Entrepreneurial Advice from SaaS Pioneer and Salesforce CEO Marc Benioff

Marc Benioff is a classic entrepreneur success story. He didn’t like the way something worked and wanted something better. So, he took the initiative and created Salesforce in a rented apartment at the age of 34, after working at Oracle and Apple.

Today, Salesforce is worth about $25 billion with annual revenue in excess of $3 billion. And according to Forbes, Benioff (pronounced benny-off) was the most valuable CEO in 2011, giving shareholders the best bang for the buck.

Not surprisingly, Benioff gets lots of questions from entrepreneurs and others seeking his advice. In response, he wrote a book in which he gives his entrepreneurial advice. This blog post is not intended to be a substitute or replacement for the book.

Through some interviews, Benioff has given advice to entrepreneurs. I’ve curated these and include them below. Read on whether you’re an entrepreneur in SaaS or any other business.

marc benioff

Work on Something Big and Meaningful

“My summers at Apple had taught me that the secret to encouraging creativity and producing the best possible product was to keep people fulfilled and happy. I wanted the people who built salesforce.com to be inspired and to feel valued.”

-Marc Benioff

Benioff has been quoted frequently saying that the cloud means it’s “the end of software.” This would have seemed pretty far-fetched back in 1999 when Salesforce was started, but today it has become more of a reality.

When launched, Salesforce was entering a big market, and it threatened traditional business models. Instead of paying an annual fee for hard software, customers would subscribe to software and pay monthly. Salesforce was aiming to be something big and make a meaningful change in an industry.

If you’re going to put a lot of work into a new venture, you might as well make it big and meaningful.

Establish Culture Early

In the early days of Salesforce, Benioff set up the culture to be “doing what you enjoy.” So, if you have a dog, bring it to the office. If you want to wear a Hawaiian shirt, wear it.

Today, Salesforce ranks as one of the best places to work and has a 3.8 rating on Glassdoor.

Similarly, Zappos offers newly trained employees a check if they don’t want to work for Zappos. This weeds out people who are looking for only a check and don’t want to be involved in the company culture.

All great company cultures were set by the founders at the origin of the company. The key is not only setting the culture, but also maintaining it throughout the life of the company. Founders must set cultures from the beginning.

Ignore Obsolete Rules

Entrepreneurs aren’t exactly rule followers. Many are unconventional and make their own rules. It’s inherent in them to ignore convention and question why things are the way they are.

So, it should come as no surprise that Benioff recommends entrepreneurs ignore rules (and conventional thinking) that are obsolete or that defy common sense. He says:

“Don’t be afraid to ignore rules of your industry that have become obsolete or that defy common sense.”

Sometimes the best advice is to ignore the long-held principles of your industry. It cuts out the “business as usual” mindset and can lead to some real innovations.

Benioff, much like his former employer, Apple, encourages entrepreneurs to think differently.

Communication is Key and Business is Social

In an interview with The Ladders, Benioff shares his communication strategy with these principles:

  • Be responsive – According to Benioff, responding to customers quickly shows you care about them and respect their time.
  • Embrace social media- Benioff is an active user of Facebook and Twitter. Also, the team at Salesforce is an active participant on Twitter:

salesforce twitter

Benioff says,

“The future of communicating with customers rests in engaging with them through every possible channel: phone, e-mail, chat, Web, and social networks. Customers are discussing a company’s products and brand in real time. Companies need to join the conversation.”

  • Tell classic stories – When Salesforce was starting out, Benioff took the story of David v Goliath and used it as an analogy for changing an industry. He says they positioned themselves as revolutionaries and went after a big competitor in a big industry.
  • Act confidently – Who would want to work for a CEO who has no confidence in him or herself?
  • Become a better presenter – Employees represent the brand. Benioff says it’s important to be a good presenter and have a good attitude because every employee interacts with the customer one way or another.
  • Have a big dream – SaaS and cloud-based software was a new technology when Salesforce was founded. Benioff firmly believed in it, and, to this day, believes that, at some point, all software will be delivered in the cloud. He started small with servers in his bedroom closet but had a dream of making cloud-based software the future. Today, it’s well on its way, and Salesforce owes all of its success to the SaaS model.

Benioff gives companies three steps for becoming a social enterprise. They are as follows:

  1. Connect to the public social networks – People are talking about your business on Twitter. As an entrepreneur, you have to pay attention to what the customer is doing. Don’t let people talk about you on Twitter without responding.
  2. Create your own private social network.
  3. Make all your enterprise apps social.

For more information on Benioff’s view as “Business is Social,” watch his fiery keynote at Dreamforce 2012.

Stay Focused

Do not allow yourself to get defocused. Benioff says:

“[Do not] allow yourself to get disfocused…. I’ve been doing this now 13 years and I’m still as focused and as excited and as energized as the first day that I did it. And I think that for a lot of entrepreneurs, and certainly a lot of my friends who are entrepreneurs, they get disfocused….

“And I think that it’s classic and, I think, reasonable that an entrepreneur coming in is very creative and very project oriented. But, also, an entrepreneur can kind of have almost an ADD type of thing – Attention Deficit Disorder….

“And that’s classic, but the thing is you have to build the tools to help you refocus yourself and to channel that energy. If you don’t, then, I think, you end up becoming a serial entrepreneur; and I think that’s fine, but, I think, it’s much more exciting to build a sustainable company that can become a leader in the industry.

“I have a couple friends of mine who have had companies and just as they get going and just as they are ready to break through, they become disenchanted, disfocused, they sell them, they bring someone else in: ‘Oh, I’m done.’

“And I’m like ‘What are you doing?’ And I will take them out to lunch, and I will call them on the phone…. I have seen over and over again that these entrepreneurs, they…I think, get distracted. And I think that is a problem for the entrepreneurial personality. So I think you’ve got to figure out how to be able to refocus yourself.”

When asked what helps him stay focused, Benioff says:

“One of the things that we do is we have… (I write about this in the book.) We have an internal tool that I use and a communications cadence to help me to stay focused because I can be the kind of person who does need the help – I need help staying focused.

“That tool is called a V2MOM and there [are] five questions that I’m constantly asking of myself. And I do that basically every six months for the company. I ask the employees to do it once a year, to publish it, to make it transparent for all the other employees, and to take those five questions and to constantly rethink about ‘Where are you positionally?’ And it’s:

“‘What do you want?’ Vision; you know, write it down in 10 or 15 words. When I meet with entrepreneurs I’ll say to them ‘What do you want?’ That will be my opening question to them. And I want to see them write down (or show me) in 15 words what it is that they exactly want. What is their vision, what is their outcome? And then I will say to them:

“’What is most important to you about that vision?’ So what are the values or the tenets about that? What are the two or three things? Is it growth? Is it quality? Is it excellence? What is it? Write those things down and prioritize them. And number three is:

“‘How are you going to get it? What are the specific actions that you are going to specifically take, in priority?’ Write them down. And obstacles:

“‘What is preventing you from having that vision right now? What is preventing you from achieving that outcome right now?’ Write it down.

“And then, ‘How will you know you’re successful?’ Write it down. What are the measurements of success? And then get ready to recreate that on a continual basis.

“For me that’s a focusing exercise. And then I will present that back to my management team. I will present that back to the company on an annual basis, I will show them what the answers are, where I’m going, what I want to do, and I will ask them to do that back, and it’s a collaborative exercise.

“I don’t think we get enough of that. I think if you’re an entrepreneur, you have to over-communicate. I think you need to over-share those things….

“For our Foundation, they have a V2MOM as well, because if you don’t have those guiding principles, and when you’re growing… You know, we have 6,000 employees. I don’t know all these people. So I need to over-communicate and over-share and to set that forward so we can somehow get what I call alignment: That we can get all our wood behind the same arrow to get that entrepreneurial momentum.

“That, I think, is a huge challenge. And, also, it builds a lot more trust in the organization. If your employees can really see that this is what you’re doing. Of course, you’ve got to walk your talk. If you’re going to write it down and say you’re going to do it, you better do it. Or your employees are going to walk out and say ‘I’m going to find somebody to follow who is actually going to get this done.’ That transparency builds trust, I think, and that collaboration builds trust.

“These are kind of modern values that we need in the entrepreneurial organizations…the transparency, alignment, collaboration, trust….

“On chatter, which I spend a lot of time on, I’ll see these tremendous individual contributors who are in the organization, who are adding value and coming up in the organization. HUGE focus on the individual contributor, giving them the props so that they can be more successful! This is also really, really important.

“And at the end of the day, it’s still a huge focus on the customer. If the customer success is not your number one value, you have to reevaluate and relook again.

“You know…I have these entrepreneurs who somehow end up in my world, and I work with them, and I work to facilitate this V2MOM with them. And it’s tough for them. And we’ll go through the exercise, and then I’ll send them away, and they’ll come back.

“We’ll start out with them (and maybe two members of their management team), and they’re all over the map. And we bring them together and they’re going, and then I send them away, and they come back, and they present it to me.

“And then, maybe two or three weeks later, they’ll write something: ‘Oh we’re working on x, y, and z.’ I’ll say ‘How does this relate to your V2MOM?’ And they’ll be like ‘Well it doesn’t,’ and I’m like ‘All right, maybe it should be brought in then, or maybe it shouldn’t.’ Because I think this issue of disfocus, this can be a big issue.”

Don’t Forget about Helping Other People

“This is my number one recommendation to entrepreneurs…don’t forget about helping other people because it’s so easy.”

-Marc Benioff

Salesforce is a philanthropic company. Benioff says it’s ingrained in their culture, from the CEO on down. Benioff himself donated $100 million to help build a new children’s hospital in San Francisco.

Salesforce employees get 4 hours per month, or 6 days a year, of paid time for volunteerism. This is in addition to their regular vacation time.

Additionally, they employ a 1/1/1 model as part of the Salesforce Foundation. The 1/1/1 philanthropic model is “We take…

  • 1% of equity,
  • 1% of profit, and
  • 1% of employee time.

“And we put them into the 501(c)3 Salesforce Foundation.” Today the stats break down like this:

  • 18,000 non-profits, NGOs, social entrepreneurs, and higher ed use Salesforce for free.
  • Over $40 million has been donated.
  • 445,000 hours of community service have been contributed.

Benioff says,

“We don’t charge people who are trying to change the world.”

While giving money away won’t fit all companies, it still is beneficial to help other people. You’ll feel good about it, and it will reflect well on you. It’s also good for your health.

Marc Benioff Tidbits

On the early days of Salesforce and focusing:

“Our focus was directed at developing the best possible and easiest to use product, and this is where we invested our time. Realize that you won’t be able to bring the same focus to everything in the beginning. There won’t be enough people or enough hours in the day. So, focus on the 20 percent that makes 80 percent of the difference.”

Focus on alignment, on getting people on the same page. “You can have growth and you can have all these things, but if you don’t have alignment, I think it can be a real struggle, I think, for the employees,” says Benioff.

If you’d like more entrepreneurial tips from a SaaS pioneer, read his book. You can find some excerpts here.

Any feedback? Let me hear it in the comments!

About the Author: Zach Bulygo is a blogger for KISSmetrics, you can find him on Twitter here. You can also follow him on Google+.

  1. Great points discussed in this blog, I will definitely share your post!

  2. Excellent quotes and excellent quote by Hiten shah. Culture is some thing which you have to develop your self. :)
    Thanks

  3. Benioff is really a good example of not being afraid to do something huge and thoughtless. As we see the results are unbelievable. But still I personally am afraid to give up my job and create a new company. But the conclusion to have an idea and then move forward makes me think of this idea.

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