For corroboration of this effect you don’t have to look further than Salesforce. Salesforce has recently issued guidance for its FY24 results and it’s an object lesson in delivering value from Category Design.
Its guidance for its non-GAAP adjusted revenues in FY 2024 is $34.8bn. In FY 2023 Salesforce delivered $31.4bn, in FY2022 $26.5bn. Back in FY2014, just ten years ago, revenues were $4.1bn. That’s non-stop double digit growth. Every year.
In that period the stock price has increased over five times. But what is truly spectacular is the increase in margin as its Category leadership in CRM became indisputable. As recently as 2020, Salesforce’s margin was 16.8%, the guidance for 2024 is 30.5%, margin increase powering upwards through the pandemic as companies continued to spend money on cloud-based applications.
Underlying this is a great build and buy strategy. This has reinforced what appears to be a clear Category Blueprint with horizontal and vertical applications that helped deliver the numbers with the size of the acquisitions getting broadly bigger over time. For example Slack – $27.7B in 2020 Tableau – $15.7B in 2019; MuleSoft – $6.5B in 2018; Demandware – $2.8B in 2016; ExactTarget – $2.5B in 2013.
This doesn’t happen by accident. Salesforce founder and CEO, Marc Benioff is an all-time great Category creator and leader. An example and inspiration in building a Category from a clear founding Point of View through to an incredibly sticky ecosystem.
Track down his Dreamforce conference keynote speeches from the last decade and experience the clear Category leadership intent stitched through every word as each next stage is evangelised. Never short on ambition, Dreamforce 2023 was self-described as `The AI event of the year.`
It’s all a reminder as to what the hard yards in Category Design can deliver. Anyone seeking to find further inspiration for a Category journey in 2024 would do very well to study Benioff’s strategy carefully and put his book `Trailblazer` on their Christmas reading list.
After all, as Benioff says, neatly summarising for us, inter alia, the aim of Categorisation in Trailblazer, `The future isn’t about learning to be better at doing what we already do, it’s about how far we can stretch the boundaries of our imagination.`
Find more discussion on Salesforce’s rise to CRM category leadership and many other contentious Category issues on The Difference Engine podcast at https://link.chtbl.com/thedifferenceengine