Your Corporate Strategy is a Prisoner of History
(or, Why CEOs Should Listen to Their Inner Revolutionary)
I was once thrown out of our CEO’s office. That was the beginning of a journey of corporate reinvention that led to us taking our startup to IPO. Here’s the story of that initial banishment that led to a crisp corporate strategy plan for Silicon Valley tech company Keynote, which IPO’d and then sold to Private Equity. My goal in this article is to evangelize how product managers can own corporate strategy and business expansion. And whether Microsoft, Twitter, Slack, or Salesforce are building products that are designed for the future, mired in the past, or bridging the past to the future. CEOs, founders, and strategists must be alert if they see the signs of a company strategy being guided by experiences that result in being a “Prisoner of History,” a phrase that is attributed to Frantz Fanon, a French philosopher and revolutionary.
Note: First written in 2016, this article has been updated in 2023.
The Pitfalls of Experience: “We Don’t Do That”
At a previous Infrastructure SaaS company, Keynote, a Bessemer Ventures funded startup, the CEO asked me to start their hybrid Product & Corporate Development department. I didn’t quite fit the mold of the head of Corporate Development—I was an MIT computer engineer, having built expert systems for conversational intelligence at the MIT Artificial Intelligence Laboratory, and an Oracle engineer during its later high-growth years. I didn’t have an MBA and wasn’t ever in investment banking. What I had was two things–experience at Oracle, a software company that knew how to combine building and selling better than any other enterprise player, and enterprise startup cred, having done the startup journey with a relational database startup that competed with Oracle and that we subsequently took public. The CEO gave me a role that fit my entrepreneurial drive and interest in learning about the ecosystem of SaaS companies–this was in the early 2000s, and the total value in the public markets of SaaS companies was not yet $1 billion, while in 2020 it is $1 trillion.
This–entrusting this mission to me–was the mark of a great CEO, one who believes in people’s abilities, not in resumes. “Always understand what each person is passionate about–and give them the freedom to do it” is what he later advised me when I joined the executive leadership team.
I loved the unique, sometimes product-sometimes corpdev role. I liked looking forward to where businesses were headed, and because of my product background, be intelligent about assessing the effort to get to the future. In my first few weeks, I prepared some ideas for product expansion. They were based on the premise that our total addressable market needed to expand, but in a way that would not put our company in direct competition with the big, public companies in our space. Therefore, our products need to be reimagined for personas different than the ones our sales team was selling to. I interviewed as many people as I could, quickly, including customers, salespeople, sales engineers, product managers, engineers—people who knew what customers valued in our brand, not just in our product. It took much longer for me or the product team to talk to customers—as an aside, that is still true even today and is the problem that led to my next startup to solve the problem of managing diverse channels of customer communications, and then to Dropbox, where I led the enterprise product line that is expanding from storage to collaboration [Ed: it’s 2023, and I am at Meta].
I went to the product management team at the company to discuss our latest expansion ideas. The thinking behind our corporate strategy was that the company’s sales teams were selling products to IT teams only and that we needed to expand our brand to appeal to business teams at Internet and e-commerce companies like Facebook, Amazon, eBay, and brand managers at Chase and FedEx—all customers. When discussing ideas about how we could expand from our IT system administrators core to the CIO’s office and to business buyers, I constantly heard these statements from the product leaders:
- “That’s not our customer base!”
- “That’s not our culture!”
- “We need to go deeper with our current products!”
- “We can’t afford to lose our core revenue!”
- “Why are we doing things we don’t understand?!”
- and…
- “We don’t do that!”
So after a week of controversial meetings with the keepers of the flame, I began to question my newly forming strategy. I let the CEO know what the team felt—that they wanted us to go deeper with our immediate product-market fit with selling to the lower-level IT team, rather than building a product that aimed higher at the CIO’s office and wider across the CIO’s customer organizations. His response was incisive and explosive (he was Oracle’s first VP of Sales, and Oracle execs are not known for the warm and fuzzies). He said “I know what the team thinks. I hired you to be the change agent. To help us think outside the confines of our market today. To come back with new ways for us to expand our brand, products, and sales effectiveness. Now, get out of my office before I change my mind about hiring you!” And so he unceremoniously threw me out of his office—I was not to come back until we had concrete proposals on where to take products next, and identify which technologies we needed to build ourselves vs companies we would acquire to accelerate product delivery.
I realized, then what Frantz Fanon meant about being a prisoner of history. It means being in a state where our past experiences and foundational views imprison us, making it impossible to execute ideas that belong to the future. That was where the company was because its experience was shaped by their current customers and product experiences—we had too much experience selling to IT users but not enough to their executives. The next few years were transformational, going against the grain of the company’s history.
Our transformation ultimately expanded us from building a SaaS-based systems management monitoring platform for IT teams to that of a customer experience management service enabling digital transformation, which was pitched to the CIO, executives and business buyers, rather than to systems administrators. To make this possible, we first debated in open groups that I would convene–bringing diverse points of view across Sales, Engineering, Marketing, and the CEO. The goal wasn’t to create 100% consensus, but enough consensus and imbue a spirit of experimentation. And so we launched new products that helped us aim at the CIO or to IT’s business teams; these products launched quickly as some of them were powered by the 17 technology companies we acquired—small, tuck-in acquisitions that we could digest easily. We also licensed technology from innovative startups that gave them some cash, credibility, and a go-to-market partner. We experimented, and sometimes we failed, but mostly we succeeded, and our brand expanded to be that of a company that could meet the needs of management teams at digital companies, delivering on measuring, monitoring, and improving the total customer experience. We no longer just measured site speed and availability/uptime which was becoming a commodity. From having a base of customers that paid us $30,000/year on average, we transformed to having 80% of our revenues from top 200 customers that spent anywhere from $300,000 to over $1 million per year. Following its IPO debut, Keynote raised a secondary public offering worth $350M, and was later acquired by public company Dynatrace. Consider that Keynote raised only $30M from Bessemer Ventures, a VC firm in Palo Alto, California, the financial exits for shareholders and employees were excellent.
It was a success story in corporate transformation, and it makes me think about where companies in the communications business are going today—including Microsoft, Salesforce, Twitter, Facebook, and Slack. If you’re heading corporate or product strategy, read on, because it is likely that you’re sailing on the ocean in an ocean liner and changing its course requires not just strategy, but also the realization of which product strategy will fit the needs of the market you want to be in—not just the one in which you are today.
Facebook and Slack: A Future-First Product Strategy
Communications technology companies have seen a massive surge recently, long after Facebook and Twitter‘s first-generation products appeared. Recently, SMS messaging company Twilio and consumer chat company Line went public and are valued at over $3 and $5 billion respectively. Giants in communications products like Microsoft Outlook and Google Apps have been threatened by the rise of Slack, now valued at $3.8 billion (Ed: In 2020, Slack was acquired by Salesforce for $23.58 billion).
Let’s take a look at Slack’s product strategy, which is what I call future-first, i.e., it is designed for users who have no interest (at least, at first) in bridging to the past.
Like the Spanish general Cortes, who commanded his troops to burn their ships so they would never have a way to return to Spain, Slack also went all out to win territory in the new lands. Slack’s team explicitly wanted to move away from legacy technologies like email. In fact, Slack has almost zero integration with your company’s email, even after they later acquired a company that synced email to Slack. Slack’s email integration consists of defining special email addresses that your team or customers and external businesses would use—and those come into a Slack channel. Requiring customers to email a specific email address when they want to contact you—ex. myslackchannel@company.com—is not a great experience, but then it’s not Slack’s strategy (yet) to bridge with older communication platforms. Slack’s strategy to capture intra-company communications is working because that doesn’t require email, as analyst Christine Aguilar wrote in an incisive article about How Slack Grew From 500K to 1.7M Daily Active Users.
This future-first product strategy has its benefits because it is possible to move faster with new communication formats, like chat, which has less structure. Email is centered around the very personal conversation—streams of messages with private and group membership and conversation threads whose members morph constantly. Looking at the streams of email coursing through companies is enough to make your blood curdle. Stewart Butterfield legendarily saw an opportunity to introduce an intra-company communications tool centered on chat and bypass email—and the rest is…history, as they say.
It remains to be seen if Slack will be a prisoner of its own product history—being pinned by the legacy of unending chat. Each Slack channel is a stream of consciousness, and that stream has a beginning but no end. The purpose of Slack is to increase communications within an organization, and this it does through the streams of events—chats, alerts from monitoring systems like New Relic, and notifications of tasks created in Trello. Yet, the cacophony that emerges as dozens of systems integrated with Slack collide can drown out the ability of a team to get things done. Slack’s CEO Stewart Butterfield tried to purchase a company that turns email into collaboration, but, instead, venture capitalists gave it the investment it needed to fly solo (Note in 2020: later, Slack acquired this company, Astro). When Slack does go in that direction, it can truly become enterprise-oriented, where you need to bridge from the past (email) to the future (messaging). Meanwhile, startups like the one we founded—Dossier, as well as better known players like Intercom, Drift, and Kustomer (Ed: acquired in 2022 by Meta)—have seized the moment and built email, messaging, and chat so that businesses can collaborate with customers across old and new media of communications.
Future-first communication products like Facebook and Slack must move beyond their own past of being simply a messaging app—Slack for business teams and Facebook for everybody else. A message—very much like the ones that were written on paper thousands of years ago—begins and ends, and its purpose is to get delivered, redelivered, labeled, and stacked. Compared to Slack, Facebook is working to move faster past its history of the social network by delivering new services for businesses like Facebook Pages, tied to new consumer chat tools like Messenger. It does this by integrating Zendesk’s customer service software to power Facebook Pages—a bold move that other consumer companies, like Twitter, have not yet been able to do. Mikkel Svane of Zendesk, of course, thought ahead and purchased several companies to give them these capabilities; building it would have taken too long because of the prisoner-of-history syndrome in customer support.
Twitter: A Past-Perfect Product Strategy
Twitter is a communications company, first and foremost—intended to be the place where conversations start and fan out to the rest of the world. Its communications model is centered on the notion of broadcast. After all, its goal is to replace the traditional media companies—which it does tremendously well through a public broadcast technology—, lists, and followers. Much has been written about the challenges Twitter has, yet I believe that Twitter is poised to reinvent itself for the future. It appointed Bret Taylor, former Facebook CTO, to its board. Bret is a consumer-first technologist who is well-versed in the art of communications, and he himself is leading Quip, a company destined to compete against Slack, Google Docs & Drive, Trello, Asana, and other communications tools. And it just got acquired by Salesforce for somewhere between $582-$750 million. (Note in 2020: Bret is now Chief Product Officer for Quip).
The opportunity that Twitter has is to provide the backbone for all business-to-consumer conversations. The Twitter app and network are legendary in their simplicity and reach, respectively. Yet, when an inquiring iPhone buyer sends a question to Apple’s @apple handle, Twitter delivers the message to Apple, and then Apple must take and manage that communications stream, turning a public conversation on Twitter into a private one within Apple. The Twitter brand hence dissipates in the mind of the consumer once that tweet crosses the boundary between Twitter’s public domain to the private domain within Apple. This is an opportunity for Twitter— a reinvention of Twitter’s communications missions would be to provide the customer service platform that enables the brands to continue that conversation with the consumer in a way that is Twitter-friendly, letting the consumer use Twitter to power that conversation. From that perspective, Twitter was once a future-first product, but today has voices inside the company that prevents it from reaching its full potential —”This is who we are: a consumer company,” or “We want to be the central place for conversations that consumers have.” As a result, it stays focused on its core, but its core is really being a communications company, not just a consumer communications company. Jack Dorsey does recognize it—remember when he famously wanted to move beyond the 140-character tweet? That’s why he got Bret Taylor on his board—a sign of Jack’s thinking about reinvention. Twitter can quickly move beyond its consumer-oriented past-perfect product strategy. One way to do this is to bridge its consumer communications with new social tools for managing communications, sold to the same brands that purchase its ads, but also to many new companies. That’s how new markets are captured incrementally, and it works—just like it did for us at Keynote and will for Salesforce.
Microsoft and Salesforce: A Tale of Two Cities
Satya Nadella and Marc Benioff are remarkably similar. They are both networked thinkers. When Satya was appointed Microsoft’s CEO, he met with the division heads and said that they were missing the ability to interconnect their customers. He told the company’s 200+ corporate vice presidents: “Each of you is thinking deeply about the silo of your market—Dynamics CRM, Office productivity, Windows. And you are missing the ability to make all divisions at our customers to talk to each other—through interconnected experiences”. Right there is the reason Microsoft bought LinkedIn.
Marc Benioff at Salesforce built Chatter way ahead of its time, with a vision to connect everybody at a company—he didn’t quite get to execute Chatter’s expansion well because his company was also a prisoner of their CRM history. The product teams there were run for many years under the dictat: “Don’t build anything the customer doesn’t ask for.” Therefore Marc looked outwards for inspiration—and acquired RelateIQ for $400 million and Quip for $750 million, acquisitions that reflect interconnectedness. This is why Microsoft tried to purchase Salesforce in mid-2015—the CEOs think very similarly. Both future-first product strategists, they are moving ahead to a connected world while the rest of us are still going deep. Salesforce’s acquisition of Quip is enormously significant to the CRM industry. It’s not just “Salesforce buys word processing app Quip for $750M” as reported by Techcrunch—that’s a surprisingly narrow view of Salesforce’s corporate strategy. (2020 Note: Salesforce bought Slack. Enough said.)
If you are a CRM company CEO, it’s likely that your employees will insist on a narrowing of thinking when discussing the Salesforce/Quip acquisition. They will revile the product and its creator Bret Taylor (“We’re an enterprise company, not a Facebook!“). It’s hard for most to understand that a CRM company just made what may be its most brilliant move, one that will have repercussions on customer relationships for the next decade. It’s not because of “The Living Document” that Quip has developed, sort of like Google Docs on steroids. It’s because Quip got started in 2012 by a Facebook-inspired vision of interconnecting people, data, and communications in a way that Salesforce wants to harness—to dramatically change how businesses communicate with their customers. It is your job as the CEO, founders, and management team to move strategically. The first three months after an acquisition is completed—LinkedIn by Microsoft, Quip by Salesforce, and NetSuite by Oracle—is the time to regroup yourself. Post-acquisition, 90 days is the time when the strategy is discussed and teams are integrated. Conference rooms are filled for days with planning meetings, product prototypes are hammered out, pricing models are analyzed, and decisions are made. After that, everybody at Microsoft and Salesforce knows the direction in which they are headed, and they race towards it. The clock has started and you have three months to steal a march. After that, the market begins to listen to the new strategy.
So what about those employees who tell you that acquisitions are a distraction? if you’re the CEO, I’d advise you to do what was done unto me—banish the M&A team from your office, and ask them to try harder at understanding how to transform our product strengths. Or, if you are a smart employee, figure out how to drown out the noise, and state your case for an interconnected, networked business world. You might get acquired for a 49% premium from its valuation in the public market as our previous company did. Or, you might be the acquirer.
Disrupt yourself before anyone else does.
And truly understand what Frantz Fanon wrote:
“I am not a prisoner of history.
I should not seek there for the meaning of my destiny.
I should constantly remind myself that the real leap consists
in introduction invention into existence.
In the world through which I travel, I am endlessly creating myself.”
– Frantz Fanon in Black Skin, White Masks, 1952.
About Vik Chaudhary
Vik is a cloud technology leader who works at expansion or scale-up stage companies that are building new products, launching integrations with a large partner ecosystem, and expanding product lines via acquisitions. Vik’s experience is in running Product and Engineering teams as well as Alliances and Corporate Development/M&A, bring scalable management for organic and inorganic growth stages.
Vik is the Global Director and Head of Dropbox Enterprise, a sub-$1 billion product line of smart collaboration products for video, documents, storage, and communications. He is managing a product team that collaborates with an API-driven platform team of hundreds of engineers, executing on strategic partner integrations, and acquiring new technologies to create products for mid-market to enterprise customers (Ed: in 2021, I joined Meta).
For speaking opportunities, please reach out to Vik on LinkedIn.
