Selecting the right tech stack is crucial to the success of a startup. After all, it’s the foundation upon which a company’s digital products and services are built and underpins every aspect of your business, from development speed to user experience and long-term growth – so it’s important to choose wisely.

These days, founders have many options to choose from: AWS, Azure, GCP, etc. as well as less conventional options, like the Salesforce Platform.

Formerly known as Force.com – and recently re-branded to the Einstein 1 Platform – the Salesforce Platform is massive. We estimate that its revenue run rate could exceed $30B for Salesforce’s ecosystem partners and around $6.7B for Salesforce itself, as of the company’s latest quarter ending October 31^st 2023.

We believe the Salesforce Platform offers a suite of benefits that make it a compelling tech-stack candidate for today’s founders. Software industry leaders like Veeva ($30.1B market cap) and nCino ($3.91B market cap) have built on the Salesforce Platform, as are Battery portfolio companies Gainsight* and Novidea.*

But when should a company consider building—or not building—on the Salesforce Platform? Here’s what we’ve learned from our experience:

1. The Salesforce Platform’s robust developer tooling can help a company get its product to market more quickly.

Traditional cloud platforms like AWS, Azure and GCP primarily provide compute resources and are often referred to as IaaS (infrastructure-as-a-service) solutions. By contrast, the Salesforce platform merges back-end hosting capabilities with front-end tooling, i.e. the tools needed to build the visible parts of a software solution. This functionality is referred to as PaaS (platform-as-a-service). With PaaS solutions like the Salesforce Platform, developers have all the pieces of the development stack in one place – a unified toolkit, instead of needing to stitch together multiple separate components, which can save a good deal of time in the building process.

There are other tools on the Salesforce Platform that help to accelerate the product-building cycle include. They include hosting, as Salesforce hosts all its customers’ data across its servers; “Lightning Web Components,” a Javascript-based framework for building front ends that allows builders to configure, edit and duplicate components in a no-code, drag/drop/click fashion; and Flow Builder, a no-code logic builder that drives business automation into customers’ applications.

In addition, companies that build on the Salesforce Platform benefit from the features Salesforce has spent decades building: native security, access control, log in and reporting, as well as direct access to other applications leveraging the Salesforce ecosystem. More recently, Salesforce embedded much of its Einstein AI functionality directly into the platform, which may allow customers to create enterprise-grade products and sell into regulated industries more quickly through the Salesforce Platform than through others.

The efficiencies enabled by the Salesforce Platform will vary by organization and teams’ technical ability, as developers with less experience will likely benefit more. Anecdotally, however, we have heard developers get a product up and running on the Salesforce Platform in a fraction of the time it would otherwise take starting from scratch.

2. The Salesforce Platform is flexible and can be modified to fit a company’s unique tech-stack needs.

The Salesforce Platform offers easy customization: A company could choose to build its entire product within Salesforce, house all its data on Salesforce servers and have no modules on another infrastructure stack. Conversely, a company could build a single feature on the Salesforce Platform – and in doing so, take advantage of its many benefits – but build everything else on another platform. For example, a company might build a lead-generation tool for business-development representatives (BDRs) on AWS, but build a corresponding reporting feature on Salesforce, the CRM used by most of its own customers.

Of course, there is ample middle ground to optimally divide product building between platforms. Companies built on the Salesforce Platform may have independent front ends, external data storage and data processing outside of Salesforce’s infrastructure. Consider a company that creates practice-management system software for physicians. The software’s users – practice administrators, physicians and patients – require an intuitive interface and a highly secure environment for products like medical history tracking, customer records and physical scheduling. The Salesforce Platform can be an attractive option to host those products.

For products like billing, however, which can be complex and require integration into clearinghouses for insurance and processing payments, they might sit outside the Salesforce Platform (particularly if you want advanced reporting features, which may be best built with Tableau or Looker).

In summary, it’s not all or nothing when building with the Salesforce Platform. Companies can choose the pieces of product that are best built with Salesforce – and everything else can be built externally.

3. Salesforce’s AppExchange provides direct access to a massive buyer base.

The Salesforce AppExchange is one of the world’s largest business application marketplaces, boasting over 5,000 apps with over six million customer installs. These apps range from ready-made workflow solutions to infrastructure components to better configure your Salesforce instance. Salesforce admins can browse AppExchange, not too dissimilar from browsing the Apple App Store, to select apps they want for their business processes. To get listed on the AppExchange, however, a company must be a Salesforce independent software vendor (ISV).

4. There is a cost to building on the Salesforce Platform.

Salesforce has two pricing models for two different types of Platform partner. First, there are original equipment manufacturers (OEMs) that build applications on top of the Salesforce Platform; these are companies whose customers don’t need an existing Salesforce license to use their application. Second, there are independent software vendors (ISVs). These companies’ applications sit on top of their customers’ existing Salesforce instance and thus are required to buy Salesforce licenses to use the ISV’s application.

It is important to note that Salesforce can negotiate Platform deals on a one-off basis to best align value between Salesforce and a partner. For example, some companies pay Salesforce a percentage of all sales, whereas others pay Salesforce a per-seat flat price.

5. Scale is both a pro and a con with the Salesforce Platform.

Early-stage companies building on Salesforce will be able to scale their product and user base rapidly with fewer resources than would be required with other platforms. However, as these companies expand, they may encounter limitations. For instance, Salesforce has system resiliency controls in place to prevent one instance of Salesforce from negatively affecting the performance of another. Version control for customer instances can also become a challenge for a growing software company, as the Salesforce Platform doesn’t offer the full control over customers’ environments that a traditional SaaS product would.

6. Migrating off the Salesforce Platform can be challenging.

For companies using Salesforce’s front-end and back-end components, a complete platform migration would be like undergoing open heart and plastic surgery simultaneously. Luckily, the Salesforce Platform has strong documentation, but the complex challenge lies around re-creating the business logic built within the software.

In its Q4’22 earnings call, for example, Veeva announced its plan to fully migrate off Salesforce by 2030; it may take the company up to a decade to fully migrate from the platform if they fully execute on their stated plans.

7. Prioritizing skilled talent should be a focus for companies building on the Salesforce Platform.

Attracting strong talent should be a consideration for any founder, of course, but it’s especially important for those considering building on Salesforce. While most of the code an engineer writes in building on the Salesforce Platform is applicable to general software development, there’s a smaller portion of Salesforce-specific knowledge related to back-end development that a team will need to have.

So, who should build on the Salesforce Platform? And who should not? Consider these three questions…

1. Do you plan to serve a customer base that already uses Salesforce today?

If you’re selling into a user base of heavy Salesforce customers, leveraging the Salesforce Platform will help you to provide a product that looks and feels familiar to your end customer and that integrates easily with the other software they use. On the flip side, if you are selling to a customer base that uses other CRM systems, a Salesforce-supported application may not be the best approach.

2. Are you building a workflow-heavy product or a data-processing-heavy product?

Workflow applications that are built for a specific vertical (e.g., Veeva), regulated industries (e.g., nCino), department (e.g., FinancialForce, Gainsight*) or workflow (e.g., Copado in DevOps) tend to do well on Salesforce. Transaction-heavy systems that require advanced data processing or manipulation capabilities (e.g., BI) are not well-suited for Salesforce, as they will likely need to leverage many components outside the Salesforce Platform or rebuild features Salesforce has already built in another fashion.

3. What will potential investors and acquirers think?

We view the Salesforce Platform, like AWS/Azure/GCP, as a valid strategy for building generational products. Many acquirers, both strategic and financial, will likely share this point of view. The important exception to this, however, could be Salesforce’s competitors: Oracle, SAP, etc., who likely aren’t going to want to pay Salesforce annual subscription fees. This may limit some of your strategic exit options.

If you are building on the Salesforce Platform and looking for a capital partner, then please reach out to us! We’d be delighted to help you think through how to best utilize the Salesforce ecosystem.