Stephen Wong, chairman and chief executive officer of Embarcadero Technologies, prefers to be plainspoken in a field that often is filled with hype. Illustrative of this characteristic are some of Wong's candid responses to questions posed by DM Review. Concerning his experience, Wong concedes, "I've probably never held a job that I was qualified to do. When people have the desire, it's quite remarkable what they can achieve." As for his career choices, Wong has walked away from successful careers in other fields in pursuit of new challenges. When asked why Embarcadero is successful, Wong voiced his opinion, "While we've accomplished a good deal, we've still only scratched the surface of what is possible. Much work remains ahead if we are to realize our ambitions." Wong credits the company's good fortunes founded in 1993, cash flow positive since 1994 to a number of factors.
"If you attract good people and give them opportunities to stretch themselves, great things can happen," states Wong. "I'm an entrepreneurial manager who recognizes the need to take risks in order to deliver exceptional products and financial results. In taking risks, people can stumble and fall, but that's part of reaching difficult goals and developing perspective. When people come to Embarcadero, I want them to dare to do great work. It's my job to frame the overall risk taking so that the potential risks and rewards fit the company's goals and resources."
As a hallmark of the company's success, 90 of the Fortune 100 depend on Embarcadero Technologies software. Embarcadero's suite of award winning software products enable organizations to build, optimize and manage databases and applications supporting today's critical enterprise systems. Embarcadero's mission is to deliver a complete database life cycle management solution. Says Wong, "Our products help customers to conquer the considerable challenges of building and deploying high-availability, high performance database applications." Because most traditional products fail to adequately address the design, development and administration phases of the database life cycle, Embarcadero's suite of software products is designed to develop and support e-business applications, increase utilization of existing technology, leverage constrained IT resources and facilitate rapid adoption.
Unlike many other software CEOs, Wong does not have a software development background. Instead, Harvard-educated Wong's background is that of company development more specifically, venture capital.
Wong explains, "While I'm financially oriented, having grown up on that side of the business, I try to look at businesses from a broader, real-world perspective. The potential for every business is framed by the problems that it attempts to solve, which is the value proposition it presents to the marketplace. Of course, the difficult part is executing on such plans so that the value proposition becomes a reality for customers. Fundamentally, this is the most effective way to build a sustainable business."
Wong was raised on the West Coast. He explains, "Being the eighth of nine children, I developed a spirit of independence growing out of the shadow of my older siblings. I applied to schools in the northeast because I figured the further away I was, the more independent I would be."
"While I was in college at Harvard in the late '70s, I heard about venture capital before it became such a glamorous field. Venture capital sounded almost too good to be true you acted as a principal, got to work with bright and motivated people, occasionally rubbed elbows with true visionaries and could create substantial equity value while doing something good for the real economy. With these prospects, I became obsessed with finding a spot in the industry."
"I started calling all the people I knew to beg for a shot. One venture capitalist, who later became a mentor, made the mistake of giving me his home phone number. I called him morning, noon and night about a job. Finally, I cornered him with the proposition, I would put my money where my mouth was, potentially agreeing to work for nothing. I told him that while I wasn't qualified to be a venture capitalist, I would throw all of my youth, energy and smarts into proving that I could do the job. I agreed to work the summer without taking a paycheck. At the end of the summer, we'd settle up. If he didn't think I was worth anything, I would accept this as a gentleman. If he thought I was worth something, I'd graciously accept whatever he offered me. This worked great at the end of the summer he offered me a junior partnership. Unfortunately, I was already committed to graduate school and could not assume that position. Instead, I arranged to work off-hours for him while attending Harvard Business School, which almost translated into full-time hours," recalls Wong.
"When I finished business school, I was one of the few people who had gained real experience in venture capital. Again, this was still a relatively early time in the industry. I had an opportunity to join a couple of different firms, but there was a new firm here in San Francisco that was started by someone I knew. At the time, it was the largest medical venture firm in the world. I already knew the partners, I loved San Francisco and I was tired of the northeast, so I left. I took my last final on a Friday and started work on Monday. I came to specialize in starting companies technology transfer and early-stage investments. After three years, I became a partner in the firm. However, I began to grow restless because the more time I spent hanging around entrepreneurs, the more I wanted to be one of them as opposed to the money guy," disclosed Wong.
The Embarcardero Headquarters is located in central downtown San Francisco.
"I was single, 30 years old, and didn't really have any obligations. I saw my chance," says Wong. "Either you go through life saying, 'I could/should have been,' or you try. I knew there was a risk of failure, but if there was a time when I could afford to do something, this was it. I left under good circumstances I had made a bunch of money for the firm and saved a bit of money for myself, so I started scouting for the next thing to do. I was still focusing on the medical field at that time."
Wong sets the scene, "This was the early '90s and the dawn of managed care was inevitable. Healthcare costs were spiraling out of control. Additionally, companies were facing a lot of red tape in seeking regulatory approval to market new medical technologies. Consequently, entrepreneurs were left in the unfavorable position of having to achieve technological success with no assurance that regulatory approval would follow. It was at this time that I decided to explore the technology field I'd always been fascinated by technology. I was 'that' first guy with a PC that used VisiCalc and WordStar when they were first released. Anyway, I started to dabble in technology and subsequently met the other cofounders of Embarcadero. These individuals had actually worked for a company I had invested in."
"Our approach to building Embarcadero was very pragmatic. We assumed that if we did not build a demonstrably superior product, then we had no business competing against much larger companies that already enjoyed established relationships with major customers. To us, it all starts with the product. If you solve real problems for your customers, they will see the value and you will have a promising business. This," states Wong, "was our very simple formula for success."
"To avoid the distractions of raising outside capital, we placed ourselves on a strict financial diet," explains Wong. "Having been a venture capitalist, I knew that raising money and dealing with outside investors would consume a lot of time and energy. Instead, we put our heads down in an effort to build a better mousetrap, as this was the real path to creating value."
"Fortunately, our focus paid off. Our initial products were well received. They were functionally rich but exceptionally easy-to-use products that made database administration much more approachable for our users. It may sound ridiculous now, but we developed a bit of a cult following simply because we understood our user base. We knew what a day in the life of the database administrator or database programmer was like. We sweated the details to add many features, big and small, that together made our products compelling." Wong continues, "When people are focused on their work, whether they're analysts, writers or coders, they don't want to interrupt their thought patterns for fear of losing critical ideas. This is a guiding principle when we design our software we want to facilitate a frictionless workflow for our users so they can be highly productive. Over time, this can translate into superior results and big savings."
"As we've matured as a company, we've built many more products, solved bigger problems and become an established vendor for thousands of customers," says Wong. Just this June, Embarcadero released Describe a unified modeling language design and development tool that can reduce the traditional friction between enterprise application development teams, their tools and their work.
Embarcadero was named the top performing IPO of 2000. However, Wong is confident that Embarcadero's success will not diminish the company's zeal for its business. He explains, "We're more engaged than ever in understanding the problems that our customers face. To this day, there's nothing that gets Embarcadero more excited than the opportunity to create and deliver products that solve big problems for our users."
Some may think Wong has taken big, even crazy risks in his career. "I haven't always made the safe choices in my career. If I were prudent, I would have stayed on other lucrative career tracks, but at the cost of boredom. That's not me. I must be very engaged in whatever I'm doing because this is more than a job. The software field affords participants tremendous opportunities. Because of that, I've had a certain faith that success would follow if I focused on solving important problems and building talent around me," he says.
To revisit the clarity that is Embarcadero, Wong concludes, "Our strategy is to combine great products with great business execution. This is how we find and keep happy customers. It also is how we compete effectively and meet our financial goals. If we succeed in building compelling products, then everything else becomes easier. We do not have to obfuscate messages about our products because they work out of the box, solve real problems and produce quick returns."
Embarcadero Technologies Fact Table
Publicly Traded: EMBT
Number of Employees: 270
2000 Revenues: $41 million
Number of Customers: 7,000
Number of Licenses: 50,000
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