You may have come here thinking you would find the names of three companies. Perhaps you expected the names like Salesforce, Microsoft, Google, Amazon the like. I’m sorry to disappoint.
Brace yourself to find out the three best product companies in the world, in the order of priority:
- The users who love the product having trialled or used a free version demanding the decision-makers of their companies to purchase the product.
- Customers who are queuing to buy the product without the product company having to spend significant sums on sales and marketing.
- Third parties including resellers queuing up to promote and sell the product in addition to providing value-added services.
I bet you knew the answer, yet perhaps you weren’t too sure. Can you now name any companies which meet the above three criteria? Are you struggling just like me?
Let’s pick on Salesforce as I mentioned them at the beginning. Marc Benioff and his co-founders set up shop in 1999 to change the world of software. They spent a significant amount of cash in the second year hitting over £1 m revenue. Since then, they have continued to spend circa 50% of their annual revenues on sales and marketing. This has resulted in creating a tech behemoth, fuel with audacious acquisitions.
How does Salesforce compare against the above three points? Let’s just consider the Salesforce CRM, which is now called the Sales Cloud:
- Salesforce Cloud is not the easiest product to get your head around. It was built for larger companies, so require significant upfront cost in taming it and changing your processes to align with it. However, once you learn to like it, you will most likely stick with it. It’s ideal for mid to large companies.
- Unfortunately, this is not the case. But their significant spent on sales and marketing have created the demand, as most likely when you mention the word CRM, Salesforce is the first brand most people think about.
- I analysed the Salesforce market a few years ago. If I recall, at the time, their revenues were over £5 billion, yet the partner network generated nearly £75 billion by selling and servicing Salesforce customers. Salesforce definitely scores high here.
I was thinking about this topic whilst cycling during lunchtime. So wanted to quickly write it down before I forgot. Do you know any other tech companies which come close to Salesforce in scoring against the above three points?
If you want to build a company as successful as Salesforce, make sure you at least can score high on one of the three points above.