is he changing what the company's focused on, he's realizing like, we can't solve problems for other companies if we haven't solved

• 49:09David Senra?

  it for ourselves. So he says, "Wherever Ellison looked, he seemed to find glaring examples of inefficiencies, wastefulness, and intellectual sloppiness. A prime example was something called the Energy Center for Excellence. This was intended as a place to showcase Oracle's software for the energy industry. Ellison says that he uncovered plans to spend millions of dollars a year to run this center." So this is Ellison. "I asked, how much energy software are we planning to sell next year? The answer was about $10 million. So I said, does it bother anybody here that we're forecasting sales of 10 million and we're spending 5 million to run an energy center of excellence? Does that strike anyone as strange?" So you have dozens, whatever the number is. Really smart people working there and no one ever thought to question like,

• 49:54David Senra?

  are we actually getting a return on this investment? And so Ellison's solution to this, he's like, I'm going to use the company as a laboratory. So he says, I decided we're going to test our new applications inside Oracle. I'm going to turn our entire company into a laboratory. If our applications are any good, then they should save us money. And for the first time, I'll actually know and be able to control what's going on inside the company. So he talks about one of the main problems that his software is fixing is that there's data, there's data in all kinds of companies everywhere, but there's no information. There's no actual useful information that's coming out of that data. This is really dumb. Like, we should be providing, we should not be saying, hey, we're going to store your data. We're going to be saying, hey, give us your data and in return, you're going to get insights that help you run your business better. Right?

• 50:37David Senra?

  And so he realizes that there's so much duplication of effort. And he thinks that's a massive problem inside companies because all this data is siloed. And he's like, well, how much is this duplication of effort costing people? So he realizes how much it's costing Oracle and he uses the story in sales presentations. And I think this story is really interesting. So he says Ellison's favorite example of the way this system operated was the work of the supposedly powerful pricing committee. Now, this is Ellison's story that tells you how you could be selling his customers, how they could be wasting money. His whole thing is like, you should have one central database and all the applications should run on top of that database.

• 51:19David Senra?

  Stop having 15 different databases that are not talking to each other. The pricing committee was responsible for deciding how much we should charge for our products. So we do some competitive analysis. What's IBM charging? What's Microsoft charging? How does our product compare? What are the market dynamics? And then we'd make a decision and we'd say, okay, we're going to charge $10,000 per processor. We then introduced an updated price list and sent it across the hall to our global sales headquarters. Unfortunately, our global sales team had their own pricing people who felt they weren't doing their jobs unless they did their own analysis. They'd say, Larry's an engineer. What does he know about setting prices? We're salespeople. We know pricing. So they'd reset the price to $20,000 per processor and they'd sent out a pricing memo to our European headquarters in Geneva.

• 52:03David Senra?

  Of course, we had another pricing team in Geneva that redid that analysis and reset the price once more. They'd say, "What do Americans know about selling software in Europe? We're Europeans. We live in Europe." So the team in Geneva decides that the right price for Europe is $15,000 per processor. And they'd send that price out to Paris, Munich, and London. The same thing happens all over again. The guys in Germany ask, "What do French people in Geneva know about selling software in Germany? The right price in Germany is $25,000 per processor." Every country had a different price. It was crazy. We had about 200 people around the world involved in analyzing and re-analyzing and setting and resetting prices. It cost us a fortune.

• 52:46David Senra?

  It was funny, too, because he's talking about, one day he's talking to a, his story in the book, one day he's talking to one of his American clients, and they're like, they just casually mention, he's like, "Yeah, I just bought all of the Oracle software through Oracle Brazil." And he's like, "Why?" He's like, "'Cause they gave us a better price." He's like, "Wait, what do you mean?" He's like, "Well, you guys are competing with yourselves. The price in America and Europe and Brazil are different, so we just communicate with Brazil because they'll give us a better price." This is ridiculous. All right, there's a quote that I always think about, that I think about a lot, and I learned from Charlie Munger. And he's very explicit. If you read his books, listen to his speeches, he always talks about the power of incentives. And he specifically says, "Never, ever think about something else when you should be thinking about the power of incentives."

• 53:31David Senra?

  It's a hell of a statement from somebody as smart as Charlie Munger, right? Here's an example of that. "One of the worst ideas I can remember was when Ray decided we didn't do enough selling through partners. The sales force convinced him the way to fix this was to pay more money to the sales force if it went through a partner than if the deal came directly to Oracle. For example, if you sold a million-dollar deal directly, Oracle would get $1 million and you'd get $100,000 commission. But if you sold a million-dollar deal through a partner, Oracle would get $600,000 and you'd get $120,000 commission." So what do you think's gonna happen? Needless to say, our sales force pushed through many deals, pushed as many deals as possible through partners that year.

• 54:11David Senra?

  So the partners were happy, the sales force got higher payments, so they were happy, and the only loser was Oracle. So this goes back to the idea that, you know, everything's basically held together by duct tape. Don't idolize humans or companies or anything else. We're all imperfect. Larry has a lot of ideas. He mentions it over and over again, that people underestimate how important the name of your product. So he gives an example. Network computing architecture got absolutely no traction in the marketplace. So we announced a successor to the product called Internet Computer Architecture and sales took off. The big difference between the two? The name.

• 54:52David Senra?

  It never ceases to amaze me how the product name can be the difference between success and failure in the technology industry. So something you know about Ellison? He's criticized for having opposing traits. He gets criticized for both of these. It's really interesting. Yeah, I mean, you have to be guided by your own internal compass because he's... Let me give you an example. People are mad for two different things. They're mad because he's excessively dominant role in business or because he's semi-detachment from the business. So it was very interesting how he... Well, he doesn't characterize this. This is my interpretation. There's no messy... He's like, Ellison would tell you that he could be on or he could be off, but there's no messy middle for him.

• 55:37David Senra?

  So it says Ellison had told me that he's unable to strike a balance between an extreme form of laissez-faire delegation and an equally extreme obsession with influencing every aspect of the business. He could either be semi-detached from day-to-day management oracle, as he had been during the mid-1990s, this is before the... Right before the near-death experience, or furiously involved as he was now. He also has a really good idea. We talk about the idea that knowledge compounds. So he would tell you that you do not want turnover on your core product team. The knowledge that's compounding is way too valuable, so don't interrupt the compounding. This is what the book says. While many parts of the business actually need staff turnover to stay fresh and vigorous,

• 56:21David Senra?

  Ellison believes that keeping the elite kernel group together has been vital. The process of building a software product teaches a programmer what to do and what to avoid. This accumulated knowledge and experience within the 40 or 50-strong group comes from continuous work on improving the core code rather than from some extension of the product that will make a flashy new release. This is Ellison describing the traits of what he feels is the best employees.

• 56:52David Senra?

  This one guy named Derry. Derry combined brilliance with discipline and endurance. It's a rare combination. I thought this idea was interesting. Larry, on the difference between hunting and farming. The salespeople we hired in Europe were very professional and service oriented. The European management team's strategy was to build long-term relationships with our customers and do business with them on a regular basis. This European farming strategy was in stark contrast to the US sales organization hunting strategy. US salespeople tried to sell the largest possible transaction to a given customer and then move on to the next customer and the next deal. It took me until 1991 to figure out that the US hunting strategy was both shortsighted

• 57:37David Senra?

  and unsustainable. It took another decade to change the culture of the US sales force from hunters to farmers. This is Ellison's strategy is one, pick a fight, and then two, burn the boats. Once I'm finally certain of the right direction, I pick a fight, as I did with Bill Gates. It helps me make my point and it helps and it makes it impossible to do an about face and go back. Once a course has been plotted, I sail a long way off and burn the boats. It's win or die. And he keeps on this idea of like being focused on the competition. So this, this again, I have notes all over this book. It's like, this sounds like Michael Jordan.

• 58:19David Senra?

  I'd highly recommend watching that documentary, The Last Dance. But not only that, a listener recommended this book. And I don't think I'm going to do an episode on it because it's so, it's, it's so far outside of like our scope, but I, if you're interested in the mindset. So let me, let me tell you what it is. I think I'm almost done with it. I'm listening to the audiobook. I might have like, it's a short audiobook, maybe like two or three chapters left, but it's by Tim Grover. It's called Relentless. And Tim Grover was, or is, was Michael Jordan's and Kobe Bryant's trainer.

• 58:57David Senra?

  And so this book is all about the kind of mindset that those two individuals and other of his clients have and what he learned from, I think he was Jordan's trainer for almost 20 years, maybe 15 years, something like that. And so I think there's probably a lot, there's probably a huge overlap with people that listen to this podcast that would also enjoy that book. So if you feel like you're motivated by those kind of people, it's extremely competitive, relentless people. And a lot of the people we cover on the podcast, you know, you describe as relentless. Jeff Bezos was going to call Amazon relentless. Go to relentless.com. It forwards to amazon.com. Like, he almost called Amazon relentless. So that gives you an idea of what's important to him. So I would say Larry Ellison's the same way.

• 59:39David Senra?

  So the reason I say this sounds like Michael Jordan is because Ellison says that this is why Oracle exists, and that's to beat the competition and to be number one. So he says, "He strongly believes that Oracle is always at its best when it has an identifiable enemy to go after. We pick our enemies very carefully. It helps us focus. We can't explain what we do unless we compare it to someone else who does it differently. We don't know if we're gaining or losing unless we constantly compare ourselves to the competition." So then he starts, he does, this book is full of digs on Microsoft. And then this is one of them. He says, "Microsoft can't innovate, they can only copy." And he says, "Listen, that wasn't even me speaking." He says, "I was quoting Steve Jobs.

• 1:00:24David Senra?

  He," meaning Steve, "said that the thing that really bothers him about Microsoft is not how successful they are or how much money they have. It's the tasteless mediocrity of their software. I totally agree with Steve. They never, ever innovate, but they're pretty good copiers." This is Ellison on Microsoft copying continued. "Even Bill's strategy is just a copy of Standard Oil's strategy back in the 1870s. But when Rockefeller used his monopoly to crush his competitors, it wasn't illegal. There were no antitrust laws back then." So he talks about Microsoft destroys these two companies and I, the way he described it, I chuckled when I read this. Obviously, it's not funny that you destroy somebody's life's work, but what I'm saying,

• 1:01:08David Senra?

  the way he describes Microsoft, he's just very good, like, he's a master salesman. Larry is a master salesman. He says, "Microsoft killed both companies like a rogue rhinoceros trampling a couple of disoriented field mice." This is Ellison on Bill Gates. He says, "Bill and I used to be friends, insofar as Bill has friends. Back in the 80s and early 90s, all the people in the PC software industry hated Bill because they feared Bill. But Oracle didn't compete with Microsoft very much back then, so we got on pretty well. As I got to know Bill, I developed a great respect for his thoroughness of his thinking and his relentless," there's that word again, "relentless remorseless pursuit of industry domination. I found spending time with Bill intellectually interesting but emotionally exhausting.

• 1:01:52David Senra?

  He has absolutely no sense of humor. I think he finds humor an utter waste of time, an unnecessary distraction from the business at hand. I don't have anything like that kind of focus or single-mindedness." So he talks about, this is why he picked Microsoft as an enemy. In the background here, he's on the phone with Bill and they're having a friendly debate. And they hang up the phone and five hours pass and Bill calls him back. And he's like, "You know, I think you're right." And Ellison's like, "Have you been thinking about this the whole time?" Because Ellison goes around on his day, he's like running his company, working out, doing whatever, you know, the stuff that he does. And so this is his response. He's like, "I was stunned. He had taken the time and effort to think it all through and had decided I was right and he was wrong." Now, most people hate to admit they're wrong, but it didn't bother Bill one bit.

• 1:02:37David Senra?

  All he cared was that, all he cared was what was right, not who was right. That's what makes Bill very, very dangerous. Most people are so in love with their own ideas that it confines their thinking. It creates boundaries and limits their ability to solve problems. Bill has this ability to manage his intellectual vanity and take ideas, regardless of where they come from, and put them to work in Microsoft. The terrifying thing about Bill is that he's smart enough to understand what ideas are good, what's worth replicating, and he has the discipline and resources to get on with it and make it just a little bit better. Add to that Bill's ruthless perseverance and the fact that Microsoft has more money than God, and you get a most formidable foe, the ultimate foe, the perfect enemy.

• 1:03:22David Senra?

  We decided to pick a fight with the biggest, most dangerous bully in the schoolyard. There's no way to avoid this fight, so let's start it. So this gives you real good insights on to how Larry thinks and how he, I'm gonna get to it in a minute, because there's a, I'm reading this book, I'm like, why, why, you have more money, like, you don't really want to run a company, you have more money you could ever spend, like, why are you doing this? And I realize, like, he hacks himself. He does these little games so he can be focused, he makes it into a competition, and therefore it's not about money, it's about winning. And that keeps him driven. He's like, I'm not focused, and I can't grind like Bill Gates, I'm not like this. So he has to, it's actually really, really intelligent.

• 1:04:05David Senra?

  He's like, I have to find the best way to trick myself into doing this. So this is more on why he focuses so much on competition. If you're a fighter, the only way up is through the top fighters in your division. So we pick fights with IBM and Microsoft, because they're the ones who we had to beat to reach the top. By constantly measuring ourselves against the two top heavyweights, we constantly improve the competitiveness of our products and services. So he always talks about, like, I'm interested, I'm using competition as a vehicle to test myself. I think that's a very interesting way to think about that. What's also interesting when I read this book is, like, he has a great respect for Thomas Watson and IBM under his leadership. So I did, if you haven't listened to the podcast today on Thomas Watson, I think it's on a book called The Maverick and the Machine, it's founder's number 87, but he's like,

• 1:04:50David Senra?

  listen, they did great work there, they did a bunch of research and development, it's not the IBM of today. The IBM of today, I don't respect at all. So he says, I don't dream of an Oracle that's like Bill's Microsoft, or IBM version 2, meaning the current IBM, the one that's not run by Watson. Our role model is Tom Watson's magnificent creation, the technically brilliant and innovative IBM of old. That's who we want to be when we grow up.

• 1:05:20David Senra?

  So now this is the author saying like, you know, this is what I was just mentioning, like, why? Like, I'm left wondering, why? What are we doing here? Why are we doing this, Larry? Right? So it says, "Early on, I had wondered just how committed Ellison really was to making Oracle as great as IBM in its heyday. I thought that given his age, the range of his interests, his unimaginable wealth, and his own self-confessed dislike of much of the routine and drudgery that's involved in running any business, it was almost inconceivable that he would have the necessary stamina and hunger." So he says that, and then a little while later, "I found the paragraph that may be the best explanation of why Larry does what he does. This might be the best explanation in the entire book." Right? "Like a lot of people, I still find it hard to understand how someone with as many choices as Ellison, who for the most of the last 15 years has had more money than he

• 1:06:05David Senra?

  could spend and who clearly has a low boredom threshold, can bring himself to keep doing the same thing." This is Ellison saying, "My sister told me that whenever I got too close to a goal, I'd raise the bar for fear of actually clearing it. We're endlessly curious about our own limits. The process of self-discovery is one of testing and retesting yourself." So now he talks about how he applied this to, he's very famous for doing these huge sailboat races. So he says, "I won the Sydney to Harvard. That's one race. Can I win the America's Cup? I guess I'll have to find out. The software business is a much more difficult test. It's a much higher stakes game. There are probably more people playing that game, and it's a lot more interesting game. It's a lot more exciting.

• 1:06:49David Senra?

  If I wasn't doing this, I'm not sure what else I'd be doing with my life." So this is why I keep bringing up the compare and contrast to Jordan. I think Larry is addicted to competition.

• 1:07:01David Senra?

  Oh, this is really interesting. This is Larry's response. His most frequent criticism is that he's a liar, that he's either hyperbolic or just a pathological liar. And this is his response to that. "Being optimistic and exaggerating is another matter altogether. The entire history of the IT industry has been one of over-promising and under-delivering. Software executives routinely say that a product is going to be ready by a certain date, and then it turns out to be literally years late. It happened at Microsoft. It happened at Oracle. Software development is notoriously unpredictable. Maybe the only honest schedule is the one Michelangelo gave the Pope when he was painting the Sistine Chapel. It'll be done when it's done. Anything else is a guess, and sometimes we guess wrong."

• 1:07:43David Senra?

  Now, an extension of this is, you know, maybe he could say, yeah, I think it's gonna be like, maybe he could be a bit more wishy-washy in this communication. Okay, it's gonna be done in a year. Maybe I could say, maybe it's one to two years. He wants to speak, even if his, his, I would say, even if his statements are more definitive than they should be, he feels that, uh, like, that's, it's better, like, who, what kind of leader are you gonna follow? And he has a great story to illustrate his opinion on leadership. So it says, another aspect of Ellison's bravado style is equally calculated, his leadership. You cannot lead, now, this is him, "You cannot lead if you're filled with uncertainty. Imagine two officers

• 1:08:24David Senra?

  each leading a company of Marines up a hill. The first one says, 'Men, we're gonna go up this hill, and we're gonna kill every fucking enemy soldier on our way to the top. I'm going first, and you're all gonna make it to the top with me. I haven't lost one of you yet, follow me.' Cool, competent, and confident. I'm ready to follow that guy. The second guy says, 'Men, we're gonna try to take this hill. I have to admit that I don't know how many enemy soldiers on the hill, and I've never really done anything like this before, but I'm willing to go first if you're willing to follow me. We might make it, we might not. There's no way to know for certain. Even if we make it to the top, it's highly likely that some of us will be killed. Follow me.'" And this is Ellison's interpretation of this. "Well, the second guy's

• 1:09:06David Senra?

  impressively honest about his fears and uncertainties. Maybe he should become a psychotherapist, but there's no way anyone is following that guy anywhere."

• 1:09:16David Senra?

  And finally, I finally got to the part where, again, I told you the whole time I'm reading this book, like, this is Michael Jordan. Larry finally makes the MJ comparison that was obvious if you read this book. And he's talking about Steve Jobs. He says, "The Apple board replaced Steve Jobs with John Sculley, didn't it? How stupid was that? Brilliant, disciplined, intensely goal-oriented leaders routinely alienate the people they work with because they push too hard. They make the mistake of thinking everyone else on the team wants to win as much as they do. Michael Jordan was not popular with many of his teammates because he'd get in their face for not playing hard enough." And so, again, I know I'm repeating myself, but really have to, if you really want to

• 1:09:58David Senra?

  understand why Larry is the way he is, or why, more importantly, he makes the decision he makes, he's obsessed with winning, obsessed with competition. He feels, and I'm about to describe his opinion to you right now, that winning is a habit. And so he says, "Winning is a habit, so is losing. Competing and winning at Sailing has made me more confident, intense, and determined to win at Oracle. Winning breeds winning. The more you win, the more you want to win. The more you win, the more you think you can win." And finally, there's some philosophical aspects to Ellison that I find really interesting. And so he's going to talk about here, he's going to talk about time, why we do what

• 1:10:38David Senra?

  we do in life, and how you can tell if you're on the right path. "Life is the only miracle. I don't waste a lot of time. I work intensely on things that I care about, and I spend my time with people that I care about. I do what I want with my time because I know there's not much of it left. Maybe it's just vanity that motivates me. You can never really be certain of anyone's motives, including your own. You are better off measuring people on what they do. I don't know, can't know, and don't care what motivated Jonas Salk to try to make a polio vaccine. I'm just glad he did.

• 1:11:19David Senra?

  What we want to do with our lives is the most important question we all have to answer. I think even if I found out I was dying and I had a year left to live, I wouldn't change my life very much." That's 124 books done, 1,000 to go. If you buy the book using the link that's in your show notes, you'll be supporting the podcast at the same time, and I'll talk to you again soon.