Bloomberg Businessweek (December 11, 2023)

Год выпуска: December 11, 2023

Автор: Bloomberg Businessweek

Жанр: Бизнес

Издательство: «Bloomberg Businessweek»

Формат: PDF (журнал на английском языке)

Качество: OCR

Количество страниц: 68

SALES BY FORCE

Marc Benioff’s soft-sell software giant is becoming a Darwinian place to work — and a new model for Silicon Valley

Kenny never thought of himself as tech company material. As a kid he’d been into sports, and when he was a little older he worked in retail, which he enjoyed. In college, at a large state school, he studied marketing and spent lots of time with his fraternity brothers. He never learned to code.

In his last summer of college, looking to put his degree to work, he got a marketing internship and he hated it. He missed the competitive camaraderie of the locker room and the frat house. Even if he worked harder than the other interns, he says, “we all got paid the same, and that made me mad.”

Then he got a job as a software salesman, eventually landing at Salesforce Inc. A few years after graduating, he was making far more than any of his college friends by pushing online applications that make other salespeople more productive. Among Salesforce’s clients are Ford, IBM, Netflix, Verizon and thousands of other companies big and small, in finance, health care, heavy industry and, especially, tech. Often it didn’t really feel like work: Kenny spent his days checking in on customers or calling prospects, demoing software and cracking jokes with co-workers. Some salespeople, he learned, rely on aggression and pressure to close deals, but Kenny found that the most important thing was just “getting the customer to like you.” He was good at that. With commissions, he took home close to $400,000 in 2022. “Isn’t that crazy?” he says.

Yes, probably. But for a time, it wasn’t unusual. The story Silicon Valley tells the world is that its empires are built on the ingenuity and determination of engineers. In the tech boom of the past decade, however, much of the growth came not from bringing new products into the world but from getting people to buy more of the old ones. In other words, it came from salespeople.

Tech sales became, for a while, an easy ticket to the upper class. The 2010s marked the founding of thousands of companies that, like Salesforce, sold software to other companies. Covid-19 supercharged that. When Salesforce hired 30,000 people during the pandemic, most of them were in sales and marketing, tasked with flogging Salesforce’s offerings to other companies looking to equip their own growing sales staffs. “It was the best buying environment for every tech company ever,” says Marc Benioff, the co-founder and chief executive officer.

Then, when the technology industry brutally retrenched and shed thousands of jobs, many were in sales and marketing, too. Over the past year, those workers at Salesforce were four times more likely to lose their jobs than engineers were. It’s a similar story at Dell, Twilio, Zoom and other companies. The salespeople who survived the layoffs find themselves in a far harsher environment, tasked with finding a way back to growth even as their employers question just how necessary they are.

Nowhere is this situation more evident than at Salesforce itself. This story is based on interviews with 40 of the company’s current and former employees, including Kenny. (It’s an alias; he still works there.) It’s been a year since the wave of tech layoffs. Salesforce’s cuts helped the company survive intense pressure from activist investors, and its stock is one of the best-performing of the year. But at this point it’s possible to ask whether the changes—not only organizational ones but also cultural ones—could be permanent. The conventional wisdom among many tech executives, that you couldn’t have too many salespeople, was an idea that started with Salesforce. More than any other company, it birthed the golden age of software sales. Looking at Salesforce now, it’s possible to glimpse how that era might end.

Unlike tech giants named after fruit or a large number or prophetic priests, Salesforce announces its core audience right in its name. Benioff isn’t a man for subtlety. He started his software career in high school, when he wrote and sold his own Atari video games. After college he went to work at Oracle Corp., one of the most successful tech companies of the pre-internet generation. Oracle was a pioneer in creating manipulable, all-purpose databases, and it sold its software to everyone including banks and the CIA. But Benioff didn’t get a job there as a programmer; he started out answering customer service calls. “Working with customers was much more fun than writing code, and it turned out that I was pretty good at it,” Benioff wrote in his 2009 memoir. He quickly ascended through sales, marketing and product development roles, becoming the company’s youngest executive at 26 and a trusted deputy to its co-founder and then-CEO, Larry Ellison.

Benioff is a natural salesman—affable and an ursine 6 feet 5 inches. A big part of what he sells, through countless interviews, keynotes, books and social media pronouncements, is Marc Benioff. The grandson of a San Francisco official who helped create the Bay Area’s public transit system, he’s become a prominent evangelist for the idea that a more ethically informed “stakeholder capitalism” can solve many of the world’s problems. Salesforce, rather than being garrisoned in a suburban campus in the Valley, is based in downtown San Francisco. Salesforce Tower, opened in 2018, dominates the city’s skyline, and Benioff has advocated for a local tax increase to fund initiatives to help the city’s many homeless. When Mike Pence, as governor of Indiana, signed a law allowing antigay discrimination on religious grounds, Benioff threatened to pull investment from the state.

“The salesperson is the frontline soldier—they are not well-equipped, they are not well-trained, they’re by themselves, they might be in a remote territory,” Benioff tells Bloomberg Businessweek. “A lot of military analogies apply.” It’s September, near the end of Dreamforce, a massive three-day conference the company throws every fall in San Francisco, and he’s just stepped offstage after moderating a conversation about how state governments can attract tech investment. He’s wearing black suede Nikes covered with Louis Vuitton logos. Copies of his second memoir sit on a nearby coffee table alongside issues of Time magazine, a publication he purchased for $190 million in 2018.

The idea for Salesforce came to Benioff in the late 1990s. By that point, office work had already been transformed by software—you could draft and edit a document in Microsoft Word, design a building in AutoCAD and populate a spreadsheet using any number of programs. But there wasn’t good software for the particular informational needs of salespeople: Who should we reach out to at a particular company? When was the last time we pitched them? What did they say? Might they be interested in an upsell? And what are their kids’ names again? There were some offerings, most notably from Siebel Systems Inc., but Benioff wasn’t impressed by them. (Oracle would later buy Siebel.) He set out to digitally improve and expand on the humble Rolodex.

Benioff had another, more important insight, as well. At the time, most computer programs were sold like computers themselves—you buy it for a large upfront cost, set it up yourself and then use it until it breaks or you want something nicer. Benioff decided his customer relationship management software wouldn’t come on a CD. It would be hosted remotely, on the web: Clients wouldn’t buy the CRM software, they’d lease it. The user interface for the site came to Benioff in a dream. “I could see this app that looked like Amazon,” he says, “and it said ‘Contacts,’ ‘Accounts,’ ‘Opportunities,’ ‘Forecast Reports,’ as tabs. No one had ever built enterprise software quite like that before.”

That was the birth of “software as a service,” a business model now ubiquitous and acronymized as SaaS. Almost $200 billion will be spent on cloud-hosted applications this year, according to the market research company Gartner. Microsoft is a SaaS business now. So are DocuSign, Dropbox, Intuit and lesser-known but remarkably lucrative concerns such as the data storage and analytics company Snowflake and IT software maker ServiceNow.

As Benioff foresaw, cloud hosting would slash installation costs, simplify upgrades and ensure recurring revenue. But it also changed the client-salesperson relationship. Much has been made, not least by Benioff himself, of the cultural difference between his company and the one where he got his start—and of the Oedipal tension between Benioff and his on-again, off-again mentor, Ellison. The latter is, famously and proudly, a jerk, who once described his leadership style as “management by ridicule.” The culture of Oracle reflects that. Benioff wanted to create a different sort of place. He took a sabbatical from Oracle in the ’90s, swimming with dolphins in Hawaii and meeting with a dozen spiritual gurus in India. “It was very trippy,” he recalls. “And I came back and said, ‘I’m going to spend a few more months finishing up everything, and then I’m going to start this software company.’ ”

Whatever truths those experiences revealed, it’s also the case that in SaaS, as in the rest of the service industry, being nice makes good business sense. At Oracle, “If you were meeting with a customer, your singular goal was to leave the room with a signed contract—in as short a time as possible,” Benioff wrote in his memoir. High-stakes, one-off purchasing deals reward a certain ruthlessness. (Think of car sales.) A Salesforce software license, on the other hand, is “more of a marriage,” Benioff says. The real money comes from long-term renewal and expansion; if your client doubles its sales staff, that’s twice the Salesforce licenses...

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Salesforce’s Culture Shock

• Life gets a little less friendly at a Silicon Valley powerhouse

Cleaning Up World Central Kitchen

• Chef Jose Andres pushes into disaster zones, neglecting problems at home

Empire of Wellness?

• Xponential Fitness turned suburban moms into bankrupt franchisees

IN BRIEF

• Fighting in southern Gaza
• Bitcoin rally
• Drinking tax?

OPINION

• How to respond to Russia’s evasion of an oil price cap

AGENDA

• US inflation watch
• UK growth
• Wonka’s origin story

REMARKS

• Wall Street thinks rate cuts are coming for sure this time

BUSINESS /SPACE SPECIAL

• Elon Musk’s Starship shakes up flight economics
• Satellite operators are more or less stuck with SpaceX
• Know your neighbors in low-Earth orbit
• Prospectors’ next frontier: Asteroids
• Better medicine through space technology

TECHNOLOGY

• The untold story of a cyberattack in Covid’s early days
• Combating disinformation keeps getting harder

FINANCE

• Help wanted: Bank examiners. Apply to the Fed and FDIC
• Mother Nature strips bare a Hong Kong housing problem

ECONOMICS

• A shadow fleet helps the Kremlin get around sanctions
• Spain’s climate turns hostile toward avocados

SOLUTIONS /SUSTAINABILITY

• America’s hottest job is blowin’ in the wind
• Giving never-worn clothing a second life
• Is it a boat or a plane? Yes

PURSUITS

• These are not your father’s hearing aids
• Seven gadgets to improve an afternoon on the links
• What to eat in Busan, South Korea? Seafood, of course
• Poor Things, with Emma Stone, is a rich steampunk fantasy
• An e-ink tablet that’s a delight for doodlers

THE SHOW

• The concept of ownership can be messy

скачать журнал: Bloomberg Businessweek (December 11, 2023)