Book review: Behind the Cloud [Salesforce Story]
Behind the cloud is not about cloud computing. It is not about the journey of salesforce.com from an idea to a billion dollar company as the cover claims either. It is Marc Benioff’s way of patting himself on his back for his marketing genius, salesmanship and connections. And even though I put it that way, if you run a technology company, it is a brilliant book and there are tons of things you can learn from it.
The book starts with a quick introduction on his stint at Apple and Oracle, and how he transitioned from a shy coding geek to something that was way more fun – interacting with customers. He led a number of huge projects under the inspiring leadership of Larry Ellison who was an early mentor. But when Benioff realized that he had become a corporate lifer and got frustrated with the way established companies work, he decided to call it quits and took a sabbatical.
Benioff started salesforce.com to do things differently, especially to take on the world of traditional enterprise software which came on CD-ROMs and took six to eighteen months to install. And their costs ran in millions, both hardware and software. The book talks about the different aspects that make salesforce what it is today in what Benioff calls playbooks – startup, marketing, events, sales, technology, philanthropy, global, finance, leadership and finally a playbook for an inspiring conclusion.
Right from the time Benioff started salesforce.com, he believed in hiring the best. So he got in Parker Harris and team, the best in the Valley at the time, to join as co-founders and got Ellison to invest $2 million along with his valuable mentorship. Benioff talks about how he introduced a marketing-obsessed culture right from the start and embraced bold marketing tactics to break through all the industry noise. It was all the more important for them since they were not just introducing a new product but an entirely new concept as well of software as a service, as opposed to the established model of on-premise software. Benioff also talks about the importance of positioning, and how a company should either position itself as the leader or the rebel.
For them, it was simple – they were the rebel to Siebel systems, who delivered expensive on-premise CRM software and were the industry leaders in it. Right from the “No software” logo they got developed to the mock “No software” prostests they organized outside Siebel’s conferences, they used the rebel positioning to great effect. And they got awesome press out of it. In fact, once they created this ad with a fighter jet shooting a biplane (symbolic for the obsolete on-premise software industry) and the Times ran an editorial on it on the front page of their business section with the entire ad. They didn’t have to pay a cent for it.
Getting good press has always been one of Benioff’s main marketing mediums and he talks about how they have honed their meesage over time to convey the image that they want their brand to stand for. To start off, they captured the press’ attention with the David v Goliath story and the End of Software revolution. But when they became a more heard-of name, they moved on to talking about the value they added and the industry they were pioneering. The press lapped it all up. Benioff always puts in a special effort to maintain a very good relationship with the press, which makes him a resource for comments as soon as anything important happens in the industry.
The other medium salesforce has used a lot for its marketing is events, which Benioff talks about in great details. With events, they gave their customers, potential users, analysts and press a common forum to talk about both the industry and the tool. Since their customers were having massive success with their tool, they became evangelists of the brand at these events. An important lesson Benioff leaves for everyone is that it is not the pitch that you make during the event that is your message, the event itself is. If you are about innovation, make sure the event reflects it. A quick example of this is the self-service kiosks they introduced for checking in instead of people doing it.
On the sales side, Benioff wasn’t as big a rebel as on the marketing side. They used the traditional telsales model when they could not afford having offices in different regions for face-to-face meetings, and when they could, the used these offices for landing customers with more than 500 employees.
However since their model itself was different, there were a number of important differences with the way software was traditionally sold. Since the price of salesforce was fixed for everyone, their sales reps never created urgency by offering discounts. Rather they did it on the basis of the prospect’s need for it, and what salesforce could do for them. Also unlike traditional companies where they target entire companies when making a sale, Benioff used the land and expand model. They get into a company by selling to a few departments and when these departments saw the value in their products, they introduced it company-wide.
The way salesforce has expanded globally is pretty interesting to learn as well. Again, the traditional method of leveraging partner networks did not work for Benioff since they typically worked on margins, and they did not quite understand this new model of software delivery. So salesforce had to set up its own offices in different part of the world one-at-a-time and Benioff used his two-leader approach for it. He hired local leaders to head each of these offices since they had a deep understanding of the culture, industry and buying patterns of the region; not to mention the talent pool they could tap into. And then he used to put someone from his headquarters in the office to maintain the consistency with the head office. Benioff also talks about how an entry in a new region should be treated like starting up all over again. You can not use what is currently working for you in your primary market since the new market might not be equally mature. Benioff instructs that you should first educate the market, get a few customers, establish your brand, get your customers to evangelize the product for you and then go on to hire people and expand. And be at it while you are doing it since global expansion requires a continued focus and determination.
Benioff also talks about when salesforce went public and how he hired the best people for the job. They made an important decision to go public on NYSE instead of NASDAQ. Since they were in San Francisco, people thought just like the other dot com companies, they could also go away quickly. However NYSE added the traditional, old-line and established branding which is exactly what they wanted to have for fiscal matters. And Benioff used his marketing genius even here when he chose their ticker to be – CRM. Yes, CRM.
Finally Benioff talks about the strong hiring culture that they have. For him, hiring works the sme way as sales. They build a talent pipeline by tapping into every connection they have, irrespective of whether they have a suitable position or not. So many a times when salesforce employees are having lunch with people they know, they are in fact interviewing these candidates without them even knowing about it. And when they have a suitable opening, they quickly know whom to go to. Also, they have multiple rounds of interview and even ask interviewees to give presentations so that they know they are hiring the best people for the job.
All in all, the book has both its strong and weak points. On the weaker side, the book is not a smooth read. The narrative is is frequently interruped by “tips” Benioff wants to give us, and it sounds like do-it-my-way-and-you-will-be-successful in places. Also Benioff doesn’t talk about the struggles of salesforce in details, or the ego clashes he typically has with industry leaders. But on the stonger side, Benioff talks about so many different aspects of running a business – starting up, raising money, marketing, sales, using your connections, finance, expanding globally, philanthropy, hiring and a lot more – that there is a lot everyone can learn from it. Also the way he has taken on the established software industry and toppled giants like Siebel is very inspiring. So if you are someone who is excited by technology and its implications, give it a read.
[The book review has been contributed by guest author, Sanket Nadhani who heads Marketing & Sales at FusionCharts. He also writes for the FusionCharts blog talking about usability, charting tips & tricks and mostly about all the behind-the-scenes fun. He loves his food and beer. Follow Sanket on Twitter:@sanketnadhani. Sanket earlier shared Review of Delivering Happiness]