ServiceNow's Amazing Journey

I’m publishing this series to discuss a topic that I follow closely - cloud stocks, trends, strategy, acquisitions, and more. Please subscribe to my Cloud Stock Analysis series and never miss an article.

Continuing with the Entrepreneur Journeys of extraordinarily successful companies, here I bring you ServiceNow. The company currently has a market cap of over $54 billion. We first covered ServiceNow back in 2009: Deal Radar 2009: Service-now.com. And Fred Luddy was at our roundtable in 2015: Roundtable Recap: Billion Dollar Unicorns with Fred Luddy, Founder of ServiceNow. Going back to origin stories, here is our conversation from 2010:

Fred Luddy founded ServiceNow.com in early 2004 and has served as chief executive and technology officer since the company’s inception. He was CTO at Peregrine Systems from 1990 to 2003. Prior to Peregrine, he founded Enterprise Software Associates (ESA), and worked at Boole and Babbage, and the Amdahl Corporation. Fred tried to attend Indiana University and Sir George Williams University, but he found part-time programming for these institutions to be far more compelling than the classroom experience.

Sramana Mitra: Fred, give me some background about your childhood and early career.

Fred Luddy: When I was 16 years old, which was in the early ’70s, I had a part-time job as a purchasing guy at American Standard. They bought a high-end computer, and I walked into the data center where the Hewlett-Packard computer was and never wanted to leave. I was a moth drawn to the flame. Something pulled me in and made me believe that I wanted to be part of this data processing community. I’ve been that way ever since.

For more than the past 30 years I’ve been a programmer. It’s what I want to do every morning when I wake up, and it’s what I do on weekends and on long plane flights to Europe. In a lot of ways I started this company to support my habit, which is writing software.

Sramana Mitra: You are a nerd with a capital “N”.

Fred Luddy: You could spell the entire word capitalized.

Sramana Mitra: What did you do after?

Fred Luddy: I went to Indiana University, where I got a job working for the dean of economics. I was running part-time, which paid for my school. I managed to work for him for 70 to 80 hours a week, and I flunked out of school. I then moved to Montreal, where I got a job working for a French service bureau and had a wonderful time. It was a very technical company.

From there I ended up in Silicon Valley in 1976, before was known as Silicon Valley. I went to work for the Amdahl Corporation. They built mainframes and I built a couple of software products for the hardware company. They became very successful in terms of the amount of revenue they generated and notoriety gained for the company. They were in the area of mainframe performance. I thoroughly enjoyed the company, and it was a wonderful experience. I was probably the most formative part of my career. There were a lot of very bright people from both a technical and a business perspective. Those people really gave me a phenomenal education to help me through the next 15 to 20 years of my career.

I then went to work for a software company called Boole and Babbage as a consultant. I worked on mount products that they sold, which were also reasonably successful in the mainframe area. At some point in 1988, I got disillusioned. I decided to quit my job and moved to Los Angeles to play beach volleyball. I found out a few things. I learned that I was short, slow and not a good athlete. Beach volleyball quickly went by the wayside and I started a software company called Enterprise Software Associates. It was a cataclysmic failure.

Sramana Mitra: What were you trying to do with it?

Fred Luddy: It was in the area of mainframe software tools. I have advice for any entrepreneur, which is if you’re starting a company and you have a partner, you should first find out if your partner is a convicted felon for fraud. I forgot to do that. I got talked into going into business with a man who did not have a good reputation. It was a very painful part of my career and a very expensive lesson. We racked up the normal amount of debt, which I had to pay as an individual over three or four year period after the company folded. I became disillusioned with people in general. Fortunately I met up with John Moores, the founder of BMC. He pulled me into Peregrine. My career had an upturn from there.

Our conversation continues here.

Looking For Some Hands-On Advice?

For entrepreneurs who want to discuss their specific businesses with me, I’m very happy to assess your situation during my free online 1Mby1M Roundtables, held almost every week. If you are visiting the San Francisco Bay Area, come meet me at an upcoming Rendezvous meetup. You can also check out my LinkedIn Learning course here, my Lynda.com Bootstrapping course here, and to follow my writings, click Follow from here.