Profile: Marc Benioff
We talk exclusively to the cloud CEO about leadership in IT
Marc Benioff, Salesforce.com CEO
From a rented West Coast apartment to renting software to the world, Marc Benioff might seem to typify the sort of brash American CEO that Europe is wary of. But there is much more to him than that, argues Stuart Lauchlan, as Salesforce.com celebrates 15 years in business.
The mind of a fox in the body of a bear: as good a description as any of 6ft 5in Marc Benioff, founder and CEO of Salesforce.com. One of the pioneers of cloud computing and Software as a Service (SaaS), where organisations access pay-as-you-go applications on demand, Benioff has preached the cloud message for over 15 years as its chief evangelist.
Benioff comes from the ‘big bread and circuses’ school of leadership: those US technology CEOs who put on a show and share the conference stage with rock stars, philosophers and philanthropists. But face to face in his office in San Francisco, he’s affable and laid back, open to discussing any topic. Many of his peers see such conversations as briefings or corporate pitches, or as opportunities to unleash their stadium-sized egos.
Salesforce.com has gone from being the archetypal ‘four men in a rented apartment’ startup in Silicon Valley (the area around San Francisco, its suburbs and satellites) to become, in March 2014, a $4-billion-a-year company with more than 10,000 employees worldwide. Its customer base includes Burberry, Virgin, Toyota, and General Electric.
Two sides of the same coin
But flash back to the late 1990s and Benioff is at the end of a long stint at Oracle, the enterprise software house headed by another self-appointed titan, Larry Ellison. The two men had much in common: both were, and are, driven individuals; both had enormous sales panache; and both wanted to lead their industry in a particular direction.
This meant divergence or collision. In the end, it was the former, then the latter. Benioff realised that he didn’t want to be an Oracle lifer. On sabbatical, he rented a hut on the Big Island in Hawaii – a place second only to San Francisco as an influence on Benioff’s life. The backdrop was the rise of the internet. As he explains: “We wanted to take advantage of the new platform to deliver business applications cheaply through a website that was as easy to use as Amazon.”
Initially, he pitched his ideas to Tom Siebel, then CEO and founder of Siebel Systems – at the time, the fastest-growing software company in history. Siebel was another ex-Oracle staffer, but no fan of Ellison’s. The meeting came to nothing, so Benioff and three developers set up in a small apartment on San Francisco’s Telegraph Hill.
Barely a month later, the first iteration of what would become Salesforce.com was live. If that seems extraordinary, note that entrepreneurship is in Benioff’s blood: his late father, Russell Benioff, built a chain of clothing stores from nothing, and Benioff Jr attributes much of his own work ethic to watching his father.
His heart’s in San Francisco
Another influence was his grandfather, Marvin Lewis, a San Francisco supervisor in the 1940s and 50s credited with establishing the Bay Area Rapid Transit (BART) system that connects the city with surrounding areas. A plaque can be found outside Salesforce.com’s offices commemorating Lewis and his services to the city.
That’s fitting, as San Francisco bleeds into the Salesforce.com culture. While other technology firms set up in faceless industrial parks or build high-tech campuses as monuments to themselves, the 3,000 people at One Market Street work in the heart of a diverse, vibrant, liberal metropolis. The firm is opening further offices within walking distance in the city to accommodate its growth.
Benioff has continued the family tradition of good citizenship, not only through the employment that his firm brings to the city, but also through his philanthropic endeavours: he and his wife Lynne spearhead fundraising for San Francisco’s $1.5 billion UCSF Benioff Children’s Hospital.
But unusually, this personal philanthropy extends into the heart of the company he founded. The Salesforce.com Foundation was established the year after the company was born. It donates one per cent of the company’s resources – profit, equity and employees’ time – to support community organisations. “That was easy for us at the time because we had no employees, no profit, and no equity,” he jokes.
Philanthropy in action
As well as the company donating money and product to good causes, each of its employees sets aside at least one per cent of their time each year to do voluntary work on the company’s pay cheque. By 2013, the Foundation had clocked up 400,000 hours of community service, supplied product for free (or at a steep discount) to more than 16,000 not-for-profit organisations, and given $40 million in grants to support the likes of The Red Cross and the UN Food Programme.
“I’m not interested in just selling a bunch of software,” says Benioff. “That’s been done. I want to give something back. I want the company to have a legacy beyond software. But to do that, you need to integrate philanthropy into the culture of a company.”
His understanding of the practicalities of corporate philanthropy stems from representing Oracle at the Presidents’ Summit for America’s Future, at which the five living US presidents of the time called for a commitment to volunteering and civic engagement. Particularly inspired by General Colin Powell, who had just retired as Chairman of the Joint Chiefs of Staff and was driving a scheme called ‘America’s Promise’, Benioff set up ‘Oracle’s Promise’, a scheme to get PCs into schools in low-income areas.
Powell has since become a friend, one of many such relationships that have seen the Benioff contact book expand into one of the biggest in corporate and political America. He sat on George W Bush’s technology committee, but was also a major fundraiser for the Barack Obama re-election campaign, welcoming the President into his home and into the Salesforce.com offices. A pragmatist, then, always with an eye on the best opportunity.
Then there are the showbusiness connections – worn conspicuously, California style. Benioff has phoned up Stevie Wonder to chew the fat with him onstage to cover for a late-running Bill Clinton. Neil Young (a personal friend), Peter Gabriel, Will.i.am, Green Day, and George Lucas have all been among the many guests at Salesforce.com events.
The firm’s annual customer conference Dreamforce is part business jamboree, part San Francisco cultural festival. (Some companies sponsor tours by big-name acts; Benioff books the Foo Fighters to play the office party.)CLICK: IT conference or stadium gig?
But this is San Francisco, and so there’s a self-improvement thread at Dreamforce too, reflecting Benioff’s varied philosophical interests. He’s been described as both Jewish and ‘Buddhist-lite’, and contributions from the likes of life coach Tony Robbins and the writings of Dale Carnegie all flavour the event. So, like many Valley CEOs before him, is there more than a trace of hippiedom about him?
Benioff cites meeting Hindu teacher and humanitarian Mata Amritanandamayi as a key influence. She earned the nickname ‘the Hugging Saint’ from claims that she has embraced over 30 million people. He shares a surprising interest, perhaps, with his old boss, Larry Ellison: Zen Buddhism, of which the late Steve Jobs was also a devotee. “I’ve been in Zen monasteries meditating with Larry in Kyoto,” says Benioff. “Zen is one of the intersections between Larry and Steve.”
Mention of Jobs prompts another insight. “There have been so many important messages in my life, but one that was so important to me was an event to celebrate Yoa Nando’s Autobiography of a Yogi,” he says. “Steve used to read that once a year. When he went to India that initiation was one of the most important insights he had.
“Steve had a tremendous sixth sense for innovation. That’s an important message for any entrepreneur. One of the keys is to ‘realise yourself’; work on yourself; actualise yourself; do the necessary things. That’s a major part of who Steve was. He manifested all of that in his work.”
The Art of War
As for himself, Benioff has found that he is a man driven to succeed. He cites Oracle’s Ellison as his chief mentor in business, but perhaps not always in the way that Ellison intended. Ellison urged Benioff to read Sun Tzu’s The Art of War, in which the 2nd Century BC Chinese military strategist advises readers to “ignore the anger” and use it for good.
“We believe in ‘The Art of War’, in that we are trying to get our competitors to attack us with angry, virulent energy,” says Benioff. Following this and other Sun Tzu strategies allowed Salesforce.com – with little marketing budget in its early days – to cajole larger rivals, including Oracle, into attacking it and so help raise its profile.
In this way, the one-bedroom startup suddenly seemed important, given the size and market share of the opponents who took time out to engage with it. With few resources at his disposal, Benioff forced an industry to listen. “If the press loves it, so do I,” is one of his mantras. As a result, his company became the tail that wagged the dog of the on-premise enterprise software sector: a startup that forced a market to react to a new agenda.
Salesforce.com’s ‘No Software’ campaign was particularly brazen, because Salesforce.com is software, but the client rents rather than buys it. In one early guerrilla-marketing stunt, Benioff arranged for ‘protesters’ to picket a Siebel Systems event with actors brandishing ‘No Software’ signs. He also hired a mock TV crew from fake station ‘KNMS’ to cover the events. Siebel bosses rose to the bait and called the police, guaranteeing widespread press coverage.
You need a certain mindset to pull off stunts such as these, and not everyone has it. When Microsoft responded in kind by installing ‘protestors’ outside San Francisco’s Moscone Center on day one of a Dreamforce event – brandishing posters of an unhappy Salesforce.com customer called Bernard – the stunt backfired. The next day, Benioff spoke of his sorrow at how unhappy Bernard was, before wheeling Bernard himself onstage.
‘Bernard’, of course, was an agency model hired by Microsoft. Salesforce.com tracked him down and flew him to the Dreamforce stage, where he recanted his support for Microsoft – much to the amusement of the 16,000-strong audience.
Not a clean slate
But that’s not to say that Benioff hasn’t made mistakes. A couple of years ago, he began talking about Salesforce.com powering what he called ‘the social enterprise’, by which he meant firms who could use social media for customer management and business gain. But in Europe where social enterprises are third-sector, not-for-profit organisations, an embarrassing row loomed.
In the UK, social enterprise lobbyists threatened to picket Dreamforce after Benioff tried to trademark the term ‘social enterprise’ – a massive own goal for a community-minded philanthropist. To his credit, Benioff ordered a global climbdown, and learned that US-style grandstanding often translates badly into overseas territories, especially the more cynical UK and Europe.
Now his firm is entering a new phase. The growing enterprise legitimacy of cloud technologies has led to a detente, of sorts, with Oracle, after years of tension caused by Benioff’s jibes that his old firm’s business model was out of date. Although Larry Ellison had himself been an early investor in Salesforce.com, Oracle’s business is built on selling software (and recently, hardware), while Salesforce.com’s is built on not selling it: the two were always going to collide.
The crunch came in 2011 when, at just 24 hours’ notice, Oracle bumped Benioff from a reported $1 million paid-for speaking slot at its annual OpenWorld conference, apparently because Ellison was angered by tweets that Benioff had posted about one of his speeches. But Benioff remembered his Art of War, stayed calm, and set up court in a nearby hotel, inviting the media to hear his side of the story.
Again he grabbed the headlines – this time from inside his opponent’s camp. The next day, Ellison laid into Salesforce.com as never before, dismissing it as a “roach motel” that you could check into but never leave – a good Californian curse. Benioff’s riposte was that he was only doing what Ellison had taught him to do.
Peace breaks out
But in 2012, Ellison changed tack about cloud computing, a technology set he had long dismissed as hype and vapourware. He had, in Silicon Valley soap opera terms, a ‘Bobby Ewing in the shower’ moment, rewriting an entire storyline as if it were a dream and rebranding the new sector in his company’s own image (‘Oracle Cloud’).
Then in 2013, peace broke out as Ellison and Benioff signed a strategic partnership between their two companies and hosted one of the most unlikely joint press conferences in Silicon Valley history, in which they practically fell over themselves to play nicely with each other.
But the tie-up with Oracle leaves many questions lingering as the dust settles on what – in public, at least – was one of the industry’s great slanging matches. If you’ve whipped up a revolution, as Benioff had, by turning the masses against the old order, then reconciliation is bound to leave some supporters feeling confused and angry. But the move reflects the pragmatism of both men and demonstrates, once again, that they are two sides of the same coin.
It may also, some believe, eventually herald the return of the prodigal son to Oracle. Ellison has spoken about retirement in a few years and he must be thinking about a succession plan. But for now, Benioff says his objective is to grow Salesforce.com to the next level: namely a $5-billion-a-year technology giant.
But much has changed in the technology sector over the past 15 years as cloud platforms, app stores and social media networks have become the norm. Benioff takes great interest in the new generation of younger business leaders, citing the likes of Yahoo! CEO Marissa Mayer and Box CEO Aaron Levie as examples. “There are a ton of them out there, there are dozens of them,” he enthuses. “That’s exciting. We are in the most magical and exciting time in the history of our industry. There are lot of kids out there who are free to invent.”CLICK: Benioff chats to Marissa Mayer of Yahoo
Benioff backs promising startups with his own money, but says, “I don’t have time to meet entrepreneurs, I don’t have time to do due diligence, so it’s more haphazard and random than I’d like it to be. But I will back things because I like the person. I sometimes don’t invest because I don’t like the person. I’ve lost a lot of money by not investing in something because I don’t like the person!”
But it’s fitting that as someone who has always acknowledged his own mentors, Benioff is now cast in that role for a new generation. His advice is simple. “I say to them, ‘You can go and do this. I’m not special. Go and create your own companies,’” he says.
“I want to write a book on how to go from being a $1 billion to a $5 billion company. The principal learning is to not be afraid to keep pushing the reset button on the business, the people, and the innovation. Don’t be afraid to keep trying new things. We’ve done a lot of acquisitions. Some of them have worked, some of them haven’t. But who cares? The important thing is we’ve learned a lot.” TS
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