Larry Ellison - Oracle Software
Why are CEOs paid so much? If you believe in market forces, it's simple supply and demand. A top Fortune 500 CEO is as rare as a top NFL quarterback or a major-league pitcher. Corporations pay to attract the few good ones and throw in excessive severance packages if the match doesn't work. It's also why founder/CEOs are so rare. The entrepreneurial qualities that make a successful founder are usually not found in a person with the qualities of a top CEO.
Bill Gates provides the rare example of success in both areas. Although he wasn't know for a particularly charming or charismatic personality, he was highly skilled in his industry's technology, was a sharp negotiator and competitor, and held his own in a face-to-face meeting with IBM when he was in his early twenties and looked even younger.
But what about Larry Ellison, the founder of database software company Oracle Corporation? While Gates' family and education launched him down the success track early on, Ellison was on a road to failure. He grew up in a single-parent household that had a modest income. He never graduated from college and hardly seemed to have been able to pick a major. He bounced around among various programming jobs until, purely by chance, he fell into the right technology at the right time and place to start a database software company.
Through another stroke of luck, the company made big sales early on to government customers including the CIA. My company also targets products to the government, and believe me, selling to them involves a lot more luck than selling to the private sector. The fact that the sales were made even though the software didn't work adds to the luck. These initial sales financed the growth of the company and allowed Ellison to retain his significant ownership.
Both Oracle and Microsoft were started around the same time. Whereas Gates founded Microsoft while still in college, Ellison didn't found Oracle until his late thirties–a great example of how you can become a success later on and after a life lacking indications that you'll succeed.
The race was on. Both Oracle and Microsoft went public around the same time. Then ultra-competitive Larry Ellison tried to catch ultra-competitive Bill Gates in the net worth race. The decades-long rivalry extends to the anti-Microsoft Silicon Valley culture of Oracle and the Microsoft culture of Redmond.
The companies also have competing products. Virtually every product produced by Oracle is also available from Microsoft. Oracle's products typically are cheaper, and in the case of the flagship database product, better or at least easier to use. The major difference is that Microsoft's products run only on Windows while Oracle started out as a multi-platform product.
Although he went from successful founder to successful and respected Fortune 500 CEO, Larry Ellison never would have made it to CEO had he not founded a company that grew with relative ease. So is he talented, or did he just find himself in the right place at the right time with the right people to make him America's luckiest entrepreneur?