Thought Leaders in Mobile and Social: Alex Dayon, Executive VP of Applications, Salesforce.com (Part 4)

Sramana Mitra: What about geography? Salesforce is an international company with widespread adoption. But there are some markets that have not adopted Salesforce.com yet. What are some of your thoughts about those large emerging markets?

Alex Dayton: I think there’s what I would recommend to Salesforce and what I would recommend to an entrepreneur to do. My recommendation to an entrepreneur is stay laser focused. Focus is key. You need to know what your sweet spot market is. Is it companies under 100 users, under 2,000 users, above 1,000 users? And then pick a region and be the leader in one region before you go to five.

SM: That’s the question that I’m asking. We have a very interesting company out of Italy, a Silicon Valley–Italy company, that is getting great traction with a crowdsourced customer support technology for large enterprises. Their traction is in Europe in major enterprises. And we have a bunch of companies that cater to the Indian market. India’s very active right now in terms of cloud startups.

AD: Yes, I started companies in both France and in the U.S., so I have perspective from the two sides of the Atlantic. I would strongly recommend that an Indian entrepreneur try to first focus on the U.S. market. That’s where you want the competition early. In every business, competition is always good news. Competition makes you stronger. The U.S. has the benefit of being the largest IT market in the world, which means that any good idea can be tested in the local market. Once you feel you have the right replicable model, you have to be aggressive about the U.S. first. And then you can expand. If you look at Salesforce, some people outside the U.S. say, “Well, you’re too big in the U.S., and that’s big enough.” We have huge teams in England, France, and Japan. Salesforce is actually pretty big, but we have such an amazing traction in the U.S. that continues to grow dramatically regardless of how much we invest in foreign markets. I do believe the U.S. market is the reference market. Wherever you are in the world, that’s the market you need to be focusing on. Today we are living in a global world. It’s not a market that’s hard to capture, but you need to face your competition where it is. No matter how you look at it, you need to be a leader in the U.S. market.

SM: Interesting.

AD: That’s very clear for me. As I said, I started companies. And I met leaders in business intelligence out of Paris, but it took us a lot of calories to do it.

SM: I think things are different from when you started Business Objects.

AD: Things go much faster than they did at that time, yes.

SM: Depending on what segment you’re going after, customer acquisition methods have become different. If you’re going after the small-business market – let’s say you’re a French company or an Italian company or an Indian company, and you’re going after the small-business market in the U.S., it doesn’t matter because the customer acquisition strategy is the same. Wherever in the world you sit, you’re going to use online marketing to acquire those customers.

AD: Absolutely. You’re touching on the earlier point that entrepreneurs today have tools in hand to build their brands and reach customers who no one had in the past in terms of virality and social reputation. It doesn’t matter where you are, which is I think, an amazing opportunity for entrepreneurs everywhere in the world. But you need to make sure you measure your performance in one reference market, and it needs to be the U.S. market. And you need to find your competition and benchmark yourself on that particular market. If you benchmark yourself on the Italian market or the Indian market, you probably have a huge blind spot.

SM: You’re absolutely right; however, there is a case to be made for entrepreneurs who are building products and using local customers to get their products built. You do need reference customers to work with in the process of building your products, and you need money. If there are customers in your local market who are willing to pay for your products and services while you’re building that, that’s just fine.

AD: I agree. I think it’s OK to bootstrap your business and acquire your early customers and develop customer success and learn. But it should not be your [sole] strategy. That’s my point.

SM: I agree with that.

AD: It’s just a bootstrapping strategy. You need to get to the first dollar of revenue. Any customer is good as long as he’s replicable, no matter where he is in the world. You’re touching another interesting point, which is I believe that today all markets are equal business requirements. There’s always some vertical area where you have local regulations that make that untrue, but at the end of the day, whether you’re an Indian business, a French business, an Italian business, the markets are going to be very similar in terms of value proposition, unless you touch on some regulations. You sometimes have regulations, for example, on privacy in the social area where Europe is more controlled than it is in the US. Other than that, the expansion needs to be driven by the US market.

SM: OK. A corollary of that, all of Salesforce.com’s acquisitions will happen with the U.S. as the reference point.

AD: Yes, but we buy companies everywhere in the world. My team was in Paris when I bought Radian6 in Fredericton, New Brunswick. We bought DimDim in India for a real-time in cloud. Rypple is in Toronto. I can tell you, I’ve spent a lot of time on planes buying businesses around the world. But, indeed, we always look at the capacity to acquire our reference market. But to your point, geography has never been a barrier to us. We’ve developed a pretty strong expertise at buying companies all over the world.

SM: What other messages to you want to convey to entrepreneurs who are eager to know what you have to say?

AD: It’s clearly an amazing time to be starting a company. The world is becoming social. It is becoming mobile. You have ways to build your brand in the social world and build momentum around your product in a completely different way from what was possible five years ago. It’s also a completely new way to deliver your customer experience from marketing, sales, services for your products as well as for your traditional channels. Finally, I think it’s an amazing time to think about building your company, attracting talent, in a different way from the past. Now, you can reach people – because a company is as good as its team – and now you can build a team with a speed that was never possible before. It’s exciting to be talking to you because there’s never been a better time to be building a new business.

SM: Thank you, Alex. I’ve enjoyed talking to you. I’m sure the entrepreneurs will find this helpful.

AD: Thank you.

This segment is part 4 in the series : Thought Leaders in Mobile and Social: Alex Dayon, Executive VP of Applications, Salesforce.com
1 2 3 4