All success stories begin with an idea you truly believe in and the courage to go your own way when venture capitalists give you the cold shoulder.

By clearly differentiating yourself from others, putting the customer at the heart of your business, and by not being afraid to pick on the big challenges.

Even the biggest companies in the world start off as mere ideas.

Tip from Benioff: When you notice an idea’s potential, don’t be intimidated by it, even if it means going at it alone.

Benioff was on sabbatical after over ten years as vice president of Oracle when he got his inspiration while swimming with dolphins in Hawaii. Around this time, the Customer Relationship Management (CRM) company Siebel Systems went public with a software solution that enabled salespeople to track leads, account information and manage contacts. However, it was expensive, flawed and high-maintenance.

1. Benioff noted the concept and thought he could improve the software using a ‘Software-as-a-Service’ approach, specifically through a cloud computing model, so he contacted founder Tom Siebel about his idea. However, although supportive, Siebel didn’t think it would win over a significant part of the market.
2. But Benioff stuck to his vision and decided to go at it alone. He knew he had to think big. To draw in the best engineers for his new company, he marketed his vision as ‘the end of software business and technology models.’ He knew that this benchmark would intrigue any skilled developer.

”There won’t be enough people or enough hours in the day. So focus on the 20% that makes 80% of the difference.”

Mark Benioff

3. Advertise your product aggressively from the beginning. Marketing: it’s the NO.1 way to garner attention when you’re still a growing company. If you want to see the same kind of success as Salesforce.com, you must assert yourself either against the market leader or as the new market leader from the very start.

The first thing you must figure out is how you can show the public that you are unique.

4. Next, Salesforce.com needed branding. For this, Benioff hired Bruce Campbell, a legendary marketer who created the ‘no software’ logo, which consisted of the word ‘software’ in a red circle with a line through it.

He was right: after plastering the logo all over magazines and newspapers, the campaign was recognised as the Hi-Tech Campaign of the Year by PRWeek.

5. It’s not enough to simply stand out from the crowd, you must also pick a fight with the biggest players. In one instance, they paid actors to pretend to be protesters waving ‘no software’ signs in front of a conference for their main competitor, Siebel User Group. Every visitor was given an invitation for the Salesforce.com launch party and many of them showed up.

6. As Salesforce expanded, they found it less necessary to concentrate on attacking their competitors. Now was the right time to really market the value of their service.

One of the best ways to do exactly this is to use events wisely to maximise the viral effect.

There are two important marketing strategies that result in the best sales conversions: the first are editorials, which are unbiased write-ups in the press. The second are testimonies, word of mouth created by customers enthusing about their success stories.

Rather than presenting their product to potential investors, Salesforce.com started organising a road show in a string of cities called City Tours, with events featuring keynote speakers, customer presentations and demos. This brought potential customers, journalists and analysts together to share their experiences.

This way of catering to the end user made a marked difference in the company’s marketing success. Traditional software companies chased executives, although they controlled budgets, were less likely to use the product themselves. So Salesforce saw more value in celebrating their real customers. They covered events with posters of them, even incorporating them into their presentations.

7. Putting customers at the heart of your business. Benioff understood that potential customers wanted to be hands-on with the software before they signed anything. So he started giving away free trials over the internet so customers could try it without talking to a salesperson. This isn’t unusual today, but in 1999 it certainly wasn’t standard industry practice.

Salesforce.com also created ‘bugforce’, a scaled-down database where customers could report bugs and offer new ideas for the software.

With this constant feedback from customers, they were able to rework and refine the software immediately, and respond to customers’ needs effectively. This customer centric approach helped them win over customers.

8. However, the dot-com bubble burst hit Salesforce hard in 2001. Many companies decided to leave Salesforce.com and by October 2001, the company was losing up to one and a half million dollars per month, creating critical cash flow problems.

Their solution was to change from a monthly to a yearly billing plan. Although this was a conservative approach and restricted the customers’ payment plans, over 50% of them agreed to it immediately. Within a year, Salesforce.com went from being in the red to making a profit, retaining many of their customers. This was only possible because they had earned trust and loyalty of their customers long beforehand, and the same customers now felt secure about paying upfront.

9. Focus on developing one flawless product after the other, not many simultaneously.

Software companies such as Oracle traditionally tailored their products for each company that used their product. But Salesforce.com focused on a single service to suit everyone.

The developers at Salesforce.com used a technology model they called ‘multitenancy’. This acted like an apartment building where tenants split costs associated with the whole building, but every tenant still had their own lock and could decorate their apartment however they liked. At Salesforce.com, this meant the user could access the software running on the Salesforce.com servers while still working with their own data.

Venture Capitalists saw this as a loss of control and feared they would shed customers as a result. But this was never a problem-maintenance became easier because every user received updates or new features automatically. Besides, if they went back on the idea, how could they promote ‘the end of software’ if they began offering exactly what they wanted to destroy?

10. Before their small-scale development team started writing the code, they created core principles for the system and laid them out on a whiteboard. They concluded that the system should be fast, because salespeople needed information quickly. Next, they decided their code should be as simple as possible, which would make identifying and fixing bugs easier.

Their principles paid off: in the first quarter of 2009, the service had a 99.9% uptime and over 200 million transactions per day.

‘We could make everything much less complex and far less expensive by sharing our resources.’

Mark Benioff

11. Consider cultural differences if you want to expand your business in different countries.

What should you do if you want to be internationally competitive? Choose your headquarters wisely.

They set up their headquarters in Dublin, Ireland. At this time Dublin was attractive to big companies like Oracle or Microsoft, due to the English-speaking population and the favourable tax rate of 12.5%.

The company also began to tailor their marketing strategy for different markets. Salesforce’s aggressive marketing strategy was hugely effective in the US and Europe, now they set their sights on Asian markets, beginning with Japan. Japanese companies are traditionally cautious about foreign products, and look for something relatable. Salesforce.com learned this lesson from their direct sales manager. Everytime he introduced Salesforce.com to potential Japanese customers, he would throw in a few references to other growing companies like Google or Amazon, with which the Japanese were familiar. Then when two of the biggest Japanese companies-Canon and Japan Post -started implementing Salesforce.com into their workflow, many more were happy to follow suit.

12. When it comes to capital and finance, combine thinking outside the box with sensible accounting.

According to a study, 79% of small businesses start out with a serious lack of funds. So Benioff went to those who believed in him: his family and friends. To his surprise, he found many people in his immediate circle who totally backed his idea. Remarkably, over five fundraising rounds he managed to raise $65 million between 1999 and 2002, much to the chagrin of the venture capitalists who had rejected his idea. Instead of chasing down VCs, look to other means to support your idea.

Summary:

Salesforce is a solid example of a company who became hugely successful by following a few key guidelines: stand by your vision; know how to position yourself in different markets; keep your customers at the centre of your business; pick one product or service and do it in the best possible way; don’t be scared of the big players.