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Post-pandemic planning is a ‘beginner’s’ mind for reinvention: Salesforce Co-CEO

Salesforce Co-Founder and Co-CEO Marc Benioff sits down with Yahoo Finance's Brian Sozzi at the 2022 Dreamforce Conference to talk about the company's post-pandemic recovery, hybrid office environments, Salesforce's 2023 guidance, the state of the tech industry, and environmental values.

Video Transcript

[AUDIO LOGO]

RACHELLE AKUFFO: The Dreamforce conference continuing today, and our Brian Sozzi sat down with Salesforce co-founder and co-CEO Marc Benioff. Now, he started by asking about the state of tech stocks.

MARC BENIOFF: The market sells off on high interest rates. Now let's put that aside. And now let's talk about how we get all of our industries going post-pandemic. Post-pandemic, you know, well, during the pandemic, we actually were able to succeed over a lot of things we did pre-pandemic. Now post-pandemic, we have to bring people back. We have to sell them software. We have to explain our solutions. This is very technical.

And, look, selling software is two things. One is you need a salesperson to come and talk to you and explain to you how it works. The second thing is you want to actually go talk to somebody and get validation. And events like this give you both.

And I'm very excited about what's happening here in San Francisco. I think it's a huge shot in the arm for our local economy, $40 million. It's validation of where the tech market is, and also that Salesforce has this tremendous position in the hearts and minds of all of these customers.

BRIAN SOZZI: I loved your keynote, Marc. And one thing that stood out to me amongst-- in that keynote, this term you mentioned, the Japanese term shoshin--

MARC BENIOFF: Shoshin.

BRIAN SOZZI: --and the need to have a beginner's mind. How are you applying that to Salesforce right now?

MARC BENIOFF: Shoshin means have a beginner's mind, The Idea that in a beginner's mind, you have every possibility. But in the expert's mind, you have few possibilities. So that's how we operate Salesforce. At the beginning of every year, we sit down with a blank sheet of paper. We ignore all of this. We say that this never happened.

And we say, what do we want? What's important about it? How do we get it? What is preventing us from having it? How will we know that we have it? We answer these five critical questions. We define our core values like trust, customer success, innovation, equality, sustainability, and then we manifest it into our organization by operationalizing our values into our company.

How are we going to get trust? What's preventing us from having trust? And how will you know that you have trust? And this process, shoshin process, we call it the V2MOM process. This has been instrumental and critical for us in running our business for the last 23 years.

BRIAN SOZZI: Just being here for two days, it feels like there's another reinvention going on inside of Salesforce. Is that fair?

MARC BENIOFF: Well, I think post-pandemic is very much a beginner's mind, that this is a new day. It's a new frontier. We really have to think about things new. I don't think there are a lot of things that are similar pre-pandemic. And I think you have to think about your business in a new way. You can still do things that you did before, and a great example is Dreamforce. Here we are.

BRIAN SOZZI: 40,000 people.

MARC BENIOFF: 40,000 people. But you also have to build technology that you did not have to build before. So you probably saw we have Slack now with audio, with video, with huddles because people are working in hybrid work environments. They need new tools that work well at home and in the office that bring each other together. Folks want to come together. That's just one example post-pandemic.

BRIAN SOZZI: Why do we have offices anymore?

MARC BENIOFF: Well, I think a lot of people do want to come back to the office, I think especially young people. Probably back in the day, you remember when you were young, when I was young, and it was great to be able to go in the environment together.

BRIAN SOZZI: We're still young, Marc. We're still young.

MARC BENIOFF: We're not as young as we were.

BRIAN SOZZI: OK.

MARC BENIOFF: And I'll tell you that when we were mentored, we all have stories of when we were mentored, when we were trained, when we were taken under somebody's wing and really educated and supported. And I think a lot of that happens in the office environment. And I want to make sure that our employees, you know, can participate in our culture, do volunteerism, support the environment, but also get mentored and also become part of the community.

BRIAN SOZZI: So you're all-in on flexible work.

MARC BENIOFF: I think that's extremely important.

BRIAN SOZZI: Interesting. So talk to us about your Investor Day, big guidance numbers. I think it surprised a lot of folks on the Street. Most importantly, you reaffirmed that $50 billion revenue target, no recession. Is any economic slowdown baked into that number?

MARC BENIOFF: What we can see with our business is that our revenue trajectory remains very strong, even with all of this unusual currency changes. $50 billion still looks like it is a high-quality target for us. In fiscal year '26, we added that with 25 basis points-- or sorry-- 25% margin.

So that's an increase from 21% where we are today. We want to grow our revenues. We want to increase our margins. We want to increase our market share. We want to increase our levels of customer success. We want to bring people together. It's all related.

BRIAN SOZZI: I miss you-- I just missed you at the Goldman Sachs conference a couple of weeks ago, but I caught your presentation. And you said maybe the market doesn't appreciate how focused you are on improving operating margins. Is it hard to just not go out there and buy another company, given where how valuations have just-- they've tanked the past couple of months?

MARC BENIOFF: For us, I think that the market doesn't fully appreciate how committed we are to growth and margins. It's also why we have announced a new-- great new lead independent director yesterday, Robin Washington. It's why we announced a $10 billion stock buyback. It's why we announced a clear margin target at 25%.

It's why we confirmed our $50 billion revenue number because I don't the mark-- don't think that the market and the investors fully appreciate it. But I have to tell you, we probably didn't have to do any of that because when they came here, that was the real inspiration, motivation, and excitement for all of these investors because they realized-- because they're talking to these folks who are here-- that this is going far better than we could have ever hoped.

BRIAN SOZZI: How important is the big deal to you and Salesforce's future, doing that big transaction?

MARC BENIOFF: Well, I think big deals are important. Small deals are important. All deals are important. I think-- we don't have a bias around size and quality of transaction. We like it when a customer buys our Sales Cloud or our Service Cloud or our Marketing Cloud or our Commerce Cloud or Slack or Tableau or MuleSoft, our platform.

But we like it best of all when they buy all of it as one integrated suite called Customer 360. That's what we've really done. We enhanced it here at the show with Genie. Genie is the real-time extension--

BRIAN SOZZI: I saw the bunny ears.

MARC BENIOFF: The bunny.

BRIAN SOZZI: You and Bret.

MARC BENIOFF: The bunny. The bunny. I can tell you the story of the bunny if you want to hear about the bunny. But it was important for us to make sure that we are delivering high-quality levels of innovation like real-time, like artificial intelligence, like automation into our core platform and delivering the next generation for the customers. And you can see how they're reacting to it all very positively, I think far more positively than I expected it before the show started.

BRIAN SOZZI: Last one here on a personal note. I only know you and Salesforce, Marc Benioff and Salesforce. I've grown up just following you and this company. You said in an interview last year, you are now moving into the fourth quadrant of your life. What does that quadrant look like for you?

MARC BENIOFF: Well, I think you see that I have this incredible company here. I also have an amazing company with "Time" as well. I'm so grateful to be part of your industry. Even "Time," yesterday, launched an amazing new--

BRIAN SOZZI: Amazing.

MARC BENIOFF: --company called CO2.com, which is the easy button for small and medium businesses to go net zero because, look, every company has to find a way to support the environment. Salesforce also launched its Net Zero Cloud. Salesforce also launched its Net Zero Marketplace. On my mind is the environment. There's three things that are very important to me for the fourth quadrant. Is there a fifth quadrant? I hope there is.

BRIAN SOZZI: I hope there is. I think it gets over to 100.

MARC BENIOFF: It doesn't imply there is when you say quadrants. But anyway, number one is-- number one is we all have to go net zero. And, look, net zero, this is a new term for me. When I went to college, I'd never heard about net zero, so learning that we're emitting too much, that we have to really evaluate our emissions, how to reduce our emissions, how to sequester our emissions.

It's also why we came up with and launched this amazing program, global program called 1t.org, the trillion tree alliance to put a trillion trees on the planet, to sequester 200 gigatons of carbon. The tree is one of the great ways to take all of the CO2 out of the atmosphere, and it turns it into oxygen. We all know about photosynthesis from, like, the third grade.

BRIAN SOZZI: Don't quiz me on it, please.

MARC BENIOFF: It's more important than ever. Well, the CO2's in the atmosphere. The tree right here is converting it to O2, keeping the-- keeping the carbon and growing. So we need more trees, so thank you to the tree.

BRIAN SOZZI: Yes.

MARC BENIOFF: And also, it's an ecopreneur revolution. A lot of them are here. Entrepreneurs like me-- entrepreneurs like me who are focused on the environment and ecology are ecopreneurs. And this ecopreneur revolution, this is a third part of what's so important today because if we're going to get to 50% clean energy by 2030, we're going to have to achieve these things that we're talking about.

BRIAN SOZZI: Lastly, you've given so much back to society, time, money, you name it, San Francisco. You signed the Giving Pledge. What do you think about Patagonia's founder's initiative? Is that the new benchmark? He's giving his company away, Marc.

MARC BENIOFF: I think that is very inspiring and incredible what he has done. He's also led with his values through the entire lifetime of the company. And he is setting a high mark for what is possible for entrepreneurs. And I think entrepreneurs in the future will look to Patagonia as the way to do it.

BRIAN SOZZI: Does that change how you think about what you do?

MARC BENIOFF: It's honestly just very inspiring to me that there's many people out there who believe that business is the greatest platform for change and that they can use their businesses to improve the state of the world. When I went to college, Brian, the business of business was business. And today, the business of business is improving the state of the world. You look at the Patagonia founder. But I can give you many examples of many CEOs who realize they have incredible corporate resources, and they can use those corporate resources to improve the world.

RACHELLE AKUFFO: Great stuff with our Brian Sozzi there with Salesforce co-founder and co-CEO Marc Benioff.