Marc Benioff’s Definitive Startup Guide for Becoming Successful Companies and Entrepreneurs

Marc Benioff’s Definitive Startup Guide for Becoming Successful Companies and Entrepreneurs

Marc Benioff started Salesforce in 1999 at the height of the internet bubble. He had been working at Larry Ellison’s company for 13 years and figured he wanted to start something of his own. He was one of the highest paid Oracle employees at the time. However, even with the financial comfort, he felt that his idea had reached the perfect time to kick off.

He quit Oracle and established Salesforce, a company that at the time was focused on re-inventing the world of enterprise software by making cloud computing a major component of this market. Later, in 2000 the dot-com bust happened, and all tech companies were losing money faster than they could control the fall. Startups like Benioff’s were on the brink of death.

It was so bad that no venture capitalist wanted to touch Salesforce at the time. No investor was giving any positive news. Benioff recalls in a story published by Business Insider how one of those venture capitalists shouted at Benioff’s wife who was pushing a stroller up the streets of San Francisco saying, “Salesforce is never going to make it!”

When he launched Salesforce, Larry Ellison was a close friend and his employer. He was allowed to work at Oracle for a while before his company took off. Larry was one of the first seed investors into Salesforce, however, despite their friendship to-date, they fell off after Benioff realized that Ellison had launched a CRM company in secret that was competing with Salesforce. In the years that followed, Benioff quit Oracle and later forced Larry Ellison to quit the Salesforce board.

Salesforce got its first venture capital after so many pitch decks, meetings, and presentations. The man who first gave Salesforce a chance with his money was Pat McGovern. After the founder of Salesforce and his co-founder Parker Harris spending their money paying bills and struggling through the early days, McGovern gave Benioff a hearing once before boarding a plane. McGovern is the founder of International Data Group which publishes magazines like ComputerWorld, PCWorld, and Network World. He had been investing a lot abroad in companies based mostly in China.

Once Marc Benioff had pitched his “next level of software” company to McGovern, he got an investment on the spot. Later on, he would raise $62 million from McGovern and other private investors.

“It took us about $55 million before we went cash flow positive,” Benioff said.

Suffice to say that the rest is history. And that history is good. Salesforce is a company with a market cap of $114 billion as of 3rd September 2018. In 2017, it made $10 billion in sales. The stocks at Wall Street are healthy as they have never been before; Salesforce is arguably the biggest CRM company in the world.

When Marc Benioff started his company, his goal was simple: to build an affordable online customer relationship management (CRM) software as a service. He was one of the earliest adopters of Software-as-a-service now commonly known in the startup world as Saas.

About two decades later, his goal as an entrepreneur has been achieved. He needed salespeople to track leads and manage clients more efficiently. Precisely, he wanted CRM to be easy to get as it was easy to get a book from Amazon at that time. In all ways, himself and Parker Harris, his co-founder, have achieved this with a solution that now employs over 30,000 people and is loved by millions of customers. In San Francisco, it employs more people than any other tech company; over 5,000 of them.

What’s Benioff’s Most Important Value?

Without values, it is not possible for companies to succeed. It is even worse for startups. Big companies might discover that they just messed up in one or another, and pour money out to PR agencies to try and fix the situation.

Marc Benioff has said a number of times that nothing beats trust. The more customers trust you, the more they will pay you. The more they trust you, the more people they will tell about your business. The more they trust you, the stronger relationships you will build.

In the wake of Facebook’s user data violation in the Cambridge Analytica scandals and fake news ravaging the platform, Benioff spoke out. In the wake of Uber’s issues that led to Uber former CEO Travis Kalanick stepping down, Benioff was heard again. For both companies, he emphasized that the biggest value they had broken was trust with their users. As far as he was concerned, both companies are facing trust-based issues where the users do not trust how their data was used or how operations and employees were managed.

“There is nothing more important than the trust you have with your customers, with your employees, with your partners and all your key stakeholders.” ~ Marc Benioff

For startups and CEOs his advice to retain trust as your highest value. In an interview with CNBC, Benioff said:

“In today’s world, you have to have trust as your highest value. When you lose trust with your customers, like we saw with Facebook, you’ve got to really work hard to build it back. And in that case, you have a crisis of trust. We saw that last year here in San Francisco with Uber as well. These are companies that go through an incredible crisis because they have to reboot their values.”

What Guided Benioff in His Early Days?

For someone who faced so many obstacles, Benioff must have had guiding principles or some motivation and drive that led him not to quit. One of Benioff’s earliest employees, Tien Tzuo, has written about his experience as Salesforce’s 11th employee and first chief marketing officer (CMO) in an article published by Forbes. It all shows one thing, drive and passion could never have been enough. So what was?

1) Pitching a Product is More about Listening

Tien once attended a meeting with Benioff where they would pitch a client on joining Salesforce. It was a Salesforce meeting that turned into a sales call, then into a listening call.

Instead of waiting for the client to say what problems they were facing then pitching them product features, Benioff started asking the client questions like what do you think of the name “Salesforce.com”?  What do you think of the tabs as a navigation tool? What do you think of the Salesforce colors?

The clients then replied with feedback. As the sales call went on, the CMO realized that Marc’s strategy was to always test his vision, strategy, and ideas. He used this opportunity of speaking to possible clients to help him get an understanding of not only what the client was looking for but also what the client thought of the product design and efficiency. Listening was his way of pitching the product, and it worked so many times.

2) Do Not Be Afraid of Big Ideas

When Salesforce first started, it was not just a big idea but it looked impossible. Those days, companies were spending weeks, months, and sometimes years installing heavy software to use as CRM solutions. Coupled with the millions of dollars they were spending on a product that was not really worth it, Benioff thought the impossible possible.

To cut down on costs and drastically reduce the learning curve while clearing away installation specs and procedures, Salesforce was going to be a solution based online, in the cloud, and all you needed to do to use it was a $50 monthly subscription, internet, an email address and a password.

In 2003, Benioff called Tien and asked him to prepare a different kind of software release event. Marc was tired of boring release conferences. He wanted something new to rejuvenate the upcoming software release. His idea was to name the release “S3” and release it in a movie theatre during the premiere of Terminator 3. While this got the then CMO by surprise, he obliged and bought all the movie tickets at once. However, before that Tien would need to raise $250k through partner sponsorships

He did raise the money after convincing the sponsors that Salesforce was up-to some good. The software release was a huge success. It taught Tien how to push beyond the comfort zone and go for more. Not to be afraid of new ideas you might have, despite how big they might seem.

3) Always Remember Your First Principles

When Tien and his team came up with new ideas, a new way of doing things and a whole new strategy, they would be so excited to present these to Benioff only for him to toss them off. And he would incessantly start to remind them of what Salesforce wants to become, and why their ideas were going to take Salesforce away from the direction it is intended to go. Those were the fundamental ideas under which Marc started his company.

Some of the questions that he asked them and indeed had asked himself years earlier while launching the company were “How does the Internet change software delivery?” or “What if CRM was as simple and intuitive as buying a book on Amazon?” It was these questions that he would remind his team of so that they do not waiver from the goal and vision of the company.

Tien learned from Marc Benioff that it takes a lot of discipline to repeat the same message day after day, month after month, year after year. Marc would deliver the same fundamental first principles of Salesforce in a thousand different ways to ensure it doesn’t become recitation. It was about staying on course.

4) Do not Be Afraid to Tear Up the Master Plan

When you start a business or a role within a company, you always have a plan. You want to do this and that. After a month or a year when it doesn’t work do you keep doing the same thing or do you start over?

Over the years, Marc Benioff has rewritten a new master plan for Salesforce. In the 9 years that Tien worked at Salesforce, he rebuilt his team with new spirit and new plans every so often when the initial plan never seemed to work.

This is somewhat the way to do things in the 21st century. When Apple realized that the populace preferred bigger phones, despite their initial stands on the phone sizes, they changed and made bigger phones. Amazon began as a bookstore online, today it is that and more. Salesforce is definitely no longer just a CRM company. It has expanded into more verticals in their quest to make enterprise software easily available online. Microsoft used to focus all their energies on selling more Windows licenses and Microsoft Office suites, today, the company is moving full speed into the cloud market and making this a major component of their business.

Sometimes the best-laid plans do not work out in reality as you had planned them. Even as you stick w to the company’s founding principles, always seek to question whether your plan is working. If it is not, change it. When your role at the company doesn’t seem to be working, redefine it by employing new strategies. Always be ready to tear up that well-laid plan and start over.

5) Dream Big

Salesforce has come a long way. The company started off in humble places. After a couple of months, Marc Benioff had the company move into an 8,000 square-foot office. There were only 10 employees, and this was in 1999. His co-founder, who to his credit has run the engineering division since the company began, at the time was astounded that Benioff would lease such a huge space for only 10 people.

However, Benioff had chosen to see things the way he wanted them to be.  Not the way they were.

“We’ll be out of here before you know it,” he had said to Parker Harris. True to his words, one year later despite the tech burst they ran out of space and moved to a bigger space.

6) Think About the Future

Despite their disagreements with Larry Ellison and eventual fall out in terms of business, Benioff has indicated in his book “Behind the Cloud” that they are still close friends and Larry is his mentor. One peculiar thing about Larry Ellison was how much he would talk about the future. People joked that he had his tenses confused and was not living in the present.

Nonetheless, Marc Benioff learned so much from this part of Larry. Leaders were not privileged to think about now but tomorrow. Leaders have to see things in the present even when they are yet to happen.

Benioff writes in his book:

“A successful leader is one who is always thinking about the future, not just the present.”

7) Every Employee is a Marketer

When Salesforce was starting off, one thing that Benioff and Harris did was to make sure that every employee plays a key role in marketing the company. There were several training sessions every year even as the company expanded to hundreds of employees. They wanted to train their employees on messaging.

Benioff was very keen on the message that employees put out about the business. So the company made a two-sided laminated card that stated in one sentence what the company did.

“It also provided information about the benefits of our service, our newest customers and partners, and our most recent awards. With this card, we leveraged everyone—from developers to engineers to quality assurance people—as integral parts of our marketing organization,” he writes in his book.

If the company had just distributed the card, it would have been pointless. So they offered training for every member of the team to ensure they were clear on what message should be delivered to the world about Salesforce. Benioff wanted the marketing to be first class, and the marketing pitches to be out of this world. The training was effective and brought into perspective the message on the cards.

Startups today can leverage the existence of tools and services like Pressfarm to handle their public relations efforts which include marketing pitches, the cold emails to journalists, the creation of target media lists and story angles, and long-term PR strategies. The messaging has to be horned again and again in consideration of modern PR trends. It is easier if there are professionals with experience in this taking you through it.

As the company grows, everyone on the team becomes an ambassador. Looking at the employee (a.k.a brand ambassadors) numbers of Salesforce even in their earlier years, it is a no wonder they are such a force in cloud computing.

Marc Benioff on Startup Investment

For the last decade, Marc Benioff and Salesforce Ventures have made a very good name for themselves when it comes to investing in startups in Silicon Valley. In fact, they have put money into about 20 startups and counting. Marc is definitely becoming a big name in the venture investing world, and startups are clamoring for his money and name on their boards.

It is not easy to get him to invest in your company. Startups in Silicon Valley are eyeing for the unicorn status. This is in every root what Benioff doesn’t like. Speaking to Business Insider about 3 years ago, he said he would never invest in companies that want to be seen as unicorns and billion dollar companies before the market has validated them.

How do you validate your billion-dollar status as a startup? Yes, you get an IPO and let the market see your value. He advises startups to shun away from companies and investors chasing unicorn statuses. He has demonstrated this concept using a startup known as Fitbit, for which he was an early investor before it launched its IPO later on.

“There is no reason why these companies who claim to be worth billions of dollars and making billions of dollars to stay private. They need to get out on the market, run their companies with the right level of governance, and let the market rationalize these valuations.” ~ Marc Benioff

Through Salesforce Ventures, Benioff has invested in Dropbox, Evernote, and DocuSign long before they were billion dollar companies. He insists that valuations should be factual and realistic. And that there is no problem with not being a unicorn.

Startup founders and investors have argued that staying private allows you to run your business in the direction you would like it to go without focusing on making more money for shareholders. However, Benioff disagrees. He has not had a problem making money for shareholders. Making money should go hand in hand with the direction of a profitable company.

“Being a public company is good. It forces us to make sure we keep the cadence…we have to keep our eye on the ball. The unicorn mania that’s going on, that’s dangerous for our Silicon Valley economy.” ~ Marc Benioff


At 23 years old, Benioff won the Rookie of the Year Award at Oracle. When he was 26 years old, he was being paid $300,000 a year as a star executive at Oracle. At the time, he was just an aspiring entrepreneur. However, today he is a golden star in marketing. His conferences are attended to by the Who’s and Who’s of Silicon Valley. His startups are well funded, and in tandem with what he believes in as an entrepreneur. Startups in 2018 can learn a lot as they aspire for growth to become the next big companies of the future.

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