As we hit almost 20 years of when Salesforce 1st started (1999), and the company continues to have massive success in not only the CRM market but all of cloud computing, I was interested to read a little more about how Marc Benioff started the company and how some of the ideas the company now embraces were brought about.
In this short excerpt, I highlight 25 facts that intrigued me the most in Benioff’s book, Behind the Cloud, The Salesforce.com playbook, co-authored by Marc Benioff, Chairman and CEO of Salesforce and Carly Adler, award winning journalist for Business Week, Forbes, Fortune, Time and many more well-known publications.
While I’m not a Salesforce employee, some of the facts may be outdated but were part of the book’s publication in 2009.
1. Larry Ellison, executive chairman of Oracle, was a mentor to Marc Benioff and allowed him to work part time (and take an extended leave of absence) to begin building Salesforce while still working at Oracle. Ellison was also on the board of directors at Salesforce and invested $2 million to get the company up and running.
2. The original idea of the marketing message of “No Software” received significant push back as it promoted a negative message (which is considered a cardinal sin in marketing) as well as there was still software involved so the message wasn’t completely factual.
3. Clever marketing strategies that Salesforce used: hiring actors to protest software at Siebel user groups; offering rickshaw rides with donuts and coffee with Salesforce advertising; renting taxis for passenger’s coming into a Siebel conference to be pitched to as well as leaving marketing brochures in the car seats; issuing press releases on the day of its competitors earning calls.
4. Metaphors created along some of Salesforce’s innovation:
Salesforce.com is Amazon meets Siebel
AppExchange is the eBay of enterprise software
Force.com is the internet’s Windows operating system
5. Pioneered the “try before you buy” model, by offering 5 free licenses, to gain valuable feedback from customers and to help revise the design and user experience. For example, the create new account button was on the right-hand side, causing it to go missing on some monitors, was initially provided by a customer.
6. On the onset, Salesforce’s primary customers were small .com businesses who were flushed with .com venture capital cash, and then with the .com crash, Salesforce almost filed for bankruptcy as it was $1 to 1.5 million in negative cash flow every month.
7. Salesforce utilized the “land & expand” sales technique which traditional software companies did not do. Salesforce would start with one division to allow a customer to limit their risk, take a small position and experience the benefits before making additional purchases.
8. Venture Capitalists tried to convince Salesforce to offer 2 products, 1 on premise (for enterprise customers) and 1 cloud based (for small businesses). The team felt this would be a nightmare to manage and broke their philosophy of “No Software”.
9. In 2005, when Salesforce’s production systems went off line causing negative publicity, they decided to create trust.salesforce.com which allowed full transparency and accountability to provide real time information on system performance and security. This idea was inspired from eBay.
10. Salesforce has on demand architecture which allows the company to see broad patterns of user behavior to understand what features customers are and are not using.
11. Customers originally did not have a way to customize their screens, rename fields, create new objects, etc. causing customer annoyance with the Salesforce object naming conventions that may have not been relevant to specific industries (for example, in healthcare: Hospitals versus Accounts, Patients vs Contacts)
12. As customers started asking for more and more applications and capabilities, Salesforce could not keep up with the development internally, which they then opened up PaaS (Platform as a Service), which led to Apex, VisualForce and Force.com
13. The 1st internal app built on PaaS, was Volunteerforce, used by Salesforce employees to manage their internal volunteer hours.
14. IdeaExchange was created for harnessing customer’s ideas on how to enhance the Salesforce product. A similar concept was then used by Dell which led to Dell notebooks offering the Linux operating system, as well as Starbucks coming up with the Splash Sticks.
15. The 1% movement in the form of products was not inspired by Salesforce internally, rather directly from Non-Profit Organizations that Salesforce was already helping financially to then take advantage of the free subscriptions being offered. This also led to Google.org (the charitable arm of Google) based on Marc delivering his story to Stanford where Larry Page and Sergey Brin were in the audience.
16. The 1st Salesforce customer in Europe was based out of the Salesforce Dublin office and was a mere 35-pound (46 U.S.D) sale.
17. The launch into Australia was unique as there was already a company called Salesforce that was a call center outsourcer, so trademark infringement came into the picture. During this resolution, a simple 1-page contract considered “light & love” was created to help resolve the dispute by removing the legal jargon.
18. Marc originally seeded Salesforce with $6 million of his own money, then raised additional funding from friends and family as VC funding was an uphill battle; eventually $65 million over 5 rounds of venture funding from 1999 to 2002 was raised. At the time of this book publication, Larry Ellison’s initial $2 million investment was worth more than $200 million.
19. Initially, Salesforce wanted to go public on the NASDAQ, then Marc was convinced by his CFO that going public on the NYSE would prove that Salesforce could fit more in line with the traditional, older generation, well-established companies versus the up and comer, new and edgy, companies that were on the NASDAQ.
20. Salesforce ended up being the 1st .com on the NYSE and was the best performing IPO of its time gaining 56% on its debut in 2004.
21. When the stock symbol, CRM was formed, SFA was also thought of but Salesforce wanted to be known for more than just sales force automation.
22. The acronym V2MOM stands for Vision, Values, Method, Obstacles, and Measures to depict Salesforce’s organization alignment.
23. As Salesforce begin to recruit, they knew they couldn’t compete with some of the more well-known tech companies, so some of their selling points were offering: agile development, innovation away from client-server technology, and most importantly developers could see their code make it to production in 3-6 months versus not at all with some of the bigger companies.
24. The #1 characteristic that a candidate should have is the desire to change the world via technology with an interest in giving back.
25. Finally, 3 rules that helped Marc Benioff in his success and inspiration which was also the work of Albert Einstein:
Out of clutter, find simplicity
From discord, find harmony
In the middle of difficulty, lies opportunity