The Dull Shall Inherit the Earth: The Story of Salesforce

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S1: Nicole Sonot is a journalist who attended an event called Dreamforce in San Francisco a couple of years back.

S2: It’s kind of like

S3: a music festival, but for customer relationship management nerds.

S1: Dreamforce is an annual 200000 person conference for users of a product called Salesforce, a piece of software that helps companies organize their sales data.

S3: You have thousands of people walking by with their like Salesforce backpacks and their Salesforce shirts and their Salesforce hats and their lanyards.

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S1: The most recent Dreamforce was held virtually because of covid, but in past years it’s been a real Reija

S4: Hey Dreamforce 20 20. You are part of the Metallica family. This for you.

S1: Dreamforce also includes some other slightly incongruous elements.

S3: There’s this Monck station where you can go hang out with these monks and they’ll give you advice or you just meditate there. The monks are in this special monks, so.

S5: This safe island that we all can take refuge is not in New York City, not in San Francisco, but in yourself, and we all can come back to that safe place to take refuge with my inbred

S1: hundreds of thousands of attendees, heavy metal bands, monks all coming together to pay tribute to Salesforce. But what is Salesforce? Even after he’d attended the conference, Nikil wasn’t totally sure.

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S3: I just became overwhelmed by the kind of jargon that was just constantly being thrown at me. And I couldn’t really understand and I couldn’t really get people to explain it to me. And like non jargon terms,

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S1: this is in fact a big part of the appeal of Dreamforce for its attendees. It’s a gathering where you can revel in this thing that’s totally bewildering to everyone else.

S3: They all have this sort of vision for what Salesforce is and can be. And they have this sort of shared idea that it’s like the coolest thing in the world. But nobody they talk to, like, understands why that’s the case. And so they all get together and they just sort of have this, like, grand moment of collective, you know, celebration of this thing.

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S1: Salesforce is B2B software. It’s for companies, not consumers. It’s software for customer relationship management. And if you’re like me, your eyes sort of glaze over when you hear the phrase customer relationship management. But Salesforce is absolutely massive. It’s a crucial part of the infrastructure of American business. It likely touches your life in all sorts of ways. You don’t even realize it’s also getting bigger, making tons of acquisitions. Salesforce recently spent almost twenty eight billion dollars to buy Slack. The workplace chat app at the helm of Salesforce is a man named Marc Benioff. He owns Time magazine. He’s been throwing his weight around politically for a while now, going to Davos, supporting various liberal causes. Some think he might eventually run for mayor of San Francisco, but he still strangely under the radar in some ways. A lot of people who’ve heard of Mark Zuckerberg or Jeff Bezos have never heard of Marc Benioff. So what’s the story behind this big, boring company that might not be so boring? What do you need to know about the software service that wants to swallow the whole business world? I’m Seth Stevenson. Welcome to Thrilling Tales of Modern Capitalism. Today on the show, The Dull Shall Inherit the Earth, The Story of Salesforce. In the 1980s and 90s, Marc Benioff was an up and coming executive at Oracle, the database software company run by Larry Ellison Benioff had started at Oracle when he was just 22 years old and he’d become Ellison’s protege. But Benioff long to do his own thing while on a vacation in Hawaii, he figured out what that thing would be. Here’s Nickelson out again.

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S3: He claims in his book that he discovered the idea for this while swimming in the sea with dolphins, and that was like the moment of inspiration he had to, like, create Salesforce.

S1: What was Benioff dolphin influenced epiphany? Well, his boss, Larry Ellison, had already figured out that companies were drowning in their own data data about their operations, their customers and everything else. Oracle made software that helped to organize that data, and it made a lot of money doing it. What Marc Benioff realized was that the way Oracle was doing it was out of date until he is a reporter with The Wall Street Journal.

S6: I think a big part was just, you know, Benioff in the founding teams ability to see the future of how software is going to be sold, and that is it’s going to be available over the Internet.

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S2: In the old days,

S1: if you were a company that needed database software, you’d pay a huge upfront fee to someone like Oracle and then you’d install the software using like CD-ROMs onto your own computers in your own offices. The software lived on your computers and the data you inputted lived on your computers. What Marc Benioff saw when he founded Salesforce in 1999 was that he could put database software out there and what we all now know as the cloud and instead of charging a big upfront fee to install it, he could charge a recurring monthly fee to have access to it. This approach has come to be known as software,

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S2: as a service.

S6: This model of selling software was really way ahead of everybody. In 1999, no one was doing this. So being able to know where the market was going and pioneering that model of how you sell software I think was really key in bringing them to the forefront of this market where really big entities like S&P and Oracle were selling this very sort of the old way of selling software. And Salesforce, this was decades

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S2: ahead of them.

S1: These days, we all live in the cloud. We can access things from whichever device we’re on at any moment. If the device dies, we get a new device. No problem. And everything’s still out there in the cloud for us. We don’t have to worry about updating the software or backing up the data. The software company does that for us. It seems obvious now that database software should be in the cloud. But it wasn’t back then. There were some legitimate concerns about this new approach. For instance, companies weren’t always confident they could keep their data secure if it lived in the cloud instead of on their own computers. But a big part of the problem Marc Benioff faced was that people just didn’t fully get it. Here’s Benioff in twenty nineteen talking about how hard it was to raise money for his fledgling company.

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S4: I was lucky that I had some rich friends. If I had didn’t, I would not have been able to get the company going. No one on Sandhill Road would give me any money. I think that they did not understand this incredible opportunity for cloud computing. They certainly did not see that this would be a company with forty five thousand employees and more than one hundred billion dollar market cap. They just could not see it.

S1: Those people who didn’t invest made a huge mistake by 2003, less than four years after it launched, Salesforce had 400 employees, 100 million dollars in annual revenue and offices around the world in 2004. It went public today. It’s an absolute giant salesforce is used by the vast majority of Fortune 500 companies. It makes 20 billion dollars a year. It employs almost 50000 people. Among its many customers, the business team at Slate, they use it pretty much all day, every day to track what’s happening with their efforts to sell ads on podcasts like this one. But for the rest of us who don’t work in sales, Salesforce is still kind of an enigma. Or as Errantly puts it,

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S6: no one really knows what Salesforce does except people who use it.

S1: So let’s break it down. What is this customer relationship management thing that Salesforce does? It helps a company’s sales team track all its interactions with customers and potential customers. If you’re a customer of anything, there’s a decent chance there’s a file about you on Salesforce somewhere.

S6: Yeah, behind the scenes. I mean, a lot of your transactions are being put into this giant Salesforce database. That company rents out and this data will be collected about you and future ad targeting campaigns will reach you. And this is all kind of coming through Salesforce as platform.

S1: Let’s say a company is trying to sell you something. They’ll have a Salesforce file that notes every time they’ve contacted you over email or the phone or social media. And what resulted, whether you bought anything from them in the past, whether you complained about it or returned it, and why they might even see that you tweeted about their product last year and you posted on Facebook about it the year before that. And this is true for every customer or potential customer using Salesforce. The company can aggregate that data and turn it into charts and graphs that tell them things about their customers as a whole, what’s working and what’s not. It lets them turn thousands or millions of interactions into insights. And because it’s so useful and so many companies use it, Salesforce, its tentacles are very far reaching. Here’s Nikil Sonot.

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S3: Its figures outstandingly, massively in American capitalism. I mean, just imagine all of the things you do on a daily basis that are like entered into some data system, which is basically everything, like anything in which you deal with the private sector. Chances are good that something that you’re doing is like being entered into a Salesforce system and the responses you get come from that Salesforce system. So you’re basically indirectly interacting with it like all the time.

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S1: And Salesforce keeps getting bigger, swallowing up other companies. Most recently, Salesforce bought the chat app Slack for twenty seven point seven billion dollars. Marc Benioff introduced Slack’s CEO in this hypnotically awkward moment at the most recent Dreamforce.

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S4: First of all, let me introduce you to an incredible entrepreneur, an incredible CEO, the founder of Slack, Stewart Butterfield. Stewart, come on out here. All right. Welcome. Thank you. Great to see you. I wish I could give you a hug, but we’re staying six feet apart. Ten feet is

S1: slack is how lots of companies communicate internally. And the speculation is that Salesforce will use slack as a sort of interface for the information Salesforce gathers. It’s all part of an effort to beat out competitors, chief among them, Microsoft, and become what Salesforce calls the single source of truth, the one place to go. If you’re a company that needs to understand its own data and all this growth, all this acquisition is being directed by one rather puzzling fellow.

S6: He is an interesting dude. He’s weird.

S1: More on that when we come back.

S4: Ladies and gentlemen, please welcome Chairman and CEO Salesforce, Marc Benioff. Thank you.

S6: Thank you. Benioff is a singular, fascinating person, he loves the stage, he loves being around powerful people.

S4: Tomorrow night, my friend right here is going to play for him. Have you heard of his band Metallica?

S1: And Marc Benioff is about six foot five, a bear of a man with slicked back hair. He wears a lot of Hawaiian shirts and peppers. His speech with Hawaiian words and phrases. He’s owned in the state there for a couple of decades now. And Hawaii is where he came up with the idea to launch Salesforce. Like many a tech billionaire, Benioff hasn’t been satisfied with merely creating a successful company and getting wildly

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S2: rich from it. I don’t think

S6: there’s any doubt he is a man with a big ego and he needs to be seen. His need to be seen as need to be validated. His ego needed to be stroked. I don’t think there’s any doubt about that as a facet of him.

S1: Before a company issues an IPO, there’s what’s called a quiet period, a time when executives aren’t supposed to say anything substantive about the company. While Salesforce was in the quiet period before its IPO in 2004, Benioff gave an extensive interview to The New York Times during which, among other things, he repeatedly ridiculed a competitor. The FCC ended up delaying the IPO, but he couldn’t even keep quiet during the quiet period. Since then, he’s bought Time magazine and slapped his company’s name on the tallest skyscraper in San Francisco.

S4: Not only can you see every part of our community from this tower, and I’ll tell you that as we all travel up there and see all parts of San Francisco, every part of our community can look up and see us as well.

S1: He never misses a chance to schmooze at Davos. He’s the central figure of every Dreamforce conference, the garrulous M.C. spouting quasi spiritual platitudes and encouraging people to meditate with the in-house monks.

S4: So this is appropriate. And right here at the monastics, welcome to the monastics, helping us to come together with your mindfulness this week. Thank you.

S1: He can seem ridiculous, but Benioff came up as a sales guy at Oracle and he remains a sales guy at heart. And what he’s selling, customer relationship management software, is sort of inherently dull. So Benioff spices up his brand with all sorts of tangential Michiganders.

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S4: What’s three sixty truth or 360? Truth is another amazing thing that we’re introducing here that has been the holy grail of computing, Jim, what we call Sacerdote, the single source of truth we’ve had.

S1: Nickelson Sonot says there’s a marketing strategy at work here to differentiate Salesforce from its competitors.

S3: The main attempt is to kind of like sex up this really unsexy thing, business to business. Enterprise software is basically more focus on things like security and like fault tolerance and losing data. And so if you’re able to even a little bit like make it feel like it’s fun to use or like interesting, it’s going to take you far.

S1: Benioff has also tried to brand Salesforce as a vehicle for good in the world.

S4: I so strongly believe that business is the greatest platform for change. I work on that every day with Salesforce already.

S3: He’s really compelled by this idea that doing business well and succeeding at business is like a good for society. He believes that pretty strongly and it informs a lot of what they do. So he’s just taken by this idea that you can sort of infuse business with these, like, humanistic practices and make it a sort of space for human development.

S1: Virginia’s motto is that business is the greatest platform for change. He’s an advocate for so-called inclusive stakeholder capitalism, and from its inception, Salesforce has preached what it calls the one one one model pledging to put one percent of its revenue, one percent of its product and one percent of its employees time toward the good of the community. Benioff as a San Francisco native and he’s been deeply involved in city politics, vocally supporting causes like the effort to fight homelessness and calling out other Bay Area tech CEOs for not doing enough. This all seems admirable, but when moral duty and corporate success collide, Benioff hasn’t always chosen the nobler path. In 2018, it came out that U.S. Customs and Border Protection, the agency responsible for separating immigrant children from their families, was using Salesforce to, quote, manage border activities and modernize its recruiting process. Salesforce came under pressure from inside and outside the company to cancel the contract with CBP. Benioff tried to defuse the situation by donating a quarter of a million dollars to ISIS, a nonprofit that provides services to refugees and immigrant families. The group turned down the money, and then Benioff made things much worse.

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S3: So he had this back and forth with the head of this organization races and, you know, try to like smooth things over by giving them this huge donation. And the head of the organization was like, I don’t want that. Can we talk about it? And Benioff responded by being like, I can’t. I’m scuba diving right now.

S1: That scuba diving email leaked to the press, which was not a terrific look, and Salesforce never canceled the CBP contract. Benioff also made a big deal about treating employees right during the covid pandemic, according to Errantly.

S2: You know, early

S6: on the epidemic, he had this 90 days, no layoff pledge and, you know, 90 days had passed and he had a great quarter. You know, he called this a victory for stakeholder capitalism. And then the day after he announces, you know, a thousand employees are being laid off.

S1: Salesforce has described that move as a reallocation of resources. It says that some of the laid off workers, Salesforce, wouldn’t tell us how many got rehired in new roles. But it’s worth asking, especially since Salesforce seems intent on growing ever bigger and becoming the single source of truth for its customers. How much of Marc Benioff spiritual do gooder shtick is genuine and how much of it is just a clever way to inject some deeper meaning into a product that mostly exists to help companies leverage analytics to improve the throughput of their sales pipeline? Perhaps the one one one model and the monks and the Hawaiian shirts are all just customer relations management. That’s our show for today, this episode was produced by Jess Miller and Cleo Levin, Technical Direction from Merritt. Jacob Gabriel Roth is Slate’s editorial director for audio. Alicia Montgomery is the executive producer of podcasts at Slate. June Thomas is senior managing producer of the Slate podcast network. If you like this show, you can help us out by just subscribing or if we’re already regulars in your podcast feed. Help us spread the word about our show by leaving a review in iTunes next week on the show. How to Capitalize on Color.

S4: You know, we had companies that would send us a feather from a bird and say, we love this color. We want that to be our brand power, and you create it for us.

S1: That’s next week on Thrilling Tales of Modern Capitalism.