NetSuite customers span small family businesses to the Fortune 500 and include at least one of every type of Standard Industrial Classification (SIC) codes, Jim McGeever, Executive Vice President of Oracle NetSuite, explained to a crowded hall at the Times Square Sheraton earlier this week at the NetSuite SuiteConnect event. But despite all their differences there is one thing NetSuite customers have in common – growth.
For example, GoPro, an early NetSuite customer went from 10 employees to $1 billion in revenue while on the system. When Groupon signed on with NetSuite it was the fastest-growing company in US history. Marketplace numbers suggest NetSuite customers grow faster on average as well. In 2017 the MSCI Emerging, an index of small and midsized businesses, grew 8 percent and the S&P grew 6 percent. NetSuite customers? They grew an average of 17 percent, according to McGeever.
Promising that NetSuite will be the Alfred (the butler) to its customers’ Batman, McGeever said it is NetSuite’s goal to help its customers succeed. The problem is, it’s become harder and harder to scale a business.
McGeever presented a slide that has been making the rounds at tech shows for years, demonstrating the pace of change. Since 2000, 52 percent of the Fortune 500 that were on the list back then are no longer on it. That kind of turnover is much faster than the decades prior. From 1960, it took 40 years before the Fortune 500 saw that kind of turnover. But it’s not just the turnover, McGeever said, the big are getting bigger. The Fortune 500 now accounts for a higher percentage of GDP than it did 25 years ago. The challenge manifests in NetSuite’s own customer base as well.
“We sell a lot of software to people below $100 million in revenue and a lot to companies in excess of $500 million, but not a lot in between,” McGeever said. “A lot of companies make it to that $100 million barrier and don’t have the velocity to keep growing. It’s becoming harder and harder to start and scale a business.”
There are five main barriers to growth, according to McGeever: finding the next customer; increasing profits; cash flow visibility; tackling regulations; and building a winning team. Each comes with its own specific challenges and demands different things of the business and the systems on which the business runs.
When it comes to those underlying systems, NetSuite has an advantage over competitors, McGeever noted.
“When NetSuite was founded, we were founded to run a business, not to run a department,” he said. “It’s not just finance and accounting. We have one database. We built the product with that core data set in mind.”
Having that core data set is essential to overcoming those growth barriers. Companies that go through early, rapid growth can often overlook some of their underlying problems.
“I’ve been saying growth covers all sins for 10 years and I still forget it,” McGeever said. “NetSuite was focused on billings growth when we were public and that wasn’t really driving growth. For us it’s recurring revenue. We’re now growing twice as fast [since being acquired by Oracle].”
The key, McGeever said is focusing on the right data and understanding what not to focus on. For example, Jamie Siminoff implemented NetSuite just as his company, Ring(opens in new tab), maker of the connected video doorbell, was taking off. Now, he is able to check his phone in the morning, see how his business is performing, and then put it away.
“We’re trying to empower people like Jamie,” McGeever said. “Let us focus on the back office and you focus on what’s important. He onboards every new hire personally still. Growing that culture is more important than worrying about his inventory levels. We let him focus on the things that move the needle for him.”
Kelvin Joseph, CMO and COO of Steiner Sports(opens in new tab), a sports marketing and memorabilia business, joined McGeever on stage at the event. Steiner recently implemented NetSuite to replace a Microsoft Dynamics AX system that couldn’t handle the diverse needs of a business that is both a services business (sports marketing) and a B2C product business (collectibles). It required so many patches and workarounds, it “became like Frankenstein,” Joseph said. Now, he is able to focus on building relationships.
“With NetSuite, it grows with us and it updates itself,” Joseph said. “We just want to talk to our customers. I don’t want to worry about a system.”
Not only do NetSuite customers like Steiner Sports and Ring tend to grow faster, data suggests that the more customers use NetSuite, the more they grow. NetSuite customers using the commerce(opens in new tab) functions grow even faster on average -- 24 percent to 17, McGeever said.
“It’s like a gym membership; the more you use it, the more you get out of it,” McGeever said.
To learn more about the advantages of NetSuite and its plans for the future, register now for SuiteWorld18(opens in new tab) in Las Vegas, April 23-26.