In what can only be characterized as a stunning turn of events, Salesforce co-CEO Bret Taylor announced his resignation yesterday, claiming he wanted to return to his entrepreneurial roots. Whatever his reasons, it was a shock to all who cover this company, and it’s safe to say that few if any saw this coming — even his mentor, Salesforce co-founder and co-CEO Marc Benioff.
Taylor is a Silicon Valley mover and a shaker. He’s worked at big companies like Google and Facebook. Until recently, he was board chair at Twitter, helping lead the social media giant through this turbulent year of Musk-induced madness until its new owner dissolved its board last month.
He also has small-company experience as former CEO at FriendFeed, an early social networking outfit, and Quip, which Salesforce bought in 2016 for a hefty $750 million.
Taylor and Benioff seemed to hit it off immediately after Quip joined Salesforce, and the relationship was (and apparently remains) deep and heartfelt. As a result, Taylor raced through the ranks at the CRM giant to co-chairman and co-CEO in just four years.
When Jeff Bezos stepped back as CEO at Amazon last year after leading the company since its founding in 1994, we speculated that Benioff could be the next executive to take that step. The logical choice, the heir apparent, appeared to be Taylor, who was poised to take over whenever Benioff decided to spend more time in Hawaii.
Instead, we have Taylor walking away and Benioff in charge for the foreseeable future.
The announcement came amid Salesforce’s third-quarter earnings report, and during a call with analysts, Benioff seemed genuinely shaken by his co-CEO’s move.
“This is just really hard for me, and I’m extremely sad to see him go. I know he has created two great companies. I know he wants to go create a third great company. And you can’t keep a wild tiger in a cage,” Benioff said.
For those looking for a deeper answer, it seems like it keeps coming back to Taylor’s desire to do something on his own again. Perhaps the whole fiasco he had to deal with as the Twitter board chair simply burned him out and he realized it was time to build again.
Brent Leary, founder and principal analyst at CRM Essentials, said Taylor has done it all and has earned the right to do what he wants with his career.
“Taylor is in the unique position to do whatever he wants to do in the tech industry and do it wherever he wants to. So it will be really interesting to see what he creates next, given what he’s leaving behind,” Leary told TechCrunch.
Anand Thaker, a martech industry adviser who has founded multiple companies, speculated that the current economic climate wasn’t a good fit for Taylor’s skill set, and perhaps that’s why he chose to venture off on his own again.
“While still a shock, the announcement may not be surprising due to the series of converging signals. The overall tech climate with revised projections, cutbacks, self-assessment addressed by their CFO, layoffs and Starboard’s callout were all calling for a return to greater efficiency, retention and margins,” Thaker said.
“With that in mind, it’s possible many of Bret’s entrepreneurial strengths, energy and desires, typically powerful in a growth environment, would no longer be compatible with the near-future plan at Salesforce.”
Jason Wong, an analyst at Gartner who covers Salesforce, had similar feelings despite the shock of the announcement. “Bret says he’s an engineer and entrepreneur at heart and wants to get back building a company, and tech downturns are always interesting times to start up new ideas, especially given the layoffs in the tech sector and more talent available. He certainly has the capital and the connections to pursue a significant venture of his choice,” Wong said.
What happens next for Salesforce? It seems that losing someone with Taylor’s talent at a crucial time can’t come without some ramifications, but Wong said the company has the talent to make up for it.
“Bret’s departure should not have an impact on Salesforce customers or partners. Salesforce has a strong product and technology organization and there is a deep bench of executives, with several being former CEOs,” he said.
Leary said with Benioff in place, there is always going to be continuity. “As long as Marc is at the helm and engaged, Salesforce will be what it always has been in terms of its position in the industry, but after hearing Marc speak about Bret on the earnings call, there seemed to be a deeper personal attachment there that went well beyond the significant talents he brought to the company,” he said.
Laurie McCabe, a partner at SMB Group, believes Salesforce will find a replacement quickly. “In terms of the impact on Salesforce, it means that Marc has to handle more day-to-day operations until they replace Bret. Since it seems like Marc would like to spend most of his time focusing on strategy and philanthropy, I would expect that they won’t waste too much time identifying a new co-CEO,” she said.
While that’s not clear, Benioff was asked by analysts during the earnings call about the impact of Taylor’s departure. He pointed out that Salesforce has many experienced people behind Taylor, some of whom have been at the company for decades. As Holger Mueller, an analyst at Constellation Research, told TechCrunch yesterday, the co-CEO role is designed with resilience in mind.
It still feels strange, no matter the reasons we’re being told, that a person who was seemingly at the top of his profession at a company that has set a lofty $50 billion revenue goal by FY2026 would step away from all that.
It seems that even Marc Benioff was left with his jaw on the floor by this announcement.
“ … we’ve got to let them be free and let him go, and I understand, but I don’t like it. And Bret, you know that you’re always going to be our brother,” Benioff said. “You know that you — we love you very deeply, that you have a home here. We’re going to try to get you back somehow.”