How Young Companies Can Grow Faster, Smarter - Daniel Saks, AppDirect

Accelerating Innovation

Build vs. Buy

© 2014 AppDirect, Inc. Confidential Material 7/8/15 2

2009

© 2014 AppDirect, Inc. Confidential Material

AppDirect: Helps businesses find, buy, and use software

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20M+ Reach to end business

users globally

$135M Capital raised from seed

to Series D

4 Acquisitions

300+ Team members

§  Awards:

§  Customers: §  Highlights:

§  Investors:

© 2014 AppDirect, Inc. Confidential Material 7/8/15 4

Traction…

© 2014 AppDirect, Inc. Confidential Material 7/8/15 5

“How do you sustain growth beyond initial traction?”

© 2014 AppDirect, Inc. Confidential Material

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1)  Establish a Growth Strategy

2)  Develop Network Effects

3)  Build an Innovation

Framework (include M&A)

© 2014 AppDirect, Inc. Confidential Material

#1

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"Paradoxically, then, network

effects businesses must start

with especially small markets.

Facebook started with just

Harvard students. " — Peter Thiel (Zero to One: Notes on Start Ups, or How to Build the Future)

© 2014 AppDirect, Inc. Confidential Material 7/8/15 10

Segment Geography Capability

Harvard

Ivy League

Colleges

High school

Everyone

Cambridge MA

East Coast

USA

Europe

Global

Profiles

Photos

Events

Newsfeed

Marketplace

Demographic Language Device

Harvard Undergrads

Ivy League Students

College Students

All Students

Everyone

English

Spanish

Japanese

Chinese

All

Web

Mobile

Tablet

Virtual Reality

All

© 2014 AppDirect, Inc. Confidential Material 7/8/15 11

Segment Geography Capability

Telecom

Retail

XaaS

VAR

Everyone

Canada

North America

Europe

Asia

Global

App Listing

Marketplace Manager

Developer Center

Billing

Data

Demographic Language Device

SMBs

Enterprise

Consumer

Education

Government

English

French

German

Korean

All

Web

Mobile

Tablet

Desktop

All

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1)  Establish a Growth Strategy

2)  Develop Network Effects

3)  Build an Innovation

Framework (include M&A)

© 2014 AppDirect, Inc. Confidential Material

#2

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© 2014 AppDirect, Inc. Confidential Material

Benefits of Magnetic Momentum

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Growth Cost of Acquisition

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But how do you grow even faster?

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1)  Establish a Growth Strategy

2)  Develop Network Effects

3)  Build an Innovation

Framework

© 2014 AppDirect, Inc. Confidential Material

#3

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S-Curve

Time

Reve

nue

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S-Curve + Innovation

Innovation

Window

New Innovation

Original Innovation

Time

Reve

nue

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Alpha Beta Scale

Explore

New Ideas Prove the

Metrics

Scale the

business

Innovation Strategy

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Alpha

Billing

Innovation Strategy: Case Study – Billing

BUILD

PARTNER

BUY

Alpha

© 2014 AppDirect, Inc. Confidential Material

Innovation Strategy: Case Study – Billing

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Vision Alignment

Culture Alignment

Clarity of Execution

© 2014 AppDirect, Inc. Confidential Material

#3

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Alpha

Data

Visualization

Innovation Strategy: Case Study

BUILD

PARTNER

BUY

Leftronic

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Magnetic Momentum + Flywheel Innovation

Time

Reve

nue

© 2014 AppDirect, Inc. Confidential Material

Recap:

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1)  Have a Growth Strategy

2)  Establish Network Effects

3)  Develop an Innovation

Framework (include M&A)

© 2014 AppDirect, Inc. Confidential Material

Closing Thought….

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Is it too early for me to start

thinking about growth strategy

and M&A?

© 2014 AppDirect, Inc. Confidential Material

© 2014 AppDirect, Inc. Confidential Material

www.appdirect.com

@danielsaks