Russ: This is The BusinessMakers Show heard here and online at TheBusinessMakers.com and its featured guest time and with me this morning is Jeff Dachis, founder and CEO of the Dachis Corporation and founder and former CEO of RazorFish - that's the company that's credited with leading the way for the digital services industry more than a decade ago. Well, Jeff, welcome to the BusinessMakers show.

Jeff: Thanks, Russ.

Russ: Let's start with what's important to you today. Tell us about the Dachis Corporation.

Jeff: Well, let me just first say the Dachis Corporation is just our holding name right now. We haven't really launched our products or our services yet so we incorporated under that name and we're still in stealth mode, in a way, figuring out what we're going to do and looking at the market that we're about to serve. And so that's a holding company name. That will change as we launch the product. Just so you know.

Russ: OK.

Jeff: We're really looking at business transformation again. We led the way with RazorFish with what we called digital change management when the Internet first came on the business scene and now there's a new wave of technology that's enabling businesses to communicate better with the constituents that they work with and we're calling this the social enterprise.

Russ: Which means it's kind of related totally to social media?

Jeff: In a way. Social media? I call it social computing because social media we think of in a different way.

Russ: OK. So the business world is going to get into social communications. Now, we've had several guests on our show that touched up on this - I don't think quite as in depth as you plan to do it - but you're from the school of thought that it's going to change business all across all sectors, correct?

Jeff: Absolutely. Much like we got people on the Internet over ten years ago, now we need to do something with all this connectivity. So businesses really need to now utilize all the ability that they have to connect and communicate with their given constituents.

Russ: OK. And everybody that we've had on the show that advocates this really starts using those words like "openness" and "authenticity" and "transparency." Do those all sync up with your vision?

Jeff: Absolutely. There really is no way to communicate in an authentic meaningful way unless you're open and transparent and honest.

Russ: OK. And from my perspective as being a business person that ran several businesses and there were always challenges. What we're talking about here is just opening up the discussion of those challenges almost completely to the public.

Jeff: There's a limit to some of the openness that we're talking about here. We're not advocating that businesses expose all of their trade secrets or expose every facet of their business to everybody. What we're advocating is that the people that they do communicate with and that they do have relationships with - whether they be customers, suppliers, vendors, shareholders, distributors, employees, or the communities that they operate in - that they operate in those environments with an authentic and open and honest, transparent dialogue with those constituents.

Russ: Is there an example of somebody that's doing that today in your opinion?

Jeff: There are quite a few companies that are communicating with their constituents in a meaningful way. There is a company called Zappos, which is a shoe company.

Russ: Right.

Jeff: But they do just a really great job in connecting with their constituents, both their employees, their executives and their customers all have sort of a meaningful and ongoing dialogue and relationship with that company. Dell is doing a really good job at shifting from what they were like, which was sort of closed off, silo-based, command-and-control-like structure to becoming a more open and transparent and responsive company. And then, finally, a company that's really aggressively taken this approach is a big company called Cisco. John Chambers has led the way in shifting the way Cisco thinks about the way they run the company, the way they engage in relationships with their suppliers and distributors, and the way in which they engage their customers. They are truly trying to - and I believe they are succeeding in many ways at becoming a responsive, engaged participant that's meeting the needs of their constituents.

Russ: Well, those companies that you mentioned, Jeff, we did have Lionel Manchaca [sp], the Dell blogger, on the show - this was probably about a year ago - and it was quite amazing that a company like Dell, with as many computers shipped in a year, would open up the communications to its customers top to bottom by "let's talk about problems". It was really pretty cool. So just how is this entity today called the Dachas Corporation going to do this differently than anybody else?

Jeff: Most of the companies out there that are proffering the idea that businesses should be communicating better are primarily selling technology. They're selling tools, platforms that enable people to connect in communities, that will enable those communities to do things like post and display in various formats like forums and Wikis and blogs and micro-blogging and micro-sharing and a variety of post sharing photos and sharing videos. And the technology is one thing, but most businesses don't really know, honestly, what to do with the technology.

Russ: Right.

Jeff: So what we're looking at doing is aggregating a platform to enable companies to make those connections technologically, but then providing professional services to help the companies manage the change that's going to be required to organize differently to utilize those technologies. So the technology alone doesn't get you there. You really need to shift the culture of the business and the way the business thinks about what it does.

Russ: OK. So it's platform plus professional services.

Jeff: Correct.

Russ: Wow. And so these professional services would be upper-end, modern consultants that go in and explain how you have to start sharing information.

Jeff: Exactly. Business process reengineering, change management consulting, policies and procedures, work flow, and then the shifting of the way business structure is architected. Businesses currently are primarily fiefdoms and silo-based and in big companies there is a lot of protecting information and protecting what individual silos do. And that needs to shift. People need to start sharing and communicating and collaborating in the most meaningful ways. And the businesses, I think, that are going to adopt that sooner than later are going to be the ones that are going to be successful.

Russ: Well, how likely do you think it might be, Jeff, that we look back at this five years later and sort of scoff at it and say, "What were we thinking?" Do you think that that's possible?

Jeff: No.

Russ: OK.

Jeff: Honestly. We have millennial-generation individuals coming into the work force, into the supply force, into the consumer force and we have a global economy that is struggling right now at finding what is actually an authentic way of doing business. We've got, I think, businesses clamoring for new revenue, clamoring for ways to reduce costs and communicating and collaborating is really the only way to do that right now and technology is available to do it. So I think we're going to look back and say, "Why didn't we do this sooner?"

Russ: OK, great. We're speaking with Jeff Dachis, founder and CEO of the Dachis Corporation and founder and former CEO of RazorFish. We'll be back with more with Jeff after this. You're listening to The BusinessMakers Show heard here and online at TheBusinessMakers.com

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Russ: is The BusinessMakers Show heard here and online at TheBusinessMakers.com. And continuing on with Jeff Dachis, founder and CEO of the Dachis Corporation and founder and former CEO of RazorFish. Well, when we finished that last segment you were pretty emphatic, Jeff, that all businesses are going to be changed by this openness. What role and how is the Dachis Corporation going to participate in that?

Jeff: Our strategy is going to be to acquire or build or partner with technology companies that allow us to help companies that, in all their functions, connect people and give them specific business tools to lay over those connections. So we're building technology, we're buying technology, and we're partnering with technology to be able to provide that to the businesses that we're working with in addition to creating a robust professional services platform that enables us to help companies change the way they do business.

Russ: Are you already looking at perspective acquisition targets?

Jeff: Yes. We're looking at quite a few companies in a range of products and industries primarily around connecting people and then with applications that sit on top of those connections enabling them to do specific business things. Austin Ventures is a firm in Austin, Texas, where we're based, that has backed us and is quite supportive of our efforts in finding acquisition candidates.

Russ: Have you made progress already on the professional services side of the company?

Jeff: Absolutely. We've hired a couple of analysts away from Forester. Both Peter Kim and Brian Haven have come to us from Forester and we're looking to build out our professional services platform under them. Another woman named Kate Neederhoffer has joined us from Neilson Online as our VP of Measurement Science, helping us measure and decide what to measure with all these connections that people are making.

Russ: When do you anticipate that you're actually going to have something where you're calling on a company to change the way they do their business?

Jeff: Well, ideally, we're not going to be calling on companies. Ideally, what we're going to do is present what we do and…

Russ: And they'll come to you.

Jeff: …and companies will hopefully come to us. That's ideally the way we'll set it up.

Russ: [laughs] Build it and they will come.

Jeff: But, yeah, a few more months and we should be out in the marketplace.

Russ: Cool. I know I think you have a lot more credibility from our audience because you've participated in a transformation before. Tell us a little bit about RazorFish. I mean, I know you guys hit the ground running back in the ‘90s, correct?

Jeff: Yes. We started the company in 1994. We went public in 1999. I think we were worth a little over six billion dollars in market cap in the year 2000. I created the company by doing over 25 acquisitions over a 20 month period. So we built the company pretty quickly.

Russ: In the very beginning, what was it that triggered the idea for you because you started it in an apartment, right?

Jeff: Correct. Well, you know, you have those ideas. Sometimes I get them in the shower - those "aha" moments where you realize that there's something very powerful going on among a variety of trends that are converging. And at the time, then, there was this digital technology that seemed to be rapidly getting created and not so rapidly getting adopted by businesses and you could sort of see where things were going if you were paying attention. And so we created a company around digital change management and helping businesses get digital. And that was based on a thesis that everything that can be digital will be. And now I think that that thesis has proved to be true. Everything that could be digital is now.

Russ: Who was your first significant customer at RazorFish?

Jeff: The very first customer we had was Time Warner.

Russ: [laughs] That's a nice customer. How many employees were in RazorFish when you won Time Warner?

Jeff: Just Craig and myself - my partner. He and I were able to do HTML when there really wasn't anybody who knew HTML.

Russ: Right.

Jeff: And Time Warner was building out a product called Pathfinder, which was their website at the time, which was a portal, and they needed help architecting it and building it and we were who they called on.

Russ: And so at the height and the size of the company, employee-wise, while you were still there, what was the biggest number?

Jeff: Well, I left in 2001 and just prior to a round of layoffs we were about 2,200 employees in 15 cities and in nine countries.

Russ: And you were still CEO at that time, too?

Jeff: Absolutely, yes.

Russ: And you're still pretty young right now so how old were you then?

Jeff: [laughs] I don't know if I'm…

Russ: [laughs] You're young, believe me.

Jeff: [laughs] I don't know if I'm all that young. Let's see. When did I leave? I was in my mid-30s.

Russ: Wow. And what were you doing before RazorFish?

Jeff: I had been doing a lot of things. I acted in a bad B horror film. I was a waiter. I was a singing telegram. I had started a marketing business doing gorilla marketing called In Your Face. I worked for a graphics pre-press company. I kind of just bopped around looking to try to find what I was supposed to be doing. And then you have that moment where you find what you're supposed to be doing and RazorFish was it.

Russ: But nothing specifically there prepared you for RazorFish.

Jeff: Actually, all of it. I'm sort of a Renaissance man and all of that combined gave me the experience to do what I did. I also worked with my brother on creating a credit card cash advance system for the casino business in the early ‘90s and we took that company public in '93, I believe. But I'm largely unemployable. [laughs] I don't think I could get a job.

Russ: I don't think I asked you this, but when did you actually launch RazorFish? What year?

Jeff: October of 1994 and we had our first client in January of 1995.

Russ: Would it be accurate to say in the very beginning what you were doing was just building websites for companies?

Jeff: That would be accurate, yes. Digital design is what we called it.

Russ: OK. We're talking with Jeff Dachis, founder and CEO of the Dachis Corporation and also founder and former CEO of RazorFish, another incredible transformation company. And we're going to be back with more with Jeff after this. You're listening to The BusinessMakers Show heard here and online at TheBusinessMakers.com.

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Russ: This is The BusinessMakers Show heard here and online at TheBusinessMakers.com. And continuing on with Jeff Dachis. Jeff, you just told us that RazorFish story and you shared with me that you left the company in 2001, a couple of years after the IPO. What were the circumstances that motivated that?

Jeff: Well, RazorFish was a really interesting time. We built a company when there was a huge demand for the set of services we were offering. And then in late 2000, early 2001, it seemed like the media and the financial markets were putting quite a damper on our business prospects - not so much the value of what we were delivering, but people's perception of that value. And that created a lot of downward pressure on our stock. It created a sense of doubt in our employees about what the future of our business was going to be. It placed a lot of doubt from our customers on the viability…

Russ: You mean there were actually stories about the company that were just not very flattering?

Jeff: Not very flattering and not true. And so the dot-com bust really took the wind out of the sails and it made it not so much fun anymore. Not that an entrepreneur has all fun times, but the amount of negative energy that was being directed toward my partner and myself having nothing to do with what we were doing, but more so having to do with the general macro trend, it just made sense for us to leave the company at that time.

Russ: Was there pressure from your board?

Jeff: No, no.

Russ: You just said, "We resign. We don't want to do this anymore"

Jeff: Yeah. We said, "We didn't sign up for this." There was a lot of activity going on we just thought we could better address as Chairman of the Boards versus as executives inside the company.

Russ: Well, we told a lot of stories here about the ups and downs of entrepreneurship. Has that been the only troubling thing that has happened to you since you've done this?

Jeff: Not the only troubling thing, but I have to say that there's been quite a bit of humility, as many people today know, in the marketplace. So that was a very humbling experience. My personality and soul was wrapped up in that company and the employees and our relationships with all of those great wonderful people that we worked with. And so it was very difficult to separate us from that entity. And then 9-11 happened, which was a very humbling experience, being in New York City at that time.

Russ: Sure.

Jeff: And just watching that thing that we had built sort of become something else. Fortunately, with most lessons in humility, there's oftentimes a silver lining. And we learned many things about business and here we are starting something new. But RazorFish went on to re-tool itself and grow again to now what I think is over 2,500 employees in a bunch of cities around the world and I think it's the largest interactive services company in the world and was recently sold to Microsoft for six billion dollars.

Russ: Right. Are you involved?

Jeff: I'm not involved anymore but there's a lot of pride there, a lot of great feelings about all the people that are still there and all the success that they've had. It's really nice to see that happen. I also had a daughter in 2003.

Russ: Wow.

Jeff: My daughter, Ruby, is five years old and that sure is a humbling experience, and what a wonderful, wonderful blessing to have happen to you. And I'm sure everyone can concur that children are just a most wonderful thing.

Russ: Absolutely. Well, before I let you go, I have to acknowledge you mentioned New York and RazorFish was based in New York, but as I understand it, the Dachis Corporation is headquartered in Austin, Texas, right?

Jeff: Yes. We're in Austin, Texas now. Austin Ventures has backed us and that's where we are. My wife and I determined that Austin would be a great place to have kids and raise a family and so we're based out of Austin now. I am still up in New York quite a bit but Austin, Texas is our home.

Russ: That's cool. And lastly, my standard question from people such as yourself: What kind of advice would you give to a young aspiring entrepreneur? Let's put them in the digital world and they're just obsessed and they love it and they want to do something, they want to change the world, they want to build a successful company. What would you tell them?

Jeff: Stay true to yourself. There are going to be a lot of doubters with people who have vision because visions are about where things are going to be in the future, not where they are today. So people who have their eye on where they are today can't really see those visions in the future. So stick with that. And moreover, make sure that there's a concrete business model for you to get from here where things are today to where that vision is tomorrow. And if you can connect the two - concrete business model with real business - to your vision, you're going to be successful. So stick with it.

Russ: Jeff, thank you so much for your time.

Jeff: Thank you. I appreciate it, Russ.

Russ: You bet. We've been talking with Jeff Dachis, founder and CEO of the Dachis Corporation and founder and former CEO of RazorFish, the company credited with leading the way for the digital services industry more than a decade ago. And you're listening to The BusinessMakers Show heard here and online at TheBusinessMakers.com.