Editor’s note: In the world of software, Sandra Kurtzig ranks among a rare handful of outstanding, groundbreaking leaders. A Silicon Valley pioneer, she founded ASK Computer Systems in 1972 and created the MANMAN product family. She was the first woman to take a technology company public, after she grew ASK into one of the 10 largest software companies in the world. After semi-retirement (but also serving on the boards of six academic institutions and teaching at Stanford University) she returned to the software world in 2010 as founder, chairman and CEO of Kenandy.
And she has a wonderful sense of humor and outlook on life and business. Her humor is infused with her wisdom in this SandHill interview in which she discusses her views on entrepreneurship, the role of women leaders in the software world, startup exit strategies, dealing with market disruption, and much more.
What was your vision when you founded ASK Computer?
Sandy Kurtzig: My original vision was to have a part-time job and start a family. I knew that by the time of the thousandth diaper I would want more balance in my life. I started the company first, but with the intention of being able to continue it part time after my children were born. I founded ASK in 1972 and incorporated it in 1974.
What was your vision for what this company would do that nobody else was doing at the time?
Sandy Kurtzig: I had been selling time-sharing services at General Electric and potential customers told me that the hardware was interesting but didn’t do anything for their company without an application to help them keep track of inventory and figure out when to order parts just in time to optimize their spend. So I started writing code to help them run their manufacturing operations. Then they wanted an application to help with their financials. I built the business the old-fashioned way — by listening to customers and developing software to serve their needs.
Was there something differentiating about the programs you wrote?
Sandy Kurtzig: At the time I started ASK, there were no packaged applications and everyone did custom programming. And mini-computers were just starting to enter the market. ASK became the first packaged program for ERP (called MRP at that time) for the mini-computer. So it was disruptive for the market still focusing on mainframes.
At the time you started the company, did you have an exit strategy in mind?
Sandy Kurtzig: Exit strategy? I didn’t even have an entry strategy. My exit strategy was figuring out how to get home before midnight so I could do at least one of the bottle feedings. And if I worked from home, my kids were sitting on my lap.
Keep in mind, at that time, venture capitalists didn’t invest in software companies; they only invested in hardware companies.
Did ASK have competitors in those early days?
Sandy Kurtzig: We had lots of competitors. We had probably 100 competitors, and IBM was a major competitor at the time. But we just did our thing, and pretty soon we got popular.
In today’s world, not very many startups go up against IBM.
Sandy Kurtzig: We were too small for them to even watch us at the time. And they were on mainframes.
Instead of selling to the big corporations, we sold to divisions of the big corporations, which wanted control over their division’s destiny. We circled the IT department by going after all the divisions.
That’s similar to how software is sold now, with SaaS and cloud selling to business unit stakeholders instead of the CIO. And it is causing disruption now.
Sandy Kurtzig: Absolutely. That’s why I came back after retiring from ASK and founded Kenandy. It’s basically the same disruption parallel. Now you have SAP and Oracle, which are the duopolies for on-premises systems and have big, heavy applications. And the big corporations are saying they need applications that are nimble and can get up and running fast. They don’t want to go through a long implementation process, and they want something that the vendor maintains and keeps updated like the multi-tenant SaaS model. Plus, of course, there weren’t mobile phones or tablets when Oracle and SAP were built, so they didn’t develop software that even contemplated that. So anything they do now to address that need is an add-on, and add-ons are never the same as doing things natively.
Tell me about your decision to go back to the software world after you took ASK public and then retired.
Sandy Kurtzig: I retired (at least I thought I was totally retired) and moved to Hawaii. Marc Benioff happens to be a good friend and neighbor in Hawaii. I was doing investing and looking at disruptive technologies and realized that Oracle and SAP had been around for a long time and hadn’t been disrupted like other technologies. And I thought there would probably be a really good player that would emerge in the ERP space.
So I asked Marc about which companies to invest in — because he’s obviously Mr. Cloud and knows everything that’s going on in the cloud market. Without missing a beat, he said: “You are, and I’m investing.” I tried to explain that it wasn’t on my bucket list to start another company. But like a lot of other people, he doesn’t listen to me.
So you had a chat with Benioff and took his advice. Then how long did it take before you started Kenandy?
Sandy Kurtzig: Marc said, “Just go look at it.” He said it would need to be native, and he set several other parameters. I started doing a mock-up of the design and code and showed it to some potential customers. And they said, “If you don’t do it, somebody else is going to do it.” That’s not what you tell a competitive person.
I made a deal with Marc that he had to keep quiet about it for a year and give me a chance to put a team together. I wasn’t sure I was going to do it, so I didn’t want him talking about it while I tried to get a year’s head start. And he kept his word. He jumped the gun a little bit, but I knew he was going to do it when we announced Kenandy with Ray Lane and Marc Benioff at Dreamforce in 2011.
What was different about your second time around in the entrepreneurial world with Kenandy compared to the first time with ASK?
Sandy Kurtzig: It’s really the same thing: I want to build a great company.
But the funding aspect is different because we have outside investors this time. We never had venture capital at ASK. We went from $2,000 to public. With Kenandy, Larry Sonsini, one of my good friends who is also on our board (as is Ray Lane), convinced me to talk to venture capitalists. Our first financing of Series A was with Kleiner Perkins.
If we go public with Kenandy, we’d like to do it on the NYSE this time, as opposed to NASDAQ, just to do something different. But we didn’t start with an exit strategy. I know that’s what a VC looks at. But I think entrepreneurs need to put a business plan together and make sure it makes sense for the long term, not a short-term flash in the pan. And if it doesn’t make sense for the long term, then they shouldn’t start the company. My attitude is when you start a company you better love your product, love the people that you hire and love the customers. Make sure you really want to stay with it for the long term. The thought of starting a company with the thought of selling it, as many startups do today, is not what I would do.
Years ago at ASK it was unusual for a woman to run a company in Silicon Valley, and in almost any industry at that time. Did you hear comments like “They won’t make it because she’s a woman?”
Sandy Kurtzig: One of our first prospects at ASK said they didn’t buy from us because there was a woman CEO. But I never knew that was the issue at the time. I’m sure there was discrimination; but the comments weren’t said to my face and I didn’t hear them until after we were already successful.
I think in some ways it’s an advantage. If somebody makes a decision not to buy from me because I’m a woman, they’ll at least make the decision fast, and I can get in and out very quickly. And I always take the high road. If you don’t want to buy from me because I’m a woman, that’s your loss, not mine. I’ll go on to the next customer who will buy because we have a good product.
When you look at the “woman thing” today, I think the most important thing is that we get to a gender-neutral society. I don’t think handouts to women or to men is the right way. I think you just need to hire the best, because the best will build a company.
I see some fabulous women at Kenandy who have three children and travel, and women who are pregnant, and they figure out how to get it all done. If you give a busy person something to get done, it will get done.
I like being a woman, so I act like a woman. I think men know how to relate to their daughters, sisters, mothers and wives; but they don’t know how to relate to a woman who acts like a man. So I always act like a woman. And they help me get ahead because they know, obviously, as a woman I can’t do it myself. But I know I’m equal.
Is that your advice for aspiring women leaders, especially in Silicon Valley, where it’s hard to be a woman leader?
Sandy Kurtzig: I don’t think it’s hard. I just think that you always have obstacles. But there are always obstacles for men too. There’s even a study that says tall salespeople do better than short salespeople in sales. In some ways, knowing your obstacles is much better than not knowing.
Here’s what I recommend. I believe that the first and most important thing is for a woman to decide what’s important to her. If she’s not happy at work, she won’t be a happy person; and that reflects on everything that she does and in her family life. Women should not let people push them around by saying they have to be a leader or have to do this or that.
I think women go through the same things that men go through. How do I fit in all the things I want to do in my life? Can I have a family and can I have a work life and how do I balance both? If a woman wants to stay home and raise children, she should do that. She can always go back in the workforce later. Raising children is the most important job there is. And you can’t give the children back. But if you’re at a company you don’t like, you can always give it back and go someplace else. If you want to be a woman leader in business, just go for it and do a good job. And if you’re not recognized at a company, and you really analyze it and think it’s the company, not you, move on.
At the time that you launched and built ASK, you knew that it was a disruptive company and product. Have you ever faced a situation where you had a competitor that was a disrupter to your business, and how did you handle it?
Sandy Kurtzig: As ASK grew and became a big company, it was a time when there were different platforms. So when we wrote applications, we had to write applications to support multiple platforms; there was no standardization. Companies came in with platforms that we weren’t on, and it was very difficult to transition to those platforms. As a public company, it’s very tough to transition when you also have to keep your quarterly earnings going as you develop new products.
The same situation is occurring today with legacy software companies transitioning from the perpetual license model to SaaS and cloud models. What is your advice on how to position a company’s talent in that situation?
Sandy Kurtzig: When you’re a successful company in one market and you want to go into another market, you really have to be very careful and do it the way you probably wouldn’t think you should do it: take people who have experience in that particular application or technology. Don’t confuse a lot of experience with somebody who can get the product done.
Sandra Kurtzig is chairman and CEO of Kenandy, producer of the leading cloud ERP platform for the global enterprise. She is the founder and former chairman and CEO of ASK Computer Systems, which created the groundbreaking MANMAN product family. She grew ASK into one of the 10 largest software companies in the world and was the first woman to take a technology company public. She has received numerous business awards.
Kathleen Goolsby is managing editor of SandHill.com.