TechCrunch Disrupt SF: Marc Benioff on ‘a new kind of capitalism’

The Bible says something about it being easier to thread a camel through a needle than to get a rich man into heaven. It’s not every day that I begin a post with the words “the Bible says.” It’s also not every day that I write (mostly) approvingly of a billionaire CEO. But then there’s Salesforce Chairman and Co-CEO Marc Benioff. With daily news headlines reporting one corporate ne’er-do-well after another, it’s refreshing when someone like Benioff comes along. TechCrunch Disrupt San Francisco 2019 attendees were treated to a panel discussion featuring the man the event host once named its CEO of the Year. Benioff spoke at length about his company’s more laudable endeavors. He did not speak at all about its most controversial one, because nobody asked him about it.

Values Create Value

In introducing Benioff, TechCrunch Managing Editor Jordan Crook acknowledged that “it’s pretty difficult in today’s universe to think of a business that can both do good for the world, and also turn a profit.”

“It’s normally one or the other,” she said. But Benioff has always been a bit of an outlier. In the early days of Salesforce, he decided to do things a bit differently from most of the competition. In addition to building the new technology model we know today as the cloud and a new subscription-based business model, Benioff came up with a values model — the much-vaunted 1-1-1, or Pledge 1 Percent.

“We we had an idea that we could integrate a set of values into our business, and that our values would create value,” Benioff explained. “We could take this 1-1-1 model I came up with and [give] 1 percent of all our equity, 1 percent of all our product and 1 percent of all our employees’ time.”

The result? “Today we’ve done 4 million hours of volunteerism, we’ve given away a third of a billion dollars,” Benioff said. “We’ve also run 45,000 nonprofits and NGOs on our service for free, which has about a billion dollars of product a year.”

Human Need or Corporate Greed?

It’s not just 1-1-1. Benioff has also taken political positions that are wildly unpopular amongst his plutocrat peers. Such was the case with Proposition C, a 2018 San Francisco ballot initiative that imposes a 0.5 percent gross receipts tax on corporate revenue over $50 million, which included over 300 of the city’s biggest companies. Benioff was a staunch and very public advocate for Prop C, which led to now- infamous Twitter feud with Twitter CEO Jack Dorsey, who like most big CEOs strongly opposed the measure.

Stopping short of acknowledging the role of Big Tech in exacerbating San Francisco’s homelessness crisis, Benioff at the time wrote that “homelessness is all our responsibility” and that “together as one San Francisco we can take on our city’s most complex and difficult problems.”

“As San Francisco’s largest employer, we recognize we are part of the solution,” he said at the time.

Benioff revisited his Prop C advocacy on the TechCrunch stage as he spoke about uplifting stakeholders as well as shareholders.

“When we walk… down the street, you’re looking into the eyes of those people who are on the street who have to be one of my key stakeholders,” he said.

“That’s why we fought so aggressively for proposition C,” said Benioff, “[while] some of the other leaders in Silicon Valley didn’t want to give up their profits or their revenue, and they don’t care.”

But how do we make them care? Benioff said that “it has to come ultimately from them as individually as leaders, and it has to come from their employees or their customers.”

He continued:

“But we know that we’re ultimately on the right side of history, because what are we going to do, leave all these homeless people on the streets? This is ridiculous! What’s going on? They’re telling us that that’s not a problem. It’s up 17 percent since… a year ago, That’s what’s crazy… And yet, we’re still fighting those people… And they’re saying, Oh, no, we’re not going to do anything, and lower our taxes even further. It’s a joke.”

A New Kind of Capitalism?

Benioff asserted that as we progress, only companies that consider the interests of all of their stakeholders will survive and thrive.

“You have to do the traditional business pieces, but then you have to think about what kind of business are you building,” he said. “That’s where the stakeholder return starts to come together… You’ve got to operate with that level of values and that level of ethics.”

“I really strongly believe that capitalism, as we know, it is dead, that we’re going to see a new kind of capitalism,” said Benioff. “And that new kind of capitalism that’s going to emerge is not the Milton Friedman capitalism, that it’s just about making money… And if your orientation is just about making money, I don’t think you’re going to [last] very long as a CEO or a founder of a company… In today’s world you certainly have to be more than that.”

Business as a Platform for Change

Benioff highlighted Salesforce’s contributions to local education as an example of how he is able to “use my business as a platform for change.”

“We’ve given about $67 million to the public schools, and the last seven years, it’s been a really exciting program that we’re part of,” he said. “Last week I was giving a speech on a playground at Presidio Middle School… and I’m looking in [kids’] eyes saying, ‘I am here to support you’… These are my stakeholders. If my company is not benefiting them, then who is it benefiting?”

Salesforce’s stakeholder investment, Benioff said, are “one of the reasons that we have a K through 12 computer science program in San Francisco, and that San Francisco now has the highest-rated math program of all the metro schools in California.”

“That is the gift of having a business is that business is the greatest platform for change,” Benioff asserted. “That’s what I love about my business after 20 years. It’s what gets me excited about getting up and going to work every day.”

The Elephant (Not) In the Room

When you say that there’s an elephant in the room, it implies that everybody there knows about a difficult situation but they just don’t want to talk about it. If I were a betting man, I’d wager that the majority of the audience has no idea that Salesforce is under contract with US Customs and Border Protection, which is running concentration camps where undocumented immigrants, including many children, are being imprisoned in horrific conditions. The immigrant aid group Refugee and Immigrant Center for Education and Legal Services (RAICES) last year rejected a $250,000 donation from Salesforce, citing the company’s CBP contracts.

Indeed, more than 650 Salesforce workers have signed a petition urging Benioff to rethink the company’s contracts with the agency. Benioff rejected the request while stating that he opposed the Trump administration’s family separation policy. He also donated over $1 million to groups helping undocumented immigrants who are affected by family separation and other administration policies and actions at the southern border.

Here, it seems, Benioff isn’t all that different from other CEOs who will do business with even the most unsavory customers if it means boosting their bottom line.

To view the entire conversation, click here.