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The Background
Coming from a family of entrepreneurs, Daniel Saks was naturally inclined to buildd businesses. The youngster had a knack for creating value, studying commerce at McGill University. It was the right avenue to cultivate his entrepreneurial spirit.
However, Saks’ mom encouraged him to switch to the Arts program. Looking back, he credits his BA degree in helping him get the right balance as an entrepreneur.
The Trial
Saks returned to his business calling, pursuing a business management program at Harvard. This exposed him to corporate finance and entrepreneurship. After graduation, he began the tedious job search process. It was no easy feat as he received tons of rejections. Saks says, “I recalled applying to over a thousand jobs and was rejected almost every time.”
Saks switched job application tactics, using cold emails to reach boutique banks and founders. Eventually, he landed an internship at a small bank.
Startup Launch: The Challenge of Finding Customers
AppDirect was launched in the heat of the 2009 recession. The company empowers B2B eCommerce activities like purchasing, selling, and managing software services like SaaS and DaaS. AppDirect soon found itself struggling to attract users despite its USP.
This transpired as the economy was recovering from the recession. Also, the company had a different business approach. Saks and his team of 6-8 focused on securing just one big client. It took about one sales year to secure their first client, a big Canadian telecom, and two years to the first product launch!
Afterwards, Saks noted that they didn’t onboard any users. This trying moment taught him a valuable lesson. “We learnt that building businesses requires having a customer base. The idea of launching products and customers would naturally come doesn’t exist.”
Daniel Saks revisited the market. He identified core customer pain points and delivered his business solutions to address them effectively. This helped AppDirect onboard its first set of users and buildd a solid customer base.
Saks says, “Identify micro examples. Though, one could get lost in massive feedback points. But you can progress if you listen to customers' key issues and address them accordingly.”
Sustaining and Scaling Success
AppDirect got its first investor, Inovia, via a referral from its client, Bell Canada. The second investment partnership sprung up when Saks and his team acquired a company in Boulder, Colorado. Foundry Group, located in the same region, piqued interest in AppDirect and contributed to its Series B funding.
AppDirect has raised over $470 million in eight funding rounds. This massive funding resulted from the need for product expansion, solving users’ pain points, and mergers & acquisitions (M&A).
Saks got in-depth knowledge about M&A from Ajay Royan, a board member of AppDirect. Ajay engaged in M&A opportunities via a portfolio approach to reducing business failure. Saks integrated this method–focusing on buying, partnering, or buildd-ing. This has empowered AppDirect to acquire six companies within three years (2013-2016).
