I Spent 14 Days Studying A Programmer Who Built a $167 B Company — Here Are His Weird Rules To Build a Startup
Steal This Programmer Blueprint
Before 1999, Marc Benioff was just like any other programmer.
Stuck in a corporate job.
He wanted to do something different. But he had no idea what to do.
In February 1999, he founded his first company, Salesforce.
By 2009, he took Salesforce’s revenue from $0 to $1077 million. Salesforce is currently valued at more than $167 billion.
I wanted to know how he built a multi-billion dollar software services company. I read his books and listened to different podcasts to discover his strategies.
Here I’ve talked about five of his strange rules for starting a startup.
1. Take some time off
Work hard at your job and you will be successful in life. This is the most useless advice I have ever received.
Just by working hard, you will never be able to gain mental clarity. You need to take some time off where you do nothing in order to have mental clarity.
In 1996, Marc was a Vice President of Oracle for about 10 years.
His job gave him different kinds of benefits. He had been receiving a large salary from Oracle.
I had been there for ten years and was becoming something I had never anticipated: a corporate lifer.
If you have ever worked for a company. You will understand how hard it is to leave a company if you have worked for it for more than 2 years.
When you change companies, your colleagues change. You have to adopt a new style of working. You may have a great bond with some of your colleagues and this bond forces you to stay in your comfort zone.
We as developers have a habit of staying in our comfort zone. We try to push the same programming language and tech stack within our company that we know. Tech companies pay us a lot. This is also a comfort zone for us and we stay with these companies for a long time.
Marc was also in a situation where he was comfortable with his corporate life. He wanted to do something different in life. But the thought of leaving his current job made him nervous.
Instead of quitting the job entirely, he decided to do something that ended up changing the trajectory of his life.
What he did: He took some time off.
Taking time off may look like a basic idea, but it changed Marc's life.
During his leave, he meets his old friend Terry. Both of them discussed a lot about early-stage startups and how the internet was reshaping old and new businesses. His friend told him about a secret entrepreneur sitting inside him.
Also, during his sabbatical, he travelled to India and meet the Dalai Lama. The Dalai Lama spoke to him about the importance of community service. He realized the importance of giving back to society during that time.
This sabbatical changed his whole direction in life.
“Don’t be afraid to take time off when you need it.”
2. It’s ok to think differently
Thinking only in one direction makes clones, not businesses.
Society wants us to think in the way we’re told, but you can’t build a business if you just think like everyone else. It’s quite weird our education system teaches us to fit in but to build a business you need to stand out.
If Marc hadn’t thought differently than other companies and people, he wouldn’t have built a $167 billion empire.
Since he was an Oracle employee, he knew a lot about the software business. Until then, software companies used CD-ROMs to deliver software to other companies.
He understood the entire CD-ROM business well. Every new software company that was founded used the CD model to deliver the software.
He was not thinking like every other businessman out there. He knew that the entire process of setting up a CD-ROM software business would take about 2 years. To run such a business a huge capital was required. He didn’t want to waste a second on a CD-ROM software business model.
What was wrong with the CD-ROM model?
The CD-ROM software business was a difficult business to start. The barrier to entry was high. The margin was low.
To build any CD-ROM-based software business, you must first have a large capital to set up an office. Once you have an office space, you need to hire developers who will write efficient code. These developers will cost you a lot of money. Finally, you need a great delivery partner with a big network to take care of the delivery.
Two major drawbacks to a CD-ROM business were piracy and storage. Anyone could easily duplicate what’s on your CD-ROM and you will lose money as a business. CD-ROM used to have less storage and sometimes multiple discs were required to store a large software application.
Marc's idea was to sell software to companies using cloud computing.
“I saw an opportunity to deliver business software applications in a new way.”
The entire concept of cloud computing was new. Most individuals didn’t want to take the risk of using a new kind of delivery system.
But for him, it was a massive opportunity. He wanted to make it easy for companies to buy, use, maintain and update their software. With the help of cloud computing, these things could be done easily. He wanted companies to pay a monthly subscription fee to use their software service.
When you start to use the internet as a delivery medium for software instead of using CD-ROMs, you gain massive benefits for both buyer and seller.
Let’s think about this.
Any customer who is going to use the software will not have to pay a lot of money upfront. Since the companies have to pay monthly fees to use the software, the initial cost is reduced. A startup that has limited cash could also use subscription-based software. But the same startup might not be able to pay for a gigantic software at one time.
Any company buying the software and installing it with CD-ROM will not receive software updates or support. Since the company is not using the latest version of the software, it will contain bugs and will be less likely to have the latest feature. But these things change when the software begins to get delivered over the Internet.
After considering the advantages of a subscription-based model, Marc set out to revolutionize the entire software industry. He then began to think about how to set up a SaaS company when only a few people believed that software could be delivered in the cloud.
“Although there was yet to be any kind of SaaS industry, I believed that all software would eventually be delivered in the cloud.”
3. Hire the best talent at any cost
Marc had a rough plan of what Salesforce would look like. He wanted Salesforce to be a customer relationship management software.
When I started reading about Salesforce. I had no idea about customer relationship management software. I researched it.
A customer relationship management software:
- provides a way to unite all the teams that work for a company.
- There are many departments within a company such as Sales, Marketing, IT and Commerce. Individual teams sometimes do not have the same customer insight.
- Suppose the sales team forgets to share customer data with the marketing team. Once the marketing team had no sales data, their marketing experiments will be meaningless.
With customer relationship management software, all departments will have the necessary data. The marketing team will know what kind of experiments to try based on user feedback since they have access to support chats and recent purchases.
Marc wanted the software to be delivered over the Internet. He wanted to end the era of CD-ROM software. To build the software, he needed people who had knowledge of sales force automation and can write quality code.
At this point, I want to address a false belief the programmers have. They think that a startup is all about funding. They keep chasing funding and just talk about it. Yes, if you are building a startup that needs to raise money, it’s important.
But initially, in addition to funding, it also matters to hire the best engineers.
With the best engineers, you can build the product at a faster rate. In the software, as a service category, the speed at which you ship code plays a key role in the success or failure of your startup.
That’s why Marc wanted to hire a talented engineer, Parker Harris.
Used a good story
He knew he had to uniquely explain his vision to Parker.
He decided to use the most powerful technique to persuade people: storytelling.
With good storytelling, you can share your vision effectively. Once a potential hire connects emotionally to your story, there’s a good chance they’ll want to work with you. The story you share with the potential hire should get them excited about being a part of something big. This will give them a sense of purpose.
He knew these things well since he had already been doing some type of sales for Oracle. He was also a programmer a long time ago, so he also understood the psychology of programmers.
First, he told Parker about his vision to make him feel like he was part of something big: “the end of traditional software and technology models.” His vision was big which inspired Parker.
“I believed that this was a great story and would appeal to Parker.”
But just because of a big mission, Parker wasn’t going to join him. Parker was an engineer, and we engineers want to solve tough engineering problems. To get Parker excited, Marc told him that we need to create a service that must be highly scalable.
A scale test helped him to persuade this key engineering talent.
“I knew that the scaling test would be compelling to any great developer.”
4. A strange logo can help you stand out
Companies were frustrated with the CD-ROM business model.
They wanted something new.
They were ready to experiment with the new. Updating any software used to be a huge pain because of the CD-ROM.
Marc understood the frustration of these companies early. He wanted to introduce a new business model to help companies easily buy and maintain their software. To do this, he wanted to use the Internet as a delivery medium.
This kind of thing happens in business frequently.
People start using an imperfect product and become dependent on it. Now this product that was once new become mainstream and people start getting frustrated with it. Even a small difficulty with the product forces people to look for alternative products. When people desperately need alternative products, new companies are established to fulfil people's needs.
This was also the case with the CD-ROM software business.
When people started using CD-ROMs to install software, it was a new concept. People got excited because they were frustrated with the floppy disk. People became dependent on the CD-ROM for any kind of software installation. All companies started using CD-ROMs to deliver their software. CD-ROM was not the best software delivery method, it had its own flaw.
As the whole CD-ROM business got big, people started to talk a lot about its problems. They were badly looking for new alternatives. This was a unique opportunity for companies to establish new types of service.
This is why Marc was excited about this software as a service business opportunity.
He knew that in order to introduce this novel idea he had to do something different.
Unique logo idea
He came up with a unique logo.
The name of the logo was the NO SOFTWARE logo.
On the logo, the word SOFTWARE was in the red circle, and a line cut it into two halves.
Most people consider a logo to be a small part of a business.
For them, a logo is just a waste of time and will never attract new people.
But let’s reconsider the importance of the logo for a second.
Your logo is the first thing your customers notice about your business. They may or may not give a shit about your logo. Since they are already doing business with you, they care about the services you provide, not the logo.
If you think from the potential customer perspective, your logo can spark a lot of emotion in them. Your potential customer sees your logo for the first time, and if it is a regular logo that doesn’t convey a spark of emotion, they may choose to ignore your brand.
But if you have a logo that piques people’s curiosity, your vision can travel fast. People will automatically get attracted towards your business.
Marc wanted to do something unique with their logo.
If you see the NO SOFTWARE logo above, you will find that it can arouse a lot of emotions in the general public.
Just after seeing this logo, they will ask questions like:
- Is the software going to die?
- Are software engineers going to lose their jobs?
- Is a new type of software coming?
- Is the software going to be replaced with some new technology?
- What’s wrong with this world of software?
He found the NO SOFTWARE logo interesting.
This logo could help them differentiate the Salesforce brand from others.
This logo with violated two fundamental rules of marketing:
- Never promote yourself with negative marketing.
- Never go against your industry.
Just by using this logo, people started to talk about this new company, Salesforce.
5. Establish yourself as a thought leader
We, programmers, are in the habit of keeping our personal and professional lives separate. We don’t want the two to mix.
When I listen to founders, they don’t want to talk about their personal experiences that forced them to create a particular product.
This is stupid behaviour from a marketing perspective.
If you don’t talk about your personal life, how will your potential customer relate to the product or services your company offer? You will not be able to convince people why they should choose your product over others available on the market.
As a founder, your story is the most important thing.
Your story will bring you the distribution of the product.
If you look at the revolutionary founders, you’ll find that their company and who they were as people are almost indistinguishable. They stand for something.
So before you create the product, you should consider championing something that will help establish you as a thought leader.
Marc at the time established himself as a thought leader on the topic of “the end of traditional software”.
Wherever he gave a talk, his topic was usually “the end of traditional software.” This forced the mainstream media to talk about what he was talking about. He never missed a single opportunity to speak on this subject.
He later began receiving opportunities to speak on this topic from different media houses.
Establishing yourself as a thought leader on an issue will help you receive opportunities you never imagined.
If you are the founder of a company where your character and story do not align with the mission of your company. You have to rethink the whole strategy.
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