February 19, 2010
Behind the Cloud: The Untold Story of How Salesforce.com Went from Idea to Billion-Dollar Company-and Revolutionized an Industry by Marc Benioff and Carlye Adler
Since I work for a software company, I was very interested in the story of Salesforce.com and how they built their application and company. As the book points out, Salesforce.com sought to build an industry – what is now SaaS (Software as a Service) – something that they certainly took the lead on over the past decade with great success. Salesforce.com has a mini-industry built around its product and platform.
The book is an excellent blend of advice that is provided as plays (think sports playbook) with the story of Salesforce.com woven in. The writing is excellent, and you can really feel Marc’s enthusiasm and pride at how he steered the company from its inception to its present-day success.
The journey can be gleaned as you read through the various playbooks that comprise the book:
The Start-up Playbook
The Marketing Playbook
The Events Playbook
The Sales Playbook
The Technology Playbook
The Corporate Philanthropy Playbook
The Global Playbook
The Finance Playbook
Marc comes across as daring and unconventional, particularly in his marketing approach – such as staging a “protest” at a competitor event. Marc is very willing to go after the market leader, stating in Play #22: “Engage the market leader. By their defending themselves against you, they acknowledge you and begin to chip away at their own airtime.”
Marc had a vision and courage from the outset, and that was to build a hosted model that did not require customers to install and configure expensive software, which was not something everyone bought into. As he noted in Play #52, venture capitalists argued for him to build a hosted model to lure small businesses AND an in-house package that would be similar to other companies in the CRM space.
Marc and Salesforce.com said “No.” They felt that their SaaS model would never work if they hedged their bets. Marc also explicitly stated this in one of his plays – Play #13: “Be willing to take a risk – No hedging.”
I completely agree with this, and I’m sure others will as well, including Andy Grove of Intel. As I noted in my post Are you Committing Your Business Tanks?, Andy Grove has stated: “Hedging is expensive and dilutes commitment.” And without commitment, Andy says, “You will always be looking for a way out rather than a way to win.”
Marc, in Play #20 continued his daring advice, stating: “Always, always go after Goliath” – positioning yourself in the role of underdog and visionary. This is dangerous advice without considering the greater context of the Salesforce.com story.
It is NOT a great idea to take on an established competitor head-to-head; if Salesforce.com created yet-another CRM in-house enterprise product like the venture capitalists suggested, they would have been hammered by the competition. It would be been extraordinarily difficult to differentiate Salesforce.com against other established competitors.
Fortunately, Marc is big on differentiation, and he did what The Innovator's Solution: Creating and Sustaining Successful Growth by Clayton M. Christensen, Michael E. Raynor suggest: Salesforce.com disrupted the incumbent players and went where they did not want to – or could not easily – go. Salesforce.com created a fully hosted application using a subscription model that was fundamentally different than the competition's locally installed, in-house software that was purchased in full up front.
The market leaders didn’t initially believe in this model and did not want to participate in that fashion. It was only after Salesforce.com had begun to establish itself that the competition reacted, and they responded by making strides to deliver their software in the same way.
The book tended to reinforce other concepts that successful companies espouse: hire and retain great people, treat your customers well and learn from them, and adapt your company as you go. Overall, the book offers a great deal of insight about business success in general, and Marc’s flair and enthusiasm make the book both informative and entertaining.
I highly recommend the book, but don’t be fooled by the title; you won’t learn anything about cloud computing, but you will learn about and understand how the Salesforce.com cloud was formed and grown.