In the 1990s, Jeff Dachis started the interactive marketing and design agency Razorfish on the simple premise that, “everything that can be digital, will be.” Then around 2007, with Web 2.0 on the rise, a new idea began bubbling up: everything that can be social, will be. And just like that, Dachis was on to his next big thing.
In 2008, Dachis scored $50 million from Texas-based Austin Ventures to found Dachis Group. Late last year Dachis sewed up the market by acquiring Powered, Archrival and Stuzo. And last week, the company snagged another $30 million in funding. It’s currently the world’s largest social business consultancy with clients such as American Express, Coca Cola, P&G and Samsung. It’s been quite a third act for Dachis.
Razorfish, which grew from a two-person Web shop to a bustling 2,200-employee enterprise with $250 million in revenues, was once worth more than $5 billion. After losing a bundle in the dot-com bust, Dachis tried his hand at several other start-ups including Studio Holdings, an investment portfolio management firm; and the digital media design firm Bond Art & Science.
He was also known for his arrogant swagger, which was on display for anyone who watched 60 Minutes. But Dachis has mellowed since then. Indeed, he sounds positively down-to-earth, peppering his observations with healthy dose of self-deprecation. Living in Austin will do that to you.
At 44, Dachis notes that when he was coming of age there was no such thing as multimedia. “The entertainment and communications business was so fragmented. I didn’t know what to do, but I knew I wanted to do in that space,” he says. So he tried it all: acting, singing, deejaying, dancing (yes, he studied ballet, and yes, he even holds a bachelor’s degree in dance) with varying degrees of success. “I pretty much sucked at all of them,” he laughs, “but it exposed me to every facet.”
When digital media emerged in the early ’90s, Dachis honed in right away, starting and growing the Razorfish agency out of his one-bedroom apartment in New York City alongside MIT Media Lab alum Craig Kanarick. In just two years, the company rose to giddy billion dollar heights then, sank to seven figures.
As he witnessed the evolution social media, or what Dachis refers to as “the democratization of the tools of self expression,” he began to see a new way forward. Never again would a business have to spend millions on one-way advertising, rely solely on SEO to drive e-commerce, or worse, not be able to scale via word-of-mouth. Web 2.0 ushered in the age of connecting, communicating, participating and engaging.
“For the first time in history, businesses have the ability to do this in meaningful, authentic, and transparent way. It’s more powerful than the first digital revolution,” Dachis emphasizes. “We call it social business now. Soon it will be just business.”
Amid this rise of social-business-as-usual, VCs and angels are funding social start-ups at rates reminiscent of the first bubble. Even the investor feeding-frenzy surrounding Facebook’s potential IPO has Dachis non-plussed. Instead he says, “We believe this opportunity is real, regardless of the frenzy. Businesses will need this service and we are building a solid platform.”
If anything, surviving and thriving after the first burst has given Dachis cautious optimism tempered with experience. “I think the future’s bright. We are not immune to severe economic downturn, but businesses can be more effective and efficient with [social] communication.”
So what’s next? Dachis confesses it’s always challenging for an entrepreneur to stay true to himself. “The things that keep me up at night are when I sense that it’s possible that I may be drifting.” Other than that, he says he doesn’t know yet. “A lot of people ask, ‘Jeff, what’s your exit strategy?’ And I say I’m not trying to exit. I want to win this one.”
This interview is part of a series about the paths that innovators took to get where they are today. See more Innovation Agents.