Demandforce: Pursuing Entrepreneurial Dreams

Abstract

This case lends itself to courses covering the topic of rapid expansion of an enterprise. By 2012, Rick Berry, the founder and CEO of Demandforce (DF), and his team had built a company with annual revenue of approximately $70 million. DF provided small businesses with software tools used by more than 23,000 individual businesses and 50,000 business users to communicate with their customers. DF's business model was software as a service (SaaS) for a monthly fee. The company's value creation for its clients was evidenced by a high client renewal rate of 88%. But after DF was acquired by Intuit in April 2012, Berry knew that the game had changed dramatically. He was now confronted with a new challenge—one he had never faced: building a big company. He had to take his business and grow it into one with $750 million of revenue as quickly as possible. Excerpt UVA-ENT-0198 Apr. 10, 2013 Demandforce: Pursuing Entrepreneurial Dreams Rick Berry, the founder and CEO of Demandforce (DF), sat in his sparsely decorated corner office in his company's downtown San Francisco location one morning in late June 2012 mentally retracing his unlikely journey from being a high school and college basketball star center from Detroit to graduating from the Darden School of Business to setting out in 1994 to pursue his dream of “going West young man” to Silicon Valley. On his way to Silicon Valley, he made a stop in Austin, Texas, where he worked for four and a half years for Trilogy Software getting his first entrepreneurial opportunity as that company's fortieth employee. Berry did eventually make it to Silicon Valley, where he took a familiar path of learning from failure, rebounding, and forming his next venture—DF—in his garage in 2003. With lessons learned, he and his team built a company over the next eight years that was acquired by Intuit in April 2012 for over $ 420 million (see Exhibit 1 for data revenue and number of employees over time). DF's 300 employees were focused on its purpose: providing small businesses with software tools to communicate with their customers, build a strong online reputation, and leverage network marketing. Its tools were used by more than 23,000 individual businesses and 50,000 business users including auto repair shops, salons and spas, dentists, chiropractors, and veterinarians. Its business model was software as a service (SaaS) for a monthly fee. DF's value creation for its clients was evidenced by a high client renewal rate of 88%. . . .