Max Maeder

LinkedIn will slowly unravel as each category gets carved into niches, rather than a single player taking the market: Networking >> Communities • @joinrevgenius, @IndieHackers Job boards >> Niche aggregators • @Pallet_HQ, @StartupJobs, @RemoteOK 1/2

@tanayj Any source on the 2% of revenue from Professional Services? There doesn’t seem to be anything out there to confirm.

Per CNBC, Anthropic is expected to hit $1B in revenue this year, roughly a ~1000% increase y/y. Breakdown of revenue is: • Third Party API (via Amazon, etc): 60-75% • Direct API: 10-25% • Claude chatbot subscriptions: 15% • Professional Services: 2%

@jasonlk I think people also discount the additive value of products like Mulesoft + Tableau, in addition to the revenue boost they provide. For now, Slack really just remain a boost to the top line until they can figure out a tighter Product integration.

Slack still growing 17% now, even inside of Salesforce Fairly impressive Did Salesforce overpay? Maybe Does it matter? Probably not They need that “extra” ~$2B in ARR now, growing 17%

What are the best applications you’ve seen OUTSIDE of generative AI? ie. Predictive analytics for lead scoring, pipeline management. And a BIG one, the potential for AI related to Deal Desk (peripheral to CRM) - in theory, with mature processes around pricing strategy, shouldn’t layering in lead to this function disappearing in the future?

Working on a presentation about advancements in AI that apply to the world of business software and SaaS (particularly CRM). So much to talk about, it's hard to choose. If you were in the audience, what would you want to hear about? What questions would you have?

@rwang0 @constellationr Seems like an interesting way for them to deploy $10B of capital given slowing revenue growth and cuts to spending across the board (R&D, Sales, Marketing), no? x.com/maxlmaeder/sta…

MyPOV: @Salesforce posts strong Q4, adds dividend, outlook conservative bit.ly/3UXswp0 Marketing and Commerce Cloud had fourth quarter growth of 7% with Sales, Service and Platform posting revenue growth of 10% to 12%. @ldignan @constellationr

The message from Salesforce on their earnings call this week is concerning if I’m a customer. • Cut spend in R&D, Sales, and Marketing by $800m last year. • Plan to spend $10 BILLION on a share buyback... Investors have been pressuring Salesforce to focus on profitability recently. They disbanded their Mergers & Acquisitions team as a result. Many people were excited by that announcement. “Salesforce needs to focus on improving the current Product suite!” Fair. Well, they spent $150m LESS on R&D last year than in the prior year. No Acquisitions & No Innovation? Meanwhile, Hubspot increased their investment in R&D by 40% last year. (Even the sleepy ORACLE is increasing their spend on R&D.) Salesforce also cut spend on Sales & Marketing last year. Hubspot increased 20%. I wasn’t overly concerned when Salesforce slowed in their M&A activity. They needed to appease investors and show profitability. But cutting that type of spend is only part of the equation. This earnings announcement shows they are planning to spend. A LOT. Just not in areas that benefits customers. They are spending in ways that benefit investors. • $10B share buyback program. • Announcement of their first stock dividend. This is cash that could be spent elsewhere. 👉 Investing back in R&D. 👉 Building a cash reserves to make moves in AI. And they’re going to need it. 4 companies are positioned to dominate in AI. Microsoft, Amazon, Nvidia, Google. In 2023, they invested a combined $23B in AI Startups. That was a stunning 30% of all venture deals around Data & AI. I understand Benioff highlighted a bunch of positives on the call too. • References to an increase in multi-Cloud deals • Data on an increase in deals with $10m+ ACV • Heavy talk around Einstein and AI This is Marketing speak, though. You simple CANNOT: • Spend less on Research & Development • Spend less on Sales & Marketing • And stop pursuing the aggressive acquisition strategy that got you here Don’t get me wrong, I’m rooting for Salesforce as much as anyone. I run @found_hq, which does nothing but help companies hire Salesforce Freelancers. But is this the best use of $10,000,000,000?

@gertjanwilde I don’t expect it to be the end of the moves Vista Equity will make in the space either …

@MaxLMaeder Well spotted. Looks like it’s happening with Drift “acquiring” Salesloft.

Has a Private Equity Firm ever merged holdings to launch a SaaS juggernaut? Vista Equity could take on Hubspot overnight. They hold a majority stake in: • Pipedrive (CRM) • Gainsight (Customer Success) • Drift (Conversational Marketing) • Salesloft (Sales Engagement) #SaaS #PE #CRM

When people see the growth at a company like ServiceNow, they often forget what’s behind this type of go-to-market machine. They have one of the biggest Rev Ops teams I’ve ever seen - 500+ people globally - dedicated to the science of Sales. ServiceNow CEO said this growth is largely thanks to GenAI capabilities. “The SKU outsold any other new introductions put into the marketplace.” While the Product & Eng. teams are to thank for feature releases … You can’t bring new products to market without a strategic backbone. 👉 Pricing Strategy Macro Level Insights • 17 people dedicated to it 👉 Deal Desk Micro/Account Level Deal Strategy • 65 people dedicated to it 👉 Partner & Channel Operations Strategy Unlocking Network Effects • 42 people dedicated to it 👉 Customer Outcomes Translating measurable success to Sales & Pricing Strategy • 7 people dedicated to it At ServiceNow, they have entire teams focused on : –– Market Segmentation & Analysis (Led by a Director of GTM Customer Segmentation) –– GTM Sales Analytics (Led by a VP of GTM Analytics) –– Regional Specific Pricing Strategy –– Industry Specific Sales Enablement –– GTM Product Analytics –– Customer Outcomes –– Field Operations –– Support Operations –– Sales Enablement –– GTM Systems Sure, most companies don't need a Rev Ops this size. But there is a TON to gain from analyzing sophisticated orgs. It uncovers areas that you aren’t currently focused on.

In November 2022, Bret Taylor stepped down as Salesforce Co-CEO. Then, he joined the Board at OpenAI + Shopify, founded a $1B AI startup. This may go down as the biggest loss Salesforce has ever seen. Bret Taylor has become absolutely unstoppable. A Quick Timeline of Events: 2016: Salesforce acquires Taylor's company, Quip, for $750m 2016: Taylor joins Twitter Board of Directors 2017: Taylor named Chief Product Officer at Salesforce 2019: Quip is re-launched as Salesforce Anywhere. 👉 This appeared to be Salesforce's answer to Microsoft Teams. (It was not.) December 2020: Salesforce Acquires Slack. • A massive bet in Salesforce's battle with Microsoft. • Taylor was the chief architect behind this acquisition. November 2021: Taylor named Co-CEO of Salesforce. November 2022: Taylor leaves Salesforce. Now, this is where things get interesting ... March 2023: Taylor founds new AI Startup, Sierra. June 2023: Sierra raises $20m, valued at $100m (after 3 months) June 2023: Taylor joins Shopify Board of Directors November 2023: Taylor becomes Chairman of the Board at OpenAI January 2024: Sierra raises $85m, valued at $1B WHOA 🤯 When Taylor left Salesforce, it was to "get back to his entrepreneurial roots". I was skeptical. A contributing factor seemed to be misalignment about Salesforce's future. And while I don't know for sure, the ultimate question is: What would Salesforce look like today with Bret Taylor as the lone CEO?

@heyolivehaus Your site is perhaps my favorite on the internet.

realized suuuper late that I never designed a 404 page for my site 🙈 but now I'm a proud Picard owner 👀

@boringmarketer Exactly what we do at @found_hq. Initial focus as a marketplace matching companies to vetted Salesforce Freelancers and evolved to a 50/50 focus on Salesforce and Revenue Operations Leaders.

Random idea: Someone should build a marketplace, newsletter, etc. focused on fractional leadership across different business functions. - Fractional CMO - Fractional CRO - Fractional COO Many companies don’t need these roles full-time but would greatly benefit from even a few hours per week in my opinion. Thoughts?

The future of Upwork and Fiverr will follow the same trajectory as Craig’s List. It was ‘unbundled’ into niche, vertical specific marketplaces. Freelancer’s Marketplaces were one of those offshoot categories. I believe the future of that space will be niched down versions - a Salesforce Freelancers Marketplace, for example. You can’t accumulate a high enough concentration of high-skilled talent to serve every market as a generalist Marketplace attempting to do it all.

Salesforce is killing a huge opportunity with a pricing mistake. As more companies lean into Community-Led GTM motions, Salesforce is making it impossible to build Communities in Slack. Slack charges per user regardless of use case. A Slack Community like @relume_io (with 2,139 members) costs $139,569 per year. The decision is sending Communities to Discord and other competitors. This is an overlooked opportunity and fatal mistake. In my opinion, this would be a simple marriage btwn Salesforce <> Slack. It’s beneficial in a few ways: 1. Drives organic, bottom-up Slack adoption 2. NEW USE CASE provides insights to inform on new features/products 3. Communities play a big role in the Sales motion (Slack >> Sales & Marketing Clouds) 4. Access to vast conversational data for AI Point 3 is likely the most important of all. The way companies Go-to-Market is changing. And Salesforce needs to be listening to the market. It’s not just inbound (Marketing) vs. outbound (Sales) motions. The new normal includes Community-led and Partner-led motions. For years, Salesforce wanted to go after a social platform. First, LinkedIn. Then, Twitter. Slack provides the same opportunity. TENS OF THOUSANDS of Communities could exist in Slack. Each Community has a very specific topic and persona. Layering conversational insights on top of pre-defined personas is gold. Salesforce would benefit greatly from: 👉 Greater Product Innovation 👉 A Wedge into SMB Slack gives them the opportunity for both. But it doesn’t seem like they’re going to capture it. — #CRM #Salesforce #Slack #Communities

The Executive brain drain happening at Salesforce is very real. At the end of Q4’23, they lost Slack CEO (now CEO of Bumble) and Salesforce CMO (now CEO at Lattice). Something to watch 👀

2024 Prediction: Salesforce will start acquiring again. After 2 acquisitions in 2023 (@AirkitAI, @Spiff_Inc)… Expect to see 5+ in 2024 👇 Investors loved Salesforce’s earnings throughout 2023. The stock was up 91% last year. Salesforce focused on profitability above all else. • Investment in R&D was down YOY • Investment in Sales & Marketing was down YOY • Subsidized Professional Services was down YOY But this won’t continue forever. Otherwise, Salesforce quickly becomes ‘the new Oracle’. A cash cow that doesn’t innovate. And that will be the beginning of the end for them. I believe they will continue innovating to remain dominant. That needs to happen through acquisitions. I always say it’s worth paying attention to Salesforce Ventures’ investments. In 2023, Salesforce made 2 strategic acquisitions: 1. Airkit (Sept. 2023) 👉 Goal: Boost AI Competency 2. Spiff (Dec. 2023) 👉 Goal: Bolt-on for Sales Cloud , easy upsell to drive bottom line growth Both of these were SFVC portfolio companies. • SFVC invested in the Airkit Series A + B Rounds. • SFVC invested in the Spiff Seres B + C Rounds. Corporate Venture Arms are how market leaders keep tabs on innovation. Acquisitions are how they bring that innovation into the fold. This is a good thing. Salesforce knows competition is heating up in the space. We should expect them to stay in front of it.

@gokulr Why does the % of revenue spent on Sales & Marketing typically decrease as growth slows in more established SaaS players?

100% agree with Jason. Sales and Marketing as 20% of revenue is a pipedream for most companies, even highly efficient scaled public companies. For example, enclosed below are Sales and Marketing as a % of revenue for Monday (NASDAQ: MNDY) and Klaviyo (NYSE: KYVO). MNDY Sales and Marketing is 57% of revenue while KVYO Sales and Marketing is 39% of revenue. And these are world class PLG companies with multi-billion dollar market caps, the best of the best.

@Kazanjy CPQ at least set them up for a move into the back office, which they never pursued. This seems like a very simple revenue grab, point solution add-on that tracks with their sole focus being to squeeze profitability. But that strategy is the beginning of the end.

@MaxLMaeder TBD, hasn't been the case for a second? Steelbrick wasn't exactly groundbreaking tech.

Salesforce stock up 1%, or $2b on announcement they're going to acquire Spiff, a variable compensation automation solution. Back to basics. Focused on sales use cases. I guess the market likes seeing Salesforce capture more of the value its ecosystem creates.

@Kazanjy Fair but the day Salesforce starts making acquisitions purely to add another $50/user to the top line, rather than with a broader strategic product or market expansion view in mind, is the day we can officially label them the new Oracle.

@MaxLMaeder Hm. I mean - people pay $50 per rep for comp software. Add that to the $150 per seat customers already pay for Salesforce? Seems pretty cut and dry to me?

@mediaking Makes sense. I deal in the Salesforce world and having paid $50K+ for a booth multiple years in the past, I can say those reasons are the only correct way to rationalize conference attendance.

@MaxLMaeder They have not had a measurable impact in the last 3 years. They are more to meet interesting people. What has had a meaningful impact is going and meeting the people we already do business with in person.

Part of me wants to “disappear” from conferences, community events, and most non work stuff for a year to see how much MarketBeat grows if I give it full time attention for 12 months.