by Dan Lyons
Entire blocks have been shut down to traffic. All of downtown is gridlocked. Restaurants and hotels are booked solid. I’m staying at the Courtyard Marriott, which was my home away from home during my stint as editor of ReadWrite. Last year I spent so many months living in this hotel that when I walk into the lobby the woman at the front desk recognizes me and remembers my name. Last year I paid $129 a night. This week, because of Dreamforce, I’m paying close to $700 a night. As for getting around town, forget about finding a taxi. They’re all booked. Oh, and the forecast calls for rain. It’s a nightmare.
None of this is as awful as Benioff himself. He stands six-feet-five-inches tall and weighs three hundred pounds, with gleaming white teeth and curly black hair that glistens with hair gel. He is a former salesperson who now sells software that lets other salespeople sell more stuff. It’s called customer relationship management, or CRM, software. Benioff is also one of the wealthiest people in the world, a member of the Forbes billionaire list. Here in the main auditorium of the Moscone Center, thousands of people who sell things over the Internet are standing up and cheering for him as if he’s some kind of superhero.
The whole thing makes me depressed, in part because Benioff is a buffoon, a bullshit artist, and such an out-of-control egomaniac that it is painful to listen to him talk. He lives in Hawaii and signs his emails “Aloha.” He’s a Buddhist and hangs out with Zen monks from Japan, and he gave his golden retriever the title “chief love officer” at his company. He is the Ron Burgundy of tech. He and this conference are the essence of everything that has gone wrong in the industry. “Have you transformed the way you innovate?” was Benioff’s big line at the 2012 Dreamforce show. Note that you can switch the two buzzwords in the sentence and it still sounds good and still means nothing. Meaningfullessness is not a word, but should be. There’s an art to this kind of horseshit, and Benioff is its Michelangelo.
More depressing is that Benioff represents a threat to HubSpot, and while he may be ridiculous, he’s not someone you want to have as an enemy. Salesforce used to be HubSpot’s biggest ally, investing in HubSpot and even selling HubSpot software to its customers. Halligan loved Benioff so much that he named the company’s biggest conference room after him. That happy relationship ended six months ago when Salesforce acquired one of HubSpot’s rivals, ExactTarget. Supposedly Benioff first tried to buy HubSpot, but Halligan rejected his offer.
At the keynote I’m sitting next to one of our sales reps, who tells me that Salesforce.com has been calling our customers, urging them to dump HubSpot and switch to ExactTarget, which has been renamed Salesforce Marketing Cloud. Salesforce.com claims that its marketing software is better than HubSpot and works seamlessly with Salesforce.com’s core CRM software.
These claims may or may not be true, but Salesforce.com makes a compelling sales pitch. A lot of our customers use Salesforce.com. They bought HubSpot as a kind of add-on to their CRM software. Why keep paying extra for HubSpot when they can buy their marketing software from the same company that makes their CRM software? No doubt Salesforce.com also offers an attractive price if you buy the bundle.
“So what do you say when your customers tell you that Salesforce.com is trying to poach them away?” I ask the sales rep. “What story can we tell our customers to counter the story they’re getting from Salesforce?”
The sales rep just shrugs.
Halligan has decided that if Salesforce.com is going to enter our market space, then we will enter theirs. In secret, HubSpot’s engineers have started developing a CRM program to compete against Salesforce.com, but we haven’t announced it yet.
Cranium has become obsessed with Salesforce.com. He hates these guys! He wants to kill them! He’s like Ahab stalking the whale. Before the ExactTarget deal, Cranium loved Salesforce.com. He used to spend a fortune buying booth space at Dreamforce. In 2011 he made forty HubSpot employees dress up in orange cheerleader tracksuits and run around handing out tiny stuffed unicorns. He still thinks this was a brilliant marketing scheme. I cringe when I look at the photos. I wonder if anyone refused to wear a tracksuit, and if so, what happened to that person. I’m relieved that this year we can all just wear regular clothes, so I don’t have to find out.
We’re here in part to steal ideas—we’ll see what these guys do to create a spectacle and copy that for our Inbound conference in Boston. We’re also here to gather competitive intelligence, to see how Benioff talks about his new marketing software and what the audience makes of his pitch. We want to find out what we’re up against.
Based on what I’m seeing, we’re in trouble. Sure, Benioff is full of shit, but so are we, and Benioff is way better at being full of shit than we are. Also, Salesforce.com’s sales are about fifty times what ours are. In terms of hype, the disparity is even greater. Just two months before this, HubSpot’s Inbound drew five thousand people, a tiny fraction of the Dreamforce audience—even after giving away or selling a lot of our tickets at a discount.
We’re screwed, I keep thinking. We’re totally, absolutely screwed. Not because the ExactTarget product is better than ours, because who even knows, and who even cares? Having the best product has nothing to do with who wins. What matters is who can put on a great show, who can create the biggest spectacle, who can look huge and unstoppable and invincible, and who is the best at bluster and hype.
When it comes to these things, nobody comes close to Benioff. Nobody has cashed in on the bubble as well as he has. In 2012, Salesforce.com lost more than a quarter of a billion dollars, and in 2013 it will lose almost as much. In 2013 the company is fourteen years old and not making a profit. But its revenues are growing more than 30 percent each year, and growth is what investors are looking for, so even though Salesforce.com is bleeding red ink, its stock has doubled over the past two years, and Benioff’s personal net worth has soared to $2.6 billion.
Now, here in the Moscone Center, the P. T. Barnum of the tech industry is giving a master class in how the game is played. It’s the Marc Benioff show, brought to you by Marc Benioff, with special guest Marc Benioff. Fifteen thousand people are packed into this hall. Thousands more are packed into spillover rooms. It feels like a rock concert. In fact it is a rock concert. Before Benioff appears, the lights go down and suddenly Huey Lewis and the News are performing “The Power of Love.” It is nine in the morning. From our seats, way in back, we can barely see the band, but we watch on huge screens, the kind used at football stadiums.
Next comes Benioff, making a big high-energy entrance, like some kind of cheesy talk-show host, roaming up and down the aisles, a man of the people. He wears a blue suit and a pair of multitoned shoes, called Cloud Walkers, custom made by Christian Louboutin. He says he chose that Huey Lewis song because the power of love is what Salesforce.com is all about. He doesn’t want to talk about business. He wants to talk about the hundreds of millions of dollars that he and Salesforce.com have donated to worthy causes. “The best drug I ever took,” he says, “was philanthropy.”
I suspect that opening with a big-name band is also a form of dick measuring. It’s Benioff’s way of saying, “I just spent three hundred thousand dollars to have a band play one song. You know why? Because I can.” The same goes for his philanthropy. Benioff says he’s challenging other tech billionaires to give away as much money as he does. The thing is, a lot of rich tech people do give away a lot of money; they just don’t go around bragging about it. Benioff’s challenge is a form of self-aggrandizement, his way of saying that while others might give away money, Mine is bigger. He wields his philanthropy like a four-foot cock, slapping us all in the face with it.
Benioff talks about the UCSF Benioff Children’s Hospital, which used to be called UCSF Children’s Hospital until Benioff donated $100 million and got them to rename the place after him. Next he shows a movie about Haiti and earthquake victims, and talks about all the money Salesforce.com has sent there to help rebuild the country. When the movie ends, he introduces the prime minister of Haiti, Laure
nt Lamothe, along with supermodel-turned-philanthropist Petra Nemcova, and actor-slash-asshole Sean Penn. The crowd goes nuts. I’m feeling like I might be sick.
The idea is for Benioff to “interview” these people, but the “interview” consists of Lamothe saying how grateful he and his impoverished countrymen are to Benioff, and then Benioff talking over him. It’s painful. Here is the prime minister of a sovereign nation, flown into a tech conference by a billionaire, in those shoes, just so that the prime minister can kiss the billionaire’s ring in public. Everyone eats this up. They love Benioff! They stand and cheer. Benioff walks down off the stage into the aisles like a televangelist, bathing in the adoration, saying awesome and phenomenal, again and again. What, exactly, is awesome? This whole thing! All of us! Just for being here, just for caring, we’re all awesome! It’s phenomenal!
I glance over at Cranium. I wonder if he’s thinking what I’m thinking, which is that we could purchase nuclear-powered orange tracksuits that shoot lasers from both sleeves and we would still be no match for this guy. Why would customers buy software from pikers like us when they can buy software from Benioff? I’m appalled by Benioff’s performance, and I find him completely repellent, but even I want to buy his software. Cranium looks pissed off.
Finally the presentation shifts to product announcements. Huey Lewis returns to the stage and plays “Back in Time,” and then there’s a huge fake thunder explosion, dry ice machines blanket the stage in fog, and the co-founder of Salesforce.com, Parker Harris, drives onstage in a white Tesla and leaps out dressed as Emmett “Doc” Brown from the movie Back to the Future, in a white lab coat and a crazy snow-white wig.
Harris and Benioff perform a clumsy skit about how Harris has just returned from the year 2019 and brought back some software he found there, and that is what Salesforce.com will be announcing today. The truth is that Salesforce.com has little new to introduce. All of the stuff about hospitals and Haitians and Huey Lewis is meant to distract us from noticing that Benioff doesn’t really have much to talk about other than warmed-over versions of old products. The misdirection works. People whoop and clap. They nod their heads as if they totally understand phrases like the Internet of customers, where people make decisions at superhuman speeds, and companies operate at the speed of now, as well as at the speed of sales. What sales and marketing people must do, someone informs us with great urgency, is race into the future a little faster than our customers, and get to the future first, and be ready to greet them when they arrive.
Before you can try to figure out what that means, Dreamforce rolls on. Over the next few days the show features some of the biggest names in tech, like Dropbox CEO Drew Houston, HP CEO Meg Whitman, Yahoo CEO Marissa Mayer, and Facebook COO Sheryl Sandberg. Benioff has latched on to the “Women in Tech” crusade and made it his cause célèbre. “Powerful women” is a theme of the conference—yet oddly enough only four members of Benioff’s twenty-two member management team and only one member of his board of directors are female. Salesforce.com is run almost entirely by white men. But look—over there! It’s the prime minister of Haiti! And wait, hold on—is that thunder and lightning? Indoors? Is that a Tesla? From the future? On stage?
Green Day plays a concert in AT&T Park, home of the San Francisco Giants. Alec Baldwin gives a talk. Tony Bennett and Jerry Seinfeld make appearances. It’s all part of what Salesforce.com describes as “dynamic programming to exhilarate the Dreamforce community.” Cavernous halls are lined with countless booths rented out by software makers hawking programs that work with Salesforce: add-ons, plug-ins, mobile apps. There’s a “connected devices playground” and a “Dreamforce hackathon.” There are more than a thousand breakout sessions and “success clinics,” where people can learn how to sell stuff. Two people dressed up in foam balls—the Salesforce.com mascots, SaaSy and Chatty—bounce around the conference, dancing awkwardly with legions of mostly white people.
The final day features a speech by Deepak Chopra, noted charlatan and quack. He and Benioff are friends. Chopra rambles on about joy and meaning and interconnectedness and the importance of loving yourself. The old W. C. Fields line “If you can’t dazzle them with brilliance, baffle them with bullshit” seems like the motto not just for Chopra but for the entire conference. Benioff and his philanthropy, the dry ice and fog machines, the concerts and comedians: None of this has anything to do with software or technology. It’s a show, created to entertain people, boost sales, and fluff a stock price.
I roam the show floor, gazing at middle-aged salespeople in suits who sit on beanbag chairs staring at their phones, and tech bros in T-shirts and man buns playing Ping-Pong. I sit in the Tesla that’s on display outside the auditorium, dreaming that my HubSpot options might someday be worth enough that I can buy a car like this.
I figured Cranium would be setting up dinners for the HubSpot gang. But… nothing. No email from Cranium, no invitations to get together. Just like with my first day at HubSpot, I’ve been flown out here to attend this show then left to myself, with no instructions, no socializing.
Cut loose, I spend my evenings catching up with friends in San Francisco. I do some shopping in Union Square. I have breakfast with a tech CMO from the East Coast and lunch with a PR exec from a company in the Valley. Torrential rains strike on the night of the Green Day concert, but thousands of people go anyway. Many of them stay even after the sound system blows out and Green Day’s Billie Joe Armstrong tries to carry on as an acoustic show, with no microphone.
I stay in my hotel and gaze out my window at the rain-blurred lights down below, marveling at all the money and evil sloshing around down there. One hundred and forty thousand salespeople have hit San Francisco, armed with expense accounts and determined to have the time of their lives. They will sleep with their clients. They will sleep with their colleagues. Hookers have flown in from all over the country for this. Tinder and Grindr and the Craigslist “casual encounters” listings are packed with out-of-towners looking to hook up. The strip bars and S&M clubs are booming. Dreamforce turns out to be a four-day orgy worthy of Caligula, a triumph of vulgarity and wasteful spending, with free booze and endless shrimp cocktail and a rate of STD transmission that probably rivals Fleet Week.
Gazing down on this mess is like looking into the pit of Mordor. So many lost souls! These glorified car salesmen, these people whose jobs involve coercion and manipulation, whose lives revolve around making their numbers. Every month, every quarter, every year: sell, sell, sell! These are the people who took the Internet, one of the most wonderful and profound inventions of all time, and polluted it with advertising and turned it into a way to sell stuff. No wonder these zombies need to take a week off in San Francisco once a year, with some Deepak Chopra and maybe an eight ball of coke and a Canadian hooker to make the whole thing seem worthwhile.
Dreamforce is only part of Benioff’s mad campaign of megalomaniacal self-aggrandizement. Five months from now, in April 2014, Benioff will announce plans to make Salesforce.com the anchor tenant for a new skyscraper that is already under construction in San Francisco. Salesforce.com will commit $560 million to help finish work on the one-thousand-foot glass-and-steel skyscraper, which will become the company’s headquarters and be named the Salesforce Tower. When it opens in 2018, it will be the tallest building in the city, dwarfing everything around it. Maybe Benioff is oblivious to the phallic symbolism, or maybe he doesn’t care, or maybe—and this is my theory—he knows exactly what he’s doing and he loves it. Mine’s bigger! It’s the biggest!
For P. T. Benioff there is no end to the extravagant spending. At the 2015 Dreamforce he docks a one-thousand-foot-long luxury ocean liner at pier 27 to serve as a hotel and party space—the Dreamboat, he calls it. Salesforce.com still isn’t turning a profit, but thanks to Benioff’s huffing and puffing Salesforce.com’s market value has topped $50 billion and Benioff’s own net worth has swollen to $4 billion. Benioff has invented a form of financial alchemy, one where he makes money by losing
money. The more Benioff squanders on parties, the richer he gets.
Looking down from my hotel window in November 2013, I realize that things are playing out exactly the way Tad, my investment banker friend, told me they would when I met him for a drink just one year ago at Anchor & Hope. This is what a trillion-dollar wealth transfer looks like. Across the country, in New York, bonuses on Wall Street are going to be the highest they’ve been since 2007, before the crash. In 2013, there will be more IPOs than in any year since the dotcom bubble peaked in 2000, and in 2014 there will be even more, according to Renaissance Capital, a company that tracks the IPO market.
Surely it cannot end well when a bunch of money-losing companies go racing into the public markets, and when risk that previously was confined to private investors gets shifted onto the public. Nevertheless, the Fed keeps printing money, and the stock market keeps going up. The ducks are quacking, and the VCs are racing for the exits, launching IPOs as fast as they can.
Somehow I find myself sitting in the middle of the maelstrom. Part of me finds the whole thing appalling. But another part still hopes to profit from it.
Fourteen
Meet the New Boss
I’m still in San Francisco when I get an urgent message from Wingman asking me to call him. There’s some big news, he tells me. The company is about to announce an important new hire—a guy named Trotsky. Trotsky will oversee HubSpot’s content operations and thus will now be my boss, instead of Wingman.
On the phone, Wingman keeps talking about Trotsky as if he’s a celebrity. Finally I confess to Wingman that I’ve never heard of Trotsky. I’m a little bit embarrassed to admit this, but who is this person and why is it a big deal that he’s joining HubSpot?