14 Mar 2015: When you have a Harvard degree in accounting and finance, you would think it would be a cakewalk to find a job on Wall Street.
That wasn’t the case for Daniel Saks, the 29-year-old cofounder and co-CEO of AppDirect, a cloud marketplace and management platform.
When Saks got his master’s degree from the Harvard Extension School in 2009, he tried to get a job at a bank like Goldman Sachs or Morgan Stanley, but he never received an offer. It was the recession, and jobs weren’t opening up.
Things were starting to look bleak. Saks’ only work experience at the time was an unpaid summer internship at a small firm in San Francisco. Worse, his familyâ€™s 100-year-old furniture business had just shut down because of the recession.
“Life was pretty grim,” Saks tells Business Insider.
With no job and his family business going under, Saks needed time to clear his mind. He decided to go on a trip to see his old family friend Nicolas Desmarais, who was in San Francisco doing consulting work at Bain & Co.
At about that time, Saks was also starting to think about launching his own business. He always admired his father’s entrepreneurial spirit and felt as if running a business was in the family. He just couldn’t figure out what exactly he wanted to do.
Desmarais at the time had large tech-company clients who were looking for ways to upgrade their infrastructure and cloud offerings. So he was aware of the industry’s shift to cloud software, or software offered through the internet. And as Saks bounced around ideas with Desmarais, it became clear that if he were going to start a company, it had to be in cloud software.
“We realized cloud computing could completely change the way businesses operate,” Saks says. “It could have even saved my family’s business.”
Saks spent the next five months finalizing his business plan. He also persuaded Desmarais to quit his job to work full time on the new startup. Desmarais’ mom was disappointed that he was leaving his lucrative consulting gig, but the two went on to cofound AppDirect in 2009.
AppDirect is now the backend software powering the marketplaces of many companies. It basically builds an app store for its clients, much like iTunes or Google Play, but only for business apps. It provides a white-label marketplace for companies like Samsung or Rackspace, so those companies could rebrand it as their own marketplace. For example, Samsung has its own Samsung KNOX marketplace, and Rackspace runs its own Rackspace Marketplace, where apps optimized for their respective platforms are sold to clients. Both marketplaces use AppDirect’s technology.
The idea of AppDirect may sound simple, but companies have to spend a lot of resources to build up app stores on their own. Although some companies like Salesforce have the capacity to build their own, many businesses prefer outsourcing to companies like AppDirect. It also gives AppDirect’s clients the ability to curate and monitor the apps sold on their marketplaces, giving complete transparency over use of the apps.
The business has been doing quite well. More than 20 million people are using AppDirect’s service so far, including employees at big enterprises like Comcast, Deutsche Telekom, and ADP. Its revenue has been doubling for the fourth straight year and reached $18 million last year.
On Wednesday, it announced another round of funding at $50 million from investors including Peter Thiel and Ajay Royan’s growth-stage venture capital fund Mithril Capital Management. Saks told us the company was valued at roughly $600 million, double its valuation from last year.
“AppDirect opened a new market for software makers by helping small businesses find software and use it well,” Thiel said in a statement.
Saks says AppDirect expects to continue doubling in size (both in revenue and employees) in the foreseeable future. It already has offices in San Francisco, Munich, London, and Montreal, but Saks plans to keep expanding with the new funding.
Desmarais’ mom is also convinced. After AppDirect signed on Bell Canada, one of the biggest companies in Canada, she told him, “If you signed on Bell Canada, then sure you can go start this business.”