November 2023

The Salesforce story may be the most popular one used to describe the process of creating a new industry category. Before Salesforce.com, software was bought as a “product”. Salesforce redefined the industry so that now software is bought as a “service”. The company truly deserves tremendous credit for changing an entire industry by creating a new category, but a big part of why they were successful doing so is that they realized they couldn’t do it alone.

At the beginning of 1999, few people would say that the software industry was broken. Computers and software had fundamentally changed how people and businesses work, especially following the introduction of the IBM PC in the early 1980s. These changes made workers and industries more productive and contributed to increasing quality of life. 

But then the Web happened. Companies like Google and Amazon raised everyone’s expectations of how things should work. You need something? You search for it online and find it in minutes or seconds. Sure, if it’s a physical product, you might need to wait a few days for it to show up on your doorstep, but everything became very simple. If it works that way for websites or books, why couldn’t it work for software?

That’s what Marc Benioff wanted to know. In his book Behind the Cloud, Marc wrote “My vision was to make software easier to purchase, simpler to use, and more democratic without the complexities of installation, maintenance, and constant upgrades.” In 1998 Marc started actively pursuing his vision. He recruited a team to start building the product and wrote a business plan. On March 8, 1999 the three-person team started working in a one-bedroom apartment next door to Benioff’s home. They called the company Salesforce.com to reflect the problem they were solving (SFA) and the new Internet-centric model they were introducing. In July, Benioff quit his Oracle job and focused entirely on Salesforce.

By 2003 the company had edged out from SFA into the broader category of Customer Relationship Management (CRM). Salesforce had successfully created the category of SFA/CRM Software as a Service (SaaS), but it hadn’t achieved Benioff’s vision of completely redefining the software industry. Even as a publicly-traded rapidly growing corporation Salesforce simply would never have enough resources to accomplish that on their own.

Benioff developed a new vision and a new direction for the company. Salesforce would not only provide Software as a Service (SaaS), but also a Platform as a Service (PaaS) on which others could develop software applications. Benioff wrote “creating a platform offered a way to resolve our biggest problem: customers were clamoring for more applications, and we didn’t have the resources to build everything ourselves. Further, we knew that outside developers needed a better way to create applications. There was so much that was truly painful about the process, and the heavy lifting required to build salesforce.com was fresh in my mind.”

Today, I think it’s safe to say that the SaaS category is now firmly established and the industry has been transformed. Perhaps this transition was inevitable, but Salesforce was able to accelerate and benefit from the creation of the broad SaaS category because it chose to collaborate with others. 

Read my full telling of the Salesforce story here.

Are you in the midst of creating a new category? Reach out if you’d like to brainstorm approaches to accelerate and de-risk the process.

Behind the Cloud by Marc Benioff and Carlye Adler tells the exciting story of a high-growth technology startup from initial concept through and beyond IPO, structured in a way that other founders and leaders can easily learn lessons from salesforce.com’s challenges and successes. It’s a fun read and I believe that any business leader would learn something applicable to their current situation by reading this book.

The authors have done a masterful job of melding two different approaches to writing a book like this. The subtitle of the book is “the untold story of how Salesforce.com went from an idea to a billion-dollar company — and revolutionized an industry.” Normally such a “story” book would be written chronologically, telling the step-by-step, week-by-week, month-by-month, year-by-year story of the company’s progress. However, I’m guessing that Benioff’s passion was to tell the story in the form of lessons learned, and such a “teaching” book is more useful if similar lessons are grouped together thematically. Somehow the authors managed to organize the lessons thematically, but order the themes so that the story largely unfolds chronologically as you read from the first theme through to the ninth theme. Doing so maintained the power of “story” (beginning, middle, end (at least as of 2009)) while also delivering the power of “teaching”.

Specifically, the book is broken into 111 “plays” — specific things the Salesforce founders and team did, and that others can adopt. These are broken down into 9 thematic “parts” or “playbooks”: Start-Up, Marketing, Events, Sales, Technology, Corporate Philanthropy, Global, Finance, and Leadership. Each playbook contains 10–20 plays. Each play is typically 2–5 pages long, includes very specific stories from the history of Salesforce, and generalizes what the authors learned into a lesson that could be applied by other companies.

No reader will immediately benefit from all the lessons learned, but almost any business leader will find something useful for their current situation amongst the 111 lessons shared. If you’re looking for an interesting book to read that might benefit your ability to lead your business, this could be a great choice.

Read the full review here.

Product Roadmaps Relaunched by C. Todd Lombardo, Bruce McCarthy, Evan Ryan, and Michael Connors is a guide for those involved in new product development, especially product managers responsible for setting the strategy and guiding the development of products. It teaches a more strategic way to use product roadmaps — providing clarity and a common understanding while avoiding over committing or getting into details more appropriately managed elsewhere.

I’ve been involved in product development in one form or another for the past few decades. Managing the process has become more structured and scientific over those years, but the most significant change has been the adoption of elements of design thinking, lean startup, and agile development. While business decision making has become increasingly data-driven and algorithmic, the reality is that what the market wants and needs is still fairly mysterious. Product developers must find a healthy balance between satisfying the desires of decision makers to predict what will happen and when, with maintaining the ability to learn what will actually succeed before rushing a new product to market. Product Roadmaps Relaunched suggests an approach for achieving this balance.

The first chapter of the book is primarily structured around common problems that are addressed by the book’s new approach to product roadmaps:

• Nobody understands why things are on the roadmap
• You are shipping a lot but not making progress
• Executives and customers demand commitments
• Marketing and sales are not selling what you are making
• Customers aren’t excited about your new features
• Your stakeholders and customers expect a firm commitment on dates for your product releases
• Time spent estimating design and development efforts takes time away from actually implementing them
• Your team looks at the roadmap as if it were a project plan listing when features will be released

In the second chapter, the authors define the key components of a product roadmap, including a product vision, business objectives, product themes, high level timeframes, and a disclaimer that all of it is liable to change at any time. The next eight chapters walk through the process of developing this new type of product roadmap. The final chapter provides readers with guidance in how to help their organizations begin to implement this new approach to product roadmapping. 

Read the full review here.

Unlike some examples where an industry giant pulls together a coalition of startups to help establish a new category, the story of the establishment of the 4G category is one where a small startup (Clearwire) pulled together a coalition of industry giants (Intel, Motorola, Google, Sprint Nextel, Comcast, Time Warner Cable, Bright House Networks). 

In 2004 Craig McCaw acquired Clearwire, a collection of assets, most importantly a collection of spectrum licenses in the EBS and BRS bands around 2.5 GHz. One of McCaw’s other companies (NextNet) had already been working on technology to deliver 4G-like capabilities. He made NextNet a subsidiary of Clearwire to focus on building the network equipment the company would need and approached Intel about becoming a strategic partner. 

Intel largely missed the opportunity for its chips to be included in cellphones. However, early in 2003 the company launched a strategic initiative with a chipset called Centrino that would add WiFi to laptops and other mobile computers. The success of the Centrino initiative to establish WiFi as the ubiquitous standard for wireless local area networks encouraged the company to pursue making WiMAX the ubiquitous standard for wireless metropolitan area networks. In October 2004, Intel invested an undisclosed (but “significant”) amount of money in Clearwire and began working with NextNet on deploying pre-standard WiMAX.

During 2005 the company launched service in its first 25 markets covering about 5 million people. In 2006 Intel invested an additional $600M into Clearwire. Motorola became a second strategic partner by investing in Clearwire and acquiring NextNet. These three companies each brought critical elements to the table in making the push for WiMAX to become the de facto standard for 4G wireless. By 1Q2007 Clearwire had signed up 285,000 subscribers. In its initial 25 markets, more than 10% of homes passed had signed up for Clearwire service and many of those markets had achieved cash-flow break even. Those results were impressive and proved the concept of 4G-like wireless broadband, but they were far from significant enough to establish the 4G category. The company would need more help.

A truly mobile service has to work wherever you go and it has to stay connected even when you are traveling at highway speeds. Fixing these problems would require a lot more spectrum and a lot more money. Sprint and Nextel had each separately acquired EBS/BRS bands in about a third of the country each. The two companies had merged in 2005. In 2008 Sprint Nextel announced the combination of its 4G business with Clearwire to form the new Clearwire. The new venture received Sprint Nextel’s 2.5 GHz spectrum (resulting in a nationwide footprint), and $3.2 billion in cash from Intel, Google, and three of the largest cable companies.

The deal brought more than just spectrum and cash. The third missing component to firmly establishing the 4G category was a marketing and distribution strategy. The new Clearwire would build and operate the 4G network, and Sprint Nextel, the cable companies, and other wholesale customers would sell the capacity on that network to their customers.

By the end of 2010 Clearwire’s network covered 119 million people, their subscriber base had grown to 4.4 million, and revenue had grown to $180M in the fourth quarter alone. Clearwire and its allies had successfully created the 4G category. Within a few years almost no one would consider buying a phone that didn’t have 4G technology. Unfortunately, category making can be hard and expensive. LTE ended up winning the technology war over WiMAX. Clearwire ran out of money and was acquired by Sprint. Sprint itself struggled to survive and eventually was bought by T-Mobile. However, the core capabilities and assets that started in Clearwire continue to provide mobile broadband leadership for T-Mobile. 

It’s impossible to know the “what if’s” around 4G if Clearwire hadn’t led the creation of a powerful collection of tech giants to establish the category. We will never know because Clearwire and its allies did make true mobile broadband available at the same time (2007–2010) that Americans were falling in love with the smartphones that needed it most.

Read the full story here.