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Taking on Oracle: Inside MongoDB’s Headwinds

For the startups vying to attack the $34 billion-plus database market Oracle Corp. has dominated for decades, creating software popular with developers doesn’t guarantee success. Figuring out a sales strategy is crucial.

Take MongoDB, so well positioned among the young companies nipping at Oracle’s heels that last summer it was valued at $1.2 billion, making it one of New York’s most valuable startups. Yet behind the scenes, MongoDB was burning cash—around $70 million in 2013—without commensurate sales growth to show for it, people familiar with the company’s finances said. One major factor was wasted sales efforts and tension in its sales operation.

At the same time, MongoDB was wrestling with technical challenges that made it hard for the developers who liked its database product to scale it up for big projects. The glitches weren’t unheard of for a young database company, but some Fortune 500 users grew impatient and defected to competitors.

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During a previous career as an investor, he said was “struck by some degree of naiveté in thinking that a good product and a good open-source community is the panacea for all problems and will lead to success. You still have to get customers to write a check.”

—Amir Efrati contributed to this article.

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“This is the classic maturing of the sales process,” said CEO Dev Ittycheria.