Selling Power Magazine Article

Box’s wunderkind CEO Aaron Levie admits that, even as an ambitious 19-year-old college sophomore, he wasn’t dreaming about the day he could eliminate prospecting from enterprise software sales. Frankly, like most of his fellow University of Southern California (USC) students, at the time he probably knew a lot more about cold pizza than cold calling. But having grown up in the technology-drenched culture of Seattle, spending his high-school days developing Websites and building online products and services, Levie arrived at USC determined to start his own company.
 

The result: an online platform, which Levie launched from his dorm room in 2005, where college students could work together on school projects. It has now blossomed into Box, a cloud-based collaborative tool for enterprises that boasts more than 7 million users worldwide (representing 77 percent of the Fortune 500), financial support from such big-name investors as Mark Cuban and Netscape founder Marc Andreessen, and a market valuation of around $600 million.

All Your Files Belong to Us


In fact, as Levie admits, the basic idea behind the start-up was not exactly revolutionary. Put simply, Box is an Internet-based application that makes it easy to share and manage files, whether they are documents, videos, PowerPoint presentations, spreadsheets, photos, etc. The inspiration behind Box, he says, is not the data-storage element, but the way the application allows users to collaborate on and share that stored data.
 

“For sales organizations, that means you can pass around and share marketing collateral, contracts, and media assets among the people on your team or even out to customers,” Levie explains. “So we see a lot of companies using Box to deliver media to their customers, to share best practices within the sales team, and for collaborating around information, whether that’s a proposal, an RFP response, or even delivery of a final product through Box.”
 

The main benefit, he adds, is that, because the data is all stored online, users are freed from any of the traditional headaches associated with managing software, hardware, and systems or building applications and ensuring data security. This is all possible, of course, thanks to “the cloud,” that limitless storehouse of online data powering such big-name applications as Salesforce, Google Apps, and Amazon. Levie says he was confident about the decision to pivot away from targeting the consumer market in favor of the enterprise after calling representatives at 10 randomly selected companies to ask how they shared files, backed up information, and protected data.
 

“Every single person came back with a different answer,” he says. “That let me know that we were correct in our hypothesis that the world needed something like this.” 
 

The advantages to Box and other Web-based Software-as-a-Service (SaaS) applications over traditional enterprise software solutions should be readily apparent to anyone who’s ever spent three to six laborious months piloting an enterprise-wide software program. Instead, as millions of relieved converts from Siebel to Salesforce have learned over the past decade, with a SaaS solution, users can typically be up and running with a product in a matter of minutes.

What’s Better Than Free?


Levie says that the other key driver behind Box’s success is the “freemium” sales model, which allows users to try out a basic version of the product at no cost: no limited-time offers, no 30-day trials, no inputting credit card numbers “for security purposes,” no barriers to entry at all – just free. The company banks on the likelihood that, having seen that the technology works and provides proven value, users will eagerly pay for the opportunity to enjoy more powerful and feature-rich versions.
 

Besides breaking down the obstacles between customers and Box’s products, Levie says, the freemium model also eliminates the preliminary steps in the Box sales process, doing away with prospecting almost entirely.
 

“We invert the sales process completely, because before we even call you, you’re going to have users in your organization who are using the technology and applications,” Levie says. “So by the time our sales reps are talking to you as a potential customer, you can already use Box in your business, you already know its effectiveness, and you can easily measure the cost savings and how successful your people are being with the product. We don’t need to pitch you on the product, we just need to align our technology to your business strategy to make sure you’re getting the most value out of it.”
 

Instead of viewing freemium as a means of eliminating the sales function, as some software companies do, Levie says Box has taken an aggressive sales approach, deploying nearly half the company employees in sales-related roles. In the process, he adds, Box has managed to invert an old selling truism.
 

“In the traditional outbound sales model, you might spend 90 percent of your time talking to people who are not going to use your product,” he says. “That’s not an efficient use of time. Much better is a product vehicle that has those prospects raising their hands and saying, ‘Now’s the right time to talk to me.’ So you can fundamentally solve people&rsq
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uo;s business problems and help customers navigate that process, because you’ve already broken down the barrier of determining whether they need the solution or not. You wind up spending 90 percent of your time talking to people who are already interested and ready to go, instead of the other way around.”
 

Casting false modesty to the wind, Levie says that the Box sales organization “represents the future of enterprise software sales.” Meanwhile, many of Box’s customers are using the cloud platform to revolutionize the way they’re selling, as well. Red Bull and TaylorMade both send salespeople out on the road using iPads loaded with Box to securely access product information and other custom content while on-site, Levie says. Plus, he adds, another client – a top 10 commercial real-estate firm – uses Box as a mobile CRM tool for sales representatives to pull client and commercial property data wherever they go.

Who Knew You Could Do That?


Levie says that Box’s strength lies in a flexibility that allows users to determine how the cloud-based application can improve their sales efforts. Part of what makes his job fun, he adds, is hearing customers come up with their own innovative strategies for using Box.
 

“When we built the app for the iPad, we were thinking more about the person working at home who wants to pull down a document that someone else is working on, or someone in a meeting who wants to look over the executive calendar,” Levie says. “But as soon as we launched, we got calls from pharmaceutical companies, retail manufacturers, marketing agencies, who were using the iPad with Box as a tool to enable a mobile-sales workforce. That was not our perspective on the world, so it was superexciting to hear about customers going out and building new use cases for us.”
 
In late September of 2011, 350 or so of those customer innovators flew to San Francisco to attend BoxWorks, the company’s first customer conference. Levie, in his trademark orange sneakers, strode purposefully back and forth across the stage, energetically extolling the virtues of Box’s new features; announcing new key corporate partners, such as salesforce.com and Motorola; and taking potshots at Microsoft, which still leads the file-sharing market space with SharePoint.
 

BoxWorks was something of a coming-out party for Levie’s company, mimicking similarly lavish (if larger) conferences put on by the likes of the late Steve Jobs, Mark Zuckerberg, and Marc Benioff. The day even closed with a performance by Third Eye Blind, a favorite band of Levie’s during his middle school days in the ’90s.
 

And while six years of incredible growth and performance is no guarantee of future success, plenty of industry players share Levie’s upbeat assessment of Box’s prospects. One “traditional” software company came calling last September with a reported $500 million buyout offer, only to be spurned by Levie, who says that interrupting the corporate plan now, with the nearly limitless cloud market still out there, would be selling the company short.
 

And this gets to the root of Levie’s confidence in Box’s future: it’s not in just the company, the employees, or even the product, he says, but in a belief that the cloud, combined with freemium, creates the optimal path to connect users to software. “In the entire technology industry, there’s probably not anything you can’t let people use first,” he says. “So why would you create any barrier to that? It just seemed counterintuitive to us that you would ever block people from using your technology.”