This is the second in a four-part series of startup visualizations built by the students of Jay Rosen’s Studio 20 journalism program at NYU. Read the first post in the series which introduces the tool and maps out Silicon Valley’s “first family,” the Fairchild Mafia.
(startup descriptions pulled from Crunchbase)
[Visualization built by Simran Khosla, Jesse Kipp, Nuha Abujaber, and Jonathan Soma]
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The history of Oracle
Many of you may know that Elon Musk served as the inspiration for Robert Downey Jr.’s portrayal of executive-turned-superhero Tony Stark. But did you know Oracle founder Larry Ellison helped shape the character, too? He even made a cameo in the second Iron Man movie alongside Musk.
Maybe the reason Musk’s Starkness gets all the attention is that Ellison doesn’t build spaceships and sports cars. He makes database management systems. Computer hardware systems. Enterprise software. Sexy, right?
But while Musk supplied the character’s immense intellect and love of futuristic gadgetry, Ellison supplied Stark’s yacht-rocking, mansion-collecting opulence, not to mention the “5 o’clock shadow plus blazer look.” Ellison is party in the front and business in the back, like a reverse mullet. And just as Ellison’s outsized personality runs counter to Oracle’s wonky product line, there’s more drama behind the company and the companies it helped spawn than any enterprise software company should have a right to claim.
In 1977, Ellison started the company that would become Oracle, focusing on relational database management software (If you really want to know how relational databases differ from regular databases, start here). Making software for businesses was a much different game than making semiconductors like the ones Fairchild manufactured. With semiconductors, there was a constant technological arms race to fit more and more transistors on smaller and smaller chips. But with enterprise software, you didn’t have to be the best, you just had to sell it. Sarah Lacy describes this atmosphere in a secret never-released ebook she wrote on the five families of Silicon Valley:
Unlike the slavish master of semiconductor physics, enterprise software has a pretty long shelf life. By the early 2000s, billions had been spent on software that was implemented but never used and millions more spent on software that was never even implemented. A lot of it just didn’t work.
But it didn’t matter. Once a company had bought it, it was stuck. It was way more expensive and a bigger hassle to rip it all out and start with a new vendor, and truth be told, all enterprise software had problems. There was no guarantee a competitor would be any better. Salesmen frequently didn’t even know what they were selling. So companies sucked it up and kept paying maintenance fees and upgrades for new versions of software they had to have to stay competitive but openly loathed.
But while Oracle was raking in the dough, all was not well in the land of Ellison. Like William Shockley, whose paranoia and management style caused eight of his best employees to leave and start Fairchild, Ellison was not always the easiest boss to get along with. In the book Softwar, Ellison tells author Matthew Symonds, “I invented my own style of management called MBR. MBR stands for ‘management by ridicule.'”
Some would argue that ridicule-driven management makes for a toxic work environment, but it’s hard to argue with results. So many of Ellison’s underlings have gone on to do huge things. Tom Siebel, who worked at Oracle for six years, used his millions in commissions to start a competitor to Oracle, Siebel Systems. And although Oracle eventually bought out his old rival’s company, it had to pony up $5.8 billion to do it.
Another one of his employees, Marc Benioff (who like Siebel, had a longstanding feud with Ellison) started software giant Salesforce.com. Evan Goldberg, who founded Netsuite, was another of Ellison’s guys. Even Gregory Maffei, who only lasted a few months at Oracle, has left his mark on companies as diverse as Microsoft, Barnes and Noble, and Starbucks.
In many ways, the Fairchild Mafia and the Oracle Mafia couldn’t be more different. While Ellison ruled by ridicule, reveled in opulence, and made billions playing the software game, Fairchild pioneered the Valley’s culture of equality and modesty, quietly slaving away on tiny semiconductors, the DNA of the computing revolution. But what they have in common are the staggering number of successful businesses that shot off from their core founders and employees. And if two businesses as different as Oracle and Fairchild can spawn such rich ecosystems by sheer concentration of talent, then it’s proof that the notion of a great Silicon Valley family, while rare, is more than just a one-off anomaly.
Stay tuned for Parts 3 and 4 of our startup ecosystem visualizations
[Art by Simran Khosla]