WEBVTT - How to Win: Consulting the Oracle 0:00:04.519 --> 0:00:07.880 Oracle, a software company and giant in the tech industry, 0:00:08.000 --> 0:00:10.520 is no stranger to make or break moments. For instance, 0:00:10.600 --> 0:00:14.360 back in they were caught misrepresenting their revenues, a mistake 0:00:14.440 --> 0:00:16.799 that would cost some millions of dollars and cost many 0:00:16.800 --> 0:00:19.880 employees their jobs. And in two thousand one, co founder 0:00:20.000 --> 0:00:23.279 Larry Ellison was faced with a lawsuit for potential insider 0:00:23.360 --> 0:00:26.960 trading after he and his CFO sold off Oracle stock 0:00:27.080 --> 0:00:30.560 just weeks before the company's quarterly earnings were announced. There 0:00:30.560 --> 0:00:33.280 are multiple times Oracle has risen above the brink to 0:00:33.320 --> 0:00:37.960 maintain success, whether due to questionable choices or unforeseeable circumstance. 0:00:38.040 --> 0:00:40.519 But maybe the most fantastic story of how Oracle has 0:00:40.600 --> 0:00:43.280 risen above the brink is the story of its creation 0:00:43.400 --> 0:00:47.000 and how Larry Ellison overcame poverty, hardships, and naysayers to 0:00:47.040 --> 0:00:59.880 found the second most successful software company in the world. Hi, 0:01:00.000 --> 0:01:02.920 I'm Jonathan Strickland and I'm Ariel Casting, and this is 0:01:02.960 --> 0:01:05.080 The Brink, a podcast that's all about the make or 0:01:05.120 --> 0:01:08.119 break moments that have defined success or failure for a company. 0:01:08.200 --> 0:01:12.200 And we're going to talk all about Oracle today, the 0:01:12.840 --> 0:01:17.240 enormous software company, the business to business enterprise and the 0:01:17.319 --> 0:01:23.760 founder Larry Ellison, who has something of a reputation for flamboyance. 0:01:23.840 --> 0:01:26.520 Let's say that's a good way to put it. Jonathan 0:01:26.760 --> 0:01:30.679 will make care attitude. Yeah, yeah, come at me, world, 0:01:30.720 --> 0:01:34.240 I got your brot unapologetic, Yeah, a little a little 0:01:34.360 --> 0:01:38.920 rock star in the form of a software engineer. He's 0:01:38.959 --> 0:01:42.240 a he's a really interesting story. He is. And partially 0:01:42.280 --> 0:01:44.800 because as I was researching this, I found a lot 0:01:44.840 --> 0:01:47.520 of conflicting information, maybe not on the big points, but 0:01:47.600 --> 0:01:51.280 on little details. Yeah, which tells you that perhaps the 0:01:51.320 --> 0:01:54.080 story has changed with the telling. Every now and again, 0:01:54.160 --> 0:01:56.680 you know it's yes, sometimes we see this right, Well, 0:01:56.720 --> 0:01:58.720 we'll go back and we'll start looking. And also depends 0:01:58.760 --> 0:02:02.000 upon who is it that's ronicling the story, right, So 0:02:02.080 --> 0:02:05.200 sometimes you get it from the person themselves. Sometimes that's 0:02:05.200 --> 0:02:08.760 the most reliable sour. Sometimes it can be less reliable. 0:02:08.840 --> 0:02:13.000 Larry Ellison is a guy who's been known to embellish, 0:02:13.120 --> 0:02:16.760 used maybe some extravagant word play. Perhaps we'll say, so 0:02:16.800 --> 0:02:20.240 we're gonna talk really about not just the company, but 0:02:20.400 --> 0:02:23.519 the personality attached to that company, because he really does 0:02:23.600 --> 0:02:27.919 have a remarkable story. It's almost akin to what you 0:02:27.919 --> 0:02:31.040 would see for the origin of a superhero, like the 0:02:31.520 --> 0:02:36.080 Childhood Superhero. Yeah. For instance, he was born to a 0:02:36.160 --> 0:02:39.000 single mom. She was only nineteen at the time in 0:02:39.080 --> 0:02:41.520 New York in nineteen four and he never knew his 0:02:41.560 --> 0:02:44.560 biological dad, right, and he only met his his mother 0:02:44.880 --> 0:02:47.720 much later on. I mean he was he was still 0:02:47.760 --> 0:02:51.320 a baby when he and his mom parted ways. He 0:02:51.320 --> 0:02:53.880 didn't meet her again until he was an adult, so 0:02:55.040 --> 0:02:57.840 for a long time he didn't even realize that his 0:02:57.880 --> 0:03:01.200 biological mother was someone other than the person who raised him. Yeah, 0:03:01.240 --> 0:03:03.080 I don't think he knew he was adopted till he 0:03:03.160 --> 0:03:06.560 was twelve years old. Yeah. The reason why she gave 0:03:06.639 --> 0:03:08.600 him up, she she actually gave him to the care 0:03:08.639 --> 0:03:12.200 of her aunt and uncle, was that he got sick. 0:03:12.320 --> 0:03:14.960 He caught pneumonia when he was just nine months old. 0:03:15.280 --> 0:03:19.680 She was nineteen, unmarried, just not not in a position 0:03:20.160 --> 0:03:23.280 to be able to care for him, and so she 0:03:23.520 --> 0:03:26.440 ended up giving him over to the care of Lilian 0:03:26.560 --> 0:03:30.320 and Louie Ellison, her aunt and uncle. Yes, Um and 0:03:30.520 --> 0:03:34.880 Lily was a very good, very loving adoptive mother. Larry 0:03:34.880 --> 0:03:38.360 Ellison says that his adoptive father was less so Yeah, 0:03:38.440 --> 0:03:43.120 Louis essentially, according to Larry, Ellison said that, uh, Larry 0:03:43.280 --> 0:03:46.720 was was no good, that he was never going to 0:03:46.800 --> 0:03:49.720 amount to anything. Yeah, and you know, Louie Ellison was 0:03:49.800 --> 0:03:51.760 in real estate. He made a lot of money and 0:03:51.800 --> 0:03:53.600 then during the Great Depression he lost it all. So 0:03:53.680 --> 0:03:56.040 maybe he was just a really unhappy man, could have 0:03:56.040 --> 0:03:59.880 been very bitter because of losing that fortune, and was 0:04:00.400 --> 0:04:04.440 pretty much all about undermining Larry's confidence, at least according 0:04:04.560 --> 0:04:10.160 again to Larry's tale of his childhood. And so Larry 0:04:10.200 --> 0:04:13.480 goes on. He goes to school. He's smart, but not 0:04:13.680 --> 0:04:16.719 like the kind of student who really applies himself. He 0:04:16.760 --> 0:04:18.719 knows his math and he knows his science. He's pretty 0:04:18.760 --> 0:04:20.800 good at it. But um, he also has trouble with 0:04:20.839 --> 0:04:23.479 authority figures, and that's what school is full of. Yeah, 0:04:23.800 --> 0:04:25.719 it turns out that if you, I guess, you know, 0:04:25.760 --> 0:04:27.880 when you get a home life where you're being undermined 0:04:27.920 --> 0:04:31.360 by the person that you assume is your dad over 0:04:31.400 --> 0:04:35.640 and over again, maybe authority is something you bristle at. Yeah, yeah, 0:04:35.680 --> 0:04:38.919 you're trying to gain some control over your own fortune. 0:04:39.240 --> 0:04:42.000 But he gets through high school and then he goes 0:04:42.040 --> 0:04:45.640 on to college where obviously he just coasts through his 0:04:45.760 --> 0:04:49.640 classes and graduates, right, That is not right. No, he 0:04:49.680 --> 0:04:52.359 went to University of Illinois and he was named Science 0:04:52.400 --> 0:04:55.560 Student of the Year. But then he dropped out. But 0:04:55.720 --> 0:04:58.919 he did so because he suffered a tragedy. Yeah. His 0:04:58.960 --> 0:05:03.720 adoptive mother us away. Uh, two years after he started college. 0:05:03.800 --> 0:05:07.720 So he leaves because the woman he identifies as his mother, 0:05:07.800 --> 0:05:10.039 the woman who raised him, has passed away. Yeah. I 0:05:10.040 --> 0:05:13.240 mean I can't personally really blame him for that. No. 0:05:13.360 --> 0:05:16.680 I mean that's a truly traumatic event, and he would 0:05:16.720 --> 0:05:19.320 try to make another go at it. It wasn't like 0:05:19.360 --> 0:05:21.000 he just dropped out of college and that was it. 0:05:21.080 --> 0:05:23.960 He did try. He re enrolled, but in a different school. Yeah, 0:05:23.960 --> 0:05:26.719 he went to University of Chicago and then he dropped 0:05:26.720 --> 0:05:29.080 out after one semester. And I don't think it's because 0:05:29.080 --> 0:05:31.719 his adoptive mother died again. No, No, it turns out 0:05:31.760 --> 0:05:35.320 that that's a one time only thing then, unless unless 0:05:35.360 --> 0:05:38.440 she's a zombie. No. As far as I know, even 0:05:38.440 --> 0:05:41.960 in the craziest of Larry Ellison's backstories, I never heard 0:05:42.000 --> 0:05:46.680 of zombie adopted mom. He then moved to California, which 0:05:46.920 --> 0:05:49.919 is the place he gotta be. Yeah, Apparently he started 0:05:49.960 --> 0:05:53.680 looking around for a job, and he kind of was 0:05:53.760 --> 0:05:56.760 doing pretty much any job he could he could find. 0:05:57.040 --> 0:06:00.560 In those early early days. He worked at places Fireman's 0:06:00.560 --> 0:06:03.200 Fund in Wells, Fargo, where he did technical work, and 0:06:03.200 --> 0:06:06.120 then a brief stint as a programmer at DOL. Now 0:06:06.120 --> 0:06:11.960 what's interesting is that he didn't study computer science in college. 0:06:11.960 --> 0:06:15.320 He didn't learn to program in school so much. He had, 0:06:15.360 --> 0:06:18.080 you know, maybe some familiarity with it, but he really 0:06:18.680 --> 0:06:22.000 started looking into that once he had left school, and 0:06:22.040 --> 0:06:24.200 he did it by just sort of grabbing books on 0:06:24.240 --> 0:06:26.880 the subject, reading and studying about them, and then kind 0:06:26.880 --> 0:06:30.440 of learning from their programming for dummies. Yeah, before there 0:06:30.520 --> 0:06:32.760 was such a thing. But essentially, yeah, this is the 0:06:32.760 --> 0:06:35.680 early days of computer programming in a lot of ways, right, 0:06:35.720 --> 0:06:38.719 Like we're talking about an era where you were starting 0:06:38.720 --> 0:06:41.920 to see computers emerge out of high tech companies and 0:06:42.240 --> 0:06:46.440 universities and finally make their way into enterprise into businesses. 0:06:47.120 --> 0:06:50.280 This is really before the era of personal computers, and 0:06:50.320 --> 0:06:52.560 they're still really big. At that time, they were still 0:06:52.560 --> 0:06:55.159 pretty big, and so he was teaching himself how to 0:06:55.560 --> 0:06:58.240 program from various books. So it wasn't like he was 0:06:58.279 --> 0:07:00.560 flying by the seat of his pants. He knew what 0:07:00.600 --> 0:07:02.960 he was doing, but he came at it from a 0:07:03.040 --> 0:07:07.599 very obtuse angle. So then he started at a company 0:07:07.600 --> 0:07:10.960 called Ampex Corporation in nineteen seventy three, which was in 0:07:11.000 --> 0:07:14.400 the business of making generators and electric motors. Now by 0:07:14.440 --> 0:07:17.400 the seventies, by the time he started, there wasn't really 0:07:17.560 --> 0:07:19.960 working on generators and electric motors anymore. They were working 0:07:19.960 --> 0:07:22.880 on making multi track tapes, like you know, eight track tapes, 0:07:23.000 --> 0:07:26.360 largely for data recording, not for not for putting you know, 0:07:26.440 --> 0:07:28.960 John Denver's greatest hits on him instead of that rocky 0:07:28.960 --> 0:07:32.240 Mountain high you can overlap the information, Shanna, Well, this 0:07:32.320 --> 0:07:34.640 is more about looking at you know, like computer data, 0:07:34.720 --> 0:07:38.560 like storing computer information to magnetic tape. In fact, Ampex 0:07:38.680 --> 0:07:42.280 was contracted by the c i A to create a 0:07:42.480 --> 0:07:46.000 large terrior bit mass storage system on tapes. So that's 0:07:46.040 --> 0:07:48.000 kind of what they were doing. Yeah. So, and this 0:07:48.120 --> 0:07:53.240 is also mark the beginning of Ellison's love affair with 0:07:53.480 --> 0:07:56.040 working relationship with the c i A, which would become 0:07:56.040 --> 0:08:00.320 an important component in the formation of Oracle. So Wison 0:08:00.560 --> 0:08:03.800 would start to build databases for Ampex. Now that also 0:08:03.920 --> 0:08:06.240 is very important, So there may be listeners out there 0:08:06.240 --> 0:08:09.040 who said, I've heard the name Oracle. I don't know 0:08:09.080 --> 0:08:10.800 what they do. You know, there's a lot of people 0:08:10.800 --> 0:08:12.760 who say that, Yeah. I mean even for a long time, 0:08:12.760 --> 0:08:15.760 I cover technology for a living and and I didn't 0:08:15.840 --> 0:08:17.800 have a whole lot of crossover with Oracle. It was 0:08:17.800 --> 0:08:20.320 the name that I was always familiar with. So when 0:08:20.320 --> 0:08:25.560 they started off, Oracle was really about making databases. And again, 0:08:25.600 --> 0:08:28.680 this isn't an era before you had spreadsheet programs or 0:08:28.760 --> 0:08:32.760 database programs that are all throughout software suites these days. 0:08:33.120 --> 0:08:36.079 This was before all that happened, and so you needed 0:08:36.120 --> 0:08:40.480 to have essentially proprietary databases created. So these were all 0:08:40.559 --> 0:08:43.679 kind of made from scratch at the like one off, 0:08:43.840 --> 0:08:45.400 I need you to make this for me, can make 0:08:45.400 --> 0:08:48.360 it for me, right. It may be like that organization 0:08:48.400 --> 0:08:50.480 I just worked with, they needed something that was going 0:08:50.520 --> 0:08:55.560 to manage supply chains and sales and shipping. But this 0:08:55.679 --> 0:08:57.520 other one has nothing to do with sales. It's all 0:08:57.520 --> 0:09:00.120 about production. So it's a similar thing, but it's going 0:09:00.160 --> 0:09:02.800 to need a different implementation. There weren't any like one 0:09:02.840 --> 0:09:04.840 stop shops for that stuff. You had to have it 0:09:04.880 --> 0:09:07.480 built for you. So that's kind of what he specialized in, 0:09:07.520 --> 0:09:11.040 and that's really what Oracle specialized in when it first started, 0:09:11.120 --> 0:09:16.440 was in database design and implementation. Now, after that, Oracle 0:09:16.520 --> 0:09:21.719 would expand lots of other enterprise stuff, essentially creating all 0:09:21.760 --> 0:09:25.000 the systems that allow big companies to do all the 0:09:25.080 --> 0:09:27.560 behind the scenes work. The way that you would keep 0:09:27.600 --> 0:09:30.600 track of all the different, various moving parts of a 0:09:30.640 --> 0:09:34.680 big company. That's what Oracle does. They create that these days. Yeah, 0:09:34.720 --> 0:09:37.240 but when they started growing, they started off with this 0:09:37.320 --> 0:09:40.439 one solution they made specifically for the CIA and adjusting 0:09:40.480 --> 0:09:43.120 it instead of creating something completely new for they could 0:09:43.160 --> 0:09:47.200 adapt what they had done for other implementations. We'll talk 0:09:47.280 --> 0:09:58.679 more about that right after this quick break. While he 0:09:58.760 --> 0:10:02.400 was at Ampex and working on these database projects, he 0:10:02.520 --> 0:10:05.760 met two people who would end up being his co 0:10:05.920 --> 0:10:09.160 founders for Oracle. In fact, depending upon the version of 0:10:09.200 --> 0:10:12.199 the story of Oracle you read, they're technically the co founders, 0:10:12.200 --> 0:10:14.960 and then Allison came on shortly thereafter. This is one 0:10:15.000 --> 0:10:17.840 of those places where you get some conflicting information. So 0:10:17.880 --> 0:10:22.800 there was Robert Bob Nimrod Minor and Ed Oates. Those 0:10:22.800 --> 0:10:26.320 were the other Ampex employees who would become co founders 0:10:26.360 --> 0:10:30.920 of Oracle, and they both graduated with degrees in mathematics. Yeah, 0:10:30.960 --> 0:10:34.400 so they did have the degree right where Larry Ellison 0:10:34.920 --> 0:10:37.120 might have had a little more hootspah. Yeah. Now, el 0:10:37.200 --> 0:10:39.839 Ellison definitely comes across as sort of like if I 0:10:39.880 --> 0:10:44.160 were to compare him to some other iconic businessman, I 0:10:44.160 --> 0:10:47.080 would say that Ellison is in many ways similar to 0:10:47.120 --> 0:10:49.280 Steve Jobs, and in fact that two of them were 0:10:49.480 --> 0:10:52.520 very close friends. When Steve Jobs was still alive, they 0:10:52.559 --> 0:10:57.400 were very close friends. Steve Jobs, uh was the salesman 0:10:57.760 --> 0:11:00.319 for Apple more than anything else. He was the who 0:11:00.360 --> 0:11:04.520 was able to sell this idea of personal computers, whereas 0:11:04.559 --> 0:11:08.120 Steve Wozniak, the co founder of Apple, was largely the 0:11:08.160 --> 0:11:12.560 guy who was actually building the systems. Ellison he got 0:11:12.600 --> 0:11:14.800 his hands dirty. I mean he was coding, but he 0:11:14.880 --> 0:11:22.400 was really more uh more adept at the handshaking and 0:11:22.520 --> 0:11:26.040 salesmanship side of things in many ways. Yeah. Yeah. But 0:11:26.200 --> 0:11:31.000 before Ed and Bob and Larry all created Oracle together, 0:11:31.280 --> 0:11:34.160 Larry did take a brief stint at another company. Um. 0:11:34.160 --> 0:11:37.600 He worked at a place called Precision Elements, which basically 0:11:37.679 --> 0:11:41.920 was another data storage company, right, So he worked there. 0:11:42.120 --> 0:11:45.480 He was contracted out to work with this, or maybe 0:11:45.520 --> 0:11:48.840 Minor and Oates were, but they were all working on 0:11:48.920 --> 0:11:52.800 similar projects right again, as this database technology that was 0:11:52.840 --> 0:11:55.960 still coming into fruition in the mid seventies. Yeah, and 0:11:56.040 --> 0:11:59.400 about that time, some accounts say that Bob and Ed 0:11:59.440 --> 0:12:01.800 decided to are their own company and they invited Larry 0:12:01.840 --> 0:12:05.719 to join. Yeah, this would be Software Development Laboratories or 0:12:05.920 --> 0:12:09.560 s d L and other accounts. Larry says that the 0:12:09.559 --> 0:12:12.480 company he was working for, Precision Elements, had more work 0:12:12.520 --> 0:12:15.800 than they could handle, and so he encouraged Bob and 0:12:16.000 --> 0:12:17.800 D to bid on some of their work. So that 0:12:17.920 --> 0:12:21.520 Bob and D formed this company as contractors for the 0:12:21.559 --> 0:12:23.960 company that Ellison was. But whose idea it was to 0:12:24.040 --> 0:12:26.120 form this company is a little up in there. Yeah, 0:12:26.240 --> 0:12:29.000 it gets a little hard to determine based upon the 0:12:29.080 --> 0:12:32.760 multiple histories out there. But no matter what, they do 0:12:32.960 --> 0:12:36.680 end up forming this company, the SDL company, the Software 0:12:36.679 --> 0:12:42.000 Development Laboratories, and one of, if not their very first 0:12:42.160 --> 0:12:46.120 clients was the c I A. Yes, they needed a 0:12:46.200 --> 0:12:49.920 database for a secret project they were working on. Yeah, 0:12:50.200 --> 0:12:53.080 and this secret project had a code name, and that 0:12:53.160 --> 0:12:57.400 code name was Oracle. Yeah. So it turns out the 0:12:57.520 --> 0:13:00.840 name of the company actually comes out of I kid you, 0:13:00.880 --> 0:13:05.320 not actual spy stuff, yes, which is kind of cool 0:13:05.559 --> 0:13:09.200 now and scary. We don't know what spy stuff exactly. Well, 0:13:09.280 --> 0:13:11.960 it's a database. I would imagine it's some form of 0:13:12.080 --> 0:13:14.720 way of keeping track of people what the c I 0:13:14.840 --> 0:13:17.640 A think are batties, yes, or at least people you 0:13:17.679 --> 0:13:20.080 should keep an eye on. Yes. I mean, granted, it 0:13:20.080 --> 0:13:22.920 could have easily just as been a database that the 0:13:22.960 --> 0:13:25.640 CIA used to keep track of their assets. I mean, 0:13:25.880 --> 0:13:29.160 I had nothing to do with keeping tabs on various 0:13:29.240 --> 0:13:33.760 individuals that they thought might be somewhat suspect. Yeah. Larry 0:13:33.880 --> 0:13:37.680 is a big advocate for having a massive database of 0:13:37.720 --> 0:13:41.320 all the law enforcement databases in the United States. Yeah. 0:13:41.360 --> 0:13:46.920 Ellison has often advocated for what some people might call 0:13:47.080 --> 0:13:50.200 more of a surveillance state. Yes, and that gets a 0:13:50.200 --> 0:13:53.200 little hairy. Whatever the case, we don't know what the 0:13:53.200 --> 0:13:56.599 Oracle project really was ultimately, apart from the fact that 0:13:56.720 --> 0:13:59.720 needed this database and Ellison thought the name was pretty cool. 0:14:00.040 --> 0:14:03.680 Around the same time, ed Oats is reading up on 0:14:03.760 --> 0:14:07.360 some research that had been done previously, and it was 0:14:07.760 --> 0:14:11.480 about IBM and a language they had developed called sequel 0:14:11.600 --> 0:14:15.280 or s q L. Now sequel was useful, but it 0:14:15.320 --> 0:14:19.440 hadn't really been rolled out for commercial practice yet, and 0:14:19.640 --> 0:14:22.200 it was allowing for a type of database called a 0:14:22.240 --> 0:14:25.760 relational database, which was a new way of thinking about 0:14:25.840 --> 0:14:29.280 organizing information. So you would say, you have different points 0:14:29.280 --> 0:14:32.720 of data, and then these different points have relations to 0:14:32.880 --> 0:14:35.920 one another, and a relational database would allow you to 0:14:36.000 --> 0:14:39.400 search based upon those relationships. You're no longer looking at 0:14:39.440 --> 0:14:42.600 just a cell. Now you're able to pull up a 0:14:42.640 --> 0:14:46.360 whole bunch of different information that all relates to whatever 0:14:46.400 --> 0:14:49.280 your query happens to be. It's a pretty basic idea 0:14:49.360 --> 0:14:53.480 that is implemented widely these days, so it seems obvious 0:14:53.560 --> 0:14:55.560 on the face of it, but in the mid seventies 0:14:55.560 --> 0:14:59.120 this was a brand new concept. I'd imagine that this 0:14:59.160 --> 0:15:02.040 process would normal take a lot of time, but since 0:15:02.080 --> 0:15:04.960 these gentlemen were well versed with databases, they were given 0:15:05.000 --> 0:15:07.520 two years to make this solution for the CIA, and 0:15:07.560 --> 0:15:09.560 it only took them one. But you know, like you 0:15:09.600 --> 0:15:12.040 mentioned before, Bob Minor did a lot of the architecture. 0:15:12.080 --> 0:15:14.880 He was kind of the Wazniac of this first project. Yes, 0:15:15.040 --> 0:15:18.280 I think one of my favorite things about the official 0:15:18.360 --> 0:15:21.000 product Oracle would come out with Now that they've done 0:15:21.040 --> 0:15:23.680 this project for the CIA, they were ready to take 0:15:24.160 --> 0:15:27.280 this database model and sell it as a product to companies. 0:15:27.480 --> 0:15:29.840 They go out to sell it to companies, but Ellison 0:15:30.560 --> 0:15:34.160 makes a suggestion that is a little weird, which is 0:15:34.200 --> 0:15:40.320 that let's call our software version two instead of version one. 0:15:40.800 --> 0:15:44.640 The logic behind that was any company that looks out 0:15:44.640 --> 0:15:46.840 there and sees a product and they see that it's 0:15:46.880 --> 0:15:50.080 labeled version one, that company is going to think, well, 0:15:50.120 --> 0:15:53.080 this is a brand new thing. It's totally untested, it's unproven. 0:15:53.800 --> 0:15:56.400 I'm not going to invest thousands of dollars in that. 0:15:56.520 --> 0:15:58.600 I don't want to pay to beta test. Yeah, I 0:15:58.640 --> 0:16:02.040 want something that has a proven track record. So Alison said, 0:16:02.400 --> 0:16:06.000 let's just hall version one version two and fool everyone 0:16:06.000 --> 0:16:09.200 into thinking, oh, this is the refined product. And they 0:16:09.200 --> 0:16:12.600 bring on another person to help them with development, Bruce Scott, 0:16:13.200 --> 0:16:15.120 who a lot of times is referred to as the 0:16:15.280 --> 0:16:18.400 fourth co founder of Oracle. Yeah. By the time that 0:16:18.480 --> 0:16:21.200 they get up to nineteen eighty, they started looking at 0:16:22.040 --> 0:16:25.360 many computing as in like the sort of the desktop computers. 0:16:25.360 --> 0:16:29.960 Now they're looking at desktop because that's after Apple had 0:16:30.000 --> 0:16:33.520 gotten into the game. Commodore was creating I still have 0:16:33.600 --> 0:16:37.400 my Commodore sixty four. Oh my gosh. Wow. And then 0:16:37.800 --> 0:16:41.240 you started seeing IBM was about to launch the personal 0:16:41.240 --> 0:16:44.640 computer around this time. So this was a shot across 0:16:44.640 --> 0:16:47.000 the battle saying there's gonna be a big change in 0:16:47.080 --> 0:16:50.960 computing coming up. That meant that companies that previously would 0:16:51.000 --> 0:16:53.720 not have been able to afford investing in computer systems 0:16:53.720 --> 0:16:57.120 because they were these huge, you know, twenty thou dollar 0:16:57.280 --> 0:17:00.760 machines per machine, they would now be to go into 0:17:00.800 --> 0:17:04.480 these smaller versions, these Apple computers or the IBM PC, 0:17:05.280 --> 0:17:07.440 and for a fraction of that cost they could buy 0:17:07.880 --> 0:17:10.560 ten machines, you know. So suddenly started seeing a lot 0:17:10.600 --> 0:17:14.080 of companies say, maybe we can finally digitize our business. 0:17:14.160 --> 0:17:17.520 We can bring computers into this and so Oracle, Larry 0:17:17.520 --> 0:17:21.240 Ellison in particular, says, these are markets we should target. 0:17:21.280 --> 0:17:23.520 We should make sure we create products that can run 0:17:23.560 --> 0:17:26.280 on those computers, because how we're never really going to 0:17:26.359 --> 0:17:28.919 be hitting the home user. We'll be able to hit 0:17:28.920 --> 0:17:31.840 all those small to medium sized businesses that are going 0:17:31.880 --> 0:17:35.400 to want to operate the same way as these bigger companies. 0:17:35.440 --> 0:17:38.399 So this was a kind of a ce change. This 0:17:38.480 --> 0:17:42.359 was Larry Ellison saying we have to go after this group. 0:17:43.000 --> 0:17:45.679 And more than just a C change in that sense, 0:17:45.680 --> 0:17:48.320 they also started programming in the C program language. But 0:17:48.400 --> 0:17:52.080 that's you know, that's that's me being being silly with puns. 0:17:52.200 --> 0:17:56.160 Now it's very clever, and they finally officially changed the 0:17:56.240 --> 0:18:00.359 name of their company to Oracle. By then there unn 0:18:00.480 --> 0:18:04.600 version two point three. They start building their business and 0:18:04.640 --> 0:18:07.720 it ends up being a pretty dramatic rise. They're they're 0:18:07.760 --> 0:18:11.200 doing really well in those first few years. For example, 0:18:11.880 --> 0:18:17.520 Oracle split their stock ten times. Now here's how a 0:18:17.560 --> 0:18:20.280 stock split works, in case you aren't aware, Yes, please 0:18:20.320 --> 0:18:23.280 explain it to me, okay. In the stock split, company's 0:18:23.320 --> 0:18:25.280 board director says, all right, well, we're gonna do so. 0:18:25.280 --> 0:18:27.760 We're gonna take the number of outstanding stocks that are 0:18:27.760 --> 0:18:31.240 out there, and we're going to increase that number. So 0:18:31.720 --> 0:18:33.680 I started off with a hundred shears, are I'm gonna 0:18:33.760 --> 0:18:36.399 double that Now it's two hundred shares. So ariel, if 0:18:36.440 --> 0:18:39.880 you had two shares of stock in my company, now 0:18:39.920 --> 0:18:44.000 you would suddenly have four shares. But the value of 0:18:44.040 --> 0:18:46.960 each of those shares will be cut in half because 0:18:47.000 --> 0:18:50.159 you can't change the value of the company this way. Otherwise, 0:18:50.160 --> 0:18:52.560 you would just be magically making a company more valuable 0:18:52.600 --> 0:18:56.520 every time you split the stock. However, by reducing the 0:18:56.560 --> 0:19:00.679 price point per share, you create more up tunities for 0:19:00.760 --> 0:19:04.760 small or midsized investors to buy shares in your in 0:19:04.840 --> 0:19:08.520 your company, which can stimulate even more growth. Yes, so 0:19:08.760 --> 0:19:11.879 by splitting ten times, that meant Oracle was getting to 0:19:11.920 --> 0:19:14.080 a point where they were seeing their stock price grow 0:19:14.720 --> 0:19:16.919 where they felt, we need to split the stock so 0:19:16.960 --> 0:19:19.399 that we can reduce the price on a per share 0:19:19.440 --> 0:19:23.880 basis and improve liquidity. We have more to cover, but first, 0:19:23.960 --> 0:19:36.360 let's take a quick break. Now. You say, you say 0:19:36.440 --> 0:19:39.640 that you cannot just magically decide how much your company 0:19:39.720 --> 0:19:44.760 is worth. But yeah, Oracle kind of tried that a 0:19:44.760 --> 0:19:46.560 couple of times a couple of times, and it got 0:19:46.600 --> 0:19:52.440 them into a little bit of trouble. So they misrepresented 0:19:52.440 --> 0:19:55.680 their revenues for three quarters in a row to bump 0:19:55.720 --> 0:19:58.720 up their stock prices. Right, that was the accusation. So 0:19:58.840 --> 0:20:01.880 Oracle says, all right, well, we've got a whole bunch 0:20:01.880 --> 0:20:05.160 of handshake agreements out there with companies. These companies said 0:20:05.160 --> 0:20:08.600 we're going to buy your software. The actual deal hasn't 0:20:08.640 --> 0:20:13.040 happened yet. What was happening was that Oracle was posting 0:20:13.119 --> 0:20:18.520 these revenue figures that were not actually, you know, real, 0:20:19.440 --> 0:20:22.439 because those sales had not all happened yet. They were 0:20:22.600 --> 0:20:26.359 possibly real. They were imaginative. They were imaginative. But this 0:20:26.440 --> 0:20:29.359 isn't the only time that they kind of played a 0:20:29.359 --> 0:20:33.320 little fast and loose with numbers. Uh. In two thousand one, 0:20:33.359 --> 0:20:37.600 they actually kind of, uh another accusation, got accused of 0:20:37.600 --> 0:20:41.400 insider trading. Yeah. The accusation is they knew that their 0:20:41.520 --> 0:20:44.520 company was not going to be worth as much once 0:20:44.560 --> 0:20:46.960 the quarterly earnings were announced, and so they went ahead 0:20:47.000 --> 0:20:50.080 and sold off a bunch of stock before it dropped. Yeah, 0:20:50.240 --> 0:20:54.239 that's not great, it is uh, yeah, that's illegal. As 0:20:54.280 --> 0:20:59.040 it turns out, that whole mess would take years to reconcile. 0:20:59.359 --> 0:21:03.600 It got real ugly, but ultimately Ellison kind of got 0:21:03.640 --> 0:21:05.679 out of that. The Ellison has been involved in a 0:21:05.720 --> 0:21:11.119 few kind of notable strange lawsuits. So there was a 0:21:11.119 --> 0:21:14.600 case where Ellison agreed to donate a large amount of 0:21:14.600 --> 0:21:18.200 money to a nonprofit charity as part of a settlement 0:21:18.240 --> 0:21:21.720 to get out of an accusation, and then he didn't. 0:21:22.480 --> 0:21:24.760 I was about to say, that's really great to build 0:21:24.800 --> 0:21:28.280 some goodwill up with your rectifying the issue. But I 0:21:28.280 --> 0:21:30.800 guess if there's no follow through. He said in two 0:21:30.840 --> 0:21:33.280 thousand five he was going to make a one hundred 0:21:33.480 --> 0:21:40.240 fifteen million dollar donation to Harvard University had for a 0:21:40.280 --> 0:21:44.320 special medical center, and that made headlines. I mean, that 0:21:44.400 --> 0:21:47.320 was a huge announcement. But in two thousand and six 0:21:47.359 --> 0:21:49.439 he said, you know what, never mind, I'm not going 0:21:49.480 --> 0:21:51.840 to make that hundred fifteen million dollar donation I said 0:21:51.880 --> 0:21:54.520 I was going to make. And the reason he changed 0:21:54.520 --> 0:21:59.040 his mind is that the president of Harvard University had 0:21:59.080 --> 0:22:03.240 stepped down owned and he was friends with Harvard University's 0:22:03.240 --> 0:22:07.000 president at the time, so this was sort of I 0:22:07.080 --> 0:22:09.600 made that agreement when my buddy was running things, but 0:22:09.640 --> 0:22:11.320 now my buddy's not there, so I don't really want 0:22:11.320 --> 0:22:14.400 to do that anymore. Meanwhile, the medical center had already 0:22:14.440 --> 0:22:16.679 started kind of doing what O Oracle had done a 0:22:16.720 --> 0:22:20.200 decade earlier. They had started spending money they didn't have yet. 0:22:20.440 --> 0:22:24.480 They started making hires and allocating where that money was 0:22:24.480 --> 0:22:26.240 going to go because they thought it was coming in, 0:22:27.040 --> 0:22:31.040 which is a valuable lesson for everybody. Don't make plans 0:22:31.040 --> 0:22:33.280 to spend money you don't have yet. This is why 0:22:33.280 --> 0:22:35.800 so many people get in trouble with credit cards. It 0:22:35.880 --> 0:22:40.080 is I mean this was just on dollar scale. And 0:22:40.119 --> 0:22:42.560 not to say that he hasn't been philanthropic. He has. 0:22:42.680 --> 0:22:48.040 But Ellison has this reputation of being very outspoken, very opinionated, 0:22:48.480 --> 0:22:52.320 very declarative in his statements, and then not his behavior 0:22:52.480 --> 0:22:57.680 has not always followed through with that. He was notorious 0:22:57.720 --> 0:23:02.280 about taking a very close approach to holding onto Oracle 0:23:02.400 --> 0:23:06.720 and determining what the company did, like almost on micromanaging approach. Yes, 0:23:06.840 --> 0:23:09.880