It’s been a pretty rough week for Salesforce co-founder and CEO Marc Benioff and the folks at his company: Three talented executives — co-CEO Bret Taylor, Tableau CEO Mark Nelson and Slack CEO and co-founder Stewart Butterfield — announced their resignations in quick succession.
It’s fair to ask what exactly is going on at Salesforce to lose three accomplished people so quickly, but it’s also important to parse each exit to determine whether they are part of a political battle or just some odd confluence of unconnected events.
The news seems to have spooked investors, with the company’s stock down nearly 17% over the last five days. But what do these departures mean to Salesforce and to the companies it spent so much money to acquire over the last several years? Further, how does it impact the executive depth that Benioff has worked so hard to build up? Finally, does he look for another co-CEO to help him run the company, or does he continue running it alone for the foreseeable future?
And another one gone, another one gone…
Let’s start with Nelson. He’s the least well-known of the three. Salesforce bought his company, Tableau, in 2019 for almost $16 billion. At the time, the company was run by Adam Selipsky, who left last year to become CEO at AWS when Andy Jassy was promoted to Amazon CEO after Jeff Bezos stepped back from that role.
For every action, there is an equal and opposite reaction in the C-suite, apparently.
Laurie McCabe, a partner at SMB Group, said it appears that Tableau will be more tightly integrated into Salesforce in the future, which might make Nelson’s departure less surprising from a business perspective.
“It sounds like Salesforce isn’t putting in a successor there because they’re integrating Tableau more tightly with Salesforce technology, so this may be more of a planned resignation that Benioff knew was coming than the other two. But it still amplifies the turbulence in the executive ranks,” McCabe told TechCrunch.
Butterfield, on the other hand, might simply have had enough of trying to be part of Salesforce and all that entails, and he took the earliest opportunity he could to leave. In a Slack message he sent to the company, provided to TechCrunch by sources, Butterfield put it this way:
So: why?? Well, we started this company 13.5 years ago (though it’s “only” been 10 years since we started development of Slack itself). It’s been a long and wild run. I am not going off to do something entrepreneurial. Though it may sound hackneyed, I actually am going to spend more time with my family. We have a new baby coming in January. Can I tell you something? I fantasize about gardening. So, I’m going to work on some personal projects, focus on health, and try to learn as many new things as I can.
That Butterfield’s news comes almost exactly two years after the acquisition announcement probably means that he had planned to leave as soon as his contractual obligation under the terms of the acquisition was completed, said Anand Thaker, a martech industry adviser who has founded multiple companies.
“While Bret’s news was more shocking, Stewart’s departure is much more plausible that it was in the works as we approached the two-year acquisition mark of Slack, where a number of Slack folks are considering their next move,” he said.
Gartner analyst Jason Wong said that Butterfield’s exit also has to do with Salesforce asserting itself more with Slack, and as that happens, other longtime executives are taking the opportunity to leave.
“More interesting is also the departure of Slack’s chief of products, Tamar Yehoshua, and head of branding and marketing, Jonathan Prince. It’s clear that Salesforce is taking Slack in a direction that is more aligned to extending and enabling their Customer 360 Platform, rather than Slack being a general productivity platform.”
Taylor is another matter
Of the three announcements, the most perplexing is Taylor’s, a man whose star was rising at Salesforce when he chose to walk away. Skyflow co-founder and CEO Anshu Sharma, who was VP of product management at Salesforce for six years earlier in his career, said Taylor was always an odd fit for the company.
Taylor’s background is mostly in consumer, with experience at FriendFeed, Facebook and Google (helping build Google Maps). Salesforce, on the other hand, is firmly in the enterprise, and while Taylor went after a business market with Quip, Sharma said that was more of what he calls prosumer, as opposed to selling to large companies.
“Prosumer is kind of like consumer, except you can charge $5 a user a month, which makes sense and provides more predictability and for almost the same [consumer-style] product, but how do you go from there to wanting to sell software to Alcoa? And what motivates you?” Sharma wondered.
In terms of filling in the holes left by these departures, Sharma said there are still lots of experienced people left at the company, and Benioff still has a significant talent pool that he can tap into.
“Marc has always had more executives on his leadership team than he knows what to do with them. And in some ways, he likes collecting smart people. [ … ] So he loves talent. He likes executives, and he knows if he has one or two extra, then in a pinch people can step up and do other things. So he’s never held hostage by anybody,” he said.
In fact, at the earnings announcement, Benioff pointed to Brian Millham, who has been with the company for 23 years and was recently promoted to president and chief operating officer. It should be noted that both Taylor and the previous co-CEO, Keith Block, held that position prior to being promoted to the co-CEO role.
But Sharma wondered whether there will be another co-CEO role and questioned the purpose of one in a company like Salesforce, where clearly all big decisions begin and end with Benioff.
“What the fuck is a co-CEO and why do you need one? Well, I mean, you have a CEO and four other CXOs. What does a co-CEO wake up in the morning and do that’s not already being done by a CEO?” he asked.
But Holger Meuller, a longtime analyst at Constellation Research, thinks Benioff likes the model and he’ll find one again, whether internally or externally. “I think there will be a co-CEO again. Maybe not immediately. Maybe there will be an internal horse race, or the Salesforce board takes its time to find the right external candidate,” he said.
Regardless of whether the three exits happening so quickly were a mere quirk of timing or something more consequential, it is clear that Salesforce has a way of inserting itself in its acquired companies in a way that makes executives eventually head for the exits.
One of the consequences of that approach is that the company no longer has a clear heir apparent, and for Benioff, that’s yet another challenge to handle while guiding his company through choppier economic waters in the coming months.
Comment