The Larry Ellison Playbook

Larry Ellison Is the King of Hostile Takeovers

His operating principles resemble those of conquerors like Belisarius, Alexander the Great, and Frederick the Great.

Ellison admired Napoleon and built Oracle on three ideas that define conquest: control, speed and audacity.

Hostile Takeover Strategy

Ellison fought hostile takeovers the way Napoleon fought campaigns. He chose the moment of maximum vulnerability, committed fully and attacked the target’s weakest point:

The Hostile Takeover Strategy

Napoleon wrote that the art of war is to have larger forces than the enemy at the point of attack. Ellison applied these principles to timing. For Ellison, that meant waiting until a rival was already under pressure, then moving fast before it could recover.

Imagination Rules the World

In 1974 Ellison's wife told him she was leaving. After a therapist visit, Ellison made her a promise: he would become a millionaire. He made a commitment to himself that day not to be a failure.

From that day* he saw himself as a successful man and acted like one. *

Ellison imagined the way things could be, then tried to make reality conform to his vision.

He talked about Oracle as the giant it would become, and was already telling customers that Oracle would become the largest software company in the world.

People around Ellison joked that he had a problem with tenses. If Oracle would soon have fifty employees, Ellison spoke as if the fifty were already there. His longtime assistant described it as* “so much wishing he could make it so.”*

Control Is Everything

Ellison’s priority was always to own as much of Oracle as he could.

His belief: power flows to the one who never dilutes.

Ellison avoided venture money like the plague. He funded Oracle with bank loans, cut deals and sales pushes, which kept his cap table clean and his ownership undiluted.

Felix Dennis, who built an $850 million media empire, wrote the clearest description of Ellison's mentality:

Sell Harder Than You Build

Oracle's first database was called Version 2, and the company had five people. Ellison expected buyers to trust a second version more than a first one, so the name made a tiny company look further along than it was.

1. Sell the future before you sell the product. Ellison first sold CEOs on the idea that the Internet would let them centralize their systems, slash IT costs, and give managers better information through a browser, and Oracle was betting the company on getting there first.

2. Make the customer argue your case for you. At his CEO roundtables, Ellison talked about Oracle’s own bloated systems and billion dollar cost reduction. Soon the executives in the room started sharing their own horror stories. Ellison called it “CEOs Anonymous.”

3. Reduce a technical purchase to one economic equation. Ellison wanted salespeople to quantify the savings from switching to Oracle across hardware, software and labor. That shifted the conversation away from feature comparisons. The customer was deciding whether staying with IBM was worth the extra money.

4. Use simplicity to steal attention. Ellison wanted people to understand Internet computing in seconds. So Oracle built a $500 computer that did one thing: open a browser. “In marketing, simple messages always win.”

Hire for Arrogance

Oracle recruiters became famous for asking candidates one question:

“Are you the smartest person you know?”

A yes could get you hired. A no led to a follow-up question about who that person was, and Oracle then went after them.

Ellison valued raw intelligence over experience and liked people who argued back. He wanted employees who trusted their own thinking enough to challenge him.

Napoleon chose his generals the same way. He promoted soldiers who showed ability, and he expected every soldier to hope for a general's rank.

Napoleon also kept the pressure on after the hire. He wrote that the art of governing consists in not letting men grow old in their jobs, and he told his staff that his marshals were not indispensable, because he had a hundred division commanders who could replace them. Ellison tied senior bonuses at Oracle to market share, so every executive had to keep winning to keep the reward.