In the late 1990s and early 2000s, a wave of investor enthusiasm over the Internet swept through the markets and pushed multiple companies to multi-billion dollar valuations.
Unfortunately, not all of these companies were revenue generators, and once this was revealed, the market crashed and many tech stocks went bust.
Even though the dot-com bubble cast doubt on the Internet, it was clear that it had the potential to usher in a digital transformation that would lead to the creation and distribution of new software products.
Enter Salesforce, a company that solidified itself as a major player in the customer relationship management (CRM) software-as-a-service (SaaS) space since its founding in 1999.
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Co-founded by Marc Benioff, Parker Harris, Dave Moellenhoff, and Frank Dominguez, Salesforce was established with the goal of making “CRM as easy as buying a book on Amazon.”
To turn this vision into reality, Benioff and his partners went to work on a cloud-based CRM tool that anyone with an Internet connection can use.
For those who may not know, CRM is a system for managing a business’ interactions with current and potential customers.
CRM software is leveraged by businesses of all sizes. For large enterprises, this software is used to track customer activity and share it across departments. Meanwhile, small businesses utilize it to do more with fewer resources.
Regardless of a company’s size, the goal of utilizing CRM and CRM software is to improve customer relationships to achieve growth.
Back then, software solutions had to be stored on discs, which users then had to download onto their systems.
The same principle applied to software updates, making software use tedious and time-consuming, especially for larger organizations.
Enter the online cloud and SaaS…
The growth of the Internet ushered in the inception of the online cloud in the mid-1990s.
This essentially enabled end users to access software from anywhere, as long as they had access to the Internet. As a result, physical discs were no longer necessary to deliver software solutions.
By leveraging the cloud, SaaS providers deliver software to approved end-users over the Internet. Meanwhile, updates and new features are rolled out to customers when they’re released.
Simply said, SaaS, at the time, was a game changer, especially in the enterprise software space because distributing and maintaining software was a seamless process for both providers and customers.
Unfortunately, the dot-com bubble finally burst at the start of the 2000s and this negatively impacted Salesforce as it was forced to cut 20% of its workforce.
The bubble bursting also cast doubt on the viability of tech companies that operated using the SaaS model.
Dominating the CRM Space and Empowering Customer Retention
While the dot-com bubble cast doubts on companies that employed the Internet in the delivery of their services, Salesforce was in a position to thrive because its target customers were (and still are) in need of CRM solutions to help their organizations manage customer relationships and data.
Since Salesforce delivered its solutions to customers through the cloud, it could service customers from practically anywhere as long as they had Internet access.
In September 2005, the company introduced its AppExchange service, enabling third-party developers to design and sell applications to Salesforce customers.
The service enabled Salesforce to extend the core functionality of its platform to meet any unique business need.
Aside from offering CRM functions, Salesforce expanded its platform to include a complete suite of customer success solutions, marketing automation, commerce analytics, and more.
Given the services provided by Salesforce, it’s reasonable to attribute its success to those offerings. However, there’s more to it than that.
At its core, Salesforce’s profitability is built on its subscription-based, pay-as-you-go structure for its cloud-based offerings.
This business model enabled the company to generate predictable and recurring revenue at a time when most software providers operated on large, one-time license fees. While the latter was a good way of driving revenue at the time, it was unpredictable and volatile.
Salesforce’s Success Through the Lens of RDS
RDS’ second tenet—fulfill otherwise unmet customer needs—shows us why Salesforce attained the success it enjoys today.
According to Professor Joel Litman and Dr. Mark L. Frigo in the book, “Driven”:
“The path to the creation of wealth is through the customer by fulfilling their unmet needs. This is the recipe for achieving high returns on investment. High-performance businesses deliver an offering that the customers believe is not otherwise available.”
This statement, when understood in the context of Salesforce’s story, shows the importance of fulfilling and continuously providing the unmet needs of your customers.
Since every business needs a way to keep track of its customer data, Salesforce was uniquely positioned as a company that could thrive in the digital age. More importantly, it rapidly expanded its offerings throughout the years to keep up with customer demand and need.
Combined with a subscription-based business model, it’s unsurprising to know that Salesforce grew into the market giant it is today.
In fact, as of 2025, the CRM giant’s market cap stands at over USD 250 billion.
Salesforce isn’t showing any signs of slowing down soon as it’s also poised to take advantage of the AI boom through its AI-powered solutions and AI agent offerings.
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If you’re looking to gain a better understanding of Return Driven Strategy and Career Driven Strategy, we highly recommend checking out “Driven” by Professor Litman and Dr. Frigo.
Click here to get your copy and learn how this framework can help you in your business strategies and ultimately, in ethically maximizing wealth for your firm.
About The Dynamic Marketing Communiqué’s
“Tuesdays: Return Driven Strategy”
In the book, “Driven,” authors Professor Joel Litman and Dr. Mark L. Frigo said that the goal of every long-term successful business strategy should incorporate the combined necessity of “making the world a better place” and “getting wealthy.”
That is why they created Return Driven Strategy and Career Driven Strategy—frameworks that were built to help leaders and professionals plan and evaluate businesses so they can also help others achieve their organizational goals and career goals.
The frameworks describe the plans and actions that drive returns for anyone in an organization such as independent contractors, marketers, brand managers, communicators, and other people in any field. These actions lead to the creation of wealth and value for customers, employees, shareholders, and the society.
Every Tuesday, we’ll highlight case studies, business strategies, tips, and insights related to Return Driven Strategy and Career Driven Strategy.
In planning, building, or managing brands and businesses, these strategies, case studies, and guidelines will help you choose what specific actions to take and when to take them.
Hope you find this week’s topic interesting and helpful.
Stay tuned for next Tuesday’s “Return Driven Strategy!”
Cheers,
Adrian Kyle Vergara
Content Writer
Valens Dynamic Marketing Capabilities
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