Mark Hoffman’s Fourth Run: Enquisite (Part 5)

SM: What is the story of Commerce One? How did you get involved there?

MH: In 1995 I became the chairman of Sybase. It was a tough time in the market for database people and there were disagreements with the board. I felt that we should look at selling the company, and others wanted to change and grow it. We were about $1 billion in 1995. I went the chairman and then maybe nine months later I resigned. It is hard to grow a company from the ground up and then let it go yet still be attached at that level.

SM: What were you looking to do next?

MH: I found out that it is hard when you leave. I went from working incredible hours with tons of levers to watch, to suddenly having nothing. It was mentally difficult and it was a bit physically difficult as well. During that time I helped start a few other companies and was the angel investor for them.

SM: Did you maintain an investor role in those companies?

MH: I was an investor and a coach. As they grew, I became just a board member. I then got introduced to a company that had some very good technology around a buying application. It would automate the buying process for people sending out a lot of catalogues. You could put the catalogue on the CD and be able to buy from that application. They were very small and only had 15 people. They were not capable of growing the company and had no experience in commercial enterprise.

One of my board members from Sybase was there. He asked me to come take a look at it and we eventually worked something out. I went to work there, and it became Commerce One. When I come into these companies, rarely is the product right. I had to decide if the technology was good for the marketplace and then shape it in the right direction.

SM: You said the founder did not see the potential of the Internet when it came to the digital catalogues?

MH: There were two founders. One of them just did not see it. The other did. The son got it and the father didn’t. The son continued to work at Commerce One; the father didn’t but was able to preserve his stock options.

I would rather see entrepreneurs stay. They are smart people and have a lot of vision. But if they can’t give up their power or are not contributing in a big way, they should not stay.

SM: What was your go-to-market strategy with Commerce One, and when did you see the market start to adopt it?

MH: We built a server that would go into a corporation. You could take an order and pass it to that server, which would then place the order into the corportation’s systems. This would be directly to a retailer. We then found out that people did not pay attention to that server when it was installed at retailers. Orders would fall through the cracks.

My IT manager and I had a conversation which led us to turn the servers into a centralized resource that we would manage. We would just provide the retailers the feeds at the end.

SM: Commerce One thus became the marketplace where people would place orders and then pass them on to someone else to fulfill them. What was Ariba, your main competitor, doing?

MH: We focused on the marketplace. Ariba focused on the buying application, enterprise software for procurement. We had that application, but we believed the marketplace was what would pull it together. We did a deal with GM who brought in Ford and Chrysler. Boeing brought in a huge global military marketplace.

SM: In the case of someone like GM, was it a gated marketplace?

MH: They all invested in a single marketplace and that marketplace had a different name. Each would participate in that single marketplace and they would bring other firms into their central marketplace, which was one they ran.

This segment is part 5 in the series : Mark Hoffman’s Fourth Run: Enquisite
1 2 3 4 5 6 7