TableofContents

TitlePageCopyrightPageDedicationForewordIntroduction

PART1-TheStartUpPlaybook

HowtoTurnaSimpleIdeaintoaHigh-GrowthCompany

Play#1:AllowYourselfTimetoRechargePlay#2:HaveaBigDreamPlay#3:BelieveinYourselfPlay#4:TrustaSelectFewwithYourIdeaandListentoTheirAdvicePlay#5:PursueTopTalentasIfYourSuccessDependedonItPlay#6:SellYourIdeatoSkepticsandRespondCalmlytoCriticsPlay#7:DefineYourValuesandCultureUpFrontPlay#8:WorkOnlyonWhatIsImportantPlay#9:ListentoYourProspectiveCustomersPlay#10:DefyConventionPlay#11:Have—andListento—aTrustedMentorPlay#12:HiretheBestPlayersYouKnowPlay#13:BeWillingtoTakeaRisk—NoHedgingPlay#14:ThinkBigger

PART2-TheMarketingPlaybook

HowtoCutThroughtheNoiseandPitchtheBiggerPicture

Play#15:PositionYourselfPlay#16:PartywithaPurpose

Play#17:CreateaPersonaPlay#18:Differentiate,Differentiate,DifferentiatePlay#19:MakeEveryEmployeeaKeyPlayerontheMarketingTeam,

andEnsure...Play#20:Always,AlwaysGoAfterGoliathPlay#21:TacticsDictateStrategyPlay#22:EngagetheMarketLeaderPlay#23:ReportersAreWriters;TellThemaStoryPlay#24:CultivateRelationshipswithSelectJournalistsPlay#25:MakeYourOwnMetaphorsPlay#26:NoSacredCows

PART3-TheEventsPlaybook

HowtoUseEventstoBuildBuzzandDriveBusiness

Play#27:FeedtheWord-of-MouthPhenomenonPlay#28:BuildStreetTeamsandLeverageTestimonyPlay#29:SelltotheEndUserPlay#30:TheEventIstheMessagePlay#31:ReduceCostsandIncreaseImpactPlay#32:AlwaysStayintheForefrontPlay#33:TheTruthAboutCompetition(ItIsGoodforEveryone)Play#34:BePreparedforEveryScenario...andHaveFunPlay#35:SeizeUnlikelyOpportunitiestoStayRelevantPlay#36:StayScrappy...butNotTooScrappy

PART4-TheSalesPlaybook

HowtoEnergizeYourCustomersintoaMillion-MemberSalesTeam

Play#37:GiveItAwayPlay#38:WinFirstCustomersbyTreatingThemLikePartnersPlay#39:LetYourWebSiteBeaSalesRepPlay#40:MakeEveryCustomeraMemberofYourSalesTeamPlay#41:TelesalesWorks(EvenThoughEveryoneThinksItDoesn’t)Play#42:Don’tDisYourFirstProductwithaDiscount

Play#43:SalesIsaNumbersGamePlay#44:SegmenttheMarketsPlay#45:LeverageTimesofChangePlay#46:YourSeedsAreSown,soGrow,Grow,GrowPlay#47:LandandExpandPlay#48:AbandonStrategiesThatNoLongerServeYouPlay#49:OldCustomersNeedLovePlay#50:AddItOnandAddItUpPlay#51:SuccessIstheNumberOneSellingFeature

PART5-TheTechnologyPlaybook

HowtoDevelopProductsUsersLove

Play#52:HavetheCouragetoPursueYourInnovation—BeforeItIsObviousto...Play#53:InvestintheLongTermwithaPrototypeThatSetsaStrong

FoundationPlay#54:FollowtheLeadofCompaniesThatAreLovedbyTheir

CustomersPlay#55:Don’tDoItAllYourself;Reuse,Don’tRebuildPlay#56:EmbraceTransparencyandBuildTrustPlay#57:LetYourCustomersDriveInnovationPlay#58:MakeItEasyforCustomerstoAdoptPlay#59:TranscendTechnicalParadigmsPlay#60:ProvideaMarketplaceforSolutionsPlay#61:HarnessCustomers’IdeasPlay#62:DevelopCommunitiesofCollaboration(akaLoveEverybody)Play#63:EvolvebyIntelligentReaction

PART6-TheCorporatePhilanthropyPlaybook

HowtoMakeYourCompanyAboutMoreThanJusttheBottomLine

Play#64:TheBusinessofBusinessIsMoreThanBusinessPlay#65:IntegratePhilanthropyfromtheBeginningPlay#66:MakeYourFoundationPartofYourBusinessModel

Play#67:ChooseaCauseThatMakesSenseandGetExpertsonBoardPlay#68:SharetheModelPlay#69:BuildaGreatProgrambyListeningtotheConstituentsPlay#70:CreateaSelf-SustainingModelPlay#71:ShareYourMostValuableResources—YourProductandYour

PeoplePlay#72:InvolveYourPartners,YourVendors,YourNetworkPlay#73:LetEmployeesInspiretheFoundationPlay#74:HaveYourFoundationMimicYourBusiness

PART7-TheGlobalPlaybook

HowtoLaunchYourProductandIntroduceYourModeltoNewMarkets

Play#75:BuildGlobalCapabilitiesintoYourProductPlay#76:InjectLocalLeaderswithYourCorporateDNAPlay#77:ChooseYourHeadquartersandTerritoriesWiselyPlay#78:BoxAboveYourWeightPlay#79:ScaleWithoutOverspendingPlay#80:UnderstandSequentialGrowthPlay#81:UpholdaOne-CompanyAttitudeAcrossBordersPlay#82:FollowStrategy,NotOpportunityPlay#83:GoingFar?TakeaPartner.GoingFast?GoAlone.Play#84:Fine-TuneYourInternationalStrategyPlay#85:SendMissionariestoBuildNewMarketsPlay#86:HandleGlobalDisputeswithDiplomacy(akaLightandLove)Play#87:EditanOverarchingOutlookPlay#88:BringOldTrickstoNewRegionsPlay#89:Don’tUsea“SeagullApproach”;theSecrettoGlobalSuccess

IsCommitment

PART8-TheFinancePlaybook

HowtoRaiseCapital,CreateaReturn,andNeverSellYourSoul

Play#90:Don’tUnderestimateYourFinancialNeedsPlay#91:ConsiderFundraisingStrategiesOtherThanVentureCapital

Play#92:UseInternetModelstoReduceStartUpCostsPlay#93:SetYourselfUpProperlyfromtheBeginning,ThenAllow

Your...Play#94:MeasureaFast-GrowingCompanyonRevenue,Not

ProfitabilityPlay#95:BuildaFirst-ClassFinancialTeamPlay#96:BeInnovativeandEdgyinEverythingYouDo—ExceptWhen

ItComesto...Play#97:WhenItComestoCompliance,AlwaysPlaybytheRulesPlay#98:FocusontheFuturePlay#99:AllowforChangeasYourCompanyGrows

PART9-TheLeadershipPlaybook

HowtoCreateAlignment—theKeytoOrganizationalSuccess

Play#100:UseV2MOMtoFocusYourGoalsandAlignYourOrganizationPlay#101:UseaTop-DownandBottom-UpApproachPlay#102:BuildaRecruitingCulturePlay#103:RecruitingIsSalesPlay#104:KeepYourStandardsHighasYouGrowPlay#105:HowtoRetainTopTalentPlay#106:TheImportanceofMahaloPlay#107:FosterLoyaltybyDoingtheRightThingPlay#108:ChallengeYourBestPeoplewithNewOpportunitiesPlay#109:SolicitEmployeeFeedback—andActOnItPlay#110:LeverageEverything

TheFinalPlay

Play#111:MakeEveryoneSuccessful

NotesAcknowledgementsAbouttheAuthorsIndex

Copyright©2009byMarcR.Benioff.Allrightsreserved.

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LibraryofCongressCataloging-in-PublicationDataIncludesbibliographicalreferencesandindex.

eISBN:978-0-470-53591-21.Salesforce.com(Firm)2.Customerrelations—Management.3.Salesmanagement.I.Adler,Carlye.II.

Title.HF5415.5.B.8-dc22

2009021671

HBPrinting

ForLynneandthesalesforce.comemployees,customers,andinvestors—withoutwhoseunconditionalsupport

wewouldnotbesuccessful

Foreword

In2001,inthemidstofourpreviouseconomicmeltdown,MarcBenioffcametomeworried.Internetcompanieshadevaporatedovernight,andsalesforce.com,atwo-year-oldcompanywithahighproportionofdot-comcustomers,wasailing.“I’mscaredaboutthefutureofmycompany,”Marcsaid.“Wecan’tgetventurecapital.I’mworriedaboutsurvival.” It was a precarious time, but I knew then, as I know now, that economicshakeoutsneednotbodemisfortunefortechnologycompanies.Not,atleast,forinnovative ones. Technology does not recognize economic recessions ordepressions;italwayscontinues.And,asallvisionariesknow,inchaosthereisopportunity.IassuredMarcthatsalesforce.comwouldlast.“Thisisyourtime,”Isaid.“Youcandothis.” Iwasbullishon salesforce.comandMarc, not because I have a crystal ball(though that certainlywouldbe convenient), butbecause therewas aneed forchange in the software industry and an audience ripening for salesforce.com’s“End of Software” revolution. I had seen similar issueswith affordability andaccessibilityplaguethehardwareindustrywhenIstartedDell.

Computershave longbeenapersonalpassion;growingup, Iwas fascinated

with themachines but also struck by the inefficiencies in the industry, whichrequired that we purchase computers from dealers, who bought them fromdistributors or manufacturers. Not only did that system yield a computer thatcostfourtimesthevalueofthepartsinside,butittooksolongthatthemachineswere obsolete by the time customers got them.Buying direct from the sourcewasanunprecedentedideaintheindustry,butitmadecommonsense—eventoacollege student.Thedrive to implement simplenew ideas anddefy traditionaloneshasbeenthefoundationofDell—andthebiggestreasonourcompanyhasreapedhugerewards. Salesforce.comsoughttosolvesimilarinefficienciesinthesoftwareindustry.Enterprisesoftwarewasexorbitantlyexpensiveandoneroustoimplement,and,intheend,itdidn’tworkverywell.Thiswaswhatenterprisecustomerscametoexpect. (Forgetsmallercustomers; theycouldn’tevenafford it.)MarcchangedthatrealitywhenheusedtheInternetasaplatformtodeliverbusinesssoftware

and reduce the risks and costs long associated with the client-server model.Saleforce.commade its service available to themasses, and it attentively andcreativelyengagedwith itsentireaudience. Itworkedfor thepeoplewhousedthe service (not only the folkspaying for it), and it builtwhat they requested.Thisearnedsalesforce.comanarmyofenthusiasts.Andthecompany’sfocusoncustomersuccessforcedallcompaniesinthesoftwareindustry—andfarbeyond—torethinktheirmodels. It certainly has inspired new thinking at Dell. Over the past few years, wecommitted to making some fundamental changes. We needed to refocus onprovidingthebestcustomerexperience,andwewantedtoscalefarbeyondthecommoditygameandrapidlyincreaseinnovation.Iwent toMarc,whoalwaysseemed tobeamachinefornewideas,andaskedhim,“Howcanwe innovatefaster?” Marc told me about an internal networking technology they were using atsalesforce.com to work with customers and create a “feedback loop.” Thisdiscussion led to IdeaStorm, an online community forum that we now use toengageour customers, elicit their ideas, andhelpdeterminewhichones toputinto practice. The site,which is like a live 24/7 focus group, has helped fieldideas from more than ten thousand customers and allowed us to offer betterproducts,suchasnotebookswithLinuxOSpreinstalled,backlitkeyboards,andcomputerswithmoreUSBports.At the time I amwriting this,our customershave contributed 11,289 ideas,which have been promoted by other customersmorethan651,394times,withover84,908comments.IdeaStormenablesustolistenasneverbefore,anditwasaturningpointinrestoringourreputationasacustomer-centriccompany.

AtDell,we’ve seen thebenefits of havingMarc and salesforce.comonour

side.Ithashelpedusaligntwentythousandmembersofourglobalsalesteam,integrate thousands of our global channel partners, and rapidly evolve ideas.That’swhywe’re now deploying the service acrossDell and putting it at thecenterofeverycustomerinteraction. Eight years ago,Marc had concerns about salesforce.com’s survival, but ofcourseitdidn’tjustsurvive—itthrived.Ithasearnedthedistinctionasthefirstdot-com listedon theNewYorkStockExchange, and today it generatesmorethan $1 billion in annual revenue. Salesforce.com changed corporatephilanthropy by integrating giving into its business model—and sharing thatmodel so that myriad companies have collectively flooded talent, products,

services,andbillionsofdollarsintotheircommunities.Becausesalesforce.comoffersemployeesanopportunitytomakeadifference,notjustearnapaycheck,it’sknownasoneofthebestplacestowork.Itsoriginalapplicationhasbecomethenumber-onehostedCRMservice,andthecompanyhasestablisheditselfasthe leader in the Software-as-a-Service (SaaS) industry it pioneered. And,through relentless focus, creativity, and passion, salesforce.com inspired anenterprisecloudcomputingindustry.Inshort,thenewandunconventionalideasthatsalesforce.comhasevangelizedhavechanged thewaywedobusinessandchangedtheworld.

Therehasbeenaprofoundshifttowardcloudcomputinginthepastfewyears.

Nearly everymajor public and private cloud is powered byDell, andwe areecstatic to be running today’s most exciting companies, includingsalesforce.com,Facebook,Microsoft,andmanyothers.Whatmotivatesmemostaboutthisnewwayofcomputingisitspotentialformassinnovation.Now,forthe first time, developers across the globe can access unlimited computingpower. It’sextraordinary thatwitha simpleWebconnection,anyonecanbuildapplicationsanddeploythemtouserseverywhere. By igniting the SaaS industry and then offering its Platform-as-a-Service,salesforce.com has spawned an ecosystem of countless new companies. It hasoffered largecompanies (suchasDell)andsmallercompanies just startingoutvaluableinsightsonhowtoinnovateandsucceedinthefuture.

InBehindtheCloud,MarcBenioffshareshisunconventionaladviceinaclear

andentertainingway.The lessons in thisbookarenotexclusive to technologycompanies. They are applicable to all companies and all leaderswhowant tochange the status quo andmake a difference.Marc tells the inspiring story ofhowtheydiditatsalesforce.com,andrevealshowanyoneelsecan,too.ThisisagreatguideforanyaspiringentrepreneurorCEOnavigatingthelandscapeofthefuture.It’stheplaybookforEnterprise2.0. We are in unprecedented economic times, but we are also in a new era ofinnovation.ItellanyonerunningabusinesstodayexactlywhatItoldMarcwhenhewasweatheringachallengingclimate:thisisyourtime.Youcandothis.And,withthetoolsinthisbook,itwillbeeasierandmorerewardingthaneverbefore.

MichaelDell

Founder,Chairman,andCEOofDell

Introduction

Thisbookisthestoryofhowsalesforce.comcreatedanewindustry,madeourcustomers successful, and established itself as the market leader, all whilemaking theworld abetterplace. In thisplaybook, I’ll share the strategies thatI’vedevelopedduringmythirtyyearsinthetechnologybusiness,thelasttenasthecofounderandCEOofoneofthefastest-growingsoftwarecompaniesintheworld. Istartedsalesforce.cominarentedapartmentin1999withthegoalofmakingenterprisesoftwareaseasytouseasaWebsitelikeAmazon.com.Thatidea—todeliverbusiness applications as a serviceover the Internet—would change thewaybusinesses use sophisticated software applications and, ultimately, changethe way the software industry works. In less than a decade, our business hasgrownfromasimpleideatoapubliccompanywithmorethanabilliondollarsinrevenue.

Wehave achieved successby approachingbusiness in anewway.Thenew

models we have created—for marketing, sales, technology, finance,philanthropy,globalexpansion,andleadership—havebeeneffectivelyemployedby other companies, and we believe that any company can succeed with ourstrategies. Atatimewhenmoreentrepreneursarestartingcompaniesfasterandcheaperthaneverbefore,thesimple,accessible,andunconventionaladviceofferedherewill help you stand out, innovate better, and grow faster in any economicclimate.Thebookfollowsthesameeasy-to-useandeasy-to-implementmantrasasourservice.Dividedinto111“plays”(afittingnumber,asour1-1-1modelisso responsible for our success), it tells you howwe developed award-winningbreakthroughproducts, toppledmuch larger competitors,woncustomersof allsizes—andrevealshowyoucandoall this too.Aswepromisecustomerswhouseourservice,expecttoseeimmediateresults.That’snotall,though.I’llshowyouhowtobuildabusinessthat’snotjustprofitablebutinspiring:goodforyouremployees,goodforyourcustomers,andgoodforyourcommunity.

Perhaps like you, I have always wanted to be an entrepreneur. I grew up

watchingmyfatherrunachainofwomen’sclothingstores,andmygrandfather,aninnovativeandunusualattorney,runhisownpracticeandcreateBART,theSan Francisco Bay Area Rapid Transit system. My obsession with softwarebeganwhen I wandered into a computer lab in high school. I would begmygrandmother to driveme to the local RadioShack so I could use the TRS 80model1.Later,IusedtheincomeImadeatmyafter-schooljob(cleaningcasesatajewelrystore)tobuymyowncomputer.Iwrotemyfirstpieceofsoftware(HowtoJuggle)andsolditfor$75. What I really loved was the ways we could use computers to shareinformation.When Iwas fifteenyearsold, I startedmy firstcompany,LibertySoftware,withsomefriends.WewroteadventuregamesfortheAtari800.Mygrandmotherwrotethemusicforthegames,andmyparentsweresupportiveofmy entrepreneurial endeavors, even permittingme to travel to Europe onmyown to research a castle I was going to replicate in a game. (The sense ofindependence that trip initially fostered was quelled when I forgot to phonehomeandmypanickedmothercalledScotlandYard.Embarrassing,buttrue.) ItwasincredibletosellsomethingthatIhadcreatedfromnothing.Itookthereviewsveryseriously;evenbackthenIknewthattobesuccessfulIneededtolisten to the users. Luckily, the games did well. I was sixteen years old andearningroyaltiesofabout$1,500amonth.Itwasenoughtobuyacarandcovercollege. I focused my studies at the University of Southern California on buildingcompaniesandcreatingnew technologies,and ranLibertySoftwareoutofmydormroom.ThelessonsIlearnedasanentrepreneurwerepivotal,aswerethoseI learned working for somebody else. In 1984, I had a summer job at ApplewritingsomeofthefirstnativeassemblylanguagefortheMacintosh.IhadtheopportunitytoworkonthemostexcitingandimportantprojectatApple,anditwas like getting paid to go to Disneyland. There were fruit smoothies in therefrigerators,amotorcycleinthelobby,andshiatsumassages.

The very best part was being able to witness Steve Jobs walking around,

motivatingthedevelopers.Steve’sleadershipcreatedtheenergyandspiritintheoffice. Apple encouraged the “think different” mind-set throughout its entireorganization.Weevenhadapirateflagontheroof.Thatsummer,Idiscoveredthat it was possible for an entrepreneur to encourage revolutionary ideas andfosteradistinctiveculture.

ThatlessonbecameevenmoreobviouswhenIreturnedtoAppleforasecondsummer internship as a technical sales support person with an Apple partner.Althoughonlyoneyearhadpassed,Applewasanextraordinarilydifferentplace.Steve Jobs had been fired, and everything I enjoyed about Apple’s visionaryculturehadevaporated.

While the environment was not as invigorating, I learned another critical

lesson that would guide the rest of my career: the power of each customerexchange. If the exchangewas executed aswell as possible—ifwemade thecustomertrulysuccessful—wehadtheopportunitytotransformhimorherintoan Apple loyalist and evangelist. This opened my eyes to the importance ofcustomersuccess. At heart Iwas still a shy computer programming geek addicted to buildingtechnology,butrightbeforegraduation,twoofmyentrepreneurshipprofessors,Tom O’Malia and Mac Davis, offered some direct advice that significantlyaltered my path. They told me that the most successful business executiveswould be the ones who got real-world experience before starting their owncompanies. In their opinion, “real-world experience” was a sales positionfocused on building relationships with customers. They called it “carrying abag.” Their advice ledme to accept a job at Oracle, answering customer servicecallsthatcameintothesoftwarecompany’s800number.Iwasn’tconvincedthatI wanted to dedicatemyself to sales, and I didn’t want to be an 800-numberoperator,butIsoondiscoveredthatworkingwithcustomerswasmuchmorefunthanwritingcode,anditturnedoutthatIwasprettygoodatit. Oracle had about two hundred people when I started, and the fast-growingcompany prized the efforts of young people and rewarded them. Founder andCEOLarryEllisonregularlywalkedthehallstochatwithemployees.(Iusuallytook these opportunities to sharemy enthusiasm forMacs.) Soon after I sentLarry a note asking when Oracle would be on theMacintosh and included abusinessplanabouthowtomakeussuccessfulintheApplemarket,LarrymademethedirectorofOracle’sMacintoshdivision.

Being responsible for the division that created software for personal

computerswas an amazing opportunity.Then, afterTomSiebel, the executivewhorandirectmarketing,resignedandrecommendedmeashisreplacement,I

inheritedanevenmoreexcitingandformativerole. ItwasLarry’svisionthatinspiredme.Hewantedmetocreatean“electronicvillage” and the next generation of sales and marketing using state-of-the-artelectronic conferencing technology, software systems, and multimedia. Larryenvisioned a world of interconnected computers that could easily shareinformation across the planet at the touchof a button.The Internet seemed toofferapathtoreachsmallanddisaggregatedcustomers,andIbelieveditcouldultimatelytransformtheindustry.

Bythemid-1990s,suchcompaniesasAmazonandYahoo!wereintroducinga

newwayoflifeforconsumers.ManyofmycolleagueswereleavingOracletolead their own companies, most of which were traditional software plays. Inmany ways, Oracle served as an incubator where you got your legs, built anetworkof friends, and learnedwhatyouneeded togooffonyourown—andultimately compete with Oracle. Although I had invested in several of thesecompanies,Iwasn’tquitereadytoleaveOracleUniversity.Ifelttetheredtothegrowingcorporationby theexcitementofapowerful joband thesecurityofalucrative salary and addictive stock options. In addition, there was therelationshipIhadwithLarry,mymentorandfriend,oneofthegreatestsoftwareentrepreneursintheindustry’shistory.Iwaslearningfromthebest. Duringmy tenure at Oracle, the company exploded into the second-largestsoftwarecompanyintheworld,rightafterMicrosoft.Althoughitscultureprizedinnovation, the company could no longer respond quickly or easily to newdirectionsoropportunities.Ifoundthatlimitationextremelychallenging,anditeventuallydrovemetoseekopportunitiesoutsideOracle.

Maybeyouarethinkingaboutleavingasecurejobtostartyourowncompany,

or perhaps you are already running your own business. For me, launchingsalesforce.comwas away to respond to newdirections andnewopportunitiesthatIcouldnotpursuefrominsideanestablishedcorporation.Itwasalicensetodothingsdifferently.Fromtheverybeginning,salesforce.comsetouttobuildanewtechnologymodel(on-demand,ordeliveredovertheInternet—nowcalledcloud computing), a new sales model (subscription based), and a newphilanthropicmodel (integrated into the corporation). Ten years later, we hadsucceeded on all of these fronts. We also had surpassed my expectations bycreatingthefirst$1billioncloudcomputingcompanyandspawninganew$46

billionindustry,ofwhichwearethemarketleader. Readontolearnhowwebecameoneoftheworld’sfastest-growingsoftwarecompaniesandaboutthetremendousfunwe’vehadalongtheway.You’lltravelwithusaswehaveourbigentrepreneurialepiphany,aswe turna simple ideainto a startup company, and as we develop innovative technology and sell itthrough unconventional strategies. You’ll witness our struggles, includingcomingclosetobankruptcyduringthedot-comdisaster.Finally,you’llseehowour unconventional ideaswere validated through our listing on theNewYorkStockExchangeandhow,throughitall,we’vefoundawaytogiveback.

Thetacticsandstrategiesthatdefineourstorycanhelpanycompanysucceed,

andevenbecome thenext salesforce.com.So turn thepage and envisionyoursuccess.Thisisthefirststepinmakingithappen.

PART1

TheStartUpPlaybook

HowtoTurnaSimpleIdeaintoaHigh-GrowthCompany

Play#1:AllowYourselfTimetoRecharge

Some ideas hit with a big bang. Others take time to stew. The idea forsalesforce.com had been simmering since 1996 when I was a senior vicepresidentatOracle.IhadbeentherefortenyearsandwasbecomingsomethingIhadneveranticipated:acorporatelifer.

IknewthatIneededachange,butIwasn’tsurewhatIwantedtodo.Quit?

Start a company? Take Oracle in a different direction? I was searching forbalanceinmylifeaswellasanopportunitytopursuesomethingmeaningful.ItookabadlyneededsabbaticalfromworkandrentedahutontheBigIslandofHawaii, where I enjoyed swimming with dolphins in the ocean and havingenoughtimebymyselftoreallythinkaboutthefuture. My friends, including Oracle colleagues, came to visit. We had long talksaboutwhat the futurewould look likeandwhatwewanted todo.KatrinaandTerryGarnettwereamong thosewhospent timewithme.Terryand Ibecamefriendswhen he ranmarketing and business development forOracle.He latermovedtoVenrock,theRockefellerfamily’sventurearm,celebratedforitswiseinvestmentsincompanieslikeAppleandIntel,andhewasmakinginvestmentsin early-stage startups. I had a great respect for hismarket instincts.Oneday,duringaswim,webegandiscussingonlinesearchenginesandhowtheInternetwaschangingeverythingforconsumers. IwasintriguedbyWebsitessuchasAmazon.com,whichrevolutionized thewayconsumersshopped.IthoughttheInternetwouldchangethelandscapeforbusinesses,too.ItoldTerrythatIwasexploringhowtotakethebenefitsoftheconsumer Web to the business world. He enthusiastically encouraged me topursuemy own Internet technology business. “You’ve been atOracle forever;youknowthesaferoute,”hesaid.“ButIthinkyouareanentrepreneur.Ithinkyoucandosomethingnew.” After threemonthsinHawaii,I traveledtoIndiafortwomonthswithArjunGupta, a good friend who was at a similar crossroads.We had an incredibleawakening in India. One of our most invigorating meetings was with HisHoliness the Dalai Lama, who talked about finding one’s calling and the

importanceofcommunityservice.WealsosoughtinsightfromtheHinduguruandhumanitarianleaderSriSriRaviShankar.Butthemostpivotalmeetingforme was with Mata Amritanandamayi, commonly known as Ammachi, “thehuggingsaint,”becauseshewarmlyembraceseveryonewhocomestovisither.She’shuggedatleastthirtymillionpeopleandhascallusesonherfacefromsomanyencounters.Knownas the“motherof immortalbliss,”shehasdedicatedherlifetoeasingthesufferingofothers. ArjunandImetprivatelywithAmmachi,anditwasshewhointroducedmetotheidea,andpossibility,ofgivingbacktotheworldwhilepursuingmycareerambitions.IrealizedthatIdidn’thavetomakeachoicebetweendoingbusinessand doing good. I could align these two values and strive to succeed at bothsimultaneously.ItoldherIwasthinkingaboutleavingOracle,andshetoldme,“Notyet.” My sabbaticalwas one of themost productive periods ofmy career; itwascertainlyoneofthemostinfluential.Don’tbeafraidtotaketimeoffwhenyouneedit.Youcouldlearnsomethingthatwillchangethecourseofyourlife,andat the least you will stave off the burnout that plagues so many driven,entrepreneurialpeople.

Play#2:HaveaBigDream

Isawanopportunitytodeliverbusinesssoftwareapplicationsinanewway.Myvision was to make software easier to purchase, simpler to use, and moredemocraticwithout the complexities of installation,maintenance, and constantupgrades. Rather than sellingmultimillion-dollar CD-ROM software packagesthat took six to eighteen months for companies to install and required heftyinvestments in hardware and networking,wewould sell Software-as-a-Servicethroughamodelknownascloudcomputing.Companiescouldpayper-user,per-monthfeesfortheservicestheyused,andthoseserviceswouldbedeliveredtothemimmediatelyviatheInternet,inthecloud.

If we hosted it ourselves and used the Internet as a delivery platform,

customerswouldn’thave toshutdown theiroperationsas theirprogramswereinstalled.ThesoftwarewouldbeonaWebsitethattheycouldaccessfromanydevice anywhere in the world, 24/7. This model made software similar to autility, akin to paying a monthly electric bill. Why couldn’t customers pay amonthly bill for a service that would run business applications whenever andwherever? This delivery model seems so obvious now. Today we call it on-demand,Software-as-a-Service (SaaS), multitenant (shared infrastructure), or cloudcomputing. In fact, Nicholas Carr, former executive editor of the HarvardBusinessReviewandoneofthemostinfluentialthinkersintheITindustry,hassincewrittentwobest-sellingbooksvalidatingthisidea.Carrhasevensuggestedthat “utility-supplied” computing will have economic and social impacts asprofound as the ones that took place one hundred years ago,when companies“stopped generating their own power with steam engines and dynamos andpluggedintothenewlybuiltelectricgrid.”1 The industry has come a long way, but consider that when we started, wedidn’t have these industry supporters, or even these words, to describe thecomputingrevolutionwebelievedwasbeginning.Althoughtherewasyettobeany kind of SaaS industry, I believed that all software would eventually bedeliveredinthecloud.Iwouldsoonfindthatinordertopursuemydream,Ihad

to believe in it passionately and be ready to constantly defend it. This lessonlearnedduringourearliestdaysstillguidesustoday.

Play#3:BelieveinYourself

WhileIwasinHawaii,thecustomerrelationshipmanagement(CRM)companySiebel Systems went public. I had worked with the founder, Tom Siebel, atOracle, and was familiar with a sales force automation product called OracleAutomatic Sales and Information Systems (OASIS), which he had developedand had parlayed intoSiebel. I thought a program that allowed salespeople totrackleads,managecontacts,andkeeptabsonaccountinformationwasagreatidea,andIhadbeenanearlyangelinvestorinhiscompany.Siebeltookoff,andtheIPOnettedmeagreatreturn,yetIalsoknewtheproduct’sflaws.Thismademethinkaboutsalesforceautomation(SFA)orCRMasanapplicationcategorywithrevolutionarypotentialtobedeliveredon-demand,asaservice.

SFAisahugemarket;everycompanyhassomekindofsalesforce.Inthelate

1990s, when I was investigating the category, there was certainly room forimprovement.Enterprisesoftwarewasespeciallyburdensomeforthecustomer.Itrequiredmaintenanceandcustomizationthatneededmonths,orevenyears,togetright.ItalsorequiredaheftyITresourcecommitment,andmoremoneythanmanycompanieswantedtospendonthisaspectoftheirbusinesses.Itstruckmeas curious that although this softwarewas so troublesome, it remainedwildlypopular. I attributed this to the fact that if the software could increase salesproductivitybyeven5percent, itmadeameaningfuldifference to abusiness.What would happen, I wondered, if we offered a product that could increaseproductivitybythesameamount,ormore,andwemadeiteasiertoaffordanduse?Couldyougetareturnoninvestmentinsixtotwelvemonthsratherthaninthree to five years? Replacing the traditional client-server model for an on-demandservicethatwassimpleandinexpensiveseemedlikeasurethingtome. I had a number of conversationswith Tom Siebel about creating an onlineCRMproduct.Typicallicensingsoftwarewassellingforextraordinaryamountsofmoney.The low-endproductcouldstartaround$1,500peruserper license.Worse, buying pricey software wasn’t the only expense. There could be anadditional $54,000 for support; $1,200,000 for customization and consulting;$385,000forthebasichardwaretorunit;$100,000foradministrativepersonnel;and$30,000intraining.Thetotalcostfor200peopletousealow-endproduct

inthe1990scouldexceed$1.8millioninthefirstyearalone.2 Most egregious was that the majority of this expensive (and even moreexpensively managed) software became “shelfware,” as 65 percent of Siebellicenseswereneverused,accordingtotheresearchgroupGartner.3 I told Tom about the SaaS CRM solution I envisioned. We would have“subscribers”payasmallmonthlyfee($50to$100,whichaddeduptolessthanhalfthecostofthetraditionalsystems),andwe’d“operate”itsotherewouldbeno messy installation for the customer. Tom liked the idea so much that heinvitedmetojoinSiebel.

Through further discussions, however, I realized thatTom saw thepotential

onlywiththesmallbusinessdivision,atinypercentageofSiebel’smarket.Isawthe idea as havingmuchwider appeal. I thought it was something that couldrevolutionize the software industry. I knew Internet-based applications wouldeventuallyreplacetraditionalofflinesoftware.Ibecamepassionateandobsessedwiththisidea,anddecidedtogoafteritonmyown.

Play #4:Trust aSelectFewwithYour Idea andListen toTheirAdvice

IwascertainthatIwantedtostartsalesforce.com,butIwasn’treadytoopenlydiscussmyidea.Infall1998ImetforlunchwithBobbyYazdani,afriendfromOracle and the founder of the human capital management company SabaSoftware.WeweregettingtogethertodiscussSaba,inwhichIhadinvested.

Likeme,Bobbywasstruckbythetransformationthatwashappeningbecause

of the Internet.Weknewwewerewitnessingamajor shift, and itwasn’t longbeforeourconversationturnedtothesubjectofambitionandentrepreneurship. “Thenumber-onemistakeentrepreneursmakeisthattheyholdtheirideastoocloselytotheirchest,”Bobbysaid.“Theirdestinyistheirdestiny,though.Iftheysharetheirideas,otherscanhelpmakeithappen.” IconsideredwhatBobbywassayingandsilentlyacknowledgedhowIhadn’tmentioned the idea of starting salesforce.com to anyone since Tom Siebel.MaybeBobbyhadavalidpoint. I toldhimIwanted tobuildCRMonlineanddeliveritasaservice. “It’sverygoodyoutoldme,”hesaid. “Why’sthat?” “Ihavethreemenworkingformeascontractors.NotonlydotheyhaveSFAexperience, but they have experiencewithmajor Internet applications aswell.Theyarethebestofbothworlds.” Icouldn’tbelievethiscoincidence,ormygoodfortune.Bobbyexplainedthatthe threedevelopershad theirowncompany,LeftCoastSoftware, and thathehadwantedtobuythemout,but theyweren’t interested.Theywantedtogrowsomething, and felt that Sabawas too far along. “They are brilliant engineerswith good vision,” Bobby said. “Let me introduce you to Parker Harris.” Iwasn’tawareofitatthetime,butbytheendofthatlunchmydestinywasset.

Play#5:PursueTopTalentasIfYourSuccessDependedonIt

ImetwithParkerHarrisassoonaspossible.“So,areyouguysgood?”Iasked. “We’resomeofthebestpeopleyou’llfindintheValley.” Ilikedthatconfidence,especiallyconsideringthatitwasbolsteredbywhatIhad alreadyheard.Still, I preparedmyself for a very shortmeeting.AlthoughParkerseemedlikeapromisingtechnicalcandidate,Iwasn’tsurethat thiswasthenextmovehehadenvisionedforhimself.I’dheardthatParkerhadrecentlyreturned from a six-week trek inNepal and told his business partners that hewantedtodosomethingmoremeaningfulthanhelpingsalespeoplesellmore.IwasconcernedthatParkerwouldbefundamentallyopposedtoSFAandthathewouldthinkitboringbecausehehaddoneitbefore. I also thought that enterprise softwarewasboring, butmyvisionwas todosomethingmuchbigger.Myvisionwas “the endof the softwarebusiness andtechnologymodels” aswe knew it. I believed that thiswas a great story andwould appeal to Parker, who hadmajored in English literature atMiddleburyCollege.Building thisservicealsoprovidedan intellectualchallenge inasmuchas it had to be highly scalable, reliable, and secure; the service had to besomethingeverycustomercouldusesimultaneously.Iknewthatthescalingtestwould be compelling to any great developer. I also had a trump card: ParkerwantedtobeinSanFrancisco.Everyday,heenduredalongcommutefromhishouse in the city to the Saba offices in Redwood Shores. “I have the sameproblem,”Itoldhim.“Salesforce.comwillbeinthecity.” Parkerwassold,buthehadtogethisbusinesspartners,especially themorepessimisticDaveMoellenhoff,toseethelight.

Play#6:SellYourIdeatoSkepticsandRespondCalmlytoCritics

On a Saturday morning in November 1998, the developers from Left CoastSoftware came to my house on Telegraph Hill to discuss buildingsalesforce.com. I had written a short business plan in preparation for themeeting.Afterthedevelopersreadit,Davetoldmeallthereasonswhyitwas“acrackpotidea”andwouldneverwork.

“It’sanenterprisesale,”Davesaid.

“Thisistotallydifferentthanallofenterprisesoftware.It’sthenextgenerationofcompaniesthatdon’tevensellsoftware.Itisanew,moredemocraticway.Itis the end of the software technology model. It is the end of the softwarebusinessmodel.Itistheendofsoftwareasweknowit,”Ireplied. “You’ll have to invest a ton of time to land customers,” Dave said. “Whywouldtheytrustthis?Whywouldtheybuythis?” “Peoplewant tobe apart of something that is the future,” I said. “Besides,peoplearefrustratedwiththecurrentsystems.Thiswillbebetter:we’lldeliverthe applications as a Web site with easy-to-use tabs. It will be as simple asAmazon or Yahoo! Unlike our competitors, we’re not asking for a biginvestmentupfront.Theconceptisasimplesubscriptionmodelof$50peruserpermonth. It’s 10 percent of what people are paying for Siebel—and, unlikeSiebel,we’llhaveourcustomersforever.” “WhataboutSiebel?Don’tyoufinditsdominancefrightening?”askedDave.“Isthereroomforsomeoneelse?” “Siebelisunabletosatisfymostcompaniesoutthere.TheInternetwillallowustogiveallcompaniesanalternativesolutionforwhichtheydon’thavetopaya fortune and that theywill enjoyusing.The Internet,with all this power andcapability,willdestroytheclient-servercompaniesthatstandtoday.Technologyisalwaysbecominglowerincostandeasiertouse.It’sacontinuum.Let’srideit.” Davetriedtoprovokemewithnegativecommentsabouttheproductswebuilt

atOracle(whereIwasstillworking).“Frankly,Oraclehasn’tcreatedanythinggreatotherthanitsdatabase,”hesaid. Iknewbetterthantotakeoffense,andIsimplydisagreedpolitely.Later,DavetoldmethathehadplannedtogrillmetoseehowIwouldconvincepeopleofthe concept and was also testing to see how I would react to negativity. Heassumed that I must have had a temper to survive and thrive at Oracle—aMachiavellianenvironmentperpetuatedbyLarry’swell-known“managementbyridicule” style. (It was no secret that insiders described the culture with thephrase “We eat our young.”)Thatwasn’t how I liked to operate, though.Thetime I’d spent in India andmycommitment topracticingyogaandmeditationserved me well, as did reading Sun Tzu’s The Art of War, which advocateskeepingone’scoolatalltimes.

HowtoStayCalmintheEyeoftheStorm“Hewhoisquicktemperedcanbeinsulted,”SunTzuexplainedintheArtofWar.Thesefourcheckpointscanhelpyoustaycool—andretainyourpower—eveninthemostheatedsituations:

•Stayinthepresentmoment.•Observeyourfeelings.Donotbecomeyourfeelings.Beaware

ofyourreactions.•Donottakeonothers’feelings,butlistentoothers—and

yourself.•Askyourself,“HowshouldIhandlethis?ShouldIreactatall?”

Play#7:DefineYourValuesandCultureUpFront

On March 8, 1999, Parker Harris, Frank Dominguez, and Dave Moellenhoffbegan working in a one-bedroom apartment I’d rented at 1449 Montgomery,nextdoortomyhouse.Wedidn’thaveofficefurniture,soweusedcardtablesand folding chairs. What we lacked in furnishings, we made up for with anamazing viewof theSanFranciscoBayBridge. I hung a picture of theDalaiLamaover thefireplaceandanotherofAlbertEinsteinon thewall.BothwerepartofApple’snewadcampaign,andeachsaid,“ThinkDifferent.” MysummersatApplehadtaughtmethatthesecrettoencouragingcreativityandproducingthebestpossibleproductwastokeeppeoplefulfilledandhappy.Iwantedthepeoplewhobuiltsalesforce.comtobeinspiredandtofeelvalued. Thatwasn’ttosaytherewasanythingglamorousaboutthoseearlydays.(Theoriginal server roomwas the bedroom closet,which also held Frank’s clothesbecausehewasflyingdownfromPortlandfortheworkweekandsleepingonafutonunderhisdesk.)Webuiltaculturesimplybydoingwhatweenjoyed.Wewore Hawaiian shirts to instill the aloha spirit in the company. We ate latebreakfasts at one ofmy favorite restaurants,Mama’s, just down the street onWashington Square.Dave brought his dog towork. I got a dog too, a goldenretrievernamedKoa,whoalsojoinedusintheofficeandsoongotpromotedtoCLO(chiefloveofficer).

Play#8:WorkOnlyonWhatIsImportant

Webuiltthefirstprototypewithinamonth.Itdidn’ttakeverylongbecausethedevelopers knew sales force automation from their previous experiences.Further, it was a lot easier to build a Web site than to create complicatedenterprisesoftware.Ouroverarchinggoalwas,asthedeveloperssaid,to“doitfast,simple,andrightthefirsttime.”Theuserinterfacewasbarebonesalmosttoafault,butwewantedtheservicetobeextremelyeasytouse.Ithadonlythenecessary information fields, such as contacts, accounts, and opportunities,whichwereinitiallyorganizedbygreentabsatthetopofthescreen.“Nofluff,”one of our first developers, PaulNakada, used to say.Exactly likeAmazon, Ithought.

Our focus was directed at developing the best possible and easiest to use

product,andthisiswhereweinvestedourtime.Realizethatyouwon’tbeabletobringthesamefocustoeverythinginthebeginning.Therewon’tbeenoughpeople or enough hours in the day. So focus on the 20 percent thatmakes 80percentofthedifference.

Play#9:ListentoYourProspectiveCustomers

I invited friends and colleagues to visit the apartment, which I called theLaboratory, and asked them to test the prototype andoffer feedback.MichellePohndorfForbes,afamilyfriendwhowasinsales,wasoneof thefirstpeopleweinvitedtocyclethroughtheprototype.Sheconstantlyremindedustomakethesiteeasytonavigatewithasfewclicksaspossible.MyfriendswhoworkedatCiscosharedeverythingtheyhatedaboutusingtraditionalenterprisesoftwareproducts,andtheywalkedusthroughwhatwasn’tworkingforthem.Welistenedand then responded by designing salesforce.com to be all the things thattraditionalsoftwarewasn’t.

Unlike the way software had traditionally been developed—in secret—

everyone was welcome at the Laboratory. When a group of Japanesebusinessmen were in town, they came to see what we were creating. WeeventuallybecameastoponatourforvisitingKoreanbusinesspeoplewhowereinterestedinseeinganAmericanstartup.Beinginclusiveofpotentialusersfromlarge and small companies across the world helped us gain valuable insight.After all, our goal was to build something that could serve as a global CRMsolutionforthemasses. In addition to asking dozens of people to cycle through the application,wehired Usability Sciences in Texas to test the product. The company providedfeedbackandvideotapesofpeopleusingthesitesothatwecouldseewhatelseneededtweaking.Oneproblemwediscovered,forexample,wasthatour“createanewaccount”buttonwasinthewrongplace.Itwasontheright-handside,anditdisappearedonsomemonitors.Bysimplymovingittotheleftside,mirroringthewaypeople read,we sawahuge improvement in thewaypeopleused thesite.Thisexperienceprovedthevalueofinvolvingprospectiveusersinordertobuildauserinterfacethatwasintuitive.

Play#10:DefyConvention

Askingusersforfeedbacksothatyoucanfine-tuneaproductorservicetotheirneedsiscommonsense.Yetthispracticewascompletelycounterintuitivetotheway the software industry worked. Don’t be afraid to ignore rules of yourindustrythathavebecomeobsoleteorthatdefycommonsense.

Creating an attractive user interface that people enjoy using is the key to

buildinga trulygreatproduct.Thisseemssoobvious,but itwasn’t thewayinwhichsoftwaredesignwascustomarilyapproached. Steve Jobs is themasterofbuildingcomputerproducts that createcustomerexcitement and loyalty. It’s also no coincidence that his products look likenothingelseoutthere.Thinkdifferentlyineverythingyoudo.

Play#11:Have—andListento—aTrustedMentor

When we first started building salesforce.com, I was still working at Oracle,where I was creating a new software product called Internet File System anddevelopingthecompany’sphilanthropyprogram.Ihadmanylongconversationswith my boss, Larry Ellison, about my outside endeavor. Brainstorming withLarryaboutnewideasandproductshadalwaysbeenthebestpartofmyjob,andLarrywasveryinsightfulandencouragingwhenitcametosalesforce.com.Hegave me permission to work at salesforce.com in the mornings and come toOracleintheafternoons.Iwasgratefulforthatunusualarrangement.

Then, after I’d been running and self-financing salesforce. com for ninety

days, Larry suggested I take a leave of absence from Oracle. He said that ifsalesforce.comdidn’tworkout,Icouldcomeback—aremarkableandgenerousoffer. Larry valued loyalty, and until that time, he’d been quick to say “goodriddance”toanyonewhoexpressedaninterestinmovingbeyondOracle.Larrywas much more than my boss, though. He was my mentor for more than adecadeaswellasaclosefriend. Throughoutthethirteenyearsweworkedtogether,LarryandIspentcountlesshoursdiscussingpotentialfutureinnovations.Larrybelievedthatsalesforce.comwasthenextbigidea,andheinvested$2millioninseedmoneyandjoinedtheboardofdirectors.Heknewthat Ineededtop talent,andashewasaware thatOraclewouldbethefirstplaceIwouldlooktofindit,herequestedItakeonlythreepeoplefromOraclewithmetosalesforce.com.

Play#12:HiretheBestPlayersYouKnow

IobligedLarry’srequesttolimitmyuseofOracleasarecruitingfair,butIwasecstatic about the opportunity to handpick three talented and well-trainedindividuals to help build salesforce.com. I asked Nancy Connery to runrecruitingandhumanresources,somethingwedesperatelyneeded.ItappedJimCavalieri to build the hardware on which the software would run. Jim didn’tknow anything about sales force automation, as his background was largedatabases, but I believed he could build a systemwith the right infrastructurethatwould allow us to scale to supportmillions of users. Later I hiredMitchWallace, whom I had also met at Oracle. I had been impressed by theinventivenessMitchshowedinbuildinganapplicationfortheCaliforniaMentorInitiative, and he had been a key player in helping me build Oracle’sphilanthropyprogram. Thanks toNancy’s focus on hiring,we began to grow, and our burgeoningteam soon took over the entire apartment. I based the developers in theLaboratory, whichwas upstairs, with the view, andmoved themarketing andsalespeople, aka the “talkers,” downstairs so that they wouldn’t distract theengineers. (Engineers rule.) Eventually, I banned the talkers from the upstairsentirelyinorder tomaintainasereneenvironmentfor thedevelopers.Weusedthe balcony as the conference room. Our friend Jim Gray, the legendarycomputerscientistandheadofMicrosoftresearch,whowastragicallylostatseain2007,wasnearbyaswell.Hesentmeane-mail in1999askingwhat Iwasdoing.WhenItoldhim,hereplied,“Theregoestheneighborhood.”

TheLarryEllisonPlaybookManyofthelessonsIlearnedfromLarrystillguidemetoday.Mostofall,hetaughtmethataccomplishmentsarefueledbyfaith.WhenOracleentereditsdarkestdays,everyemployee,customer,analyst,andeventhepeopleclosesttohimdoubtedthecompanywouldrebound.Eveninthatdifficultclimate,Larry’sresolveneverfaltered.WhatIlearnedfromLarry:

•Alwayshaveavision.

•Bepassionate.•Actconfident,evenwhenyou’renot.•Thinkofitasyouwantit,notasitis!•Don’tletothersswayyoufromyourpointofview.•Seethingsinthepresent,eveniftheyareinthefuture.(We

jokedthatLarrygothistensesconfusedbecausehewouldtalkaboutthingsthathadn’thappenedyetasiftheyhad.Thistaughtmethatasuccessfulleaderisonewhoisalwaysthinkingaboutthefuture,notjustthepresent.WayneGretzkyfamouslyputitanotherway:“Skatetowherethepuckisgoing,notwhereithasbeen.”)

•Don’tgiveothersyourpower.Ever.In a way, Jim Gray was right. It wasn’t long before our growing staff

appropriatedmyhousenextdoor.ThedevelopersstrungEthernetcableouttheofficewindow,throughtheredwoodtrees,andintomyhomesothatwecouldallcommunicate.(Thesewerethedarkdaysbeforewireless.)Myassistantworkedfrommyhome,asdidNancy,whoranhumanresourcesinadownstairsbedroomwith a product manager, a business development manager, and a part-timeattorney.Itwasn’tideal.Iwouldoftencomedownstairstogetbreakfastandfindrecruitssittingonmylivingroomsofa.Asweweregrowingintoarealcompanywithanamazinganddedicated team, salesforce.comwasquickly filling everycornerofmylife.

Play#13:BeWillingtoTakeaRisk—NoHedging

A few months into building salesforce.com, Magdalena Yesil, a fellowentrepreneurandsalesforce.com’sfirstinvestor,andIwereleavingapromisingmeetingwith a potential investorwhen she turned tome and said, “The nextmajorstepisforyoutofullyleaveOracleandendyourleaveofabsence.It istimetobeafull-timeentrepreneur.” Thiscaughtmebysurprise.IhadassumedthatIcouldnurturesalesforce.comwithoutabandoningOracle.IhadspentsomuchofmycareeratOracle,andithadbecomesomuchapartofmyidentity.IrealizedthatMagdalenawasright,though.ItwastimetocutmyothertiesanddevoteeverythingIhadtobuildingsalesforce.com. After all, I was relentlessly passionate about the idea, whichmademewilling to take an enormous risk.Thiswas amajor turning point inhowIviewedthecompanyandmyroleinit. In July 1999, salesforce.com becamemy full-time job. The first decision Imadewas thathavingeveryoneworkingnextdoorandoutofmy living roomwasnot themost sustainable solution.Onmy first official full dayofwork, Iwent out to look for new office space. My sister’s friend recommended theRinconCenter.Ilikeditimmediatelybecausethereweredolphinsdecoratingthebuilding,andIviewedthisasapositivesignbecauseIhaddevelopedtheideafor salesforce.com while swimming with dolphins in Hawaii. Parker and theteamcame to see thenew space. Itwasnearly eight thousand square feet andlong and narrow. At the time, there were ten employees at salesforce.com.“That’swaytoomuchspace,”Parkersaid.

HowtoLeaveaPlaceWhereYouHaveInvestedEverything—WithoutBurningBridges

Leavingthecomfortandsecurityofacurrentpositiontostartyourownventureisexciting—anddaunting.You’llfirstneedtodoyourownsoul-searchingtogainthenecessaryconfidence.Thesefivetipscanhelpmaketheprocessofleavingeasier,andultimatelymaketheventuremore

successful.

Seektheencouragementandsupportofyourmentor.Thebestmentorsencouragetheirmenteestotakerisksandpushtheirlimits.Thesementorswillserveasanimportantsupportsystem.Buildawelcomingenvironmentwithfamiliarfaces.Atsalesforce.com,weinitiallyhiredpeoplefromourowncircles—beitfromoursocialcircles,fellowalumnifromOracle,orevenfromcollege.Usingthisapproachmadeiteasyformetofeelfullyconfidentinmyteam,andmadeourfirstemployees—peoplewhoalsoleftsecureroles—feelmorecomfortableandexcitedaboutembarkingonthisadventure.

Embraceincreasedresponsibility.Theopportunitytogrowyourcareerisalwaysakeyreasontomakeamovefromasecurecompany.Considerthethrilloftheunknown.Joiningastartupisoneoflife’smostexcitingandrewardingexperiences.Sure,ithasitsupsanddownslikearideatanamusementpark,butformanypeoplethat’senjoyable.

Weightheabilitytotakerisks.Havingfaithinyourabilitiesisessential,butsoisexaminingwhereyouareinlifeandwhetherornotrisk-takingisanoption.

“We’llneveruseitall.Whatareyoudoing?”Hewasveryupsetandconcerned.

Iwasn’tthinkingaboutthecompanywewereatthatmoment.Iwasthinking

aboutthecompanyIwantedustobe.“I likeit;we’regoingtotakeit.”Isaid.“We’llbeoutofherebeforeyouknowit.”Parkerdidnotbelieveme.

Play#14:ThinkBigger

Insummer1999wehadtenemployeesandatwo-pageWebsite(ahomepageand a recruiting page requesting that resumes be sent tocooljobs@salesforce.com). Everywhere we looked, Internet companies weregrowingwildly,andfinancialdealswereheatingup.Wewereconstantlytalkingaboutthedealsofthepastfewyears,suchasHotmail,whichhadsoldfor$400million.

“That’salotofmoney,Marc.Don’tyouthinkthat’salotofmoney?”asked

Frank Dominguez, one of the salesforce.com developers and cofounders,referringtotheHotmaildeal. “No, I would never sell for that. They left a lot ofmoney on the table,” Ireplied.Frankcouldn’tbelieve that Icould thinksobigwhenwewerestill sosmall.Although the other founderswere initially leery about ourmove to theRinconCenter,theyquicklygrewtolikethenewlargerspace.Theydrovegolfballsdownthelengthoftheofficeandflewremote-controlheliumblimps.Wehadnoofficefurniture,soweput tablesbytheoutlets thatwerealreadythere.Everyonehadtosetuphisorherowndesks(weboughtsawhorsesanddoorsatHomeDepot), and employees received their computers inboxes andput themtogetherthemselves.ItwasanarchetypalCaliforniastartupscenewithadogintheoffice and amass of young and energetic peoplewearingHawaiian shirts,workinghard,andsubsistingonpretzels,RedVineslicorice,andbeefjerky.

In typical dot-com style, we exploded. By the time cofounder Dave

Moellenhoff returned fromhis three-week honeymoon inNovember 1999, thestaffhaddoubled.AsIhadpromisedParker,aboutoneyearafterwemovedintothe Rincon Center, wewere bursting out of the space. Three salespeople haddesksinahallway,andfiveITspecialistshadtakenovertheconferenceroom.Our nextmove, in November 2000, was to shiny new offices at OneMarketStreet.Itwasonlyablockaway,soweputtheserversonofficechairsandrolledthem across the street. Although we were not going any great distancegeographically,theleapusheredinanentirelyneweraforourcompany.

PART2

TheMarketingPlaybook

HowtoCutThroughtheNoiseandPitchtheBiggerPicture

Play#15:PositionYourself

Even before salesforce.com officially launched, we understood the value of amarketing-obsessedculture,andwestrovetogenerateexcitementaboutournewon-demand deliverymodel.DonClark, a reporter at theWall Street Journal ,visiteduswhilewewerestillbasedintheapartment,andhewroteafront-pagestory called “Canceled Programs: Software Is Becoming an Online Service,ShakingUpanIndustry.”PublishedonJuly21,1999,thearticleillustratedtheshift that was occurring. Clark cited our company, founded only six monthsbefore,asoneoftheexamples.HewrotethatIwas“drivenbyachancetomakehigh-techhistory,”andheclosedthearticlebyquotingmesaying,“Thiswillbethespawningofanewindustry.”1 Thearticlehelpeduspositionourselvesaswehadwanted(asrevolutionaries)andmademe realize thatwewere in thepublic arena.Weneeded a realWebsite.Immediately.IaskedParkerHarristobuilditovernight,andthatturnedoutto be an auspicious decision.We received five hundred leads the next day! Itbecameclearthatweweretrulyontosomething. We continued to unveil our idea to beta customers, and that fall, I went toMonacotoattendtheEuropeanTechnologyRoundtableExhibition(ETRE),theworld’smostinfluentialgatheringoftechnologyCEOs.Atthetime,wedidnothaveapublicrelationsagencytohelpusgarnerpress.AlthoughIhadwantedtoengageOutCastCommunications,afirmwithwhichIhadworkedonaprojectatOracle,founderCarynMarooneywastoobusytostartworkforusrightaway.Luckily, Pam Alexander, a noted high-tech strategist, found me at the ETREshowandconvincedmetohaveapressparty.Ihostedasmallpartyinmysuiteat the beautiful Hotel de Paris, and I demonstrated the product to a group ofthirtypeople. Pamwas correct in her assumption that the industrywould be interested inhearingfromus.Prominentjournalistsattended,includingDavidKirkpatrickofFortuneandDavidEinstein,theWestCoastbureauchiefofForbes,andpeopleunderstoodthatweweretalkingaboutsomethingbiggerthanCRM:“TheEndofSoftware.” Webegantogetmoreexcitingpressactivity,mostlyonlineatfirst.Ibelieve

thatthecoverageopenedCaryn’seyesthatwehadsomethingimportanttosay,andOutCastCommunications took us on as a client.Having the right agencywouldbepivotaltoourimageandsuccess.

Whether or not you engage a PR firm, always ask yourself, “What’s my

message?” Position yourself either as the leader or against the leader in yourindustry. Every experience you give a journalist or potential customer mustexplainwhyyouaredifferentandincorporateaclearcalltoaction.Thisdoesnotrequirealargeteamorabigbudget;itjustrequiresyourtimeandfocus.

Play#16:PartywithaPurpose

As the calendar flipped from1999 to 2000,we readiedourselves to introducesalesforce.com to the world properly and officially. This was the era of theextravagantdot-combash(onecompanyhiredperformersfromCirqueduSoleil;anotherflewinanaccordionplayerfromTurkey).2Evenagainst thisbackdropofexcess,Iwantedthesalesforce.comlaunchtostandout.

WeheldoureventatSanFrancisco’sRegencyTheater.Althoughwewanted

ourgueststoenjoythepartyandplannedthemenuandentertainmenttoensurethattheydid,theeventalsocarriedamuchlargermission.Unlikeotherdot-comparties,whichfunctionedtointroduceacompanyanditsproducts,weneededtointroduceanentirelynewmarket(on-demand,orSaaS,orcloudcomputing)andpromoteanewwayofdoingbusiness. Salesforce.comusedthisdifferencetoitsadvantageandcreatedastoryaboutwagingwaragainst the traditionaland ineffectivewaysoftwarewasdelivered.Ourmissionwas tooffer anewandbetterway to servecustomers.This storywould be the keystone of our entire business. I believed that if we took ourcustomers’view—andfiguredouthowtomakethemsuccessful—wewouldbeprofitable.Thisapproachmightsoundlikecommonsensenow,butatthetimeitwascompletelycontrariantotheestablishedmodel.

WehiredtheB-52s,the“world’sgreatestpartyband,”whichmadeforlively

anduniqueentertainment.Totellourstory,wetransformedthe lowest levelofthetheaterintoaspacethatrepresentedenterprisesoftware,akahell.Therewerecageswithactorsplayingcapturedenterprisesalespeople locked inside.“Help,getmeout,”theyscreamed.“Signthismillion-dollarlicenseagreement.Ineedto make my quota!” There were carnival games, including Pitch CDs in theToiletandWhack-a-Mole,wherethemolestobewhackedwereothersoftwarecompanylogos. After our guests worked their way through this inferno, they progressed tolimbo.Finally,when theywere ready, theywereable togouponemore level

andobtainNirvana.Thetopfloorrepresentedheaven.Therewasaharp.Therewaslight.Therewassalesforce.com.

At a cost of about $600,000 (the B-52s were $250,000 alone), the event

wasn’tinexpensive,butitdrewmorethanfifteenhundredattendeesandearnedus a firestormof invaluable press.Most important, the audience and thepressrememberedthestoryofchangeweweredisseminating. At the time of the party, we had a small amount of revenue and were notprofitable.Iwasn’tconcernedaboutthat,butnotbecausethiswasduringthego-go days marked by the “profits don’t matter” mind-set. I was confident thatsalesforce.com would be very profitable. In order to get there, though, weneededtobuildapowerfulbrandbehindourgreatservice.Therewasn’ttimetowaste; companiesmust embrace boldmarketing tactics from the beginning inordertobreakthroughalltheindustrynoise. I stoodupat thepartyandmadeadaringcomment,butone that Ibelievedwholeheartedly:“Wearegoingtobea$100millioncompanythreeyearsfromnow,”Ideclared.“We’regoingtobethelastdot-com.” A fewweeks after the party, theNASDAQhit its peak of 5,048.Dot-comswereflyinghigherthanever.Then,onlyafewmonthslater,almostallofthemcame crashing down. As the dot-com rush panned mostly fool’s gold, manycriticsandcolleagueswonderedaloudaboutthefutureofsalesforce.com.Peoplesuggestedwe drop the “dot-com” from our name, as thewhole categorywasbeingbranded“dot-bombs”or“dot-cons.”Ineverconsideredit.Istillbelievedin the power of the Internet to change everything. And as any entrepreneurwouldagree,failurewasnotanoption.

Play#17:CreateaPersona

I played the role of revolutionary at our launch party and even wore armyfatigues because I needed to demonstrate that I was ready to lead our battleagainst the established software industry. This readiness to fight for what webelieved represented the vision andvalues of our company.As the founder ofthismission,itwasmyjobtowalkthetalk.

Many CEOs are leery of getting too personal and are wary of inventing a

mythicalpersona.Don’tbeafraidtostepintotheforefrontandtakerisks.Mostof the world’s best CEOs are indistinguishable from the companies they run.Embracinga“role”establishesthemasthoughtleadersandgivesthemacertaincelebritystatusthatbegetsinvitationstospeakwiththepress,atevents,andonpanels—primeopportunitiestospreadtheirmessages. Anyonecancreateapersona,but it takes timeandenergy todo itproperly.Your “character”must fitwith your company’s story to bolster your brand. Itmustbeheartfeltandauthentictowhoyouareifitistobesuccessful.Itshouldnotbemereartifice.

Peopleseemtothinkthisisdifficult,orevenimpossibleforsomebodywhois

more reserved. That’s not the case. Anyone can do this, especially because itdoesn’t require that you immediately accept a new part. I wasn’t wearingfatiguesonourfirstday;theideaemergedmonthsintobuildingsalesforce.com,afterwedevelopedourmissionandhonedourmessage.Learnandbuildasyougoandallowyourpersonatodevelop.

Play#18:Differentiate,Differentiate,Differentiate

Whenstartinganynewinitiative,Iliketoseektheinsightofthebrightestminds.My “go to the guru” approach led me to hire Bruce Campbell to help brandsalesforce.com.Bruceisoneofthebestadmeninthebusiness.Hebrandedandlaunched Saturn, was part of the “Tuesday Team” for President Reagan’sMorninginAmericaTVcampaign,andhelpedinrebrandingpublic television,Bank of America, and the Gallo Winery. I shared with him our “End ofSoftware”mission,andhecametomewithanideaforaNOSOFTWARElogo(thewordSOFTWAREinaredcirclewithalinethoughit;thinkGhostbusters).Itwasperfect.Itwassimple.Itwassexy.Itwasfun.Iespeciallylikedthatitfiton a button. I also appreciated the phone number it inspired, 1-800-NO-SOFTWARE,whichprovidedcustomersaneasywaytofindus.

Although I loved the NO SOFTWARE logo immediately, almost everyoneelsehatedit.Itwasimportanttofindouteveryone’sreasoning,andmytrustedadvisersmadesomevalidpoints.“Itviolatesthenumber-oneruleofmarketing:never promote yourself with a negative message,” our PR team explained.Otherswereconcerned thatwewouldalienatecustomers.As theypointedout,manyofourcustomersweresoftwarecompanies.Further,membersofthepresstendedtogetboggeddowninsemantics.“It’snotaccurate,”theysaid.“Youstillmakesoftware;youjustdeliveritdifferently.” Given these concerns, even the people on the salesforce.com team believedthatmovingforwardwiththissloganandlogowasadisastrousidea.Infact,thestaff tried to ignore it, hoping that it would disappear. Although research andlogic were behind some of their concerns, I felt that their arguments wereoverruledbythemostimportantruleinmarketing—thenecessitytodifferentiateyourbrand.Ourdifferentiatorswereeaseofuse,abusinessmodelofsharedrisk,andlow-riskcommitment—everythingthatsoftwarewasnot.

The End of Software mission and the NO SOFTWARE logo effectivelyconveyed how we were different. I put the logo on all our communicationsmaterialsandpolicedittomakesurenooneremovedit.(Theydidsoanyway.)IworeaNOSOFTWAREbuttoneverydayandaskedouremployeestoaswell.(Theydidso,somewhatreluctantly.)Itwasn’tjustthelogothatweusedtogainrecognition. The dot-com in our name and our gonzo PR strategies (more onthoselater)werealsotacticsthatservedourdifferentiationstrategy.

Inanefforttofurtherraisethecollectiveconsciousnessaboutourwaragainst

software, I created a provocative advertisement with a fighter jet shooting abiplane.The fighter jet representedourcompany,whichwasbuilton themostadvancedtechnologyandwasavastimprovementonanythingthatcamebeforeit.Thebiplanewasametaphorforthesoftwareindustry:obsoleteandill-suitedforitstask.

The inside story is that I stole this entire concept from Larry Ellison andOracle.Previously,LarryhadcommissionedanadvertisementwithOracleasthefighter plane taking down its database competitors,whichwere depicted (youguessedit)asbiplanes.Iknewthatanupdatedversionwouldpayhomagetomyorigins and serve as the perfect vehicle to introduce our cutting-edge End ofSoftware campaign. After receiving permission from Rick Bennett, theadvertisinggeniusbehindtheOraclead,IhiredthesameartistOraclehadused,to create an illustration for us.Our advertising agency thought the illustrationwassilly,butIhadpreviouslyseeniteffectivelyconveyanimportantmessage.Withahunch that it could succeedagain, I turned it intoanadvertisement forsalesforce.com.

IshowedtheadtoMichaelLiedtkeandJessicaGuynn,reportersattheContraCosta Times, whowrote a spiritedweekly business column called “SynergizeThis.”Theyimmediatelyappreciatedtheconceptandunderstoodthatwewereadifferentkindofcompanyonamissiontodisruptthewaythingsweredone. Itwasasurpriseeventome,however,whentheTimesrantheadvertisementasartonthefrontpageofthebusinesssectionalongwithaneditorialfeatureonsalesforce.comandTheEndofSoftwarerevolution.Thenewspaperincludedtheentirecoloradvertisementwithoutourhavingtopayacentforit!Itwasacoupin the ad business and a major triumph for our company. Bruce Campbellcouldn’tbelieveit.Hehadthoughtthefighterjetadwasridiculous.ImaginehissurprisewhentheContraCostaTimes,hishometownpaper,wasdeliveredthatmorning! All of this made me very happy: we proved that differentiatingourselves was a powerful marketing strategy that worked. (As far as theparticularsareconcerned,ifthepresslovesit,sodoI.) TheepiloguetothisstoryisthattheaddidrunasanadvertisementintheWallStreetJournal,anditsaudacitydrewevenmoreattentiontosalesforce.com.ThepartIfindmostamusingisthatnooneexceptforLarry(andRickBennett)knewthat I had stolen the concept from Oracle. Essentially, this was my way ofbowingtoLarry,whohadtaughtmeatremendousamount.Byallowingmetodothis,Larryconfirmedthathewastrulymymentor,someonewhoencouragedmetotakewhatIlearnedfromhimandelevateittonewheights.

ABrandIsNotJustaLogo—It’sYourMostImportantAssetIlovetheNOSOFTWARElogo;it’snotourbrand,though.“Alogoissimplyagraphicrepresentationofacompany,”saysBruceCampbell,thecreatorofthelogoandourchiefcreativeofficer.“Abrandismore.Ithastobeacollectivesetofmemories.” Tobeeffective,acompany’sbrandmustbeconsistent.Acompanymustuseitspeople,itsproducts,anditsmessagingtoconsistentlyreinforcethesamepositivepointsitwantstodemonstrate.Adeliveryservicethatpromisestometiculouslycareaboutyourpackagescannothavedirtytrucks.Abankthatsaysitcaresaboutitscustomerscan’thavetwentypeoplewaitinginlinewithonlytwotellersonduty.Brandscannotbreakthepromisestheymake.Brokenpromisesdestroycustomers’trust.Thatruinseverything.

Abrandisacompany’smostimportantasset.Acompanycan’t“own”its

facts.Ifthecompany’sfacts(speed,price,quality)aresuperiortothecompetition,anygoodcompetitorwillduplicatethem,orworse,improveuponthem,assoonaspossible.Whatacompanycanown,however,isapersonality.WeownNOSOFTWARE—notbecausewearetheonlyonedoingitbutbecausewewerethefirsttothinkitwasimportanttocustomers.Byconsistentlydeliveringanattitudethatisfuturefocusedandpioneering,wehavecreatedapersonality.Weactthewaypeopleexpectusto,whichhasmadethemfeelconnectedtous.Itgoesbeyondlogic.It’sanemotionalattachment,andthat’sanassetthatcannotbestolenbyanycompetitor.

Play#19:MakeEveryEmployeeaKeyPlayerontheMarketingTeam,andEnsureEveryoneIsOnMessage

Oneday,earlyinouroccupancyattheRinconCenter,ourmarketingdirector,adeveloper,aqualityassuranceperson,andanengineerwereintheelevatorwhenanothertenantinthebuildingasked,“Whatexactlydoessalesforce.comdo?”Tomysurprise,everybodygaveadifferentanswer.

Thiswas troublesome.Everyone at our companyneeded tounderstandwho

wewereandwhatwedid.Moreimportant,theyneededtobeabletoeffectivelyrelayitinonesimplesentencetoanybodywhoaskedandeverybodywhowouldlisten. Because that consistent message clearly hadn’t made its way to ouremployees on its own, we had to educate them. This presented an amazingopportunity: if we succeeded, we could transform every employee into amarketingrepresentative. To ensure that everyone was on the same page (literally), our PR firm,OutCast Communications, produced a two-sided laminated card. It was amarketingcheatsheetthatstatedinonesentencewhatwedid.Italsoprovidedinformationaboutthebenefitsofourservice,ournewestcustomersandpartners,and our most recent awards. With this card, we leveraged everyone—fromdevelopers to engineers to quality assurance people—as integral parts of ourmarketingorganization.

Thecardwouldhavebeenoflittleuseifwehadsimplydistributedit.Instead,

weofferedtrainingtomakesurethateveryonewascrystalclearonthemessagethatwewanteddeliveredtotheworld.Intheearlydays,wemetwiththewholecompanyforbrown-baglunchsessionstogooverthelatestmarketingpitchforthe company. Even thoughwewere small, it was essential to ensure that ourmarketingwasfocusedandfirstclass. Over time, as we grew, we required that all customer-facing employeesbecome “certified” in how to position the service and how to deliver ourmessages.We taughteveryonehow todefend themessagesagainstobjections,

whichmade them feelmoreprepared andconfident.Oneof themoreunusualaspectsofourpitchesisthatwemadethem“rolebased,”meaningthatwewouldpresentadifferentproblem-solvingsolutionangletoaCIOthanwewouldtoasales manager. The ultimate result of this meticulous coordination is thateveryoneisonmessagewiththeprecisionofasophisticatedpoliticalcampaign.

Play#20:Always,AlwaysGoAfterGoliath

Weroutinelyupdatedthecardtoreflectourcurrentcustomersandpartners,buttherewasalwaysoneitemthatstayedthesame:ourcompetitor.Salesforce.comonly acknowledged one competitor—themarket leader.After all, thatwas theonlypositionforwhichwewerevying.Furthermore,itcastusintherightroleas theunderdogand thevisionary. It’s alwayswise toplay thevisionary card.Everyonerootsforyou.IfthereisnoGoliathinyourindustry,goafterthestatusquo.

AlthoughwewantedtopositionourselvesagainstGoliath,wehadn’talways

plannedtoattackourmuchlargercompetitordirectly.Inaway, thatstartedbyaccident. February 22, 2000, the day of The End of Software salesforce.comlaunch party, was also the day of a giant Siebel User Group conference indowntownSan Francisco. This coincidencewas truly unplanned, but oncewediscovered it,wedecided touse the flurryof activityaroundSiebel’s event toouradvantage.

IsEveryoneinYourOrganizationOnMessage?

First,takethetimetoanswerthequestionshere.Yourresponsesarewhatwilldeterminehowyourcompanywillbeviewedbytheoutsideworld. Inviteyourteamtofillouttheanswerstothesequestions.Ifyouseevariedresponses,it’stimetogeteveryoneinalignment.Createyourown“cheatsheet”cardanddistributeitthroughouttheorganization. Whatweare:(Whatdowewant?)________________________________________

Benefits:(Whatisimportanttocustomersaboutwhatwedo?)________________________________________Customers:(Whatareourmostsuccessfulcustomerstories?)________________________________________Keypartners:(Whatmakesthemsuccessfulusingourproduct?)________________________________________Competitors:(Howarewedifferentfromourcompetitors?)________________________________________Onthemorningoftheconference,wesentprotesters(inreality,paidactors)to

theMosconeCentertopickettheconference.Theywavedmockprotestsigns—NOSOFTWAREposters—andshouted,“TheInternetisreallyneat...Softwareisobsolete!”WealsohiredactorstopretendtobeaTVcrewfromlocalstationKNMS,whocameonlocationtocoverTheEndofSoftwaremovement.“Whatdoyou thinkof the Internet?,” a fakeTV reporter askedpassersby, pointing amicrophone toward them. I had originally planned to have a tank roll inwithsomeonedressedasGeneralPatton,butlaterdecidedthatsuchastuntmightbetoo outlandish. Even without the general, we won the interest of conferenceattendees. We also captured the attention of the competition. Twenty SiebelexecutivespouredoutofMosconeto investigate.ASiebelexecutivecalledthepolice,whoimmediatelyarrivedtoprotecttheprotesters! Thepolicepresenceonlyfannedtheflames.Theresultinghullabaloohelpedattract an even larger audience, and the police couldn’t stop ourmock protestbecause we were there legally. It was exciting to plan this attack, and themarketingteamenjoyedwatchingthesceneunfoldfromastakeoutcar,butthiseffort had a higher purpose than having a good time at the competition’s

expense.WeapproachedeverypersonwhowentintotheSiebelconferenceandgave him or her an invitation to the salesforce.com launch party that night.(Manyofthemshowedup!) This marketing stunt worked across many fronts: we built salesforce.commorale,gotgreatpresscoverage,andbroughtourcompetitor’scustomerstoourevent to hear our message. Within two weeks, more than one thousandorganizations signed up for our service; most were introduced to it througharticlesaboutthelaunch.Later,ourEndofSoftwarecampaignwasrecognizedbyPRWeekasthe“Hi-TechCampaignoftheYear.”Wewouldusethistypeofcreativeapproachtoattackthecompetitionmanymoretimes.

Play#21:TacticsDictateStrategy

Oneideaaloneisatactic,butifitcanbeexecutedanumberofdifferentways,itbecomes agreat strategy.Because theguerilla tactic of directly leveraging theactivitiesofourcompetitionworkedsowell,werepeateditandmadeitoneofour marketing strategies. I learned this idea from the marketing classicPositioning:TheBattleforYourMind,byAlRiesandJackTrout.

Everyone at salesforce.com constantly brainstormed about opportunities to

leverage our competition’s activities for our own benefit. One of my favoriteexampleswaswhenwefoundawaytouseaSiebelconferenceinSanDiegoasa prime platform for our then-new “wake up and smell the salesforce.comcoffee”successmessaging. On the day of the conference, right in time for themorning rush,ElizabethPinkham,seniorvicepresidentwhorunsourevents,gatheredacrewoftempsonbicyclerickshawsoutsidetheSanDiegoConventionCenter.Theyofferedridesto the two thousand conference attendees and handed out free Krispy KremedoughnutsandPeet’scoffeeinmugsthatcitedagreatanalystquote,“WakeupSiebel,salesforce.comisadisruptivetechnologyandisslowlymovinginontheCRM prize.” (US Bancorp, Piper Jaffray) That wasn’t all. We gave Siebelcustomers salesforce.com marketing materials with quotes from recent pressarticles, and during the rickshaw rideswe had the chance to speakwith themabout the benefits of the salesforce.com service. The fun spirit we createdsparked the interest of even the biggest Siebel devotees, and many broughtsalesforce.com-branded mugs (and talking points) into the conference. EvenTomSiebelgraciouslyacceptedacupofcoffee.

Later, we devised a way to transfer attention from the competition to our

company at Siebel’s European User Week. The conference was in Cannes,France,whichmostvisitorsaccessbyflyingintoNiceandtakinganairporttaxitoCannes.Werentedallthetaxisandusedtheforty-five-minutedrive,whichweprovided for free, as an opportunity to pitch our service. We decorated thevehicles with NO SOFTWARE logos and filled them with our marketing

brochures. The executives, left with no other option than to take our rides,becameirateandcalledthepolice(again). Wesucceededbecausewecaughtourcompetitorbycompletesurprise.(Thiswas another tactic I learned fromThe Art ofWar, inwhich Sun Tzu advises,“appear at placeswhere hemust rush to defend, and rush to placeswhere heleast expects.”) Participating in our competitor’s events helped us weave ournameintoitsstories,articlesweknewwouldgarneralotofattention.Tofurtherleverageitsannouncements,weissuedpressreleasesaboutsalesforce.com’snewfeaturesornewcustomersthesamedayitsquarterlyearningsreleaseswentlive.We meticulously planned so that anyone looking for Siebel always foundsalesforce.com. Eventually,when anyone thought about Siebel, he or she alsothoughtaboutsalesforce.com.Therealitywasthatwewerestillthegnatonthebackofanelephant,butourunusualtacticsweremakingthatelephantdance.

Play#22:EngagetheMarketLeader

Wewerealwayslookingfornewwaystodifferentiateourselves,andwebeganconsideringanadcampaignthatwoulddirectlytakeonthecompetition.IcalledRickBennett,who had done the biplane ad, and he came upwith “Don’t getbullied,” a campaign featuring a schoolboy writing on a chalkboard. Oneadvertisement showed the schoolboy (my cousin)writing themessage, “Iwillnot give my lunch money to Siebel” one hundred times. Another had himwriting,“IwillnotspendmysummervacationinstallingSiebel.” The attack ads put our adversary’s executives in a quandary. To commentwould be to acknowledge us as a viable competitor. It wasn’t long, though,beforeSiebel began to react. “There’s noway that company exists in a year,”Tomsaidofsalesforce.cominaninterviewwithFortune.InresponsetotheWallStreetJournal runningourad,Tom latercommented,“Iamsurprised thatanyreputable publication would agree to run an ad of such questionable taste.”3Although Idon’t think that itsexecutiveseverunderstood this, the fracaswithSiebelwasnotpersonal.Wehadaproblemwiththetraditionalsoftwaremodelthatdidn’tcareaboutcustomers’success.Webelievedthat“businessasservice,”pursuinglong-termcustomerengagement,wasbetterforourbottomline. ThereisaJapanesebeliefthatbusinessistemporal,whereasrelationshipsareeternal.That’s true.Onedayyoucompete.Thenextdayyoupartner.Onedaysomeoneisyoursubordinate;thenextdayheorshemaybeyoursuperior.Atitsfinest,businessisfriendlycompetition,justlikeagameoftennis.

AsIwashittingballsover thenet, thecompetitionshouldhavebeenhitting

ballsbackatme.Instead,wheneverwepulledoffsomeguerillaPRtacticorbeatSiebeltoanaccountorluredoveroneofitsexecutives,peopleatthecompanytook itpersonally.Thatemotional reactionput thecompanyatadisadvantage.Don’teverletthecompetitionmakeyouangry.Youmusthaveclarityofmindtomakeyourowndecisions—nottheonesthatyourcompetitorswantyoutomake.Youmustbetransparenttothecompetition.See,recognize,andunderstandwhatyourcompetitorisdoing. Siebelexecutivesdidnotseewhatwasobvious(thatweweretryingtorattle

them), and as the company began defending itself and acknowledgingsalesforce.com,wechippedintoitsairtime.Thepressbegantoseethisfightasanincreasinglyinterestingstory,andthatfurtherlegitimizedus.Thetailstartedtowagthedog.Atthispoint,wehadalreadywon.

Play#23:ReportersAreWriters;TellThemaStory

Although the battle between salesforce.com and Siebel wasn’t driven by apersonal feud, the press didn’t see it that way, and reporters loved buildingdramaaroundthisstory.Thatmakessense.Afterall,reportersliketotellastorywithaprotagonistandavillain.

It was fortuitous that journalists already saw Siebel as the villain. At user

conferences,Siebel irked reportersby separating them fromeveryoneelseandleading them around like sheep. Salesforce.com, in contrast, welcomedjournalists, encouraged them to mix with customers at events, and eagerlyintroducedthemtocustomersforinterviews.“Talktowhomeveryouwant,”wesaid.Ascustomerssharedstoriesoftheirsuccesseswithsalesforce.comandthisnew model, we differentiated ourselves and emerged as the little upstart thatcould.Thepressbecameourbestally. The realitywas that in termsof revenueandcustomers,wewere still just atiny little startup.No one at theWall Street Journal , theNew York Times, orBusinessWeekreallycaredaboutasmallstartup.However,theydidcareaboutasmall startup that pledged to upend the industry leader. Journalists welcomedhearing from a challenger that was a harbinger of an industry-widetransformation.

Being an agent of change was a key element of our marketing strategy. A

DavidversusGoliathstoryisinteresting,butwehadtopitchthebiggerpicture.That’s where The End of Software story came in. We painted a picture thatshowed that the industrywaschanging.We talkedaboutwhatourcompetitorsdid wrong. We introduced our solution. We explained why it was good forcustomers. We talked about the future and tapped into the large audience ofpeoplewhocaredaboutwhatwouldhappennext.

Play#24:CultivateRelationshipswithSelectJournalists

I enjoy meeting with journalists. As an author and someone who prizescommunicationas themostessentialpartofmy job, Ialso identifywith them.Evenwhile I appreciate theconversations Ihavewith theseprofessionalswhocareaboutwhattheyareobservingintheworldandwhoareconstantlythinkingaboutthefuture,Ialsoconsidermyrelationshipswithjournalistsandbloggerstobeapivotalpartofourmarketingstrategy.

I never treat members of the media as adversaries; they are friends of the

company.IkeepalistofabouttwodozenreporterswhomIconsiderinfluentialworldwide,andIpayextraspecialattentiontothem.Imaintainmyrelationshipswiththeseindividualsthroughin-personmeetingsandfrequentcontact.Iensurethatitissimpleforthemtoreachme.Theyhavemydirectcontactinformationand do not have to go through our PR department to connect with me. Icontinually keep in touch by sending them information that I think would behelpfultothem. Developing these relationships has provided tremendous opportunities.Journalists immediately think of me as a resource for a quote or commentbecausetheyknowthatIwillbeavailable toofferfreshinsightandmeet theirdeadlines. Relationships engender trust so that when I send out a memo orcomment, thesejournalistsaremorereceptivetoit.Forexample,whenIheardthatMicrosoft(finally)announcedthatitwantedtoentertheSaaSbusinesswithaCRMproduct,Ifiredoffane-mailtoselectjournalists:“Well,it’s7:29A.M.in Singapore, and I just read that Microsoft announced a new offering tocompetewithuswhileIwasasleep.”IincludedtheinterofficememothatIhadwritten (I’d done this before; tactics dictate strategy), and the San FranciscoChroniclerananarticleaboutmyresponseonitsWebsite.TheyincludedwhatIsaidinthee-mailandevenreiteratedtheir“favorite line”ofthememo:“SteveBallmerhaspublicly fretted thathewouldnotbe ‘out-hustledbyanyone,’butthefactisthatMicrosoftisbeingout-hustledbyeveryone.”Evenbetter,theyrantheentirememoinanothersection.Nodoubt,sendingcarefullychosenmembersofthepresswell-craftedofficememosisonemorewaytogetyourstorytold.

AlargepartofourmarketingandPRstrategyismakingsurethatwealways

remainrelevant.Oneofthewayswedothisisbymakingourselvesavailabletodiscuss the direction of the industry. We don’t just sit around and wait forsomeonetocall.IfsomethinghappensthatIcanleverage,Iimmediatelysendajournalistane-mailwithmycommentsor“leak”aninternalmemo.Ialsoliketoforwardrelatedarticlesandotherpeople’sideasthathelpestablishourpoint.Forinstance, we often referenced Clayton M. Christensen’s The Innovator’sDilemmaandNicholasCarr’sTheBigSwitch,twothought-provokingbooksthatvalidatedourcrusade. Itisessentialtospendtimelearningaboutwhatishappeninginyourindustryto leverage these opportunities as well as to prevent being caught off guard.Using industry news to our advantage has served us very well. For example,whenMicrosoftmadeanannouncementthatitwasplanningtobuyGreatPlains,a competitor of salesforce.com, I sent amemo to our staff and forwardedmycommentstojournalists.Amongotherthings,Iexplainedthat“MicrosoftGreatPlains will cause ‘Great Pains’ to the software CRM players who built theirproducts in Microsoft’s path.” Not only was this quote reiterated in manyindustryarticles,someusedthe“GreatPains”punintheheadline!(Homerun.) I’m a believer in the power of public relations. It’s significantly cheaper toencourageajournalist towriteastorythanit istobuyanadintheWallStreetJournal ,wherea repeating full-pageadvertisement inaprimespotcan run inexcess of amillion over the course of a year. That’s an unreasonable amountconsideringthatmostpeoplewon’tbuyaservicebecausetheysawit inanad.Peoplebuybecauseanexpertsaiditwasgoodorbecauseausertoldthemaboutit.Think about it.Howmany times have yougone to a restaurant based on agiantad?Ifyou’relikeme,thathashappenedveryfewtimes.Howmanytimes,in contrast, have you followed the recommendation of a friend or a positivereview in a magazine or newspaper? Unbiased references by experts carrytremendouspower.

Play#25:MakeYourOwnMetaphors

IspendalotoftimethinkingaboutwhatIwanttosaytojournalistsandhow Iwanttosayit.Iliketocomeupwithsimplemetaphorstohelpexplainwhatweare doing and communicate our message. Early on, for example, I said,“salesforce.com is Amazon.com meets Siebel Systems,” then it was“AppExchangeistheeBayofenterprisesoftware,”andlater,“Force.comistheWindowsInternetoperatingsystem.” Metaphors are the simplest way to explain your services and communicateyour message. Here’s how to do it: relate your product to something that iscurrent and relevant and that everyone understands. Don’t forget to test yourmetaphorsbeforeyouputthemoutthere.Tryafewandrunthembycustomers,analysts, and people in your network tomake sure theywork. Creating thesemetaphorstakestimeupfront,butit’swellworthit.Journalistsondeadlinearetoopressedfortimetocomeupwiththeirownmetaphors,sotheyusetheoneswesupply.Thisfurtheraidsourefforttoremainconsistentandonpointwithourmessaging.

Play#26:NoSacredCows

Roughlytwoyearsafterwestartedourcompany,GeorgeHu,ananalyticalandenterprisingStanfordMBAstudent, joined salesforce.comas a summer intern.(Sixyears laterhewould leadourglobalmarketingorganization.)Georgewastasked to investigate new vertical markets, such as health care or financialservices, for our business to pursue, but on his own initiative he began toexamine our sales process and analyze the effectiveness of our marketingdollars.Atthetime,wewerespending$2to$3millionamonthondirectmailandadvertisingcampaigns.

GeorgeusedtheSalesforceapplicationtodeterminethenumberofsalesleads

beinggeneratedbyour directmail campaigns.He found thatwehad fourteenleadsinsixmonths.Wewereshocked,andnoneofuscouldbelievehowmuchmoney we were wasting. Although some of the campaigns were extremelysuccessful at differentiating our brand and garnering a firestorm of publicity,George’smetricsdemonstratedthattheyweren’twinningcustomers.Itwastimeforadrasticchange.Afterall,itdidn’tmakeanysensetocreatesomethingtrulyinnovativeandthenrelyontiredmethodstomarketandsellit. This led to a new marketing model, which we based on tactics that wereworking.(We’lldetail thoseinPartThree.)Keepinmindthat the landscapeisalwayschanging;youmustalwaysexaminewhat’sworking,evolveyourideas,andchangethewayyoudothings.

PART3

TheEventsPlaybook

HowtoUseEventstoBuildBuzzandDriveBusiness

Play#27:FeedtheWord-of-MouthPhenomenon

As salesforce.com grew, it seemed less necessary to center our marketing onattackingthecompetition.Weevolvedourstrategytopromotethevalueofourservice. We examined what marketing methods most directly converted intosalesanddiscoveredtwomeansthatcanbeusedeffectivelybyanycompany:

•Editorial:unbiasedbusinessandtechnologystoriesinthepress•Testimony: the word-of-mouth phenomenon created by customers

sharingtheirsuccessstorieswiththeirpeers Wereinventedourmarketingstrategytoharnessthesetwotacticsandcreateforums to allow them to flourish.The idea stemmed from the successwehadwithourlaunchparty,whichprovedtousthateventswereagreatwaytobuildbuzzandbringinbusiness.Wedecidedtotestthatideafurtherwithaseriesofevents. The intent was to invite disparate groups—customers, potential users,analysts,press,partners,philanthropists,andnonprofitleaders—andallowthemto interact and feed off of one another’s energy and insights. Truthfully, weweren’tsurewhetherornotalltheseconstituentswouldattend,butwedecideditwasworthatry. Wekickedoffoureffortwithasix-stop“CityTour.”Inaway,itwassimilartoa financial roadshowinwhichcompanies introduce themselves topotentialinvestors,butinsteadofpitchingbankersandfundmanagers,weweremeetingwithcurrentandprospectivecustomers.ThefirsteventwasinPhiladelphia.Weinvited fiftypeople.About fifteen showedup.Wedidnot let thatdampenourmood. We acted as if there were four hundred attendees, and we created anincredibleenthusiasmaroundtheproduct.(Ifyouwantasuccessfulevent,youhavetoprojectsuccess;yourattitudewillhelpmakeitahit.) Althoughthefirsteventattractedfewerpeoplethanwehadhoped,welearnedan important lesson: the number of people was less crucial than the mix ofpeople. Excitement stemmed from combining customers and prospects andseatingeveryonetogether.Thiswastheantithesisofthewaytraditionalsoftwarecompaniesquarantinedprospectsandjournalistsfromexistingcustomerssothatthefirstgroupcouldn’tbepoisonedbythesecondgroup’snegativeexperiences. Wedidn’thavetoworryabout that.Ourcustomerspaidmonth-to-month,so

weknewtheywerehappy.Itmayseemlikeagambletorelinquishcontrolandplacesomuchfaithinourcustomers,buttheriskpaidoff.Customersusedtheopen platform they were given to share their enthusiasm about the service.Eventsprovedtobeaneffectivewaytomaximizetheviraleffect.

Play#28:BuildStreetTeamsandLeverageTestimony

AlthoughIhadbeeninspiredbythecustomerenergythatSteveJobshadbuiltaround the Macintosh, the idea for cultivating a group of salesforce.comenthusiastsdidnotcomefromthetechnologycommunity;itemanatedfromthehip-hop community.A friend introducedme toMCHammer,who visited ourSanFranciscooffice(wearingabusinesssuit,notthetrademarkHammerpants)andsharedhis“StreetTeam”concept:thatofbuildinglocalnetworksofpeopletobackyou.Atthetime,Ididn’tknowhowsalesforce.comStreetTeamswouldwork inaction,but I thought thatMCHammerwasacreativegeniusand thatthisunconventionalideawasworthinvestigating.

Our City Tour program served as a vehicle to extend the salesforce.com

message,ignitepassionbehindtheidea,andhelpusbuildsalesforce.comStreetTeamstogetcustomersoutandsellingforusonalocallevel. EachCityTourstopincludedakeynoteaddressinwhichItalkedaboutCRMandthepainthathaddriventheprospectstoseekanewalternative.Therewasalso a dedicated time for questions and a live demo of the product. We hadassumedthatwewouldfieldthequestions,butinsteadourcustomerschimedinwiththeanswers.Initiallyweweresurprisedtofindourselveswatchingfromthesidelinesasagroupofsixtypeoplesuddenly

StreetTeams:MakeCustomersPartofYourMarketingForceYou’vealreadyenlistedemployeesinthemarketingeffortbydrillingthemwithkeymessaging.NowtakeittothenextlevelbyturningcustomersintoStreetTeams:

•Givecustomersaserviceorproducttheylove.•Elicitcustomers’insight—anduseit—sothatthey’lllovewhat

you’reofferingevenmore.•Provideaplatformforcustomerstosharetheirenthusiasm.•Operatelocallytobuildteamsthatinfluenceothersona

communitylevelandcollectivelyformaglobalnetwork.brokeoffintoaconversationabouthowtouseourservice.However,afterseeingthisunfoldateventafterevent,webegantorecognizewhatwashappening:peopleweren’tattendingtheseeventstomeetus.Theywerecomingtomeetotherpeopleusingtheproduct.

It was an incredible discovery. We needed to find ways to foster this

phenomenon,sowebuilt flexibility into theCityTourprogramsuch that therewas time for these conversations and exchanges to takeplace. Itwas amazingwhat that allowed:without prompting fromus, customerswould stand up anddeliverspontaneoustestimonyprofessingtheirbeliefinourproduct.Theseuserswereeagertosharetheirstories.

Aroundthistime,IhadtheopportunitytomeetandspeakwiththeReverend

Billy Graham, and I realized the power of testimony to inspire and influenceaudiences. Ibegan to thinkabouthowtoapplyanevangelicalsystemtosales.Wecontinuedtoencouragecustomerstospeakoutandsharetheirstories.Ratherthan address an audience and preach about salesforce. com (prospectivecustomers didn’t believe what we said; they believed what customers wereexperiencing),Ibegantocallonsomeonefromtheaudiencespontaneouslyandaskhertoshareherexperience. This morphed into a movement, and our customers soon becamesalesforce.comevangelists. Itmade themthebestmarketingandsales teamanorganizationcouldhave.Theunbiasedtestimonialshadanimmediateimpactonsales. And, over time, this approach earned us a reputation for being open tofeedbackandbeinggreatlisteners.Weletcustomersspeaktheirmindsandnevercensoredwhattheysaid,ortriedtoquiettrivialconcernswhentheycameup.Infact,wefeltthatthesemadethepositivecommentsmorebelievable.

Althoughwe began eliciting these endorsements organically,we soonmade

customer testimonials a formal part of the City Tour agenda. Prospectsfrequently had the same questions, and customers were able to address thequeriesmoreeffectively thanwecould.Wecontactedcustomers inadvanceoftheeventsand invited themtospeakabout theirexperiences.Wedidnotofferpayment,yetwefoundthatmostuserswerehonoredtobeinvitedandeagertoparticipate.

HowtoManage—andSucceedwith—CustomerTestimonyAlthougheverycompanyknowsthatcustomerreferencesareimportant,mostcompanieshavealaxapproachtomanagingthem,notgivingreferencesmorefocusthanabulletpointonamarketingperson’sto-dolist. Referencesareafundamentalmarketingweapon.Theyaresopowerfulthatwehavesomeonesolelydedicatedtomanagingthem,andweleadeverypieceofmarketingmaterialwiththird-partytestimonyfromacustomeroranalyst. Wealsohelppreparecustomersformediainterviewsorforsalesforce.comeventslikeCityTours.(WehavethreecustomersspeakateveryCityToureventinapanelortalk-show-stylesetting,whichallowsseveralcustomerperspectivesandsuccessstoriestobetold.) Atevents,weletanyonespeak.Ioftenhaveanopenmicforcustomersandprospects.Ofcourseit’salsoessentialtohavehappyandsuccessfulcustomers;otherwisethiscouldn’twork.Inasalesforce.comrelationshipsurvey(conductedin2007and2008byindependentsupplierCustomerStat),94percentofcustomerssaidtheywouldrefersomeone,and74percentalreadyhad—numbersthataretwicewhatmoston-premisesoftwarevendorsareseeing.Leveragingthatsuccesshasbecomeakeypartofourmarketingplan.

Play#29:SelltotheEndUser

Salesforce.com customers are mostly sales, marketing, or customer supportpeople, the people who use traditional enterprise software products. Yettraditional enterprise software companies had nevermarketed to these people.Enterprisesoftwarecompaniestargettheexecutiveswhocontrolthebudget.Tousthatseemednonsensical,sowetargetedtheendusersinsteadandfoundthattheyweregratefultofinallybegivenavoice.Ourcustomers—whowerebraveenough to embrace a product that went against the traditional softwareestablishment—becamelikeabandofsavvyrebels,andwecelebratedthemassuch.

We were grateful to these users, and our strategy became centered on

nourishingourcustomernetwork.Wereferredtoourusersas“customerheroes,”andblewupgiantpicturesofthemandpostedthemateventsandincludedthemon our materials (with their permission of course). Their companiesacknowledged their success too;with salesforce.com, theyhadachieveda fastimplementationandhighuseradoption,andhadmadeapositiveimpactonthebottom line. Many, rewarded for these results, rose to new heights in theircareers. SoonwebegantoseeadsonMonster.comandothersitesinwhichemployersrequested candidates with salesforce.com experience, and resumes in whichcandidateshighlighted“implementingsalesforce.com”asadifferentiatingskill.Later,ourcustomers,suchasMattEvans,formerlyabusinesssystemsanalystatTribuneMediaServices,reportedthathisnewhiresexpressedexcitementaboutlearning the Salesforce application and the ability to put this skill on theirresumes in the future. (“That’snot thepoint,”Matt replied.)Forus,allof thiswasverytelling.Bytargetingtheenduserwewerecreatinganeconomy—withbothdemand-andsupply-sidevalue.

Withallthispositiveenergy,oureventsdevelopedintoasalesforce.comlove

fest.Ourcustomerswereproudtosharehowtheyusedsalesforce.comandeagerto find out how others did too. Customers were using our terminals or their

laptops to log on to the salesforce.com Web site and look at one another’sapplications. As our customerswere evangelizing about our product, theywere having agoodtimeaswell.Webegantonotice that thereweresalesforce.comgroupieswhocametoaneventeverytimewewereintown.Theyalwaysleftwithastackofbusinesscards, andmanyof themkept in touch.EachCityToureventcostabout $250 per attendee—significantly less than the traditional advertisingwehadbeendoingandmuchmoreeffective.Whenaprospectcametooneofourevents,about80percentof the timewewereable toclose thedeal.Appealingdirectlytothepeoplewhousedtheservicemadeallthedifference.

Play#30:TheEventIstheMessage

ItwouldberemissnottomentionthatwemadeafewerrorswiththefirstofourCityTours.Manyrantoolong.Onewasheldinthedingybasementofabudgethotel,whichwas amistake. Selecting the right site is important—the locationshouldbeone that reflectswhatyouwant to sayaboutyourbrand. Ifyouaresellingahigh-qualityservice,youreventsmustofferahigh-qualityexperience.Wenowhosteventsatfour-orfive-starhotelsorworld-classrestaurantsandtryto book the newest, most exciting, or highest-rated venues in town to attractattendees.Thesearethevalueswewanttohavepeopleassociatewithus.

Youmust always view an event as an opportunity to reflect—and extend—

yourimage.Forexample,weextendourpromotionofon-demandtechnologiestoincludeself-servicekiosks(similartothoseintheairports)toallowattendeestoquicklyandeasilycheckintoourevents.Letthepersonalityofyourcompanyshine,andthatmeansbeconsistent.Ifyouareaboutinnovation,makesureyourevent embraces the spirit of innovation. If you are about sustainability andresponsibility,makesurethechocolateyougiveoutasafavorisfair-trade!

TheHost’sPlaybook:HowtoThrowaGreatEvent

•Manycompaniesmistakenlythinktheyjusthavetoholdanevent.Wrong.Ifyou’regoingtodoit,doitright.

•Ifyouwantasuccessfulevent,youhavetoactlikeit’sasuccess;yourattitudebecomesaself-fulfillingprophesy.

•Thenumberofpeopleisfarlesscrucialthanthemixofpeople:seatprospects,journalists,andcustomerstogether.

•Harnessyourcustomers’positiveenergyandmakethempartofyourmarketingforce.Peoplewilltalkaboutyouwhetheryoulikeitornot—whynotprovidetheforum?

•Theeventisthemessage.Ensurethateverydecisionyoumake—fromvenuetofoodtospeakers—reflectswellonyourbusinessandconveysyourmessage.

•Atop-tiervenuecanattractattendeesandmakeyourbusinesslookestablished.

•Makesureyourqualityserviceisreflectedineveryaspectoftheevent,fromtheinvitationsyoudesigntotheconfirmatione-mailyousend—eventosuchdetailsashavingnamebadgesreadywithnamesspelledcorrectly.

•Haveenoughpeoplemanningthedoorstopreventalongwaittogetin.Yourguestsshouldfeelyourwarmwelcomefromthemomenttheyarrive.

•Everyemployeeattheeventmustbeonmessageandlookthepart.Prepteammemberstohandledifferentscenariosandrecognizeyourattendees.Remember:oneindividualcanruinthewholeeventbybrushingsomeoneofforgivingananswerthatisnotaccurate.

•Networkingisavitalpartofeveryevent.Helpattendeesmeeteachother,exchangecontactinformation,joinyourcommunity,andlearnfromoneanother.Wehostanetworkingreceptiontowrapupeveryevent;it’sagreatwaytogetattendeestotalktoeachother,meetourpartners,andquizourproductexperts.Thesenetworkingeventsusuallyhappeninsidetheexhibitionareatoleveragetheenergyofthelivedemos.

•Makeyoureventfunaswellasinformative.We’vehadgreatresultsinvitingvisionaries,suchasColinPowell,NeilYoung,andMalcolmGladwell,tospeakatourevents.

•Youreventmustlookeffortless.Spendthenecessarytimetoplanandmakesurethatallyourtechnologyanddemonstrationsworkflawlessly—doapracticerun.

•Capturecustomertestimonialsonsiteattheevent.Wehavephotographersandvideographerstophotographandrecordourmostsuccessfulcustomerssharingtheirstoriesabouthowourservicehaschangedtheirbusiness.(Wefollowupaftertheeventtogettheirapprovaltousethesegreatnewcustomertestimonialsacrossallofourmarketingproperties.)

•Provideeveryattendeewiththemostrelevantnextstepstobecomeevenmoresuccessful.Forexample,thenextstepmightbeafreetrialofanewproduct,oritcouldbeaspecialofferontraining.Askyourself,“WhatdoIwanttheattendeetodonext?”andthencraftthepost-eventexperiencethatwillallowhimorhertotakeaction.

•PutcontentfromyoureventonyourWebsite,yourcompany’sFacebookpage,andYouTubetoallowyourmessagetocontinueto

circulatelongaftertheeventisover.

Play#31:ReduceCostsandIncreaseImpact

Wefine-tunedoureventsstrategysothateacheventwashostedatagreatvenue,andwedevelopedaformulathatincludedakeynoteaddress,apresentationfromat least one or two customers who fielded questions, a demo, and a cocktailparty.Yes,youreadthatlastoneright.

TheinspirationforthehappyhourstartedinNewYorkCity.Weweredoing

ourusualdog-and-ponyshowatahotelnearWallStreet.Afterthepresentation,morethanhalftheaudiencelingered,andafteraboutthirtyminutes,thecleaningcrewcame inandkickedeveryoneout.Notwanting to lose themomentumofthis exciting exchange, I invited everyone down to the hotel bar. Almosteveryoneaccepted.Twohourslater,after thegrouphadclearedout,Ireflectedontheunbelievablescenariothathadjustunfolded.SeveralprospectshadbeenconvertedintocustomerswhileIdidlittlemorethansitbackandhaveanicedtea. Weknewthatthesecrettocreatingsuccessfuleventswasbringingcustomersandprospectstogether.TheWallStreetafter-hourscustomerQ&Ademonstratedthat we could maximize the positive effects by offering everyone additionalopportunities to mix informally. From that experience on, we budgeted for acocktailmixerattheendofeveryCityTourpresentation.

We also discovered that attendees loved to boot up their laptops and play

aroundon the application and investigatenew features.That encouragedus toadd an “Expo”with our booths and the booths of our business partners (whobuiltapplicationsthatworkedwithSalesforceorhelpedimplementourservice)asawayforattendeestolearnabouteverythingthatwasavailable.Ourpartnerswereawareof the trafficoureventsdrew,so theywereeager toparticipate.Infact,theywereevenwillingtosharethehostingcosts. Everyone loved theCityTours,butas theybecamemorepopular,we foundthatwecouldn’t afford to run them ineverycity.Wecameupwitha solutionwhenanEastCoastsalesmansaid,“Idon’tneedorevenwantthecontent.Ijust

wanttohavethesocialmixer—high-enddrinksandappetizerswithcustomers.” It was unconventional, but we like unconventional, so we decided it wasworth a try.We planned a small cocktail party at theGrandHavanaRoom inNewYork.Elevencustomersandprospectscame,and therewereeightpeoplefrom our company. We drank scotch and smoked cigars and talked aboutsalesforce.com.Thebillwasalmostone-tenthof a standardCityTour,but thenet effect was virtually the same. Customers learned from one other, and theprospectsweresweptupbythecustomers’gusto. Whenmarketing executive Phill Robinson joined us to build the Europeanmarket,hetoldmehedidn’tunderstandthepointoftheseso-calledClubEvents.“Yougetcustomersandprospectstogether,butyouhavenobusinesscontentandnodemonstration,”hesaidincredulously.Phill’sdubiousnesswasnotsurprising,considering he had beenwith our competitor for seven years andwas not yetreformed.“Whywouldyougetthemtogetherifyou’renotgoingtopitchthem?Whatdoyoudo?” Whatwedoisquitesimple.Werelyonthequalityoftheproductandprovideanopportunityfortheproducttobediscussed.Themosteffectivesellingisdonenotbyasales teambutbypeopleyoudon’tevenknowwhoare talkingaboutyourproductswithoutyourbeingawareofit.Inthisera,thoseconversationsaremorefrequentandmorepublicthanever.Theyarenothappeningbehindcloseddoors, but 24/7 in the blogosphere and on social networking sites. Instead offearing thesepublicconversations,companiesmustcater to themand leveragethem.Byprovidingaforumforcustomerstomeet,youcanbeaparticipant intheseexchangesandusetheviraleffecttoyouradvantage.

GetYourGamePlanReadyThere’salotofprepworknecessarytoexecuteaflawlessevent. •Developyourplantoacquirecontacts.Definesuccessmetrics.

Setyourleadgoalanddetermineyourtargetconversionandcloserates.

•Establishafollow-upprocessbeforetheevent.Developallcommunicationmaterials,e-mails,andcallscripts.Executetheplanwithinafewdaysoftheevent.

•Createanexcitinggiveawaytodrawtraffictoyourevent(orboothatyourtradeshow).Considerhotproducts—forexample,we’ve

seensuccesswithiPhones,MacBooks,andNintendoWiis.•Haveacompellingoffer,suchasanexclusivediscountonyour

productorservice,fortargetattendees.•Providecontentthatvalidatesyourideas.Whitepapersorbest

practicesdocumentationbythirdpartiesiseffective.•Leveragecomplementarypartnerships.Invitebusinesspartners

tocollaboratewithyouinplanningandhostinganevent,orteamupwithcomplementarypartnersattradeshowstodrivetraffictooneanother’sarea.

•Createatakeawaypieceforattendeesthatincludesyouroffer,contactinformation,andquotesfromsuccessfulcustomersandotherthird-partyvalidation.

Play#32:AlwaysStayintheForefront

Inorder to remain relevant,youmust establishyourself as a thought leader inyourindustry.Bethecanaryinthecoalmine,warningpeopleofwhat’sahead—and demonstrate how your company is shaping the future. Events are aneffectiveway to deliver yourmessage to your audience and the press (whichthenreiteratesittoawideraudience).

Wehold“launchevents”everysix toeightweeks.That’s theperiodof time

within which I believe something new should be introduced to the press. Ideliverthekeynote,inwhichwealwaysannouncesomenews(anacquisition,apartnership, or a product) as well as talk about the future direction of theindustryandourroleinit.Theseevents,heldinsuchtoppressmarketsasNewYork,SanFrancisco,andLondon,giveusanopportunitytostayintheforefrontand remain relevant.Theseeventsare thedrumbeatofourmarketingstrategy:thevolumeofmediacoveragealwaysincreasesontheheelsofalaunchevent.ThenumberofpeoplevisitingtheWebsite increases,andthenumberof leadsincreases.Mostimportant,revenueincreases.

Play#33:TheTruthAboutCompetition(ItIsGoodforEveryone)

Although our events have been spectacularly effective at drawing traffic, oneincidentcreatedthebiggestpercentagegainintraffictothesalesforce.comsite(upuntil that time).Wedidn’tplanthisone,butwemayhaveplayedarole incausing it. InOctober2003,afteryearsofdenouncing theSaaSmodel thatwehadbeen trailblazing,SiebelSystemsannounced that itwould launchaSiebelCRM on-demand service. Less than two weeks later, it bought UpShot, aproviderofon-demandenterprisesoftware.

OurbiggestcompetitorhadfinallyseenthepoweroftheInternetasthenext

platform.Whereasthegiant’sstepintoourterritorymighthavethreatenedsomeyoungcompanies,weknewthiswasexactlywhatweneeded.Afterall, itwasourgoaltocreateanindustry,notjustacompany.Siebel’sentryintothespaceendorsedourmodel.Ourcompetitorbecameourkarmicpartner. WithSiebel’snews,we’dfinallysucceededat initiatingamarket .Amarketdoesn’t exist until there is a competitor, and ideally two or three competitors.Competition is good. In the case of Siebel-UpShot, it was very good. Theannouncement of its on-demand play almost doubled our business virtuallyovernight because it validated ourmodel. Don’t fear competition: welcome itandleverageit.

Play#34:BePreparedforEveryScenario...andHaveFun

Aftera fewyears,ourCityToursbecamesodelugedwithattendees that therewasstandingroomonly.Thenextstepwasanannualuserconferencewherewewould have the opportunity to fuel camaraderie and further strengthen ourcommunityofevangelists.WenamedthiseventDreamforce.UnlikeaCityTourevent,whichranforafewhours,theannualDreamforceeventwasheldoverthecourse of a few days. Our first Dreamforce attracted more than a thousandattendeesfromcountriesas farawayasAustralia,Cameroon,andIsrael,but itwasoursecondDreamforcethattaughtussomeofourmostvaluablelessonsineventplanning.

Dreamforce2004wasslatedforthebeginningofNovember—kickingoffon

the day of the U.S. presidential election. It wasn’t an ideal time to hold aconference that had people traveling from all over the country, but we had agoodreason.ItwastheHiltonSanFrancisco’sonlyavailabletime. Theproblemofelection timingpaled incomparison towhathappenednext.Twoweeks before the conference, all SanFrancisco hotel employeeswent onstrike.Apprehensivethatwewouldbewithoutavenuetohostourbiggesteventof theyear,weplanned for twoscenarios:PlanA, inwhich thehotelworkersendedthestrikeintimetohostourconference,andPlanB, inwhichthehotelworkers stayed on strike. We had two versions of everything, includingconferenceguidesandstaffingcrews.Itturnedoutthatthestrikecontinued,soitwasfortunatewehadplannedforacomprehensivePlanB.Sureenough,PlanBturnedouttobebetter.WekeptpartoftheconferenceattheHiltonandmovedmanyofthepresentationstooffsitelocationsthatcouldaccommodateuswithoutourhavingtocrossthehotelpicketlines.WeplannedforthekeynotetobeheldintheGoldenGateTheater,afewblocksfromtheHilton,whichallowedustostretchourcreativewingsinaprofessionaltheaterspace.

Almostthreethousandpeopleshowedup(morethantwicethenumberwe’d

hadthepreviousyear),andwhileattendeeswereanticipatingpresentationsfromindustryleaders,wealsogavethemanelection-daysurprise.AfterIintroduced

myself and began to deliver my address, marketing executive Clarence Sowalkedontothestage,whisperedtome,andhandedmeapieceofpaper. “Ihavejustbeeninformedthatthepresidentishere,”Isaid.“Hetoldmehemightswingby,butIdidn’tbelieveit.” Thepresidentialmusicbegantoplay,theeagleinsigniaflashedonthescreens,and“President”GeorgeW.Bushwalkedontothestage.Actually,itwasareallygoodfakepresident,theterrificimpersonatorSteveBridges,whomwehiredtokickoffDreamforce2004withanElectionDaycomedysketch. Whenthe“president”finishedtheroutine,Iwentbackonstageanddeliveredthekeynote.We’vealways loveddoing fun things like that—and turningwhatothers may have seen as a hardship into an opportunity to create somethinggreat.

Play#35:SeizeUnlikelyOpportunitiestoStayRelevant

Somepeoplebelieve in luckorkarma.Theycertainlyexist,butonlyfor thosewhohavethemind-settoseethem.ItwastheopeningmorningofDreamforcein 2005, the biggest day of the year for salesforce.com, and my fiancée wassufferingwithsympathyanxietypriortomykeynoteaddressandcouldn’tsleep.ScouringtheInternetat4:30A.M.,shediscoveredthatOraclehadmadeanearlymorning announcement: Oracle had agreed to buy Siebel. This was uncannytiming.

ShewokemeknowingthatIwouldhavetomovequicklytoacknowledgethis

colossal news. I thought this was the gift of the century and jumped to takeadvantage of it. The marketing team was at my house immediately, and wesecuredaninterviewonCNBC,whereIwasabletocommentonOracle’slackof innovation and predict Siebel’s death. We completely reworked the entirekeynote address that had been planned for months to focus on this landmarkeventandtoillustratehowtheon-demandmodelhadbecomepowerfulenoughtokill our enormous competitor.Weplayed theCNBCnewsbroadcast onTVscreens aroundMoscone CenterWest. The timing was so auspicious and thebroadcastwasviewedassuchacoupthatmanypeoplethoughtthewholethingwasstaged! This was a victory for salesforce.com and the on-demand industry we hadhelped spawn. It was evident that we were accelerating to the next level.Consolidationintheclient-servercomputingindustrywasopeningthedoorforSaaS.ReporterscametoDreamforcesimplytoseewhatIwouldsayaboutthenews. They not only published stories that included our insight but alsomentionedthatitwasourannualuserweek.WewerementionedinnearlyeverySiebel-Oracle story, and our event got more press than even I could haveanticipated.

TheindustrywasgoinggangbustersdissectingtheSiebelacquisition,andthe

generalopinionwasinkeepingwithminethat theopportunitytobethegloballeaderintheCRMmarkethadopenedforsalesforce.com.(Oneoutletevenran

theinternalmemoIsenttoourstaffandprinted,“Benioffisright.”1ItalsosaidthatSiebelwasa“dinosaur”thatwasnowextinctandthat“consolidationoftheoldguardofenterprisesoftwarewillcontinueassoftwarepurchasingcontinuesto shift to On Demand vendors.”) Even Bruce Cleveland, formerly Siebel’sseniorvicepresidentandgeneralmanagerofon-demand,laterreflected,“Ifyoureadwhatwasinthepress,youwouldthinksalesforce.comwaseatingSiebel’slunch.”Wehadworkedtirelesslyformanyyearstolaythegroundworkforthis.

Play#36:StayScrappy...butNotTooScrappy

Weknewthatwehadtrulyemergedastheunrivaledmarketleaderintheeyesofthe industry when we arrived at Dreamforce 2006 to find that a handful ofemployees froma smallCRMcompanyhadsetupamockprotestoutside theconvention center. I’mnot really surewhat theywere protesting, and itwas asmall, low-budget, and poorly executed rip-off of the types of tactics we hadinvented, but that wasn’t the point. The point was that we knew not to getruffled. Wedidnotwant thiscompany toget freePRonourcoattails! Ignoring thisescapadeworkedwell.AbloggeraskedaDreamforceattendee ifshehadseenwhatwasgoingonoutsidewhenshearrived,andsherepliedthat itmusthavebeensomekindofsalesforce.comstunt.(Note:ifyouaregoingtocompetewithsomeoneathisorherowngame,alwaysremembertostepuptheinnovation.) Most of all, our smaller competitor’s stunt didn’t work because we neverforgot or underestimated the lessonswe’ve learned.We’ve seenwhat happenswhenbiggercompaniesactdefensivelyandvalidatesmallcompetitors.Nooneshouldevermakethatmistake.

Wemightbethemarketleadernow,butthatdoesn’tmeanwe’recomplacent

or see our work as done. We have evolved our mission from replacing onelegacy company to toppling the entire traditional software establishment totransformingtheentireindustry.Ourcurrentbattle:wehavetosavethecustomerfromMicrosoft,Oracle,andSAP. Our current strategy: evolving our unconventional tactics to beat biggercompetitors and overcome new challenges. When Microsoft announced aplatformtoallowdeveloperstocreateapplicationsthatcanbeaccessedviatheInternet(anideathateerilyechoedourownoffering),wewerereadytorespond.Membersofour teamdescendedonMicrosoft’s launchevent.TheycircledtheLos Angeles Convention Center on bicycles and handed out salesforce.comTshirts,doughnuts,andflierspitchingourForce.complatformas“thefastestandeasiestway to build, buy and run business applications.” In an effort to swayMicrosoft’scrowdofdevelopers to signup forour service (and furtherneedle

ouropponent),wegaveawayfivenewcomputers.Ofcoursetheyweren’tPCs.TheywereMacBookAirnotebooks!

Wemaybeabigcompanynow,butwe’llneverforgetwherewecamefromor

thecorevaluesandspiritedeffortsthatgotuswherewearetoday.Furthermore,we’veneverabandonedtheimportanceofhavingfun.

UnderdogtoMarketLeaderStrategiesevolveasyourroleshifts,butyoushouldcontinueto •Plankillerevents.

•Continuebig-bangeffortswiththepress.•Heavilyinvestincustomers’successandleveragetheirvoice

(usecustomerstosellnewproducts,reachintonewaccounts,andspeaktothepress).

PART4

TheSalesPlaybook

HowtoEnergizeYourCustomersintoaMillion-MemberSalesTeam

Play#37:GiveItAway

Intypicalsalesforce.comstyle,ourinitialsalesstrategywentcompletelyagainstconvention. In a response that was becoming just as predictable, countlesspeopletoldusthatitwouldneverwork.

Historically, enterprise software companies sold their products for vast

amountsofmoneyaccording toaverydefinedsystem.Theirprocess involvedsending out white papers, visiting prospects in their offices, and delivering ahighlycustomizeddemonstration.Aftermonthsofworkand several roundsofnegotiations, thecompanyclosedamultilicensedeal.Thevendorcollected thebillupfront,leavingthecustomercarryingtheentirerisk. That process didn’tmake any sense to us.All the old-school laborious andhigh-costsellingstepswerenolongernecessary.WehadenteredtheneweraoftheInternet,andourservicewasavailable24/7ontheWeb.Itwassosimplethatcustomerscouldlearneverythingabout it,subscribe,andget it runningjustbyvisitingwww.salesforce.com.Itwasdo-it-yourself.Therewerenoanalystsandnomeetings.Further, therewasnohaggling.Theservicecost$50peruserpermonthforeveryone,andcustomerspaidastheywent.

Upendingthatpartoftheenterprisesoftwaresellingstatusquowasenoughto

warrant some quizzical comments, but one strategy in particular sealed ourskeptics’doubt:wegaveourserviceawayforfreeinthebeginning.Thiswasakeypartofourseed-and-growstrategy,whichassumedthatifweplantedaseedinthegroundandnurtureditappropriately,wewouldsoonseethefruitsofourlabors.Inordertoprepthatproverbialground,weofferedafreefunctionaltrialforfiveusersforayear.Thetrialwasopentoanyonewhoexpressedinterestinsalesforce.com;thisindividualdidn’tevenhavetospeakwithasalesperson. Althoughafreetrialhasevolvedintotheindustrystandard, thiswasnot thecasein1999.Nosoftwarecompanyallowedaprospecttousetheentireserviceat no cost.We recognized that prospectswanted to feel assured thatwewereaccurately representing our service’s capabilities, so we needed to let them

experienceitforthemselves.Admittedly,theplanwasself-serving.Offeringtheserviceforfreeincreasedouropportunitiestogainvaluablefeedback,whichweknewwasthesecrettocreatingasuccessfulproduct.

Play#38:WinFirstCustomersbyTreatingThemLikePartners

Thanks toourdevelopers’ talent andour earliest test users’ (read: friends’ andformercolleagues’)guidance,wedevelopedaqualitybetaapplication.Finally,itwastimetogooutandwinactualcustomers.Suddenly,westumbleduponournewestandbiggesttest:makingpeoplecomfortableputtingtheirmostsensitivedata(proprietarycustomerlists)onourservers.Everyonewasconcernedaboutsecurity breaches. Itwas challenging to convince prospects to try our service,and itwas especially challenging to convince the first one.Most people don’twant tobe the first to take agiant risk.Realizing that truismwaspivotal.Wefinessedourstrategytotargetpioneerswhosawanopportunitytoparticipateinsomethingnewandexciting.

ThatfirstpioneercameintheformofBlueMartiniSoftware,oneofthesmall

softwarecompaniesinwhichIhadpreviouslyinvested.IknewIwasaskingforafavorwhenIcalledthefounder,MonteZweben,butIalsoknewIwasofferingsomethingthathereallyneeded.Monte’ssalesteamwasusingspreadsheetsandwanted a CRM system, but it couldn’t afford traditional enterprise software.Blue Martini also needed a service without the complexities of enterprisesoftware, becauseMonte wanted his sales team to be focused on selling, notgettingasystemupandrunning. Monte floated the ideaofusingournew servicebyhis sales force (the endusers), and they immediately embraced it.BlueMartini (whichhas sincebeenacquired and is now known as Escalate Retail) became our first customer inAugust 1999. The service was up and running within two weeks—not themonthsoryearsbywhichothersoftwareimplementationsweremeasured.Evenbetter,BlueMartinididnothavetomakeamillion-dollarinvestment.

Wedidnothavea formal salesorganizationat this time so inourquest for

earlycustomers,everyoneonthesalesforce.comteamwasencouragedtocontactanyone he or she knew in any industry, or at any startup. Diane Mark, ourproductmanager,won our second clientwhile shewas standing in line at thelocalmarket,MollieStone’s.Sheranintoaformercolleaguewhowasworking

asa salesmanagerat iSyndicate, acompany that sold syndicatedcontentovertheWeb.Sheaskedhimwhatthecompanyusedtomanageitssalesprocess. “ACT!andExcel,”he replied.“It’samess.”Aftera shortmeetingwith theiSyndicateexecutives,theysignedonasoursecondcustomer.BySeptember,wehadfivepilotcustomersusingsalesforce.comforfree.Theyweremorelikebetacustomers,butIcalledthemdesignpartnerstorecognizetheirrealcontributions.

Our design partners’ insights were essential to the development of our

application.Wecontactedthemfrequentlytodiscusstheirexperienceusingtheservice, and they became the eyes and ears of the engineering team. Theydiscovered featuresand toolsand functionalities that theyneeded.Weaddedabuttonthatallowedanyusertoimmediatelysendusanidea,andwecouldreactveryquickly.Wecreated“bugforce,”ascaled-downdatabasetotrackbugsandnewideas,whichhelpedusratethefrequencyoftheproblemsorrequests.Thedevelopment team built all additional functionality in a very short time—amatterofweeks,whichwasunheardofintheindustry.Beingsmall,nimble,andin constant communication with our earliest customers is what enabled us toproduceaterrificservice. In fall 1999, once we had honed the service into something ofmeasurablevalue to customers, we hired our first dedicated salesperson (and fifteenthemployee)tohelpacquireadditionalfreeusersandtoconvertourfreeusersintopaying customers. The plan worked exactly as intended. Blue Martini soonstartedpayingfortheservice.Beforelong,Colo.com,adatacenterprovider,waspayingfortwenty-fivesalesrepstousesalesforce.comandtoutingourserviceinthepress,explainingthatitcostafractionofatraditionalenterpriseproduct.

Ourconversionstrategywassuccessfulforseveralreasons.First,throughthe

free trial, prospects had already experienced the service, and they knew itworked. Second, it was a very low risk proposition because the service wasbilledmonthly and therewas freedom to change the plan or quitwithout anypenalties.Third, itwas such agoodproduct that usersbecameaddicted.Theyneededit.

GofromAdoptiontoAddictionwithaFeedbackLoop

Beopentoincludingallcustomers,andtreatthemaspartners.Todoso,utilizeafastandprioritized“feedbackloop”:

1.Stayintouchwithcustomers.2.Developawaytotracktheirrequests.3.Respondtotheirrequestsquickly.4.Askiftheirneedshavebeensatisfactorilymet.5.Payattentiontohowtheyareusingtheproduct.

Play#39:LetYourWebSiteBeaSalesRep

Weweregrowingwithourexistingcustomers,andournascentsales teamwaslanding new customers, and then something extraordinary happened thataccelerated everything. In December 1999, an article titled “Salesforce.comTakes the Lead in Latest Software Revolution” appeared in the Wall StreetJournal.

The story was written by Don Clark, a journalist I had invited to the

Laboratory to meet the developers and test the product while we were stilldevelopingtheprototype.Mycofoundershadbeenangrywithmeforspeakingwithajournalistsoearlyinourdevelopmentprocess,but it turnedout tohavebeenworththerisk(andtheirwrath).ThiswasthesecondtimethatDonClarkwroteaboutus.WhereasClark’spreviousstoryhadmentionedsalesforce.comaspartof theexciting trendof softwaremovingonline, thisone,whichappearedonlyeightmonthsafterwewerefounded(andtwomonthsbeforeweofficiallylaunched)focusedentirelyonus. The day after the article came out, the phones began ringing likemad.Wewere inundatedwith leads.More thanahundredpeople came toourWeb siteandrequestedinformation.

We didn’t even have a sales process developed to deal with the level of

interest.(WehadaWebsite,butwedidn’thaveanypeopletofollowthrough.)Peter Wooster, the first salesperson, was still the only member of the sales“team,”andhewasburied inqualified leads, implementingprogramsover theweekendandtrainingcustomersonhowtousetheserviceduringthebeginningoftheweek. TheJournal articleencouragedusers fromcompaniesofall sizes to registerfor the free trial—even salespeople at such megacorporations as Xerox andSiemens. This strategy also created a unique sales phenomenon: before mostprospective customers heard from somebody at salesforce.com, they werealreadyusingtheservice.

Beforeyouhaveasinglesalesrep,youcaninvestinyourWebsiteandletit

do some selling.AgoodWeb site ismore effective than anydirectmarketingcampaign. A lead capture screen, where visitors are required to enter theircontactinformation,isaneffectivewaytofindhotleads.It’sessentialtokeepaWebsiteeasytouseandfreshwithregularupdates.

Play#40:MakeEveryCustomeraMemberofYourSalesTeam

Justaswetappedeveryemployeeasamarketingperson,webelievedthateverycustomer could serve as a salesperson. Inside every customer there wasunrealized potential. By offering training and support, we could build a salesarmythatwasnotlimitedtoafinitenumberofsalesforce.comsalespeople,butcould scale to hundreds of thousands—and, one day, millions—of customersalespeople.

Thesalesandmarketing teamsmustwork together to fosterevangelistsand

build a sales army. At any company, the marketing department and salesdepartmentmustbebestfriends.It’snecessarytoplaytogether,partnertogether,andultimatelysucceedtogether. AlthoughIbelievedthataservicethatwaseasytopurchase,easytolearn,andeasytousewouldsellitself,Ialsounderstoodthatweneededtobuildaprocessforsellingandastrongsalesteamtocaptureandqualifyleadsandtoclosedeals.

At the time that we reinvented our marketing strategy to be focused on

leveragingeditorialopportunitiesandcustomer testimony,wecreateda formal“process”aroundmarketingandsales.WecameupwiththediagramshowninFigure4.1. Theheartofmarketingwasourinternaldatabaseofleads—thecorethatkeptourcompany ticking.Earlyon, the free trialswereoneof thebestmethodsofcapturingleads(wewereabletocollectnamesandcontactinformationeasilyinexchangeforthefreetrial),andweneededtoinvestigatewhatothermethodswecouldsystematicallyemploytodriveadditional leads.Weevaluatedsourcesofleads—word ofmouth, Internet search, press activity, and directmarketing e-mails—andlistedthemontheleft-handsideofourheart.Next,wecementedourfollow-upstrategybycreatingasystemtotracktheactiontheprospecthadtaken(contactedus, registered foranevent),andwecommitted to followuponanyleadwithintwenty-fourhours,whethertheleadcamefromtheCIOofaFortune500 company or a university student. After all, this was the beginning of a

relationship,andwewantedtoprovideaverypositivecustomerexperiencefromthestart.

We devised a plan for the marketing team to work with the sales

representatives and provide scripts, templates, and training so that everyonewouldhavethecorrectpositioningandlatestoffers.Thesalesteamclassifiedtheleads into categories (working leads, qualified leads) and aimed to push themthrough to a deal usingmyriad delivery tools and content thatwe created forvariousstagesintheleadcycle. Thegoalwas toconverta lead toadeal in thirty toninetydays. If thedealdidn’tclose, itwasn’t tossed,butwaskeptactive inanarchiveofwarmleads.Wefoundthatbycontinuingtocultivatetherelationship,wewerelikelytomakethesaleeventually.Figure4.1.90-DayCampaignstoCashtoCustomerCycle

The cycle doesn’t end with a signed deal. Because we use a subscription-basedmodel, we have to invest just asmuch effort inmaking our customerssuccessful once they are signed on—otherwise they’ll leave. We created asystem of best practices (including customer events and webinars) to helpsupportcustomersandkeepthemhappy.

Play #41: Telesales Works (Even Though Everyone Thinks ItDoesn’t)

If thiswasawaragainst thesoftwareindustrymodel,ourmarketingteamwasourAirForce,providing thehigh-levelaircovernecessary toblanket thezonewithourmessage. Itwas themissionof thesales force toconduct theone-on-one combat on the ground. The truth is that many of the techniques initiallyemployedbythesalesteamweren’tinnovative,butwefoundthatinvestingtimeanddemonstratingtenacityweresimpleandeffectivesellingstrategies.

Thiswas still the eraof thedot-combrouhaha, and Iwas invited to several

parties every night. I would speakwith a large number of people and collectbusinesscardsfromeveryone.Thenextmorning,Iwouldgivethestackofcardstothesalesteamandurgethemtocontacttheleadsimmediately.Theyhatedit.Theytriedtohideastheysawmewalkdownthehallway,butluckilytheofficewasabigopenspace,andtherewasnowhereforthemtogo.Ialsoencouragedthe teamtocalleveryone theyknewandtoroutinelyaskfriendsoffriendsforreferrals.Thosefriendssometimesgotaggravated,butwegotusers.Theyweremyfavoritekindofusersbecausetheleadswerefree! Whensalesforce.comwasfounded,therewasapreconceivednotionthatyoucould not sell CRM applications over the phone. Companies were investingmassiveamountsinbuildinghigh-touchteamsthatoperatedinfar-flungoffices.We broke that mold—mostly because we couldn’t afford to follow it in thetraditionalway—and proved that telesales couldwin a high close rate at one-third thecostand inone-third theamountof the timeas the traditional sellingmodel. Althoughourapproachissimilartowhatothercompaniesmightcalltelesales,wecalleditour“corporatesales”modelandfoundthatrecruitsrespondedmorepositivelyto that term.Webuilt thecorporatesales teamwithrecentgraduatesfrom great colleges who were terrific at answering the incoming calls. Theseindividuals were smart and energetic, and were closing sales without muchtraining.Wealsobuilta teamofmoreexperienced“outboundsales” repswhowerecallingoutandclosingdeals.Weofferedanextensivetrainingbootcamp

and gave sales reps three to six months to build a pipeline. (They were thenexpected to close business, and those who didn’t perform were movedelsewhere.) Customerswerecuriousabout thelackofaface-to-facemeetingatfirst,butsoon they appreciated the calls and Web demos as effective time-savers foreveryone.Thispracticewouldbecomemore relevant later,when the economyfaltered and all corporations slashed their travel budgets and begancommunicatingviaWebconferencingandconferencecalls.Althoughwedidnotpredict the shift, our strategy, born of necessary frugality, prepared us to takeadvantageofit.AstechnologyadvanceswithbetterWebconferencingtoolsandnewandlessexpensivewaystoconnectpeoplemoreeasily,thisisthebestwayforanycompanytogetitssalesteamupandrunning.

OutlineforaSalesCall:TheTopFivePointsforaWinningConversation

1.Leveragetheexperiencetheprospecthashadwithother

solutions.2.Introducethevalueyourproductoffers.3.Providesuccessstoriesfromcustomers.(Buildandmaintaina

strongreferralprogram.)4.Verifysuccessstoriesbyofferingcustomertestimony.5.Provideacustomerfortheprospecttocontact.

Play#42:Don’tDisYourFirstProductwithaDiscount

Many of our sales repswho came from the enterprise software industrywereaccustomed to offering a discount. The discount had become their closingstrategy when they had to make their targets. I didn’t think we needed thatmotivator,andIbelievedthatourservicewasfairlypriced.Discounts,Ithought,were tied to perceived risk. Offering deals would compromise the service’svalue. Mostimportant,bykeepingthepricethesameforeveryone,wekeptthecostslow for everyone. It was the most democratic way. Unlike the rest of theindustry,wechargedthesameperseat,whethersomeonewantedtwolicensesortwohundred.Whyshouldsomeonepaylessjustbecausehisorhercompanywasbigger?Thatdidn’tseemfair.Iwasunyieldingonthis.Iheardthejokesbehindmy back that I wouldn’t give even my grandmother a discount. It’s true; Icouldn’t—thatwould ruin the democraticmodel onwhich salesforce.comwasbuilt.(Shepaidfullprice.) Unabletorelyonadiscounttocloseadeal,oursalespeopleactuallybecameevenbetter.Insteadofwaitingtopushextrahardattheendofthequarter,theypushedtoclosedealsimmediatelyallyear.Theurgencytosellbecameaboutthecustomer’s need for our service, not about the salesperson’s need to make aquarterly quota.Our selling strategy—tobe priced to the value of themarket,keepcosts low, andnot favor anyone—notonlywas effective at closingdealsbutalsobecameanessentialpartofourbrand.

Onceacompanyismoreestablished,therearereasonstoimplementdifferent

price structures, but don’t get your product off to the wrong start byundervaluingit.

Play#43:SalesIsaNumbersGame

Inanefforttobetotallycustomerfocused,wemadeitourpolicytoimmediatelyrespondtoanyleadregardlessofitssize.Therewassomuchactivitythatbeforelong our salespeople were closing $50,000 to $70,000 per salesperson permonth.Wequicklydiscoveredthatthemoresalespeoplewehired,themorewesaw revenue increase. This proved that we couldn’t simply encouragesalespeopletosellmore.Weneededtoincreasethenumberofsalespeople.Thiswasthekeytogrowingrevenue. Ninetimesoutoften,companiesfailbecausetheydon’tsetupalargeenoughsales force and thus have noway to collect enough revenue. Don’t skimp onsales reps: 25 to 50 percent of the employee base should be salespeoplewhoreporttotheheadofsales.(Halfofourcompanyisinsales.) Whenyouare inagrowthphase,usecashtohire—andhire,hire,hire!Youhavetogrowthedistributioncapacitybyhavingasmanysalespeopleasyoucanand by organizing andmanaging the sales team to ensure productivity.At thesame time, it’s necessary tomotivate individuals to close asmuchbusiness aspossible. There is a huge difference between a $50,000month and a $60,000monthmultipliedbyeverysalespersonovertime.

Play#44:SegmenttheMarkets

We launched salesforce.com as a democratizing service, without dedicatingresources to target markets of specific size. In particular, we were concernedabout investing toomuch in the smallbusinessmarket, anaudience thatmadesenseforus,butonewhere thecostofcollectingwas likely tobeexorbitantlyhigh compared to the revenue generated. In addition, there was worry aboutpotentialattrition.(Onlyabouttwo-thirdsofnewemployerfirmssurviveatleasttwoyears,andabout44percentsurviveatleastfour,accordingtotheU.S.SmallBusinessAssociation.) RobAcker, a formerOracle salesmanagerwho joinedus in spring2000 tobuildaleadgenerationteamandanaccountmanagementteam,encouragedustorefineour strategyand targetparticular audiences.His suggestionwas spurredbyhisobservations.Robwasresponsiblefor trackingincomingleadsandhowmanyseatswereeventuallypurchased.Hekneweverysingledetailabouteverycustomer. He had to—in a quest to learn what was working, I’d often askspecificquestions:“How’stheBusinessWeekaddoing?Howmanycallsdidyouget?Howmanyleadsdoyouhave?” After tracking everymetric, Rob noticed the successwewere experiencingwith small companies (businesses with fewer than thirty employees). Heapproachedmewiththeideatorampupoureffortstospecificallytargettheverysmallbusinessmarket,whichhe found tobeprogressive in its supportofnewtechnology: “There’s a huge opportunity,” he said. “We’re thinking this isn’tprofitable,butthismightbeagoldmine.Justgivemeoneguy.” I hadbeen focusedonbuildingother areasof thebusiness, andbecausewewerestillasmallcompany,wehadtobeverycarefulaboutoutlayingtoomanyresources. I alsowanted to see how seriouslyRob had considered his plan. (Ioftenvetideasbyplayingthedevil’sadvocateorarguingtoseeifsomeonewilldefend them.) I mentioned my concerns to Rob, and he responded withconvictionthathebelievedthiswastherightidea.Hehadresearchtosupporthisclaim that small business was going to be extremely profitable. Rob waspassionateabouttakingadvantageofthisopportunity,andItrustedthathecouldmakeitwork.“Takefourpeople,”Itoldhim.

It turned out to be a very good decision to focusmore attention on smallerbusinesses.Thecloserateswerehigher,andthesalestimeandcostofsalewerelow.We experiencedphenomenal growth in this area and expanded from foursalesrepstotwentyrepsinjustsixmonths.

Segmenting the markets made sense, and I was reminded of the value of

listeningtoourpeople.Employeesaredeeplyinvestedintheorganizationwheretheywork,andtheyoftenhaveworthyideasabouthowtomakeitabetterplace.Tellthemthatyou’dliketohearfromthem—andmaketimetolisten.

Play#45:LeverageTimesofChange

Because of ourmandate to target small business, and inwhatwas probably areflectionofthetimes,alargeproportionofourcustomersintheearlydayswereInternet startups.They sharedourappreciationof the Internet, theywereearlyadoptersoftechnology,andtheyweregrowingatawildpace.Itseemedthatourdot-com customers were calling every day to add new subscriptions. OnlinesearchsiteLookSmartwent fromfivesubscriptions to fifty inonemonth.Ourbusinesswasbooming,anditwaslargelyfueledbythedot-comfury.

Then, suddenly, everything started to unravel. Many dot-coms, once flush

with venture capital money, began to run out of cash. As many of thesecompanies struggled to survive,wehad todealwith theuglyconsequencesofveryserioususerattrition.Whereassomeofourcustomersreducedthenumberofusers,otherspulledoutentirelyandthenfolded.ByOctober2001,thecrashhaddeeplyaffectedourbusiness.Wewereburning through$1million to$1.5millioneverymonth,andwewereseverelycashflownegative.Thepotentialforbankruptcywasathand. Weneededtoimplementanewstrategytoimprovecashflow,andwefoundourselves in a seemingly disastrous predicament. Investorswere spooked, andvaluations were appallingly low, making it an awful time to raise capital.Furthermore,Iwouldn’thavewantedtoraisemoneyevenhadthisbeenthebestoffundraisingtimes—additionalfinancingwouldhavedilutedthevalueofalloftheoriginalinvestors’shares.

On theheelsofseveralunfruitfulmeetingswithventurecapitalists (seePart

Eight for those horror stories),MagdalenaYesil, our first investor and a veryactivememberofourboard,approachedmewithanidea.Shebelievedthatourmonthly billing plan, which was meant to be a low-risk proposition forcustomers,was jeopardizing the financial securityofour company.Magdalenasuggestedthatwechangeourstrategytocollectingforayearormoreupfrontand offering a discount as an incentive. Her analysis demonstrated that thiswould solve our cash flow problem,whichwas largely created by paying our

sales reps a commission based on a twelve-month deal, while only collectingrevenue from our customers onemonth at a time. It was taking two to threemonths to recoup our expenses on each deal—and that was in the best ofcircumstances. Thiswashardly thebestofcircumstances, though.Wewere in themidstofthedot-commeltdownandwerelosingaccounts.Werealizedthatmanyof theaccountswe had lost had beenwith us for less than a year,meaning that wenever recouped our expenses. Further, managing billing around a month-to-month customerwas, by itself, costingus a fortune.CarlSchachter andBrianMillham,membersofourteamwhofocusedonbusinessdevelopmentandsales,had, likeMagdalena, come to believe that we needed to change the way westructureddeals.Theyinvestigatedwhatothercompaniesweredoingtocapturecommitmentandspentadaywithapartnerofourstogainanunderstandingofhow it was securing commitments by selling contracts. Carl and Brian tookeverything they learned back to salesforce.com and began to consider how itcouldbeadaptedtoourbusiness.

Althoughthisideatosellannualormultiannualcontractsandtoencouragethe

commitmentwith a discountmay seem like a simple one andmay even seemobviousinhindsight,itrepresentedadramaticshiftforourcompany.Ourteamwasdividedastowhatweshoulddo;severalofuswantedtomaintainourno-contract and no-discount policy. After all, we had publicly touted thesedifferentiators.Couldwesuddenlychange?Wouldcustomersbewillingtomakethisswitch? Ultimately,weneededtomakethischangeinordertosurvive.Wecreatedtwofactors to justify a discount: the total number of users and the length of thecontract. We offered existing customers the opportunity to continue with thepriceof$50perpersonpermonthiftheysignedanannualcontractandpaiduscashupfront.(Westillrecognizedtherevenuemonthly,butthisapproachwouldcementthecustomer’scommitment,helpwithbillingandcollectionscosts,andimproveourcashposition.)Ifcustomerspreferredtocontinuemonth-to-month,theratewouldbeournewpriceof$65amonth.Althoughwethoughttheplanwasfairandattractive,itwasneverthelessagreatshocktouswhenabouthalfourcustomersimmediatelyagreedtoit.

Ourcustomerswerewillingtoacceptthechangebecausewehadearnedtheir

trust and their loyalty. Our customers, it turns out, were rooting for us tosucceed.Wewerealsoestablishedenoughbythispointthatabout20percentofournewcustomersacceptedtheplanrightaway.Manyofthesecustomerssaidthattheyweremotivatedbythepricediscount,andtheybelievedthatpayingonanannualbasiswassimplerthandealingwithamonthlybillingcycle.WhereasIhadalwaysbeenconcernedthatcustomerswouldfeelconstrictedbyanannualcontract,itturnedoutthatmanyofthemsawitasagoodopportunitytolockinfavorableterms. Of course—aswe had suspected—therewas a fair share of customerswhowerenotpleasedwiththechange.Iwouldevengoasfarastodescribeahandfulofthemasoutraged.Concernedthatwecouldlosethesecustomersandwantingtoprovideasolutionthatwouldquelltheiranger,weofferedtograndfathertheminwiththeoldpriceandmonth-to-monthpaymentscheduleforoneyear.Itwaschallenging tomaintain,but it kept themsatisfied, andeventually earned theirlong-termbusiness.

In an effort to ensure execution of our new plan, we wanted to create an

incentive to spur sales reps to close annual deals. “Let’s give sales reps 50percenthigher commissions to signannualdeals,” saidFrankvanVeenendaal,whohad joinedus tohelpbuild the sales team (andhadalwayshated theno-contractpremise).Frankrecommendedthatwepaytherepstwomonths’worthof sales revenue for every twelve-month contract. Under this innovative newarrangement, sales reps would be motivated by the financial rewards ofcapturingalongercommitment,andwewouldstillkeeptenmonthsofrevenueinthebank. Thatdecisionhadasignificantramificationonourgrowth.Bycollectingupfront—andofferingsalesrepsarealmotivatortoensurethatweclosedmultiyeardeals—wewent from cash flow negative to cash flow positive in less than ayear.Wemade this new structure part of our official compensation plan—andit’s largelywhywe’vebeenable tocontinue togrowan impressiveamountofcashonthebalancesheettothisday.

ListeningIsanUnderratedVirtueThereisonlyonewaytogetcustomersupport:earnit.Ifyoudeliveronyourpromisesandtreatcustomerswell,youwillearntheirtrustandloyalty.

Thatmakescustomersrootforyourcompanyanditssuccess. Throughopencommunicationandtransparencyyoucankeepcustomertrust,andevenmakechangestheymaydislikewithoutlosingthem.Donotmakechangeswithouttheirpermissionorwithoutgivingthemachoice.(Coca-Colalearnedthisthehardwaywhencustomersrevoltedagainst“thenewtasteofCoca-Cola.”Theyhadn’taskedforthissweeterformulation,theydidn’twantanewCoke,andtheydidn’tbuyit.OnlybylisteningtocustomersandthenreintroducingtheoriginalCokedidthecompanyregainloyaltyandsales.) Customersneedtobeawareofchangesthatarehappening—andtheyneedtofeelasiftheirneedsareconsideredinthecompany’sdecisions.

Play#46:YourSeedsAreSown,soGrow,Grow,Grow

Likeallnewcompanies, salesforce.comwas focusedon survival in its earliestyears.WehadtoeducatethemassesabouttheSaaSmodelanddemonstratethatitworked.Oncewefinallyproved that,weneeded todeviseastrategy to takeourcompanytothenextlevel.Weneededtoimprovecashflow—andweneededtogrow,andgrowfast.

Intheverybeginning,wecastabignet,fishingforanycustomerwhobit.For

the most part, we caught a lot of minnows, and then, as we became moreestablished,weattractedsometuna.Manyofourminnowsgotwashedawayinthedot-comcrash,butthebiggerfish,suchasAmericanMedicalResponseandAnalogDevices,foundourelasticservicefittingforprecarioustimes,andtheyweathered the storm with us. We realized that it was time to target furtherupstream. With the product’s success well established, winning enterprisebusinessbecameaformalobjective. Itwasclearthatthisendeavorwouldrequiremassiveorganizationalchanges.Creating a world-class field sales force—the kind of team we needed to winlarge deals—was not an easy proposition.Asmuch aswe hadwished towinenterprisecompaniesinthepast,andevenmadesomelacklustereffortstodoso,wedidnothavethedistributionordistributioncapacityinplacetomakethisasustainablepursuit. Building distribution is a tremendous challenge: it’s expensive, it’s time-consuming,and it’salwaysevolving (especiallyasgeographic targetschange).ThefirststepwastoexpandbeyondourcallcenterinSanFranciscoandplacesales reps in the field.Weneeded individualswhowereexperts in thevariousmarkets and professionalswith a proven track record.Although the corporatesalesteamdidafantasticjobonthephone,theyweren’ttherightgrouptobuildenterprisesales.Theyhadjustgraduatedfromcollege,hadnoexperiencesellingface-to-face,andworeTshirtsandjeanstowork.Theydidn’tevenownsuitsandties. (Not an anomaly in California, but not necessarily something thatwouldtranslateacrossthecountry.) We asked salesforce.com executive Carl Schachter, previously

salesforce.com’sVPofbusinessdevelopment,tostartthefieldsalesteam.Intheverybeginning,CarlwasbasedinSanFrancisco,andtherequirementsofthejobmeant that he was constantly crisscrossing the country to deliver salespresentations. Itwasn’t efficient (andwe soon based people in various cities),but this early step proved that enterprise clients placed a great importance onface-to-facemeetings. Conducting these in-personmeetingsalsoprovidedgreater insight intowhatworked,anditofferedusanopportunitytohoneoursalespitch.Carlcreatedtwosalesapproaches.PitchAembracedpracticality:ithighlightedthesuccessoftheproduct and its low risk, whichmade it a perfect solution in uncertain times.PitchBevokedthevision:itintroducedhowthecloudcomputingmodelbroughtdemocracytoenterprisesoftwareandhowitempoweredcustomers.Ittappedtheinnate desire to be a part of something that was new and exciting and urgedpeopletojoinarevolutionandparticipateinchangingtheworld.(Atthesametime,ofcourse,wehadtoincludeamessageofutilityanddemonstratethattheproducthadrealvalue.) Todecidewhich pitch to use,Carl invested timedoing research about eachprospect. That type of preparation made a huge difference. No matter whatstrategy we used, the number-one focus was on our customer’s needs andproviding a solution that could be implemented instantly. Unlike traditionalenterprise software companies, we did not mention what could be donetheoreticallyorwhatwecouldofferinthefuture.Wefocusedonwhatcouldbeachievedimmediately.

PreparationIsAlmostEverything

•Knowtheprospect’sbusinessandproducts.•Understandtheprospect’srequirements.•Predictanyobjectionstheprospectmighthave.•Learnthebusinessdriversoftheprospect’ssuccess.

Wedevelopedabifurcatedstrategy togrowsales.Thecorporatesales team,

which conducted business mostly over the phone and via Web conferencingtools,wasbasedatourheadquartersinSanFrancisco.Havingeveryoneinoneplacehadproventobeaterrificwaytobuildcompetitionandcamaraderie,anditalsomadeitsimpletodeliverfrequenttraining.Thisteamtargetedcompanies

with fewer than five hundred employees. The field sales team approached thecompanieswithmorethanfivehundredemployees.(We’vesincemovedthelinebetweencorporateandfieldsalesfromfivehundredemployeestoonethousandemployees.) Our goal was to create a balanced portfolio of small, medium, and largecustomers.Althoughwewantedtogrowrapidly,wecouldnotbuildafieldsalesteam overnight. Instead, we grew strategically as necessary, segmenting thebusinessaccordingtogeographicterritoriesandbusinesssize.OurfirstdomesticoutpostwasNewYork,wherewehiredA-listplayersfromgreatcompaniestogrow business on the East Coast. Later we added territories in Chicago andAtlanta. Weneededa leader togrowourworldwidesalesanddistributioneffort.JimSteele, theexecutiveVPofworldwidesalesatAribaCorporation,camehighlyrecommendedbyourexecutivesearchfirm.AroundthesametimethatwewererecruitingJim,wewereseparately(andwithoutJim’sknowledge)recruitingoneof his star players, David Rudnitsky. David’s genius for selling to enterpriseclients was matched only by his gift for picking game-changing startupcompanies. (He’d worked at Oracle, Netscape, and Ariba, each in its earliestdays.)Aftersomeconvincingonmypart,bothsignedon,andIwaselatedwhenDavid—whohadwonNetscape’sfirstenterprisesalewhenMcGraw-Hillboughttenthousandbrowsersallatonce—mademeanamazingpromise:“I’llgetyouyourfirstthousand-userdeal.” JimandDavidhadbeenwithusonlyforaweekor twowhenan incredibleopportunityunfoldedatSunGard,aNYSEFortune1000company.CrisConde,whohadjustbeenpromotedtoCEO,waslookingforawaytointegratethedatasystems giant’s eighty different business units and sawCRM as the “unifyingglue.”Thepossibilityofourbiggestcustomertodate,andthethousand-userdealDavidhadguaranteed,wasright infrontofus.Atthetime,SunGard’svariousdivisionswereworkingonmyriad systems,butCrisnoted that salesforce.comwastheonlyonethatwasspreadingvirally.“Thesalespeoplewerebuyingitontheir own; they were swiping their own credit cards and going around theirmanagerstopurchaseanaccount,”hesaid. That“vote” fromtheuserswassignificant toCris,andmeetingwithhim todiscuss our service’s capabilities not only yielded our biggest customer at thetimebutalsohelpedbuildablueprintforsellingtoallenterprisecompanies.Crissharedwith the sales teamexactlywhatheneeded,andweknew immediatelythat we were capable of providing these abilities to SunGard—or to any

customer:1.Security:datacouldn’tgetleakedorlost.2.Scalability:ithadtogrowwiththecompany.3.Reliability:ithadtobeaccessible24/7.4.Performance:ithadtoworkrightaway.5.Integration:ithadtointegratewiththeback-officesystems.6.Customization:ithadtolookandfeellikeaSunGardedition.

In addition, Cris stressed another demand: “We want the pay-as-you-gobusinessmodel.Italignsyourcompany’sgoalswithourgoals.”Asweenteredintoourbiggestdealof that time,our subscriptionmodelbecamevalidatedassomethingthatwonlargeandsmallcustomersalike. TheSunGarddeal helpedus land additional enterprise clients, andwe soonlearnedanotherimportantlesson:Wecouldnolongerbedrivensolelybyprice.Simplybeingthecheapestwouldn’tdoanythingforanyone.Theservicehadtowork aswell as, or better than, the expensive versions if big customersweregoingtomakealong-termswitch.

Evenour biggest customers reiterated this point. “I amnot focusedonhow

inexpensive it is; I am looking for value,” Rick Justice, executive VP ofworldwideoperationsandbusinessdevelopmentatCisco,said.Hedidn’tevenwanttotalkaboutpricinguntilweprovedtheproduct’sworth.

TheRudnitskySalesPlaybookThebestsalespeoplearedrivenbyinstinct,passion,andapowerfulworkethic.Ultimately,though,closinggreatdealsalwayscomesdowntoexecution.Davidinitiallycreatedthisplaybookfortheglobalfinancialservicesdivision,whichheruns,butitprovedsosuccessfulthatithasbeendeployedthroughoutourentireenterprisesalesteam.Someofthefollowingideasmaynotberevolutionary,butit’suncommonforsalespeopletoactuallyemployallofthem.Iftheydointernalizetheseideasandexecutethem,theywillfindsuccess.Guaranteed. ThinkBIG,HaveAttitude

Thinkbigwhenstrategizingwithyourcustomers,andfocusontheirentirepotentialenterpriseneeds,notjusttheimmediateopportunityinfrontofyou.Thinkbig(dollarsandscope)whendeliveringaproposaltoyourcustomers.Getthemexcitedandemotionallyconnectedtothebiggervision.Thinkbiggerthananyopportunityofthepast.

Similarly,behaveasifyourcompanyisbig,evenifit’snot.WhenDavidandJimstarted,ourbiggestcustomerhadfivehundredusers.Ouraveragecustomerhadtwelveusers.Wesharedthisinformation,butwefocusedonwhereourcompanywasheaded,andhowrightnow—astheindustrywastransformingandwewereusheringinthefuture—wastherighttimetobuy.NoDealIsWonorLostAloneEverydealshouldbetouchedbymultiplepeople.Trustthepeoplearoundyouanddivideandconquer.“I’mlessimpressedwithsomeonewhoclosesa$2milliondealalonethanIamwithsomeonewhobroughtallofusinandstillclosedthesame$2milliondeal,”saysDavid.Ataminimum,bringingintherestoftheteamhelpsmitigateriskand,inmostcases,helpssellmore.Ourenterpriseteamregularlyholds“accountchallenges”whereaccountexecutivespresentthedealstheyareworkingonandbrainstormaboutwhattheywanttoaccomplishandthepotentialchallenges.ConnecttheDotsDon’tdialfordollars!Nevercold-call;alwayscallwithaplan.Learnaboutthecompanyanduseyournetworktofindtherightindividual(s)toapproach.OursalesteamusesournetworkthesamewaypeopleusethebusinessnetworkingWebsiteLinkedIn,constantlyreachingouttoourcontacts(ourexecutiveteamorourboardofdirectors)tofindconnections.Withthereachofourexecutives,customers,andpartners,itisalmostimpossiblenottobeablesomehowtoconnectthedotsbeforeengagingwithaprospect.WhenweweretryingtowinlenderCITasacustomer,forexample,werealizedthatGaryButler,theCEOofADP,acustomerofours,wasontheboardofCIT.IreachedouttoGary,whorecommendedustoCIT.ThefirstmeetingwehadatCITwaswithitsCEOandchairman,JeffreyPeek.Byconnectingthedots,wewontheunlikelyopportunitytogettothe“C”levelonaninitialsalescall.Thisultimatelyresultedina

multithousand-userdealandanextremelyshortsalescycle.Focuson“WhyNot”Everyonewantstothinkaboutwhyadealwillclose,butit’smoreprudenttofocusonwhyitmightnot.Thinkaboutthefiveorsixthingsthatcouldbeproblematic.Thenfigureouthowtosolvethoseproblemsinadvance.Focusingonthe“Whys”putsyouatbestonparwithyourcompetitors;anticipatingthe“Whynots”givesyouasignificantadvantageoverthem.AlwaysTaketheDealofftheTableIfadealisready,closeit.Thiseliminatessuchrisksasthebuyerleavinghisjoborthemarkettanking.Werecentlygotthesensethatamultimillion-dollardealwasstalling.Wedideverythingtocreateasenseofurgencyandgetthedealsigned.Itwasagoodthingwedid:twoweekslatertheCIO,whowasalsoourexecutivesponsor,leftthecompany,butnotbeforeourcontractwasexecuted.Wecouldhavecontinuedtonegotiateforalargerdeal,butgettingthedealoffthetableprovedtobefarmorevaluable.GetYourFaceinthePlaceYoucan’tlearneverythingaboutyourcustomersoverthephone.Walktheirhalls—frequently.Itstrengthensacustomer’sconfidenceinyouandestablishesarapport.FunFactsBuildInstantCredibilityKnowallyoucanabouthowothercustomersarespecificallyusingyourproduct.Knowwhichdepartmentsofacompanyyoumightalreadybein,whoyouareworkingwith,whoyoubeatout,andwhy.Collecta“funfacts”libraryandusethisinformationtobuildcredibilitywithprospects.BeProactiveonAllPaperworkDon’tgetcaughtinthemomentumofthedealandavoidthepaperwork.Itwillcomebacktobiteyou.AlwaysGetQuidProQuoinNegotiations

Greatsalespeoplehavetheconfidencetosayno.Alwaysconsiderwhatelseyoucangetbeforeyousayyes.Askformoreusers,acertainclosedate,orapressreleaseaboutthedeal.Revealingnewdealsinthepress,suchasthesigningofSunGard,allowedustogetthewordoutandgetourfootinthedoorwithotherfinancialinstitutionsandenterpriseclients.WinningSunGardvalidatedourserviceasreliableandsecure,anddirectlyhelpeduscloseournextenterprisedeal,withtheHRandpayrollservicesgiantADP.(Termssurroundingdisclosureabouttheagreementmustbepennedinthedeal:makecertainyoucanannouncethewin,includingwhythecompanyisusingyourserviceandwhomyoubeat,butensurethatnumberscannotbedisclosed.)ShareBestPracticesCelebratesuccesses—andlearnfromthem.Sendthegreate-mailsandgreatproposalstotherestoftheteamsothattheycanseewhat’sworkedandusetheminotherdeals.GoAfterGameChangersPursuedealsthathelpmovethecompanytothenextlevel.Thesedealsarerevolutionaryinacompany’sevolution.Theyredefinehowacompanysells,evolvethesalesmodel,andchallengeeveryonetogettothenextlevel.Winninghugecustomers,suchasDellandJapanPost,wasgamechangingforourcompany.

Play#47:LandandExpand

We began with eighty users at ADP and seventy-five users atMerrill Lynch;bothinitialdealsscaledtomultithousand-usercommitmentsoncewewereinthedoorandafterwehadtheopportunitytoproveourservice.Welearnedthatwhenyouarestartingout,youcan’ttrytocaptureanentirecompanyatonce.Startinasmall division.Companies are looking to limit their investment risk, and theyappreciateanopportunitytotakeasmallerposition,experiencethebenefits,andthenmakeadditionalpurchases.Thismarksafundamentalshiftfromtheprocessofthetraditionalsoftwareindustry,whichtriestobagentireorganizationsinonego. In the end, “land and expand” achieves that same goal, but alsomakes itpossiblefornewerbusinessestowinlargerormoreestablishedcustomers.

Once there’ssuccesswithafewdepartments,youarewellpositionedforan

enterprise-widepurchaseanddeploymentcommitment.Recommendacorporatelicense agreement spanning departments andmultiple products. The pitch: it’slessexpensivethangradualadoptionatlistprice,andit’seasiertodeploy.

Play#48:AbandonStrategiesThatNoLongerServeYou

Aswegrewdistribution,wesoondiscoveredthatsomeofthestrategiesthathadproven successful in the past no longermade sense aswe evolved.A perfectexample was the free trials, which had previously been so essential to oursuccess. A few months into our effort to win enterprise clients, Frank vanVeenendaal came to me concerned that the free trial—and the low barrier toentry—wasdoingusadisservice.

Frank believed that customers weren’t thinking as carefully about their

salesforce.com implementation as they would had it required a largerinvestment. He found that usersweren’t conducting appropriate due diligenceand weren’t striving to win the support of their executive committees. Theabsenceof thatbuy-inhadanadverseeffectoncustomersuccess—andonourbusiness. “In 10 to 15 percent of cases, a salesforce.com user would hear, ‘I didn’tapprovethat,”’Franktoldme.Heurgedthatweuptheanteasawaytogeneratemore support for our service. I knewhewas right: itwas time to stop sellingsalesforce.comasasolutionthatwasinexpensiveenoughtobepurchasedeverymonthandslippedbyonanindividual’sexpensereport.

From“TryandBuy”to“BuyandTry”Westartedoutwithafreetrial:fivefreesubscriptionsayear.Thisnourishedourseed-and-growstrategytofirstservesmallcompaniesandsmallerdepartmentswithinlargercompanies.Aswescaledtocloseenterprise-widedeals,wesetupapaidtrialthatallowedcustomersto“buyandtry”ourservicebeforecommittingtoalargepurchase.Bothoftheseearlytrialswoninitialadoption—andyieldedlargerdeploymentlater.

Instead of sneaking in under the radar, we needed to respect organizational

hierarchy.

Oneofthechangeswemadewastheintroductionofamorecomplextrial—a

proofofconceptthatdemonstratedtolargercompaniesthatwecouldcustomizethesolutiontotheirneeds.Inacknowledgmentoftheincreasedcostsofbuildingmore complex trials and our desire for a greater investment from users, weevolvedthefreetrialtoa“buyandtry”experience.Wefoundthatwithskininthe game on both sides, we were able to connect more easily with theappropriate business and technical constituents and win organization-widesupport.

Play#49:OldCustomersNeedLove

Although companiesmust always be on a quest for new customers, they cannever forget about existing customers.We built a customer successmanagers(CSM)organizationtoensurethatcurrentcustomerscontinuedwithourservice.TheSaaSmodelmakesiteasyforcustomerstochurniftheyarenotsuccessful,for unlike the on-premise model, it doesn’t force customers into taking onexcessiveup-frontcostsandtechnicalinfrastructurechanges.

Becausewecansee if theusersare loggingon to theSalesforceapplication

(it’srunningonourcomputers),weknowthatifacustomerisnotloggingon,heorsheisnotachievingsuccessandwillthereforealmostcertainlyleaveusattheendofcontract.OurCSMteamvisitsthesecustomers,findstheproblems,andfixes them for free. The CSM organization works: renewal rates atsalesforce.comhavebeenabout90percent(andthatincludescustomerswhogooutofbusiness).

Play#50:AddItOnandAddItUp

Aswewonwideradoptionwithinorganizationsandwonnewenterpriseclients,wefoundthatwehadtochangethewaywepromotedthe“do-it-yourself”aspectoftheinstallation.Ourservicedesignedforlargecorporationswasmorerobust,andthesecustomers,especiallywhenembarkingonaverylargeimplementation,were seeking and expecting more formal guidance than we had previouslyoffered.Tomeetthisneed,wefocusedonbuildingaprofessionalservicesgroup.Thenewdivisionmadesenseonvariouslevels:ithelpedcustomersgetthemostoutoftheservice;itofferedanopportunityforustodisseminateourexpertise;and it provided an add-on product to sell. (Sales reps receive additionalcommissionforsellingprofessionalservices.) It made sense for us to extend our offering with a professional servicesdivision,whichallowedustobuildaworld-classsalesteamandservecustomersmoreeffectively.Itwasalwaysourobjectivetomakeeverycustomerfeelasifhe or she were the only one with whomwe were working, and this divisionhelpedusmeetthatgoal. I’ve alwaysmademyself very accessible to customers.Everyonehasmye-mail address (ceo@salesforce.com), and I can assure you that people use it. Ianswereverycustomere-mailIreceive.

IfIhearfromtheCEOofacompanywithonesubscriptionwhosaysthatheorshe is disappointed with the service, I immediately respond and say thatsomeone from professional services will be in touch. (I copy professionalservices on the e-mail and ask the customer to followupwithme and letmeknowhowitgoes.)Thisapproachworks: thesituation isusually resolved inafewminutes,andIfrequentlyreceiveveryhappye-mailsfromcustomers. ThereisanimportantpartofprofessionalservicesthatpartnerswithoutsideorganizationssuchasAccenture,KPMG,Deloitte,andotherconsultancies thatrecommend and help enable our service. We’ve had great success partneringwiththeseorganizationstowincustomers.Thisstrategywasnotpossiblewhenwefirststarted,butassalesforce.comand the industrymatures, itmakesmoresense.It’sexcitingtoseeotherconsultingfirmssellingandhelpingdeployour

services. In fact, one of salesforce.com’s earliest hires, Mitch Wallace, nowworks foranewcompany,VeevaSystems,which implementsourservice,andEricBerridge,whoworkedformeatOracle,startedBluewolfGroupasanon-demandconsultancytoservethisneedaswell.

It’sexcitingtohaveplayedapartinlaunchingnewbusinesses,andweeagerly

welcomethesepartnersintoourecosystemastheyhelpussellourserviceandgrow.At thesame time,wearestill investing inour internal services team. Infact, thedemandforsalesforce.com tech-heads isgreater thanever, andwe’vemorphedourteamintoanexpertservicescorps.Evenwiththerelationshipswithother firms, we’ve found that many companies, such as Dell, demand asaleforce.compresence.Someofthem,likeITindustryveteranBobRidout,theformerCIOofDuPont,specificallydemandedmypresence.Ultimately,wemustdowhateverittakestoensurethatcustomersaresuccessful.Wehavetobecausethat’swhat drives renewals, but understanding the value ofmaking customerssuccessfulisalessonthatallcompaniescanrelateto.

Play#51:SuccessIstheNumberOneSellingFeature

Whenwe started salesforce.com, companies sold separate software systems tosmall, medium, and large companies. We wanted to change that and provideeveryonewith the same affordable and effective service. For as long as I canremember, people told us we couldn’t serve all markets—they told us that itcouldnotbedone.

Admittedly,ourevolutiondidnotalwaysunfoldasweoriginallyenvisioned

it, but our seed-and-grow strategy proved effective across the board. It madesense to start with small companies, which validated our service to largerorganizations. As we grew our product line to serve enterprise businesses, itsimilarlymadesensetostartsmallwithinthelargerinstitutions.It’samazingtoconsider that nomatterwhat size customerwewere pitching, orwhere in theworldwewereselling,asingularideadroveallouraccomplishments:weneversold features.We sold themodel andwe sold the customer’s success. Today,one-third of our revenue is from small business, one-third from mediumbusiness, and one-third from large companies, including Cisco, E*TRADEFinancial,andStarbucks. Our best customers have becomeour best salespeople.Afterwe proved thevalueofourservicetoDell,forexample,itintroducedustoitstoptwovendors,whoarenowcustomers.Themosteffectivethingyoucandotosellyourproductis to introduce a prospect to a happy customer. Happy customers are thestrongesttroopsinthemostpowerfulsalesarmy.

MetricsUsedtoMonitorSuccessThesearesomemetricsthatyoucanusetomeasureyoursalesteam’ssuccess.Knowingthesemetricshelpsthesalesorganizationpredictrevenueandbuildafinancialplan:

•Inboundsales•RawWebtraffic

•Capturerate•Leadconversionrate•Closerate•Averagedealsize•Percentageofbusinessthatisfromnewcustomersasopposedto

customersthatareaddingon(Ifyouareaddingonmorethanyouareclosing,therewon’tbeanythingtoaddonnextyear.)

•Salescyclelength•Salesproductivity(theaverageamountthesalesrepclosedona

monthlybasis)

PART5

TheTechnologyPlaybook

HowtoDevelopProductsUsersLove

Play#52:Have theCourage toPursueYour Innovation—BeforeItIsObvioustotheMarket

Icameupwiththeideaabouthowtobuildsalesforce.cominmysleep.Literally.IhadaweirddreaminwhichIenvisionedAmazon.com,butinsteadofthetabswith Books, CDs, or DVDs, they said Accounts, Contacts, Opportunities,Forecasts,andReports.Afterthisdream,Ihadanalmostcrystal-clearpictureofwhereweweregoing.ThewordsofWaltDisneyranginmymind:“Ifyoucandreamit,youcandoit.”Thatsaid,Ihadnoideahowweweregoingtogetthere.

Everything rested on inventing the technology to enable an Internet-based

business service that could be used simultaneously by masses of people.Salesforce.comcreatesa lotofnoisewith itsguerillamarketingstunts,but theengine that reallydrivesour company—theone effort that our successwhollyrelies on—is producing a service that customers love. The extravagant partieswouldn’tbeenthusiasticallyattended,thegonzotacticswouldn’tbeconsistentlyreported, and the salespeople wouldn’t be receiving their commissions if wewerenotofferingaservicethatdeliveredeverythingwepromised. Historically,companiessuchasOracleapproacheddevelopmentby thinkingof designing for the biggest companies in the world. Systems were built onindividual stacks of software and hardware capable of scaling to manageinformationfortheentirestaffofGeneralMotorsorallofGeneralElectric.Thatwas a tall order, but wewere doingmuchmore.Wewere designing a singleservice tomanage information forall thecompanies in theworld touseat thesametime.

To design a limitless system, we had to think differently about software

design.AsParkerHarrislikedtosay,“Wehadtobuilditfromthegroundupforthe Internet.”The servicewould be one logical system100 percent hosted bysalesforce.com, which would scale dynamically as subscribers and newcustomers adopted the service. That presented benefits for customers, such assharing common capabilities (IT assets like database engines, disk space, andsecurity),whichwouldreducerisksandcosts.Atthesametime,eachcustomer

received a securely partitioned, highly personalized experiencewith their owndata,logic,andend-userexperience. Wecallthistechnologymodel“multitenancy,”andit’seasytothinkofitasanapartmentbuildingwherethetenantsofthebuildingsharecommoncosts,suchas building security or the laundry facilities, but they still have locks on theirdoors and the freedom to decorate their apartments as they wish. Consumerservices likeYahoo!Mail orMicrosoft’sHotmail use this kindofmodel—it’showtheirconsumersaccesstheirindividualmailaccountscheaply(orevenforfree) through a browser without the need to install any software and howmillionsofuserssharethesameback-endsystems.Thesecompaniesdon’tsetupa new e-mail server for each consumer. Similarly, we thought businessapplicationprovidersdidn’tneedtosetupanewserverforeachcustomerwhentherewasthepossibilityforeveryonetoshareit.

Althoughwe believed that this technologymodel was a way to reduce the

operational burdens for customers, our SaaS concept, by which a customerhanded over his or her proprietary data to be housed on our server—and then“rented”accesstooursoftware—soundedlikelunacytomostpeople. We heard the same concern over and over again: a panic over giving upcontrol. Ibelieved that the trepidationwasmoreemotional thanrational,but itledtopressuretoofferanotheroption.Venturecapitalistsarguedthatweshouldbuildatechnologymodelthataccommodatedachoice:ahostedmodeltolureinsmallerbusinesses,andan“in-house”packagedsoftwareoptionsimilartowhatwasbeingofferedbythetraditionalcompaniesforlargercompanies. Noway,wedecided.Althoughhedgingabetmightbeprudentinsomecases,our idea simply couldn’t work if we offered a choice. Doing so would ruineverything.Totrulybenefitfromtheon-demandmodel,ourcustomersallhadtobeusingoneversionsothatwhenwedidmaintenanceandupgrades—benefitsthat the technology model allowed us to do continuously—everyone wouldreceivethesamefeaturesautomatically.(Inthein-housemodel,usersareneveron themost currentversion. It’s suchanuisance toupgrade, in fact, that evenSAP,whichhasteamsofpeopletocoercecustomerstoinstallitslatestsoftware,reportedlydoesn’talwaysrunonitsownmostrecenttechnology!) Therewasalsoaphilosophicalreasonthatwecouldn’tofferahostedchoice.Webelieved in theEndofSoftware—thatall companieswouldeventuallyusetheInternettoreplaceallthesoftwaretheyonceinstalledonPCs.Thiswasour

religion. How could we promote the very software option we were trying todestroy?Aswewentagainstconventionalwisdom,wefoundthesecrettobeingsuccessful inthetechnologyindustry.Companiesmustnotonlyseeinnovationbefore it is obvious to the market but also have the courage to pursue thatinnovationyearsbeforeit’saccepted,orevenunderstood.

Play#53: Invest in theLongTermwithaPrototypeThatSetsaStrongFoundation

In the earliest days of salesforce.com, our small team believed that our ideacouldwork,butwehadno real senseofhowfarwecould take it.Howmuchcouldwescaletheservice?Howmanyuserscouldwehaveonthesystem?Howcouldwemakeitinfinite?

Ourphilosophywastowritecodethatlastedforthelonghaul.Practicallyon

dayone,Parker,Dave,andFrankdevelopedtheirownguidingprinciplesaboutthe system: “Do it fast, simple, and right the first time (and did we mentionfast?).”Theywrotethese“laws”onawhiteboard,andtheystuck.Theyforcedustocreatecodethatwassimpleandefficient,andthisiswhatultimatelygaveustheabilitytoscale. Doing it fastmakes sense as the number-one rule for any company. It wasparticularlycriticalforusbecauseweweresellingaserviceforsalespeople:theyneed informationquickly and tend tobe impatient.Being fast becameaproofpointforthemodel;ifitwasn’tfast,peopleweren’tgoingtouseit.

Oursecondlaw,tomakeitsimple,supportedourvisiontomakeourservice

aseasytouseasbuyingabookonAmazon.com.Simplicityalsosupportedourfirstgoaltokeepitfast.Atypicalprogrammeratthistimehadthemind-setthatbigandrobustcodewasbeautiful.Wedidn’tagree;complicatedcodebecomesbloatedandslow.Weaspiredtotrimthecodetobeasminimalaspossible.Thattypeofarchitecturealsomadeiteasiertoidentifyanyproblemsaswescaled. Whenitcametoourgoalofdoingitrightthefirsttime,weknewtherewasnootherway.Softwaredevelopmentis incrediblycomplex.There’sgreatpressuretogetaprototypeoutandtocutcornersinordertomeetdeadlines.Parker,Dave,Frank,andIhadwitnessedhowshortcutssparkedmajor issues later.Weknewthat the initialprototypeset the foundation for theentireproduct. If it’smessyoutof thegate, itcan’tholdupovertime.Infact, it’scommonforthecodetoexplode as developers try to transition and scale. These so-called success

disastershaveplaguedthesoftwareindustry.Theydon’thaveto.

Play#54:FollowtheLeadofCompaniesThatAreLovedbyTheirCustomers

The development model that we embraced was different from the one withwhichwewereaccustomed toworking in thecorporateAmericaof the1990s.Enterprise software had traditionally been built by engineers who worked incorporate office parks with little or no interaction with the customers until apredetermined “five-year plan” was complete. This isolationist existence hadseriously stymied innovation in the technology industry. Companies were notmovingfastenoughforcustomers.

Consumer companies, such as Google, eBay, and Yahoo!, were the first to

changethepace.Thedevelopersat thosecompaniesdidn’tgoMIAforseveralyears and then suddenly roll out everything they’d been working on at once.Thesecompanieslaunchedasingleapplication(GoogleandYahoo!startedwithsearch, eBaywith auctions) and then feverishly built out a product suite afterthey evaluated how the applicationwas being used. It involved a process thattook weeks instead of years. Delivering a service over the Internet offered amore evolved and more efficient way to observe usage and engage withcustomers that we believed would define the entire future of softwareengineering. Although each of the salesforce.com founders had a lot of ambition andenergy,weknewthebiggestthreattoafledglingtechnologycompanyisdoingtoo much at once. Our ultimate goal was to have a comprehensive line ofproducts toserveeveryone,but itdidn’tmakesensetokickoffwithasuiteofservices, or editions specifically geared to different-sized businesses. Itwouldhavetakenyearsandendlessfundingtobuildsomethingsocomplex,andbythetime we released it, we would have missed the real opportunity to capture apieceof themarket.Worstofall,wewouldhavebeendesigning inavacuum,without the benefit of our customers’ invaluable observations and insights toguideusaswebuilteachnewfeature.

Play#55:Don’tDoItAllYourself;Reuse,Don’tRebuild

Whenitcametobuildinginnovativetechnology,wetookabetonafewexistingthings.First,wetookabigbetontheInternet,andonJavaastheprogramminglanguage for the Internet. Second, we relied on the Oracle database. Oracle’sdatabasewaslargeandfast,andwewerefamiliarwithit,sotherewasnoreasonto build our own. There were less expensive options, but we were not asconfidentthattheothersolutionswouldbeabletoscale.Today,ourbackendisstill agiantOracledatabase thatwecustomize foreach tenantandwhere theycancontinuouslyupdatetheirdata.

The secret to buildingwinning technologywas not only thatwe bet on the

right building blocks but also that our vendors’ executives were personallycommittedtooursuccess.Today,morethaneverbefore,companiesdonotneedtobuildtechnologyfromscratch;youcanbuildonInternet-basedplatformsandtapintodistributioncenters,datacenters,andunlimitedcomputingpower.Thecloudcomputingmodelsavestimeandcapital.Allcompaniesbenefitwhentheycanaffordtofocusoninnovationratherthaninfrastructure. Consider Appirio, a software and services company that runs its entirebusinessinthecloud.Ithasexplodedfromzerotoonehundredfiftypeopleintwenty-three states and in three countries in two-and-a-half years—and spentlessthanone-thirdofwhatacompanyofitssizespendsonIT.“Becauseofthecloudwewere able to savemoneyandbemore innovative inhowwework,”says cofounder and marketing chief Narinder Singh. “We’re like a next-generationIBMwithoutthebaggageofhardware.”

Play#56:EmbraceTransparencyandBuildTrust

One of the biggest issues for any cloud computing company is ensuringreliabilityoftheservice.Wehadmademassiveeffortstoensurethatourservicewouldalwaysbeup,suchasconfiguringourdatabasetorunonseveraldifferentserverssothatifonemachinefailed,theotherswouldstillwork,yetinlate2005our sitewentdown.Customersquicklybegan togrumble that the servicewasunreliable.Makingmattersworse, a competitor signed up for a free trial as awaytoascertainwhenourservicewasdown—andreportedanyproblemstothepress.Literally,withinminutes,journalistswouldcallseekingcomment.Beforelong,salesforce.com’sreliabilityissueswerewidelypublicized,andwewereinserioustrouble.

Duringtheperiodwestruggledwithoutages,weactuallyhadanuptimerate

of 99 percent, and our service wasmuch better andmuchmore reliable thansoftware,butanydisruptionwasunderstandablymaddeningforcustomers.Welosttheirfaith. Salesforce.com entered an incredibly challenging time. There werefundamental issueswith our technologymodel, and itwas unclearwhether ornotwe’dbeabletogoforwardonourcurrentcodebase.Wequestionedif thetechnologywouldbeabletoscaleasmuchasitneededto,andwhetherornotwewouldbeabletocontinuetodeliverthesamelevelofinnovation.

Parker and the teamof engineers tirelessly scrambled to fix theproblemby

workingwithourvendorsatOracle,Sun,andVeritasandrebuildingthesoftwareand executing myriad stability projects. We dedicated all our technologyresources to solving this issue. All development on new features temporarilystopped.Astheengineersworkedaroundtheclocktofindasolution,therestofuswereunsureofhowtorespondtotheescalatingcriticism.Nooneknewwhattosaytocustomersor to thepress,butwebelievedastrategyofminimizationandcontainmentwouldserveusbest. At the time, I felt that our public responsewas not our primary concern. I

thoughtweneededtofocusonimprovingthetechnologyandtoremainaslowprofileaspossibleuntiltheproblemwasresolved.Onceeverythingwasfixed,Ithought,wecouldrespondwithaproperexplanationandsharegoodnews.Westopped takingcalls,andwestoppedreturningcalls.Thisseemed like thesaferesponse,butitwasunlikethewaysalesforce.comusuallyoperated,whichmadeusfeeluncomfortable. “This isnotwhoweare;weareusually theones callingpeopleup,”BruceFrancis, thevicepresidentofcorporatestrategy,said tomeonedayduringtheheightofthecrisis.“Hidingdoesn’tfeelright.” Ihadtoadmitthatpartofmefeltthatifwedidn’tconfirmtheproblems,theydidn’t exist. I hadmistakenly assumed that reporterswouldn’twrite about theissues if they didn’t have our comment. That was an antiquated assumption,however. Blogging was just taking off, and bloggers don’t adhere to thetraditionalrulesthatmagazineornewspaperreportersfollow,suchasholdingastory until they get confirmation or comment. After the blogs covered it, theestablishedmediapickeditup.

We realized that silence had been a terrible strategy.And itwasn’t just the

decision not to talk that had been an egregious error, it was that we had nottalked immediately.Partof theproblemwasexacerbatedby theverynatureofSaaS:becausewehostedeverything,peoplecouldn’tcalltheirowndatacentersandlearnwhatwashappening.Customerswereannoyed. As the crisis built, we gathered our top two hundred fifty managers at anoffsitemeeting.Thereliabilityofourservicewas,ofcourse, themostpressingtopic.Rightthenwehadourworstoutagetodate.Thesystemwentdown,andrestarting the huge databases took ninety minutes—an eternity for customersdependentontheservice.Customersandthepresswereclamoringforanswers,anditwasdifficultfor themtoreachanyonebecauseallourmanagerswereattheoffsitemeeting.

Wehad to findaway to communicatequicklyandcandidly—even ifgoing

public with our problems felt like a defeat at the moment. Parker and Bruceurgedme to post our internalmonitoring system,whichwe used to track ourstatus(everythingrunningperfectlyappearedingreen,performanceissuesweretagged in yellow, and service disruptions were marked in red). It was a boldmove and a big leap of faith. We would be allowing the public—and the

competition—toseeexactlyhowoursystemwasfunctioningeveryday.Itmeantthatwewouldbesharingembarrassingdetailseverytimethesystemslowedorstoppedworking.Whywouldanycompanymakeitselfvulnerableinthatway? AtfirstIwashesitant.Itmadesensethatcustomerswouldseewhatwasgoingon in real time, but I didn’t think that our reliability information should beavailabletoeverybody.Iworriedthatjournalistsandourcompetitorswouldusethisinformationagainstus.Ultimately,however,Iletgoofmyfearandrealizedthatcompletetransparencywaswhatweneededifweweretorestoretrustinourcompany.Itwouldalsoencouragegoodbehaviorfromtheorganizationbecauseit added a new level of accountability and responsibility. In themiddle of thedisaster,we opened up our internal system for everyone to see. I called it thetrustsite.

The site—located at trust.salesforce.com—offers real-time information on

systemperformancewithup-to-theminuteinformationonplannedmaintenance,historical informationon transactionvolumeand speed, reportsoncurrent andrecent phishing and malware attempts, and information on new securitytechnologies and the best security practices. Instead of hiding behind ourproblems, we started educating customers, prospects, and journalists aboutwheretheycouldfindtheinformationtheyneeded.Itwasliberatingnottohavetoactdefensively. Theeffortwasaninstanthitwithreportersastheycouldimmediatelyseeforthemselves what was happening. We further benefited because it took the“gotcha”weapon away fromcompetitors.Best of all, the trust site gaveus anopportunitytotalkaboutsomethingpositive—transparency.

There isnoquestion:wewouldnotbearound today ifwewerenot always

betteringthetechnologyandimprovingitsspeedandreliability.(Ourserviceranat99.99percentuptimeinthefirstquarterof2009,runsmorethan200milliontransactions a day, and has subsecond response time; and we are constantlymakingadvances todeliver it even faster.)At the same time, I don’t thinkwewouldbethrivingtodayhadwenotshiftedtoembracemoretransparency.Thedifficult decision to launch the trust site—to “open the kimono,” as BruceFranciscalledit—differentiatedus.Transparencyandtrustbecameastrongpartofourbrandingandidentity.

ReliabilityIsaTechProblem,buttheWayYouSolveItIsNotwithTechnologyAlone—It’swithCommunication

Onceagain,wedidnotinventthissolution;wegotourinspirationfromtheconsumerworld:eBaypioneeredthisideawithitspagesthatinformusersofoutages,glitches,andmaintenanceupgrades.Thishadnotbeendoneinthecorporateworldbeforewedidit,thoughithassincebeenvalidatedasabestpracticeforcompaniesofallstripes.WhenBlackBerrystruggledwithserviceoutages,manyarticlespointedtothesalesforce.comtrustsiteasawaytodealsuccessfullywiththeseissues.Outofacrisisthathadthreatenedtodamageourreputation,wehadcreatedpowerfuldifferentiation.Now,wetalkabouttransparencyineverypitchwemaketothepressandtoprospectivecustomers.It’sacornerstoneofourmessaging. Today,ifourserversaredown—evenfortwentyminutes—wecallourtopcustomers.Icallmanyofourcustomerspersonallytoapologizeandsharewhatishappening.Oftentheyarecompletelysurprisedtohearfromme.OneCIOataverylargecompanytoldmethathecouldn’tbelieveIwastakingthetimetocallhim.Herevealedthathehadhaddatacentersdownfortwodays,soanhourofdowntimedidn’trepresentamassiveproblemtohim.Wefound,however,thatopencommunication,intandemwithquicklyfixingtheproblem,istheonlywaytobuildandretaintrust.

Play#57:LetYourCustomersDriveInnovation

Weaimedtomakethesalesforce.comservicesimilartotheconsumerWebsitesthat people had already embraced. We wanted customers to love to use theSalesforce application, so we started by giving them something they werefamiliarwith:tabsacrossthetopofaWebpage.Initially,asIsawinmydream,we had five tabs: Contacts, Accounts, Opportunities, Forecasts, and Reports.Thesetabsrepresentedthefivethingsthatourcompanydid.Theapplicationwasmuch simpler than theexistingenterprise softwarepackages,but evenwithoutallthebellsandwhistles,itenabledcustomerstoturnopportunitiesintodeals.

Fromtheverybeginning,weinitiatedadialoguewiththeseusersaboutwhat

was missing in the Sales Force Automation (SFA) application. Salespeopleroutinelyaskedprospectsaboutfeaturestheywantedandrelayedtheirfeedbackto theproductmanagers.Wequeriedprospectsonwhy theydecidednot togowith us, andwe spent timewith large enterprises—customers thatweweren’tinitially able to serve—to learn what additional functionality was required tomake themconsiderour service.Weheardaboutmissing features, suchas theabilitytotrackmultipleproductsorawaytomanagepricelists.Wemighthavethoughtof theseonourown,orwemightnothave,butwecertainlywouldn’thaveknownwhichwereinthegreatestdemand. Thankstoour“nosoftware”model,wehaveanotherwaytolistentocustomerresponse.Theon-demandarchitectureoffersustheopportunityto“watch”howusersusetheapplication.Wedon’tdothisinaBigBrotherway,wherewecanseedataorinformationaboutacompany.Rather,thesystemsimplycountsbroadpatternsanonymouslyandnotifiesusifthereareissues.Theseinsightsintohowusersareusingourserviceallowsustolearnaboutwhattheyuseandwhattheydon’t.

Asweevolvedourserviceinresponsetocustomers’needs,wefacedtherisk

of changing our service toomuch—andmaking it so specific that it couldn’tcommonly serveall customers. Ifwewanted tocontinue tohavemassappeal,weneededtoapplychangeswithabroadbrush.

Itwasn’t long beforewe began to notice fairly consistent feedback that theinitialfivetabswerenotenoughforallcustomers.Thereweretwofundamentalways in which we could have expanded. One was vertical, meaning that wecould make the existing tabs go deeper with increased functionality (such aspharmaceuticalorbanking);theotherwaywashorizontal,orgoingbroaderwithadditionaltabs(forexample,CaseManagement,Solutions,orDocuments).

Weultimatelymadethedecisiontodoboth.Althoughweneededtolimitour

expansion to ensure that we did not spread ourselves too thin, we had torecognizeourgoaltobetheon-demandmarketleader.Ifwewantedtoachievethat,weneededtohavethecapacitytoserveboththesmallbusinessandlargebusinessmarkets. ThelimitlesspotentialoftheInternetallowedustobuildthiscapacity,andtheideasforthechangeswemadecamedirectlyfromcustomersandprospects.Welaunchedonlywhattheyrequested,andweconsideredtheirinsights,evenwhenwedidn’tagree.Thatwasoneofourwisestmoves.Lookingback,wenowknowthatourbiggestevolutionaryepiphanystemmedfromacustomerrequest—onethatweinitiallybelievedwasimpracticalandthatwewerereluctanttopursue. Afterwehadbeenofferingourserviceforafewyears,ahealthcareexecutivecalledmeandcomplainedabouthowthesalesforce.comtabswerelabeled.“Thetabnamesdon’tspeaktoourpeople,”saidMartyHoward,SeniorVPatPatientCare.“Ihave‘hospitals’;Idon’thave‘accounts.’Ihave‘patients’;Idon’thave‘contacts.”’ “Justthinkofthehospitalasanaccountandthinkofthepatientasacontact—it’ssimple,”Isaid. “No, that’s too confusing,”Marty replied. “Why can’t you just rename thetabs?Ithinkit’simportantforothercompaniesandotherindustriesaswell.” Renamethetabs?Tobehonest,thisseemedridiculous—thetabshadgeneralwordslikeContacts,whichfromahighlevelappliedtomostusers.Wecouldn’tchangeitjustforoneperson.

WedecidedthatMartydeservedforusatleasttoconsiderhisrequest,andas

we thought about itmore critically,we stumbled on another idea.What ifwedidn’tchange the tabs foroneperson,but rather leteveryonechange the tabs?What ifwe left the tabs blank andoffered away for customers to type in tab

namesthatdirectlycorrespondedtotheirlineofwork?Carservicescouldtrack“drivers”and“vehicles.”Arecruitercouldmanage“positions”and“prospectiveemployees.”Nonprofitscouldfollow“causes”and“donors.”Thischangewouldallow us to provide every user with a customized experience, and it wouldpotentiallyextendour reach. Ibecamecaptivatedby this idea,andIcalled thedeveloperstomeetwithmetodiscusshowtobuildit. “We’lldoit,butit’stedious,”ParkerandDavecomplained.

“Let’sjustfigureouthowtodoit,”Isuggested.

“Itwillhaveramificationsthatwillcascadethroughthewholeproductline,”Davewarned.

“Yes, I think itwill be a key feature of the technology,” I replied. Iwasn’t

afraid of this game change; I was excited about it. Dave spent one monthcreatingawayforcustomerstocustomizethetabstotheirindividualneeds.Thenewcapabilitywasimmediatelymetwithhugeapplause.Itmadetheapplicationmorerelevanttousers—anditmadesalesforce.comstickier. Ourdecisiontoaddtabshadbeenanexcitingpartofourevolution,butitwasthe blank tabs that were revolutionary. Responding to customer demand, weexpandedfromrenamingtabstoincludingthepossibilityofrenamingfields,andeventuallytocreatingnewfields.Thesenewcustomobjectsallowedcompaniesto incorporate additional information that would specifically serve them.Hospitals could create custom objects to track medical instruments and theirlocations. A recruiting company could create a place to track a prospectiveemployee’spastexperience,andanotherobject tomanageinterviewschedules.Wealsoaddedaworkflowsection,whichalloweduserstostoreinformation—for example, a place where a recruiter could direct resumes or where a salesmanagercouldcreatea task to sendout ane-mailwhenevera$1milliondealwasclosed.

Witheachoftheseavailablecustomizationfeatures,userswereabletocreate

miniapplicationscustomizedtotheirneeds.Thecapabilitywasdesignedsothatcustomizationcouldbeexecutedthroughtheuseofdrop-downmenusandpoint-and-click configuration tools, without having to write a line of code. As ourcustomers became involved in customizing features to suit their needs, we

gainedevenmoresalesforce.comenthusiasts.Wemovedusersfromadoptiontoaddiction.

Play#58:MakeItEasyforCustomerstoAdopt

We made a significant leap in the technology when we offered integrationcapabilitiesbyprovidinganapplicationprogramminginterface(API),orawayforsalesforce.com to communicatewith other programs.This transformedourproduct and technology so that thedata in salesforce.comwerenot isolated inWebsilos,butcouldinteractwithotherdatathatwerebehindthefirewalloronotherWebsites.TheAPI,forexample,allowedsalesforce.comtointerfacewithGoogleMaps, so salespeople could instantly access a map of where all theircustomerswere located.Google and salesforce.com “talked” through theAPI.Salesforce.comprovidedalltheinformation,andGooglegeneratedtheballoonsonthemap.Thismovetoallowintegrationwasagiantstepinourevolution.

Early on, we struggled with a way to explain the API. We knew it was

important, but SaaS wasn’t truly an accepted concept yet, and our API wasinitially confusing. Further, we made the mistake of limiting availability bycharging a significant fee and restricting its use to companies with provenrevenue.Werealizedthat thosebarriersmadeadoptiondifficult.Inaneffort togetmoresupport,wewentbacktoourprovenstrategyoffirstofferingaccesstoa new service for free. We also started an online forum for people to askquestions,whichofferedusawaytobuildacommunity. Providingeasieraccessibilityandadditionaleducationalopportunitiesprovedto be the right move. Before long, there were more users, more activity, andmoretransactionsmovingthroughtheWebservicesAPIthantherewerethroughtheapplication.

Play#59:TranscendTechnicalParadigms

Oneofthemostpivotaldecisionswemadeasacompanywastomakeourcodeavailabletoletothercompaniesbuildtheirowncomplementaryonlineservices.Thisideatobecomeaplatform,oranoperatingsystemfortheInternet(similarto how Windows is an operating system for PCs), offered a way to alloweveryonetocreateapplicationsonlineandgaveusanopportunitytoattractandretainmorecustomers.Thiswasthewaytogrowourcompany.

Despite my bullish belief in Platform-as-a-Service (PaaS), the decision of

whetherornottogoaheadwiththeideawasadauntingone.CouldwebuildanInternet operating system? There were potentially gigantic compatibility risksinvolved inallowingsomeoneelse’scode tooperateonour system.Wedidn’teven know if customers would trust it. It wasn’t surprising that there wasn’tmuchinternalsupportforsuchanuntestedidea. However, creatingaplatformofferedaway to resolveourbiggestproblem:customers were clamoring for more applications, and we didn’t have theresources to build everything ourselves. Further, we knew that outsidedevelopersneededabetterway tocreateapplications.Therewassomuch thatwas truly painful about the process, and the heavy lifting required to buildsalesforce.com was fresh in my mind. There were so many decisions andpurchases: networking devices, storage systems, databases, open sourcedatabases,datacenters.Andthosewereonlythestartupsoftwareconsiderations!Then we had to build the software and make sure it worked in multiplelanguages and on multiple devices, among other challenges. After that, thereweretechnologyissuestoaddress,suchasauthenticationandavailability.

Iwonderedwhyeveryoneintheindustryputthemselvesthroughthisonerous

processwhen,with thebenefitsofmultitenancy, thosedayscouldbeover.Wecouldmakeeverythingmuchlesscomplexandfarlessexpensivebysharingourresources. There was a huge audience of developers, especially those in emerging

countries who couldn’t afford to build according to the current model. If wecould make our infrastructure available as a service, we could help level theplaying field—and, I thought,unleash innovation.The“platform in thecloud”effort became a pet project of mine. Part of my drive stemmed from theintellectual challenge and my eagerness to innovate. The rest came from thepotentialtheplatformhadtotransformsalesforce.comfromanSFAapplicationtoamassiveWebservicescompany.

I hiredSteveFisher, a great technologist andmy formerbusinesspartner at

LibertySoftware,thecompanywefoundedinhighschool.Stevewasconfidentthathecouldbuildsuchaplatform,buthedidn’tnecessarilyliketheconditionsthatIfeltwererequired.IdidnotwantStevetobepollutedbyanythingrelatedtoCRM,soIcalledhisworka“secretproject”anddidn’tallowanyonetotalktohim. Steve complained that he was lonely, but his complete focus and attentionelicitedquickresults.Inoneweek,hebuiltthefirstapplicationontheplatform,Volunteerforce, which our employees still use to manage their volunteeractivities.ItdidnottakelongbeforeStevecreatedawayforuserstotogglefromsalesforce.com intoother applications, such as e-mail or spreadsheets, throughtheuseofadrop-downmenu.Somesawthissimplyasapull-downmenu,butIsawthiscapabilitytoworkwithmultipleapplicationsasthebeginningofaWeb-basedoperatingsystem.

Withthistool,whichwemarketed(andcalledMultiforce),webegantosegue

salesforce.comintoaplatformforotherstobuildon.Althoughsomeuserslikedthe ability to customize without any code, larger and more tech-savvy usersbegan todemandmore complex customizations.We realized that the toolsweused internally were valuable to other people too. We made our own nativeprogramminglanguage,Apex,whichweusedtocreatednewproducts,availableto these developers. With this offering, they could write their own code andcreate and run any application on our platform, as well as use our otherresources,suchasourdatacenterandsecuritytechnology. ThroughatechnologyParkerbuiltcalledVisualforce,userscouldcreateanyapplicationwith any user interface (for example, they could build any forms,createanybuttonsor links, andembedanymash-up).This feature tookus farbeyondtheoriginalconceptofallowingusersto“renamethetabs.”Infact,users

couldgetridofmybelovedtabsthathadoncedefinedeverythingwedid!Thetechnologyofferedawayfordeveloperstobuildonablankpageandopenedupa new world of possibilities. Users could create any interface design theydesired.TheygainedtheabilitytorunthatuserinterfaceonanyInternet-enableddevice or operating system platform, so it could appear in one format whenviewedonaniPhoneandinanotherformatwhenviewedonSafariorMozillaorevenatouch-basedkiosk.

We saw PaaS as the natural extension of the SaaS business model. We

ultimatelybrandedthesalesforce.complatformasForce.com.Atfirst,aswehadanticipated, customers were apprehensive to build on it. We got calls frompeopleasking,“AmIgoingtobreakyourcomputerswithmycode?”Wehad,ofcourse, figured out a way to prevent that. Our customers and partners haveembracedPaaSanddramaticallyextendedourscopewith thecreationofmorethanonehundred ten thousand customapplicationsmanaging everything fromvacationrequeststoaccountsreceivable. Some of the world’s largest organizations, such as Citigroup, adoptedForce.com to build programs used by private bankers and financial advisers.Morgan Stanley used it to build a recruiting application. Internationalmultimedia news power-houseThomsonReuters standardized on our platformand then implementedanentire strategy to sellproducts that arebasedonourplatform. JapanPost, theworld’s largest institution in termsof asset holdings,usedtheplatformtowritecustomerserviceandregulatorycompliancesoftwareformorethanseventythousandemployees. Other organizations have found innovative uses and benefits as well.SchumacherGroup,a$300millionemergencydepartmentandhospitalmedicinemanagement company in Lafayette, Louisiana, used our platform to build 90percentofitsoperationalapplications,includingprogramstorecruitdoctors,getreimbursed by insurers, manage contracts, and assist in disaster response.Force.com allowed the company to write applications four times faster thanconventionalprograms.Italsosavedsignificantresources.“Ifweweren’tusingtheForce.complatform,we’dhavetohireanadditionalfivefull-timeemployeestomanage the system,” chief information officerDouglasMenefee said in aninterviewwithBloomberg.com.Thearticlenotedthatthesalariesforthosejobsrange from $40,000 to $80,000.1 (Note: Great technology yields successfulcustomers,whichiswhatdrivesgreatpress!) The first decade of salesforce.com was dedicated to building a killer

application to replace expensive shelfware.We grew our service to meet ourcustomers’demandsandexpandedbeyondSFAtoincludemarketing,customerservice, content management, analytics, and much more. We added mobilecapabilities and borrowed ideas from social networking sites to allow ourcustomerstocommunicateeasilywitheachotherandwithus.

Our customers became better customers with each of these developments.

SeagateTechnology,forexample,sawuseradoptionincreaseby50percentandextendedhowitusedourservice.Welauncheda“channel”componenttoallowourmanufacturingcustomers tocollaborateandshareaccount informationandleadswiththeircorporateresellers,systemsintegrators,andotherpartners.Forsomecompanies,asmuchas70percentoftheirbusinessisconductedthroughpartnerorchannelsales,andtheydesperatelyneededawaytogaina360-degreeviewacrossall theirsaleschannels.Thisadditionalfunctionalityallowedus towin customers that never looked at us before, such as Avaya. By givingcustomerswhat they needed,wewere able to grow our business substantiallyandtakeitinanewdirection. The second decade of salesforce.com,which I think is evenmore exciting,focusesonPaaS,whichallowscustomerstorunalltheirenterpriseapplicationsandtheirWebsitesandintranetsinthecloud.Byenablingdeveloperstocreateand deliver any kind of business application, entirely on-demand andwithoutsoftware, salesforce.com has catapulted beyond its CRM roots and expandedintoamulticategorycompany.Newfunctionalityhasbeenbuiltbyourusersandoutside developers. For example, CODA, a financial managements solutionscompanyinEurope,usedourplatformtocreateanaccountingsystemthatworkswithsalesforce.com.

IfCODAapproachedthistheoldway,bybuildingtheinfrastructure(notjust

the data center but the entire software stack as well), it would have takenupwards of $20 million and several years. Using our platform eradicated theneedforservers,loadbalancers,andnetworkingswitchesandforpeopletotuneandmaintain them,andaffordedCODAthe luxury to focusonexactlywhat itdoesbest:buildingakilleraccountingapplication.

Play#60:ProvideaMarketplaceforSolutions

Asnewtechnologymodelsevolvedandascompaniesreachedapointofhavingto decide which path to choose, the old PC model or cloud computing, weneededtodoeverythinginourpowertoensurethattheyselectedthetechnologyofthefuture.

We needed to make people aware of the amazing developments, so we

decided to create an on-demand marketplace that packaged and distributedapplications.Wecalled themarketplaceAppExchangeandset itupasasinglesitewheredeveloperscoulduploadapplicationstheybuilt,andcustomerscouldsearch, read reviews, test for free, andultimately purchase anddownloadnewapplications. BusinessWeek called it the “eBay for business software,” and Forbesdescribed it as the “iTunes of business software.” AppExchange—much likeeBay and iTunes—works because communities work best with marketdynamics.Likeanyothermarketplace,weofferedanopportunityforcustomerstofindwhattheywerelookingfor,anabilitytotestit,andaplacetotalkaboutitwith other like-mindedpeople.Theupshot of this exchangewas an incrediblecustomer base for the developers who uploaded their applications—and afantasticopportunityforsalesforce.com.

We don’t collect any royalties when companies buy applications on

AppExchange, but as customers adopt additional applications running on ourservice, they will be much less likely to leave us for a competitor. WithAppExchange,weevolvedbeyondbeingatechnologyprovidertobecominganenabler of innovative technology.Much of our future rests on this developingecosystem. Without an ecosystem of partners to further a company’s vision, evencompanieswithextraordinaryservicescanbe relegated tobeingnicheplayers.Opportunitiestogrowcanbecomelimited.Beopentopartneringwithotherstoexpandyourcapabilitiesandservice.

ThinkaboutwhatAppledidwiththeiPod;Applehasanentireecosystemof

companies thatmake speakers, headphones, and cases catering to that device.TheseaccessoriesofferiPodusersmorewaystoenjoytheirdevice. It’s flattering when other companies build something to further develop orenhance your product or service, but don’t accept everything that comes yourway. The iPod ecosystem has been so successful because Apple carries onlythose products that meet its exacting standards. Apple users trust Apple-authorizeddealersandcontinuetodosobecausethecompanyhasnotmadeanycompromises.It’s imperativethatyouneverdoanythingthatmightsquanderacustomer’strust.

Play#61:HarnessCustomers’Ideas

We have been on a constant quest to grow our customer community, andwebuildofflineandonline forums todoso. In2004,we launchedaWebsite forcustomerswhosuccessfullyself-implementedourservice,asawayforthemtosharetheirexperienceswithothersusingtheserviceorwiththoseconsideringit.Overtime,webegantoexperimentwithblogs,messageboards,andotherformsofsocialmedia.Wehadtensofthousandsofcustomersgivingadvice—andweneeded a way to take advantage of this phenomenon. Calling upon crowdsourcingmodelsandWebsiteslikeDigg,whichallowuserstoshare,discover,and vote on content, we created the ability for customers to vote on and rateideaspostedbythecommunity. This tool evolved intomore than a souped-up suggestion box.We called itIdeaExchange,anditbecametheeditorialboardofthesite.Italsoofferedawayforus to introducean ideaandobservehow it resonatedwithourcommunity.Someideaswerevalidated,andwedecidedtoinvestinthem.Othersgotweededout before anyonewasted their time. The site became, as JamieGrenney, ourIdeasproductmanager,likestocallit,“aglobalfocusgroupthatneversleeps.”Sincewe’ve launchedit,we’vereceivedeleventhousandideas,257,000votes,andtwenty-sixthousandcomments—allwrittenbycustomers.(It’salsohowwetested—anddecidedupon—atitleforthisbook.) OurdeveloperpartnershavealsofoundIdeaExchangetobeafertileground.One startup company, Appirio, had been thinking about building integrationcapabilitiesbetweenGoogleandSalesforce.Then,AppiriocofounderNarinderSingh saw a post on IdeaExchange calling for a way to let information fromSalesforce accounts to appear on aGoogle home page. The postwas actuallywritten by Jamie, who runs IdeaExchange, and we all thought it was a goodsuggestion,butwedidn’thavetimetobuildthisadditionalfunctionality.Appiriodid, and within six weeks it created it and launched it on AppExchange. Itquicklybecamethetopapplication.

ThisapplicationwassuccessfulnotjustbecauseAppirioisapartnerthatwe

like but because it built a compelling service for customers. Only the best

applications—theonescustomerslikethemost—bubbletothetop.Thissystemis completely different from the way the software industry (defined bycompanies and customers having an adversarial relationship) had operated forthepastfiftyyears. IdeaExchange became our secret weapon for innovation. One day, over e-mail, I mentioned the success we were having with this system tomy friendMichaelDell.MichaelhadjusttakenbackthereinsasCEOofDell,andhewaslookingforwaysforthecompanytomovefasterandbecomemoreinnovative.“Dellshouldhaveanideasengine,”Isaid.ThesystemwouldprovideascalablewaytocollectandcapturefeedbackfromtheDellcustomercommunity.

Within threeweeks,Dell launched IdeaStorm—builton theSalesforce Ideas

platform—togiveDellcustomersandenthusiastsachancetobecomeapartoftheproductdevelopmentprocess.IdeaStormwasanimmediatesuccess.Thedaythe site launched, a user suggested that Dell sell computers with the Linuxplatformpreinstalled. In the comingweeks, tensof thousandsof users agreed,andthepostrankedasthenumber-oneideaformonths.Threemonthslater,asadirect resultof this intelligence,Dell releasedseveralconsumernotebooksanddesktopswith the Linux operating system preinstalled.Using the Internet andour Ideas technology platform, Dell has gained the ability to listen to itscustomers.AsJeffHoweexplainsinhisbook,Crowdsourcing:WhythePowerof theCrowd IsDriving theFutureofBusiness, “Dell’s IdeaStormattempts tocapture the collective intelligence of the crowd.... It’s using the crowd tobrainstorm new innovations.”2 The result? Ideas turning into revenue withinmonths. Michael Dell, pleased with the immediate return on investment, shared hisexperience with Howard Schultz of Starbucks. He even did a demo for him.(Michael makes one hell of a sales engineer.) Like Michael, Howard hadrecentlyreclaimedtheCEOtitleofthecompanyhehadfounded.Havinggrownfromasinglestore to thelargestcoffeehousecompanyintheworld,Starbuckswaslookingforawaytoreconnectandreengageinaregulardialoguewithitscustomers.BeforeIknewit,Iwashavinglunchwiththislegendaryentrepreneurtotellhimaboutthetoolwehaddeveloped.Thirtydayslater,wesignedadealwithStarbucks,andthecompanysoonlaunchedMyStarbucksIdea.com.Howardsoon revealed ina shareholdersmeeting that itwasoneof thecompany’s fivekey initiatives and commented inBusinessWeek that the adoption of this toolwouldchangehiscompanyandinstillwhathecalled“aseeingculture.”3

Thisonlinecommunity,whichallowsStarbuckscustomerstoshareideasandtovoteonthemanddiscussthem,hasinfactallowedthecompanytoseewhatits customers want. As Chris Bruzzo, vice president of Star bucks brand andonline marketing, puts it: this “is helping our customers shape the future atStarbucks.” The company has received seventy thousand ideas and executeddozensofthemthathaveimproveditsbusinessandhasusedthecommunitytoreport back on improvements, including free AT&TWi-Fi access for iPhoneusers, a richerhot chocolate, and ready-brew instant coffee.Oneof theirmostunusualresponsestocustomerfeedbackwasdebuting“splashsticks,”whichfitintotheholeinthelidtopreventcoffeefromspillingwhilesomeoneiswalkingordriving. ThereisnodoubtthatmanagingtheideasofcustomersismakingStarbucksmorebelovedbycustomersaswellasmore innovative.“Iwas floored. ItwaslikeStarbuckswasreadingmymind.Thatlittlestickmademywholemorning,”AngelaVargowroteinablogresponsetotheinitiative.

BecomingPartofYourCustomer’sDialogueInthisnewageofnonstop,immediatecommunicationinblogs,wikis,Twitter,andYouTube,youcanbefairlycertainthatyourcustomersarehavingaverypublicconversationaboutyourproductsandpractices.Everycompanyneedstofindawaytobecomerelevantinitscustomers’conversations.AsMichaelDellsaidinBusinessWeek,“Theseconversationsaregoingtooccurwhetheryoulikeitornot,O.K.?Well,doyouwanttobepartofthatornot?Myargumentisyouabsolutelydo.Youcanlearnfromthat.Youcanimproveyourreactiontime.Andyoucanbeabettercompanybylisteningandbeinginvolvedinthatconversation.”4 Rightnow,everybusinessmustdetermine:

•Howcanmybusinessbeapartofthisconversation?•Howcanmybusinesslearnfromit?•Howcanmybusinessuseittoinnovate?

Play #62: Develop Communities of Collaboration (aka LoveEverybody)

Earlyon,werecognizedthatweneededothercompanies,bothbigandsmall,topartnerwithusanddeveloponlinesoftwarethatcomplementedourown.Thisisnotanewidea,buttraditionalsoftwarecompanieslikeSiebelorSAPnevertrulyempoweredtheirpartners.Theynevermadeacapitalinvestment.Wesawmanysmallercompanies takingabetonour service,andwedecided thatweshouldsupport them in order to truly benefit from the massive potential power ofcollaboration.

Wewantedtobeclosetothesecompaniesandremoveasmuchoftheriskfor

their businesses as possible. Why not provide a self-contained environmentwheretheycouldconnectwiththepeoplewhoinventedtheindustry?Thiswastheimpetusforthesalesforce.comappsdevelopmentincubator. We leaseda facility inSanMateo,California,andbegan rentingcubicles tostartupsthatwantedtobuildtheirbusinessesontopofourplatform.(Wechargeafeethatallowsustobreakeven,butwedonotmakeaprofit.)Weprovideon-site programmers to help with coding questions, we introduce startups topotentialcustomers,andwehelpthemmarkettheirservices.

Companieswereimmediatelydrawntotheopportunitybecauseitmadesense.

“I don’t want to manage infrastructure,” Narinder Singh, the cofounder ofAppirio, explained. “We have a business to build, and I want to focus 100percentonthat.”NarinderusedtoworkoncorporatestrategyatSAP,andwithhis familiaritywith itsproductsandhisconnections to itsexecutives, itwouldhavemade sense to launcha startup that supportedSAP.Narinderdidn’t evenconsider it. “The betwe had tomakewith SAPwas so daunting.Weweren’tgoingtogettheattentionofSAP;itwasaclosedsystem,evenifwewereontheinside,” Narinder said. Besides, “I worked with smart people, but if you’redrivingago-cart,Idon’tcareifMarioAndrettiisatthewheel;youaren’tgoingtowin the race.”Narinderbelieved in the revolution in the cloud, andwedideverythingwecouldtomakeiteasierforhimtojoinourforce.

Providingdeveloperswithbothaplatformandacommunity(andalotoffreeTshirts)hasgeneratedafleetofonehundredsixtythousanddeveloperswhoareinnovating more rapidly than ever before. Take, for example, the fact thatAppExchange launched with seventy applications and by 2008 offered morethan eight hundred applications.AsWiredmagazine stated, this newmodel is“delivering silicon power to the people.”5 This ability for anyone to use theInternettocreateandsellapplicationsisthenextcomputingparadigm.Finally,TheEndofSoftwareishere.

Play#63:EvolvebyIntelligentReaction

There’salotofcontroversywhenitcomestotheoriesaboutevolution,butwhenitcomestoevolutioninthesoftwareindustry,there’sonlyonetheorythatmakessense: surviving by learning from experience and usage patterns. My friendAdamBosworth,theWebandsoftwarepioneer,describesthisorganiclearningprocessas“intelligentreaction.” A normal development cycle in the technology industry is three years. Atsalesforce.com, it’s ninety days. We make minor upgrades every week andunveilamajorreleaseeverythreetofourmonths.(Webrandtheseaccordingtothe seasons, as the fashion industry does.) With this process, innovation isconstantandourcustomersparticipateinthematurationprocess. Constant releases ensure that we receive real-time feedback from themarketplace,whichhelpsdirectournextmoves.Ultimately, it’s far simpler tomakeadjustments tosmallsteps than it is to fixhuge leaps that fall flat in themarketplace.Thesesmalldevelopmentsalsoplayabigroleindictatingproductevolution.

Intelligent reaction—or going where our business takes us—is what has

always dictated our nextmove and howwe evolved from an application to aplatform company. Salesforce. com could not have started as a platform.Weneeded a critical mass of end users, the hundreds of thousands of customersusing theapplicationandproviding inputso thatwecouldseewhat theywerelookingforandknowhowtobuildadditionalfunctionalitythatsuitedthem.Itisthe user community, or customer base, that ultimately gives a company“permission”(throughtheirdemandsand,eventually,purchases)tolaunchnewproductsandenternewmarkets. Therearenewrulesinbusinesstoday.Usershavemorepowerthanever.Thatisnotsomethingyoushouldfear.Successfullyscalingaproductandgrowingacompany are much easier when you’ve engaged the end user as an activeparticipantintheprocess.

PART6

TheCorporatePhilanthropyPlaybook

HowtoMakeYourCompanyAboutMoreThanJusttheBottomLine

Play#64:TheBusinessofBusinessIsMoreThanBusiness

Westartedsalesforce.comwithagoaltocreateadifferenttypeofcompany.Ourvision was to build a different technology model (Software-as-a-Service), adifferent salesmodel (subscription based), and a different philanthropicmodel(integrated into the for-profit corporation from the very beginning). Each ofthese ideas emanated from our disenchantment with the traditionalmanner inwhichthingsweredone.Thephilanthropiceffortinparticular,though,stemmedfromapersonalexperience.

Earlyinmycareer,duringmyfirstfewyearsatOracle,Idefinedmysuccess

bymakingmoneyandachievingpower.Bymyearlythirties,however,Irealizedthatthesesuperficialachievementsdidnotproviderealmeaningortruehappiness.Despitealistofimpressivetitlesandapileofmaterialpossessions, I felt that somethingwasmissing,andbegan toconsidermyplaceintheworldandhowIcouldmakeadifference.

Theopportunitytotakeasix-monthsabbaticalfromOracleandatriptoIndia

spurredaprofoundchange inme,butnooneatOracleunderstoodwhat Ihadexperienced or accepted my transformation. Larry Ellison expressed fatherlyconcern that I’dgoneoff thedeepend,andRayLane, thenOracle’spresident,didn’tappreciatemydesiretotalkabouttheseideas(“Ididn’tunderstandit.Hewasaslikelytotalkaboutgettingintouchwithyourselfashewastotalkabout[thespecificsof]aproductdesign,”helatersaidaboutme.1)MycolleagueandfriendEvanGoldberg lamented the loss ofmy happy-go-lucky days. In someways I could appreciate the confusion, as everyone was accustomed to mycollecting toys, driving fast cars, and otherwise living largely. Why would Isuddenlyembracesuchdramaticallydifferentinterests? ItwasasifbydivineinterventionthatshortlyafterIreturnedfrommytriptoIndia andmyenlighteningmeetingwithAmmachi, Iwas invited to attend thePresidents’ Summit forAmerica’s Future. In 1997GeneralColin Powell,whojust had retired as chairman of the Joint Chiefs of Staff, and the five living

presidents stood up together and launchedAmerica’s Promise, a program thaturgedthenationtomakeagreatercommitmenttoitsyouth.

Ihadneverbeforebeenapartofaconversationthatsuggestedbusinessesuse

alloftheirassets—theirequity,theircapital,theirpeople,theirrelationships—toserve as a force for good in the world. This was different from what I hadlearned in school, and it challenged the accepted thinking of esteemedeconomists, such as Milton Friedman, who famously said, “The business ofbusinessisbusiness.”Iwasimmediatelyattractedtothisradicalidea,andIfeltcompelledtoparticipate. IreturnedfromtheeventandtoldLarryEllisonaboutthesummitwithgreatenthusiasm.Hewasimmediatelyreceptiveandinfactrevealedthathehadbeeninterested in launching a foundation at Oracle. The purpose was to outfiteconomically challenged public schools with networked computers. Larrywanted to commit $100 million from Oracle over ten years to create thisprogram.

Fast-forward a fewmonths, and suddenly Iwas in chargeof the company’s

firstmajor philanthropic initiative. Itwaswith great fanfare thatwe launchedOracle’sPromise,ourownvarianton theAmerica’sPromise initiative,atNewYork City’s Radio City Music Hall in 1997. I had the opportunity to meetGeneralPowell,whoendorsedthecauseandsoonbecameamentor.Hegavemeadvice on how to take the lead in this effort and encouraged me to grantemployeestimeofftovolunteer. Itwasexcitingtooverseethisprogram,butitwasextraordinarilychallengingaswell.Ididn’thaveanyexperiencerunningaphilanthropicinitiative,andthenonprofitworldwasoftendubiousaboutthesincerityofafor-profitcompany’sintentions,especiallyconsideringthatOraclehadnotrackrecordinthisarea.Atthe same time, the opportunity introduced personal challenges. MyresponsibilitiestodevelopandmarketnewproductsatOracledidn’twane.Halfmy time was spent in management meetings in glistening office towers inRedwoodShores, and theotherhalfwas spent indilapidated schools inSouthCentralLosAngeles;Washington,DC;NorthernIreland;andIsrael. Despitethechallengesthatcamewithblendingthesetworoles,Ifoundmuchof the work to be rewarding. On the surface, the program succeeded in itsmission.Weplacedthousandsofcomputers inhundredsofschoolsworldwide.

Wetouchedthelivesof tensof thousandsofyoungpeople.And,althoughthiswasn’t the impetus of the effort, Oracle reaped positive recognition thatbenefited the company. (Larry was even interviewed on the Oprah WinfreyShow.) Ultimately, however, the program fell very short of its full potential—somethingthatbecameevidentduringanembarrassingfiascoattheMacFarlandMiddleSchoolinWashington,DC.OraclehadbeentappedtowirethisschoolasaspecialfavortoGeneralPowell.Theschoolwasspreadoutoverseveralfloorsandterriblyrundown.

The temperature climbed to a scorching 110 degrees on the day of the

installation, and the humidity was suffocating. The school didn’t have anyelevators,andtherewereonlythreepeopleonourteamtogetthejobdone.Noonecametovolunteerfromtheschool,andalthoughlocalOracleemployeeshadpreviouslycommittedtoparticipating,theyneverarrived.Itwasclosetotheendof the quarter, whichmeant employees were busy selling and trying tomaketheir numbers. No one viewed participating in the volunteer event with anyseriousness. They certainly didn’t think itwould reflect negatively on them iftheydidn’tshowup.Afterall,wasn’ta100percentfocusonthebottomlinethemost important thing? In 1997, that was the belief that guided corporateAmerica. Still,itwasanincrediblyhumblingexperiencetohavetocallGeneralPowellandexplainthatwehadfailedtocompletethetask.Icouldn’thearhisresponsebecausewe had a bad connection. Thatwas probably for the best. I think hemighthavehunguponme.

About thirtyminutesafter theawfulphonecall, abattalionofU.S.Marines

swept into the school. Our teamwas caught by surprise when they said theywere there to install the computers.Although therewas relief inknowing thatthisforcewouldgetthejobdone,itdidn’tgivememuchsolace.Oraclehaditsownarmyoffiftythousandtech-savvyemployees,severalthousandofthemjusta few miles away; why did we require the Marines’ assistance to set upcomputersinamiddleschool? The experience forced me to consider the shortcomings of the program. Irealized that although in theory doing goodwas a relatively short order for acorporation,itwastootallatasktosimplytackon.Iunderstoodthattosucceed,

suchaprogramhadtobewovenintothefabricofanorganization.

Ibegantoconsiderhowtomakeaphilanthropicprogrampartofacompany’s

DNA. I knew that if we had been able to draw on Oracle’s full assets—itsemployees, customers, products,money, and partners—we could havemade amuchmoresubstantialcontribution.Thisideabecameapassionofmine,anditfurtherignitedmyinterestinstartingmyowncompany.

Play#65:IntegratePhilanthropyfromtheBeginning

Parker,Dave, andFrank, the salesforce.comcofounders,were receptive to theideaofbuildingabusinessthatsimultaneouslygavebacktothecommunity.Weallsharedthephilosophythatthevalueofacorporationshouldbedistributednotonlytoitsleadershipbutalsotothecommunitiesinwhichitoperatesandtotheworld. We discussed these ideas on our first day of work, and filed theSalesforce Foundation as a 501(c)(3) public charity at the same time that weincorporatedsalesforce.com.The foundationwas seededwith personalmoney,but the ultimate goal was for the company’s equity and assets to sustain andgrowit.

My experience with Oracle’s Promise taught me that goodwill and sincere

intentions were not enough to build a strong corporate foundation. It wouldrequire the leadership of someone with experience in both the nonprofit andcorporate worlds. A friend recommended Suzanne DiBianca, a managementconsultant who did strategy and organization development with leaders ofFortune500companies.Prior tohercorporateexperience,SuzannehadservedasadirectorofanonprofitorganizationthatworkswithNGOsandgovernmentofficials to encourage peaceful resolution techniques for global and localconflict. I believed that this background had given her the skills necessary tobridgeboththenonprofitandfor-profitworlds. Suzanne officially joined as the executive director of the SalesforceFoundation in 2000. Over the next few months, we researched establishedcorporate foundations andpersonallymetwith dozens of foundationdirectors,including those at Cisco Systems, Hewlett-Packard, and Levi Strauss & Co.Therewasmuch to learn from theexperiencesof thesecompanies, and itwasourintentiontounearththebestpracticesincorporatesocialresponsibility.

Play#66:MakeYourFoundationPartofYourBusinessModel

The insight we gained from other companies was tremendous. eBay, forexample,hadendoweditsfoundationwith$1millionofcorporatestockpriortothe company’s 1998 initial public offering. It was one of the pioneers inprovidingcompanyequity tofundphilanthropicgoals,andwewerecaptivatedby the power of this model. As the company grew, the foundation grewproportionately. I knew that salesforce.com could be the energy to power thefoundation;thefoundersagreedtoplacemorethan1percentofsalesforce.comfoundingstockintothefoundation,andwecouldn’twaittoseeittakecharge. Thecommitmenttosetaside1percentofequitywasthefirststeptobuildingthe 1-1-1model thatwould eventually guide our foundation. The idea for thesecond1percentcommitment—1percentofemployees’time—wasinspiredbytheprogramatHasbro,thecreatorofsuchtoysasMr.PotatoHeadandG.I.Joe.IhadmetHasbro’schairman,AlanHassenfeld,attheWorldEconomicForuminDavos,Switzerland.HasbrowasstartedbyAlan’sgrandfatherinthe1920s,andthe company had embraced a tradition of philanthropy since its earliest days.Alanwas extremelygenerous in sharingHasbro’s experience and serving as amentor.“It’s thejobofthechairmanorCEOtoset theethicsofacompany.Ifthe leadership truly believes in what it is saying and acts accordingly, thatemanatesthroughtheentirecorporation,”hesaid.IunderstoodIwouldhavetoevangelize these values, but Alan toldme that wouldn’t be enough. “It’s onething to talk about it; it’s another to try to get your people involved andempowered.” OneofthewaysHasbroempowereditsemployeeswasbyofferingfourhoursamonthofpaidtimeofftoperformcommunityservice.Withthatinvestmentoftime,Hasbroemployeeshavemadeinnumerablevisitstoseriouslyillkids,builtincredible playgrounds for children with disabilities, and participated in life-changing programs like Operation Smile. The people who worked at Hasbroknewtheywerecontributingsomethingmeaningful,whichmadethemfeelmoreinvested in the company and inspired them to do their best. I thought thatsecondary gain further justified the hours our employees would be spendingoutside our office. Maybe the volunteer program would prevent them fromfeeling as rudderless as I had during my time at Oracle. Building on the 1

percentallocationofequity,wedecidedtogiveemployeesmorethan1percentoftheirtime—sixpaiddaysoffannually—tovolunteer.

The1-1-1ModelFromitsinception,theSalesforceFoundationusedauniquemodelofintegratedphilanthropy,onedesignedtogrowwiththecompany.Our1-1-1modeldisseminatesaportionofthefinancialandintellectualwealthoftheorganizationtothosemostinneed:

•1percentequity:using1percentoffoundingstocktooffergrantsandmonetaryassistancetothoseinneed,especiallytosupportyouthandtechnologyprograms

•1percenttime:findingmeaningfulactivitiesforsalesforce.comemployeesduringtheirsixpaiddaysoffayeardevotedtovolunteerism,andpromotingacultureofcaring

•1percentproduct:facilitatingthedonationofsalesforce.comsubscriptionstononprofits,helpingthemincreasetheiroperatingeffectivenessandfocusmoreresourcesontheircoremission

The1-1-1ModelinActionA terrificexampleofhowour1-1-1modelworks isaSanFrancisco initiativecalledProjectHomelessConnect,whichbringsawidevarietyofsocialserviceproviders—housing experts, doctors, job coaches, people to fit eyeglasses,dentists, the DMV—together under one roof for the day. The program hasbecomeoneofthemostsuccessfulinitiativesfordealingwiththehomeless,andhasnowbecomeanationalmodel.Followingisanexampleofwhatimpactwecanmakewithwhatwecallafullpackage:people,technology,andmoney. •1percentequity:WehavegivenProjectHomelessConnectgrants

tobuyeverydaynecessitiesforclients,suchastoiletrykits,sweatshirts,andsleepingbags.

• 1 percent time: Our company participates in Project HomelessConnect every month with more than a hundred employees. They doeverythingfromoutreachandrecruiting(includingfindingandbringingthehomelesstotheCivicCenter)towalkingthemaroundtodifferentdoctorsor services.Our employees bring their families and friends to help out—somethingweencourage.

• 1 percent product: Our employees built an application on the

Force.complatformtoinputthehomelessclientdata,andcustomizedittomeettheneedsofProjectHomelessConnect.

Therewasanotherresourcethatseveralcompanieshadcommittedtodonating

tocharitablecauses:aportionofprofits.LeviStrauss&Co.,Merck&Co.,andBen& Jerry’s, for example, had earmarked a percentage of their earnings orprofits togo into their corporate foundations.Following their lead,wemadeacommitmenttogive1percentofourprofitstocommunitygroups.Wewerenotprofitablewhenwemadethatcommitment,andwouldnotbeforsometime.Weunderstood that although we would not immediately see the cash for thiscommitment,weneededtotakealong-termapproach.Thiseventuallyledtoa1percentproductinitiative(wherebywedonatethesalesforce.comserviceinlieuof profits)—a contribution that we’ve since realized can have amuch greaterimpact on a nonprofit organization (by helping it scale) than a cash donationmighthave.

Play#67:ChooseaCauseThatMakesSenseandGetExpertsonBoard

Salesforce.comisatechnologycompanyfoundedonabeliefintheInternetasademocratizing tool; therefore, it’s logical that our foundation aims to provideaccess to technology to young people in underserved communities. In 1999,whenwe launched our company, the digital divide, or the gap between thosewithandthosewithoutaccesstocomputersandtheInternet—andtheimbalancethatgapcreated—wasamatterofconcern. Iwas troubledabout thisdisparity,andIalsorecognizedthatthetruepoweroftheInternetrestedonitsreachbeingextendedtothemasses.

In 1998, legislation called E-Rate was passed in an effort to spur the

deployment of high-speed Internet access to schools in low-income areas.AlthoughthelegislationwasapositivestepinimprovingaccesstotheInternetinschools,itdidnothaveanyjurisdictionoverafter-schoolprograms.Wefoundthis to be an overlooked area inwhichwe could invest tomake a difference.ThroughourongoingrelationshipwithColinPowellandAmerica’sPromise,weconnected with PowerUP, a nonprofit organization launched to combat thedigital divide. It was seeded with $10 million from the family foundation ofAOLfounderSteveCase,anditsoughttoleveragepartnershipswithpublicandprivate organizations. The goal was to promote youth development throughtechnology and to enhance young people’s lives in after-school settings bywiring existing community centers such asYMCAs andBoys&Girls Clubs.Technology companies likeHewlett-Packard,Gateway, andCisco Systems, aswell as nontechnology companies such as Power-Bar, saw the benefits of thismodelforcollaborationtosolveacommunityneed. BeingconnectedwithPowerUPandothercompaniesthatsupporteditwasagreatway tomakean impact.Theeffortalsomadeus realizehowmuchworktherewastobedone.Weneededateam,notjustonededicatedperson,tobuildastrong foundation. Immediately, I thoughtwe coulduse the assistanceof JulieTrell,ateacherandtechnologyexpertwhomIhadmettwoyearsearlierwhenIwasworkingonaprojectforOracle’sPromiseinIsrael.

JulieandIhadbeenintroducedthroughamutualfriend,andwhenItoldheraboutwhatweweredoingatOracle,shereplied,“Youcan’tjustgivecomputerstoschools—youhavetotrainteachersandyouthworkers!”Iknewthenshewasright,andIwasgratefulwhensheofferedtospendthenextmonthvolunteeringher time to help with the training. Later she assisted us when Oracle wiredschoolsinAtlanta,andIneverforgotheradvicetome:“Ifyoustartafoundationthat focuses on schools and technology, you have to hire a teacher,” she said.“Youshouldn’tjustbeacompanythatgivesoutcomputersandmoney.Youneedsomeone who is familiar with working with kids and education—it givescredibilityandmakesadeeperimpact.” Iwanted to ensure thatwewouldbemuchmore than a company that gaveawaycomputersandmoney. IhandedJulie’s resume toSuzanne.“Here’syourfirstemployee,”Isaid.

Play#68:SharetheModel

Weopenedourfirstafter-school technologycenterat theEmbarcaderoYMCAinsummer2000.ItwasincredibletohaveColinPowell,theoriginalinspirationforthiseffort,inattendance.Ihadtheopportunitytospeakatthelaunch,whichgaveme thechance toshareourmodelandenlistothers to joinourcrusade. Iwasamazedbythepotentialofothersjoiningandthepossibilityofencouragingthisonamassivescale.Whatwouldhappen,forexample, ifa top-tierventurecapital firm required its portfolio companies to place 1 percent of their equityinto a foundation serving the communities inwhich they did business? Itwasphenomenaltoconsiderthegoodthatwecouldgenerateandthepositiveimpactitwouldhaveonsociety.Wewouldn’tneedtodependonthegenerousgiftsofwealthydonors.IwantedtoevangelizethisideabecauseIknewthatourefforts—the contributions of one small startup company—could only scratch thesurface. “I challenge other Internet companies to follow suit and set aside aportion of their company stock toward community initiatives,” I said to theattendees.“Thosewhoaren’treadytostarttheirownfoundationarewelcometoleverageourresourcesandinfrastructureandjoinforceswithourfoundationbydonatingstockandvolunteeringtime.” ThiswasthebeginningofaneffortwewouldlaterdevelopintoaninitiativewecalledthePowerofUs—andacornerstoneofourmission.Byincludingourvendors and partners, we have been able to magnify our impact as well asstrengthen relationships. Do not limit your philanthropic efforts to yourcompany;youwillbefarmoresuccessfulifyouleverageyourentirenetwork.

TheCaseforCorporatePhilanthropyWebelievethatallbusinessescanandshouldhelpmaketheworldabetterplace.Wealsobelievetherearerichrewardsindoingso.Buildingpartnershipsbetweenprivateenterpriseandpublicinterestproducesprofitableoutcomesforeveryone.Herearethetopreasonswhyyoushouldgetstartedrightaway:

It’stheRightThingtoDo(forthecommunityandthecompany)Empoweringyourcommunitiesstimulatesbusinessdevelopmentandimprovesthebottomline.Bettereducationtranslatesintoamoreskilledworkforce.Reducedpovertylevelsresultinhigherconsumption.ItBuildsYourBrandCustomerswithafavorableimpressionofacompany’sphilanthropyarethreetimesmorelikelytobeloyalcustomersthanthosewhohavelessfavorableperceptionsaboutacompany’sphilanthropicefforts.∗ItAttractsandRetainsEmployees—SparkingaCompetitiveAdvantageNearlytwo-thirdsofGenYemployeessaytheyprefertoworkforacompanythatprovidesopportunitiesforthemtoapplytheirskillstobenefitnonprofitorganizations.∗∗ Allthingsbeingequal,employeeswhohaveafavorableimpressionoftheircompany’sphilanthropyarefivetimesmorelikelytoremainwiththeiremployer.∗It’sFun—HonestItisagreatwaytogettoknowthepeopleyouworkwith(bothemployeesandbusinesspartners),andit’srewardingtoseethatyoucanmakeanimmediateimpact.*CouncilonFoundationsandWalkerInformation,“NationalBenchmarkStudy:MeasuringtheBusinessValueofCorporatePhilanthropy,”May2002.**2007DeloitteVolunteerIMPACTSurvey

Play#69:BuildaGreatProgrambyListeningtotheConstituents

The first salesforce.com-sponsored technology centers aimed at bridging thedigital divide were a great idea in theory, and the centers were welcomeadditionstocommunities,buttheprogramwasfraughtwithseriouschallenges.PowerUPoperatedasalarge-scalenationalprogramwithacentralizedapproach.Wefoundthattheone-size-fits-allmodeldidn’tworkateverycenter,andsomecenterswereduplicatingexistingresourcesandservices.Furthermore,althoughtheprogramwaseffectiveinitsmissionofspreadingcomputersacrosstheland,itdidn’tdictateacoherentcurriculumthatcommunicatedhowtouseormaintaintheequipment.That,wesoonfound,wasabigproblem.

Salesforce.comemployeesralliedbehindtheeffortrightaway,butthecenters

didnotgainthetractionwehadanticipated.Thestudentswhoattendedweren’tusingcomputersforthefirsttime;infact,someofthemknewmorethanmanyoftheteachers.Theyweren’tinterestedinplayinggamesorlearningthebasics,buttheirteachershadlittleelsetoofferthem.Werealizedthatifwedidn’tgivethe students some relevant content quickly, we’d lose their interest—and ouraudience. The donated computer systems were on their way to becomingridiculouslyexpensivepaperweights.Weneededtoimmediatelydeterminehowto leverage our investment into something with real value to the people wewantedtoserve. Althoughcomputer-savvystudentsweren’ttheaudiencewehadexpected,werealizedwestillhadanopportunitytomakeacontribution.Wewouldn’tbethefirst to introduce underserved youth in San Francisco to technology, but wecouldoffer themaway topursue theirpassion.Maybe thisoutcomewouldbeeven better than what we had anticipated. The kids who came to our centerswerecrazyabout trying the latestmachinesandprograms. Inmanyways theyremindedmeofmyselfwhen Iwas in school andplayedon the computers atRadioShack.That opportunity fueledmy interest in technology—andgavemetheconfidenceandinspirationtostartmyfirstbusiness.

SteveWright,aformerPeaceCorpsvolunteer, technologist,andhighschool

educatorworkingattheBeaconInitiative,whichraneightofthecomputerlabswe supported, joined the foundation and helped us cater the program to ouraudience. Steve observed the students at work and discovered they wereinterested in exploring theWeb,watching videos, listening to andmaking rapmusic, and trying to build pages online. They were drawn to interactivetechnology.(Thatwassomethingwecouldappreciate!)SteveshowedthemhowtomakebeatsonlineandworkedwithJulietoteachfilmingandeditingskillstohelpthemproducetheirownfilms. These young people had a lot to say about hard-hitting topics, includingjuvenile justice, gun violence, and homelessness, and our new focus on youthmediatookoff.Oursalesforce.compeopleloveditbecauseittappedtheirinnateskills;theyoungpeopleloveditbecauseitgavethemaneffective,accepted,andcreative way to share their ideas. The program taught technology skills thatcould help them stand out in school and the job market, and the experiencefosteredimportantinterviewingandcooperationskills.Ialsoappreciatedthattheprogram had measurable results. The participants’ hard work resulted in filmshortsandWebsitesthatthestudentstookprideinshowing.

Inanefforttoshowcasethestudents’work,wehostedaYouthMediaFestival.

Thefirstfestivaldrewacrowdofmorethanthreehundred,andtheaudiencewassurprisedand impressedby thequalityof thework.Oneof the films,a thirty-minutedocumentarycalledBus24:TheDiversityBussharedtheexperiencesofyoung filmmakers ages ten to sixteen years old as they journeyed on the SanFrancisco Municipal Railway Bus 24 from the rougher edges of Bayview-Hunters Point to themore privileged parts of Pacific Heights.Many of thesestudents had never left their own communities or experienced the way otherpeople lived in less violent neighborhoods. The film captured the interactionstheyhadwithfellowriders, revealed thediversityof thecityeachofuscalledhome—andgaveallofussomehope. As we expanded the foundation internationally (international offices havetheirowndedicatedfoundationstaffoncetheygrowtoacertaincapacity,usuallyseventy-five or more employees), the program evolved into an internationalmedia festival.We hosted events in San Francisco and London and flew ouryoung filmmakers in from all over the world to present their work. As wewitnessed how these films resonated with audiences, I decided it would beremarkable to bring some of these films and several young filmmakers to theWorldEconomicForum.

The students were excited to show their films at the conference in Davos,

Switzerland,andtheytooktheirroleaschangeagentsveryseriously.Wespentmonths preparing and produced six films in three categories—health, poverty,andtheMiddleEast.Weinvitedyoungfilmmakers,includingDannie,asixteen-year-oldfromtheUnitedKingdom;Ahmed,aneighteen-year-oldfromBahariyaOasis,Egypt; andDima,a fourteen-year-old fromSderot, Israel, to show theirfilmsandtalkabouttheirinspirationandthechangetheyweretryingtoeffect. We had expected to garner attention, but wewere shockedwhen the eventdrew an enormous crowd, including such prominent leaders as environmentalactivistandformerU.S.vicepresidentAlGore, techlegendMichaelDell,andmusicianandhumanrightsadvocatePeterGabriel.SomepeoplehadwarnedmethatIwastakingabigrisk—afterall,Iwasshowingaroomfullofluminariesyouth-made films, including one about teenagers and sexually transmitteddiseases. I believed, however, that the audience at Davoswould be receptive.Peoplewho are dedicated tomaking a difference in thisworldwant to hear ayoung person’s perspective. Although I didn’t think it was a risk, Iunderestimated how pivotal itwould be for these young people to share theirfilms.

Dannie,whocontributedaharrowing—butultimatelyupliftingandhopeful—

musicvideoaboutself-harm,spokepassionatelyaboutwhysheandherfriendsmade the film, their personal struggles, and how they’ve since committed tocampaign on the issue of self-harm in schools. Theo, a San Francisco studentwhohasworkedwiththefoundationpracticallysinceitsinception,contributedapowerful film about homelessness in San Francisco. The city’s mayor, GavinNewsom,whoattendedtheevent,tooktheopportunitytospeakaboutthewayshis administrationwas trying to address the problemsTheo raised in his film.AhmedandDima,whohailedfromcountrieswithalongandbitterrivalry,andcouldn’tcommunicatewithoneanotherintheirnativelanguages,discussedtheuniqueopportunitytogettoknowoneanother. “Ilikehim,”saidDima.

“He’smybrother,”repliedAhmed.

As the session closed, I realized that the biggest risk we took was not ininviting these young people to share their voices; the biggest risk would be

ignoring what they had to say. It was obvious that the wisdom these youngpeopleofferedoutshinedwhatwegavethem.Thestudentsrealizedthepoweroftheir voices as well. The next day, Ahmed said, “What happened last nightchanged everything inmymind.When I saw the important peoplewatch thefilm, I realized Ihavemadesomethingbigger. Iamhappy tosee this. Ididn’teverbelieveitwouldbelikethis.Itwasneverinmydreams.” Iwasamazedbywhatwecouldachievebygivingyoungpeopleopportunityandencouragement.Theo’sfilmonhomelessnessinSanFranciscohelpedbuildmuchneededawareness.Dannie’s filmabout self-harmencouraged theUnitedKingdom’sParliamenttoincreasetheamountofmoneydistributedtoschoolstofundapart-timecounselortohelpyoungpeopledealwithemotionalissues.Theimpactwasreal.Ourmissiontogivepeoplethetoolsandtheplatformtomakeapositivedifferencegrewfromthere.

Play#70:CreateaSelf-SustainingModel

Insummer2004,wewitnessedthetruefinancialpowerofourintegratedmodel.Salesforce.com went public and became listed on the New York StockExchange. The initial public offering raised more than $12 million for thefoundationinoneday.

This event proved the capability of pre-IPO companies to make a positive

difference through an early financial commitment of equity. The infusion ofcapitalbolsteredour foundation’sability tobeself-sustainingandprovided theopportunitytomakebiggerfinancialcontributionstoourcommunities.PriortotheIPO, thefoundationwas largelyfundedbyprivate investments in theearlydays,butweneededcashtoscaleandgrow.TheIPOgeneratedthosefundsandallowed us to develop a grants program to fund youth development andeducational organizations.We also gained the financial freedom to embark onotherinnovativeefforts. OneprogramwasBizAcademy,afour-dayentrepreneurialworkshopdesignedforhighschoolstudentsinunderservedschooldistricts.Theprogramwasjointlydeveloped with BizWorld, originally founded in 1993 by prominent venturecapitalistTimDraper.TheideafortheBizWorldelementaryschoolprogramwassparkedwhenTim’sdaughteraskedhimwhathedidalldayatwork.Inaneffortto explain business to his eight-year-old, he tapped his daughter’s passion formakingfriendshipbraceletsandcreatedanactivitytoteachyoungpeopleaboutrunningtheirownbusinessessellingtheircreations.Weappreciatedthebenefitsof theprogramandtailoredaversionforhighschoolstudents that fitwithourcompany and incorporated our CRM technology. We called on the businesstalents of our salesforce.com team, venture capitalists, and other professionalsaround the world to teach the students how to become entrepreneurs. Theprogram is hosted in our office, and the students are required to interact andnetworkwithourcorporateemployees,whoareverydifferentfromthem.

The goal is for the students to experience the ins and outs of running a

company, and one of themostmotivating factors is that they keep the profits

theyearn.Participantscollaboratetomanageallaspectsoftheirbusiness,fromraisingmoneyandlearningaboutfinances, tomanufacturingaproductof theirown creation (picture frames, clocks, potted plants), to marketing and sellingtheir product using the salesforce.com application. Our third year intosponsoringtheprogram,wechangedthefocusfromsellingaproducttosellingaservice—somethingthatdovetailednicelywithourbusinessmodel.Thestudentswerechargedwithselling“greenconsulting”services,andtheywereresponsiblefor researching, analyzing, and offering suggestions on how to solve each ofsalesforce.comdepartments’environmentalchallenges. It’s been incredible to witness how the students run their own businesses.During one of the recent programs, something extraordinary happened. Thebusinesses were selling decorated potted plants, and although all the pottedplantslookedhandmadeandfairlysimilar,oneoftheteamsdecidedtosellthemat $25 apiece—about $10 more than the other teams. We didn’t want todiscourage them, but we suggested they consider lowering the price becausetheircompetitors’verysimilarproductwaspricedsomuch lower.Samuel, thecompanypresident,wasadamantaboutnotwantingtochangetheprice.Hesaidthatbasedonthedemographicsandsalaryrangesofthepotentialcustomersinthebuilding,thepricewassomethinghistargetaudiencecouldafford.Wedidn’tpushit,andtheywenttomarket.Partofthemarketingplan,thecompanythenrevealed, was to give a percentage of its profits to the environmentalorganization NativeEnergy. The result: it not only sold its products forsignificantly more than any of the other companies but also sold out faster,servingasaninterestingcasestudyforallofus.

We enjoy sponsoring this program and love the energy these young people

bring into our office.Although it’s undeniably fun,we take the program veryseriously,andweexpectthestudentstooperateonatrueprofessionalbusinesslevel. Students arematchedwith employeeswhohelp thembuild professionalandsocialrelationshipsandassistwithschoolworkandcollegeapplications.Theresultofhavingsuchhighexpectationsofthementeeshasbeenastounding.Thestudentsgainbusinessandtechnologyskillsaswellastremendousconfidence. Thereisameasurablegoaltotheprogramaswellinhelpingthestudentswincoveted internships, positions that are notoriously difficult for these teens tosecure in their local communities.We teach them how to sell themselves bywriting resumes,perfecting theirpitch,networking,negotiating, andpracticinginterviews.Morethan50percentoftheparticipantsarematchedwithinternships

at local businesses. On average, about thirty interns work in salesforce.comofficesaroundtheglobeeachsummer.BizAcademyisthevehicleweusetohireall our high school-age interns, andmany staywith uswell into their collegecareers.Forexample,CristinaLam,oneofourfirstBizAcademygraduates,nowworks for the foundation as a community involvement coordinator. JessicaHuang,who’s beenwith our professional services department since 2006, hasbeen so valuable that we created a way for her to work year round whileattendingschool.

We’ve hosted fifteen academies around the world, and our first class of

graduates is now halfway through college. Many, including Cristina, are oncollegescholarshipsprovidedby the foundation. Inother instances,graduatingfrom the program has been a springboard for a permanent job. Take EdmondAsante, a participant in our UK program, whom we met through one of ournonprofit partners, Landmark Training, which works with young people whohaveleftschool.WecollaboratedwithLandmarkonaBizAcademyprogramtointroduce young people to the possibility of looking for employment beyondtheirimmediateneighborhoodsupermarketsandstores.Edmondwashiredasatrainee at HBV Enterprise, a consultancy in London that helps entrepreneursstartandgrowtheirbusinesses.HegainedconfidenceandexcelledatHBV,andbeforelong,hewasofferedafull-timesalariedjob.

Play #71: Share Your Most Valuable Resources—Your ProductandYourPeople

The decision to give 1 percent of our profits in the form of product donationwasn’t our idea. It camedirectly from requests fromnonprofits.Less than sixmonthsafterweofficiallylaunchedourcompany,wegotacallfromagroupofstudentsatBusinessToday, the largeststudent-runmagazine in thenation.Thenonprofit, originally started in 1968 by three Princeton undergrads (includingSteveForbes)andruneachyearbyanewteamofgraduatingseniors,askedusfor a free subscription to salesforce.com. They were in search of a way tomanage their data amid the constant management changes, and thoughtsalesforce.commightbetheanswer.

Aroundthesametime,anemployeeinmarketingcametousandrequesteda

salesforce.com subscription for Rainforest 2Reef, a conservation group thatprotects part of Mexico’s 1.8-million-acre Calakmul Biosphere Reserve fromdeforestation.Theemployeehadbeenvolunteeringatthenonprofitandbelievedthat our service could help it manage its pipeline and communicate with itsmembers more efficiently. We donated our service to help the organizationautomatically update its records and trackhowpeople find it.This resulted inimmediateincreasedtraffic.“Whatweusedtogetinonemonth,wenowmightseeinoneday,”saysCheriSugal,Rainforest2Reef’sexecutivedirector. As the salesforce.com application became more sophisticated and morecustomizable, its relevance to nonprofits grew exponentially. We know thatintroducing these groups to a technology that is easy to use can dramaticallyimprove how theymanage their information and canmake a difference to thebottomline.(Rainforest2Reefhasseenafivefoldrevenueincreasebyusingtheservice!) We formally began our 1 percent product donation program by givingsubscriptions of the service to organizations that we already supportedfinancially, such as WITNESS, a nonprofit that uses video and onlinetechnologiestoexposehumanrightsviolations.Wesearchedforothernonprofitsinterested in using cutting-edge technologies to better manage their

organizations. Many approached us for subscriptions as well. By 2008, morethan five thousand nonprofits across fifty-two countries, including the RedCross,StanfordUniversity,UnitedWay,TeachFirst,MicroloanFoundation,andAshoka,wereusingthedonatedapplicationandoperatingmoreefficiently. It’sbeenamazing toseewhat theseorganizationshavebeenable toachievewith the salesforce.com platform. The Children’s Aid Society CarreraAdolescent Pregnancy Prevention Program, which educates teens about theconsequences of sexual activity, was able to convert from a paper-basedenvironment to an electronic one through salesforce.com, which reducedturnaroundtimes,improveddataintegrity,andhelpedsavecountlesstrees.TheGoogle Foundation has used the application to track every facet of its work,including thedistributionofmore than$150million ingrants toorganizationsthatareaddressingtheworld’smostpressingproblems. The UN World Food Programme, the international community’s frontlineagencyinfightinghunger,usedtheservicetoimprovethemanagementofdonorrelations activities and streamline fundraising operations—enabling it to raisefundssignificantly fasterandallowing theorganization’sofficers to save time.“Ourdonorrelationsofficersneedtofocustheirtimeandattentiononactivitiesthat directly raise funds for the poor,” Corinne Fleischer, the chief of donorrelationsfor theUNWorldFoodProgrammeinAsia, toldus.“Putsimply, themoretimewefocusonnewpartnerships,themorepeoplewecanfeed.”

AnyoneCanStartanIn-KindProductDonationProgramOnewaytogetyourphilanthropicprogramsstartedeasilyistobeginbyprovidingyourproductorserviceforfreeoratadramaticallydiscountedratetononprofits.Gatherateamofpeopletothinkcreativelyabouthowyourproductorservicemighthelpanswerasocialproblemormoveanonprofit’smissionforward.

Play#72:InvolveYourPartners,YourVendors,YourNetwork

Our partners, experts in building and deploying new technologies, witnessedhowwewereleveragingourresourcesforthecommunity,andbeganaskingushowtheycouldgetinvolved.In2002,EricBerridge,thecofounderofBluewolfGroup,anon-demandsoftwareconsultancy,calledusforadviceaboutbuildingacorporatephilanthropicprogram.Atfirstthecompanyparticipatedinvolunteereventswehadplanned, suchasdelivering turkeys to soupkitchensduring theholidaysorworking ina shelter forwomenwhowere thevictimsofdomesticviolence. By joining forces, we were able to accomplish more. There wasanotherbenefit in thatwegot toknowoneanother—something thathelpeduscollaboratebetterasbusinesspartners. Bluewolf eventually established its own 1-1-1 model. It’s become animportantpart of the company, and, likeus,Bluewolfuses its foundationas arecruiting tool.“Itattracts the rightkindofpeople,”Ericsays.“Someonewhodonatestheir timehastobewillingtogoaboveandbeyondthecallofduty—andthesearethetypesofpeoplewhobuildupanentrepreneurialculture.” Bluewolf’s two hundred employees give back in a variety of ways, fromhelpingseniorcitizenswritetheirresumestotutoringhighschoolstudents.Asatsalesforce.com, the Bluewolf staff drives the program. It was the employees’ideatoestablishascholarshipfundthatallowstwostudentseveryyeartoattenduniversityandstudytechnology.Bluewolfhasseenbenefitstoitsbusiness,too.As a consulting company, it sells its skills at integrating salesforce.com intodifferent types of companies. It uses its pro bono experience of rolling outsalesforce.comatthirtyNewYorkCityschools(tohelpthemtrackattendance,test scores,anddisciplinaryactions)asacallingcard.“Ican take that story toany company,” Eric says. “They know ifwe did that successfully,we can doanything.” It’sobviousthatweamplifythedifferencewearetryingtomakeifweincludebusiness partners like Bluewolf. Tapping the power of collaboration andleverage,wemade this a formalpursuitwith thePowerofUs, aprogram thatinvitesourpartnerstoprovidedonatedordiscountedservicesortodevelopnewfunctionalityforthenonprofitsector.Thegoalistomakeiteasyforthemtoget

involvedandforustoharnessthepotentialpowerofourentireecosystem. It’s working. CRM Fusion, for example, built an application that allowssalesforce.com to work with PayPal, which allowed organizations likeRainforest2Reeftoreceivedonationsautomatically—eliminatingtheneedtopayanyone to input any data manually. Theikos (now part of Astadia), one ofsalesforce. com’s implementation partners, got the system for the UNWorldFoodProgrammeupandrunning,customized,andreadytoserviceitsoperationsacrossAsiainlessthanfiveweeks.Anothersalesforce.compartner,SwiftRiverConsulting, created custom objects in salesforce.com for Wardrobe forOpportunity,anorganizationthatprovidesfreeinterviewandworkingwardrobestolow-incomejobseekers,sothatitcouldtrackthenumberofclientsitservedaswellasmanagetheworkofitsvolunteers. Oneofthebestpartsofmyjobhasbeenintroducingthisconcept todiverseaudiences. A number of years ago, I was speaking about our programs at aStanford lecture hall where two young entrepreneurs, Larry Page and SergeyBrin,weresittinginthefirstrow.“WearestartingacompanynamedGooglethatwilldonoevil,”theysaid.(Ihadneverheardofit.)“Wewanttodothis.”Andtheydid. “Google.orgwas thrilled to copy, emulate, and ‘steal’ thewonderfulsalesforce.commodelof1percentequityand1percentprofit,”saysDr.LarryBrilliant, the formerexecutivedirectorofGoogle.organd thepresidentofTheSkollFoundation’sUrgentThreatsFund.“MarcBenioffisavisionary,andLarryandSergeyhavecontinuallyacknowledgedhimastheinspirationfortheirplanforGoogle’sphilanthropy.” Thismightbeourgreatestcontribution.Google.org isnowworthmore than$2billionandismakingarealdifferenceinaddressingsomeoftheworld’smosturgentproblems.Weareequallyproudof inspiringothercompanies, includingNetSuite,iRobot,LiveOps,andPalmOne,whicharefurtherdevelopingasimilarmodel.CollaborationandleveragehaveproventhePowerofUs.

Play#73:LetEmployeesInspiretheFoundation

From the foundation’s earliest days—actually from the time it was just aseedling of an idea—we determined that for it to be successful, it had to bedriven by the interests of our employees. Building a foundation that reflectedtheirpassionswastheonlywaytheywouldtrulyembraceitastheirs.Therearemany examples that demonstrate that they have. Take, for instance, whathappenedafewyearsagowhenIopenedourannualcompany-widemeetingforquestionsandSueAmar,apremiersupportanalyst,stoodupandasked,“Whatarewedoingabouttheenvironment?” Itwasagoodquestion,andIknewtheanswer,butinsteadofgivinghersomehalf-baked information on our recycling programs and initiatives we wereconsidering,Idecidedtoencouragehertocontributeherideas.“I’mnotsure,”Isaid.“Youhavesixpaiddaystofigureitout;I’llsupportyou.”IsuggestedthatSuespeakwithSuzanne,thefoundation’sexecutivedirector. Notlongafterthemeeting,Suecamebacktomewithaplanforsaleforce.comtoreduceitscarbonfootprint.ThesediscussionsbegantotakeplacearoundthetimeofthereleaseofAnInconvenientTruth,theeye-openingfilmthatcapturesAlGore’scrusadetohaltglobalwarming.Manypeopleinourcompanyralliedbehindthecause.

Althoughwewereenergizedabouttheeffort,wewerehardlyexpertsinthis

area.Wesearchedforleadersinthisfieldandengagedrespectedorganizations,includingCleanAir-CoolPlanet,NativeEnergy,andConservationInternational,forguidance.Withthesepartners’help,wefoundawaytoneutralizetheexistingeffectofourgreenhousegasemissionsfromouroffices,datacenters,andtravelactivity through investing in renewable energy projects. These investmentshelpedfinancetheconstructionofseveralspecificprojects,suchasawindfarmrunbytheRosebudSiouxTribeinSouthDakota,afamilydairyfarmmethaneenergyproject, andan international carbon sequestrationproject in theMakiraforestofMadagascar. This was a first step in becoming environmentally responsible. There areadditional investments we’ve made—much closer to home—that are just as

important. We’ve developed local programs to support recycling andcomposting,andanefforttoassessofficeequipment,includinglookingatwaysto reduce paper waste. We’ve also begun to subsidize commuter travel, andcreatedincentivessuchasaBiketoWorkgrant,inwhichwedonateadollartoalocalnonprofitorganizationforeverymilebiked.

Inaddition,weestablishedtheEarthCouncil,anentirelyvolunteer-rungroup

thatexaminesgrassrootschangesthatcanbemadewithinthecompanytohelpthwart the climate crisis. It likely comes as no surprise that the leader of theEarth Council during its first yearwas SueAmar. Later, aswe expanded oureffort, we assigned Sue to a new role as the first sustainability manager atsalesforce.com, tasked with helping our company establish an environmentalmission statement and working to integrate policies that support sustainablebusinesspractices. Thisisnottheonlyexampleofouremployeestakinginitiativeandownershipof thecompany’s efforts tomakeadifference. In lateAugust2005,HurricaneKatrina,oneofthedeadliesthurricanesinU.S.history,devastatedmuchofthenorthcentralGulfCoast.ConsideringthatweareatechnologycompanybasedinSanFrancisco,itseemedthatourbiggestcontributiontoreliefeffortswouldbe financial. In fact, we raised more than $1 million, but that’s not all thathappened.

Within twenty-four hours of the levee breaking in New Orleans, seventy

employees gathered on an impromptu conference call to discuss ways tocombine the different Katrina survivor lists and share vital information. TheybuiltasearchabledatabasecalledthePeopleFinderproject,purchasedtheURLkatrinalist.net, and created a Web site that accessed the database. Thesalesforce.comemployeesconceivedoftheprojectonFriday,September2,andthe initialdataentrywascompletedwithmore thanninety thousandentriesbyTuesday, September 7. They collaboratedwith other foundations to build anddeploythetechnology,andultimatelydozensoftechnologistsandthousandsofvolunteers on the Internet helpedmake it happen. The list eventually grew tomorethan650,000entries,andhasservedmillionsofsearches. Our three thousand employees have donated more than one hundred fiftythousandhours to thecommunities thatweserve.Ofourglobalworkforce,85percent is active in volunteering. (The national average of individuals who

volunteeris26percent,accordingtotheBureauofLaborStatisticsoftheU.S.DepartmentofLabor.) These people—people who are inspired to create change, people who areconfidentthattheworktheydomatters,peoplewhoarededicatedtosomethingbigger than themselves—are the best employees in the world. These are thepeople every company should vie to hire and work to retain. These are thepeople who always go a step beyond and whose work builds an exceptionalcompany.

HowtoBuildanEmployee-InspiredFoundationStartfromtheVeryBeginningAllnewhiresatsalesforce.comlearnaboutthefoundation—andparticipateinavolunteeractivity—duringtheirnew-hireorientation. CanvassEmployeesAboutTheirInterestsWeaskemployeeswhattheywanttofocuson,whichgeneratesasenseofownership.EstablishaFormalStructuretoElicitEmployeeInvolvementWesetupemployee-ledfoundationcouncilstoserveasindependentadvisorygroupsofsalesforce.comemployeestothefoundationforeachofour1percents—product,time,equity—aswellasourOnewiththeEartheffort.MaketheFoundationPartofYourCompanybyMakingItVisibleAtsalesforce.com,foundationemployeessitwithcompanyemployees.Mostofourcompanymeetingsincludereportsonourcommunityserviceprojects.RecognizetheEffortsofEmployeesEveryyear,wehonorafewexceptionalpeopleineachregionwhohave

goneaboveandbeyondthecallofduty.EachVolunteeroftheYearrecipientisawardedagrantof$500inthewinner’snamemadetoanorganizationofhisorherchoice.Wealsosendthank-youe-mailstovolunteers—andcopytheirmanagers—afterwereceivefeedbackfromnonprofitorganizationsaboutthedifferencethesevolunteershavemade.FostertheFoundationinGoodTimesandBadIt’sdifficulttocontinuetoinvestinthefoundationindarktimes,butit’snecessary.Onetimeweheldavolunteeringeventonadaywhenwewereforcedtohavesomelayoffs.Therewasdiscussionastowhetherornotweshouldcanceltheevent.“No,peopleneedthismorethanever,”Isaid.“Thiskeepspeopleconnectedtous.”Cancelingwouldhavesentthewrongmessage.Wewerenotgoingtoturnourbackonthecommunitywhentimesweretough.LetItEvolveandChangeEmbracedynamismineverythingyoudo!Note:Foreverythingyou’llneed,fromadviceonstructuringaprogramtosecuringboardalignmentandresources,suchasjobdescriptionsandsampleequitydocuments,pleaseseewww.sharethemodel.org.

Play#74:HaveYourFoundationMimicYourBusiness

In areas all over the globe, the salesforce.com application and platform haveaffectedhownonprofits, includingHabitat forHumanityandSusanG.KomenfortheCure,runtheirorganizations.Thedemandfortheservicehasalsoledtoanew business initiative at salesforce.com and a new opportunity for thefoundation.Our1percentproductcontributionspecifiedthatwegivenonprofitstensubscriptionsforfreeandofferanyadditionallyrequestedsubscriptionsatan80percentdiscount.Thereweremanynonprofitorganizations,suchasStanford,thatwereusingtheserviceandunawareofthediscount.

Inanefforttobuildawarenessaroundthisprogram,wecreatedagroupwithin

thecompanytofocusexclusivelyonhighereducationandlargeNGOaccountsthatneededmore than tendonatedsubscriptions.Although theseorganizationswerepayingadeeplydiscountedratefortheservice(80to90percentofthelistprice), the sheer number of paying customers and users created significantrevenue. On average, the total amount of revenue from higher education andlargeNGOsamountedtoapproximately$2millionayear. We decided to do something radical: shift the group that focused on highereducation and large NGOs—and the revenue they generated—from thecorporation to thefoundation.Thischangeofferedan incredibleopportunity toensurethefoundation’ssustainabilityandexpansion.

Most foundations do not operate this way; instead of building (non-

fundraising-related) programs that generate revenue, they determine that theycan spend only a certain percentage of the endowment (usually 5 percent)annually.Althoughthatmakessenseasawaytosustaintheendowment,itlimitsthe types of projects a foundation can afford to fund, and limits growth. Byinstitutinganannualspendingcap,wedeterminedthatourendowmentcouldlastfifteentotwentyyears—butitwouldnotguaranteeperpetuity. Innovative nonprofits have historically achieved true sustainability byembracing a revenue-generating business model. Since 1917, the Girl Scouts

organizationhasheldanannualcookiesale,whichusesthenonprofit’sresources—anarmyofenterprisingyoungpeople—tosellcookies.Theorganizationhasfurtherextended its reachbypartneringwith suchcompaniesasNestlé,whichchurnsSamoas,Tagalongs,andThinMintcookiesintoitsEdy’sicecreamanddirects a portion of the proceeds to the Girl Scouts. Another example is theNationalGeographicSociety,anorganizationfoundedmorethan120yearsagotoeducatepeopleabouttheworld.TheSocietycollectedmembershipduesandlaunched the magazine as a giveaway to members to spur enrollment. Later,NationalGeographicsupplemented that revenuestreamwith itscablenetwork,films, and DVDs, making it the largest nonprofit scientific and educationalinstitution in the world and a billion-dollar business! By blurring the linesbetween nonprofit and for-profit models as these organizations have, ourfoundationwillincreaseitsabilitytosustainitself—andmakeagreaterimpact.

The foundation has grown in tandem with our company. One of our most

exciting achievements was reaching one million subscribers—a milestone forour company and the SaaS industry. To celebrate, we donated a total of $1milliontotennonprofitorganizations. Since inception we’ve given away $14 million in grants to deservingnonprofits,butwehavegainedmuchmore.Thefoundationhasmadeusabettercompany.Ithasservedasa tool forcollaborationwithothercompanies. Ithasmade our employees more fulfilled, more productive, and more loyal. It hasmadeallofushappier.Ididnotknowthiswouldbethecase,butourcustomersalso have greater appreciation for us because of our philanthropic work.Customers have rallied behind our cause, arriving at our conferences early tohelpbuildplaygroundsandpaintschools(evenintherain).Thisisnotwhywedo it, but theopportunity toworkon somethingbigger togetherhaspositivelyaffectedourbottomline.

When I reflecton thepast tenyears, I see thatourgreatestcontributionhas

been in creating a population of change agents. I’m proud of our employees,who have broadened their lives and the lives of young people, from at-riskstudentsinSanFranciscotoyounggirls inAfrica.We’vebeenexcitedtohaveourpartnersjoinourforcesandseeemployeesgooffontheirownandtakewhatthey’velearnedatsalesforce.comwiththem.Thisisawaywe’vefoundtocreatealegacy.

PART7

TheGlobalPlaybook

HowtoLaunchYourProductandIntroduceYourModeltoNewMarkets

Play#75:BuildGlobalCapabilitiesintoYourProduct

Veryfewcompanies launchwiththemandate togoglobalfromthebeginning.Thegeneralbeliefisthatinordertoprosperinternationally,astartupmustfirstestablisharock-solidcommercialbaseathome.

Although Ididnotwant to acthastily, Iwasnotwilling towait for long to

grow salesforce.com beyond its Silicon Valley roots. The need for CRM isuniversal, so I thought we would be successful everywhere. Internationalcompanies desperately needed our service, as did geographically scatteredorganizations that had to function as a single, cohesive unit. My perspectivetowardoverseasexpansionwasthattherewaslittletimetowaste. We had considered the international potential of our service from the veryearliestdaysofourcompany.WehadbuilttheSalesforceapplicationsothattheusercouldconfigureittoanycurrencyandalmostanylanguage(evencharacter-based languages) with just the click of a button. This on-the-fly translationfeaturewas included in the earliest release, and although itwas radical at thetime,weneverchargedanythingextraforit.ThisideastemmedfrommyworkatOraclewithprincipaltechnologistYoshiOikawa;itdemonstratedthatglobalcapabilitieswerenotanadd-onfeaturebutanintrinsicpartofourservice.

Remember,though,thatsimplyhavingaWebsiteinanotherlanguagedoesn’t

meanyouhaveapresenceinthatmarket.Translationmustpermeatethroughoutthewholeorganization:severalclicksdownontheWebsite,inthehelptext,andwiththepeopleansweringthephones.Alsodon’tforgettorelyonlocalexpertsforassistancewith idiomaticandcolloquial translation.Reportedly,whenKFCenteredChina,itsadvertisingslogan“finger-lickin’good”wasmistranslatedintoChinesecharactersthatmeant“eatyourfingersoff.”Workwithbothexpertsandcustomerstoensurethatalltranslationmakessense.

Play#76:InjectLocalLeaderswithYourCorporateDNA

Our international foray began in February 2000 when Fergus Gloster, DavidDempsey, and JohnAppleby, executiveswhowere runningOracle in Ireland,read aBusinessWeek article about salesforce.com and e-mailedme: “What areyoudoingaboutEurope?” Iwasalreadyfocusedonbuildinganinternationalpresence,andithelpedthatnowanopportunitypresented itself in the formof a team that I trusted. I hadpreviously collaborated with these executives on a philanthropic program inBelfast. After months of discussions about building the Europeanmarket, wehiredthisteamandbroughtthemtoSanFranciscotomeeteveryoneandreallyexperiencesalesforce.com.WehadoutgrownourspaceintheRinconCenter,butournewofficesweren’t readyyet. In themeantime,our sales teamhadsetupshopinabasementoffice.Itwasn’tideal—therewasadreadfulsmellofgarbageandabadmouseproblem.(RealestateinSanFranciscohadbecomesoscarcethat we were left with no other option.) Unfortunately, it was an especiallymalodorousgarbagedaywhentheEuropeanteamcametovisit. TheIrishexecutivescametoourofficewearingsuits,buttherestofuswerein our usual uniform of Hawaiian shirts, shorts, and baseball caps. Fergusseemed shocked by our informal attire and the NO SOFTWARE doormatadornedwithdolphins.HewasequallyunnervedbythefactthatIwastrainingKoa,whowasjustapuppy,andhadinstalledafirehydrantinmyofficeforthispurpose. Koa used it successfully for the first time during the visit. I was soexcited about Koa’s success that the meeting broke up temporarily. “Oh mygoodness, what have we gotten ourselves into? This is too California-esque,”Ferguscomplained.

I figured thatFerguswouldrecover fromthiscultureshockquicklyenough.

Besides, we did pretty much everything differently at salesforce.com, so thisservedasagoodintroductiontothewayourbusinessworked.Icouldn’twaittoseewhatnewideastheywouldtakebacktoEurope.

Play#77:ChooseYourHeadquartersandTerritoriesWisely

AlthoughdogsanddolphinsnevermadeittotheofficeinDublin,ourapproachto building our company inEuropewasn’t that different from the approach tobuilding it in the United States. We centered our sales operations with acorporate sales team (what other people call telesales) in one city to leveragetrainingopportunitiesandbuildcriticalmass,justaswehaddoneintheUnitedStates.Atthetime,Dublinwasaprimeplacetoestablishourheadquarters.TheEnglish-speakingcitygaveusafootintotheEuropeanmarket,andthecorporatetaxrateof12.5percentmadeitadditionallyappealing.WewerehardlythefirstU.S.companytofindDublincompelling;Oracle,Microsoft,PayPal,andeBayalsorootedthemselvesinIrelandforthesereasons. WerentedasmallofficeandbegantobuildatalentedcorporatesalesteambyrecruitingexperiencedpeoplefromOracle,Dell,andothergreatcompanies.(Wepledged to build a field sales teamonce corporate sales gained initial revenueandmarketshare,justaswedidintheUnitedStates.)Theteamwasmadeupofnativespeakers:whenaGermancustomercalled,hethoughthewasspeakingtosomeone in Frankfurt; when a French customer called, she believed she rangsomeoneinParis.(Weensuredthatcallersgottotherightemployeebyhavingthem call into local phone numbers, which were routed to our central phonebank.Wealsousede-mailandonlineformstocaptureleadsandthenrespondedtotheseonlineinquiriesinthelanguageoftheinquirer.) This systemwentagainst thecurrentmodelof sellingenterprise software inEurope.Atthetime,itwasbelievedthataCRMcompanywouldneverbeabletobuildbusinessinsuchcountriesasFrance,Spain,orSwedensellingoverthephone. The traditional model was to build a presence via a network ofpartnerships. Itwas the partners, operating in different countries,who did thegroundworktowincustomersandmarketshare.

Thatstrategyhasmerit inasmuchaspartnerscanleveragelocalrelationships

andthepartnershipstructurecanhelpinsulateacompanyagainstcashissuesandforeignexchangerates.Butitwouldn’tworkforus.Partnersarepaidonmargin,whichkeepsthepriceshighforcustomers.Thatwentagainsteverythinginour

model. Besides, we really had no choice. When we started, there was noestablished European partner network that focused on on-demand, SaaS, orcloudcomputingsolutions. Our biggest challenge in Europewasn’t our unconventional selling strategythat initially relied on selling over the phone, but the fact that the on-demandmessagewasstillradicallynew.Onceagain,wehadtoeducatethemarketaboutthemodelandcreatean industry.Businesses in theUnitedKingdomwere justbeginning to be introduced to concepts we had discussed domestically someeighteen months before. France was two to three years behind in terms ofawareness.

The good newswas that Europewas receptive to ourmessage. Themarket

lovedtheDavidversusGoliathstrategy,andwelaunchedthebusinessinEuropebyusing the same tactics thatdictatedour strategies in theUnitedStates: freetrials, building relationships with members of the press, and encouragingcustomerevangelism.

ThinkLikeaStartUpAgoodguidelineforglobalstrategyistothinkabouttheearlystartupdays.Recallhowyougotyourfirstcustomersandhowyoutackledearlychallenges.Evenconsiderusingtheoriginalmessaging—notthecurrentmessaging.Youcan’tmarchintoanewcountryandsimplyreplicatewhatyouarecurrentlydoingathome.It’spossiblethatthenewmarketisn’tmatureenoughyet. Oneofmymentorsinglobalbusiness,ChikaraSano,theformerCEOofOracleJapan,demonstratedthepowerofthisideawhenhecommittedtofocusingOracleJapanexclusivelyonbecomingnumberoneindatabasemanagement.ThecompanyhadalreadyachievedthatdominanceintheUnitedStatesandhadevolvedtobuildnewapplicationsandaconsultingbusiness.AlthoughtherewaspressuretoattempttointroducetheselinesofbusinessinJapantoo,Sano-sanstucktowhatOracledidwhenitfirststarted,andultimatelybuiltaverysuccessfulbusinessinJapan. Inthinkinglikeastartup,abidebythesethreerulestohelpsaveinfrastructurecosts:

1.Translatetheproductondayonetothemajorlanguages,butonlyaddadditionallanguagesascustomerdemandbuilds.(InEuropewe’vefoundmerittothe“80-20rule,”whereby80percentoftherevenuecomesfrom20percentofthelanguagesspokenintheregion.Althoughweconsideredstartingoperationsallover,weboileditdowntotheUnitedKingdom,Germany,France,Spain,andtheNordiccountries—andkeptourfocusthere.)

2.Buildabedrockofsmallcustomersineachcountrybeforehiringlocalemployees.Thisprovesthatthemarketisreadyandthecommitmentisworthit.

3.Don’toverhire.Employmentlawsoverseasarecomplicatedandlargelyfavortheemployee.Whenhiringsalesandcustomerservicepeople,adheretothesamestandardsthatyouwouldinthehomeoffice.

Play#78:BoxAboveYourWeight

SimilartothewaybusinessinitiallyunfoldedintheUnitedStates,mostofourinitial business in Europe stemmed from new technology companies.No dealwastoosmall.ThefirstcheckmadeouttotheDublinofficewasfor£35.00.TheteaminEuropeframeditandwentouttocelebrate.TheEuropeanoutpostwoncustomers across the United Kingdom, Germany, and France. Afterapproximatelyoneyear inbusiness,wemovedfrom the four-thousand-square-footofficespacewherewestartedtoPowerscourtHouse,anexceptionalestateon theoutskirtsofDublin.TheGeorgianbuildingdatesback to theeighteenthcentury. Although I admired it, I wondered if an ancient stone castlewas theappropriatecommandcenterforourfuture-focusedmission.Worse,thebiggatesattheentranceremindedmeofsomethingoutofaMontyPythonfilm.

Therewasareasonwewerethere,however.Atthetime,beingadot-comwas

a serious liability. Itwas imperative thatwe appear reputable and established.The new location was widely known and respected—values with which wewantedtobeassociatedinthismarket.Itworked.Ourmovetothisstatelylocaleattractedalotofpublicity.Onceagain,startupsalesforce.comfiguredoutawaytostretchitsshadow. Later,in2006,whenweoutgrewPowerscourtHouse,werippedapagefromthis playbook and moved into another carefully selected space—an officebuildingnextdoortoMicrosoft.

Play#79:ScaleWithoutOverspending

Webegantogrowwithbiggercustomers,andrecruitedgloballeadershiptohelpusbuildanenterprisesalesteaminEurope.Weexpandedthesalesorganizationwith carefully planned field offices. We were not influenced by the massivemultiheadquartersmentalitythatdefinedtherestoftheindustry.Wedidn’thavemuchrevenueyet,so itmadesense tospend lessonofficespaceandmoreonmarketingandhiringsalesprofessionalstoselldirectly.

Although our headquarters were in Dublin, the vast majority of our initial

customers,presscontacts, andanalystswere inLondon,and Iwondered ifweneededmoreofaphysicalpresencethere.BecauserealestatewassoexpensiveincentralLondon,wesetupaverysmallandbasicofficeinCamberley,Surrey(aboutthirtymilesoutsidethecity).Thisallowedusahomebasetobuildteamspirit,but itwasn’tnecessarily themostconvenient location,nordid it radiatethe right image to reinforce our brand. Since our early days in Europe, I hadbeencampingoutintheMandarinOrientalinLondonandusingthehotelasavirtual office to meet customers. From eight in the morning until midnight,stakeholderswouldbeinandoutofmyhotelsuite.Wewereabletodothisonlybecause we had Internet-based software. In the old on-premise model,companiesneededtohaveexpensivecomputers(servers)closetothecustomersto run thecomplexsoftwareand todo thedemos, forcing them tobuyor rentexpensivecentralLondonoffices. Even with our new office outside London, we continued to operate out ofhotels,whichsavedusmoney,andbyselectingworld-classvenueswewereabletoprojectanimageofsuccess.Wecontinuedthiscycleformanyyearsanduseitto this day as we extend to new markets. (Eventually, I moved out of theMandarin.Thebedwasuncomfortable,Imissedhome,andwegrewbigenoughtowarrantacentralLondonofficeofourown.) As we gained customers across Europe, we hired employees who workedfromhome(andhotels),andweopenedsmallofficesinGermany,Spain,Italy,andothercountriesoncewehadestablishedenoughdemand.

Play#80:UnderstandSequentialGrowth

We have made strategy changes and added new leadership to our Europeanbusiness, but overall,we have continued to run the Europe,Middle East, andAfrica (EMEA) region the same way we do in the United States with abifurcated business model that has corporate sales (selling to the smallercustomers) and enterprise sales (selling to the largest customers) running asalmost separate businesses. This is not the only similarity. In fact, we havedeterminedasequentialprocesstogrowththatweinitiatedintheUnitedStatesandadhere to innearlyeverymarketweenter.Thesystemincludesenteringacountry, establishingabeachhead,gainingcustomers, earning local references,and thenmaking hires.Next,we seek partners, build add-ons, and grow fieldsales. It is a system that operates as a machine with distinct cogs that worktogether.Thebestpart is that it isan iterativeprocess thatworks inalmostallmarkets;orasDougFarber,who’sbuiltourmarketsinAustraliaandAsia,says,theabilityto“rinseandrepeat”isthekeytoglobalgrowth.

Play#81:UpholdaOne-CompanyAttitudeAcrossBorders

The Internet was making the world more homogeneous when it came to ITneeds,andtheservicesweweresellingwerenotaffectedbyglobalboundaries.Therefore,itwasourphilosophytokeepasmuchofourmodelintactaspossibleandthenmaketweaksasnecessary.SteveGarnett,thechairmanofEMEA,likedto say that our mantra was to build saleforce.com in Europe, not to buildsomething entirely new called saleforce.com Europe.We found that a sharedvision across borders became the connective tissue of our geographicallyscatteredcompany. Our U.S. brand is about success, scrappiness, and customer centricity. OurinternationalPRandmarketingstrategiesembracethosesamevalues.Similarly,our brand is about our unique 1-1-1 integrated philanthropic model, so thefoundation has a presence in each of our global offices. Staying true to thosevalues and maintaining a consistent vision have allowed us to extend ourmessage into new markets and even change the way enterprise softwarecompanieswork.

Admittedly,noteverythingaboutourbrandwasimmediatelyorentirelywell

received. Our European team was less than eager to participate in the yogaclassesortogetmassagesatoffsiteworldwidestrategymeetings.TheHawaiianshirtsweredifficultfortheEuropeansaswell.IboughttheteamshirtsatTommyBahamaso that theycouldparticipate inAlohaFridaysduring theirU.S.visit,and theypledged tocontinue the tradition in Ireland.Fergus later toldme thatwearingtheseshirtsduringthedayinDublinmadehimlookasifhe’dbeenatastagpartyandforgothiswayhome.“HawaiianshirtsbelongsignificantlywestofIreland,”hedecided. Perhaps not everything about salesforce.comwas transferable to Europe. Itwasagoodlesson—andonethathelpedusprepareforbuildingasalesforce.comthatwouldsucceedinJapan.

Play#82:FollowStrategy,NotOpportunity

AroundthetimewefirstexpandedintoEurope,wealsoembarkedonbuildingapresenceinJapan.IhadlovedworkinginJapanwhenIwasatOracleandhadalwaysconsideredsalesforce.com’sinternationalfocusonJapanahighpriority.It was the second-largest IT market in the world, and I knew that Japanesebusinessescouldbenefitfromourservice.

Wehadlongbeenpreparedtoenterthismarket.Salesforce.comhadreleased

aJapaneseversionfortrialuseatthesametimetheproductwascommerciallylaunched in theUnited States.We also invested in hostingAsian visitors andsharingourEndofSoftwarevisionwiththem.ThosemeetingswereafantasticwaytolearnaboutthemarketinJapanandtheneedsofJapanesebusinesses. AlthoughwehadoureyeonJapan,itwasn’tuntilwewereapproachedbyalargeJapanesecompanywithanopportunitytoresellourserviceintheJapanesemarketthatwesuddenlyhadanimmediateimpetustoexplorebuildingcapacityin this country.Theoffer came fromavery famous company,but I knew thatdidn’tnecessarilymeanthatthiswastheappropriatewaytoentertheJapanesemarket.

IcalledChikaraSano,theCEOofOracleJapanandoneofmymentors,for

guidance. Sano-san had led Oracle’s success in Japan and helped create themodel for partner engagement that was adopted by Oracle globally. Heimmediately voiced concern over salesforce.com establishing a close alliancewithsuchalargeandestablishedcompany.“Ifyoustartofftoodeeplywithoneplayer,thiscanlimityouroptionsdowntheroad,”hewarned.Oracle’ssuccess,heremindedme,wasbasedonitsabilitytopartnerwithallcompanies. Onceacompanygetssometraction in theUnitedStates, it’snotuncommonfor an overseas corporation to express interest in starting operations in itsterritory.Alwaysbeopentoopportunity,butdonotsignthefirstone.Itisbetterto act than to react. Further, steer clear of “exclusive” partnerships. Althoughsuchapartnershipmightofferquickentry intoanoverseasmarket, it canalso

severelystymiegrowth.(Youwillbelimitedifyourpartnerisn’tgrowingattherateyouwant.)Thewrongpartnercanbeaparasitethatdepletesyourassets.

Play#83:GoingFar?TakeaPartner.GoingFast?GoAlone.

Although the partner deal on the table was not the right agreement forsalesforce.com, we understood that the right partner agreement could help usestablishasuccessfulpresenceinthedifficultJapanesemarket.U.S.companiesneed the leadership of local experts to steer through Japan’s cultural,communication, and business practice issues. Sano-san suggested we connectwith Allen Miner, the CEO of SunBridge Corporation, an incubator of ITstartupsinJapan,andconsiderthecompanyasajointventurepartner.

IfoundtheopportunitytopartnerwithSunBridgeverycompellinginasmuch

asIalreadyknewandtrustedAllen.HeandIfirstmetinMay1986whenwesatnext to each other at an orientation for new Oracle employees. Shortly afterAllenstarted,hewasdispatched toJapan tobuild thebusiness there. Japanesecompaniesembracedtheproduct,andOraclehadasuccessfulIPO.AllenandIcollaborated on several projects, including Oracle’s first product built fromscratchwithJapaneselanguagesupport.BothofushadleftOracleatthesametimetopursueourownbusinesses.Itwasafortunatecoincidencethatourpathshadcrossedagain.

LeverageLocalExpertsWhenbuildingapresenceoverseas,alwaysleveragelocalresources—especiallylocalexperts.Lookforaminority-ownerjointventurepartnerthatcanbeasoundingboard.Apartnercanhelpattractandrecruittalentandbringinotherpartnersandvendors.Welookedtoourpartnertohelpusgetstartedandoperatemoresmoothly,whichallowedustolargelyavoidthegrowingpainsthatmanycompanies(andthereforetheircustomers)experience.

SunBridgemostlyfocusedonworkingwithlocalJapanesestartups,butAllen

was excited about the opportunity to build salesforce.com in Japan. Westructuredauniquejointventureagreement thatmadesalesforce.comJapananindependent entity of salesforce.com in the United States. (Most companiesstructure themselves in Japan as a subsidiary of the U.S. company, but webelievedthattosucceedwehadtobeheavilyinvestedinJapan.)Thecompanywas set up so that theU.S.-based salesforce.comwas themajority owner andSunBridge also invested. Our plan was to build toward an IPO so that thecompanycouldbeanationalassetwithownershipopportunitiesforemployeesandtheshareholdingpublic.

As an IT incubator, SunBridge was involved from the earliest stages and

helpedthecompanydevelopbusinessandrecruittherightplayers,includingthefirstpresidentofsalesforce.comJapan.AkiraKitamuracametosalesforce.comwithmorethantwenty-fiveyearsofexperienceinthetechnologyindustry.Inourfirst meeting, Kitamura-san revealed that this new on-demand deliverymodelwasashock tohimandwasentirelyunknowninJapan.Still,hewas instantlyexcited about cloud computing becoming the future model for businessapplications in Japan. I likedhispassionateattitude.The rightmind-setmakesallthedifferencebetweensucceedingandfailinginaninternationalmarket. Kitamura-saninitiallyhelpedsalesforce.comgaincustomertractionbyrelyingon the personal relationships he had built overmany years in the industry. Infact,somecustomerssimplyboughttheserviceasafavortohimandnevereventried it. Luckily, most of the new clients were eager to experience this newmodel. As always, salesforce.com targeted the end user—not the person whocontrolled the budget—and these individuals were impressed by the superiorcustomermanagementthatourserviceoffered.

Play#84:Fine-TuneYourInternationalStrategy

AftersometimebuildingthebusinessinJapan,wefoundthatOracle’smodel—that of using partnerships to sell the service—was not working effectivelyenoughforsalesforce.com.

Winningpartnerswasalongprocess,andweneededabetterandfasterwaytopenetrate the market. Although the strategy was unusual in the highlyfragmented market of Japan, we decided to go back to our basics and buildsalesforce.com as we first had in the United States and Europe, throughaggressivemarketingandadirectsalesteam.Thisstrategyworked,butwedidhavetomakeseveraladaptationstofittheJapanesemarket. WerecruitedEijiUda,adirect-salesgeniuswith20years’experienceatIBMandthepresidentandCEOofSoftBankCommerce(thelargestITdistributorinJapan),aspresidenttohelpbuildthiscapacity.ShortlyafterUda-sanstarted,wewentfromgettingoneortwomediahitsamonthtogettingconsistentcoverage.The difference: the right positioning. Whenever Uda-san introducedsalesforce.com as a global company, he referred to other growing companies,such as Google, Amazon, and eBay. This lesson in associatingwith the rightplayersturnedouttobeapplicabletoourentirebusinessinJapan.

Salesforce.com had already proved the power of customer references and

testimony, butwe learned that therewere specific nuances to succeedingwiththisstrategyinJapan.Thesecretherewasn’tinwhatwassaidbutinthesource.Tohave themost significant impact, referenceshad tocome fromJapan’skeyinfluencers—verylargeglobalcustomersandgovernmentorganizations. Althoughweunderstoodthenecessityofcapturingthesetypesofcustomers,winning the biggest players was not an easy feat. In Japan, the leadingcompanies and government agencies tend to be ultraconservative; it’schallenging for a foreign company with a new model to land these mega-accounts.Uda-sandefinedveryspecifictargetaccounts,anddedicatedresourcesto go after them. He leveraged his relationships with managers at such large

companiesasCanon,Hitachi,Mizuho,NipponSteel,NTT,andRicoh.

Weinvitedmanagersat thesecompanies tosalesforce.comevents,similarto

theonesweranintheUnitedStatesandEurope.Oneof thesalesmanagersatCanon took the invitation toHaruoMurase, the president andCEO ofCanonMarketingJapan,andexplainedourservicetohim.Murase-san,consideredoneof themost respected sales leaders in Japan,wasn’t immediatelydrawn toourservice—infact,hisgroupwasintheprocessofdevelopinganewsystemusingOracle software, and he dismissed us as one of the “Internet-related venturestrying toget into themarket.”As luckwouldhave it, though,he attendedourevent,andheandIhadtheopportunitytomeet. Wemostlytalkedaboutcameras(I’manenthusiasticphotographer)andaboutCanon,which I find tobeoneof themost innovativecompanies in theworld.Once I returned to theUnitedStates, I sentMurase-san an e-mail seeking theCanonEOSDigitalcamera,whichwasjustbeingreleasedandwasverydifficulttoobtain.Murase-sanarrangedformetoreceiveoneofthefirstones.(Istilluseit;itisamazing.)IkeptintouchwithMurase-san,andwheneverIwasinJapan,Ivisitedwithhimandsharedwithhimthedevelopmentsinourbusiness.Uda-sanspenttimewithhimaswell,explainingthebenefitsofourserviceandhowitcouldbeflexibleenoughtomeettheneedsofhisvariouslinesofbusiness. Initiallyasanexperiment,Canontestedourserviceandacompetitor’swithinone business unit. Much as it did in the United States, the land-and-expandstrategyworked in Japan.Before long,wehad thousandsofCanonemployeeson salesforce. com, and, according to Murase-san, the service has had asignificant impact on those users. “Their attitude changed,” he said. “Theapplicationmadetheirliveseasier.” Our team also approached the Japanese government, knowing that winningsuchanaccountwouldserveasabeachheadfortherestofthecountry.Pointsofchangeinacompanyarealwaysaprimeopportunityforentry,andJapanPost,thecountry’spostalsystemandsavingsbank(andthelargestfinancialinstitutionintheworldintermsofassets),wasintheprocessofbeingprivatized.KazuhikoYoshimoto, then the CIO of Japan Post, had been our customer previously atMizuho Information Research, and we leveraged that relationship and thesuccessMizuhohadexperiencedwithour service.After JapanPost completedan exhaustive and prudent research process, salesforce.com won the openbiddingandsecuredadealforfivethousandsubscriptions.(Itlatergrewtomorethanseventythousandsubscriptions.)Thiswasamajorcoup,notonlybecause

oftheimpressivesizeofthecontractbutalsobecausethegovernment’sselectionof salesforce.com validated cloud computing services as an alternative to thetraditionalmodel.ItalsoconvincedmethattheJapanesegovernmentisveryfairandopentoforeigncompanieswithnewandinnovativeideas.

As Uda-san had predicted, winning Japan Post as a customer captured

tremendous media attention. The story made top page of the Nikkei, theequivalentoftheWallStreetJournal,andsubsequentlywewerethesubjectofmore than two hundred news articles on this topic alone. The implementationwas also a major success with the customer, which deployed our service totwenty-four thousandpost offices nationwide in only threemonths.The JapanPostwinalso led to theclosingofdealswithbanksand insurancecompanies.There was a domino effect from there. Many additional large financialinstitutions,aswellasnumeroussmallandmedium-sizebusinessesthroughoutJapan, standardized on salesforce.com. Whereas we were able to start withsmallercompanies in theUnitedStatesandEurope, the top-downmodel is thewaytosucceedinJapan,wherethelargestcompaniesprovidethemostpowerfulreferences.

Play#85:SendMissionariestoBuildNewMarkets

Itcanbedifficult toidentifytalentoverseas,andespeciallychallengingtofindpeoplewhoarea cultural fitwithyourorganization.For this reason, thereareincredible benefits to temporarily sending the best people from yourheadquarters to help establish or grow a new market. These expats—ormissionaries, as I call them—are taskedwith hiring key people, building up aregion,andultimatelyfindinga localexecutiveas their replacement.Althoughinitially,perhapsnaively,Ithoughtthatsuchamissioncouldbeaccomplishedineighteenmonths,we’vefoundthatitcantakeclosertothirty-sixmonths.

Having seen the missionary strategy work in other regions, I asked Carl

Schachter, who was running the western half of North America’s field salesoperations,tobecometheCOOofJapan.ToCarl,myrequestseemedoutoftheblue. He had never lived outside California, and although he spoke Spanishfluently,hedidnotspeakawordofJapanese.ThiswasanideatowhichIhadgivenmuchcarefulthought,though,andsomethingIbelievedwouldwork. Inanybusiness,it’svitaltokeepthingsdynamic.Onewayofdoingthatisbyoffering talented executives new challenges. Carl was ready for such anopportunity, and the business in Japan needed an operations leader whointimately knew our business and could facilitate communications withheadquarters. I also believed that there would be a multitude of benefits toadding a second leader at the top. It can be an effective way to introducedifferentpointsofview,drivedialogue,andinciteinnovativethinking.

IinitiallyofferedCarltheopportunityovere-mail,whichIsentonaSunday

night.Although some peoplemight disagreewith this communicationmethodforsignificantmatters, I finde-mail tobeaveryeffectivewayto introduceanidea andpromptdecisionmaking. In this case,Carl had time to thinkwithoutbeingputonthespot,andIwasabletoarrangetomeetwithhiminpersonthefollowingday. “WhatdoyouthinkofJapan?”Iaskedwhenhecameintomyoffice.

“I’veneverbeen,”Carlreplied.

“Ithinkyoushouldgo.You’llknowwhenyougetofftheplaneifit’srightforyou.” Carl didn’t knowwhen he got off the plane (although he did note that theground was so clean you could eat off of it). After visiting our office,experiencing the efficiency of public transport, and enjoying the energy ofTokyo, he and his family decided to take a risk and upend their lives inCaliforniaandmovetoJapan. Havingtwoleadersatthetopworked:Uda-sanhadtheabilitytoconcentratefullyontheJapanmarket—the“international”sideofourbusiness—whileCarl,someone intimatewith our culture, focused on consistencywith headquarters.Thisisthe“global”sideofthebusiness,whichdetermineshowtheinternationalofficefits inwith theglobalcompany.Carl recently leftJapanandmovedtoanewpostinEurope.Theendgoalisalwaysfortheinternationalbusinesstoberun by local leaders. However, during the earlier stages of internationalexpansion,tappingtwoleaderswithdifferentexperiencesisaneffectivewaytolaytherightfoundationforacompany.

InternationalVersusGlobalLeadershipAtmanymultinationalcompanies,thereisacommonpresumptionthatheadquartersalwayshasitright.Ofcoursethat’snotalwaysthecase.ItistheresponsibilityoftheCEOofaglobalcompanytoputhighlyqualifiedpeopleinplaceininternationaloutposts—andtotrusttheirdecisions.

Internationalleadersarespecialistsintheirlocalmarkets.Theyare

adviserswhoareawareofthearea’shistory,culture,laws,buyingbehaviors,andcustoms.Theyknowbesthowtoservetheircountryandregion. Globalleadersareexecutiveswhospecializeinensuringthatinternationalofficesfitwithintherestofthecompany.Acombinationofeachoftheseleadersisessential.

Play#86:HandleGlobalDisputeswithDiplomacy(akaLightandLove)

Salesforce.comalways considered Japan a uniquemarket, not a launchpad totherestofAsia.Infact,ourentryintherestofAsiadidn’tstartinAsiaatall,butin Australia. Many U.S. companies use Australia as a gateway. ThedemographicsaresimilartothoseintheUnitedStates,themarketismadeupofearly adopters, and the similar time zone and close proximity toAsiamake iteasytodobusinesswiththerestoftheregion.

BythetimeSanFrancisco-basedexecutiveDougFarberapproachedmewith

a business plan outlining a formal foray intoAustralia and thenAsia,we hadalreadywonseveralAustraliancustomers,includingoneofthecountry’sleadingtelecom companies and best-known brands. With a burgeoning roster ofcustomers and an understanding of the Australian market (as well as Doug’snoteworthyattemptatanAustralianaccent),itseemeditwastimetoenterthiscountry. Althoughsharingcertaincultural sensibilitiesandhaving largecustomersaslocalreferencesgaveusanedge,weknewthatsettingupshopinanewregionwouldbechallenging.Still,weneveranticipatedthesituationthatsoonarose—andnearlymadeourlaunchinOzimpossible.

ThedaybeforeDougwasscheduledtoboardaplaneasourfirstmissionaryin

Australia,we received an ominous letter from the legal department of a largeAustraliancompany—calledSalesForce.SalesForceAustraliaclaimedwewereinfringing on its registered trademark, and it raised concerns about brandconfusion and potential damages. The threatening letter demanded we ceaseoperatingunderthesalesforcename. Thiswasagiganticproblem.TrademarkinfringementisanotoriouslystickysubjectinAustralia—andonethatcancostcompanieshugesumsofmoney.

Additionally,SalesForceAustraliawasanintimidatingcompanytohaveasan

adversary.Ithadbeeninthemarketrunningoutsourcedcallcenterssince1994andhadestablishedanamefor itselfbyworkingwithsuchhugecustomersasHewlett-Packard and BMW. In an effort to prepare for the worst outcome—having to enter themarket under a different name—we trademarked the namesforce. I did not, however, want to have to use the alternate name.Salesforce.comhadachievedstrongbrandrecognition in theUnitedStatesandin Europe. Rebranding in Australia and Asia would cause us to forfeit theenormousvaluewehadworkedsohardtoachieve. Afterbothofourcompanies’legaldepartmentsfailedtoresolvethetrademarkissue, Kevin Panozza, the founder and managing director of SalesForceAustralia,decidedwe’dexhaustedtheprocesswithlawyersandthatitwastimeto“godirect.” Itwasn’t longbefore I foundmyselfon the telephonewithmyAustraliancounterpart.

Doughadexpressedconcernthatthediscussionhadthepotentialtoturnugly.

Iknewthatwouldn’thappen.Contrarytowhatyouseeinthemovies,aggressiveandheatedconversationsarenotthewaybusinessdisputesarebestconducted—or resolved. Besides, I had practiced yoga that morning and was prepared toremainpeaceful. Kevin Panozza also knew that the “nice guys finish last” mantra was anantiquatedbusinessphilosophy.Hewasn’tinterestedinallowingthesituationtoescalate.Agreat and iconoclasticCEO,Kevinhadbuilt a successful companythat was rooted in being different from traditional corporations. It wasconsistently recognized as one of the best places to work in Australia, anespecially impressive achievement in an industry traditionallymarred by highattrition. The company was known for a culture that embraced freedom ofexpression,employeerecognition,greenpractices,andBeachDay,whichrivaledourownbelovedAlohaFridays.ThemoreIlearned,themoreIrealizedthatourtwosalesforcesweresoulmates.Thesetwocompaniesweremeanttomeet.

KevinandIimmediatelybonded.Eachofuswantedtoresolvethissituation

quickly—andlimitthelegalbills.“Howcanweworktogether?”Iasked. Asentrepreneurs—andthereforeoptimistsatheart—weknewtherehadtobeanopportunityhere.Wedeterminedthattherewerewaysforustopartner,refercustomers, and collaborate. We decided that there was ample room for bothcompanies in Australia. No one wanted long, drawn-out negotiations, so we

agreedtodraftaone-pagedocumentthataddressedourpartnership.ItoldKevinIwanted“lightandlove”inthedocument,andasakindredspiritwhofrequentlymentions“harmonyandbalance,”heimmediatelyunderstood.

Perhapsthebestpartofthisstoryisthatitdidn’tendwiththesigningofthat

document. SalesForceAustralia, like our company, understood the benefits ofgivingback toour localcommunities.KevinandIpledgedto take theamountthat our companies could have spent on litigation and instead donate it toestablish a young people’s development center in Laos. We ultimately wonSalesForce as a very important customer after it was acquired by anothercompany,Salmat. Withtherightoutlook,I’vefound,it’spossibletotransformalosingsituationintoaveryluckybreak.

HowtoWriteContractswithLightandLove(or,WhattheLawyersDon’tTellYou)

Awell-draftedcontractwith“lightandlove”isaone-pagedocumentthatisbulletproofandexecutedperfectly—withaslittlelegallanguageaspossible.Thebrillianceofthisdocumentisinitsbrevity.

Anyone—notjustthelegalteam—shouldbeabletounderstandthis

contract.Thekeyisthatitistightenoughtobebinding,butlooseenoughtogivelatitudesothateachpartycanoperatefreely. Onceyouhavesuchadocument,getitexecutedasquicklyaspossible!Timequellsenthusiasmandleavesyouvulnerabletopotentialrisks.

Thelight-and-lovephilosophyisnotappropriateforeverysituation;

thereareplentyofcircumstanceswhereadetailedcontractisprudentandnecessary.However,wefindthatitmakessensetoemploydocumentswithlightandloveininternationalsituationswherewedon’twanttoappeartobelitigiousAmericansandwewanttobuildastrongrelationshipwiththepartnerorvendor.Sometimesoverseascompanies(especiallyinAsia)areoverwhelmedbythelegalpracticesoftheirU.S.counterparts,andtheyfind

itrefreshingforaU.S.companytotakealighterapproach. Remember,youareenteringanewcountryandmustbeaccommodatingtomaketherightimpression.Thespiritandphilosophyofyourapproachareparamount:Whenyouentersomeone’shome,doyouaskifyoushouldtakeyourshoesoff,ordoyouputyourfeetuponthecoffeetable?Alwaysbesensitiveanddiplomaticinyourapproach,andyouwillbebetterreceived.

Play#87:EditanOverarchingOutlook

Itwas not longbeforewe exploded inAustralia.TheAustralians appreciate aspiritofirreverence,andcustomerslikedthedisruptivemodelwewereselling—and theaudaciouswayweweredoing it.The free trial, themessagingwehadalreadyhoned,andthetacticswehadpreviouslyperfectedallworkedbeautifullyinAustralia.

ItwastimetoextendintoAsia.Theregionprovidedanexcitingopportunity.

More than half of the world’s population is there, and the area holds vastpromise for growth. At the same time, this region—with its diverse markets,distinct political systems, and myriad cultural barriers—presented giantchallenges.Ascompaniesbeforeushadfound,thesemarketswerediabolicallydifficulttocrack. Understanding thegreatdealof time that thiswouldrequire,andneeding tomitigate the risks,weestablishedAustralia as the locomotive engine forAsia-Pacific.WithastrongcurrencyandbuyingcyclessimilartothoseintheUnitedStates,Australiawasaplacetogaintraction,leveragesuccess,andfromwhichtorunmarketing,operations,andsalescapacity.

Although this “nucleus” strategy was themodel many U.S. companies had

used, we found parts of it to be flawed. While we had people specificallydedicatedtotheAsia-Pacificmarket,mostoftheoffice’sbookingscontinuedtocomefromAustralia.Furthermore,werealizedthatwhatwasturningthewheelinAustralia(thesamemodelwehadusedintheUnitedStatesandEurope)wasnotsimilarlymovingtherestofAsia.Wewereaccustomedtolookingatregionsrather than distinct countries with their own local ways of doing business. InAsia,wherecountriesarefartherapartinbothproximityandideologythantheyareincontinentalEurope,anoverarchingoutlookdidn’twork. On thesimplest level,Sydneywasgeographically too far fromour target toserveasarealcommandcenter.Itwasanine-hourflighttoBangkok,atwelve-hourflighttoBeijing,andafifteen-hourflighttoDelhi.Wewereclosertoour

destination than ever before, yet both physically andmetaphorically,wewerestilltoofaraway.

We needed an office in the heart of Asia-Pacific. Singapore, an English-

speaking international business center that offered aggressive economicincentives, provided us with a prime place from which to target the largedeveloping (and geographically equidistant) markets of China and India. Thediverse talent pool was also a compelling draw. Technology companies havehistoricallycenteredtheirAsia-PacificoperationsinSingapore,makingthearearich with tech-savvy talent. Furthermore, the city-state’s high standards ofeducation and emphasis on bilingual or trilingual skillsmeant that candidateswere often fluent in three or more languages, making them valuable acrossvariousgeographies.

TheOverseasPullSatelliteofficesoftenprovetobeagreatplacetogetyourfootinthedoor.Oftentimes,largecorporationswilltrysomethingnewinanofficeoverseasand,ifitworks,deployitonalargerscale.WeinitiallywonmanymultinationalcompaniesoutofEuropeorAustralia,andlaterexpandedbeyondthoseregions.

Just as we had in the United States and in Europe—and despite what ourcompetitors did—it made sense to start with corporate sales in Asia. It waspossible to target, and win, smaller companies without having people on theground in each country. AaronKatz, who had international experience on hisresumeandseveralyears’experiencebuildingourbusinessintheUnitedStates(and who had been one of our first users), moved from California to bringsalesforce. com sales know-how to Singapore. He spent the first six monthsrecruitingstarsalespeoplefromMicrosoft,Oracle,andSiebelwhowereworkinginBangalore,HongKong,MainlandChina,andKorea.Wereliedontheselocalexpertstoteachuseverythingaboutpricing,positioning,andmarketingintheirrespectivecountries.We taught themabouthowweworked, so thatultimatelytheycouldbringitbacktothemarketstheyknewbest.

Unlikethewaytherestoftheindustryoperated(wheredozensofpeopleare

hired in each country and largely neglected when it comes time to sell the

product),we brought every new sales hire to Singapore,where they could becloselymanagedbysalesforce.comexecutives.Fromthatcentral location, theywouldalsobeabletoabsorbourculture. Initially it was challenging to convince successful salespeople to move toSingapore.Americans change jobsmuchmore frequently thanpeople in otherpartsoftheworld.InAsia,itwasconsideredagreatriskforsomeonetoleaveastablejobatanestablishedsoftwarecompanyandbetonanunheard-ofcompanyinanunknownindustry.Itwasanevengreaterriskforthemtoleavetheirhomesand uproot their lives for it. It turned out, however, that taking this risk wasexactlywhatlaterspurredoursuccess.Thecandidatesweconvincedtotakethishuge leap of faith were progressive thinkers who were drawn to the cloudcomputingmodel.Moving toanew locationmade thememotionally invested.Withsomuchatstake,theyfelttheyneededtobesuccessful.Theircommitmentto success made our customers successful—and that’s what has made ussuccessfulintheregion.

Our corporate sales team in Singapore relied on the same high-velocity

corporate sales engine (segmenting the markets, selling to executives, andtargetinghigh-techandfinancialservicescompanies)thatwehadusedinotherregions.Wedid,however,ultimatelyalterourcentralizedapproachtobettersuittheAsia-Pacificmarket. InsteadofbasingtheentirecorporatesalesorganizationinSingaporefor thelongterm,weestablishedcorporatesalessatellites,or“tentacles,” that reachedintospecificmarketsinordertorecognizethediversityoftheregionandaddressthe unique needs of these countries. After approximately eighteen months ofworkinginSingapore,wefoundthatourtransplantedtalentwasreadytoreturntotheirnativecountries,takingwiththemwhattheyhadlearned.Theexpansioncycle continues as theywork asmissionaries to further ensure our success innewmarkets.

Play#88:BringOldTrickstoNewRegions

Although the model that worked in North America and Europe needed to betweaked,many of the fundamental pieces haveworked throughout theworld.For example, we have always invested in building market awareness anddemand before we build a physical presence. In addition, we’ve seeded themarketwithcorporatesales,whichiseasiertostartandexperiencesshortersalescycles.Corporatesalesalsoprovedto tapintoagreatmarket:ChinaandIndiaaredrivenbysmallandmidsizecompanies.

We discovered that it was possible to recycle some of the samemarketing

tactics we’d used elsewhere. We also learned the importance of doing duediligencetomakesureoureffortswouldworkinanewmarket,butwelearnedthatlessonthehardway.Afewyearsago,IwasinvitedtodeliverthekeynoteaddressatanindustryeventsponsoredbytheInfocommDevelopmentAuthorityofSingapore.Iwashonored;MichaelDellofDellandJohnChambersofCiscohadpreviously participated in thisDistinguished InfocommSpeakers series. Italso served as an excellent opportunity to introduce our AppExchange todevelopers in Singapore and share with a six-hundred-person audiencesalesforce.com’svisionfora“software-free”future. Weknewthatweneededtodosomethingunexpected to tellourstory.Withthatgoal inmind,werevived themockprotestmarketingstunt fromourearlydaysintheUnitedStates.WehiredmorethanfiftypeopleandoutfittedtheminNOSOFTWARETshirtsandsandwichboards.Theycarriedsignssaying,“WeDemand:On-Demand” and “Freedom (fromSoftware)” to further support ourcause.The“protesters”andourlocalteamenthusiasticallydemonstratedoutsidetheeventcenter,stirringupcuriosityandexcitement.

Whereasaprotesthadpreviouslyprovedaprovocative—andeffective—way

to introduceourselves in theUnitedStates,protestswerevieweddifferently inthe tightly controlled city-state of Singapore. Organized protests, publicspeeches,anddemonstrationsarequiterarethere.Infact,theyarebannedunlessthey are approved by the government or take place in a certain area. Five

minutesbeforeIwasscheduledtogoonstage,thepolicecameandthreatenedtoshutdownthewholeevent.Thefunwascurtailed,anditwasunclearwhetherornotI’dbeabletodelivermyaddress. Thepolicedidbreakup theprotest,butnoonewasarrested,andIwasstillallowed togivemykeynote. Iwouldn’twant to relive the experience, andwemustalwaysaimtofullyunderstandculturalnuancesandhowtheymightaffectourefforts,butinhindsightIrealizethatevendespitethegaffe,thestuntwasasuccess.Ourmessagewasdelivered to amassive audience—and in a stylenoone would forget. We had made it clear: salesforce.com was the disruptivetechnologycompanyintheregion.Thatmessagewasvalidatedandreiteratedinmanynewspaperheadlinesandphotos.Itwassucheffectivemarketing,infact,that it inspired other companies in Singapore to stage mock protests (whichsimilarlyattractedtheireofauthorities,butwonastormofpublicity).

Don’tConfuseCommonValueswithCommonPracticesStaytruetoyourvision,butdonotconfusevisionwithbusinessmethodsandprocesses.

Itiswisetocoordinatehigh-levelmarketingglobally,suchasTheEndof

Software,butbigideasdon’talwaysrenderidenticalactionsandpractices.Youmustappreciatetheculturalsensitivitiesofeachmarket.WhereasthemockprotestworkedinSingapore(withafewcaveats),itwouldbeatotalflopinKorea,whereitisimperativetodemonstratehumilityandmodesty.

Play#89:Don’tUsea“SeagullApproach”; theSecret toGlobalSuccessIsCommitment

Perhapsthebiggestmistakewemadeaswetriedtogaintractioninnewmarkets,especiallyinAsia,wasunderestimatingtheimportanceofrealcommitment.Atfirst,webelievedwecouldtendtoamarketbyflyingin;hostingaweekofgreatevents,suchaspressconferencesandparties;andfollowingupfromourhomeoffice.Thatpracticerequiredabiginvestmentoftimeandmoney,andworse,itwasperceivednegativelyasbespeakingacircus-tentmentality.We’dseeaspikein sales immediately after an event, but then interest would fade away. Themarketshowedusthatcustomerswantedourcommitmentallyearlong.InAsia,business is conducted face-to-face, and anyone with whom we wanted to dobusinessexpectedtoseeusalotmoreoftenthanwehadfirstplanned.

ThereweresensitivitiestowhatDougFarber,oneofourfirstmissionariesand

now vice president of operations in Asia-Pacific, calls “a seagull approach”(swooping in, messing up the place, and flying away). This concern wasespecially heightened as everyone remembered the dot-com debacle and thedisastrousimpactithadinAsia.SiliconValleycompanies,flushwithbillionsinmarketcap,hadaggressivelyexpandedacrosstheglobeandrushedtohiretalentin Asia—only to go out of business a few months later. The experienceunderstandably soured people against dot-coms and foreign investment ingeneral. Wehadtodemonstratethatwewereinterestedinalong-termcommitmentbybuilding a sustained presence. We found various ways to increase ourcommitmenttotheregion,suchasbuildingourfirstinternationaldatacenterinSingapore to better support our growingAsian customerbase.Wealsobuilt anetworkoperationscentertomonitortheuptimeofthethreedatacenters,whichrequired additional facilities and headcount and therefore a significantinvestment in the region. We’ve grown the foundation locally, and ouremployees have made lasting contributions, including helping introduce andestablishabasketballfocusatSpecialOlympicsSingapore.Inaddition,growingcorporate and field sales offices in several countries has helped our company

fostergoodwill.

Ineveryrelationship,ineverymarket,commitmentcounts.Acompanymust

considerallthewaystobecomealocalasset.

PART8

TheFinancePlaybook

HowtoRaiseCapital,CreateaReturn,andNeverSellYourSoul

Play#90:Don’tUnderestimateYourFinancialNeeds

There’snodoubt thatsecuringseedcapitalcanbeoneof themostchallengingandstressfulaspectsofstartingabusiness.Tobesuccessfulasanentrepreneur,youmustpassionatelybelieveinyourideaandtheabilitytoexecuteit—andbewilling to put a lot on the line. Often that means placing a huge personalfinancialbeton theventure.Givingupapaycheckandpouring savings intoanewbusinessareintimidating,andoftenthey’renotevenenough.ThiswasthesituationIfoundmyselfinaswebegantogrowsalesforce.com.

Iseededsalesforce.comwith$6million,whichIhadsavedfromworkingat

Oracle and earned through my investments in technology companies, but therapidly growing company required more capital than I had expected. Unlikeother software companies that chargebigup-front costs for their products anduse these checks to finance the company, we were only charging a small feeeverymonth.Thatmodelmeantthatweneededsignificantcapitaltostayafloatandgrow. The discovery of insufficient funds is not an unusual one—there’s a well-known adage that suggests everything takes twice as long and costs twice asmuchasyou’dexpect.Thatmightbehyperbole,butwewerecertainlynotalonein underestimating what it would cost to build our business. Misjudging thenecessaryfinancialresourcescanbeafatalmistake;accordingtoonestudy,79percentofsmallbusinessescited“startingoutwith too littlemoney”asoneoftheircausesofcollapse.1Wedidnotwanttobecomeoneofthosefailures.

Inthebeginning,Iwasn’ttooworried.Ithoughtourfinancialwoeswouldbe

easilyansweredbyawindfallinvestmentfromaventurecapitalfirm.Thiswasstill thefrothydot-comera,anditdidn’tseemall thatdifficult toraisemoney.Afterall,onecompanyraisedenoughventurecapitalmoneytospendmorethan$1 million to place a sock puppet in an ad during the Super Bowl. I hadconnections to big-name venture capitalists, which was helpful because it’sdifficult towin aventure capitalist’s attentionwith a coldpitch.VC financingmade sense for a business like ours—a hypergrowth Internet technology

companylookingforasubstantialmultimillion-dollarinvestment. It turned out that I was wrong in my assumption. VC after VC turned usdown. Itwasn’t challenging to securemeetings,but thosemeetingsdidnotgoverywell.Wecouldnotcometoanagreementontheprice,andIbelievedthatthe VCs were significantly undervaluing our company. Most of all, it wasevidentthatmanyofthepeoplewithwhomwemetjustdidn’tunderstandwhatweweredoing.Afewtoldus that theybelievedinnetworkedcomputing—notourdisruptive“nosoftware”model.

Althoughitwasdishearteningnot tobeable toraiseventurecapital, Iknew

that Iwasn’t the first entrepreneur to be told that a good ideawouldn’twork.MGM reportedly toldWalt Disney that MickeyMouse would never be a hitbecause a giant mouse on the screen would terrify women. And for everyseemingly insignificant idea that was venture financed (and there were someharebrained ideas) there were others, including Cisco, E*TRADE, andStarbucks, that had been passed on at some point.2 Rejection from venturecapitalistswasnotenoughofareasontoconsidergettingoutofourbusinessoreven changing our business (only 10 percent of venture-backed technologycompaniesultimatelybecomesuccessful),3butitwastheimpetustofindanewfinancingstrategy—andtofindonequickly!

Play #91: Consider Fundraising Strategies Other Than VentureCapital

Inlookingforanewwaytogrowourbusiness,Ireachedouttomyfriendsandcolleagues—people who believed in me and my ideas. This was hardly anunconventional strategy. In the U.S., entrepreneurs provide on average abouttwo-thirds of startup capital and after that look to family, friends, workcolleagues,andstrangers—notventurecapital firms—toprovide theremainderoftheinvestmentcapital.(Ofthatgroup,researchshowsthatfamilyandfriendsprovide78percentofthetotal.)4Raisingcapitalfromprivateinvestorsisnotassimpleasknowingpeoplewithresources,though.It’spivotaltofindpeoplewhoarevisionaries.

Iwasveryfortunatetohavefriends,colleagues,andmentorswhobelievedin

youngentrepreneursandstartupbusinessesasthesourceofinnovation,andlikeme, theysupported thatbeliefby investing their resources.MagdalenaYesil,agreatentrepreneurandfriend,putin$500,000.LarryEllisoninvested$2million.WithMagdalena’shelp, Icontinuedtodevelopthispiecemealfundingstrategyby creating a list of potential investors and a target of howmuch capital weneededtoraise.

TreatFriendsandFamilyInvestorsProfessionallyShemightbeyourfriend,oryourgrandmother,buttreatherasaninvestor.Thisisnotonlybecauseit’srespectfulbutalsobecausenotdoingsocouldcomebacktobiteyou.Ifyoutargetlargerinvestorslater,thelegalteamsattheseorganizationswillscrutinizeyourcapitalizationstructure,andanypreviousnegligencewillcostyou. Applyprofessionalstandardsinstructuringanddocumentingallinvestments.Createaplanthatincludesformalprojectionsandanassessmentofwheninvestorswillseeareturn.Thisremindsinvestorswhytheychosetoinvestinyouinthefirstplace!

Itwasincredibletodiscoverthatmanyofthepeopleinmyimmediatecircle

were enthusiastic supporters of ourmission; I realized that piecemeal fundingthroughmyfriendsandnetworkwasawinningfundraisingstrategy.Investinginsomeone is a big bet, and it’s a lot easier to persuade someone who alreadybelieves in you than it is to convince someone you’ve justmet. The foundersinvested;HalseyMinor, the founder ofCNET,made a significant investment;Arjun Gupta, a venture capitalist (and the friend with whom I went on thepivotal trip to India), personally invested; Igor Sill, legendary technologyinvestorand theheadof thesearch firmGenevaGroup,gaveusmoney;asdidTed Waitt of Gateway, William Hambrecht of Hambrecht & Quist, StrattonSclavos of VeriSign, and many others. We did eventually receive venturefunding—$15.5 million from Attractor Partners—likely because foundingpartner Gigi Brisson had been a friend for fifteen years and believed in mycapabilities. In total, we raised $65million over five rounds of funding from1999to2002.

Ultimately, our unconventional financing model turned out to be a better

strategythanventurecapital,sometimescalled“vulturecapital,”amethodwhichwouldhaverequiredustogiveawayaheftystakeofownershipandcontrol.Italsoprofoundlyaffectedmyroleinbuildingthecompany.Morethantwo-thirdsof the time, VCs replace founding CEOs. It’s not really a surprise. From theVC’spointofview,whowouldbeasmarterbet?Afirst-timeCEO,orsomeonetheVCknowswhohasatrackrecord?Iunderstoodthatreality,butIdidn’tlikeit. Thefinancingstrategywewereforcedtopursueworked,andnowtheventurecapitaliststhatturnedusdownaretheoneswithregrets.Everyonewhoinvestedin the initial roundshasmadeasignificantreturn. (Larry’s$2million isworthmorethan$200million,forexample.)

Play#92:UseInternetModelstoReduceStartUpCosts

Although the strategy we used to finance salesforce.com was somewhatunconventional in1999, especiallywhenVCmoneywas flowing likeNiagaraFalls, it’s becomingmore andmore plausible today for companies to start upwithoutventurecapital.Thankstothefallingcostofhardware,overseascoders,andon-demandservices,startupsneedlesscapitaltogetofftheground.

Bootstrapping through Internet models is a viable way to build and run a

companyandan attractive andappropriate solution for a challenging financialclimate. There are now an increasing number of startups that have builtapplications on PaaS offerings, run their services on external servers, andmanage their businesses entirely in the cloud. There are also more ways tosecurethecapitaltheydoneed. Angel investors, or individuals who provide startup capital (usually in thefew-hundred-thousand-dollar range), are becoming more common and moreorganized. The number of angel investments has always outnumbered thenumberofVCdealsbyatleasttentoone,saysJeffreySohl,theDirectoroftheCenterforVentureResearch.Althoughtheamountinvesteddeclinedduringtheeconomicfalloutof2008,thenumberofdealshasstayedconstantandangelsarejust as interested as ever and still actively investing, according to researchreleasedby theCenter.5Thereare local angelnetworks inmost cities, and it’slikely that your accountant or attorney already knows angels. So-calledsuperangels—successful entrepreneurswho invest larger amounts, often in themultimillions,instartups—alsoofferexperienceandinsightasVCswould,buttheyareknowntobefriendlier.

Play #93: Set Yourself Up Properly from the Beginning, ThenAllowYourFinancialModeltoEvolve

Although we had initially thought that a customer’s attraction to our servicehingedonano-contract“paybythedrink”premise,thismodelwascripplingusfinancially. In retrospect, it made little sense to deliver a great service tocustomers, pay salespeople their annual commission for winning the account,andthencollectpaymentattheendofeachmonth.Wemadeacriticalchangetoourfinancialstructurebyevolvingtoasubscriptionmodelwithannualcontracts.Inournew“deferredrevenue”model,wecollectthecashupfrontandreporttherevenue as the service is delivered. It has been an ideal model to scale, andbecausewehaveanannuity,wearereleasedfromtheend-of-quarterpressuresthatplaguecompaniesusingtheperpetualmodel.AlthoughthisishowallSaaScompanies operate today, at the time it was not easy to implement, and itrequiredamassiverestructuringofourcompany.

In someways, our newbusinessmodel simplifiedmatters, asweno longer

had to send a bill every month, but the transformation of our service alsorequired operational changes that seeped into every department. We had toconvince customers to pay in advance, and that had ramifications on sales,marketing,and,ofcourse,finance. Thechangesrequiredthatwebuildaformalprocesstoexecutecontractsandmanage renewals. These financial housekeeping systems allowed us to betterpredictrevenueandbecomeamorestablecompany.Further,weanticipatedthatournextroundoffinancingwouldbethroughanIPO,andtheseformalsystemsserved to demonstrate to Wall Street that we could define—and meet—projections.

Play #94: Measure a Fast-Growing Company on Revenue, NotProfitability

Ina fast-growingbusiness likesalesforce.com,weneeded to focuson revenuegrowthandcapturingmarketshare.Todoso,everyonehadtobemeasuredonfinding new customers and expanding sales with existing customers. Wedeterminedtomeasureeveryoneonrevenue—notprofitability.Mostaccountantswoulddisagreewiththisphilosophy:“Revenueisvanity;profit issanity,”theyoften say. I’m not suggesting that profits aren’t necessary, pivotal, and evenbeautiful.It’sjustnotappropriatetostressprofitsoverrevenueinthebeginningwhenyouarestartingoutandbuildingacompany.

Here’swhy: if you turn tomeasuring people on profit too soon and during

high-growth stress, then they start to think about how they can cross-chargeotherfunctionsordivisions(onofficespace,computers,people)sothattheycanmakeaquarterlybonus.Theydothisinsteadoffocusingoutsidethecompanyonincreasing the revenue line.Further, there is adanger thatmeasuringonprofitcanpreventmanagersfromsharingtheir talentwithotherdepartmentsbecausetheyfeelasiftheyare“payingforthem”andbearingthebruntofthecost.Thiscreatesthewrongkindofbehaviorandculture,andisnotawaythatallowsanorganizationtothrive.

Play#95:BuildaFirst-ClassFinancialTeam

As part of the internal restructuring, it became clear thatwe needed someonewhocouldhelpleadusthroughthistransitionandhelpusscale.In2002,wehadabout$25millioninannualrevenue,andIbegantoquerymynetwork.IaskedmyneighborinNapaValley,SteveCakebread,theCFOofAutodesk,abillion-dollarsoftwarebusiness,ifhecouldrecommendanyCFOcandidates. Stevevisitedmeinthesalesforce.comoffice,andIgavehimademonstrationof our service. Although Steve had been at large technology companies hiswhole career, including many years at the Silicon Valley pioneer Hewlett-Packard,hewasimmediatelycaptivatedbywhatoursmallcompanywasdoing,butthenhetoldmethathecouldn’tthinkofsomeonewhowouldbeagoodCFOforourcompany.Thenhesaid,“Whynotme?” I didn’t have to give this opportunity much thought. “Yes,” I immediatelyreplied.Iwasecstatictohaveaworld-classCFOhelpbuildourcompanyasweaimedtoevolvefromastartupchallengerintoamarketleader. Rightaway,SteveandIsatdowninourconferenceroomanddiscussed thecompany’sfuture.Wediscussedourlong-termgoals.Mygoalswereto

•Winonemillionsubscribers•Becomea$1billioncompany•Achieveprofitability•GopublicontheNASDAQ

“Okay,”saidSteve,believingthatitwaspossibletoreachalltheseaims.“Butonechange:insteadofgoingpublicontheNASDAQ,let’stradeontheNYSE.”

Play#96:BeInnovativeandEdgyinEverythingYouDo—ExceptWhenItComestoYourFinances

It was always our goal for salesforce.com to go public. Most companies gopublictoraisecash,whichtheyusetoexpand,acquirecompanies,orretiredebt,butthiswasnotourimpetus.Firstandforemost,wewantedcredibility.WehadbuilttheSaaSindustry,andnowwewantedtobethefirstSaaScompanytogopublic.

An IPO would market—and endorse—our service, our company, and our

industry.It’slikeaGoodHousekeepingsealofapprovalforcompanies,andthetrust it instills can help retain talent, recruit leaders, expand businessrelationships,andreassurecustomers. Steve’s suggestion to trade on the NYSE went hand in hand with thisreasoning.“WeareinSanFrancisco,sopeoplealreadythinkwe’reflakey;andwe’re a dot-com, and those are going away quickly,” he said. “We need thecredibility and the panache of the NYSE brand: it’s traditional, old-line, wellestablished.It’stheantithesisofsalesforce.com.” TheNYSEwasanotherwaytoalterourimage.Wewerenewandedgyandinnovativeineverythingwedid—exceptfiscalmatters, inwhichitwasbest toalignwithwaysthatwereestablished,proven,andsuccessful. Takingacompanypublic,asanyentrepreneurintheprocessquicklylearns,isnotabouttheonegloriousmomentwhenyouringthebellattheNYSE.Itentailsmonths, ormore likely years, of preparation.Going publicwas not just aboutchangingourmodel, improvingourcashflow,andbringingonanexperiencedCFO.Itwasaboutstrengtheningourentireteamwithtalentedpeoplewhocouldhelpusprepareforthetransition.

We recruited a finance leader, JoeAllanson,whohadworkedwithSteve in

corporate finance at Autodesk and had experience at another Fortune 500companyandintheauditadvisorypracticeatabigaccountingfirm.Asfinanceleader, Joe would help us prepare for the IPO and help us establish revenue

recognition practices, GAAP accounting policies, and SEC reporting—allprocedures and policies that were new to our privately held company. Thereweremany internal controls and processes to put in place to complywith theSarbanes-Oxley requirements for financial reporting, to which we would beaccountable as apublic company.WehiredErnst&Young,oneof the largestprofessionalservicesfirmsintheworld,asourexternalaccountant,andawell-knownlawfirmtohelpusmanagethevastarrayoflegalrequirements. Thechangesrequireddisciplineandtheembracingofadifferentmind-settoensure that we were able to make this transition. We prepared so thatsalesforce.comwouldinternallyfunctionasapubliccompanybeforeitactuallywasapubliccompany.Forexample,oneyearbeforewewentpublic,webuiltaninternal audit department to check the processes and procedures. Mostcompanies establish this the quarter after they go public, but we wanted todemonstratetoinvestorsthatunliketherebelstrategiesweappliedelsewhereinbusiness, our approach to financeswas extraordinarily conservative.Thiswas,afterall,duringtheperiodofthehighlypublicizedscandalsofEnronandTyco.Weknewthatwehadagreatbusinessmodelthatwouldattractinvestors,butitwasmoreimportantthanevertoprovethatwealsohadgooddiscipline.

By the timewe filed to go public inDecember 2003,we had almost $100

millioninrevenue.Manycompaniesbeforeushadgonepublicwith$30to$40millioninrevenue,butthegamehadchangedentirelybyourtime.Afterthedot-com bubble burst, there was a lockdown on IPOs. As the market began torecover, companiesneeded tohave significant revenueandbeprofitable togopublic.Atthistime,twocompanieswerebeinghypedasbeingabletore-ignitethehigh-techIPOmarket.OnewasGoogle;theotherwassalesforce.com. Thesalesforce.comIPOwasviewedasalitmustestforanewbusinessmodel,so everyonebecame interested in thedeal.Both theNASDAQand theNYSEcompeted for the business, trying to lure us by promising such perks asadvertising spots or hosted luncheons on the trading floor. There were greatcompanieson theNASDAQ,suchasIntelandall thebest Internetcompanies,buttheNYSEoffereditsauthorityaswellastheopportunitytobethefirstdot-comonthatexchange.Thoseadvantageswereunbeatable. WewereunsureofwhatourNYSEtickerwouldbe,andwespentagreatdealof time trying to come up with what would best represent our company(companies on the NYSE have historically had one, two, or three letters;companies on the NASDAQ have had four or five). I was debating a few

choices, but not sold on any, when one of our bankers came tome and said,“Whatabout‘CRM’?” Rightawayweknewitwouldbeahomerun.Atthetime,wewantedtobeinthe customer relationship management, or CRM, business. Our name wassalesforce.com, whichwas slightlymisleading becausewe did somuchmorethanSFA.Wedidnotwanttochangeourname,though,asthatwouldhavehadsignificant logistical and branding consequences. Instead, we used the tickersymboltohelpusbroadcastthebiggermessagewehadforthefuture.

Welearnedearlyonintheprocessthateventhepotentialtogopublicgaveus

boththeappearanceandtherealityofstability,whichresonatedwithprospectivecustomers. Shortly after we filed with the SEC, Automatic Data Processing(ADP),thegiantadministrativesolutionscompanythathandlespayrollformostofAmerica’scompanies,chosetoplaceanorderwithusoverthemarketleader.This was one of the most important customer wins in our history, as ADPdemandedahighlysecureenvironment.ADP’sadoptionofourservicevalidatedthesecurityofoursystem. Internally,theIPOhadawildlyinvigoratingeffect.Employeeswereecstaticaboutthefuture.Therewasgreatcamaraderieatthecompany,withbothadeeprespectfortheold-timerswhohadbuiltthecompanyandanappreciationforthenewcomerswhohadhelpedusprepare for thisnextstage.WhenJoeAllansoncame in on the day we filed—looking uncharacteristically disheveled, havingspentthenightatthefinancialprintersreadyingtheregulatorypaperworkfortheSEC—hewaswelcomedasasuperhero.

Although filing to go public was an incredible emotional high, there were

somelowsthatsoonfollowed.It’sroutinetohearfromtheSECwithquestionsaboutthefiling,andweheardfromtheCommissioninJanuary,amonthafterwefiled.BecausewewerethefirstSaaScompanytogopublic,ourmodelwasnewtotheregulators,andourofferingwasviewedasonethatwouldsetaprecedentforallSaaScompanies.Thefederalregulatorsaskedmanyquestionsaboutourdeferred cost model, specifically the basis for deferring sales commissions.(Traditionalsoftwarecompaniesimmediatelyexpensethefullcostoftheirsalescommissions.) The SEC inquiry delayed the IPO, which was originallyanticipatedforearlyMarch.Beforelong,theissueswereleakedtothepress. Afterweeksofdelay, a trip toWashington,DC, tomeet face-to-facewitha

senior partner fromErnst&Young, and the partner’s discovery of a recordedprecedent for ourmodel, theSECaccepted our point of view and accounting.Thismodel is theonlywayahighly involvedsoftwaresubscriptionmodelcanwork, and it’s in line with generally accepted accounting principles. It alsoallows a better evaluation of profitability and performance because it clearlydelineates howmuch is spent to earn revenue.Months later, accounting firmsbegantopublishouraccountingfordeferredcommissionsintheirliterature.Andthenyearslater,Ernst&YoungissuedarevenuerecognitionpositionpaperforSaaS companies, which covers the key concepts and issues that arise indeterminingwhenandhow to recognize revenue.NowallSaaScompaniesdotheiraccountingthewaywedo.

Although the SEC’s scrutiny of our accounting principles was a serious

challengeforourcompany,itdidnotsourinvestorsonthesalesforce.comdeal.Theextensiveinterestledustothefinanceindustry’sversionofa“bake-off,”inwhich ten investment banks came to our office to pitch for our business.Ourgoalwastofindtherightbanktounderwriteourdealaswellastherightgroupofresearchanalysts—peoplewhounderstoodourcompanyanditsplaceinourrapidlygrowingindustry.

Play #97: When It Comes to Compliance, Always Play by theRules

In the finalweeksbefore the IPO,SteveCakebread, the I-banking team,and IhadscheduledtripstomajorfinancecentersinEuropeandtheUnitedStatestovisitthetopinstitutionalmoneymanagersandotherinvestorsandgivethemourthirty-minutepitch.WewereatthestartoftheroadshowandhadjustarrivedinWashington,DC,whenwegotadisturbingphonecallfromoneofouradvisers:“There’saproblem;theIPOisbeingheldup.” Astheshocksubsidedandtheweightofthatstatementsetin,welearnedthattheSECbelievedthatwehadviolatedsecuritieslawbypromotingourofferingbefore the regulatorshaddeclared it ready togo.Thisaccusation referred toaNew York Times profile about me, which had run a few days before. Theregulators believed that my participation in the article violated the “quietperiod,”which restrictsmanagement and insiders of companies that are goingpublicfromhypingtheirIPOordisclosinganyinformationtothepublicthatisnotincludedinitsIPOprospectus. Wehadbeenconsciousof theSEC’squiet-period rules,whichmade itverychallenging toengage inourordinarilyhigh levelofPRactivities.Sales leadsthat came to us through publicity were the lifeblood of large parts of ourbusiness.We tried hard to maintain the right balance between promoting ourservices and respecting the rules. I discussed theNew York Times opportunitywithDavidSchellhase,ourgeneralcounsel,andheagreedthatfocusingonourbusinessandtheSaaSmodelwaswithintheletterandspiritofthequiet-periodrules. Whenever the reporter asked me about the offering, I declined tocomment, saying, “The rules prohibit me from making any statements thatwouldpromotemyIPO.”ReporterGaryRivlinevenwrote that I repeated thatstatement “whenever the conversation drifted even close to the pending stockofferings.” Otherthanmydecliningtocomment,Iwasn’tquotedverymuch.Althoughnoone at salesforce.com spoke about the upcoming offering, the story focusedmuch more on the IPO than we had anticipated. It was even in the story’sheadline:“It’sNotGoogle.It’sThatOtherBigIPO.”

TheattentionpaidtotheIPOduringthequietperiodcausedtheSECtodelaytheIPOforthirtydaystoallowanyhyperbolestirredupbytheTimesarticletosubside. A month’s delay made us vulnerable to the unexpected, such as adownturnintheeconomyoralossofinterestonthepartofinvestorswhomighthavewantedtobuyourstock.Wehadworkedintenselyforthis,ouremployeeshadmadesacrificesandtakenpaycutsatprecariouspointsinourhistory,andallof us hadbelieved that the financial rewards of our effortswerewithin reach.Instead,wefacedahugenewuncertainty.

Weovercamethisobstaclebyworkingevenmorecloselywiththeregulators

to understand their concerns.At the SEC’s request,David ended each day bysending the SEC copies of all the articles mentioning the company that hadappeared that day. Ultimately, despite its initial concerns, the SEC wasincrediblysupportivethroughoutthequietperiod,andtherestoftheIPOprocesswentsmoothly.IthinktheregulatorsunderstoodthattheTimesarticlehadbeenanhonestmistake. Althoughpainfulat thetime,inretrospect, thequiet-periodviolationdidnothurt us. In fact, ironically, the SEC’s slowing downof the process created farmore publicity for the IPO than the single New York Times article did. Theuproarhelpedsales,too:wewonmoreleadsthatmonththanwehadeverhad.

Later,Googlehadasimilarproblem,althoughtheirarticlewasinPlayboy,not

intheNewYorkTimes.Eventually,theSEC,recognizingthattimeshadchangedsincetheSecuritiesActof1933thatputthe“gun-jumping”provisionsinplace,updateditsrulesin2005. Luckily,theissuesweexperienceddidnotquellinvestors’enthusiasmforourIPO.WewerethefirstSaaScompanytogopublic,thefirstdot-comtogopublicinseveralyears,and the firstdot-comthatwould tradeon theNYSE.RingingthebellattheNYSEonthemorningofWednesday,June23,2004,wasoneofthemostexcitingmomentsofmycareer.We’dhadbigplansfor thismoment,includingwearingHawaiianshirtsandhostingaluautopayhomagetoouralohaspirit,butwedecidedthatitwouldbebest,giventhepreviousissues,toappearmore buttoned up. Playing it straight on the day of our IPOdemonstrated thedichotomy that is salesforce.com. We may use nontraditional tactics andaggressivebranding,marketing,andcommunications,butinternally,wearerunveryconservatively.

The elation I felt on the morning we went public lasted long beyond the

opening bell. It was incredibly gratifying towatch the stock climb; you can’thelp but take it very personally. We ended our first day of public trading at$17.20,a56percentgain—makingsalesforce.comthebest-performingtechIPO2004hadseenthusfar. WhenIwalkedoutoftheNewYorkStockExchange,Iwasstillreelingwithexcitement when I nearly collided with a longtime friend, Charlie Moore.Charlie’s office is onWallStreet, so themeetingwasn’t that surprising, but itwassignificant.CharlieistheexecutivedirectoroftheCommitteeEncouragingCorporate Philanthropy (CECP)—an organization that has inspired, mentored,andembracedus. Iknewseeinghimat thatmomentwasa sign.Wehadbeenrewarded financially and were now a public company, but we also had topreservetheidealsofthecompanywehadsetouttocreate.Wehadtostaytruetoourcorevalues,especiallyourphilanthropicvalues.

Play#98:FocusontheFuture

There is a lotofheavy lifting inpreparing togopublic.Then, afteryouare apubliccompany,everythingreallychanges.Ourcashaccountskyrocketedfrom$30millionto$150million,andweneededtobuildateamtomanageit.

Whereasourearlierhistoryhadbeendefinedbyfiguringouthowtosurvive,

an entirely different set of standards applies to managing a public company.Overnight, there were vastly more shareholders and a different level ofresponsibility.Ournewfocuswasonmaintainingrapidgrowthforourinvestors,whileatthesametimecomplyingwithanalphabetsoupofprocedures(GAAP,SOX, SEC rules) and corporate policies, local laws, and business values andethics. Inordertosucceedinthisnextstageinourevolution,wehadtocontinuetoputformalsystemsandproceduresintoplacethatwouldhelpusscaleandgrow.One of the most important changes was establishing a worldwide revenuedepartmenttomaintaintightcontrols.Revenuerestatementsarethenumber-onerisktoshareholdersandhavethegreatestpotentialtoderailacompany.WehiredMeredithSchmidt,whohadbeen atPeopleSoft andKPMG, todirect ournewworldwide revenue department. Coming from the old world of enterprisesoftware,Meredithwasexcitedaboutthepowerofthemultitenancymodel,andespecially its effect on revenue recognition. Shewas accustomed to having todeferrevenueuntilprofessionalservicesweredelivered,meaningthatenormouslicensefeesofmillionsofdollarscouldn’tberecognizeduntil thenextquarter.WithSaaS,thedeliveryisnearlyimmediateandtherecognitionofrevenuecanthereforecommencejustafewdaysafterthecontractissigned.

AlthoughMerediththoughtthatrecognizingrevenueonasubscriptionmodel

would be a cinch, she soon discovered that recognizing revenue for a SaaScompanycamewithawholenewsetofchallenges.Oursalesteamwassellingtothe customer constantly. Because we were continually adding new users orinnovatingnewproducts,ithadbecomecommontorenegotiatethecontractsandcreate new ones. That turned into an organizational nightmare for managing

revenue,andtheambiguitythatcamefromrenegotiatingmadeussusceptibletorisk.Weneededtofindawaytodefineeverythingupfrontandstandardizethewaywedidsalescontracts.Wehadtonegotiateallthefuturepossibilitiesaheadoftimetoguaranteethatwegotthebestterms. Therewere SECguidelines to help determinewhatwe required in order torecognizerevenue,butweneededanexperttohelpexplaintheguidelinesinthecontextofourbusinessandthedifferentscenariosthatcouldemerge.Inanefforttoclarify this,Meredithcreateda fifty-five-pagedocument for thefinanceandlegal departments to serve as a practical guide to revenue, and includedfrequently asked questions. Meredith’s document was designed to illuminateexactlywhatwecouldorcouldn’tdointhesalescontracts.Forexample,couldacustomeraskforadiscountonaproductthatitwasnotpurchasingatthistime?(Yes.) Does the pricing the customer negotiates apply to all of its affiliates?(Yes.) Do we give refunds to the affiliates that paid a higher price? (No, norefundsonrevenuethat’sbeenrecognized.)Asastartup,wehadbeensofocusedon survival that we’d adopted an uberflexible attitude as a way to pleasecustomers and secure deals.Aswematured, though,we needed to define thepracticesthatbestbenefitedourcompanyinthelongrun.

A large part of getting the right procedures in place included proper tax

planning—especiallyplanning for future internationalwork.“There isa risk ifyoudon’t figure thisoutbeforehandbecauseyouwillbeassessedafter,”RafeBrown,whocamefromCiscotoheadupsalesforce.com’snewtaxandtreasurydepartment,toldus.“Thisisthefirstplacetohurtyourself.”Taxplanningwasno longer just about being compliant but about becoming tax efficient,somethingthattakesyearsofplanningbeforeyouseethebenefits.

Play#99:AllowforChangeasYourCompanyGrows

Therewasa lot togetused to inournewstatusasapublicly tradedcompany.TheSarbanes-Oxleyfilingsrequiredanarmyofexpertsanddoubledtheamountwe had to spend on outside advisers. TheNew York Times article-IPO fiascotaughtusanimportantlesson,andwehadtobecomeevenmoremindfulofwhatwesaidpubliclyandwhenwesaid it.Therewerestrict rulesaround releasingquarterlyfinancialresults,shareholdermeetings,anddiscussionswithinvestorsand analysts. (I was accustomed to speakingwith journalists individually andinformally, but communicatingwithWallStreet required speakingwith all theanalystsatonetime,givingthemeachachancetobombardmewithquestions.) Therewas amajor attitude shiftwe had to adopt as a public company, andthis,perhaps,wasthebiggestchangeofall.Ateachlevelofgrowth,adjustmentsare required; it’s the natural process ofmaturing. That said, growing up isn’talways easy, and it’s not always fun. It can be tough for a fast-movingentrepreneurialculture toadoptmorestructure,butbringingoutside talent intotheorganizationcanmakeiteasiertoseewhatchangesarenecessarytoensureasmoothtransition. OneofthepeoplewerecruitedtohelpusscalewasKenJuster,formerU.S.undersecretaryofcommerceandaformerseniorpartneratamajor lawfirm.Iknew that there were many exciting opportunities ahead, including possibleacquisitionsandmoreinternationalexpansion,butsuchopportunitiescomewithrisks.Ken had the experience, judgment, and instincts to help usmitigate therisksandtakeactionsthatbefitamaturingorganization.

Under Ken’s guidance, we instituted a series of processes, practices, and

programstohelpmakeusmoresystematicinthewayweapproachedanumberofissues.Forexample,ourlegalteambegantomonitortheacceptabledegreeofrisk in customer contracts. Our corporate development team established adisciplinedandstructuredapproach toevaluatingpotentialacquisitions,so thatweavoideddealsthatcouldoverextendanddistractthecompany,whilewestillpursuedsmallertransactionsthatwouldhaveasignificantimpactonourgrowthand strategic evolution.Wealsobecamemore focused and strategic about our

international expansion. And we developed a public policy team, which isunusualforayoungcompany,butwasnecessarytoensuretherightregulatoryenvironmentfortheemergingSaaSindustry. Wealsoput inplaceformalproceduresandprocesses forpersonnelmatters,suchasstock refreshgrantsandperformancepay raises,whichpreviouslyhadbeenhandledonanadhocbasis.Inaddition,ourrealestateandfacilitiesteambegan to take a more strategic approach to managing our growth in the realestatemarket,graduallytransitioningusawayfrombeingoverlyconcentratedinSanFranciscoandimplementingcost-savingapproaches,suchasthe“hoteling”of office space, in which there are fewer work spaces than employees—apractical adaptation to the flexible andhighlymobile nature of theworkforce.Finally, we began to focus on a broad assessment of enterprise risks and onmeasures to mitigate such risks, including the development of businesscontinuityplans.

Thisoveralldevelopmentofourcorporateinfrastructurehasbeenoneofthe

keys toour successandourability togrowrapidly.Ofcourse,all thechangesdidnotnecessarilyhappennaturally.Employees,especiallythosewhohadbeenhere for some time,oftenwanted todo things theoldway.Asmuchas I lovechange,thatevenincludedmeattimes.Forexample,Iwasinitiallyhesitanttoincludesomeof thetougherprovisionsinsalescontracts.Eventually,however,customersagreedtoourdemands,andwesignedbetterdeals. Althoughittooksometime,welearnedthevirtueofpatienceandholdingoutforwhatwebelievedmadethemostsense.Welearnedtobemoreconfidentinourselves,ourproducts,andourcompany.Welearnedthathowyouaretreatedinthemarketplaceisareflectionofhowyoubehave.

We’veseentherewardsofalwaystakingthelongview.Althoughwe’vebuilt

acompanybymaking rapiddecisionsandby responding to theever-changingneeds of the market, financial success is not something we achieved throughquickactions.It tookcarefulplanning,far inadvanceofwherewewereat thetime.Aswe’velearned,itdoesn’tmakesensetoplanforthecompanyyouare.Youhavetoplanforthecompanyyouwanttobe.

ThinkThreeYearsOut

Whatyoudothisyeardrivessuccessfornextyearandtheyearafter.Youmustmakeinvestmentsforthefuture. Yearsago,wereceivedcriticismforspending“toomuch”onmarketingfora$250millioncompany,butwhenwewerea$250millioncompany,weweren’tthinkinglikea$250millioncompany.Weweretryingtobuildabiggercompany,andtheonlywaytodothatwastoactlikeone.

Later,aswenearedthe$1billioninrevenuemark,wedidn’tfocuson$1

billioninrevenue,butwhatweneededtodotogetto$10billioninrevenue.

PART9

TheLeadershipPlaybook

HowtoCreateAlignment—theKeytoOrganizationalSuccess

Play #100: Use V2MOM to Focus Your Goals and Align YourOrganization

I’ve always thought that the biggest secret of salesforce.com is how we’veachieved a high level of organizational alignment and communication whilegrowingatbreakneckspeeds.Whileacompanyisgrowingfast,thereisnothingmore important than constant communication and complete alignment.We’vebeenable toachievebothwith thehelpofa secretmanagementprocess that Idevelopedanumberofyearsago.

When I was at Oracle, I struggled with the fact that there was no written

businessplanorformalcommunicationprocessduringourgrowthphase.Infact,I remember asking Larry Ellison during my new hire orientation, “What isOracle’sfive-yearplan?”Hisresponsewassimple:“Wedon’thaveafive-yearplan, we barely have a six-month plan.” (Even for that, there was no writtenplan,onlyabudget.) Itwasour job to figure itoutwhatLarrywantedonourown. What I yearned for at Oracle was clarity on our vision and the goals wewanted to achieve. As I started to manage my own divisions, I found that Ipersonally lacked the tools to spell outwhatwe needed to do and a simple aprocesstocommunicateit.TheproblemonlyincreasedastheteamsthatIwasmanagingincreased.

Iwentouttolookforhelp.Isoughtwisdomfromleadershipgurus,personal

developmentgurus,andevenspiritualgurus.Overtime,Irealizedthatmanyoftheseseeminglydisparatesourcessharedstrikingsimilarities.Ilookedtoemploythesecommonthreadsinmyownwork,andovertimeIdevelopedthemintomyownmanagementprocess,V2MOM,anacronymthatstandsforvision,values,methods,obstacles,andmeasures.Thistool(pronounced“V2mom”)hashelpedmeachievemygoalsinmypastworkandhelpsmakesalesforce.comasuccess.Although there are many leadership paradigms and frameworks available tofollow, V2MOM offers a new simplicity. It is easy to digest, unlike otherprogramsthattakelongertounderstandthantheydotoimplement.

V2MOMenabledme toclarifywhat Iwasdoingandcommunicate it to theentirecompanyaswell.Thevisionhelpedusdefinewhatwewantedtodo.Thevalues established what was most important about that vision; it set theprinciplesandbeliefsthatguidedit(inpriority).Themethodsillustratedhowwewould get the job done by outlining the actions and the steps that everyoneneededtotake.Theobstaclesidentifiedthechallenges,problems,andissueswewouldhave toovercome toachieveourvision.Finally, themeasures specifiedthe actual result we aimed to achieve; often this was defined as a numericaloutcome.Combined,V2MOMgaveusadetailedmapofwhereweweregoingaswellasacompasstodirectusthere.

Essentially,V2MOMisanexercise inawareness inwhich the result is total

alignment. In addition, having a clarified direction and focusing collectiveenergyonthedesiredoutcomeeliminatetheanxietythatisoftenpresentintimesofchange. In the first few weeks of operation at salesforce.com, I suggested that mycofoundersandIdefineaV2MOMandcommit it towriting.AlthoughParkermay have thought it was somewhat strange at the time, somethingmade himsave the original salesforce.com V2MOM, which I had scribbled on a largeAmericanExpressenvelope.Heframed itandgave it tomeon thedayofourIPO.Youcanseehowitestablishedafoundationforthecompany—andhowithassteeredustodate.Inasense,thatV2MOMbecameourbusinessplan.

Manyorganizationsrelyonsomekindofrubricortooltohelpmanagetheir

business.Most common are organizational charts,which are used to delineatethestructureofanorganization.Ineverlikedorgchartsasamanagementtool.They are narrow, they don’t capture the nuances of an organization, and theyaren’t empowering for employees. Further, they are static—they don’t spurcreativityor encourage change.Another tool thatmanybusinesses employarekey performance indicators,metrics used to helpmeasure progress, and somecompanies lookat critical success factors for suchevents asproduct launches.We don’t use any of these at salesforce.com. Thesemetrics are stagnant, andthey don’t work in today’s fast-moving environment, which requires thatcompaniesadaptcontinuously.Organizationsthatdon’tadapthaveproblemsinthelongrun,andtheseantiquatedtoolsdon’tinspireconstantchange.

Salesforce.com’sFirstV2MOM,4/12/1999VisionRapidlycreateaworld-classInternetcompany/siteforSalesForceAutomation. Values 1.World-classorganization

2.Timetomarket3.Functional4.Usability(Amazonquality)5.Value-addedpartnerships

Methods 1.Hiretheteam

2.Finalizeproductspecificationandtechnicalarchitecture3.Rapidlydeveloptheproductspecificationtobetaand

productionstages4.Buildpartnershipswithbige-commerce,content,andhosting

companies5.Buildalaunchplan6.Developexitstrategy:IPO/acquisition

Obstacles 1.Developers

2.Productmanager/businessdevelopmentpersonMeasures 1.Prototypeisstate-of-the-art

2.High-qualityfunctionalsystem3.Partnershipsareonlineandintegrated4.Salesforce.comisregardedasleaderandvisionary5.Weareallrich

CreateYourOwnV2MOMV2MOMhasbeenusedtoguideeverydecisionatsalesforce.com—from

thosewemadein1999tothedecisionswemaketodayasthelargesthigh-techemployerinSanFrancisco.I’vealsointroducedittootherbusinessleadersandtomusicianNeilYoung,whousesittoalignhisgoalsforLincVolt,hiscurrentefforttocreateaclean-powerautomobiletechnology. ThebeautyoftheV2MOMisthatthesamestructureworksforeveryphaseinthelifecycleofanorganization.We’veuseditasabusinessplanforourstartup,andwefindthesameconstructtobeeffectiveforoutliningtheannualgoalsofapubliccompany.

Thinkaboutyouroverallorganizationalgoalsorapresent-daychallenge

withinyourorganization,anddiscoverhowyoucanoutlinethestepstosucceedinyoureffortthroughtheV2MOMprocess.Youmighthavemorethanoneanswertoeachquestion;besuretoprioritizeyouranswers: VISION(Whatdoyouwant?):________________________________________VALUES(What’simportantaboutit?):________________________________________METHODS(Howdoyougetit?):________________________________________OBSTACLES(Whatmightstandintheway?):________________________________________MEASURES(Howwillyouknowwhenyouhaveit?):________________________________________

Atsalesforce.com,everythingwedointermsoforganizationalmanagementisbasedonourV2MOM.It is thecorewaywe runourbusiness; itallowsus todefineourgoalsandorganizeaprincipledwaytoexecutethem;andittakesintoconsideration our constant drive to evolve. The collaborative construct worksespeciallywellforafast-pacedenvironment.Itischallengingforeverycompanyto find a way to maintain a cohesive direction against a backdrop that isconstantlychanging,butV2MOMisthegluethatbindsustogether.

Play#101:UseaTop-DownandBottom-UpApproach

Fromtheverybeginning,we’vehadaV2MOMatsalesforce.com,andwe’vealwayskeptitupdated.Itisalivingdocument.It’smyresponsibilitytowritetheV2MOM,andthenIworkwiththerestofthepeopleatourcompanytomakeitasaccurateaspossible.IrewritetheV2MOMeverysixmonths,whichhelpsmegainpersonalclarityaswellascommunicatewiththecompany.

ImmediatelyafterIwritetheV2MOM,Ishareitwithourtopofficers(what

wecallour“President’scommittee,”or“Pcomm”)atourweeklymeetingsandask for their feedback.Sometimes they love it andsometimes theyhate it,butthe exercise always ensures a worthy debate. Once everyone comes to anagreement,webringtheV2MOMtoour“Core,”whichishowwerefertoourtopthirtyofficers,andwethenincorporatetheirinsights. ThisprocessofconstantiterationiscriticaltomakingtheV2MOMaccurateaswellastointegratetheseideasintoourcorporateconsciousness.Onewaywetruly achieve this is by presenting the V2MOM at our bi-annual globalmanagers’ meeting, where we gather our top two hundred fifty officers. WebreakthisgroupintofifteenteamsandaskthemtofocusonacriticalpartoftheV2MOM.Theythenpresent theirworkbackto thewholegroup.Throughthisprocess, our entire management team becomes truly involved in setting thecompany’sdirection.

Withoutadoubt,thisprocesshasbeenourbest-keptsecrettothefastgrowth

and excellence we have achieved. Reading the Vision statements through asamplingofyearsillustratesthegoalsofourcompanyatvariouspointsintime.We have been able to reach these goals because our vision—and a way toachieveit—wasdefinedandcommunicated. Althoughwe rely on our executives to return from the offsitemeeting andintroduce theV2MOMto theirdepartments, this top-downapproach isnot theonlyway that themessages flow throughourorganization.Wehavebenefitedfrom involving our employees in this process. With the development of our

platformtechnology,wegainedincreasedopportunitiestocommunicatewith—andseekadvicefrom—ouremployees.

We now collaborate on the corporate V2MOM with all salesforce.com

employees throughIdeaExchange,a socialnetworking tool thatemployeesusetocontributetheirideasaswellaspromoteandcommentonothers’ideas.Mostrecently,whenourV2MOMwentliveonIdeaExchange,wereceivedfeedbackfrommorethanhalfofthecompany’semployeesoveratwo-weekperiod.Iwasamazed at the unfiltered view this afforded us. Employees told us what washappening in customer support, employee development, and delegation, andsuggestedideas to improveourorganization.Weusedtheir insights tocreateabetterfinalV2MOMandsetthecourseforournextyear.

VisionStatements1999-Rapidlycreateaworld-classInternetcompany/siteforSalesForceAutomation. 2002-Globalleadershipinprovingthe“softwareasservice”modeldrivenbyanenthusiasticandwildlysuccessfulcustomercommunity,andenergizedbyworld-classemployees.2004-Dominatethesoftwareasaservicemarketbydoublingourenthusiasticandwildlysuccessfulglobalcustomercommunitythroughflawlessexecutionofourprovenmodel.2006-Delivertrustedcustomerandpartnersuccessglobally,andaccelerateourgrowthastheunrivaledon-demandstandardforTheBusinessWebthroughefficientexecution.2009-Createwildlysuccessfulcustomers,secureeveryrenewal,andgrowourcustomerrelationshipsthroughtheServiceCloudandForce.com.Increasetheproductivityofeveryemployeeandeverydepartment,togainmarketshareanddominateenterprisecloudcomputing.AlthoughweuseonecorporateV2MOMtodirectsalesforce.com,V2MOMs

cascade throughout the entire organization. We’ve created a system wherebyeachexecutivebuildshisorherownV2MOMfromthecorporateV2MOM,andthenhisorherdirectreportscreatetheirownV2MOMs,andsoon,untileveryemployeehasaV2MOMtoguidehimorherforthecomingyear.Thisishowwealignindividualandcorporategoalsanddemonstratehoweveryonefitsintotheorganization.(It’salsothebasisforperformancereviews.)It’sempoweringforemployeestoseehowtheirworkisimportanttothesuccessofthecompany.This process is so critical to us that we have created an application on ourForce.com platform called “Peopleforce,”which enables us to track all of theV2MOMs.Thisismorethananapplication,though;it’sbecomeour“corporateoperatingsystem,”andeachupdateallowsustorunmoreefficiently.

Play#102:BuildaRecruitingCulture

OurveryfirstV2MOM,writtenin1999,revealedtousthatourbiggestobstaclewasa talentdeficit.Weneededmoredevelopersandnewproductmanagers tohelp us build our service. However, the first hire I made based on thatintelligencewasnot anotherdeveloper. ItwasanHRmanager.Althoughmoststartupsdon’thireadedicatedHRpersonrightaway,doingsomadesensetomebecauseacquiringtherighttalentisthemostimportantkeytogrowth.

The right people and the right number of people set the pace for the entire

company.Afterall,thebetterthedevelopersyouhave,thebettertheproductyoubuild. The more developers you have, the more products you can build.Essentially,recruitingistheenginethatdrivesdistribution.Therefore,hiringwas—andstillis—themostimportantthingwedo. NancyConnery,ourfirstHRdirector,setthetoneforarecruitingculturethatradiated throughout the entire organization. In a way, we also had the closequarters of the apartment-office to thank. Our crowded space forced different“departments” (one-person departments at the time) tomix, and everyone gotswept up in the excitement and responsibility of hiring. AsNancywas goingthroughresumes,forexample,she’dcomeacrosscandidatesthatpeopleinotherdivisions already knew, and she’d solicit off-the-cuff references. That type ofinterdepartmental communication and collaboration was invaluable. We’vecontinued to tap into—and trust—our network as we’ve grown. Socialnetworking tools, such asLinkedIn andFacebook,make it easier than ever toestablishconnections,sourcereferences,and leverageeveryoneasmembersofourrecruitingteam.

Although we had ambitious plans when it came to hiring, we were often

stymiedbyourcompetitioninourstartupdays.Wewerecompetingwithscoresoffast-hiringdot-comsforthemosttalentedemployees.Thesecompanieswerespendingridiculoussumsofmoneytorecruitthebestandbrightestpeople,andseveral were paying signing bonuses.We couldn’t afford that, sowe tried allsortsofoddstrategies(likeradioads)tofindcandidates,andweconsideredthe

diversecandidateswe reeled in.One time,RobAcker,whowasona frenziedhuntforsalespeople,returnedfromarecruitingfairtellingmeaboutsomeofthecandidates he’d met. Highlights included a fishing boat captain and a truckdriver. Thefactwasthatbecausetherewasatalentshortageandwecouldn’taffordtopayforexperience,wehadtobeopentohiringpeoplewithoutit.Thisledustopeoplewhowereearlyintheircareers,butbrightandveryhungry.Wefocusedon searching for raw talent thatwe could shape.Wedeveloped a “checks andbalances”systemwherebyeverybodyhadtointerviewandreviewthesehires,sowefeltconfidentthatweweregettingtherealdeal.

HiringChecksandBalancesThefirsttraitwelookedforinnewhireswasattitude;thesecondwasaptitude.Wevettedcandidatesthroughmultipleauditpoints:

•Aggressiveinterviews.Weusea360-degreeinterviewprocesswherebypeersandothermanagersinterviewthecandidate.Duringourfirsttwoyearsinbusiness,IwasadamantthatIhadtomeetallhiresandinterviewallcandidatesaswell.EveryonehadtoagreethatthecandidatewasagoodfitwiththecompanyDNA.

•Presentations.Askingcandidatestopresentallowsustoseehowtheyperformonthefly,andespeciallyhowdeftlytheycanhandlecurveballs.Itworksonamoresubtlelevel,too.Preparationdemonstrateshowbadlycandidateswanttobewithus.WenotewhetherornottheyhavebeentoourWebsite.Aretheyfamiliarwithourproducts?Dotheyknowourcustomers?

Inmanyways, itwas easier tomold raw talent than itwould have been toretrain people with extensive industry experience.Many of the people in ourindustry had been brainwashed by the client-server model, and that attitudewould have clashedwith our culture.Ultimatelywe found that as long as thepeople we hired weremotivated, they were able to rise to any challenge andcould easily adapt to our new vision and aggressive goals. It turned out thatmany of the individuals in this fresh talent pool were better than the mostseasonedpeoplewehired, and they became someof ourmost successful. Forexample,aformerassistantatalawfirmwhomwehiredforanentry-levelsalesposition went on to become a sales manager and one of the company’s top

performers.

Play#103:RecruitingIsSales

We takehiringasseriouslyaswedorevenue.SomepeoplesayIamobsessedwith hiring, and they’re right. The demand for top talent in today’s market,especially in IT, is ferocious. It is not uncommon for candidates to entertainmultipleoffersfromhigh-profileandwell-brandedorganizations.Wealsohavetocompetewithstartupsthatareofferingequityandtheenergizingopportunityofbuildingsomethingfromthegroundup.(Ifyouareasmallbusiness, this istherightcardtoplaytowinthemostmotivatedanddedicatedemployees.)Forallbusinesses,nomatterwhatsize,itisnecessarytocomeupwithacompellingstoryinordertocompete.

We apply our sales playbook to recruiting. One example is the “attraction

strategy.”Wedon’tclosemostofourdealsonprice,andsimilarlywedon’twinmost of our employees on compensation. We use something that has morestayingpower,andsomethingthatcan’tbecopiedormatchedbyacompetitor. In sales, for example, we sell the vision we have for the future and theopportunitytoparticipateinbuildingitwithus.Wehaveotherpitchesaswell,andwetakethetimetoresearchtheprospectanddeterminewhichpitchwillbemosteffective.Weemploythismultipitchmenuinasimilarwayinrecruiting.Ifweare looking forsomeone indevelopment, forexample,wepitch innovationandouragiledevelopmentmethodology.Candidatesareexcitedtocontributetosomethingthatcustomersarepassionateabout.Theyarealsoattractedtothefactthat the code theywrite at salesforce.comwill be live in three to sixmonths,whereasmostofthecodetheywriteatMicrosoftwillneverseethelightofday. When it comes to winning the best salespeople, we pitch opportunity.Corporatesalesistheheartofourbusiness,andwepromoteourprogram’sbuilt-in career ladder to attract candidates. If someone has a vision to be a topsalesperson, she appreciates thatwehave a definedway to help her get there.(WefindthatthisisofparticularvalueinJapan,wherebeingatopsalespersonisanextremelyhonoredposition,yetlocalcompaniesdon’tofferadefinedcareerladdertohelppeoplegetthere.) It’snotjustthepitchthatweborrowfromsales;wealsoutilizetheseed-and-

growphilosophy. InsteadofhavinganHRdepartment thatacquired talent,wewantedtobuildamachinethatgeneratedahugepipelineoftalent.Todoso,westarted one-on-one relationships with prospects. We kept in frequentcommunication with these people. In many cases, the person we werecommunicatingwithorinvitingtohavelunchwasn’tevenlookingforajob(andmay not even have known he was on an interview). Frequently, there wasn’tevenanappropriatepositionatourcompany.Weknewtherewouldbeatsomepoint, though, andwewanted tomake certain thatwe had identified the rightcandidate.Later,oncethatpersonwasinthedoor,weleveragedhisrelationshipstolurehisbestcolleaguesovertoourcompany.

Justasourboardmembersareatremendoushelpinconnectingustotheright

executiveswhenwegoonsalescalls,theyplayanequallyimportantroleinthecandidate-generation cycle. Early on, board member and investor Igor Sillrecommended a great developer, Paul Nakada, who joined us as the fourthengineer during our startup days and made many significant contributions tobuilding theproduct.Otherboardmembers identified additional talent thatwecouldnothaveaccessedonourown.Manycompaniesdonotcontinuetorelyontheirboardsasa resource forcollaborationas theygrow,butwe’ve foundourboard to be especially valuable for identifying talent in new regions or newdepartments.Wearestill instartupmodeinmanyof theseareas,andwecan’tafford to put asmuch cash on the line as amore established competitor.Ourboardrelationshipshavegivenusaprovenwaytoappealtotheheartsandmindsofthebesttalent.

BuildaRecruitingMachineMuchlikeoursalesteam,therecruitingteamuseseveryeffortpossibletogenerateleads. •Don’twaitforresumestocometoyou.Getthesearchparty

going.ErinFlynn,theheadofworldwiderecruiting,alongwithherstaff,isalwayssearchingtoidentifythetop5to10percentoftalentatcompetingorganizations.(Erinisonaconstanttalentquest,networkingwitheveryoneshehires,ourboardmembers,andpeopleshemeetsatparties.)

•Considerrecruitingtobepartofyourjob.Iampersonallyon

thehuntfortalentatalltimes,andstillholdonemeetingeverydaythatIwouldconsiderajobinterview—whetherthecandidateknowsitornot.WheneverImeetsomeoneinteresting,Ican’thelpbutwonderifheorshewouldbeanappropriatefitforourcompany.Istayconnectedtothesepeopleandfindthatmanyofthemturnouttobepossiblecandidateleads.Onaverage,IforwardourHRdepartmentaboutfivee-mailsadayandaskthemtofollowupwiththesepotentialcandidates.MostofthesecompellingindividualswouldnothavecontactedourHRdepartmentorblindlysubmittedaresume,yetthisishowwehavewonsomeofthemosttalentedpeopleonourteam.

•Includeemployeesinthetalentquest.Employeesareamongtheverybestsourcesoftopbesttalent.Talentedpeoplealwaysknowothertalentedpeople.Weaskemployeestoassistuswithconnections,andweencourageeveryonetoreferafriend,formercoworker,industrypeer,orfamilymemberwithwhomtheywouldwanttowork.Asanincentivefortheirefforts,weofferabonus($2,000to$10,000,dependingontheposition)iftheirreferralishired.Itworks:in2008alone,wehired251referredcandidatesandpaidoutmorethanhalfamilliondollarsinreferralbonuses.

•Addpeopletoyourleadershiplevelfirst.Thisistherightstrategyinthebeginningofacompany’slifecycle,andshouldremainthestrategyasanorganizationgrows.Ifwemoveintoanewmarketoranewproduct,Iwantthemostknowledgeableperson—theguru—onourside.Oncetheguruarticulatesthestrategy,heorshemakesthenecessaryhiresandinveststheresourcesnecessarytoexecuteit.

Play#104:KeepYourStandardsHighasYouGrow

Inourearlydays,wehadtosellhardtowincandidates,butnowwe’vecreatedaplace that people flock to—andmore than half of the peoplewho come to usaren’t the right fit. Just as it is imperative to set the talent bar high from thebeginning,it’sessentialtokeepitjustashigh.Asacompanygrows,thebiggestchallengeistheconstantpressuretoloweryourhiringstandards.

Hiringthebestrequiresdiligence.Whenwehiretalentdirectlyoutofcollege,

welookforindividualswhocomefromthetopuniversitiesandmakeupthetop5percentof theirclass. Ifwearehiringsomeonewithmoreexperience, thoserules change. We look for massive accomplishment and energy. We likeemployeestohaveanentrepreneurialdrive;welikepeoplewhoarescrappy;wevaluefolkswhohavesomethingtoprove. Notlongago,aguestatasalesforce.comoffsitemanagementmeetingaskedhow many of the executives in attendance were first-generation collegegraduates.One-thirdofthepeopleintheroomraisedtheirhands.That’safairlylargenumber,yetitdidnotsurpriseme.Wehaveahighlymotivatedandhungrygroup,inpartbecausetheyhaveneverbeenhandedanything.Thosearethekindofpeoplewhofit—andpropel—ahigh-growthorganization.

HowtoHireInnovators:HirePeopleWhoAreBetterThanYouConventionalwisdomsaysyoushouldhirepeoplewhoarenotlikeyou.That’swrong.Hirepeoplewhoarelikeyou,onlybetter.Growingup,myparentsalwaystoldmethattogetbetterattennis,Ihadtoplaywith“A”players.Byplayingwiththebest,theysaid,myowngamewillimprove.

Wehavealwayshadaveryrigorousselectionprocess,andwehavecontinued

itaswe’vegrownbecauseeachhireissocriticaltooursuccess.Wevetpeoplethrough an extensive interview process that typically includes four to five

interviews,butitcanswelltotentofifteendifferentmeetings,evenforrelativelylowpositions. (This is helpful for the candidate too. If she is intimidated, sheself-selectsout,whichsavesustime.)

Relationships,Relationships,RelationshipsIntheearlydays,Iinterviewedeveryonewhocametoworkatsalesforce.com.That’snolongerpossible.Istillliketohaveahandineverynewhire,though.It’simportantformetobeabletoreferenceeveryonewhojoinsusinaleadershipposition,meaningthatIknowandtrustsomeoneheorsheknows.Someonefrommyexecutiveteamstillinterviewseverycandidatewehire—evenforthemostjuniorpositions.Afterall,wearelookingforthosejuniorpeopletogrowintomoreseniorposts,andit’scriticaltomakesurethattheyalignwiththevisionoftheorganization.

The(Unlikely)Number-OneCharacteristicYouWantinaHireWhatwevaluemostisadesiretochangetheworldviatechnologyandaninterestingivingbacktothecommunity.Wefindthatthisdesiredrivesthetypeofcandidatewhosharesourvision.Lookforcandidateswhoappreciateyourvisionandshareyourvalues.Thesearethepeoplewhowillfitbestandmakethemostsignificantcontributions.

High-level positions often require dozens of interviews, often with some

unlikely stakeholders. When Jim Steele was interviewing for the role ofpresidentofworldwideoperations,hemetwiththirty-sixindividuals,includinginvestors, a corporate psychiatrist,mygirlfriend, andmydog.This in nowaysloweddowntheprocess.Jimmetwitheachof thesepeopleovertwoorthreeweeks, andat theendof theprocesswewere100percent surehewouldbeagoodfit—andwewereright.

It’sveryimportantforhiringtobeconsensusdriven.Tothatend,weusethe

“allyes”rule.Ifacandidatemeetstenpeopleandninesayyesandonesaysno,thatcandidatewillnotworkatourcompany.Thismightsoundunusual,butnewemployeesneedtohavethesupportofallthestakeholders;otherwisetheywillnotbesuccessful.

Play#105:HowtoRetainTopTalent

Getting the right people on board is an utterly useless accomplishment if youcan’t keep them for the long term. All new employees require a significantinvestment,andcompaniescan’taffordtobesloweddownbypeoplewhodon’tworkoutorstay.

We’ve devised an extensive onboarding process to help employees achieve

success.Whenwestarted,newhireshadtosetuptheirowncomputers(andtheirown desks), which was fine because we needed self-starters, but as we’veevolved, so too has our orientation program. In the past number of years,wehaveincludedallnewhiresinatwo-dayorientationatourheadquartersasawaytoget themoff totherightstart.Their laptopissetupbythetimetheyarrive,andpaperwork—thebaneofmostorientations—istakencareofbeforehand.Thefirstdaybeginswithamemberoftheexecutiveteamgivinganoverviewofthecompany.Thenewhiresmeetothercompanyleaders,learnaboutproductsandgovernance, and learn aboutV2MOM.After the final session ends,we inviteeveryone todinner at a top restaurant.Thismakes sensebecause relationshipsarefundamentaltothesuccessofanybusiness.Takethetimetogettoknowoneanotherasindividuals.

GettingofftotheRightStartEncourageemployeestostopbythedeskofnewhirestogreetthemandexpressthattheyarehappytoseethematthecompany.It’sasmallthingthatimmediatelymakespeoplefeelwelcomeandhelpsboostteamworkandcamaraderie. Makesureeverynewemployeehaslunchplansonhisorherfirstday.Ifyouortheemployee’smanagercan’tgo,haveanothermemberofyourteamdoso.Itisimportanttosettherightmotivatingtonefromdayone.

A fundamental part of our orientation—and something that should beimmediatelyintroducedtoemployeesatanysizecompany—isacrashcourseonthe product and an immersion in the company culture. We offer intensiveproduct training so that all new hires receive insight into how a typical userworkswithourapplication.Inaddition,wehaveahalf-day“foundationevent”inwhichnewhiresparticipateinacommunityserviceproject,suchascleaningupapark,doingmaintenanceworkat ahomeless shelter,or serving food inasoupkitchen.Thisdemonstratestheimportanceweplaceongivingbacktoourcommunities. It creates an opportunity for employees to think differently,employteamwork,andworkwithpeopleacrossdepartments—allconceptsthatarecentraltothewayweoperate.

There’s also a required session on culture led by our chief creative officer,

BruceCampbell,who impartshisphilosophy that“aculture isa sharedvisionandsharedvalues.”Heteachesattendeesaboutourculture,whichisdefinedbya focus on the customer, standing for something, delivering on promises, andbeingresponsive,reliable,confident,passionate,approachable,trustworthy,andfun.Brandsarebuiltandsustainedonconsistency.Whetheremployeesrealizeitornot,everyoneinacompanyinterfaceswithcustomersinonewayoranother,and their attitudewill affect thebrand.Awrongmessageor attitude fromonepersonhasthepotentialtodiluteourbrand,sowetrytomakesureeveryoneisinalignmentfromthebeginning.

Play#106:TheImportanceofMahalo

It’s necessary for every company to integratemahalo—theHawaiian spirit ofgratitude and praise—into its corporate culture. It’s simple enough to rewardemployees for extra performance with extraordinary compensation and acompetitive rewards portfolio, but it’s really the everyday environment thatcontributestopeople’shappiness,success,andlongevityatacompany.WhenIstarted salesforce.com, I very clearly remembered the innovative culture ofAppleandrecognizedthatitwasthesmallthings(likethefruitsmoothies)thatmadememoreexcitedtogotoworkeveryday.Iborrowedpiecesofthatwhenwe launched salesforce.com, including a kitchen full of healthy snacks, andmassages formembersof the tech teamas a special thank-you followingeachrelease.We also added perks that reflected our culture: a company-paid gymmembership, free yoga classes with a renowned instructor, and discountedticketsonHawaiianAirlines.

Further,we’vemade celebrating our collective success an important part of

our culture. It motivates people, and it’s fun. We offer opportunities foremployees to nominate their peers for various recognition categories, and werewardthewinnerswith$500bonuses.Perhapsourmostunusual—andvisible—award recognizes distinguished employees with a life-size poster of them,whichwe display throughout our office. It’s easy and inexpensive enough foranycompanytodothis,andtheprocessaloneisenjoyableenoughforeveryonetomakeitworthwhile. Conventionalwisdomsaysthatmostsalespeopleare“coinoperated,”somostcompaniesusemonetaryincentivestomotivatetopsalespeople.Thisisessentialbut insufficient, as material things are not really what brings anyone truehappiness.Whenaskedabouttheirbestyear,salespeoplerarelypointtotheyearin which theirW-2was the highest; they point to a year in which theywerechallengedandrecognized,andhadfun.That’swhywerewardanysalespersonwho makes 100 percent of his or her quota (and a partner or friend) with afantasticexperience—athree-daytriptoMaui.Typically,60to65percentofouraccountexecutivesqualifyforthistrip.Mostcompaniesrewardonlythetop10to20percentoftheirsalesreps,butthatstrategydoesn’tyieldaveryhighreturn.

Morale for the top people is sky high, but it is brutally low for the 80 to 90percentofpeoplewhoarenotrecognized.Bysettingthebarwithinreach,we’vefoundthatmoralesoarsallyear—andpeoplestillstrivetoexceedexpectations.

To distinguish ourselves from other employers and to further encourage

peopletoperform,westrivetoofferexperiencesthatarememorable.That’swhywecameupwithBreakfastatTiffany’s.EveryyearinHawaii,wetaketheverytopsalesproducersandtheirguestsbylimototheFourSeasonsResortLana’i,whereeachgetsapersonalshopperandasponsoredshoppingtriptoTiffany&Co.,heldbeforethestoreisopentothepublic.AnAudreyHepburnlook-alikewelcomesthetopperformersandserveschampagne. It’s important to reward people because it’s the right thing to do, but thebenefitscomebacktothecompany.Involvingspousesorpartnersproducesgreatresults!Keeping themhappykeeps theemployeeshappy.Free tickets toaballgameonlygosofarwithanemployee(oraclient).Ifyoureallywanttomakeadifference, give something meaningful to an employee’s significant other orchild. Things that have some emotional value attached to them are whatencouragepeoplethemost.

Play#107:FosterLoyaltybyDoingtheRightThing

ItwasverydistressingwhenSteveGarnett,whotirelesslybuiltourbusinessinEMEA,cametomeandexplainedthathehadbeendiagnosedwithrheumatoidarthritis. He was surprised when I took an interest in his health care andintroducedhimtodoctorswhoIbelievedcouldmakeadifference.Iwashappytohelp,anditwastherightthingtodo.Wehavealsobenefited,though.Helpingpeople deal with challenging issues that lie outside the business arenasignificantlystrengthens thebusiness relationship.Not longafterwesupportedSteveincontendingwithhishealthissues,acompetitorofsalesforce.comcalledhimandtriedtolurehimaway.Althoughapromisingopportunity(thecompanywasplanningan IPO)mighthavepiqued the interestof some, the relationshipSteveandIhadforgedmadeitimpossibleforhimtoconsiderit.“I’mflattered,”hesaid,“butIcouldnevergoandcompetewithMarc.” It’s important to take the high road in the situations you couldn’t havepredicted—the situations that haven’t beenmapped out by the HR handbook.Take, for example, what happenedwhen one of our sales account executives,ScottEbersole,was invitedon theHawaii tripawarded to the top salespeople.Scottandhiswife,Wendi,leftforthetripafewdaysearly,andshortlyaftertheyarrived in Maui, Wendi, who was pregnant with twins, was rushed to thehospital,wheresheunderwentsurgery.Shespentthenexttwoweeksincriticalcondition,andaweeklatergavebirthtoBryceandKendall,eachbabyweighingonlytwopounds. Scott needed away to bewith his family for themanyweeks they’d be inHawaii,buthealsowantedtobeabletowork.Wesethimuptoworkremotely,buttherewereadditionalexpenses—arentalapartment,acar,andfood—sowealso covered them.After severalmonths, the Ebersoleswent back toAtlanta.Everyoneisdoinggreatnow,andthat’swhat’smostimportant,butasaresultofhelping his family in a difficult time, we earned the 100 percent loyalty of avalued employee. “Salesforce.comhasmade this situation as good as it couldhavebeen,”Scottsaid.“I’vealwaysfeltthatIhavetheirsupport,andit’smademetowanttoworkevenhardertogiveback.”

Play#108:ChallengeYourBestPeoplewithNewOpportunities

The very best and brightest people can quickly overcome challenges and bereadyfor thenextstep.It’s imperative tooffer themnewopportunities tokeepthemengagedandfirmlycommitted.Asmuchasit’snecessarytodefineinitialjob positions, it’s equally imperative to allow the individual to stretch in newdirections.

Welearned this lessonaccidentally,whenweneededpeopleanddidwhat it

took to get them in the door—and moved them around later. As we grew, itbecame clear that the best people don’t want to be confined by static jobdescriptions. Take, for example, the time we were hiring our first financemanager,JoeAllanson.NancyConnery,ourVPofHR,admittedtoJoethatwedidn’tevenhaveanamefortheposition,oranypaperworkonit.“That’swhatI’m looking for: a clean piece of paper,” Joe toldNancy.He had been in thesamepositionforfouryears,andfeltthattherewasnowheretogrow. One of the best ways to keep employees engaged is to evolve positionsfrequently.(Thisisnotsimplyinthecontextofdealingwithsomeonewhoisnotworkingout.Itshouldgowithoutsayingthatyouwouldremovethosepeopleasquicklyaspossible.)Takethepeoplewhoaredynamiteintheirpostsandmovethemsomewhereelse.Theywillappreciatethenewchallenges,andastalespotinyourorganizationwillbereenergized,oranewareacangetofftheground.

We select our very best people and put them in new regions, move them

across departments, and transfer them in and out of headquarters. As peoplegrow and gain more access to the executive team, they have a broaderperspectiveandadeeperunderstandingofourcompanyculture,salesstrategies,and marketing tactics. They can help leverage this knowledge across thecompany.Rotationalassignmentscanspanafewyears,afewmonths,orjustafewweeks.Evenshort-termexperienceshelpemployeesdevelopnewskillsandperspectives.

HireFast,FireFastYoudoyourbesttohiretherightcandidate,butevenwithgreatpracticesinplace,thereareinevitablysomepeoplewhodonotworkout.Theymightbetalented,buttheyarenotagoodfitforyourorganization.Ifpossible,considerotherrolesforthem,butdon’tkeeptheminpositionsthatarenotworking. Thewaytodetermineifit’stimetoletsomeonegoisthis:Wouldyouregretitifthepersonresigned?Ifyouwouldn’tregretit,youshouldhavealreadylethimgo.Youwanttoregretthelossofeveryonewhowalksoutthedoor.Inbrief:

•HireAplayers.•DemoteBplayers.•FireCplayers.

Play#109:SolicitEmployeeFeedback—andActOnIt

Right before salesforce.com’s IPO,we had about five hundred employees and$100millioninsales.Wewereinterestedintakingasnapshotofourcompanyatthispivotalpointsothatwecouldseehowthingschangedaswegrew.Theonlyway to get a truly 360-degree benchmark of our organization was to surveyemployees.Although I knew thiswas important, itwas a difficult decision tocommittothiseffort.Itwouldexposeustovulnerabilities,andtheresultswouldbeareflectiononmanagement.Ithoughtemployeeswouldbeskepticalaswell.Would they perceive management as wanting to use the survey results formalicious reasons (to identify dissatisfied employees or to weed out weaksupervisors)?Wouldpeoplereallyparticipate?

IexpressedmyconcernstoDavidYoussefnia,thefounderofCriticalMetrics,

aWeb-basedsurveycompany.“Youdon’twantasurveytohavenegativeenergyaroundit;youhavetoembraceit,”Davidtoldme.“Whenasurveyisconductedin a climate of mistrust, it is understandable that employees may thinkmanagement may use the survey for nefarious purposes.” David stressed theimportance of being open with employees about how the results would andwouldn’tbeused.Hearguedthatifwesharedourfindings—andactionplans—theprocesscouldbuildtrustbetweenmanagementandemployees. Iwasn’t sure.However, Iwas sure that that this represented a transition tobecomingamoremature company.Of theFortune500companies,70percentsurvey employees, and of the twenty-five companies named the bestmedium-size places to work in America, 92 percent conduct employee surveys.1 Weconductedourfirstsurveyinspring2005,notlongaftertheIPO.Welearnedthatalthougheveryonewasexcitedaboutthecompanyandfocusedonthecustomer,employeesweren’tsureaboutthelongevityoftheircareerswithus.

“I’mdoingthebestworkofmycareer,”employeesstatedinthesurvey.“Now

Iwanttofigureouthowtobealifer.”Alifer?Thatwasn’tsomethingweeverthought about at salesforce.com. Lifers were employees they had at Hewlett-PackardorIBM.Yetouremployeesweredemandingtoknowwhatwasinstore

fortheminthelongterm. Salesforce.com had placed little importance on formal career development.Werealizednowthatwehadtofocusonit.Ouremployeesneededmoreclearlydefinedopportunitiestogrow.Thecompanycouldalsobenefitbydevelopingarobustpipelineofinternalcandidates.

The revelations from the survey responses led us to add another level of

managementtogivepeoplemoreopportunitiesfordevelopmentandgrowth.Italsopromptedustohoneourcontinuingeducationprogram.Oneexamplewasa“black belt” series of quarter-long classes taught by executives and veteranemployeeswhowere able to take their salesfore.comexpertise and pass it on.For instance,ourVPofcorporatestrategy,BruceFrancis, taughtaclasscalledShock and Awe: Positioning and PR. Employees were eager to learn fromexecutivesandinternalleaders.Infact,theblackbeltprograminmarketinghasbeenoversubscribed,yieldingawaitlisteachquarter.

BenchmarkforEmployeeSuccessWeusethischecklisttomeasureoursuccessasleadersandmanagers.Westrivetocreateopportunitiessothatallouremployeesareabletocheckoffthefollowing:

•Iamdoingthebestworkofmyprofessionalcareer.•IhavetheopportunitytodowhatIdobesteverydayatwork.•Inthepastsixmonths,Ihavetalkedwithsomeoneaboutmy

progress.•Thereissomeoneatworkwhoencouragesmydevelopment.•Ihaveopportunitiestolearnandgrowatwork.•Myopinionsaresoughtafterandseemtocount.•Mysupervisor,orsomeoneatwork,seemstocareaboutmeasa

person.•Ihaveasupportnetworkatwork.•Mycoworkersarecommittedtodoingqualitywork.•Iamrecognizedandrewardedformycontributions.

Bythetimeweconductedthenextsurvey,wereceivedmuchhighermarksfor

traininganddevelopment.Thesurveysuccessfullyidentifiedpainpoints,andwecame up with solutions. In that sense, the use of surveys surpassed myexpectations,notonlybyprovidingabaselineindicatorbutalsobyservingasastrategicplanningtool.

Play#110:LeverageEverything

Thepowerof leverage isaconstant themeat salesforce.com.We leverageourcustomers’energytoevangelizeandsellourproduct;weleverageourresources(equity, product, time) to give back to the community; we leverage ouremployees’networkstotapthebesttalent.

In a similar way, we leverage the skills of outside organizations to help

service,sell,andbuildourproduct(andaneconomyaroundourproduct).Inthebeginning,wedidallthesupportandservicesin-house.Asoursuiteofservicesgrewandourcustomersbecamelargerandtheirneedsmorecomplex,webeganto leverage outside talent to help support them as well. Consultancies likeBluewolfandAstadiacroppedup,takingabetoncloudcomputingserviceslikesalesforce.com and offering their skills to help companies get up and runningandmaximizetheseservices.Thiswasaveryexcitingdevelopment.Ourreach,resources,andcapabilitiesstretchedwiththecommitmentofthesepartners.Wehadtonourishanddevelopthisnetwork.Thewaytodothiswasbyempoweringindividualsandbuildingacommunityaroundthem. Tothatend,welaunchedatrainingandcertificationprogramtohelpbuildaself-sustainablegroupofexpertsaroundourproduct.(Wemadetrainingflexiblebyofferingitbothonlineandofflineinclassrooms.)Thiseffortgaveusawaytoensure that their skillswereat thehighest level, and it alsoprovidedaway tovalidatetheirwork.Thepracticeofofferingcertificationsisnotnew.Microsoftdoes this, and in fact, while I was at Oracle, we launched a databaseadministration certification system. Industry-recognized certifications allowpartnersand independent softwarevendorsandadministrators toadvance theirskill sets, as well as improve job security, career advancement, andcompensationopportunities.Employersusecertificationas a litmus test, asdocustomerswho find value in knowing that they are engaging consultants of acertainstandard.

Asmuchascertificationcreatesvaluefortheindividual,itresultsinrealvalue

foryourcompany.Ifpeopleare learningandearningonacertainsystem, they

want to take it with themwherever they go. This encourages them to furtherevangelizeyourservice,andallowsyoutogrowyourbusiness. Usingeducationasawaytoextendourserviceandexpandourcapabilitiesisour strategy for future growth. It comes down to simplemathematics:we canhire one hundred developers to develop new functionality, orwe can hire tentrainerswhohavethecapacitytotrainthousandsofdevelopers.Leveragingthepoweroftrainershasallowedustohavethousandsofdeveloperscreatingnewfunctionality, sharing it in our onlinemarketplace, and enabling us to offer amorecomprehensiveservicetoourcustomers.

Thinkaboutthepartnersthatmightrecommendyourserviceandthevendors

that might build complementary products; then, do everything you can tostrengthentheentireecosystemthatsurroundsyourcompany.Indoingso,youcanturnahandfulofdisjointedpartnersintoathrivingcommunityofsupporters,innovators,andevangeliststhatwillfurtheryoursuccess.

TheFinalPlay

Play#111:MakeEveryoneSuccessful

A little over a decade ago, Clayton Christensen wrote a book called TheInnovator’s Dilemma. It illustrated how a startup company—by employinginnovation that disrupts existing business models—will always beat theestablished big companies. He cited examples like Intel’s success with themicroprocessorandthesteelmillNucor’shitwithitsrevolutionarywaytoreusescrap.Thebookwas loathedby theold-linefolksand laudedby thenewguyslikeme. It validated us for what we knewwas right: the futurewasn’t aboutsimplyimprovingonwhatwasalreadydone;itwasaboutbeingboldenoughtomakebig,sweeping,dramaticchanges.

With those ideas in mind, I started salesforce.com with a mission to do

enterprisesoftwaredifferently.Atthetime,companieswerepayinghundredsofthousands to buy and millions to install applications that were costly andfrustrating tomaintain.Wewanted to take advantage of a new platform—theInternet—anddeliverbusinessapplicationscheaplythroughaWebsitethatwasas easy to use asAmazon.com.We had to think out of the box. Literally, nomore packaged software. And figuratively, as no one was then sellingsubscriptionsforbusinessapplicationsanddeliveringthemovertheWeb. The success of our End of Software mission allowed us to promote otheragendas—specifically, a goal to change corporate philanthropy from simplywritingachecktoleveragingallacorporation’sresources.Our1-1-1model(1percentofourequity,1percentofourtime,and1percentofourprofitsthroughproduct donation) has allowed us to donate $14million in grants, deliver ourservicetooversixthousandnonprofitsatnocharge,andgivemorethan150,000hoursofcommunityservice.

Thismandate also changed our company. It established us as ameaningful

placetoworkandmadeusmorecommittedtothesuccessofouremployeesandour customers. The final play from our salesforce.com playbook—#111—acknowledges that throughmaking all our stakeholders successful, we ignitedourownsuccess. Inallindustries,especiallythetechnologyindustry,peopleoverestimatewhat

you can do in one year, and they underestimatewhat you can do in ten.As Iwritethisonsalesforce.com’stenthanniversary,Iunderstandjusthowtruethatis.In1999,Irecruitedthreedevelopers,rentedanemptyapartment,broughtinafewcomputers,andturnedthebedroomclosetintoadatacenter.Wesoonhadaprototypeoftheservicerunning,andoverthenextfewmonthsasteadystreamofnewemployees,potentialusers,investors,andreporterscamebytoseewhatwashappeningandsharetheirinsightstohelpusbuildsomethingbetter.

Thatfirstyearwasexhilarating—andexhausting.Noonepreparedusforthe

unexpectedobstacles.Thereweretimeswethoughtwewouldn’tmakeit.Now,tenyearslater,oursmallcompanyisabigone.Thefewinitialemployeeswhogave salesforce.com everything have grown into a few thousand employees.Revenuehasescalatedtomorethan$1billionayear. Welookverydifferent today,butsodoes therestof theworld.Whereasweonce had to educate the market about our “no software” model, an industryknown as cloud computing has grown up around us and changed everything.Gartnerestimatesthecurrentmarketforcloudservicesis$46.4billion,andby2013,themarketwillreach$150.1billion.1TheSaaSmarketweevangelizedisnow growing twice as fast as the enterprise software market. It has spawnedcountless new companies. We might be the first SaaS company to reach $1billion in revenue,butwewon’tbealone for long. “Today IDCestimates thattherearemorethan1,000worldwideSaaSprovidersandmorethan$33billionhasbeeninvestedinSaaSprovidersglobally,”saysRobertMahowald,directorofSaaSandOnDemandResearchatIDC. We’ve always believed that everythingwas going into the cloud because itwas amodel that allowed everyone to succeed.Now, in precarious times,weknowthattheadvantagesofcloudcomputing(lessrisk,nocapitalexpenditure,predictableoperatingexpenses,andfastresults)willfurtherspuradoption.(Casein point: in the last quarter of 2008 and the first quarter of 2009,whenmosttechnologycompanieswerebattlingrevenuedeclines,weincreasedrevenueby34percentand23percent,respectively,overthesameperiodsintheprioryears.) Nowwearemostexcitedbyhowthe industry’sgrowthwillunleash furtherinnovation. The cost of technology is continually lowering while becomingeasiertouse.TremendousadvanceswithhandhelddevicesandwirelessInternetaccesswill continue to increase cloud computing and social networking. Thisonlymakes the futuremoreexciting foreveryone, as it’s alwaysbeen throughadvances in technology thatwe have solved complex problems and improved

ourlives. Many entrepreneurs have serious concerns in these unprecedented times. Iunderstand,asIhadsimilarworriesaboutmybusinessduringthelastperiodofeconomicuncertainty.Havingsurvivedthedot-comdisastertobuildthefastest-growing technology stock on the NYSE, I know that marketplaces are morereceptivetochangeinchallengingtimes.Salesforce.comishardlyaloneinwhatithasaccomplishedoutofadversity.GE,Cisco,SouthwestAirlines,andotherdisruptivecompanieswere started indepressionsor recessions.As theEskimoproverbgoes,“thestormisthetimetofish.” Nowisnotthetimetocutbackonacommitmenttoinnovation,creativity,andaltruism. That’s what’s needed to build a brighter future. We have aresponsibility to keep going. Innovation, which led to new companies thatemployedpeople,createdwealth,andsparkedeconomicgrowth,isthewayweovercamethepasteconomiccrises—anditiswhatwillsaveusagain.

Weallhaveanopportunitytoplayaroleinimprovingthestateoftheworld.I

urge you to build game-changing businesses—wildly innovative, profitable,scalable, and sustainable businesses—that offer imaginative solutions to theproblemsweface. It ismyhope that youwill use your business acumen, your creativity, yourpassion, and the111plays in this book tomake a positivedifference. I’mnotaskingyounottomakemoney.Onthecontrary,gooutandmakemoney—andlotsofit.Butknowthatsimplymakingmoneywillnotbeenoughtosustainyou.No one who is successful is driven solely by monetary rewards. The mostsuccessfulbusinesspeoplearedrivenbyprofits—andpurpose.

Backinhighschool,whenIstartedmyfirstbusiness,Iworkedunderaposter

ofAlbertEinstein.BecauseIfoundinspirationfromit,IhunganotherpictureofEinsteinintheapartmentwhenwelaunchedsalesforce.com.Weweren’talwaysawareofit,butwewereguidedbyhisthreerulesofwork:1)Outofclutterfindsimplicity; 2) From discord find harmony; 3) In the middle of difficulty liesopportunity. We are now in a time of extraordinary opportunity. People always askme,What’s in store for the future? Where is technology going? Where isphilanthropygoing?Predicting the future is simple.The future iswhateverweimagine.Weallmustthinkthreeyearsout,fiveyearsout,tenyearsout.What’s

aheadofusiswhateverwecreate.

What do you see in the future? I see less disease. I see less poverty. I see

alternative sources of energy, innovative clean technologies, and a planet onwhichthenextgenerationcanstillbreathe.IseehopebecauseIknowthere’sacorpsoftalentedpeoplewhocanhelpusmakethetypesofboldchangesthatarenecessary. Seize the opportunity in front of you. Imagine. Invent.Disrupt.Do good. Iknowthatyoumustbepassionate,unreasonable,andalittlebitcrazytofollowyourownideasanddothingsdifferently.Butit’sworthit.Lifegrowsrelativetoone’sinvestmentinit.Ipromiseyouthatbyconsideringeveryone’ssuccess,youwillseethereturn.

I wish you great success. I look forward to hearing about the future you

predict—andlivingintheoneyoucreate.

Aloha,Marc

Notes

Part1

1NicholasCarr,TheBigSwitch:RewiringtheWorld,fromEdisontoGoogle,NewYork:Norton,2008,http://www.nicholasgcarr.com/bigswitch/.

2TheYankeeGroup.“Mid-MarketCRMTotalCostofOwnership:NoodlingtheNumbers,”CustomerRelationshipStrategies,Vol.3,No.6,June2001.

3Gartner,Inc.,“SaaSattheForefrontoftheConsumerizationofIT,”May8,2007,http://www.gartner.com/DisplayDocument?id=505054&ref=g_sitelink.

Part2

1DonClark,“CanceledPrograms:SoftwareIsBecominganOnlineService,ShakingUpanIndustry—UsersTappingApplicationsontheWebForceFirmstoReconfigureStrategy—AThreattoWintel’sPower?”WallStreetJournal,July21,1999,A1.

2DamienCave,“Dot-ComPartyMadness,”Salon.com,April25,2000,http://archive.salon.com/tech/feature/2000/04/25/party/index.html.

3MattHines,“Salesforce.com’sBrashNewAdsReflecttheStyleofItsLeader,”SearchCRM.com,March13,2002,http://searchcrm.techtarget.com/news/article/0,289142,sid11_gci809857,00.html.

Part3

1DavidBerlind,“FullTextofMarcBenioff’sInternalMemotoSalesforceStaffonOracle/SiebelDeal,”BetweentheLines,September12,2005,blogs.ZDNet.com.

Part5

1RochelleGarner,“MicrosoftUnderminedbySalesforce.cominWebSales,”Bloomberg.com,Jan.25,2008,http://www.bloomberg.com/apps/news?pid=20601087&sid=afUTE1bpZWp4&refer=home.

2JeffHowe,Crowdsourcing:WhythePoweroftheCrowdIsDrivingtheFutureofBusiness,NewYork:CrownBusiness,2008,p.158.

3JeffJarvis,“HeyStarbucks,HowAboutCoffeeCubes?”BusinessWeek,April15,2008,http://www.businessweek.com/magazine/content/08_17/b4081000030457.htm.

4JeffJarvis,“DellLearnstoListen,”BusinessWeek,October17,2007,http://www.businessweek.com/bwdaily/dnflash/content/oct2007/db20071017_277576.htm

5SpencerReiss,“PlanetAmazon,”Wired,May16,2008,http://www.wired.com/techbiz/it/magazine/16-05/mf_amazon?currentPage=all.

Part6

1CarlyeAdler,“TheFreshPrinceofSoftware,”FSB:FortuneSmallBusiness,March1,2003,http://money.cnn.com/magazines/fsb/fsb_archive/2003/03/01/338759/index.htm.

Part8

1U.S.BankStudy,2004.BradSugars,“The6BiggestMistakesinRaisingStartupCapital,”Entrepreneur,September.20,2007,http://www.entrepreneur.com/startingabusiness/startupbasics/startupbasicscolumnistbradsugars/article184350.html

2MichaelS.MaloneandShelleyPannill,“TheBestVCs,”ForbesASAP,May29,2000,http://www.forbes.com/asap/2000/0529/098.html.

3WasabiVentures,“RaisingVentureCapital:APrimerfor1stTimeEntrepreneurs,”http://blog.wasabiventures.com/raising-venture-capital-a-primer-for-1st-time-entrepreneurs/.

4WilliamBygraveandAndrewZacharakis,Entrepreneurship,Hoboken:JohnWiley&Sons,2007,pp.64,346.

5JeffreySohl,“TheAngelInvestorMarketin2008:ADownYearInInvestmentDollarsButNotInDeals,”CenterforVentureResearch,March26,2008,http://www.innovationamerica.us/index.php/publications-and-presentations/published-reports/75-the-angel-investor-marketin-2008-a-down-year-in-investment-dollars-but-not-in-deals.

Part9

1“50BestSmall&MediumCompaniestoWorkforinAmerica,”HRMagazine,July2006,http://findarticles.com/p/articles/mi_m3495/is_7_53/ai_n27932757/.

TheFinalPlay

1Gartner,Inc.,“Forecast:SizingtheCloud;UnderstandingtheOpportunitiesinCloudServices,”March18,2009,http://www.gartner.com/DisplayDocument?id=914826.

Acknowledgments

It’snosecretthatIliketothinkbig.Still,thesuccessofsalesforce.comhasevensurpassedmywildest expectations.This has been themost exciting decade ofmy life, in every way, and there have been many people who have giveneverythingtojoinmeonthisadventure.Ihavemanypeopletothank. I am immensely grateful to three talented developers—ParkerHarris, FrankDominguez, andDaveMoellenhoff—who in 1999 took a risk on a “crackpotidea,”andthenbuiltsomethingspectacular.Toall thepeople fromtheearliestdayswho left stabilityand tookachance

with me, especially John Appleby, Jim Burleigh, Steve Cakebread, NancyConnery, Shelly Davenport, John Dillon, Jim Emerich, Andy Hyde, FergusGloster, Diane Mark, Caryn Marooney, Paul Nakada, Tien Tzou, and MitchWallace.Salesforce.com is a different company today than itwas ten years ago, and

I’m appreciative of the people who have helped us become better and whocontinue to push us to evolve: Tom Addis, Joe Allanson, Krista Anderson,Lindsey Armstrong, Tom Berson, Bruce Campbell, Jim Cavalieri, LindaCrawford, Dan Dal Degan, Alexandre Dayon, David Dempsey, Steve Fisher,ErinFlynn,SteveGarnett,SueGoble,ParkerHarris,GeorgeHu,KennethJuster,Hilarie Koplow-McAdams, Steve Lucas, BrianMillham, AllenMiner,MartinMoran, Brett Queener, David Rudnitsky, Carl Schachter, David Schellhase,GrahamSmith,ClarenceSo,JimSteele,SusanSt.Ledger,PollySumner,JohnTaschek, Eiji Uda, Frank van Veenendaal, Craig Weissman, and KirstenWolberg.Additionally, salesforce.com is fortunate to have an amazing board of

directors: CraigConway,AlanHassenfeld, CraigRamsey, SanfordRobertson,StrattonSclavos,LarryTomlinson,MaynardWebb,andShirleyYoung.Isetouttowritethisbooktohelpandinspireentrepreneurs.Mystoryandthis

book would never have been realized without the many individuals whoinstructedandinspiredme.I’mluckytohavesomanytruementorswhoofferedwisdomandsupportandthengenerouslyencouragedmetopursuemyvisioninmyownway:LarryEllison,CharlieMoore,ColinPowell,ChikaraSano,TonyRobbins,andAmmachi.Thank you Michael Dell, a legendary entrepreneur, technologist, and

philanthropist,whohascontributedan inspiring forewordandwhocontinually

helpsusseeabetterfuture.ThankyouaswelltoAndyLark,whowasavailableandinsightfulnomatterwherehewasintheworld,andnomatterwhatelsehehadhappening.Amostspecial thankyou toTimLynn,mycollege room-mateandnowour

chief of staff, and to the talented and patient Laura Pavlovich, who handleseverythinganddoesitallflawlessly.Hundreds of people have had a hand in recalling their memories, editing

pages,andthemakingofthisbook.Iamgratefultoeachandeveryone.Manywent above and beyond the call of duty and deserve special recognition:RobAcker, Dana Booth, Bruce Cleveland, Bruce Francis, Jane Hynes, SuzanneDiBianca,JohnDurocher,DougFarber,ChrisFry,JamieGrenney,AnneKvetaHaack, Aaron Katz, Isabel Kelly, Charles Nikiel, Elizabeth Pinkham, JosephSchmidt,RichSheridan,JulieTrell,andMayuwaYamakawa.Iammostgratefultomyextraordinaryfriendswhosupportedsalesforce.com

andmefromtheverybeginningandwhocontinuetoamazemewiththeirwisecounsel and generous spirit:AdamBosworth,GigiBrisson,Katrina andTerryGarnett,EvanGoldberg,MarkGoldstein,ArjunGupta,SteveMcAdams,HalseyMinor, Eric Schmidt, Klaus Schwab, Igor Sill, Robert Thurman, DavidVaskevitch, Bobby Yazdani, and Magdalena Yesil. I’m grateful to LanceSecretanandNeilYoung,newerfriendswhohavebeentremendouslysupportiveofsalesforce.com,thisbook,andallendeavors.Thefollowingspecialpeoplehadinfluencesfargreaterthantheylikelyever

knew.Eachone is deeplymissed:ChrisBonacore, JimGray,Osamu Igarashi,EirikProsser,andKarenSouthwick.ThankyouRickCohenandTanyaVineratBuchalterNemerandAaronAlter

andBorisFeldmanatWilsonSonsiniGoodrich&Rosati,trueprofessionalswhoprovide solid counsel that helps me sleep better and who have proven tomoonlightasfineeditorsaswell.I’ve been lucky enough to meet some of the best people in the world of

publishing.Bydedicatingtwoyearsofherlifeandspirit,CarlyeAdlermadethisbookareality.I’mthankfulforsuperagentJimLevineandhis teamatLevineGreenberg.Aheartfeltandindebtedthank-youtotheverygiftedKarenMurphy,developmenteditorextraordinaireErinMoore,productionguruMarkKarmendy,copyeditorMicheleJones,andtheentire teamatJosseyBasswhobrought thisbooktolife.Oursuccesswouldnothavebeenpossiblewithoutourhundredsofbusiness

partners,thousandsofemployees,andmorethanamillioncustomers.Thankyouforbecomingapartofourfamilyandforyoursupport.AspecialthankyoutoAndy Brown, Gary Butler, Cris Conde, John Chambers, Guy Chiarello, Greg

Case, Gene Hall, Rick Justice, Hermann Lamberti, Harry McMahon, HaruoMurase, Bob Ridout, Keiji Torii, Steve Schuckenbrock, James Sheppard,KazuhikoYoshimoto,andMonteZweben.Myfamily—mygrandmother,myparents,mysisters—hassupportedmeand

shared invaluable lessons in life, business, and altruism that have guided mealways and still do today.AndLeia,who remindsme every day aboutwhat’smostimportant.Finally,thankyouLynne,foreverything.

MahaloNuiLoa,Marc

AbouttheAuthors

MarcBenioffischairmanandCEOofsalesforce.com(NYSE:CRM),whichhefounded in 1999.UnderBenioff’s direction, salesforce.comhas grown from agroundbreakingideatotheleaderinenterprisecloudcomputing. For its revolutionary approach, salesforce.com has received a Wall StreetJournal Technology InnovationAward, been lauded as one ofBusinessWeek’sTop 100 Most Innovative Companies, named No. 7 on The Wired 40, andselectedin2007and2008asaTopTenDisrupterbyForbes.Benioffhasbeenwidelyrecognizedforpioneeringinnovationwithhonorssuchasthe2007Ernst&YoungEntrepreneuroftheYearandtheSDForumVisionaryAward,andhasbeenrankedontheTop100MostInfluentialPeopleinITsurveybyeWeekandthe Top 10 Greatest IT Chief Executives by VNU. He was appointed byPresident GeorgeW. Bush as the co-chairman of the President’s InformationTechnology Advisory Committee and served from 2003-2005, overseeing thepublishing of critical reports on health care information technology,cybersecurity,andcomputationalsciences.In 2000, Benioff launched the Salesforce.com Foundation—now a

multimillion-dollar global organization—establishing the “1-1-1 model,”wherebythecompanycontributesonepercentofprofits,onepercentofequity,andonepercentofemployeehoursbacktothecommunitiesitserves.TheWorldEconomic Forum named Benioff as one of its Young Global Leaders, and in2007 the Committee Encouraging Corporate Philanthropy presented Benioffwith the covetedExcellence inCorporatePhilanthropyAward. Salesforce.comhas been voted one of theworld’smost ethical companies byBusiness EthicsMagazine, one of the best companies to work for by Fortune, and in 2008,BenioffwasawardedCEOoftheYearAwardbyCROMagazine.Benioff is also the author of The Business of Changing the World and

CompassionateCapitalism.Prior to launching salesforce.com, Benioff spent thirteen years at Oracle

Corporation. He founded his first company, Liberty Software, when he wasfifteenyearsold.HelivesinSanFrancisco,California.CarlyeAdler isanaward-winningjournalistwhosearticleshaveappearedin

BusinessWeek,CondéNastPortfolio,FastCompany,Fortune,Time,Wired,andmanyotherpublications.Sheco-wrote,withsalesforce.comchairmanandCEO

MarcBenioff,TheBusinessofChanging theWorld:TwentyGreatLeadersonStrategicCorporatePhilanthropy. She has been twice named one of themostinfluentialbusinessjournalistsundertheageof30byTheJournalist&FinancialReporting (TJFR)Group.Herstoryon theheftypriceof investing inaKrispyKremefranchisewasselectedfor inclusion inTheBestBusinessStoriesof theYear,2003Edition.ShelivesinNewYorkCity.

Index

A

AccentureAcker,RobADPAdvertising: developing marketing model for; differentiating company; usingbrandinginAdviceAfter-schooltechnologycentersAlexander,PamAllanson,JoeAmar,SueAmazon.comAmericanMedicalResponseAmerica’sPromiseAmmachi(MataAmritananadamayi)AnalogDevicesAngelinvestmentsAOLAppExchangeAppirioAppleAppleby,JohnApplications.SeeAppExchange;PaaS;SaaSAribaCorporationArtofWar,The(Tzu)Asante,EdmondAshokaAsia-PacificbusinessstrategiesAstadiaAustraliabusinessstrategiesAutodesk

AutomaticDataProcessing(ADP)

B

B-52sBen&Jerry’sBennett,RickBerridge,EricBifurcatedbusinessmodelBigSwitch,The(Carr)BiketoWorkgrantBizAcademyBlackBerryBloomberg.comBlueMartiniSoftwareBluewolfGroupBosworth,AdamBranding: advertising with; corporate consistency and; corporate philanthropyand;establishingEndofSoftwareas;expandingglobally;usingBreakfastatTiffany’sBridges,SteveBrilliant,Dr.LarryBrin,SergeyBrisson,GigiBrown,RafeBruzzo,ChrisBugforceBureauofLaborStatisticsBusBusinessTodayBusinessWeekButler,Gary

C

Cakebread,SteveCaliforniaMentorInitiativeCampbell,BruceCanonCareerdevelopmentCarr,NicholasCase,SteveCavalieri,JimCenterforVentureResearchCertificationprogramsChambers,JohnChanges:afterIPOs;envisioning;leveragingwithcustomers;makingcareerChecksandbalancesinhiringChildren’sAidSocietyCarreraAdolescentPregnancyPreventionChristensen,ClaytonM.CiscoCityToursClark,DonCleanAir-CoolPlanetCleveland,BruceClosingCoca-ColaCODACollaboration:developingcommunitiesof;philanthropicCommitteeEncouragingCorporatePhilanthropy(CECP)Companies:collaboratingwith;incorporatingphilanthropicmodelsinexistingCompetition: going after market leaders; leveraging; relationships with;surprisingConde,CrisConfidence

Connery,NancyConservationInternationalContraCostaTimesContracts: annual service; converting subscriptions to; writing with light andloveCooperativesaleseffortsCorporatephilanthropy:choosingcause for;creatingself-sustainingmodel for;employee-inspired foundations; foundations in businessmodel; giving back tocommunities; Google’s commitment to; Hasbro’s; in-kind product donations;incorporatinginexistingcompany;integratingwithorganization;involvingnewhires in; listening toconstituents;partnerandnetwork involvement in; reasonsfor;sharingfinancialsuccesses;sharingphilanthropicmodels;successof1-1-1Model;supportingemployeesabbaticals;sustainingfoundationsCorporatesales teams:developing; international ; sellingcorporateservices; insequentialgrowthstrategiesCosts:event;managingwhileexpanding;reducingstartupcompanyCouncilonFoundationsCriticalMetricsCriticismCRM (customer relationship management): developing international divisionsfor; Microsoft’s venture into; origins of salesforce.com; positioning End ofSoftware mission; potential sales via telephone; potentials for SaaS onlineproducts;scalabilitychallengefor;SiebelgoespublicCRMFusionCRMtickersymbolCrowdsourcing(Howe)Culture:aligningemployeesto;beginningofsalesforce.com;definingcompany;recruitingnewtalentinto;transferringgloballyCustomerrelationshipmanagement.SeeCRMCustomers:accessibilityandsatisfied;beinginvolvedindialoguesof;buildingtrustwith;contactingpersonally;contractfor;contractsfor;developingnetworkof;easeofproductadoptionby;enlistingforsales;harnessingideasof;influencingproducts;introducingprospectstohappy;leveragingchangewith;listeningto;specialsupportforprofessional;supportingexisting;testimonyof;treatingaspartners;visitingCustomerStatCustomizationfeatures

D

DalaiLama,HisHolinessDellDell,MichaelDeloitteDempsey,DavidDiBianca,SuzanneDiggDisasterreliefDiscountsDisney,WaltDominguez,FrankDot-comcrashDraper,TimDreamforceDuPont

E

E*TRADEE-RateEarthCouncilEBayEbersole,ScottandWendiEditorials80/20ruleEinstein,AlbertEinstein,DavidEllison,LarryEmployees: being on-message; career paths for ; corporate philanthropy and;employee-inspiredfoundations;empoweringasvolunteers,engaging and growing; feedback from; finding innovative; firing; fosteringloyal; incentives for; listening to; measuring success of; moving to satelliteoffices;aspartofmarketingteam;retaining;sabbaticalsfor;trainingEmployees.SeealsoHiringemployeesEndofSoftwaremission:brandingfor;creatingstorywith;mockprotests;on-demandmodelvs.hostedchoices;positioning;successofEnronEnterprisesalesEntrepreneurs: belief in self; defining values and culture; defying convention;developingvision;focusingwork;gettinggoodadvice;handlingglobaldisputes;having mentors; hiring best players; listening to customers; making changes;reducing startup costs; responding to criticism; sabbaticals for; taking risks;thinkingbigger;workingwithtoptalentEnvironmentalresponsibilityErnst&YoungEscalateRetailEuropeanTechnologyRoundtableExhibition(ETRE)Evans,Matt

Events: changing strategies for; developing strategies for; establish marketrelevance; having fun with; hosting; inexpensive, effective; planning; seizingunlikelyopportunities;sellingtoendusers;stagingmockprotests;StreetTeamconceptfor,tipsforgreat;usingword-of-mouthphenomenonExpanding:brandglobally;managingcostsand;sales

F

Farber,DougFeedbackloopsFieldsalesteamsFinancing: angel investments; building financial team; estimating need for;evolvingmodelsof;fundraisingstrategiesfor;growingintopubliccorporation;preparingandfilingIPO;revenuevs.profitability;SECcomplianceandFinancing.SeealsoIPOsFiringemployeesFisher,SteveFleischer,CorinneFlynn,ErinFocusingForbesForbes,MichellePohndorfForbes,SteveForce.comFortuneFoundations: employee-inspired; including in business model; integrating incompany; mimicking business; 1-1-1 Model and; Oracle’s development of;sustainingendowmentsofFoundations.Seealso1-1-1ModelFrancis,BruceFreetrialsubscriptionsFun:corporatephilanthropyas;witheventsFunfacts

G

Gabriel,PeterGarnett,KatrinaandTerryGarnett,SteveGartnerGatewayGEGenevaGroupGirlScoutsGloballeadersGlobal strategies: communicating corporate vision ; cultural sensitivity and ;cultural sensitivity inmarketing; demonstrating local commitment; developingglobal product capacities; expanding without overspending; guidelines for;handling global disputes ; international partnerships supporting ; planning;selecting global leadership; soliciting development advice as; starting Asia-PacificbusinessGloster,FergusGoals:aligningorganizationto;matchingmarketingtointendedGoldberg,EvanGoogleGoogleFoundationGore,AlGraham,ReverendBillyGratitudeGray,JimGreatPlainsGreetingnewhiresGrenney,JamieGretzky,WayneGrowth:employingsequentialstrategiesfor;engagingemployeesfor;preparingforsales;seed-and-growstrategy;thinkingbig

Gupta,ArjunGuynn,Jessica

H

HabitatforHumanityHambrecht&QuistHammer,MCHarris,ParkerHarvardBusinessReviewHasbroHassenfeld,AlanHBVEnterpriseHewlett-PackardHiringemployees:buildingrecruitingculture ;checksandbalances in; findingbestplayers;findinginnovativeemployees;internationalguidelines;maintaininghiringstandards;retainingandHotmailHoward,MartyHowe,JeffHu,GeorgeHuang,Jessica

I

IDCIdeaExchangeIdeaStormIn-kindproductdonationsInconvenientTruth,AnInfocommDevelopmentAuthorityInnovation:announcingregularly;findinginnovativeemployees;IdeaExchangeand;pursuinginproductdevelopmentInnovator’sDilemma,The(Christensen)InspirationandvisionIntelligentreactionInternationalleadersInternationalpartnershipsInternetFileSystemInterviewing candidates: checks and balances in ; establishing relationships;schedulingregularlyIntroductorypartiesInvestors:angel;findingfriendsandfamily;mentorsasIPodIPOs: evolving to public corporation; filing ; formalities after; philanthropicfreedomgainedby;preparingfor;SECcomplianceandIRobotISyndicate

J

JapanPostJobs,SteveJournalistsJuster,KenJustice,Rick

K

KentuckyFriedChicken(KFC)Kirkpatrick,DavidKitamura,AkiraKoaKPMG

L

Lam,CristinaLandmarkTrainingLane,RayLeadership:buildingrecruitingculture;firingemployees;focusingandaligning;fostering loyalty; instillinggratitude; internationalversusglobal; local; lookingfor top employees; maintaining hiring standards ; motivating employees;solicitingemployeefeedback;visionandLeadsLeftCoastSoftwareLegalteamsLeveraging: business partnerships; competition ; internal/external resources;timesofchangeLeviStrauss&Co.LibertySoftwareLicensingsoftwareLiedtke,MichaelLight-and-lovephilosophyLincVoltListening:toconstituents;tocustomersLiveOpsLocalexpertsLocalleaders:buildingnewmarketswith;injectingwithcorporatespiritLookSmart

M

MahaloMahowald,RobertMark,DianeMarketleaders:engagingMarketing: becoming market leader; branding and ; cultural sensitivity in;developing strategies; differentiating company; engaging market leaders;establishingproductrelevance;goingaftermarketleaders;includingemployeesin ; introductory parties and; making into story; matching to intended goals;metaphorsfor;modelfor;personafor;positioningand;productinnovationsand;relationshipswithjournalistsMarketing.SeealsoBrandingMarooney,CarynMataAmritananadamayi(Ammachi)McGraw-HillMeasuresMenefee,DouglasMentorsMerck&Co.MerrillLynchMetaphorsformarketingMethodsMetrics:basingmarketingon;criticismsof;marketsegmentingand;measuringemployeesuccess;monitoringsuccesswith;revenuevs.profitabilityMGMMicroloanFoundationMicrosoftMicrosoftHotmailMillham,BrianMiner,AllenMinor,Halsey

MizuhoInformationResearchMoellenhoff,DaveMonster.comMoore,CharlieMoraleMorganStanleyMultiforceMurase,HaruoMyStarbucksIdea.com

N

Nakada,PaulNationalGeographicSocietyNativeEnergyNegotiatingsalestermsNestléNetscapeNetSuiteNetworkingNewYorkStockExchangeNewYorkTimesNewsom,GavinNikkeiNoSoftwarelogoNucor

O

OASIS(OracleAutomaticSalesandAutomaticSystems)Obstacles:correcting;recognizingstrategic1-1-1Model:corporatestructurefor;developing globally; evolution of; in-kind product donations; involving othersin;sharingpublically;successofOperationSmileOprahWinfreyShowOracleOracle’sPromiseOutCastCommunications

P

PaaS(Platform-as-a-Service):AppExchangeand;developingapplicationswith;extendingSaaSwithPage,LarryPalmOnePanozza,KevinPaperworkforsalesPartnerships:collaboratingwith;leveragingbusinessPassionPayPalPeek,JeffreyPeopleFinderprojectPeopleSoftPerformanceincentivesPhilanthropic models: choosing cause for; employee-inspired foundations;Google’s philanthropic commitment; in-kind product donations; includingfoundation in business model; incorporating in existing company; integratingwith corporate organization; involving business partners and networks in ;listeningtoconstituents;self-sustaining;sharingpublicallyPinkham,ElizabethPlanning: events; global expansion; headquarters and territories; long-termrevenue;tax;V2MOMforPlanning.SeealsoV2MOMPlatform-as-a-Service.SeePaasPlayboyPositioning:developingstrategies;importanceofPositioning(RiesandTrout)Post-eventresponsesPowell,GeneralColinPower:personalPowerofUs

PowerUPPRWeekPresident’sSummitforAmerica’sFuturePricingproductsProduct development: communities of collaboration for; delivering productsquickly;easeofcustomeradoption;encouragingcustomerfeedbackon;findingtalent for; harnessing customers’ ideas ; including global capabilities in;innovative; intelligent reaction in ; letting customers drive; Platform-as-a-Service;providingmarketplaceforsolutions;reusinginfrastructuretechnology;speedandsimplicityin;testingproductusability;transparencyinProductlaunch:choosingpartnersfor;culturalsensitivityforglobal;expansionwithoutoverspending;globalstrategiesfor; handling global disputes; instilling corporate spirit in global leaders ;preparing for global capabilities ; projecting success for; selecting globalleadership;sequentialgrowthstrategies;telesalesteamsforProfessionalservices.SeeCorporatesalesteamsProjectHomelessConnectProspects:introducingtohappycustomers;preparingtotalkwithPublic relations: capitalizing on competition’s; changes in public image;company story for; developing cohesive message; market positioning and;receiving global; regular announcements for; reliability and; sharingphilanthropicmodels

Q

Quiet-periodrules

R

Rainforest2ReefRechargetimeRecruiting: building culture for ; maintaining hiring standards; retaining toptalentRedCrossRelationships: with competition and customers; cultivating with journalists;establishingincandidateinterviews;establishingwithleaders;fosteringloyaltywith;leveragingbusinesspartnerships;treatingcustomersaspartnersRelevance:eventsestablishingmarket;givingphilanthropiceffortsReliability:publicrelationsand;servicedisruptionsandReusinginfrastructuretechnologyRevenue:challengesofsubscriptionmodel;long-termplanningfor;profitabilityvs.RewardingvolunteersRidout,BobRies,AlRisks:developingcompanypersona;takingRobinson,PhillRosebudSiouxTribeRotatingassignmentsRudnitsky,David

S

SaaS (Software-as-a-Service): developing regulatory environment for;inspiration for ; on-demand model vs. hosted choice ; PaaS as extension of;potentials in CRM for online; providing API; public relations for; revenuerecognition position paper for; selling directly to end users; testing productusabilitySaaS(Software-as-a-Service).SeealsoPaaSSabaSabbaticalsSales: abandoning unsuccessful strategies; building with word-of-mouth; callpreparation for; closing; cooperative effort in; corporate and enterprisemodelsfor ; directingwithV2MOM;enlisting customers for; establishingpricing for;factscreatingcredibilityfor;freetrialstrategies;increasingnumberofrepsfor;introducing prospects to happy customers; landing and expanding ; leveragingtimes of change;metricsmonitoring; negotiating; paperwork for; performanceincentivesfor;preparingdistributionandgrowthof;pursuinggame-changing;recruitingas;segmentingmarkets;sellingcorporateservices;strategiesfortrialoffers;supportingexistingcustomers;targetingtohighereducationandNGOs;telesales;thinkingbig;treatingcustomersaspartners;visitingcustomers;WebsitesasrepsforSalesforceautomation(SFA)Sales reps: commissions motivating; increasing number of; sharing bestpracticeswithteam;usingWebsitesasSalesForceAustraliaSalesforceFoundation:establishmentof;1-1-1ModelofSalesforce.com:AppExchangeand;beginningsof;branding;collaborativespiritof; creating story about; customer success managers at ; designing limitlesssystem; developingWeb-based operating system; employee-generated disasterrelief at; ensuring reliability; environmental mission statement of; evolvingvisionstatements; focusing;free trialsubscriptions;goingaftermarket leaders;harnessing customer ideas ; initial meetings about; initiating product market;introductory party for ; keeping on-message; listening to customers; listing onNYSE;markingsuccesswithdonations;personaof;preparingforsalesgrowth;

productdevelopmentat;seed-and-growstrategy;sellingtoendusersSalesforce.com.Seealso1-1-1Model;V2MOMSalmartSanFranciscoChronicleSano,ChikaraSarbanes-OxleyfilingsSatelliteofficesSchachter,CarlSchellhase,DavidSchmidt,MeredithSchultz,HowardSchumacherGroupSclavos,StrattonSeagateTechnologySeagullapproachSECquiet-periodrulesSecuritiesActof1933SecurityandcareerchangeSeed-and-growstrategySegmentingmarketsSeibelSequentialgrowthstrategiesServicedisruptionsShankar,SriSriRaviSharingbestpracticesSiebelSiebel,TomSiebelUserGroupconferenceSill,IgorSimplicitySingh,NarinderSkollFoundationSo,ClarenceSoftBankCommerceSoftware-as-a-Service.SeeSaaSSohl,Jeffrey

SouthwestAirlinesSpeedStakeholders’successStanfordUniversityStarbucksStartupcompanies:adoptingformalitiesafterIPO;believeinyourself;buildingrecruiting culture; career development in; choosing international partners;creating image with events; defining values and culture; defying convention;demonstrating commitment ; developing vision for ; differentiating; disruptivebusiness models of; ensuring stakeholders’ success; establishing productrelevance ; estimating financing needed; evolving to public corporation;expandingwithoutoverspending;financialteamfor;focusingwork;fundraisingstrategies for; getting good advice; global strategies for products ; havingmentors; hiring best players; injecting local leaders with corporate spirit;integrating philanthropicmodel in; listening to customers ; long-term revenueplanning;philanthropicfoundationinbusinessmodel;planningglobalgrowth;preparingandfilingIPO;pursuingtoptalent;rechargetimewhendeveloping,1-3; reducing costs of; responding to criticism; revenue vs. profitability in ;sequentialgrowthstrategiesfor;startingsatelliteoffices;stayingscrappy;takingrisks;thinkingbigger;venturecapitalandSteele,JimStory:developingforreportersStreetTeamconceptSubscriptions: advantages of; businessmodel based on; converting to contractmodel;donatingtononprofits;freetrial;licensingvs.;revenuechallengeswithSuccess: End of Software mission; ensuring stakeholders’; evaluating salesstrategies ; measuring employee; metrics monitoring corporate; planningsuccessful events; projecting forproduct launch ; sharing financial; supportingcustomers’Sugal,CheriSunBridgeSunGardSusanG.KomenfortheCureSwiftRiverConsulting

T

Talent.SeeHiringemployeesTaxplanningTeachFirstTelesales:designingteamsfor;preparingfor;tipsfor;usingTestimony: capturing from events; defined; fine-tuning international; fosteringcustomer;managingandusingcustomerTestingproductusabilityTheikosThomsonReutersTrademarkinfringementTrainingprogramsTransparencyTrell,JulieTrialoffersTribuneMediaServicesTrout,JackTrustTycoTzu,Sun

U

Uda,EijiUNWorldFoodProgrammeUnitedWayUpShot

V

V2MOM: aligning officers to; creating own ; evolution of; meaning of;Salesforce.com’suseofValues:aligningwithV2MOM;definingcompanyVanVeenendaal,FrankVargo,AngelaVeevaSystemsVenrockVenturecapital:angelinvestmentsvs.;estimatingandfinding;startupcompaniesandVeriSignVision: developing your; establishing with V2MOM; examples ofSalesforce.com ; finding employees who share; importance of; selling topotential employees; sharing with new hires; statements of corporate; stayingtruetoVisualforceVolunteerforceVolunteers:empoweringemployee;rewarding

W

Waitt,TedWallStreetJournalWallace,MitchWardrobeforOpportunityWebsites:placingeventcontenton;positioningwithWITNESSWooster,PeterWord-of-mouthphenomenonWright,Steve

Y

Yahoo!Yazdani,BobbyYesil,MagdalenaYoshimoto,KazuhikoYoung,NeilYoussefnia,DavidYouthMediaFestival

Z

Zweben,Monte