Review: Behind the Cloud by Marc Benioff and Carlye Adler

This book is efectively a bullet point list of “plays” to build a successful company, based on what Marc Benioff did at Salesforce. Initially, I disliked the book (more on that below), but as I read on, I found quite a few good ideas, such as:

• Salesforce’s “no software” campaign was brilliant. In an era where buying software meant spending months and millions of dollars to set it up, Salesforce shows up with a Software as a Service (SaaS) model, where you can access the product instantly via the Internet and all it costs you is $50/user/month. It seems like an obvious idea now, but at the time, it was something new, and I love how that’s all captured in a simple, 2-word slogan: “no software.”

• Salesforce was one of the first companies to provide an online forum where customers could provide feedback and a platform/marketplace where developers could build their own products on top of Salesforce’s APIs. Again, both of these ideas seem “obvious” now, but not so much 10-15 years ago.

• Some of the marketing techniques they used were very clever. For example, finding a competitor’s conference, setting up fake protests around them, and paying to show Salesforce ads in all the taxis in that city. They also did a remarkably good job of establishing a rapport with reporters and “leaking” important news to them proactively.

• The ideas around charity and philanthropy are fantastic. They use a “1-1-1 model”, where 1% of the company’s equity goes into a charity foundation (so as the company becomes more successful, so does the foundation), employees are encouraged to spend 1% of their time (4 hour per month) on philanthropic efforts, and 1% of product efforts go towards philanthropic endevours (e.g., discounts for nonprofits and features for charities, such as a way to accept donations online). Another “1” you could add to the list is to dedicate 1% of profits to charities. This sort of thing is a win all around. First, it’s the right thing to do: if you were able to build a successful company, you should give something back. Second, it’s great branding: I have a far higher opinion of Salesforce now as a company. Third, it’s great for hiring: it makes the company more attractive and, perhaps most importantly, it attracts—and helps retain—the right type of people. I’m considering implementing this same system at my own company.

• There’s a great discussion of how to reward employees, not just with bonuses, but with things that will have a much bigger impact on their lives, such as fully-paid vacations to Maui for the employee and their family. This sort of vacation and a bonus may cost the company roughly the same, but whereas the latter will barely be noticed as it quietly gets direct deposited into the employee’s account, the former will create memories the employee—and their family—will cherish their whole lives.

• The model they use for planning seems simple and effective. It’s called “V2MOM”, which stands for: Vision (what do you want), Values (what’s important about it), Methods (how do you get it), Obstacles (what might get in the way), and Measures (how will you know when you have it). I can see a lot of value to writing up a V2MOM one-pager once per year or per quarter, as a quick way to get clarity around the company’s goals.

So, there’s a lot of goodness in this book. Unfortunately, it’s also surrounded by a lot of crap. Some of the “plays” are little more than platitudes: “build the software the right way out of the gate.” The writing is stodgy and lacks personality (being a list of somewhat disconnected bullet points doesn’t help). And perhaps most problematic at all is that many of the plays won’t apply to most founders, because let’s face it, we don’t all have the advantages that Marc Benioff did when he started Salesforce.

Benioff was a former Oracle exec who was able to seed the company with $6M of his own money, had easy access to loads more money (his personal friends, including Oracle founder Larry Ellison, invested millions), talent (he openly admits to agreeing with Ellison to hire no more than 3 Oracle employees—isn’t that collusion?), PR (including personal connections to the Wall Street Journal, Fortune, Forbes, famous ad agencies, etc), and a network of potential customers. So if you have all that, you too can build a company like Salesforce!

In short, the book is worth a quick skim to learn about the great work Salesforce did with marketing and philanthropy, but be prepared to roll your eyes from time to time.

Quotes

“The most effective selling is done not by a sales team but by people you don’t even know who are talking about your products without your being aware of it”

“A market doesn’t exist until there is a competitor, and ideally two or three competitors. Competition is good. In the case of Siebel-UpShot, it was very good. The announcement of its on-demand play almost doubled our business virtually overnight because it validated our model. Don’t fear competition: welcome it and leverage it.”

“Conventional wisdom says that most salespeople are “coin operated,” so most companies use monetary incentives to motivate top salespeople. This is essential but insufficient, as material things are not really what brings anyone true happiness. When asked about their best year, salespeople rarely point to the year in which their W-2 was the highest; they point to a year in which they were challenged and recognized, and had fun. That’s why we reward any salesperson who makes 100 percent of his or her quota (and a partner or friend) with a fantastic experience—a three-day trip to Maui. Typically, 60 to 65 percent of our account executives qualify for this trip. Most companies reward only the top 10 to 20 percent of their sales reps, but that strategy doesn’t yield a very high return. Morale for the top people is sky high, but it is brutally low for the 80 to 90 percent of people who are not recognized. By setting the bar within reach, we’ve found that morale soars all year—and people still strive to exceed expectations.”

“It’s important to reward people because it’s the right thing to do, but the benefits come back to the company. Involving spouses or partners produces great results! Keeping them happy keeps the employees happy. Free tickets to a ball game only go so far with an employee (or a client). If you really want to make a difference, give something meaningful to an employee’s significant other or child. Things that have some emotional value attached to them are what encourage people the most.”

“Benchmark for Employee Success: We use this checklist to measure our success as leaders and managers. We strive to create opportunities so that all our employees are able to check off the following:

I am doing the best work of my professional career.
I have the opportunity to do what I do best every day at work.
In the past six months, I have talked with someone about my progress.
There is someone at work who encourages my development.
I have opportunities to learn and grow at work.
My opinions are sought after and seem to count.
My supervisor, or someone at work, seems to care about me as a person.
I have a support network at work.
My coworkers are committed to doing quality work.
I am recognized and rewarded for my contributions.”

Rating: 4 stars