The Story of TRILOGY

It's a mid-afternoon in October at Trilogy Software, Inc. in Austin, Texas, and Ellis M. Verosub '98 is getting down at an impromptu disco party in the company's conference room.

While the party lasts for only a few minutes, the event epitomizes Trilogy, a "work hard, play hard" software company where recent college graduates run the company.

Two years ago Trilogy offered 12 Harvard seniors jobs. One accepted.

Last year, 21 out of 24 of the College's brightest said "Yes," turning down offers from Goldman Sachs and Microsoft.

The students are drawn by an anti-corporate culture and held by the opportunities that come with being on the ground floor of a small company headed for the top.

"[Trilogy has] all the fun of a start-up company without living in a garage," Verosub says.

Taking Over the Block

Founded in 1989, Trilogy develops software that helps giants like Boeing, Xerox and IBM streamline their operations. In two years, its revenue has grown from $70 million to $150 million. Meanwhile, its workforce has tripled. The amazing growth has helped catapult Trilogy from recruiting leper to leader.

The draw of a smaller company, say recent Harvard graduates now at Trilogy, is the chance to do more substantial work while being recognized as an individual, not just another cog in the wheel of a larger firm.

Razvan Surdulescu '98 had two internships at Microsoft and was eventually offered a job with the Redmond, Wash., firm.

"[Microsoft] is so big and streamlined, it is difficult to feel like you have an impact," he said. "If I choose not to go to Microsoft, it'll still be successful."

Employees say they relish the opportunity for contact with the firm's executives, possible only because of the company's relatively small size of 600.

"I was always frustrated at Harvard that I had all these super-star professors and I couldn't get to them," said John R. Miri '98, a former Crimson business executive who had offers from JP Morgan, Merrill Lynch and Proctor & Gamble.

He turned them down in favor of a working environment that would give him free reign and the excitement of joining a new company.

"Oh, my goodness," Miri says. "This really could be a really serious house-hold name in a few years."

Part of Trilogy's attraction is teaching new hires during an extensive summer training program dubbed "Trilogy University" (TU), which educates them to start working immediately on projects that can turn into products.

"You build something and you can to try to convince [Joe] to run with it," Surdulescu says.

TU, although intense, allows Trilogy to mentor its new hires with its top executive "stars," including President and Founder Joe Liemandt. The training and working experience are so substantial they cause new hires to reconsider their plans after Trilogy.

"When I got here, I was 99 percent sure I wanted to go to B-School," Miri says. "Now I am 60 percent sure."

Trilogy's success is part of a larger trend in the market for college graduates, where smaller companies are stealing people away from Wall Street and Silicon Valley.

"[Five year ago], if you had an offer from an I-Bank or consulting firm, you took it," says Gary L. Albert, president of Wetfeet.com, a San-Francisco job researching company that profiles firms. "There has been a market shift to careers that are more entrepreneurial."

While initial salaries can be lower, it's the growth potential that makes companies like Trilogy so attractive, Albert says.

"Right off the bat, they may be getting a lower base salary," he said. "[But] you could end up doing better than your wildest dreams."

Part of Trilogy's appeal: The multi-million dollar company has yet to go public. When it does, employees will be offered stock options that could be worth millions.

"I won't kid you that it isn't an issue," Miri says.

The Anti-Corporate Company

Software companies are known for being more laid back than Wall Street, and Trilogy is no anomaly. In fact, a critical part of Trilogy's pitch to prospective employees is its culture.

From the lack of a set schedule or dress code to company trips to Hawaii and Las Vegas, Trilogy defines itself as an exception to the power-suit, power-lunch rule.

The rules--or lack thereof--stem from a larger corporate philosophy that stresses individuality and allows employees to make their own decisions, says Joe Liemandt, president and founder.

"If you work best at 2:30 [a.m.] eating Doritos and drinking Gatorade, that's great. If you wake up at six and go to the gym for an hour and come in at seven, that's great as well," he says.

It's matter of treating employees like adults, says Brandon Cohen, Trilogy's Harvard recruiter. "You know how you work; get your work done," he says.

And it's a selling point to college students.

"They obviously use their culture as a competitive advantage," Albert says. "This is not a stuffy company."

It's also not a company afraid to spend money to reward its employees. After several months in the intense learning environment of TU, the company headed off to Las Vegas for the weekend.

The trip, a "corporate retreat with crap tables," Miri says, was the culmination of a summer of intense work.

Although Miri became a member of the Trilogy "L2K" club after losing two grand on the Vegas roulette wheel, he was upbeat about the trip.

"It was a blast," he says, joking about the "L2K" trophy he received back in Austin.

Although most "TU '98" graduates celebrated in Vegas, Verosub applied his TU education to cutting a deal with a French computer company--in Paris.

The commitment to morale extends beyond the walls of the company. The company has a deal with a local cab company allowing Trilogy employees to use "cab cards" to travel free anytime, anywhere in the area.

"We don't want any person from Trilogy to have any inclination to get behind the wheel when you're drinking," Cohen says.

Trilogy "cab cards" are just another example of an attempt to create an environment where employees not only work hard, but have a good time as well.

"It's a company that thinks a lot of how to make employees happy," says Karl Treen, assistant of recruiting at the Office of Career Services (OCS). "It's a nice perk and it cuts down on what employees need to worry about."

As a selling point, the tactic may be working.

"I've heard companies that are starting to look at what Trilogy is doing," Treen says.

The Downside of Small

While Harvard graduates praised the low-key Trilogy management style, they also point to drawbacks, which are linked in large part to its fast growth and its attempt to maintain a small company feel in the face of that growth.

"Trilogy focuses so much on raw talent and great people, sometimes they overlook logistical problems," says Elizabeth Schwartz '98.

Those problems include not having enough parking spaces in the company lot or setting up computers for new employees.

Taking care of little details "was frustrating in the beginning, but I have gotten used to it," Surdulescu says.

While Trilogy plans to continue its rapid rate of hiring, tremendous growth poises a problem as the company tries to cater every potential client.

"The biggest weakness is that we're growing so fast," says Jeff Daniel, director of recruiting.

"There are deals we have to walk away from because we don't have enough people," Miri says.

While Trilogy casts itself as the "next great software company," Trilogy is not in the operating system or personal computer software and faces challenges in establishing a market niche for its products.

"In the case of Trilogy, they have to evangelize their products through marketing," says Jimmie C. Chang, a technology analyst at U.S. Trust, an investment consulting firm.

Trilogy also must battle other start-up companies that are nipping at its heels, Chang says.

While Liemandt says the company will carefully decide when to go public, Trilogy must avoid the inherent pitfalls of switching from the private world to Wall Street and public ownership.

"The danger down the road is that when they go public, people cash out," Chang says. "I think that there are a lot of companies that were too young when they went public."

Yet the risks and downsides of small notwithstanding, the company's culture is selling well among Harvard students, many of whom are drawn to the company by friends who are already there.

"They seem to hire students right out of college to come back to college to talk to college kids," says Judy Murray, the OCS director of recruiting.

Not an Average Joe

Liemandt, the founder and president, is the force behind Trilogy's culture. Barely 30 years old, he started the company with four other classmates while he was still attending Stanford in 1989. He dropped out right before graduation to focus on Trilogy.

However, with only two quarters of credit left to finish at Stanford, there's always the chance of returning.

"My mom wants to know when I am going back and graduating," he says.

Though he is worth $650 million, he drives a Saturn and lives in an apartment close to the firm. Dressing up for work means wearing jeans and a polo shirt.

Verosub juxtaposes him to President Neil L. Rudenstine.

"Totally imagine if Rudy went to the Green house and had a Chick-Fil-A and sat down and talked with students at a table," he says. "Everything he has worked for, he's betting on the college kids. It says a lot about Joe and Trilogy."

The Next Chapter of Trilogy

Liemandt says Trilogy's success is the result of changing perceptions of technology companies.

"[Students] are starting to see high-tech as a career even if you're not a techie," he says.

And he intends to keep relying on recent college graduates to make the company run, contrary to conventional wisdom.

"You're just wacko, you can't do that," he hears from his colleagues.

But in his mind, the growth of the company depends on bringing in new blood, and he sees no reason to change what's working.

"Why would you stop just because you're bigger?" he asks.

As for the future--besides going public--Liemandt says he wants to create a Trilogy legacy.

"We want Trilogy to be the place where the next great leaders of tech come and learn," he says.

"We're Microsoft, 1984."