Behind the Cloud

  • Salesforce took a piece of clunky desktop software, and made a version that anyone could access — from their browser! — in 1995! Wait, no, that was Viaweb. But Salesforce did it in 2000, which is close.
  • Early in Salesforce’s life, in 2000, Benioff hired the B-52s to play at their launch party. I don’t know where he got the highly original idea of promoting software by writing a giant check to a famous band.
  • At one point, to emphasize something about how warlike the competitive environment was, he donned camouflage. Just like Southwest Airlines’ CEO did a couple years before. (There’s no Salesforce photo op, at least none I could find).
  • Benioff runs an ad campaign where Salesforce is represented as a jet, shooting down a biplane. In this case, he’s borrowing with explicit permission, and says so: the campaign was previously used by Oracle, where Benioff worked before founding Salesforce.

Timing the Narrative

Eternal Truths

  • Technical comments age poorly, as one would expect. Benioff notes that even when customers were complaining about frequent downtime, Salesforce’s uptime was always at least 99%. But 99% uptime means three and a half days of downtime a year, for a product people use to do business! Uptime standards keep getting higher; even for free products, ten minutes of downtime is newsworthy. Later, he says that developers like working at web-based software companies because their code can be live in three to six months. Imagine! Being stuck with whatever product decisions made sense three whole months ago.
  • California Real Estate: he complains about scarce California real estate in the early 2000s. Ah, if only you knew.
  • The mechanics of selling: one striking little detail about Salesforce’s global expansion was the fact that they didn’t need international offices as early as some of their competitors did: with an on-premise product, you need your clients to physically go to your office to see a demo, so not only do you need local offices, but they need to be in expensive parts of town. Since Salesforce is web-based, they saved money on London rents. This raises an interesting point: if the desktop-to-mobile transition is still happening in enterprise, it will reshape sales the same way: you don’t even need to sell to someone at their office, as long as one of you has a phone. Your elevator pitch can literally happen in the elevator.
  • SaaS Math: “We quickly discovered that the more salespeople we hired, the more we saw revenue increase.” Part of the reason I avoided learning about enterprise software is that I’m personally averse to sales. I really prefer business models that minimize eye contact. But what was true in 2000 is still true today: once you’ve got your product figured out, if you’re selling it to businesses for money, your main avenue for sales growth is salespeople. It seems like every successful SaaS company looks like it’s overstaffed on sales, but if that’s the instinct it must be exactly wrong: if everyone’s averaging between analysis and gut feel, and gut feel says to hire fewer salespeople, then they’re underhiring.

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I write about technology (more logos than techne) and economics. Newsletter: https://diff.substack.com/

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Byrne Hobart

Byrne Hobart

I write about technology (more logos than techne) and economics. Newsletter: https://diff.substack.com/

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