Farouk Hussein

Good evening, everyone, and welcome to Hg's inaugural North American Office of the CFO dinner. Looking around this room tonight, I'm shocked and very impressed by the firepower that we've been able to assemble. We've gathered founders, CEOs and C-level execs from every corner of the office of the CFO, spanning from FP&A and accounting, tax, treasury, audit, close management, you name it. We've got it here in this room.

And to put some numbers on it, we have a few empty seats, but when they fill up we've got about 30 companies representing—without NetSuite—2 billion in annual revenue, representing roughly 20 billion in enterprise value and 10,000 employees. That's pretty impressive for Hg.

The office of the CFO is one of our most impressive and successful clusters or themes. Over 20 years, we've made 30 investments representing almost $30 billion. And we have portfolio companies spanning from Tipalti, Prophix, and then most recently our take private of OneStream. It's a huge thank you to the Oracle team who's helped put together this evening.

And so that brings me to our guest of honor tonight. Someone who needs no introduction. But I will do so anyway. Evan Goldberg co-founded NetSuite in 1998. He pioneered cloud based business software long before SaaS was even a term. He has a very unique vantage point, having founded the business and scaled the business, sold the business to Oracle for over 9 billion and then stayed at the helm for the subsequent decade. Today, NetSuite represents over 40,000 organizations and is running at a 4 billion annualized revenue run rate. Evan will share some of his perspectives on AI in the office of the CFO. And so with that, I'm delighted to introduce Evan.

Evan Goldberg

Thank you for having me. And thank you for everybody for coming.

Farouk Hussein

So, Evan, I'd love to talk about the founding story. You're in a room full of founders who have all had that spark, that moment where an idea turns into an obsession. So let's talk a little bit about that famous phone call. So it's rumored that in 1998 you had a call with Larry Ellison, and obviously you worked with him for several years before as an engineer at Oracle.

Evan Goldberg

I left Oracle when the internet sort of launched in 1995, was really, you know, the year that it took off. And, you know, I'd always wanted to start a software company, and I knew that from an early age. So that seemed like the right moment. I'd had a bunch of experience from Oracle. So I started a company called NetLedger Software, which was dedicated to help build really interactive websites with animation and sound and graphics.

And those of you that are old enough to remember the product Flash, it was kind of—which was in the early days of the internet, how everybody made—that was a competitor of ours. It was a small company also that ended up getting bought ultimately by Adobe. So that kind of took the wind out of our sails with their marketing capabilities.

So after about three years and Larry had helped me in this company, which was unusual, but we had a great relationship at Oracle, and so he decided to sort of stick with me. But he didn't really care about this stuff. It was just not in his sort of wheelhouse. So he'd always call me and say, how's your graphics stuff going? That's what he called it. My graphics stuff. I'm like, my graphics stuff is not going great.

We're getting killed by this product Flash. Now that's really becoming a standard, even though we have, you know, customers that love us. But I don't think we can make it a go. But you got to just pick yourself up and try again.
And so I learned a lot being the CEO of a mammoth 15 person software company, about, like, how bad the tools were to kind of run your business. And you could use QuickBooks on one, you know, on a computer. And, like, if someone was using a computer, you couldn't get any data about your business. You know, we sold through an online store, but we also had a sales product for direct sales. And like, we had all this mishmash and like, there's got to be a better way. So I really wanted to think about how could we build this great business software that would help small companies?

So Larry calls me, says, how's your graphics stuff going? I'm like, not great. I'd kind of like to shift gears into business software because I think companies like me, that's what they really need. Plus, I'd rather sell to businesses than to like multimedia artists.

So he was like, well, that's great, because, you know, I was just thinking—I was talking to my friend Bill Campbell, who runs Intuit, and I said, aren't you going to do, like, an internet based version of QuickBooks? Because, you know, that's how all software is going to be in the future. And so he said, if I were to start a company right now, I'd do accounting on the web.

And I was like, accounting. Um, sorry for those of you in that business. I'm in the business now, so I love it. Debits—give me as many debits and credits as you can.

But I was like, I kind of want to do like sales software like Siebel so I can find out, like my pipeline and, you know, when my next—where my next deal is coming from. And so he said, yeah, well we, you know, should do that eventually also. So we agreed that we'd do a suite. But he said let's start with accounting because that's where all your products and your customers and your, you know, inventory and everything is—that's where it's kind of, it's all grounded.

And he said, yeah, and we'll do e-commerce eventually. But the big thing is he says, but what we got to do is we got to do it as like internet based. It's got to run on the internet because these companies, they don't want to manage databases. And I thought that showed a little good self-awareness that, you know, as like the leading database provider he did—he was aware that that's not fun.

And so really, I mean, the whole cloud thing was definitely him. And I was much more into this suite, this business software that would make it much easier for entrepreneurs based on, you know, the pain that I felt. And so yeah. So I took like a couple of my founders from the last company. We were in San Francisco. It's kind of funny to think now that everything happening in San Francisco—well, everything, you know, internet was happening in San Francisco—but I just got married. My wife wanted to move down onto the peninsula, and so I moved. We moved the company down there.

And Larry called me like a couple weeks later and he's like, yeah, you were doing like multimedia software in, you know, south of Market in San Francisco. And now you're like, doing accounting software in the suburbs. How do you like it? I'm like, it's programming. It's fine.

So yeah. So that was sort of the launch of the company. It took me more than five minutes to tell that story, but it literally was probably about—I mean, it literally was a five minute. I mean, that was not an exaggeration. It was really quick. We just like boom, boom, boom. Okay, done.

Farouk Hussein

Well, it usually takes us at least six minutes to write a $125 million check.

Evan Goldberg

It was only a million. It was only a million. He didn't eventually invest that much, but yeah, he started with a million. He's like, that's enough for three guys. That'll cover you for a while.

Farouk Hussein

That's great. So look, that's the background story. NetLedger then becomes NetSuite as you think about scaling the business. You talk a lot about how you've empowered people and how you've delegated. And one of the things that you've always stressed is how you've maintained kind of a maniacal focus on innovation. Maybe just for the founders and CEOs in the room—we invest in companies that are 20 million and scale them to several hundred million, hopefully billions like you are at today. What are some of the lessons that you would impart?

Evan Goldberg

Yeah, well, I mean, certainly our one big innovation—you know, we're really two big innovations. It was the Net and the Suite. It was doing it in the cloud and doing all these different things together. And one of the things you have to do, certainly you want to be innovating and things are changing pretty quickly back then. I mean, it wasn't like now where every day is like a month. There's so much stuff that happens, but, you know, things are changing pretty quickly. So we certainly wanted to keep our ear to the ground and, you know, look at the new technologies that were helping you build sort of cloud applications. They weren't called—it was called ASPs, application service providers. And then, you know, then software as a service.

But mostly I think we really stuck to our plan. We, you know, in fact, I have to say that, you know, Larry likes to think outside the box. So at one point he was like, you know what? We should have a personal version—a personal version of NetSuite for people to manage their, you know, personal finances. And that's when I had to like say, no, we are not doing that. So part of it is like stifling innovation.

But, you know, a lot of what we were doing was just—I mean, we were building this thing from the seat of our pants. It wasn't anything to emulate. I mean, Salesforce.com started three months after us. Those guys came down—they were in the city. They came down—San Francisco city, not the city. They came down and we shared notes because, like, we were the only two companies we knew of that were doing this stuff.

So, you know, a lot of it was just trying to make it all work. And it's funny, there's a funny story. Just a few months after we started, this is one time in my life that I met Steve Jobs at one of Larry's parties. And he came up to me and he said, Larry is so excited about this. You know, you're going to do accounting in a browser. And he's like, does anyone want to do accounting in a browser? And I'm like, I don't know. I think maybe he seems to think so. I'm going with it.

So yeah, I get a lot of credit for the cloud. But I was—you know, I probably—I mean I, it did seem like it would make sense. But you know, this is what my wife always says about me. She says you have to see things in action to really buy in. So it was like, seriously, like a couple weeks later, we got our QuickBooks import working because we started the company on QuickBooks—because we didn't exist yet—and we imported our data and so we could start running our business on NetLedger.

And I was at home and I was in my browser looking at like all the information about my business right there. And that's like—that's when I saw it. Actually, I probably told my wife, I'm like, oh yeah, this is gonna work.

So that was a great moment. So, you know, it's—I mean, and from there on it was—yeah, it was a lot of it was actually the innovation partially came in just trying to convince people that this, you know—just like I wasn't sure, certainly the CFOs at the time were definitely not sure. And so some of our innovation was just trying to convince them.

And like, you know, we'd go to these customers. I was talking about this earlier—go to these customers and they'd be like, I don't know if I want to put all my core, you know, key data on the internet. And I'm like, well, it's on this computer right here, right now that has a coffee stain on it. I could, like, grab it. You know, we put it in a data center that you need a hand print to get in.

So I mean, a lot of innovation was about trying to convince people. And another technique I'd use is, well, you're using Salesforce.com already because Salesforce.com definitely grew faster than us. All your customers are already on the internet. I don't think they really care what the cost of your pencils is. Okay. So just, like, put it all on there.

So we did everything we could to try to reach people. But, you know, we knew that it was starting to work when it really flipped. And instead of us having to convince, you know, these customers that you should put your information in the cloud and let us manage it for you and you don't have to deal with databases and operating systems and upgrades and all that stuff, our competitors would be hearing from them, why would I want to manage this myself? Why wouldn't I want someone to take care of it?

So that was sort of like probably in the early 2000s. And that's when it just flipped and we had hypergrowth and we went public and that was amazing. But so persistence, being creative about how you convince people that your way, which you know is the right way, but how to convince them of that, that's just as important to innovate in as your product itself.

Farouk Hussein

That makes sense. So I think I heard focused execution and you were three months before Marc Benioff.

Evan Goldberg

Yeah. That's critical. I always have that on him.

Jennifer Hamilton

That's a perfect segway. In terms of touching on the founding story, I wanted to spend a moment recapping the chapters which have made up the 28 year history of NetSuite. So just to rapid fire—you were private from 1998 through to 2007, then public 2007 through to 2016, and then have obviously been post acquisition for the last ten years. I'm curious, why was 2016 the right time to go private? And, you know, I'm curious if you have advice for folks in the room, maybe founders who themselves are thinking about selling their babies at some point?

Evan Goldberg

Well, I think, you know, you have to be able to see that you're going to be able to achieve your goals faster in a different structure. And that's certainly what we could see in 2016.

And one of the biggest things we learned early on was we were doing an upgrade from like version one to version 1.1. I mean, we got our product out—without AI—in a year. And so we were going from like version one to version 1.1, and we had to migrate everybody. And it did not go well. And we were up until like six in the morning or seven in the morning when it was supposed to be done by 10 p.m.

And that's when it kind of clicked with all of us like, oh, right, we're providing a service. Like this is—you can't throw the software over the wall. So like, we had to kind of retrain ourselves to this new way of thinking. And so that was the thought of like, why you do it separately so that those lessons can be learned sort of in isolation, not kind of, you know, held back by the ways of the past.

But by 2016, Oracle had really made a lot of the transition. It had moved a lot of its software to be in the cloud. And so it seemed like the host would not reject the organ. And in fact, it could be symbiotic. We could bring in and even get it to go faster. I could, you know, we could work with the teams there and with all the things that we learned so that they could go even faster. But they also had incredible scale internationally. Obviously there's, you know, just a lot of opportunities for us to actually go faster within a larger organization.

Oracle was very aggressive right from the beginning in sort of helping change us to this model that we call SuiteSuccess, where—and I advise this for all of you—if you can figure out a way to make sure that, like what you demoed to the customer is what you actually implement, like implement what you sold, your customers are going to be happiest that way.

And like we were in the process of changing everything to do that. But it was hard. I mean, we hadn't necessarily had that sort of discipline and we knew it was going to be bumpy. But with Oracle, they were like, no, just go for it. Like 100%. We just started selling that way everywhere. And, you know, it was hard at first and probably we didn't get the results that we wanted right away. And that would have been a lot harder as a public company. And so we were able to move very aggressively on some of the strategic initiatives that we wanted to do.

And, you know, and then subsequently being allied with Oracle on Oracle Cloud Infrastructure. So now we can be, you know, in all these great data centers with incredible performance, Oracle Autonomous Database, so that, you know, we don't have to be in the business of patching and all this other stuff that helps our operations run much more smoothly. Those kinds of things, being able to collaborate directly with those teams. Again, I think it was sort of symbiotic.

It was great for Oracle to be running, you know, a cloud service with tens of thousands of customers and hundreds of thousands of daily users that has to be up, you know, 99.99% of the time. That was good for them to kind of, you know, get that working. And then it was also good for us. The end result is we can open data centers all over the world really easily.

Jennifer Hamilton

Yeah. No, I mean, it's obviously been an incredible partnership over the last ten years and will be into the future. I know we're going to get on to AI in a moment, but before I do, you've been at the helm of NetSuite for nearly three decades, dare I say now. Many founders are exhausted after five or even ten years. I'm curious. You seem as energized and motivated as ever. Is that the case?

Evan Goldberg

No, I—it does seem. I do seem to be.

It's weird. You know, obviously this is something that I still totally believe in. Hugely. I mean, we use it. I see it in action, big and small. And so I obviously truly believe in it. But I think the thing that really is driving it now is that I've always been interested in AI. I actually quit Oracle for like six months to go to MIT to go to the PhD program at the AI lab. Larry lured me back because when I got there, I was like, oh, yeah, this stuff's not quite ready for prime time. And I was correct because it was about 30 years too early.

But I'd be in my heyday now. I tell everybody that like, you're fine. But so I've really, really always been interested in AI. And I feel like, you know, I got into this business because I want to help people on a day to day basis. You know, because I saw it as an entrepreneur that I needed help—the systems, I really felt like systems could help me.

But the way that they've been helping people is so just basic, you know, at this point, when you look at what they could do, when you think about what AI could do, you know, behind the scenes constantly helping you improve like this incredible coworker. I mean, for small companies, it's got, you know, probably even more potential in being able to dramatically help entrepreneurs succeed. So I couldn't leave because I felt like the huge potential to really achieve what we wanted to do for entrepreneurs was there. So that's sort of why I'm here still.

I also have an incredible team. And so, I'm sure you see that when these transitions happen, you know, it's one of the big challenges to make sure everybody, you know, not just the founders, but all those—a lot of the key people throughout the organization. And like we have people here from NetSuite that have been here for decades, decade plus. And that's another great reason to stay. It's just to work with the incredible people that, you know, that you know really well, but also have that fire in their belly for always being better.

Farouk Hussein

Maybe transitioning on to AI and the office of the CFO, which is probably on the mind of 1 or 2 folks in the audience. Not to age you, but you've presided over two major tectonic platform shifts. So first cloud computing and now AI. What do you see as fundamentally similar and fundamentally different between the two?

Evan Goldberg

Yeah. Well, I mean, obviously the sense of possibility, the blossoming of lots of, you know, new companies trying new things with these new capabilities, it does feel similar. I think there is a massive difference, though. And I do, you know, as much as I'm super proud of NetSuite's, you know, position having helped usher in the era of cloud computing for business, I think this is way bigger.

I just think the potential here—like, I mean, NetSuite was better than other systems. And the main, you know, the really the main difference. I mean, obviously it's easier to operate when it's in the cloud. But the main difference was we went to this sort of one system approach—suite—encompassing more of a company's operations than maybe other systems had in the past. So that was, you know, that was a pretty big change.

But the opportunities with AI, as I mentioned earlier, to, you know, dramatically change how you run your business, what you have to worry about on a day to day basis, how you can be more focused. All of that, I think is dramatically different in our industry. And obviously it's upending a million other industries also.

Farouk Hussein

Yeah, maybe let's talk about NetSuite Next. So at SuiteWorld you've called this the biggest product evolution in the company's history. Bigger than the original cloud platform, bigger than going multi-tenant, bigger than any individual module. That's a fairly bold claim. So maybe let's start with 100 embedded agents. Give us a couple of concrete examples in terms of what those agents are, what they do, what workflows they automate, and why you're so excited.

Evan Goldberg

Well, I mean, I definitely think that, you know, maybe for this crowd, one of the most interesting ones is going to be our autonomous close, which is, you know, the whole goal there is not just about saving time for people. I mean, that's great. If people can get off their urgent list and get onto their important list, that's huge. I mean, you know, you talk to everybody out there in the business world and they're like, yeah, I got this list of stuff I want to do that I never seem to get to. So that's great. So if we can automate a lot of those manual processes, that's important.

But I think equally or maybe more important is this idea that you're just going to have really accurate information about your business at all times, and you'll know your cash position. You'll be able to make, you know, much more accurate predictions from that of where you're going to be in the future. And, you know, the lack of surprises at the end of the period and the ability at any time in the period to drill down and see exactly how things are going to the largest degree possible, because the system is just monitoring everything that's going on. It's finding exceptions, right when they happen. It's helping correct them for you. Like while you sleep.

That I think is really, really exciting. So that's sort of—the agents that work on our autonomous close I think are super helpful. We have some really cool ideas that we're working on that we have not rolled out yet, but that allow you, for example, for pricing, to do continuous monitoring of what your competitor's pricing are or what things are happening in the supply chain that might impact your profitability in the future. Like just always thinking about how you can do that.

And it's also, you know, just looking at how you can be—you know, that's one of the hardest things that everybody has to do. I'm sure everybody here that has a product knows that pricing is like magic or not. It's like guesswork in a lot of cases. And so I think that's pretty exciting, especially for certain types of industries where, you know, pricing is on a day to day basis and getting it right. You know, certainly you think about a distributor—pricing is so incredibly important and margins and it's make or break for them. So that's another one that we're pretty excited about.

Farouk Hussein

Maybe just as a corollary to that, you know, you talked about accuracy and the desire for no surprises. There's a lot of debate around probabilistic versus deterministic software. How do you think about the relevance of AI for this category?

Evan Goldberg

I mean, I think you have to think about things that are delivered by AI a little differently than you have in the past. And, you know, one of the things that we're excited about is actually using AI to basically program or operate deterministic systems. Like we have—I mean, we have great automation. I mean, you know, a lot of times people talk about AI automating things—like these things have been automated for a long time.

We have something called SuiteFlow, which is our workflow manager that makes it super easy to automate approval processes and route things and, you know, alert people when something's happening. I mean, but it's programmatic. But now the ability to speak in, you know, natural language and say, I'd like you to monitor sales orders and tell me if you know X, Y, or Z is true and just say it in natural language, and then it goes and uses SuiteFlow to do it. And then it's going to be 100% deterministic because SuiteFlow is based on searches and criteria and that sort of thing.

So that's one way, I think, mixing the deterministic and this more probabilistic approach I think can be helpful. But also, you know, we're going to increasingly be using these systems to replace the work of humans, you know, replace a lot of the manual work of humans so that, you know, ideally they can work on more strategic things.

Those humans are not 100% accurate either. So if you can get the AI system to be 99.9% accurate and the humans were 97% accurate, then that's great. But yeah, you could definitely—I mean, I think it's something that always needs to be kept in mind whenever using these systems. And as we're rolling out NetSuite Next, you know, we're certainly making sure that we're making abundantly clear because we are the system of record. We have a fiduciary responsibility for our customers' financial data and correct reporting of that information. So we take that very, very seriously.

Jennifer Hamilton

And one thing you've touched on already, I just wanted to go back to, which is hype versus reality. So it can obviously be challenging when talking about AI more broadly, but also in relation to finance operations that parsing out what's real and what's a nice idea can be tough. So I guess, getting brutally honest, what do you see in terms of AI innovation in finance operations? Where do you see examples of game changing—we're never going back—versus what is maybe in the realm of hype?

Evan Goldberg

Well, so we have something called financial exception management. And it's actually just—we're rolling out anomaly detection across the entire system because you want to know about anomalies in, you know, your selling, your sales. You want to identify anything that's sort of out of the ordinary.

And that's something that we can actually see how it's used. Because if we suggest we think this transaction is incorrect, and here's how we think you should change it. Well, we can be right. We can be right about one and wrong about the other. But we can see whether we were right about either of them. If they do change the transaction, we were right that it was incorrect. And if they change it to what we suggested, then our suggestion was right.

So we already see that it's working. We see that exception management is being used by customers successfully. And that's something—once you have the agent finding and fixing those things behind the scenes when you're sleeping, you know, or out to lunch—we're never going back from that.

Jennifer Hamilton

No. For sure. And one thing you've touched on is, you know, the real foundation you have in terms of the data. So I think you've described it as the jet fuel of NetSuite Next. There's probably some folks in the room who are contending with what you've called the hairball. So, you know, customers with messy data in lots of disparate systems. How much do you see clean data as NetSuite has as the kind of key enabler? And where do you need to get to to unlock AI?

Evan Goldberg

Yeah, that's a great question. And look, there's no doubt that AI is going to be able to help synthesize data and harmonize data across multiple systems. But just like human beings, it's fraught with difficulty. What a sale means in one system, what a customer means in one system—they can be really different. And it's going to be hard even for AI to figure that out.

So, you know, this debate when the internet came out—that was one of the things that everybody said is that like, oh, now it's so easy to connect these systems over the internet that, you know, you're going to be able to put together lots and lots of systems and use best of breed. And look, none of our customers have only NetSuite. We like to—if we replace 3 or 4 systems, it's a huge win for the customers. They tell us that.

The internet, you know, made it somewhat easier. But I used to liken it to like, cell phones. Did cell phones make it easier to talk to someone from France? No, because you still didn't know French.

So I, you know, I think it's going to improve things and it's going to make it, admittedly, for sure, it's going to make it easier to integrate systems. And that's actually a net benefit because as I said, most NetSuite customers have several other systems. They don't use NetSuite for absolutely everything. They just—their internal systems that they use to run their company. Like, you know, if they have an internet service, they have a hugely complex database of all their information about their service. And so that has to be integrated and AI is going to be hugely helpful bringing data into NetSuite. AI is going to be hugely helpful there.

But I do think that just like human beings, AI will thrive in a world where the data is sort of pre-harmonized when you know what a sale means, you know what a customer means, and it's consistent. You know, we think that's the best. And, you know, but we'll see how it all pans out.

Jennifer Hamilton

Well, speaking of seeing how it all pans out, you did say over a glass of wine earlier that you don't have a crystal ball. But just for a moment, if you were to turn to the future and think about what the future of the office of the CFO looks like maybe in five years time. I'm curious what roles, given AI innovation, do you think exist that perhaps don't exist today, and what roles which exist today might be fundamentally transformed?

Evan Goldberg

I mean, certainly if you think of your like, classic, you know, AP clerk and AR clerk, maybe someone now can be an AP and an AR clerk. Just a clerk.

But no, I, you know, I certainly think that all those people doing those jobs are often doing a variety of different things. They're doing a lot of analysis and trying to, you know, figure out how to make the company more money, how to collect better, how to communicate better with customers, that sort of thing. So that's where I think—and will it mean that you can run your finance department with fewer people? I think it's possible. But this notion that it'll, you know, go an order of magnitude less. I don't think that's accurate.

But I do think that some of these kind of, you know, some of these more manual roles will evolve and hopefully to be more strategic and get that sort of drudgery out of the way. And also, everybody in the finance department should be a capable user of AI. And I mean, we're going to try—you know, we're going to help. NetSuite is going to expose all these AI tools. They have Ask Oracle. They can become really, really proficient in using that and building agents because you're going to just be able to build agents by just telling us—Ask Oracle, I want an agent to do X and it'll do it.

So I think that's within reach, I think, of many, many people in the office of the CFO easily. And then that's going to be where the power comes from to do more. And I think there will be a general trend. And we see it already and we've talked about it at NetSuite for a long time, where the office of the CFO becomes more strategic because they have these analysis capabilities and this ability, you know, to look at things in a very analytical way that maybe other parts of the company don't.

And so we've found just—I can just tell you at NetSuite, like all along involving our CFO, we had two amazing CFOs. Actually, one of them became president of the company. Involving them more and getting them involved in all the kind of strategic decisions we had to make, you know, because they would bring that analytical mindset.

And so if you're freeing them up from a lot of the day to day that has to be done just to make sure that your financials are correct and that you're dealing with, you know, accruals and all that and free them up to use those skills across your company. I think that can be a dramatic improvement and help companies succeed.

Farouk Hussein

There is some tactical and practical advice in terms of building software for the native AI CFO. So in terms of product strategy, there's a lot of discussion around native AI software versus embedding or, you know, integrating AI into existing workflows. Your advice for—as a 30 year technologist, 30 plus year—what advice do you have for founders in the audience today?

Evan Goldberg

Well, you know, what's interesting is obviously we're a company that's making a transition from—you know, we've had AI for a long time. We have this great capability in NetSuite, which I think is one of the best things you can do with AI. Still, it's called intelligent product recommendations, and it suggests to you what things you might want to sell to your customers based on what other customers have bought. I mean, pretty basic, right? And we did it with traditional machine learning.

We're now, you know, seeing how Gen AI can do it relative to our machine learning models or looking at some of the, you know, more advanced kind of hybrid systems. And so, you know, AI has been really important to us for a long time. As I said, I've been thinking about it for a long time. But there's no doubt that we are coming from sort of the non-AI world and adapting to the AI world versus other companies.

Though really, I mean, you can really, truly, only call yourself truly native AI, I think if you're like two years old. I mean if you're five years old, forget it. You're no better off than us.

And yeah. So, you know, but we are really thinking about what it means. Like, you know, NetSuite Next—the principle of NetSuite Next has been how would we design NetSuite, you know, 28 years later, if in 1998 we'd had everything that we have now.

And so trying to, you know—and so that's what I encourage everybody to do is just try not to think about evolve. You know, you're going to have to evolve. You know you're not going to rewrite everything, right? But it's a really good exercise to just think, how would this work if we could do it from scratch using AI absolutely at the center?

And if you do that from a design perspective, you can make it work, right? I mean, it's code. I mean, AI can make it work for you—like rewrite this whole system to be based on AI. Just that's one prompt. But yeah, I mean, that's what's most important is think about the design of your product and how would this work if we, you know, knew then what we know now.

Farouk Hussein

So this next question is unfortunately perfectly timed in terms of what's been happening in the public markets for the last three weeks. So some call it SaaSacre, some call it—

Evan Goldberg

SaaSacre? I haven't heard that one.

Farouk Hussein

SaaS apocalypse. So look, public software is down 30-40%. In the case of HubSpot, 70 plus percent. You have built an incredible business by being the system of record or the canonical source of truth. At Hg, we invest in businesses that are very similar to NetSuite—mission critical systems of record. So there's a question as to—do those systems persist? Does AI start eating away at them? Where do you stand on this? Especially incumbents with data, distribution, domain expertise versus AI with innovation.

Evan Goldberg

I think sometimes people in our industry or that are involved in our industry, we certainly live in a bubble. And so we see—we listen to Hard Fork. We see, you know, everything that's happening and we project out maybe a bit much. I—and vibe coding is fun. You know, I had this idea for this—this is an aside—but I had this idea for this game called Hot Dog Tycoon. And you manage a fleet of hot dog stands in New York City, and you use the real pedestrian data of the streets, and you can put your hot dog stands where you want. But if you put it on a crowded corner, you have more competition, etc.

And I asked Replit to make it and it did it in like two minutes and it was really cool. So that's—yeah, that's cool.

Farouk Hussein

Now, what's the revenue?

Evan Goldberg

Yeah, exactly. Now have I turned that into a company? No. So I just don't—I think that, you know, software companies are very important parts of the economy, but there's the other 80% or 90% or whatever it is that definitely from—I talk to our customers, they have no interest in becoming ERP or financial software hobbyists, even if, you know, the AI can write it.

Because basically what that means is every time your company changes, you have to change the system. And it's not about writing the code. Yeah, I can write the code and test the code. That's great. But did you do it right? I mean, maybe it would be good if a company, you know, studied thousands of companies before so that we know this is how you're probably going to want it to work. So that sort of domain expertise—I mean, none of these companies want to become software experts.

And then, of course, you know, if you've heard this all, I'm sure in the past couple of weeks—the compliance, security, all these things. It's, you know, so critical. It's like what I talked about, like the computer with the coffee stain on it. Do you want to go back to the computer with the coffee stain? I mean, yes, it will be on Amazon, but will you have the right security? Will you, you know, will you have the right backup, all those sorts of things?
So, yeah, I think that storing the data, managing the business logic, figuring out how a system should work for inventory, for manufacturing, for project management, all those things, I feel like that's still going to have incredible value.

Now, will people be able to build on top of these more easily? I mean, NetSuite has an incredible platform that lets you build, like, you know, entire applications on top of NetSuite. So will people use AI to do that? 1,000%. And what that means is for certain things that they do in their business that are really different from the way anything works in NetSuite—or this is true for other companies, I'm sure—as long as you have a really capable API, that's actually going to take the burden off of you for building some of these more esoteric capabilities.

I mean, that was the story of why we even built our sort of platform in the first place, because I went to a—this was probably in 2000—I went to a meeting of like our roadmap and it was like feature A for company X and feature B for company Y, and I'm like, this is not good. And like we should be building features that everybody wants and then let them do the things.

So that's why we built this incredibly powerful platform. Well, now in the age of AI, we're really, really glad that we invested so heavily in that because now we have something called SuiteCloud Developer Assistant. And you say, you know what? Build me an add on to NetSuite that can handle my, you know, whatever it is that your company does uniquely.

So I think there's going to be a proliferation of solutions built on top of our respective companies' capabilities. And that's why I strongly advise people to make sure they have, you know, really good APIs so that people can access those. And that's also the way that you're going to connect into these chatbots. Like we already have hundreds of companies that are really going deep into using MCP—Model Context Protocol—to operate NetSuite from within Claude most commonly and also ChatGPT.

What you can't do is figure out what to build. It can help you, but there's no substitute for the experience of going out to customers and iterating and seeing what works, what doesn't work. There's no really great way to speed that up. If you want to build something as broad as NetSuite, it's probably going to take a while.

But, you know, when I—I've talked to Larry about this and some of these, you know, just mentioning that there's some of these—we like to call them ankle biters. But, you know, there's some of these companies and, you know, I admire that they're doing that. And I certainly can relate to it. And you know what his answer was? Competition is good. So I mean, it's, you know, a light—lights a fire under everybody. So that's capitalism.

Jennifer Hamilton

And I guess advice for founders. So as a multi-time founder yourself, obviously NetSuite, more recently Hot Dog Tycoon—are there any, you know, 2 or 3 pieces of advice you would give that you wish you'd been told back in 1998, especially with everything you know about AI? Not generic advice, but specific tactical advice that they should take forward with them.

Evan Goldberg

Yeah, that's a good one. Well, you got to step back and see the trends in your business. We were—around 2014, 2015—we were doing too complex implementations and it was taking over. Our revenue was too much non-recurring. The customers were like, it was like, choose your adventure. They were not necessarily happy because they thought that they wanted to sort of replicate what they had in their own system, but they didn't really want that. I mean, it was just like the users were like, oh, I don't want it to change. But then the stakeholders that bought NetSuite in the first place, they're like, well, I'm not getting the benefit that I should be getting out of this.

And it's easy to—but the sales were coming in. We're growing super fast and it's really easy to just look at the numbers and say everything's great. And so stepping back and being able to identify that trend, and then making the hard choices. And that's—I talked earlier about SuiteSuccess, and we started that before we came back into Oracle. But then we supercharged it once we got back into Oracle.

So that, you know, that's sort of the second piece of advice is related to that. So being able to step back and be honest with yourself about trends in your business that are not good, even if the overall numbers are good, and then dealing with it. And often dealing with it will crater your numbers for a couple quarters or, you know, and it's painful and hard, especially certainly if you're public.

And I think that's one of the huge, you know, benefits of companies that are, you know, working with a PE firm is that they can do those things because the, you know, firms like Hg have that long view like Oracle did. So that's the next thing is like you just got to be unafraid when something is really detrimental. It could even be existential. You see it as soon as you can by looking at those trends that are outside the regular numbers and then doing something about it, even if it's extremely painful.

Farouk Hussein

Yeah, I'd love to end, Evan, with a couple of questions on Evan the Man Beyond NetSuite. So if you recall, we met—my wife and I, you and Cindy—

Evan Goldberg

Nothing beyond that.

Farouk Hussein

You mean, well, there's—

Evan Goldberg

The curing cancer thing, right? There's that.

Farouk Hussein

Yeah. So we met at the V Foundation cancer research event where you are the chairman of the board, and so you do a lot. You're involved in cancer research, children's health and education charities. You're an angel investor and a startup advisor. So maybe just tell us a little bit about what drives your philanthropic work and research.

Evan Goldberg

Yeah, well, my family is impacted by something called the BRCA breast cancer gene. And so when we were fortunate enough to have some resources for philanthropy, I got the Chronicle of Philanthropy every year as like the top 25 philanthropists in the United States. And it's incredible what these people are doing. And you could tell that there's a lot, you know, a lot of them are very strategic about it.

So we went through that and realized that the two things that we wanted to focus on, one was kids and children's health. I mean, our kids were still, you know, relatively young at the time, and we were involved in their schools and we were like—and our kids are so lucky. They go to incredible schools. They were public schools, but they had like, you know, these amazing resources. And we knew that that wasn't true in a lot of other places, not just in the United States, but around the world. So that was something that really inspired us.

And then the fact that, of course, our family had been affected by cancer. Cindy's mom—not from BRCA gene, but was affected by ovarian cancer—she's fine. But that was super, super hard, really tough. And so we started to get involved in cancer research.

But then we went over to a friend's house in 2006, I think, and saw the Jimmy V speech. And Cindy had wanted to go to the wine celebration, actually the one in Napa. And so we went over to see what it was all about. But we saw that speech and it all sort of came together and we're like, okay, that's our other thing is going to be cancer research, because obviously it affects us personally.

But then to see, you know, and then to learn from the organization not only of, you know, the negative of how devastating it is to families, but the incredible scientists that devote their lives, you know—and it's never been harder for them than it is right now. It's brutal. But even back in the day, it's always—they are writing grants all the time. They're working so hard. You meet these scientists and they are just like the most incredible people. They so believe in what they're doing. They're doing it for all the right reasons. And, so that's, you know, been incredibly inspiring to be part of that organization.

Farouk Hussein

That's incredibly laudable. Thank you for sharing. On the personal investing side, outside of, you know, great top decile B2B software investors like Hg, where would you like to put your money? What do you invest in?

Evan Goldberg

Yeah. Shameless plug. Well, I don't know. Maybe some of these AI native ERP systems.

Just in case, plan B. No. You know, I actually I really, really enjoy being involved in funds. The early startup days are incredibly fun, but I guess I feel like I most can relate to companies that are in the stage where they're using NetSuite. So I, you know, I kind of like it. I like investing in companies when they're, you know, past that initial seed stage, actually.

So that's kind of where I focus my energy because I can really, you know, just the experience that I have from all of our NetSuite customers that are in the middle of that sort of cycle. You know, hopefully one day they'd like to graduate to Fusion. I mean, that's their dream. One more ERP upgrade.

No. But I mean, obviously they want to become—a lot of them want to become gigantic enterprises, multinational, corporate, you know, whatever. Some of them don't want to do that. But, I mean, I like that sort of intermediate, I guess you call it the mid-market phase where you're, you know, you can see that your dream is potentially going to work, but you know that you're going to have to do a lot of things right. And you're kind of flying by the seat of your pants, but you start to bring in, you know, a lot of expertise, and then you have—and then suddenly your company is very spread out and dealing with that whole problem. So that's kind of like the timeframe that I'm really interested in investing in companies.

Farouk Hussein

Makes sense. And maybe to conclude, it sounds like Larry has you hooked for life. But if you were not a tech founder at NetSuite, what else would you be doing with your life?

Evan Goldberg

I mean, I'm incredibly inspired by these medical researchers. So, I mean, I don't know whether I'd be good at it or not, but, I mean, I think that would be something. But otherwise, you know, I was going to go to MIT and be in the AI lab and be an AI researcher or potentially like a teacher. I mean, I think that would be super—you know, it really does relate to the two things that I do in philanthropy, I guess, so maybe I've never thought of that before.

But yeah, I mean, like either helping with medical research or helping people learn and moving knowledge forward—those would be two, I think, incredible things to do.

Farouk Hussein

Thank you. Well, thank you, Evan, for your time. You're an incredible inspiration for all the folks in the crowd. All of our office of the CFO companies would love to grow up and be something like NetSuite one day.

Evan Goldberg

I'm sure they will. And good luck with all you're doing.

The views and opinions expressed in this podcast and transcript are those of the contributor and should not be taken to represent the views or positions of Hg or its affiliates.

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