SEBL as the Borg. An old article, but some here might find it of interest... Just imagine if you had read it and bought the stock then, just three short years ago...
tekboy@lookingbackisfatal,lookingforwardisbliss.com
forbes.com
Forbes, 5/19/97
The hardwiring of a salesman
By Josh McHugh
"IMAGINE A RACE of beings possessed of one mind, driven by one will, intent on one purpose. . . ."
Star Trek talk. It refers to the Borg, a hivelike civilization of automatons bent on galactic domination. The Borg "assimilates" its human victims, implanting them with circuitry that turns them into drones directed by the Borg's centralized group mind.
A San Mateo, Calif. company with some sophisticated software and a knack for insinuating itself into other companies' business plans is prospering by bringing a similarly single-minded approach to corporate sales. Siebel Systems pulled in $39 million in revenues in 1996, up from $8 million the year before. Even though its stock is off 45% from its high in December, the company's market capitalization is still $560 million.
What makes Siebel Systems worth 14 times revenues? Powerful software that totally dominates its customers' marketing departments. The software, which costs up to $6,000 per salesman, lets squadrons of them act as a single efficient entity, constantly accessing, analyzing and acting on a centralized collection of detailed information about customers and competitors. Suppose you're one of a tag team of eight selling computers to Chrysler. The software tells you who your teammates have already talked to, who makes the purchase decisions (and who the lackeys are), what your products' features and prices are and how close you are to closing the deal (initial contact, oral commitment, written commitment). It also keeps you up-to-date on your other accounts and sales quotas.
Discount broker Charles Schwab & Co. says Siebel's software helps its brokers predict more accurately what kinds of investments their clients will want. With the time Schwab's brokers save by not having to pump the clients for information, they make three times as many sales calls.
Networking giant Cisco Systems, looking to juice up its sales productivity, armed more than 1,000 of its salespeople with Siebel software.
Founder and Chief Executive Thomas M. Siebel, 44, a steely-eyed alumnus of database software juggernaut Oracle Corp., expresses the theory behind his software curtly: "If I can answer your questions, we're gonna do business."
Siebel also figured that anyone who owned a piece of his business would have an incentive to see him do well. Take Siebel Systems' deal with Charles Schwab & Co. Tom Siebel and Charles Schwab, the man, got together in the fall of 1994 to talk business. Schwab came away with a seat on Siebel's board and a personal stake of 2.5% of Siebel's stock, recently worth $14 million. Today, more than 4,000 of Schwab's brokers use Siebel software to access and analyze data on customers' trading profiles and account histories while making their sales pitches.
Andersen Consulting was Siebel's next target. Andersen rewrote its bylaws in 1995 so that George Shaheen, Andersen's managing partner, could join Siebel's board. The consulting company took a 10% stake in Siebel, and now recommends Siebel's automation programs to Andersen's clients. Today Andersen employs 300-plus technicians whose sole task is to install Siebel software for Andersen clients.
In March Siebel agreed to push Compaq Computer Corp. servers and laptops as the equipment of choice for running Siebel software. Compaq, in turn, outfitted its sales reps with Siebel software and agreed to collaborate with Siebel when its engineers design new hardware.
Tom Siebel has a master's degree in computer science from the University of Illinois, but he is all salesman. He joined Oracle in 1984 and immediately started beating every quota that Lawrence Ellison came up with for him.
By the time he became the general manager of Oracle's direct marketing division in 1989, Siebel realized that salesmen were wasting a lot of their time in two ways: revisiting the preferences, needs and basic information of every customer or potential customer who called, and searching for answers to questions about things like pricing, availability and competitors' products.
Siebel grabbed a couple of programmers and set to work on software that would eliminate the time wasted on taking down information more than once and looking up answers. The software worked so well that he was quickly promoted.
In 1991 Siebel left Oracle to join multimedia software maker Gain Technology as chief operating officer. Two years later Siebel had become chief executive and engineered Gain's acquisition by database software maker Sybase Inc. Out of a job and sitting on his share of the $60 million Gain sale, he founded Siebel Systems.
Siebel was far from the typical software startup, which begins with software written by an inventor/founder who stays up all night debugging. Instead, Siebel spent six months looking for management and doing market research before a line of code was typed. Salesman first and foremost, he hired engineers to write the thing.
When it was time to write the software, Siebel brought in William Edwards, who had run the 280-person engineering department at document software company Frame Technology Corp. Guided by his market research, Siebel gave Edwards a few directives: Make the software work as well for a 5,000-person sales force as for a 500-person one; make it work in several languages and currencies; make it customizable, so that the same software that works for a computer company will work for a shipping company.
For example, if a salesman tells his software that he is making a sales call in Berlin, the software activates a subprogram that converts price quotes from dollars into marks. When the salesman next indicates he is calling Tokyo, the dollars-to-marks subprogram is deactivated and a dollars-to-yen "object" whirls into action.
Siebel, who spent his formative years at Shattuck Military Academy in Minnesota, rises at 4:30 every morning to work out and check his E-mail before heading to work. Most fast-growing software companies are a bit disheveled: empty computer boxes piled in hallways, offices littered with soda cans and pizza crusts, college-age programmers in T shirts and ripped jeans.
Not Siebel. In the company's new building in San Mateo, the halls are empty. You notice three developers—a woman and two men with tucked-in dress shirts—conferring quietly in a tidy cubicle. Edwards' desk is empty except for two neat stacks of paper and a telephone.
Catchphrase at the company: "Press down hard, here's your copy." Meaning: We're here to close the deal.
"Some companies are engineering-driven," Edwards sighs. "This company is marketing-driven." For sure, it is driven. |
