Interview with Jeffrey Dachis, Dachis Group

Yesterday, Austin-based Dachis Group (, the social business and media consultancy firm headed by former Razorfish CEO Jeffrey Dachis, and backed by Austin Ventures, said it had raised another $30M in a Series B funding round for the company. To gain some insight into how Dachis is putting together a company aimed at helping businesses leverage the emerging world of social sites such as Facebook, Twitter, and YouTube, we spoke with Jeff to hear his thoughts on the area.

Congrats on the new funding. Can you tell us a little bit about your strategy of acquisitions and how you connected with Austin Ventures?

Jeffrey Dachis: It's been the most efficient means to scale our talent base. At Razorfish, I did something like 27 acquisitions in a 20 month period. We're building the company to scale it so that big businesses can utilize us to help them. I brought the concept of the business to Austin Ventures, after my wife wanted to move to Texas. I was still hanging around in New York, and commuting here, and a friend-of-a-friend of Austin Ventures sort of located me, and I located them. We began to share ideas on where the business was going, and they suggested I hang around and see if there was something for us to do together. For the most part, the idea is that when is this social thing going to get down to business--when is social networking going to become more than an advertising platform. That's the nexus of how the concept evolved. We very quickly saw the opportunity, and decided the fastest way to do this was to buy or build, and we are pursuing both.

You've made quite a few acquisitions -- I think we counted five last year that had been announced--what draws you to companies?

Jeffrey Dachis: There were seven acquisitions. The macro concept is that we're trying to help business connect, communicate, and engage with their constituents, which includes customer, partners, vendors, and shareholder, and employees. We've been looking at opportunities that allow us to fill out what I call the social business engagement spectrum. That's where businesses are able to engage with employees and the community--examples like Jive, or Socialcast, or Yammer, or a variety of tools like SharePoint, Lotus Notes Connections, Telegent, etc. Those variety of tools enable businesses to engage with their employees and create environments where ideas can be shared, knowledge can be shared, and expertise can be shared, to create efficiencies and help unlock value. What's missing is businesses understanding how to organize for that collaboration to occur, and how to integrate those tools to allow collaboration. We're interested in trying to understand those problems.

Whether it's tools and technology, consulting services, or managed services, we're trying to figure out across the employee engagement spectrum, and figuring out what value can be unlocked, and how to do it. There are a variety of firms unlocking different pieces--knowledge management firms, business intelligence firms, business process reengineering firms, tools and technology companies--those are all potential opportunities. The same is true from the customer engagement spectrum--there are tools and technology, form Facebook at one end and Twitter, SurveyMonkey and all the different community platforms, companies like Bazaarvoice--it's figuring out how businesses take advantage of that. There are also a variety of firms that help businesses do that, from social media marketers, some PR firms to some management consultancies, technology integrators, and some managed service providers. Those are all potential opportunities with whom we'd like to partner to help business understand social. This might sound complex, but it doesn't fit into a box. It's now what everyone is used to.

Has it been difficult to integrate all those different companies into the company, and do you have a strategy on how you are managing that effort?

Jeffrey Dachis: We definitely have a strategy, and it doesn't have to be difficult. Though, there are always challenges, and they're always new and unique. However, I kind of come with a toolkit and experience in doing so, and to the extent that problems can be mitigated that's something we're attempting.

You made your name with RazorFish in New York, but this time are building things up in Austin. What have been the positive or negative things of doing things here?

Jeffrey Dachis: Austin is fast becoming the social business capital of the world. For better or for worse, there are lots of social startups, and lots of social businesses that are technology startups or firms which are focused on social media, social media marketing, and social business. It's been a magnet for more people to move to Austin. That is very cool. The lifestyle here is one that is familiar to me, because I grew up in Minneapolis, Minnesota. People are nice here, and there is a fitness oriented mentality. As you know, Lance Armstrong is here. The surroundings are beautiful, and it's a great place to raise kids, which is all wonderful. That said, it is a relatively small town compared to New York City, so I think there are some challenges in the volume of people and talent here. The talent here is not quite as deep, so you don't have as deep a pool of resources. But, those are the tradeoffs you make, since if you have more people, you have more pollution more cars, more crowds, more noise, and all kinds of things. But, I love Austin.