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Behind The Cloud: Book Summary

Behind The Cloud: Book Summary

Behind The Cloud is Marc Benioff’s account of how Salesforce grew to the behemoth it is today.

There were some interesting operational and growth lessons, but for me, the real gems are when you get to see how Marc Benioff thinks.

I didn’t know much about him before I read the book, but after a few chapters, it’s clear that he’s got a superpower:

The soft, squishy, qualitative parts of company building.

He is incredible at nailing market positioning, delighting customers, and creating a passionate, loyal team that will follow him into war.

So in this summary of Behind The Cloud, I go over 3 specific areas where Marc used this superpower to transform Salesforce from a tiny apartment startup into the company that invented SaaS as we know it today.

Nailing Market Positioning

Be The Leader, or Beat The Leader

Always ask yourself, “What’s my message?” Position yourself either as the leader or against the leader in your industry.

Selling software via subscription was a strange, new concept in the early 2000s. And Marc was convinced that this new model was going to be the future, even if people didn’t know it yet.

So he positioned himself as the leader of a new frontier: “the end of software.” And in so doing, pushed the boundaries of the SaaS industry into the mainstream.

Be the leader in something. Either be #1 of a small (but important and growing) niche. Or show that you’re here to dethrone the incumbent. Don’t play to be in the middle.

weave your message in everything you do

Even though we were small, it was essential to ensure that our marketing was focused and first class.

Early in the book, Marc recounts how his experience working at Apple influenced how he thought about business. Marc takes a page from Steve Jobs and obsesses about the details of how things are perceived.

This was especially important for enterprise software, where buyers are conservative and you’re up against billion-dollar companies.

So even when Salesforce was small, Marc knew that he could punch above his weight by making sure all the public-facing comms in his company were perfectly aligned and held to a high standard.

Marc made sure everything was consistent and on-message. Everything from his pitches to journalists, Salesforce events and parties, to publicity stunts — they were all repeating the same message: “enterprise software today sucks, and we’re here to change that.”

Stand For Something

Be the canary in the coal mine, warning people of what’s ahead — and demonstrate how your company is shaping the future.

Marc says that you should always position yourself as the standard-bearer of some trend that is sweeping the industry.

Marc thinks that if he just positioned Salesforce as a company that does really great sales force automation and CRM, the company wouldn’t be where it is today.

So he positioned Salesforce as the standard-bearer for the powerful, inevitable trend of SaaS and the consumerization of IT.

It’s useful to think of this for other industries in your space. Don’t just think about trends you can own today — think about what you can own in the next decade.

Delighting Customers

Show CONSTANT Progress and Forward Movement

We make minor upgrades every week and unveil a major release every three to four months. (We brand these according to the seasons, as the fashion industry does.)

Marc notes the importance of showing constant improvement and making people feel like they’ve picked the winner.

Progress is important, but Marc takes it one step further and makes how he presents the progress a big deal as well. Salesforce even has a YouTube channel just for feature releases! Here’s an example:

Marc’s insight here is that customers love it when you have a reliable cadence for progress. It makes them feel like they’re with “the best” and the company is listening to its customers.

Make people feel at home

When a German customer called, he thought he was speaking to someone in Frankfurt; when a French customer called, she believed she rang someone in Paris. (We ensured that callers got to the right employee by having them call into local phone numbers, which were routed to our central phone bank. We also used e-mail and online forms to capture leads and then responded to these online inquiries in the language of the inquirer.)

Another great example of Marc caring about the little touches that add up to a delightful customer experience. This was when they opened their first European outpost in Dublin. Instead of a system that operated something like “Press 1 for English, 2 for French”, Marc’s team made sure to minimize any friction regarding which language the customer preferred.

Create a Steady Stream of Social Proof

References are a fundamental marketing weapon. They are so powerful that we have someone solely dedicated to managing them, and we lead every piece of marketing material with third-party testimony from a customer or analyst.

Marc knows that the most credible marketing you can create are customer references, and so generating them is an important part of the marketing function.

Testimonials help prospects and customers feel safe that they’re in the right hands, building trust right off the bat, and starting the relationship off on a positive note.

If you’ve read my summary of Crossing The Chasm, then you’ll see why this is important, especially when trying to expand rapidly into adjacent markets.

CRUSH your customer’s biggest hesitations

I wondered if an ancient stone castle was the appropriate command center for our future-focused mission. There was a reason we were there, however. At the time, being a dot-com was a serious liability. It was imperative that we appear reputable and established.

I loved this story just because it’s so boss.

Marc sensed that being known as a “startup” or being labeled as an “up-and-comer” was a negative when competing with established players.

So he made some conscious moves to counter-act that.

When they were just starting out in a new city and didn’t yet have office space, he’d rent a suite in a 5-star hotel and run meetings from there. Not Regus, not the client’s office, not even the hotel restaurant. The hotel SUITE.

When they could do it, they’d situate their offices next to a major brand like Microsoft and feed off the halo effect.

And as in the quote above, there was even a time where he turned a CASTLE into an office!

Marc quotes Sun Tzu a few times throughout the book, and it’s clear that he’s internalized the lessons about turning weaknesses into strengths. A lot of the principles from Dale Carnegie’s How To Win Friends and Influence People are also on full display. Marc used those lessons to create opportunities to impress and delight customers, allowing Salesforce to keep winning more and more deals.

Creating a Passionate, Loyal Team

Treat HR as a First-Class Citizen

However, the first hire I made based on that intelligence was not another developer. It was an HR manager. Although most start-ups don’t hire a dedicated HR person right away, doing so made sense to me because acquiring the right talent is the most important key to growth.

For many executives, HR is a nuisance that gets in the way of “real work.”

This is another area where Marc differs. He’s prioritized HR and recruiting, right from the beginning. As you go through the book, you can feel how much Marc cares about things like culture and team motivation.

Marc says that this mindset of prioritizing people gave them the foundation of a strong, positive, motivated culture — something that continues today.

Check out Salesforce’s rating on Glassdoor:

Reward Your B Players

Typically, 60 to 65 percent of our account executives qualify for this [vacation reward] trip. Most companies reward only the top 10 to 20 percent of their sales reps, but that strategy doesn’t yield a very high return. Morale for the top people is sky high, but it is brutally low for the 80 to 90 percent of people who are not recognized.
By setting the bar within reach, we’ve found that morale soars all year — and people still strive to exceed expectations.

Of all the lessons Marc shares in the book, this one was the most counter-intuitive.

Most management advice I come across has some flavor of: “identify and cultivate your top people; reward performance, not seniority; do not tolerate mediocrity; A-players only.”

Marc’s thinking is on a slight tangent.

His reasoning is that if you only reward the best people — say, the top 10% — then 90% of your people aren’t getting rewarded, and thus, don’t get any positive feedback. The net result is that team morale goes down, which leads to bad outcomes for the company.

So Marc advocates a different approach than most CEOs. Instead of optimizing for rewarding top performers, he optimizes for overall team morale and motivation.

Make Hires Work For It

We vet people through an extensive interview process that typically includes four to five interviews, but it can swell to ten to fifteen different meetings, even for relatively low positions. (This is helpful for the candidate too. If she is intimidated, she self-selects out, which saves us time.)

When recruiting and interviewing, Marc favors an approach where you intentionally put meaningful hurdles in your hiring process.

Only people who really buy into your vision and your culture will make it to the end.

Make Unanimous Agreement a Hiring Prerequisite

If a candidate meets ten people and nine say yes and one says no, that candidate will not work at our company. This might sound unusual, but new employees need to have the support of all the stakeholders; otherwise they will not be successful.

Two things jumped out at me here.

First, this is another example of how much Marc values the “soft” side of leadership. It is rare to find a company that has the discipline to follow such a rule.

Second, in order for a company to pull this off, they would need to have a steady pipeline of new candidates to interview. Salesforce can do this because Marc prioritized HR and recruiting at the beginning, so they were never in a pressure-cooker situation where they had to make a hire out of necessity.

Align with V2MOM

V2MOM enabled me to clarify what I was doing and communicate it to the entire company as well.
Although we use one corporate V2MOM to direct salesforce.com, V2MOMs cascade throughout the entire organization. We’ve created a system whereby each executive builds his or her own V2MOM from the corporate V2MOM.

There’s a huge meaty section about V2MOM, Marc’s management framework. They’re like OKRs, but also consider things like company vision and mission.

The point is to use some kind of management framework that every single person in your entire company uses.

This allows you to have a common language for setting targets, resolving misalignment and analyzing performance.

Final Thoughts on Success Biographies Like Behind The Cloud

Whenever I read books about success stories like this one, I think it’s important to keep a healthy skepticism and stay aware of survivorship bias.

It’s easy to fall into the trap of “successful person did X, therefore I must do that thing too.” It’s like saying, “Steve Jobs went to India early in his career. Therefore, if I want to achieve similar success, I must go to India too.”

I’m ending with this thought because I think there’s actually a lot of potentially dangerous advice in Behind The Cloud. Marc talks a lot about product development and marketing decisions that were made in early Salesforce — and how we should do them too. For example, he says you should “always” run events, always build a sales team, and support multiple languages on day one.

Some of the advice he gives is highly contextualized and specific to his situation, and as a people studying these lessons —  we must hold these caveats in mind.

It’s potentially dangerous if you follow advice blindly without considering the difference between Salesforce’s early history and yours. Not only was it a different era in tech; Marc was a millionaire when he founded Salesforce, had a super deep network of Tier 1A talent at his disposal, picked the right wave to ride, and timed it perfectly.

So, for me, the biggest takeaway from Behind The Cloud was this:

Even if you don’t have Marc’s background, you can build an industry-leading business if you master some of the elements that make up the soft side of company building.

Every company can benefit from awesome market positioning, delighting customers, and building a strong company culture — and Marc provides an incredible example to emulate.