In 2009, Daniel Saks co-founded AppDirect, a marketplace for selling cloud services to companies. AppDirect is now valued at $1 billion, with distribution to more than 35 million businesses around the world, including IBM, Deutsche Telekom and Lacoste. In 2015, following his success, Saks was named one of Forbes’ Top 30 Under 30. The son of entrepreneurs, Saks displayed an entrepreneurial spirit from a young age.
“I always wanted to start a business. Whether it was a lemonade stand or a tour company, I always thought about ways to create value and start businesses.”
But rather than pursuing a business degree, his mom encouraged him to study political science at McGill University. He attributes this to shaping his career and success.
“When I got into McGill Commerce my mom encouraged me to go into the Arts program, and I never really could figure out why. I said ‘Mom, I got into McGill Management, I should take the program.’ But she said, ‘You’re so much of a business person, you really have to be more well-rounded.’”
For Saks, balance is everything, and he has carried this lesson with him throughout his career. He believes that his BA degree did indeed help him become a well-rounded entrepreneur. He credits his psychology course with opening up his mind, and his urban geography class with forcing him to question norms.
However, he does think there are lessons to be learned in business school, but perhaps not the way they are being taught.
“You can learn a lot about how to raise capital, or how to market, or how to sell. What you don’t learn is how to fire a friend, or how to deal with stress when multiple customers are calling you when something goes wrong. Textbook learning may not effectively prepare you for what’s going to happen.”
What he suggests is case studies, with a focus on failure.
“If people had opportunities to hear from others, not only about successes, but specifically about the challenges, it would be tremendously valuable. I think that there is a mantra of celebrating success, so you only hear about success stories. It’s interesting, no one really asks about the hardest thing you had to go through. It doesn’t get deep enough.”
Saks is no stranger to failure. Three years into AppDirect, he recalls that they had few visitors to the platform. Harley Finkelstein, CEO of Shopify, joked that Saks had less traffic than his intern’s blog. As he thinks back, Saks says he could have easily given up. Yet, he believes that failure can create balance. What’s more, failure can create drive.
Saks had complete conviction of his vision and believed he would have success. Perhaps his well-rounded education had prepared him, or maybe it was his young, blissful naïveté. What cannot be discounted is the importance of what Saks learned by studying other founders. Understanding how Gates, Brin, Page or Bezos created enduring companies has allowed AppDirect to grow into its own success. He considers three elements necessary to create successful, endurable companies.
Firstly, founders need to define their vision from Day One. This vision drives “True North,” AppDirect’s term for owning customer focus by executing business in such a way that, not unlike a compass needle, it is always moving the company and the product in one direction.
Secondly, founders need to have very clearly defined values. This will unite the company as a whole, and make decision-making easier. However, this doesn’t mean making everyone happy, which is an important lesson Saks learned.
“I think when you grow up, you watch all these leaders and you assume that they are so impressive. But what you realize over time is that good leadership doesn’t mean making everyone happy. One of the things I struggled with in the early days is that I really wanted to make everyone happy. You have to learn over time to really put your values and the long-term mission ahead of any one person. That causes you to make difficult decisions. For me, the challenges never had to do with the businesses issues themselves, it’s always issues of perception, communication and managing people’s expectations.”
Thirdly, there must be an innovation framework implemented within the business. Finding a balance between these three elements can help founders persevere in the face of failure.
“What we find is that the combination of a stated vision, values and an innovation framework; with a long-term approach; helps be your North Star to guide you through the challenges.”
What’s clear is that there isn’t one path to success. But Saks urges people to step out of their comfort zone and open their minds.
“What the world needs is more people who are well-rounded. People who don’t say I’m an engineer first, or a salesperson first, or a business person first; but say I understand deeply how to question things.”
This interview has been condensed and edited from The CEO Series on CJAD, hosted by McGill University Associate Professor Karl Moore and produced by McGill BCom student Dominique Buchanan. The full interview will be heard on the latest season of The CEO Series, and online here.