A Programmer Turned Billionaire Transformed My Perspective on How to Crush Your Competitor
Cheat Codes No Course Can Teach You
Quitting your job is hard.
Starting a company after quitting your job is harder.
Taking your first company to a billion dollars in revenue is the hardest.
Marc Benioff did all three.
He started his company Salesforce in 1999. At first, the company had $0 in revenue and many competitors.
By 2009, he took the revenue of the company from $0 to $1 billion and destroyed the market leader in their category.
Let’s look at three strategies he used to get to that level.
1. A popular quote from the book “The Art of War”
When I first read the following quote from the book “The Art of War”:
“Appear at places where he must rush to defend, and rush to places where he least expects”
I failed to understand how this quote can be used from a business perspective. But when I read about Marc Benioff and found out how he used the above quote in business, it blew my mind.
You may not be able to understand the quote when you read it for the first time but stick with me, I will explain it to you in detail.
When Marc started Salesforce, there was a market leader in the CRM industry and that was Siebel Systems. This company had a large market share of the entire industry.
CRM explained in the most simple terms
A CRM tool helps you to keep track of all your customers.
Imagine you are the owner of a store where customers buy electronic items such as mobile phones, TVs and laptops. Every time a customer buys some electronic items from your store, you take a notebook and write down the details of each of your customers, such as their name, the name of the item they bought, and what items they wish to buy in future.
You can replace your notebook with a CRM here. With CRM you will be able to keep track of the time a customer visits you, their mode of payment and all the above things you noted in your notebook. With the help of a CRM, you will get to know your customer better and the next time they visit your store you will be able to show them the items they wanted in future.
If you take some big companies like Amazon, they use CRM software internally. With the help of CRM, two different departments will have the same customer knowledge. The support team can provide proper support if they know what items the customer bought earlier. The marketing team will know which product to market based on their recent sale activity.
How did Marc use the quote?
Marc wanted to shift the attention of people from his competitor Siebel Software to Salesforce.
There was a Siebel user conference that was going to take place in Cannes, France.
Marc and his team decided to do something about it.
The people who were part of that conference had to take a taxi from the airport to reach Cannes. The salesforce team decided to rent all the taxis available at the airport and then give free rides to the people who were going to attend the conference.
By doing this, almost everyone who was going to attend that event spent 45 minutes with a Salesforce employee. In the taxi, they delivered their salesforce pitch. The salesforce pitch was unique and interesting as they were going to deliver the software with the help of the cloud, not with CD-ROM.
Previous software used to be delivered via CD-ROM.
All the executives were forced to take their ride. Marc left them no choice but to take the cabs that were already rented by Salesforce.
One of the executives called the police.
The police did nothing because the Salesforce team had done everything legally and with the presence of police, Salesforce received more attention.
Siebel never thought that Marc could do this kind of activity.
From where does Marc learn this tactic from
Marc learned this tactic from the book “The Art of the War”.
The quote reads like this:
“Appear at places where he must rush to defend, and rush to places where he least expects.”
The book has been written from a war perspective.
You must remember that business is war. Therefore, most of the lessons in the book can be used directly in the business.
The author is trying to tell us two things about war through the above quote:
It is better to create a situation where your opponent is forced to react quickly and defend vulnerable positions.
Imagine you are planning to open a coffee shop in a shopping mall. This mall already has a Starbucks. You can’t compete directly with the Starbucks brand.
What you can do is develop strong customer service that focuses on building relationships and giving people personalized experiences. You can also position your coffee shop in a location near popular stores or entrances.
It is better to create a situation where your opponent doesn’t even expect to see you, but you make your presence there somehow.
This is what Marc did with Salesforce. Siebel would never have expected that Salesforce would come to an airport, but this is what they did.
If you want you can also do this with your software business.
2. Never let the competition make you angry
Whatever business you are running.
I mean whatever.
Always treat your competitor like a friend who is running a marathon and wants to win it like you do.
Fight with your competitors, but never take things personally.
This was a big mistake committed by the Siebel Systems team. Their team took everything personally and failed to understand Salesforce's marketing strategy.
To attack the Siebel Systems and the traditional way the software was delivered, which was via CD-ROM. Marc and his team designed an ad campaign.
In the ad, there was a schoolboy who was writing a message. The message was “I won’t give my lunch money to Siebel” 100 times. In another ad, he was writing “I won’t spend my summer vacation installing Siebel.”
Installing Siebel CRM software used to take a long time. As the software was getting delivered via CD-ROM. Marc wanted to replace the traditional model of how the software was delivered to the customers. He wanted to deliver the software via the cloud. That’s why he was attacking the CRM market leader in different ways for people to notice Salesforce.
This is why he and his team were designing provocative ads.
Marc just wanted Siebel executives to react in some way to these provocative ads. He knew that these kinds of ads would fail miserably if the executive of the Siebel Systems company didn’t react.
This is where Sieble System executives failed. They should not have acknowledged Salesforce in any way. If they acknowledged Salesforce even once it becomes a viable competitor.
The Siebel Systems executives took things personally and started saying things like “There’s no way that company exists in a year.” Their CEO told Fortune that all media companies should stop displaying this kind of junk ads. These executives thought that they were doing a benefit for their company by criticizing Salesforce.
But they were secretly giving them distribution.
This strategy is frequently used in the current era.
You will see this kind of strategy being used in our modern times over and over again.
Take youtube for example.
You will always see a group of non-famous YouTubers keep attacking famous YouTubers.
Imagine Bob is attacking famous health influencer Steve for promoting a particular health supplement.
What does Bob actually want?
Bob wants YouTube to show his video to Steve's subscribers.
Some of these subscribers will be die-hard Bob fans. Once they watch Bob's video, they will start putting negative comments on it.
Since the video is getting a lot of comments, the YouTube algorithm will promote it to more people. YouTube can’t decide if the health supplement promoted by Steve is bad or not.
What YouTube want is to promote interesting content on its platform. YouTube want to show ads to more people. So, for YouTube, the comments are an indicator that this content is highly engaging. They keep promoting it and our friend Bob keeps getting distribution.
There is one more thing in this entire drama for our friend Bob. Steve's hardcore followers will keep sending this video to Steve through different social channels and they want him to react.
Steve is now receiving this video sent from thousands of people. Many of his friends are sending him this video. He himself will see the views Bob received from the video.
Now Steve is in a difficult situation.
If he makes a video about Bob, more people will know about Bob and he could become a popular influencer in the healthcare space. If he avoids Bob, then his followers will think that he doesn’t stand for what he is promoting.
What could Steve do at this point?
First of all, Steve should not take things personally.
He has to understand that they are attacking him to get views.
He should watch the video in private and if Bob is making some good points, he should consider clearing it up with the company making the health supplement.
He should not react to Bob's video emotionally. He shouldn’t address him in any way. Just ignore all the people making these videos and if he truly believes in the brand he should keep promoting it.
Tweets
You will not only observe this type of strategy with YouTube. You’ll see this strategy with Tweets as well.
I often see Elon Musk being attacked by the mainstream media. I am not saying what these people say is right or wrong. What I’m saying is that these people secretly want to attract Elon Musk followers by sounding smart.
Famous people will keep getting attacked over and over again by people either just starting their journey or who are hardcore believers of a different idealogy.
I call this an attack-gain strategy.
3. Give content creators an engaging story
Two things.
To show you how powerful a story can be.
Bloggers love stories. YouTubers love stories. Podcasters love stories. Filmmakers love stories. Gamers love secret stories. Vloggers love stories. Journalists love stories.
Am I the best writer in the world? No
Am I a trained writer? No
I am just a below-average writer who knows how to tell interesting stories.
Every talented content creator I talk to is secretly looking for an interesting story.
In the above two sections without the Marc Benioff story, you wouldn’t care what I have to say. You only care about my words because I backed them up with a story.
Interesting stories can make or break whatever content you’re trying to create. The human brain is wired for a story.
Now let’s see how Marc used the power of storytelling.
Marc and his team started to create provocative ads against Siebel Systems.
Siebel executives started to react to these ads emotionally and took things personally.
Today, we have different types of content creators like bloggers, YouTubers, Podcasters, and Vloggers.
But when Salesforce started, there were only two types of content creators. One was Journalists and the second was Filmmakers. Marc couldn’t leverage filmmakers, as they were never going to tell Salesforce's story.
Reporters, on the other hand, loved this battle between Salesforce and Siebel. There was drama in this story. Marc and his team were dedicated to creating more drama around it.
The human mind has been programmed to consume stories and talented reporters understand this. These reporters want to tell a good guy vs a bad guy story.
Of course, the reporters saw Siebel as the bad guy.
How did Salesforce become the good guy?
A key mistake Siebel Systems made was:
They never welcomed journalists. They hated talking to them.
On the other hand, the Salesforce team welcomed all journalists. The salesforce team called them to their events and allowed them to speak to any of their customers.
Once customers started sharing their good feedback about the new Salesforce cloud model, journalists became impressed with Salesforce. This is how they became the good guy.
It’s not that Siebel didn’t have any satisfied customers. I’m sure they had some happy customers too, but they never presented their happy customers to the journalists.
The journalists just picked up the good guy Salesforce(according to them) and started talking about their model. In this way, Salesforce began to grow.