Tech

How Bret Taylor, a former Facebook and Google engineer, earned Marc Benioff's trust to become one of the most important execs at Salesforce

Key Points
  • Bret Taylor was central to the MuleSoft acquisition and he's played a leading role in Salesforce's Dreamforce roadshow.
  • Taylor and Marc Benioff have known each other for about a decade, dating back to intimate CEO dinners they both attended.
  • Benioff has put Taylor in charge of developing products that are more consumer friendly than traditional business software.
Salesforce's Bret Taylor at Dreamforce 2017
Salesforce

When the Stanford Cardinal football team beat the University of Southern California by 14 points two weeks ago, it was a big victory for Salesforce Chief Product Officer Bret Taylor over his boss, Marc Benioff.

"I am a simple man." Taylor, a Stanford alum, posted in a tweet on Sept. 7, the day before the Pac-12 Conference opener against Benioff's alma mater. "I just need my family, my health... and for Stanford to beat USC tomorrow so I can remind @Benioff about it for the next 12 months." Benioff retweeted it.

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These days, college football is about the only noticeable point of contention between them.

In the two years since Salesforce acquired Taylor's collaboration software start-up Quip, the 38-year-old programmer has climbed the company's ranks about as rapidly as the 61-floor Salesforce Tower has absorbed the San Francisco skyline. He was promoted to the C-suite in November, and recently joined a handful of top executives in traveling the country ahead of next week's Dreamforce conference, rehearsing the lengthy keynote in front of small focus groups of customers and developers.

Taylor's quick ascent plays squarely into Benioff's plan to almost double revenue to $20 billion by 2022. The company's success to date has been in transforming enterprise software from boring back office work stored on internal servers to cloud-based tools that are used by workers of all sorts from their tablets and smartphones. What started off as software for salespeople extended to marketers, field service workers and anyone interacting with customers.

The next $10 billion will require that Salesforce get its sprawling portfolio of products into the hands of more people using it to do more things, without having to be trained and retrained. It's a vision of business software made less for nine-to-fivers and more for consumers, who've grown accustomed to a world of Apple, Google and Facebook simplicity.

That's Taylor's universe. He launched his career at Google, helping create Google Maps, before starting social media company FriendFeed and selling it to Facebook in 2009. There, he ultimately became chief technology officer before leaving in 2012 to start Quip, which was building cloud-based productivity and collaboration software, with a focus on mobile devices. He's also on the board of Twitter.

"Quip was the first product I ever sold," Taylor said in an interview this month from the 15th floor of the Salesforce Tower. "I had only done ad-supported products before."

Taylor, wearing a grey t-shirt, white jeans and sneakers, spoke with CNBC from a conference room where he often works because the new building doesn't have dedicated offices. In a far corner of the room, there's a small round table with his laptop and a plant, and under the large TV screen on the wall is a credenza with pictures of his wife and three young kids.

Bret Taylor on 15th floor of Salesforce Tower
Ari Levy | CNBC

Taylor had just returned from Los Angeles where he was preparing for Dreamforce, Salesforce's massive annual customer conference, which starts Sept. 25. Rehearsals the prior week were held in New York and Minneapolis, where Taylor played the role of Benioff, a part that's also sometimes performed by Parker Harris, Salesforce's co-founder, or Keith Block, who was promoted from operating chief to co-CEO last month.

No written notes, no teleprompter. Just a concerted effort to deliver the message in 90 minutes or less, followed by audience feedback — lots and lots of feedback.

"We develop this together and the narrative is shared so it's actually fairly natural to go up and give the speech," Taylor said. "It's really interesting because it changes pretty materially from the beginning."

At the 2018 Dreamforce conference, which has over 170,000 registered attendees and will take over a solid chunk of downtown San Francisco, Taylor has a few speaking engagements on his schedule. There's a session with Harris about IdeaExchange, a site where users can recommend product features, and another meeting with financial analysts.

When he's not in conference prep mode, Taylor said he spends the bulk of his time on three big topics: Salesforce's integration of data and services on its platform, the Einstein artificial intelligence engine and Trailhead, the company's system for helping people learn how to use Salesforce.

The MuleSoft deal

Taylor's prominence at Salesforce became readily apparent in March, after the company announced the $6.5 billion acquisition of MuleSoft, the largest in its history. Taylor joined Block and Chief Financial Officer Mark Hawkins on the call with analysts to discuss the deal, and it was later disclosed that he was part of a three-person team at Salesforce that first met with MuleSoft CEO Greg Schott in February.

Salesforce buys Mulesoft in $6.5 billion deal
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Salesforce buys Mulesoft in $6.5 billion deal

MuleSoft specializes in stitching together information from disparate sources so that data in a company's legacy systems and across its array of devices can work alongside its applications in the cloud, simplifying the jobs of chief information officers and IT managers.

"Data is trapped in five places," Taylor said. "It's a really challenging customer problem to solve and CIOs we talked to didn't feel like they were moving quickly enough to respond to changes."

Speculation about Taylor's future and whether he's being groomed as Benioff's eventual successor was already swirling around Silicon Valley before the MuleSoft deal. Since then, it's only picked up.

Benioff, who turns 54 next week just as Dreamforce is getting underway, is worth well over $6 billion. He spends a healthy amount of time at his expansive estate in Hawaii and is building his name in philanthropy, primarily through financing children's hospitals. If that's not enough, Benioff has just agreed to buy Time Magazine for $190 million, though he said he'll have no operational role at the publication.

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While Block was recently named as the company's co-CEO, he's several years older than Benioff. With his 26 years at Oracle, he's viewed as a seasoned enterprise sales leader, rather than a visionary. However, Joel Fishbein, an analyst at BTIG who's covered cloud technology for over 14 years, said in an interview that there's no question that Block is the number two, even though "Bret is going to have a pretty visible role going forward."

Taylor takes the diplomatic position you'd expect from an executive at a big, publicly traded company.

"I don't even know what my reaction is to that," he said, when asked to address the rumors. "I'm very focused on the problems ahead of me right now."

Benioff told CNBC in an emailed statement that, "Bret is one of the greatest product visionaries in our industry today. We are fortunate to have him at Salesforce leading our product strategy and development."

He went on to say that Taylor is "key to Salesforce's innovation and our customers' success in the Fourth Industrial Revolution," a phrase he uses to describe how companies are managing the sudden convergence of technologies like autonomous cars, artificial intelligence and mobile computing.

A decade of CEO dinners

Taylor and Benioff first got to know each other through a dinner series that Taylor helped start in 2007, when he was an entrepreneur in residence at venture firm Benchmark. Taylor had just left Google and was working at Benchmark alongside Nirav Tolia, who later started Nextdoor, Mike Cassidy, who went on to lead Google's hot air balloon project called Loon, and the late Dave Goldberg, who became CEO of SurveyMonkey.

Benioff was a regular attendee at the dinners (which still take place) along with tech leaders like Dropbox's Drew Houston, Yelp's Jeremy Stoppelman, LinkedIn co-founder Reid Hoffman and serial entrepreneur and investor Max Levchin. Ex-Yahoo CEO Marissa Mayer even made an occasional appearance.

When Taylor left Facebook to start Quip in 2012, Benioff was a natural person to ask for investment and advice. Taylor started leaning on Benioff for advice about how to build an organization that's geared towards selling to businesses. That meant learning about pricing, cultivating customer feedback and finding distribution partners. Taylor confirmed what other entrepreneurs and investors have said about Benioff — that his number one piece of advice to software start-up founders is to hire more salespeople.

"It's intimidating to go into a new market," Taylor said. "Software is just software but the business model is different. How you grow is completely different and that impacts how you raise money, it impacts how you hire. He had a really big impact on me."

In August 2016, Salesforce acquired Quip for close to $600 million (including options), a price that looked high at the time given that the business was still early and headed directly into a very crowded market, occupied by companies like Microsoft, Google, Box and Dropbox.

In a leaked email to the Salesforce board, dated July 26, Benioff wrote, "I'm very excited about this. We have been after this for 3 years." He added, "The team is legendary and the [sic] everyone will take notice of this."

Salesforce declined to confirm that the email was about the Quip acquisition. 

"Distribution problem"

Little-known software start-ups often spend many years blowing through venture dollars to load up on the sales and marketing staff required to compete against industry giants. For Quip this challenge was particularly acute, because just about every company already used some combination of Microsoft Office and Google's suite of productivity tools, both of which come bundled with other key services like email and calendar.

"They nailed the product, but they had a distribution problem," said Peter Fenton, a partner at Benchmark who invested in Quip and sat on the board. "They needed a sales force."

Fenton, an early Twitter backer who also helped bring Taylor onto the social media company's board, said that rather than running an auction to seek the highest bid, Taylor wanted to negotiate directly with Benioff and come up with a solution that rewarded shareholders and also made sense for Salesforce. If Taylor was going to work for anyone, Benioff was clearly his top choice.

"It's growing into one of the great relationships in the Valley," Fenton said.

Salesforce's Bret Taylor at Connections in Chicago
Salesforce

Taylor said that soon after the acquisition, Benioff started picking his brain with increasing regularity, asking for his opinions on various products and how to improve them. Taylor began consulting with the teams working on the Lightning development platform and infrastructure strategy and attended Benioff's staff meetings. He was promoted In November 2017, when Alex Dayon moved from head of product to chief strategy officer.

Quip co-founder Kevin Gibbs took over the CEO role of the unit, which continues to operate within Salesforce and this week introduced a competitor to Microsoft PowerPoint.

Within the walls of Salesforce, Taylor is at the center of an effort to get past the historical roadblocks of software businesses. Typically, large software companies stop growing once they saturate their market and become reliant on locking in the same big customers to writing bigger and bigger checks.

Salesforce has some connections to that legacy world: Benioff and Block are both proteges of Oracle founder Larry Ellison, after all. But it's no accident that someone who's spent his career at Google and Facebook is now the head of product inside a company that encourages its employees to wear hoodies.

"There's a whole millennial change going on inside enterprises," said BTIG's Fishbein, who has a buy rating on Salesforce stock. "They're dictating what's being adopted inside organizations."

Taylor has brought other attributes from his past employers. In March 2003, as he was wrapping up at Stanford, Taylor was hired into Google by Marissa Mayer as an Associate Product Manager intern. Other big names in Silicon Valley to get their start in the APM program include Clay Bavor, who now leads Google's virtual reality team, and Jess Lee, who later started e-commerce company Polyvore and is now a partner at Sequoia Capital.

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This past summer, Taylor created a program with the same name at Salesforce, bringing in about a dozen students who are entering their senior year of college, with the plan to hire some of them full time when they graduate. It's one way Taylor is looking to lure the next generation of engineers into enterprise software.

But there's a little more to it than that. Taylor became such good friends with some of the colleagues from his group at Google that he still has a monthly poker game with them.

It's also how he met his wife, Karen Padham Taylor.

"Many of my closest friends are still from that class," he said. "I joke that I met my wife through the APM program, but that's not guaranteed."