Larry Ellison stepping down as CEO of Oracle is a special event. The third-wealthiest person in the United States, Ellison built Oracle from the ground up, along the way raising his profile so high only Bill Gates and Steve Jobs stand above him.
I could think of no better person to ask about Ellison's abdication than another former tech CEO, now retired, who had done a pretty good job of staying in the public eye: the legendary John McAfee. As it happened, McAfee's answers were quite thoughtful.
Andrew Oliver: How should Larry Ellison retire?
John McAfee: First, no one who is a true entrepreneur ever retires. What will happen is he will think he’s retiring, he’ll buy an island somewhere or whatever it is he wants to do, and three weeks into it, he’ll have a new idea for a new business and as a part-time hobby start doing it. The next thing you know he’ll be back to work. Because really, a mind like Larry’s can’t simply shut down and fade off into the golden universe -- it doesn’t work that way. My advice would be: Why don’t you start thinking of the name for your new company? It will keep you occupied while you’re trying to retire.
AO: He already did buy an island, actually.
JM: Everybody with that much money always buys an island, it’s true. Here’s the other thing: No one ever lives there -- I used to yacht down in the Bahamas and every few years some extremely wealthy person would buy one of the islands, spend a few million dollars building a house, and they never lived there. They came maybe once or twice, got seriously bored, 'cause really you go stir crazy on a small piece of land surrounded by water.
AO: Do you think it’s the romanticism of it not matching the reality of it?
JM: The reality is it’s excessively isolating and boring. You think it’s not gonna matter, but after you’ve walked around the island 500 times and you know every pebble, every square inch of the beach, you’ve named the trees, you start missing things like movie theaters and concerts and shopping and K-Mart and whatever. It’s the everyday things that we take for granted: Automobiles, no automobiles on these islands. No place to bicycle. Yeah, you go stir crazy, and I’ve never met someone who actually lived full-time on an island if they have the resources to get off it and do something else.
AO: To me, the bicycling would be the big thing. I’ve taken up cycling.
JM: There’s no cycling on any of these little islands that people can buy.
Anyway, I wish him luck, but I do believe that he’s not retiring. He’s merely deluding himself into thinking that he is, but three weeks from now he’ll be working on something else in his head, and I promise you, and in fact I’ll place a bet with anyone who wants that within two years, they’ll find some news of Larry launching a new venture.
AO: It’s not clear whether he’s even completely serious about retiring from Oracle. He’s staying on as chairman, which is meaningless.
JM: That’s not very much a role. Four times a year, you have to be on the phone with somebody and that’s it.
AO: But he’s also staying on as CTO, and that’s rather difficult for a company like Oracle to go without a real CTO. You can’t get top talent to come in as assistant CTO without the title, so at least for the moment it looks like he may be not completely retiring even from his current role.
JM: Here’s something else I discovered -- keep in mind I turned 69 this week, and I have seen a lot -- nobody is irreplaceable, and if you took all of the senior executives away from a company, somehow they disappeared, very little would change in that company for a very long time. We think as the chief technology officer, the chief financial officer, that somehow we are indispensable, but believe me, the people working for them, they’re going to be fine. There’s something about corporations and large organizations that are very flexible to loss of staff. I don’t think it will be such a hard job.
If it were me, I would hire from within. I would find my replacement from the ranks of subordinates who had followed my progress and knew how to do what I did.
AO: He has put his two top lieutenants -- ironically, Hurd and Catz, which makes for great puns -- as co-CEOs. Can you really have two CEOS?
JM: No, of course not. It’s like trying to have two heads. Each one of them has different ideas and there’ll be conflict -- no, there has to be one CEO. Otherwise the title has no meaning. Chief Operating Officer, Chief Executive Officer, whatever, it’s a meaningless term if you’re not the chief, if you have to share that with somebody.
What you are left with is a committee, and we all know what happens when committees run things. It’s never good.
AO: In fact, Catz has come out and said that there will be no change.
JM: I don’t think there’ll be any change either, nothing will happen. I think Oracle will probably not even notice his absence other than the social part of it.
We think we have such importance as executives. We do not. We probably create more problems than we solve. We are an executive because we don’t want things going not the way that we want them, and every executive has his own idea of success both for the company and for himself, and believe me, if they replaced him with no one, I guarantee nothing would change.
AO: Not about Oracle specifically, but you hit a glancing blow in your comments during your interview with Rebecca Costa. Oracle as a big company has seemed to be reacting rather than acting in the changing market. For example, Ellison derided cloud computing, and a year and a half later Oracle builds its own cloud. Then Oracle acquired some NoSQL vendors, but the products are being sold as a complement to the flagship. Oracle has added Hadoop, big data stuff, but it hasn’t really gained a foothold in any of those areas. While it has bought companies, I think you could reasonably say it hasn’t really invented anything genuinely new in at least a decade.
Would you agree? Why is it so hard for these big companies to stay innovative? Is there anything that can be done?
JM: The answer’s very simple. Obviously, I agree you’ve hit the nail on the head. The reason is the more massive a company, the slower it moves. This is because of the number of people that have to be involved in any decision-making or any creative process. We all know that small companies are quick and nimble and creative. It’s because they don’t have the background and history that these large companies have to carry with them.
The only way to make Oracle competitive is you’re going to have to break it up into pieces somehow, with different operating heads that do not have to report to anyone else. IBM did that when it created the first personal computer back in 1981, by creating an entirely new division that reported to no one other than the president. It had its own fiscal responsibilities, its own hiring, its own policies, and that’s how they whipped up that PC in less than a year, the world’s first personal computer.
There’s no way to do it within a large company, so unless you partition it somehow, and make each of those partitions totally independent from each other, then it’s going to be a slow, unwieldy company. Such companies do not create. They don’t innovate. They follow and react.
AO: One of the things I thought was interesting, in doing background research, is that Ellison held on to his company for decades after you left your company. He amassed billions. He’s now the third-richest American, the fifth-richest guy in the world.
It seems that if one’s goals were strictly financial, you left at the infancy of your market. The PC revolution was still really gaining momentum, we hadn’t yet gotten to the ubiquity we reached in the Western world.
He seems to be hanging almost the apex of his business. The RDBMS is no longer going -- no matter what happens -- it’s not going to have the same ubiquity. Is it good to stick around for that long, is it bad?
JM: It depends on what your heart says. If you’re enjoying what you do then yeah, it’s good. I didn’t stick around because McAfee had grown to a point where the things that I like to do were no longer possible.
When there were 15 employees, wow, we could do anything. After we went public and I had a responsibility to shareholders and took over the CEO slot, my job involved talking to investors, going to stockholder meetings and everything that I found absolutely flat and boring. I didn’t want to do it. And I did not want to be the Chief Technology Officer in a company where I reported to people that controlled the purse strings and the policies and everything else, so I left.
AO: Ellison has life extension stuff; you were doing the quorum antibiotics.
JM: That’s right -- the anti-quorom-sensing technology, which does have some life-extending properties in it, there’s no question about it.
Well, everybody wants to live forever, I don’t know why, there’s a lot of stuff running in most people’s lives that you don’t want to have to go through again. Certainly the wealthy do it more than anyone else because they have the time and the resources. They do it under the guise of research for the general public, but they’re just trying to find a way to live longer. It’s not surprising that he’s into that. I’m certainly not into it like Larry’s into it, I was genuinely fascinated with the concept of bacteria, the simplest of organisms, communicating with one another.
AO: The other thing that fascinated me as I was doing some background was how different the two of you were but how you two were similar in some ways. You both have a love of adrenaline. He has a MiG and crashes boats. You’ve had some high-profile escapes, both around the same age ...
JM: We’ve done a lot of the same things, there’s no question.
AO: When I look at some of the younger CEOs, they seem sedate by comparison. I’m wondering: What’s happened with this whole adventurer CEO or adventurer entrepreneur?
JM: I think Larry and I both are type A personalities. I think all entrepreneurs are. Forming a company and meeting your competition in the field and creating a market and keeping it alive is an adrenaline rush. It is for anybody who tries it. When that rush is sort of dissipated after it becomes successful and large and stable, we seek our adrenaline rushes elsewhere. I think that’s common to, like, Richard Branson; many entrepreneurs do this.
The younger generation is not doing -- they’re on their portable devices and video games all the time, so that’s their adrenaline rush, and that’s their outlet for adventure.
AO: Ellison also has had a contentious relationship with the press, and you have had your own back and forth with the press. Any suggestions for when he steps out of the more active public face of Oracle?
JM: I’d like to say there is no such thing as bad publicity, and I mean that sincerely. The only bad thing is an improper reaction to whatever publicity you get. If you get bad publicity and you’re out there trying to fight it, you’re going to lose. You’ll be seen as someone who probably really did do what they say.
If you’re someone who really has a laissez-faire attitude and continues business as usual and action as usual with no change, then in the end what they remember is your name. This is an absolute fact. I don’t know how it works, but I can promise you it does work.
The press will say what the press says based on financial decisions. That is, what story will sell. And you will color a story -- I’m talking to you, you know this for a fact, you’re in that profession. So we can’t get overly concerned with what the press says, whether they’re praising us or they’re leery. It’s probably kosher to do so right now, or it’s not, or they’re ridiculing you, and it really makes no difference. What matters is keeping your shoulder to the wheel and your nose to the grindstone, and forging ahead with your life and what you do. I’ve had terrifically bad press and I’ve had terrifically good press; it’s all the same.
AO: You didn’t retire, exactly. You worked on your other ventures or what have you. You seemed to have had a lot of fun adventures and maybe some not so fun. If Ellison is serious about retiring, it seems like he’s had fun, but I don’t know, it seems like with that much money you could have a lot more fun. If he was serious about retiring, what would you recommend?
JM: I would recommend he call me first, because he’s not going to retire, and I have already done many of the things that I’m sure he’s planning on doing. None of them are as fulfilling as they sound: buying the island, getting away from it all, buying a yacht, and sailing around the world. Trust me: The only fun thing that lasts for an entrepreneur is creating companies and businesses, so I would advise him to get to that task as soon as possible.
AO: Are you doing actual coding now? Or just visioneering and hiring people?
JM: I don’t do coding anymore. I don’t have the patience for it, so I have other people do the coding and the marketing and so on. I’m sort of the idea man. It is so easy to hire people to do what we think only we can do, I do that rather than do it myself.