Bloomberg Businessweek - USA (2019-05-27)

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Marc Benioff wanted everyone to know the statue

was “a very, very big deal.” The software billion-

aire, a lover of all things Hawaiian, spent $7.5 mil-

lion at auction in late 2017 for a centuries-old

carving of the war god Ku and made a show of

donating it to a museum in Honolulu last spring.

Hawaii has shaped Benioff ’s spiritual beliefs and

fostered his boldface- name friendships, and he

framed the donation as a way of giving back to the

community, saying he didn’t want to hoard the stat-

ue’s spiritual power. It’s possible he needn’t have

worried: A couple months ago, some art experts

began arguing that based on the uncertainty of its

provenance, the Ku figure is likely a tiki-bar-caliber

tchotchke worth less than $5,000. A spokeswoman

declined to comment on the statue’s value.

The co-chief executive officer of Salesforce

.com Inc., which makes America’s dominant sales-

tracking software, puts a lot of faith in his gut.

Interviews with Benioff and 18 current and former

Salesforce employees and other friends and asso-

ciates of the CEO make clear he operates more on

spur-of-the-moment instincts than on a grand strat-

egy. On the whole, that’s worked out incredibly well.

Most companies taking in $13 billion a year don’t

growthewaySalesforcedoes.Nowenteringitsthird

decade,witha marketcapitalizationofmorethan

$120billion,itsrevenueis stillincreasing26%a year.

Thesecretisdeals.Benioffhaskeptupthe

momentumbyacquiringmorethan60 companies

in20 years,includinga stringoffast-growingbusi-

nessesinmarketing,e-commerce,anddatainte-

gration.Sometimeshe’llbuya companyduringa

meetingthathadnothingtodowithacquisition

talks.AndtheCEOreadilyacknowledgesthathe

can’talwaysexplainhowhearrivedatthosedeci-

sions.“It’shard,becauseI’msomebodywhocan

seethingsthatotherpeoplecan’tsee,”hesays.

“It’sfrustratingwhenI can’tcommunicatewhat

I’mfeeling.Thisis oneofmychallenges.”

Benioffsayshedoesn’tmoveforwardwith

acquisitionswithoutayevotesfromthreeorfour

lieutenants.ButSalesforcealsofrequentlypays

abovetopdollar,andthisblackboxofbigdecisions

canalsoleadtosomeexpensivemisfires,soured

relationshipswithpeers,andquestionmarkslike

thewargodstatue.Once,whena customerasked

whentoexpectaccesstoSalesforce’ssoftware,

Benioffcouldn’thelp,hesaid,becausehe“livedin

thefuture,”accordingtoAlexDayon,thecompa-

ny’schiefstrategyofficer.

That’stroublingwhenit comes tobet-the-

companymoments,saysPatWalravens,ananalyst

atJMPSecuritieswho’sfocusedonSalesforcefor

morethan15 years.“BenioffandSalesforcewere

willing to spend a lot more money than we would

have imagined” in bids for LinkedIn and Twitter

Inc., Walravens says, offering to give up as much as

half the company. “For me personally, Twitter was

scary, because I didn’t understand it.”

Believers say that’s all just part of the process.

“To the uninitiated, he’s like a Zen Buddhist,” says

Tien Tzuo, one of Salesforce’s earliest employees

and now the CEO of Zuora Inc., a billing company

for subscription services. Asked about his missteps,

Benioff points to Salesforce’s many triumphant

acquisitions. “There’s not a lot of other software

companies who have this kind of track record,” he

says, and that’s undeniable. Still, the past few years

are also littered with major deals scuttled in part

by Benioff ’s interpersonal relationships, including

what would have been the biggest deal of all: sell-

ing Salesforce to Microsoft Corp.

A few of his purchases (ExactTarget Inc.,

Demandware Inc.) have added significant dimen-

sions when stitched into Salesforce’s primary cloud

products. Some have been less ready for prime

time. Partly out of regret that his deputies talked

him out of a bidding war for the service that became

Google Docs, the CEO spent $582 million in 2016 on

Quip,a smallcompetitortoGoogle’sG Suite.Quip

lackedbasicfontandformattingoptions,couldn’t

makePowerPoint-styleslides,andslowedtoa

crawlwhen,soonafterthedeal,Salesforceexec-

utivestriedtouseit todiscusstheirannualgoals

withemployees.Atbest,it wasa hyperexpensive

waytohireQuip’sco-founderandCEO,BretTaylor,

whowasformerlythechieftechnologyofficerof

FacebookInc.Tayloris nowSalesforce’schiefprod-

uctofficer.“Marcis morewillingtoreconceptual-

izewhatSalesforceis thanotherpeople,”hesays.

Sometimes,Salesforcedealsmovetoofastfor

itspartnerstokeepup.A fewyearsago,Benioff

offeredtobuySteelBrick,whichmakessoftwareto

helpbusinessesfigureoutthemaximumtheycan

 Some art experts say

Benioff vastly overpaid

for this statue of the

Hawaiian war god Ku

SalesforceofNature

Benioffhasbeencriticizedforoverpaying,butseveralofthebiggestdealshavepaidoff

Financialtermsundisclosed ○Completed ○ Pending

BENIOFF: MATT EDGE/THE NEW YORK TIMES/REDUX; STATUE: JESSE W. STEPHEN, © BISHOP MUSEUM; BISHOP MUSEUM ARCHIVES. DATA: COMPILED BY BLOOMBERG7/2016 5/2019

Demandware

$2.9b

Quip

$412m

Krux Digital

$742m

MuleSoft

$6.5b

CloudCraze

$190m

 TECHNOLOGY Bloomberg Businessweek May 27, 2019