- 12th March 2019
- Posted by: Edward Kirkby
- Category: Business
This week, one of the top 10 software companies in the world, Salesforce, is celebrating its 20th anniversary. The business, founded in 1999, provides the number one cloud-based customer relationship management (CRM) software. What started as just another startup in a small apartment in San Francisco, is now used by over 150,000 companies and has an annual revenue exceeding $13 billion.
The company was set up by former Oracle executive Marc Benioff and software developer Parker Harris. It was not the only software startup trying to set up CRM online at the time and other competitors included Salesnet, RightNow Technologies and Upshot. However, Salesforce was the only company that wasn’t bought out and survive as a standalone business. The site officially launched on 7th February 2000 with around 200 customers. In 2004 the business went public, launching its Initial Public Offering (IPO) on the New York Stock Exchange raising $110 million. Co-founder and CTO, Parker Harris has said ‘little did I know at the time, that in 20 years we would be such a successful company and have such an impact on the world’.
Lessons For Startups
Many lessons for other startups can be taken from the Salesforce story. From the beginning, Benioff had a vision and Harris was charged with the task of building it. Although not everyone was impressed by the software at the start, as stated by Laurie McCabe, co-founder of SMB Group, Benioff ‘was the ringmaster for software as a service. And that doesn’t mean some of these other guys didn’t also have a great vision, but he was the guy beating the drum loudest’. Benioff used unconventional marketing techniques to attract publicity, such as sending employees to protest at the Siebel Conference in February 2000, with ‘No more software’ signs. The campaign allowed people to understand what online software was at a time when it wasn’t commonly used.
Saleforce Charitable Model
Another big differentiator of Salesforce is their charitable 1-1-1 model. The aim of the scheme is to give one percentage of Salesforce’s equity, one percent of product and one percent of employee’s time to the community. This built a strong culture within the company early on as well as establishing a trust from customers and positive public image. This was particularly important when trying to persuade companies to agree to share their data online at a time when the internet was still not widely trusted.
As the company continued to increase in size, they devised a plan to boost growth further through acquisitions. In 2006, Salesforce began their acquisition journey and bought a small wireless technology company called Sendia for $15 million. The 52nd acquisition was made last year when the company bought MuleSoft for $6.5 billion. This gave Salesforce a piece of software which allows customers to bridge the gap between on-prem and cloud. This showed a shift in priority as the company grew, from ‘no more software’ to facilitating the transition.
One final lesson that can be taken from Salesforce, is that you can never stop. Although twenty years is a big milestone, in a presentation to company analysts by Parker Harris, he set out future ambitions for the business. This included a $60 billion revenue goal by 2034. A goal that can only be met if the company continues to develop and keep itself on the cutting edge of technological change.
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