AppDirect Brings Web-based Software to Small Businesses

At the end of April, AppDirect announced a $3.25 million financing roundled by iNovia Capital. The founders, Daniel Saks and Nicolas Desmarais, are both Montrealers but the company is based in San Francisco.

AppDirect is a free and private Application Network that allows businesses to find, buy, and use web-based software. With one seamless interface, businesses can subscribe to applications, assign colleagues to multiple apps, and pay just one monthly bill for all their subscriptions. Through its network of branded Marketplaces, AppDirect provides Application Developers with a single point of integration to reach millions of businesses across the globe. For Channel Partners, AppDirect is the fastest and most economical way to launch a branded web-based business application marketplace.

NextMontreal: What are your backgrounds?

Daniel: Nick holds a BA in Economics and Political Science from Amherst College. Prior to founding AppDirect, Nicolas worked at Bain & Company as a management consultant. At AppDirect, Nicolas oversees product development, channel development, and investor relations.

I graduated with a BA from McGill University and a Masters of Liberal Arts in Management from Harvard University. I have experience in investment banking at Viant Group in San Francisco and in wealth management from RBC in Toronto. I oversee sales & marketing, vendor & channel relations and HR.

NextMontreal: Is this your first startup?

Daniel: We’ve been passionate about entrepreneurship since childhood. Nicolas started a driveway sealing company for a summer. I had created the “Fallsview Tourist Center” providing tourists to Niagara Falls with packaged bus tours of the area. When at McGill, I also arranged a bus trip to Tremblant with a few friends which later went on to become Campus Vacations; a leader in student travel across North America.

NextMontreal: What have you learned so far?

Daniel: One of the most interesting things we’ve learned is just how much demand there is for web-based software among small businesses, but how nascent the industry is at the same time. A recent Microsoft study estimated that 80% of businesses will be using web-based applications by 2014, but although hundreds of developers are creating apps, very few companies have emerged to help meet the needs of the users of these applications. For example, we conducted a survey with Bell last year that showed that a majority of small business owners want features like single-sign on, access management, and unified billing. However, as of today, AppDirect is the only company creating marketplaces that provide all of these features.

NextMontreal: Why San Francisco and not Montreal?

Daniel: Both Nicolas and I were working in San Francisco prior to starting the company. It made sense to keep the company in California.

Canada is an incredible country with a growing start-up community. There are incredibly successful companies in our space such as Shopify, Freshbooks, Hootsuite, Tungle and Rypple, that are still based in Canada. I would certainly encourage Canadian start-ups to visit the Bay area and bring home some of the best-practices in building a start-up community. However, it is not imperative to move to San Francisco.

NextMontreal: It looks like you provide both a destination site at AppDirect.com but also a whitelabel service, such as the one with Bell?

Daniel: We view ourselves as having three different groups of customers: channel distributors, businesses, and applications developers. AppDirect.com is designed for businesses who want to test out the features of our marketplace. Our white-label service meets the needs of all three groups. Below, we’ve provided a breakdown of the basic value proposition our white-label service provides to each group:

For channel distributors, like our partners at Bell Canada, AppDirect provides the fastest and most economical way to launch a branded business application marketplace.

When businesses sign up to an AppDirect marketplace, they can get the appropriate applications through our recommendation engine, assign colleagues to the apps they need, and pay one monthly bill for all subscriptions.

Application developers can reach millions of businesses across the globe through a single point of integration within the AppDirect network.

NextMontreal: How did you pick the 30 or so apps that go into the marketplace to start? How many more will you add? How do you select those?

Daniel: We select apps based on a rigorous, four-step process. We begin by selecting apps that are best-suited to the needs of the customer bases of our channels. Next, we evaluate the applications to ensure they meet our high standards for security and customer support. Then, we contract the applications. Finally, we deliver the apps to our marketplaces with unified billing and provisioning, single-sign-on, and access management. Using this process, we expect to syndicate somewhere between 100-150 additional applications.

NextMontreal: The Bell Business App store just launched – what’s reaction been like so far?

Daniel: The reaction has been very positive. It’s clear that there’s a lot of interest in the Canadian business community around web-based software. Our main focus this year has been to generate even more interest and use that interest to motivate business owners to educate themselves about the benefits of web-based software. The more people know about web-based software, the more they are going to be willing to purchase applications in the future. Particularly in comparison to old legacy systems, this new model just makes so much more sense economically.

NextMontreal: The marketplace you provide also provides additional functionality – user management and administration across all apps – correct? What other functionality is managed through the app store vs. individual apps?

Daniel: We are really seeking to provide a seamless, end-to-end user experience to meet the expressed needs of the rapidly growing community of SaaS users. As I mentioned above, we conducted an extensive survey to determine what those needs were, and we found that the majority of businesses were seeking a place to find, buy, and use their applications in one location. So, we have created a recommendation engine to guide users to the best apps, and we have provided all the information users need to make an informed purchase decision on the app profile. Once an app is purchased, administrators can provision apps to users and pay for their subscriptions on one monthly bill. Best of all, users can sign-in to all of their applications with in one place with one set of login credentials.

For more information about destination site at AppDirect.com. Click here.

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