Marc Benioff’s “Behind the Cloud”: Book Review, Notes + Analysis

Poor Ash’s Almanack > Book Reviews > Business / Finance >  Entrepreneurs

Overall Rating: ★★★★★ (5/7) (solid for its category)

Per-Hour Learning Potential / Utility: ★★★★★ (5/7)

Readability: ★★★★★★★ (7/7)

Challenge Level: 1/5 (None) | 304 pages official

Blurb/Description: Salesforce founder/CEO Marc Benioff shares the origin story.

Summary: Benioff’s salesmanship differentiates this story from many other entrepreneur stories.  Concepts from this book, more than anything else, formed (whether consciously or subconsciously) the basis for much of my own marketing strategy (though admittedly toned down).

Highlights: This book takes a very different tack from most entrepreneur/business stories.  Benioff (pictured at right) takes a tone that’s lighthearted, irreverent, and focused far more on the philosophy and marketing approach of Salesforce rather than technical product minutiae or detailed descriptions of specific product developments.  

Broken up into 111 brief “plays,” the book covers various concepts that helped drive the company’s growth over time.

Lowlights: Benioff is a salesman through and through.  So, in the vein of being careful about storytelling, you do have to ask yourself if this is the truth or just the story Benioff wants to tell you about Salesforce… for example, in the book, there’s no hint of the tech-crash anxiety suggested by Michael Dell’s foreword.  Nonetheless, it is still enjoyable and valuable.

Mental Model / ART Thinking Points: sleep / rest,  marginal utilitysaliencestorytellingtrait adaptivity

You should buy a copy of Behind the Cloud if: you want a quick, easy entrepreneurship read.

Reading Tips: Part 6 (pages 135 – 168) covers corporate philanthropy and I usually skip this section because it’s neither interesting or useful to someone in my position.  I read this section the first time but have skipped it every time since – your mileage may vary.

Pairs Well With: 

The Innovator’s Dilemma” by Clayton Christensen (InD review + notes) – Salesforce is a classic “disruptor” that, in many ways, mirrors the Christensen paradigm.

Zero to One” by Peter Thiel (Z21 review + notes).  Thiel, like Benioff, is outspoken and opinionated, but more of an intellectual than a salesman.  It’s a great compare / contrast; Thiel certainly agrees with Benioff’s non-consensus view on the importance of marketing.

The Upstarts” by Brad Stone (TUS review + notes).  More great examples of disruption.

Reread Value: 2/5 (Low)

More Detailed Notes + Analysis (SPOILERS BELOW):

IMPORTANT: the below commentary DOES NOT SUBSTITUTE for READING THE BOOK.  Full stop. This commentary is NOT a comprehensive summary of the lessons of the book, or intended to be comprehensive.  It was primarily created for my own personal reference.

Much of the below will be utterly incomprehensible if you have not read the book, or if you do not have the book on hand to reference.  Even if it was comprehensive, you would be depriving yourself of the vast majority of the learning opportunity by only reading the “Cliff Notes.”  Do so at your own peril.

I provide these notes and analysis for five use cases.  First, they may help you decide which books you should put on your shelf, based on a quick review of some of the ideas discussed.  

Second, as I discuss in the memory mental model, time-delayed re-encoding strengthens memory, and notes can also serve as a “cue” to enhance recall.  However, taking notes is a time consuming process that many busy students and professionals opt out of, so hopefully these notes can serve as a starting point to which you can append your own thoughts, marginalia, insights, etc.

Third, perhaps most importantly of all, I contextualize authors’ points with points from other books that either serve to strengthen, or weaken, the arguments made.  I also point out how specific examples tie in to specific mental models, which you are encouraged to read, thereby enriching your understanding and accelerating your learning.  Combining two and three, I recommend that you read these notes while the book’s still fresh in your mind – after a few days, perhaps.

Fourth, they will hopefully serve as a “discovery mechanism” for further related reading.

Fifth and finally, they will hopefully serve as an index for you to return to at a future point in time, to identify sections of the book worth rereading to help you better address current challenges and opportunities in your life – or to reinterpret and reimagine elements of the book in a light you didn’t see previously because you weren’t familiar with all the other models or books discussed in the third use case.

Benioff begins by discussing how the idea for Salesforce came to him during a sabbatical, encouraging the reader to take time off when needed (see sleep / rest mental model, and Alex Soojung-Kim Pang’s “Rest”Rest review + notes).  The consumer web had taken off, and Benioff thought some of its benefits could apply to business software.

He approached Tom Siebel, CEO of a CRM company, impressed by how valuable the product was but seeing an opportunity to transform the expensive, burdensome on-premise delivery into a vendor-operated system which customers could subscribe to (remember that the cloud did not exist at this point).  Siebel liked the idea but only for small businesses; Benioff had bigger ambitions, so he decided to go his own way.

(In a brief digression, he provides a few interesting mindfulness suggestions from Sun Tzu’s Art of War).

In a rented one-bedroom apartment, Benioff and a few engineers built a bare-bones web-based sales force automation tool, taking the 80/20 (marginal utility) approach and focusing only on what really mattered.  Larry Ellison of Oracle provided $2MM of seed money; Benioff considered him a mentor and close friend.

As the company expanded, Benioff kept the “talkers” upstairs so the engineers could work in quiet downstairs.  Cal Newport would be happy – see Deep Work (DpWk review + notes).  Many others, ranging from Howard Schultz in Onward (O review + notes), have noted the importance of being free from distractions if you want to do high quality work, and Newport’s work explores why this is the case.  Some of the underlying science on memory  and  multitasking is available in the mental models, or Laurence Gonzales’s Deep Survival (DpSv review + notes).

Benioff left Oracle in July 1999 (he’d been working there full time).  From the beginning, he full well knew the benefits of being a publicity [word that rhymes with bore], making friends with reporters and providing them with aggressive (bordering on outlandish) promises whenever he got the chance: his logic being that favorable press coverage was more effective (and cheaper!) than purchasing advertising in the same publication.  

Salesforce also utilized various stunts (starting with an expensive party where caged actors represented the hell of enterprise software) to draw attention to the company’s mission.  Salesforce.com employees were inculcated in the company’s “end of software” mantra, and the company positioned itself as the anti-Siebel, even going so far as to protest in front of their annual user conference.  

Benioff led and instigated this; he cultivated a cult of personality, noting

“Embracing a ‘role’ establishes [CEOs] as thought leaders and gives them a certain celebrity status that begets [speaking] invitations.”  

Wonder if John Legere read this book?  Anyway, Benioff demonstrates a strong understanding of salience and  storytelling.  Benioff does note, though, the importance of your “character be[ing] heartfelt and authentic.”

 It’s also worth noting that the stunts only worked because they had the product to back it up, i.e.:

“what we do is quite simple.  We rely on the quality of the product and provide an opportunity for the product to be discussed.”  

Or, later in the book:

Salesforce.com creates a lot of noise with its guerilla marketing stunts, but the engine that really drives our company is producing a service that customers love. - Marc Benioff, founder/CEO Click To Tweet

Events, ranging from small cocktail parties to Dreamforce, continued to be a big part of Salesforce’s marketing agenda. 

This kind of stunt marketing has a surprisingly long and successful history in American business – see The Great A&P (GAP review + notes) or Made in America (WMT review + notes) for how two storied retailers launched businesses based on such behavior.  My favorite tale from those is Sam Walton talking about the carnival-like atmosphere, panty sales, and, uh, donkeys and watermelons…

The company clearly had a very strong customer focus, responding to and integrating customer feedback, and tried to turn customers into assets via word-of-mouth marketing as well as testimonials at user events and panels.  Free trials helped them get started, although they moved to more of a traditional paid trial later in their development.

At first, the company utilized telesales and web demos rather than on-site sales, which proved effective and also saved a lot of money, allowing them to reinvest into rapidly growing the sales force.  During the dot-com crash, they moved from monthly, no-contract billing to annual, prepaid billing to help their cash flow dynamics (they did keep month-to-month as an offering, but at a higher price.)

Like Jeff Bezos, Benioff makes him available to customers via email, and this drives a customer-first attitude throughout the organization (at least the way he tells it).  When the company had some downtime issues, it originally tried to hide behind “no comment,” but eventually reversed its position and decided to open a site wherein customers could view the status of the service at all times: Benioff noted that:

 “transparency and trust became a strong part of our branding and identity.”

See Brad Stone’s The Everything Store (TES review + notes) for parallels with Amazon’s development.

As the company grew, customers (particularly bigger ones) wanted more customization; providing that in-house just isn’t the basis of multitenant cloud.  This led to Salesforce releasing APIs and making itself a Platform-as-a-Service (PaaS), opening itself up to third party developers who wanted to build on top of the platform.  

As of the time of the writing, Salesforce didn’t collect fees on these apps, but did benefit from the ecosystem making their product stickier.

They also launched IdeaExchange, a customer suggestions system with crowdsourced ranking, to both surface new ideas and validate existing ones; it was rapidly adopted by Dell and Starbucks (see Howard Schultz’s Onward – O review + notes).  Salesforce also prides itself on rapid releases.

Skipping the philanthropy section: Salesforce’s international expansion seemed measured (no expensive real estate at first, translating into smaller languages and hiring local staff only once the demand is there), and they largely used a “rinse and repeat” approach adjusted to the local market, though still maintaining the global culture.

Benioff concludes the book with some interesting insights on leadership/etc.  But the real value is in the marketing/sales stuff.

 

First Read: spring 2015

Last Read: summer 2017

Number of Times Read: 3

Planning to Read Again?: maybe

 

Review Date: summer 2017

Notes Date: summer 2017