Mark Hoffman’s Fourth Run: Enquisite (Part 6)

SM: What kind of revenue ramp did you see in Commerce One?

MH: We were doing about $200 million a quarter during our last big quarter. That was really from software sales, and a minimal amount from transaction revenues.

SM: You went public on the basis of big-deal P&L. What was your market cap?

MH: It was $21 billion. It actually went up to $29 billion for a couple of days. It opened around a couple of hundred million dollars in the 1999–2001 timeframe.

SM: What happened to Commerce One?

MH: It was actually sold off. The name went with the company. The IP got sold to a second company. The core of what was Commerce One went into bankruptcy.

SM: What was your emotional reaction to all of that?

MH: That was very hard. We had over 4,000 people. I laid off 4,000 people. We were the fastest growing software company anywhere in the world, and then we were the fastest on the downside as well. There were great people. We built a phenomenal product, and that product is now probably sitting on a server in a closet somewhere.

SM: How did you recover from that?

MH: I found Everdream through another venture capitalist about six to seven months later. Everdream had started eight years before I came into it. They were trying to build a service network to repair PCs. It was a lot like Geek Squad but it never took off. Out of that, they developed some tools that would help remotely diagnose PCs over the Internet. That became the basis for what they were doing when I joined the company.

I came in and found that the solution was good but that it was not scalable. It would have required hundreds of millions of PCs in order to reach the scale needed. I ended up having to change probably 50% of the people in the company. We built a platform to scale the technology and changed the model to OEM. We did a deal with Dell and IBM before Dell bought the company.

SM: How long were you with Everdream?

MH: I was there two and a half years. I was with Sybase 11 years and Commerce One for six years, so Everdream was a much shorter timeframe.

SM: Which brings us to Enquisite, where you have been for a year now. This is another company you found through Jeff Webber, correct?

MH: Correct. Jeff was already investing small amounts of money drip-feeding on a monthly basis. They could not raise money any other way.

SM: What was it that gave you an idea that there was something here?

MH: First off, Richard [Zwicky] is a very smart guy. They were coming out of an area of the business they were not totally familiar with. I liked that it was a different piece of the business.

SM: At that point, when you decided to take on Enquisite, how did you explain it to VCs?

MH: Quite frankly, we did not have a very good plan. When I came in we had to raise money right then. Jeff had invested for almost 12 months on a monthly basis.

SM: So you pretty much got people to invest in you and your ability to figure it all out?

MH: That is pretty much what happened. Everybody really liked Richard as well. There were some products there which were good although not overly exciting.

This segment is part 6 in the series : Mark Hoffman’s Fourth Run: Enquisite
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