As an East German teenager, Schambach demonstrated in the streets with others who tore down the Berlin Wall. Today, the 29-year-old is chief executive of an e-commerce company that helps companies tear down walls that stand in the way of doing business on the Web.
"In the '80s, I was still very young and I felt like I would never be on the forefront of anything because I had missed the PC revolution," Schambach told CNET News.com. "I was wrong. The Internet showed up, and though e-commerce wasn't there yet, it made sense to me."
In a market already clogged with e-commerce software makers, why should anyone care about little-known Intershop? For starters, the company's sales are suddenly booming. Intershop claims its e-commerce software now helps run more than 20,000 Web sites worldwide and boasts clients Hewlett-Packard and NatWest Bank. Its stock, which trades in Germany, climbed to $396 a share yesterday, up from its $15 debut in 1998. And Forrester Research predicts the e-commerce market that Intershop competes in will reach nearly $5 billion within two years, up from $259 million in 1998, which bodes well for Intershop and its rivals.
Intershop made waves last summer by mocking IBM in a print advertising campaign that the Wall Street Journal deemed too crass to run on its pages. One ad pictured a farmer shoveling cow manure under the letters "e-b.s.," a thinly-veiled reference to IBM's e-business campaign.
Now, the company is intent on becoming a major player in the United States and capturing Fortune 1000 customers. Schambach is on a recruiting blitz. He recently nabbed former Compaq chief executive Eckhard Pfeiffer as the company's new chairman. Last week, Intershop named former Oracle executive Keith Costello president of its American operations.
Founded in 1990 in Jena, Germany, Intershop has about 500 employees and U.S. headquarters in San Francisco, where Schambach now lives. The company, which competes mainly against Broadvision, Art Technology Group and OpenMarket, develops software that clients use to sell products over the Internet to customers and to other companies.
Schambach's early business efforts resulted in an online order-entry system that university students used to purchase low-priced items on the Web. Buoyed by the success of the service, the company opened it to the public and expanded the catalogue size from a few hundred items to 13,000 items.
When he first started the company venture capital backing was not an option in East Germany, but Schambach kept expanding his business with the support of individual investors.
"I don't want to complain about East Germany," said Schambach. "It's difficult to start a company anywhere. There were some delays, but I didn't really see them as obstacles."
Last month, Intershop reported fourth-quarter profits that doubled on soaring sales, driving the company's shares up nearly 10 percent on the Frankfurt stock exchange. Fourth-quarter revenues increased to $19.2 million, 206 percent more than the same quarter a year-ago and nearly as much as total 1999 revenues of about 20 million.
Still, Intershop's long-term success is hardly assured. The company is competing in a turbulent and cut-throat market. All of Intershop's competitors are also riding the boom in e-commerce software and services as well, and new firms are launching every week. Competitors such as Art Technology Group are also finding well-heeled partners to help spread the word. Art Technology teamed with consulting firm PricewaterhouseCoopers recently to establish a practice dedicated to selling the company's Dynamo software.
One of Schambach's strengths is that he is able "to be non-techy on the outside, but techy on the inside," said Forrester Research analyst David Troug. "To be successful in this business you have to be able to switch from one to the other and Schambach does this very well," he said.
Troug said InterShop's product offerings have improved as the company has expanded beyond helping small companies set up storefronts on the Internet. Customers are using Intershop's Enfinity software, which is built entirely with Java and XML, to handle orders taken on various devices such as cell phones and handheld devices and synchronize those orders with their back-office accounting and billing software.
Schambach said he wants to grow the company to the size of one of the enterprise resource planning (ERP) giants such as PeopleSoft, Oracle and SAP.
"We will be in that top group in five years," he said.
Costello said he decided to leave Oracle for Intershop because he believes in Schambach's Vision.
"Intershop has the opportunity to be an important company," Costello said. "Stephan is truly seen as a visionary in this industry. He is the rock star of e-commerce."
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