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Yahoo Finance Presents: Marc Benioff

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Salesforce Founder and CEO Marc Benioff sat down with Yahoo Finance’s Julia La Roche to discuss the company’s second quarter earnings as well as the future of work during the ongoing COVID-19 pandemic. Other topics covered include vaccine mandates, leadership, and venture capital investments.

Video Transcript

[MUSIC PLAYING]

JULIA LA ROCHE: Welcome to "Yahoo Finance Presents." I'm pleased to bring in our guest today, Marc Benioff, the founder and CEO of Salesforce. Marc, always great to have you on the program. Thank you so much for joining us.

MARC BENIOFF: Always wonderful to be with you, Julia.

JULIA LA ROCHE: Well, I want to kick things off with a recent meeting that you had. You were in Geneva, Switzerland recently, meeting with numerous CEOs. And a lot of talk lately about the future of work and return to office, so I want to get your take on how are Fortune 500 company CEOs thinking about the future of work, return to office, how are they preparing or not preparing, because Marc, I've got to say, sometimes it feels like there's a disconnect between the C-suite and the employees out there about this discussion.

MARC BENIOFF: You're completely right. There is a C-suite [INAUDIBLE] it's a disconnect. You're-- so that's such a great way to put it. And I have to be careful what I say to you because, you know, when I am actually speaking about this to you and to others, I'm going to get calls from CEOs who do not agree with what I'm about to say. So I'm just putting that out there ahead of time.

But look, we're not all coming back. And you can see it worldwide, there's about 15% of employees who have come back to the office. So it doesn't matter what country you're in, whether it was Switzerland, where I was last week, or here in the United States, or really anywhere-- Asia-- it's about 15%. And I hope that it will go back higher, maybe up to as high as 40%, but right now, a lot of people are working and succeeding at home. They're at home. And they've learned how to be successful at home, just like you and I have. That is, you're at home, I'm at home. We're doing our work.

This is going very well. And that's how a lot of people feel, which is they want to stay home, they want to continue to work at home. And that should be just all right with CEOs if their employees are productive. Not all businesses, not all industries are going to be able to do that. I get it. But for all the CEOs who want to call me and say, hey, Marc, you've got this completely wrong, everyone's going back to the office, I don't think so. I think we've fundamentally shifted how we work, and also what work is all about.

JULIA LA ROCHE: I think it's so interesting when you say that because, Marc, you were so early on this trend of this all-digital, work-from-anywhere world. I remember when you were even launching Work.com last year, you were so early on this. Let's explore this further because, you know, historically, we thought of work as like a physical place, right, going to the office. But is work suddenly becoming more of like a mindset, of like I can get in that mindset and suddenly I can work for a certain amount of hours, and then be able to turn that off? How do you think about that?

MARC BENIOFF: Well, you-- you're right, work is like a mindset. And it is about, like, I can do this much Zoom, and then I burn out. I can only do about four hours of these Zooms, and then I'm done because, mentally, I'm just fried. And you know, that's fine. But I think there's a bigger thought here. And I think the bigger thought is that your digital environment, like we're on Zoom right now and we're on Slack right now, and you know, we're-- I have other Salesforce applications connected right now, our digital environment is more important than our physical environment.

And I think one more thing you could say about that is that our digital HQ is more important than our physical HQ. And that is a big idea because when I started Salesforce, I started in an apartment in San Francisco. Today, if I started Salesforce, I would start it on Slack. And that is because my digital space is more important than my physical space. I need to bring everybody together. I'm sure you would agree.

JULIA LA ROCHE: It's interesting, you're right, the digital HQ. And it's funny because you mentioned that. I was going to ask you, what would you do if you were starting Salesforce today. And that's a conversation I had with your COO, Bret Taylor, saying the same exact thing. But let me bring this up with you. When the CEOs kind of push back against this idea of, you know-- you see this work from anywhere world, and [INAUDIBLE] no, we've got to go back to the office. What is it that they're trying to get across here? I am curious what their take is. Why return?

MARC BENIOFF: I think there's six things that every CEO is focused on today, which is that trust is their highest value, that they want to have the highest level of trust between their employees and their customers, their partners, all their stakeholders. We've talked about that so many times. You know, today, health and safety are a critical part of being a CEO. If I'm going to have an off-site or event or conference, or even open my office, I need to make sure it's a safe environment. And there's technology that I need to put in place, whether it's contact tracing or whether it's vaccine management, and I need to have my digital HQ. That's absolutely critical.

And the other things I need to do are I need to be able to connect with my customers in new ways. I mean, that's one of the reasons we just had probably the best quarter we've ever had. We delivered a $6.3 billion quarter, raised our guidance to 26.3 billion for the year because every company has to connect with their customers in a whole new way. And we also have to build new green enterprises, sustainable enterprises that are net-zero. It's why we built our sustainability cloud. And I was just in Europe. It's all about the EU Green Deal. That's what CEOs are really focused on. They are going to have to comply to this new legislation.

And sixth and finally, it's about equality. It's about the equality of every human being because we need to bring everyone back to work if we're going to be successful. We need to bring back every gender, every race, every sexual orientation needs to be part of our business, because if we're not about equality and inclusion, we're not going to be able to achieve our hiring goals. We need to have-- and of course, it just creates a much better place to work, too, but it's about equality. And I think these six things will be paramount to the leadership of every CEO as they kind of build these next-generation, you know, trusted enterprises.

JULIA LA ROCHE: And you certainly have the pulse of them. I don't know anyone who has as many conversations with CEOs than you do. I want to bring up vaccines with you, and your kind of views on--

MARC BENIOFF: No, I think you do, actually.

JULIA LA ROCHE: Yeah, I don't know, maybe. We could be equal on that. But I want to bring up vaccines with you, where you stand on that. What are you hearing from your peers about vaccine mandates for the workplace, and even yourself at Salesforce?

MARC BENIOFF: Well, I think vaccines are extremely important. And for our Salesforce employers, if they want to come back into the office, they have to be vaccinated. Vaccines are going to provide a key part of a safe work environment. And we've said that that's also a critical part, like when we're running major off-sites, we're asking vaccinated employees only. I just ran a major off-site, my first one since the pandemic, where I had hundreds of my employees and executives come together in the physical environment, not just digitally.

And we said, hey, we want you to be vaccinated. We also want you to be tested. You know, testing is also a critical part of making all of this work. And we can do that. We can create a safe environment. And as I said, you can talk about trust, but you also have to talk about safety. Trust and safety are the two paramount values for the new trusted enterprise.

JULIA LA ROCHE: And Marc, before I come back to Salesforce, because you were talking about just this incredible quarter and the future ahead, I want to talk about the future in something that's not necessarily Salesforce-related. I want to talk about venture capital, and of course Salesforce Ventures and Time Ventures. People might not know your involvement there. And you are a prolific investor. You see where the puck is heading. You look toward the future. What is exciting to you from an investor perspective today?

MARC BENIOFF: Oh, there's so many exciting things happening in this world of, you know, entrepreneurship. You know, I'm an entrepreneur, obviously. I started Salesforce 22 years ago. And when I look at the amazing entrepreneurs that are out there, it's so exciting. And I meet with so many of them. I met with the CEO of OpenSea, which is, you know, this NFT marketplace, last week in New York. So exciting to see [INAUDIBLE] incredible what he has done with his business, to be able to provide an eBay of NFTs.

And another incredible area that I think is very exciting is financial services. We see the transformation of financial services. Time Ventures was very fortunate to get involved early with Dave Girouard after he left Google and starting Upstart. And you look at the amazing success that that has had, that's another great story. And the space companies, you know, we saw Astra have a very kind of wobbly launch on Monday, but wow, space as a category is really exciting. We just saw one of Time Ventures' companies, called Swarm, just got acquired by SpaceX. That was very exciting. So there's a lot of exciting things out there.

JULIA LA ROCHE: Mhm. You mentioned NFTs. And I'm just going to bring this up because there's a lot of talk about NFTs, you know, cryptocurrencies, and also a lot of talk lately about the metaverse. And I saw, you know, Time having this partnership, March Through Time, with Epic Games, the creator of Fortnite. So what do you think of the metaverse? Do you have any views there?

MARC BENIOFF: Well, I love the metaverse. And I've been in it for a while because I use Roblox, which is also a company that Time Ventures had the opportunity to invest in. I think Roblox is a vision for the future of digital interactions, where you could see that you're creating custom worlds, you're creating custom applications, but they're all built on a consistent metaverse platform. And maybe all your NFTs and all your capabilities are running inside the metaverse. It's so cool.

JULIA LA ROCHE: Yeah. And I really-- it's interesting hearing you talk about, you know, the future and what you think is interesting from an investment perspective. Let me circle back, though, to Salesforce. Again, a record quarter, raising guidance. And you mentioned 2026 wanting to do 50 billion in revenue. What is kind of your ultimate moonshot there, Marc?

MARC BENIOFF: What a good question that is. I mean, you know, you can see we've really had five amazing quarters at Salesforce, all greater than 20% growth, three of them with our operating margin over the 20%. We have this incredible new post-pandemic operating margin model that's performing incredibly well. And that is really exciting. It's being led by our new CFO, Amy Weaver. She's doing a great job.

And when we look at what's happening in terms of just a much more profitable Salesforce, a very fast-growing Salesforce, but one that's incredibly relevant to today's time, when you look at the things that are really important to companies and to CEOs like myself, Salesforce has a lot of those critical technologies. And we need to work in partnership with our customers to really transform them. Our COO, Bret Taylor, says it really well, is that it's not a digital translation, it's a digital transformation.

You can't just translate what you have been doing, you've got to transform and think about everything new. You need to cultivate a beginner's mind. In this new world, if you're not cultivating a beginner's mind as a CEO, I think you're making a mistake. It's one of the reasons why we paid $27 billion for Slack, because we knew every company was going to have to have a digital HQ, that it was a must have, not a want. You've got to start there. You're not ending there. And this is why all of our products and our capabilities all have to be connected into it. It's absolutely critical for the future of Salesforce.

So we're in a new world. We've talked about that now, Julia, many times since this pandemic started. We've left the old world behind. Goodbye to the old world. Now, we're in a new world. It's not over. Here in Florida, right, the pandemic is just a nightmare, right? Hospitals are overloaded. It's still overwhelming, what's going on. The reality is we're in a pandemic world. You know, this is a forever virus. We're only on the [INAUDIBLE] this is the Delta variant. That's only the fourth Greek letter. There's more Greek letters to come. There's more variants to come. And we've got to think about our businesses and our industries and our world against this new pandemic world, and how we're going to be successful. And that's why we need not a new version of something, we need a new vision for our future.

JULIA LA ROCHE: Yeah. You say a forever virus, and of course that totally changes the playbook for someone like yourself on how you operate a business and serve your clients. And when you think about Slack, you and I have talked about this being a kind of central nervous system to a corporation. I know that's something you had mentioned in this record deal. Curious, Marc, how is it kind of reframing your playbook when it comes to bringing out new products, and also, you know, the gaps that you hope to fill down the road with Slack, because in this new world, it makes me wonder how you kind of keep the culture, which is something I know, when it comes to acquisitions, you are really good at, is keeping that culture, the culture quotient in this new world. How do you think about filling the gaps and building out products going forward?

MARC BENIOFF: Well, you know, I believe what Peter Drucker said, which is that culture eats strategy for breakfast, that CEOs need to be focused on their culture, their values, what is really important to them. And that's why I started this conversation with you talking about some of those things, like where is trust? Is trust your highest value? Where is safety? You know? Where are are-- where are you with equality? Where are you with sustainability? These are the core values of a corporation today.

Yes, we're always going to be focused on customer success and innovation, but there's so many other values that are critical. And that's going to make up our culture, which is are we operationalized our values into our culture. So this is a key part of thinking about the future. And we cannot run companies the way they are. And look, I'm going to have CEOs calling me, I guarantee you, after this runs, and they're going to say, Marc, you have this wrong. Everybody's coming back, things have not changed, the world is what it is.

I'm like, I understand, the world is what it is. I agree. But things have changed, and we have to change, and our companies have to change. And as CEOs and as leaders of this world, we have to change. By the way, here's an example. Have you noticed outside your window, at least my window, the world is on fire, that there's fires everywhere, that we're in a sustainability crisis, that the world is actually quite a bit hotter, and that we need to be taking this a little bit more seriously?

We need to sequester 100 gigatons of carbon. We need to energize an [INAUDIBLE] revolution. Those are all the entrepreneurs focused on sustainability. We need to accelerate the Fortune 500 to net zero. These are critical things. Oh, and we need to plant a trillion trees. And that's why I started [? 1T.org, ?] because I believe that trees and reforestation are a critical part of addressing the sustainability crisis.

JULIA LA ROCHE: Which also goes back to, you know, one word that it makes me think of, Marc, and it's one you've often talked about, stakeholder capitalism. Something to keep an eye on, certainly.

[INTERPOSING VOICES]

MARC BENIOFF: --is a key stakeholder, Julia. The planet is a key stakeholder. We need to all think about that.

JULIA LA ROCHE: Marc Benioff, founder and CEO of Salesforce, I thank you so much for joining us on this episode of "Yahoo Finance Presents."

MARC BENIOFF: Great to be with you, Julia. Bye.