This Harvard grad couldn't find a job on Wall Street, so he launched his own startup - it's now worth $600 million
AppDirectAppDirect cofounder Nicolas Desmarais and Daniel SaksWhen you have a Harvard degree in accounting and finance, you'd 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 he graduated in 2009, Saks tried to get a job at a bank like Goldman Sachs or Morgan Stanley, but he never got an offer. It was the recession and jobs weren't't opening up.
Things were starting to look bleak. Saks's only work experience at the time was a unpaid summer internship at a small firm in San Francisco. Worse, his family'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.
Right around then, Saks was also starting to think about launching his own business. He always admired his father's entrepreneurial spirit and felt like 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 off different ideas with Desmarais, it only became clear that if he was going to start a company, it had to be in cloud software, commonly called software-as-a-service.
"We realized cloud computing could completely change the way businesses operate. It could have even saved my family's business," Saks says.
Saks spent the next five months finalizing his business plan. He also convinced Desmarais to quit his job to work full-time on his new startup. Desmarais's mom was disappointed that he's leaving his lucrative consulting gig, but the two went on to cofound AppDirect in 2009.
AppDirect is the backend software powering the marketplaces of many different 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 only the apps optimized for their respective platforms are sold to its clients, and they're both using AppDirect's technology.
The idea of AppDirect itself 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 its clients the ability to curate and monitor the apps sold on its marketplaces, giving complete transparency over the apps used by its users.
The business has been doing quite well. More than 20 million people are using its 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.
And on Wednesday, it announced another round of funding at $50 million from investors including Peter Thiel's early-stage VC fund Mithril Capital Management. Saks told us the company is now 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 he plans to keep expanding with the new funding.
Desmarais's 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."