We’ve been at this for awhile and really see a huge opportunity to serve this underserved market.
Provo-based DirectScale has raised $4 million in Series A funding, led by Kickstart Seed Fund with additional investment from NetSuite.
“I’ve grown companies before organically and had some success, but I just really felt the urgency to create some additional distance between us and the competition,” DirectScale CEO Rodger Smith told Beehive Startups in a recent interview. “We want to leap the platform ahead rather than just muddle along. So we’re using the money to accelerate the building of this new version of our platform.”
Utah is known as the direct sales capital of the world, headquartering numerous high-profile companies (Nu Skin, MonaVie, USANA, Neways, and many more) within state borders. With ever-growing employee and distributor bases, direct sales companies have a permanent need for a software solution that maximizes their ability to expand quickly and effectively — or as it’s known in business terms, their ability to scale.
So if you were to design a software-as-a-service solution specifically for the direct sales industry, choosing Utah as your home base would make complete sense, no? That’s what DirectScale has done, announcing both their Series A round and official launch today, fully prepared to show the world they’ve chosen wisely.
“We’ve been at this for awhile and really see a huge opportunity to serve this underserved market,” Smith says. “It’s underserved in terms of technology providers, there’s just not a lot of great options out there for direct sales companies. What DirectScale represents is the launch of our new platform. It’s true SaaS, cloud-based, current technology that has never been done in this space before.”
Now, let’s be very clear — software solutions already exist in the direct sales space. Where problems start to arise is when you start debating the pros and cons of each service, especially in relation to scaling a company.
“The majority of those solutions have been around for a long time, are based on antiquated code bases, and require a lot of customization, which is obviously expensive,” Smith says. “Once direct sales companies start to get into international expansion and begin to scale, those systems impede their growth, rather than enabling.”
Normally I wouldn’t condone enabling, that’s a pathway that usually ends in a dark place and harbors many a spoiled child. In this case, however, it just makes sense. By placing a modernized platform in the hands of scaling companies, DirectScale acts as a true enabler, unlocking the door to unlimited growth. No company deserves to be held down by an outdated solution, so for the direct sales industry, here lies the alternative — a business management platform encompassing all aspects (eCommerce, communications, prospecting, training, reports, dashboards) of the direct sales world.
“My founding partner, Jim Marks, worked for years on the corporate side, the client side of this equation,” Smith says. “He and I partnering together, him having sat on the client side of this business and me having experience as an actual independent rep in the field, has been this one-two punch that really resonates with our customers and has helped us develop a product that really meets their needs. That’s a unique position, our competitors don’t have that same kind of perspective on the business.”
DirectScale puts customization tools in the hands of the user. Instead of having to rely on outside sources for custom development work, piling up mountain-sized expenses in the process, users have the ability to configure and admin the software themselves. For large-sized direct sales companies, this feature alone holds great appeal and that’s exactly who DirectScale is honed in on.
“The sweet spot for us is companies that are already going, that have between $50 million and $500 million in sales,” Smith says. “Those are the companies that can see the largest benefit and receive immediate impact. Smaller companies we will sell to, but we do some vetting in terms of who’s the management team, what is their track record, do they have sufficient funding? If they meet that criteria, then we will do those early-stage companies as well.”
There are others who believe in DirectScale’s vision, one where scaling direct sales companies can reach their full potential through a platform that enables rather than hinders. Kickstart Seed Fund, based in Utah and sporting a portfolio of 60+ startups, believes in this vision. NetSuite, based in California and sporting a business management suite used by 24,000+ organizations, believes in this vision. All that’s left is execution.
“We had a meeting with Gavin (Christensen, Managing Director of Kickstart Seed Fund), really hit it off with him and liked his background and attitude,” Smith says. “Together, we all believed that the right place to get this deal done was in Utah. It’s the direct sales capital of the world. With Utah’s technology scene being what it is, it just made all kinds of sense to us to partner with a Utah firm….We were introduced to NetSuite by one of our partners and friends in the space and started having this dialogue about the size and scope of the direct selling industry. They perked up and really liked the idea. As we had this dialogue over the course of several months, they began to be really interested in moving into the vertical and saw us as the right kind of partners to do that with.”
Published 10/27/2015
