Serial Entrepreneur: Peng Ong (Part 3)

We continue our interview with Peng Ong and talk about his next venture, Interwoven. Here Peng addresses some very interesting topics and his personal philosophy on risk.

SM: So tell us the story of Interwoven. You put in your own money?
PO: I think the interesting thing if you look at my career, usually the one job before helped me in my current job. In match.com I saw all kinds of people trying to update the website and they were breaking things left and right. It was not just the engineer. It was the marketing person, the graphic designer, the sales person – all kinds of people were trying to get stuff on the website.

You stop to realize, in most cases in the world where you have lots of people trying to put pieces together for one deliverable there is usually a system. In a factory there is a production line. In the legal world there is document management. Websites were initially small, so you thought, “OK a few people can hack it up”, but when I looked at some of the early sites I realized that websites were going to be really big. The earliest one I saw was Cisco’s website when they had 3 Terabytes of storage. At that time you needed three or four machines to store three terabytes and literally thousands of folks trying to update the website. So it was problems like that I was sort of anticipating, but I did not realize the scale was going to be that huge, like Cisco, but I knew it was going to be big.

I knew, in every domain where this kind of problem existed, there would be two or three companies that would build significant and successful businesses out of that domain and I did not think the web would be any different.

SM: I think that was a perfect assessment of the lay of the land. It was brilliant opportunity identification.
PO: Because of the way I think of things, I tend to be less of an “out of the ball park” home run type person, and more of a guaranteed kind of moderate success. I tend to think of a domain which is significant enough, large enough, but it is not going to be everybody and their brothers that are going to want in on it. I stay pretty focused, not like Google or something that big.

SM: Let me take you back to the time when you were in the process of founding Interwoven. What was the level of risk that was involved? Were you putting in a substantial portion of your net worth to fund this company?
PO: Yes. If Interwoven had gone under I would have had to start over again, except for the house. I would have had to start everything over again. I was 32 when I started Interwoven, so I figured there was plenty of time to start over if needed. I think that is where the lessons from my Dad helped.

SM: I am an entrepreneur’s daughter as well, and it is a risk taking propensity that I think kind of gets built in if you are from that type of a family.
PO: Let me try and pose this slightly differently because I think this helps some folks even if it doesn’t help everyone. I am actually not a really high risk taker. I will explain why. It is how you look at risk. Most of us, when we think about risk we thing of dollars and cents. Now flip the situation around and think about something else; in my case I invite people to think about the time they have. You can always make money here and there later. If you don’t make some now you can make some later. You get a little bit smarter and you can figure out different ways to make money.

Time just keeps marching on. Most of us that I know of have a limited supply of it. The biggest risk to me is not that I loose money but I do not make use of the time I have as effectively as I can. When you look at it from that perspective it is very risky to get a regular job, not learn anything and not to experience very much. From that perspective, losing all of my money is lower risk to losing all of my time.

SM: Interwoven, after you seed funded it yourself you also raised some venture money as well. Who was your VC?

PO: The first one DFJ. Steve Jervetson was, I think, a rookie at that time. It was DF, there was not a J at that point. He and I got together, I can’t even remember how we got together, but we have been in touch ever since then. He saw what I was doing and he invested immediately, and we got off to the races.

SM: How long did that take you?
PO: I don’t remember all of the timelines. We got our series B probably less than 12 months from series A, and then series C came in. Series C was when Foundation came in with Excel and Martin Brauns came in, which was the guy who helped take us public and really ramped us up as a business.

SM: You were there the whole time?
PO: I resigned from the board in 2002.

SM: By that time it was public already, right?
PO: Yes, we went public in September 1999.

SM: Perfect timing, the absolute peak of the market.
PO: Yes, and we did our secondary in January of 2000. Imagine that! That saved us basically. We are still a world’s top 50 software company by revenue.

SM: In terms of dilution and valuation, what kind of ownership were you able to maintain until the exit?
PO: After the IPO I had, I think 10% of the company.

SM: Where you still running the company, or did you have a CEO?
PO: Martin Brauns came on board in 1998 as the CEO, along with a series B investment.

SM: And you were the CTO at that point?
PO: No, I took over services believe it or not, because that was an area in which we were having problems at that point.

(Next time: Encentuate)

[Part 5]
[Part 4]
[Part 3]
[Part 2]
[Part 1]

This segment is part 3 in the series : Serial Entrepreneur: Peng Ong
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