Scott Dorsey Reflects on ExactTarget & the Rise of Indianapolis Tech
The expertise and guidance of a savvy mentor can change the fortunes of a startup.
Bob Compton was that person for ExactTarget, says co-founder and former CEO Scott Dorsey. Compton—an IBM veteran, successful investor, and one of the godfathers of Indianapolis’s burgeoning tech community—was ExactTarget’s lead investor and its chairman in the early 2000s, when the Indianapolis-based marketing software firm was getting started.
Compton provided more than capital. He was also a font of knowledge and encouragement, and his presence “changed our trajectory at ExactTarget,” Dorsey (pictured above) says. The company became a pillar in the Indianapolis tech community, eventually going public and later selling to Salesforce for $ 2.5 billion in 2013.
Compton “was my mentor for almost a decade as we were growing and scaling ExactTarget,” Dorsey says in a recent phone interview. “I always thought if we had a successful exit at ExactTarget, I wanted to be doing exactly what Bob was doing.”
Dorsey is getting that chance now. Since leaving Salesforce two years ago, he has put time and money into nurturing Indiana startups both on his own and through High Alpha, a firm he co-founded last year that operates a startup creation studio and a separate venture capital fund, both focused on enterprise software. He sits on the boards of High Alpha; TechPoint, an organization that runs programs aimed at promoting and improving Indiana’s tech scene; Nextech, a nonprofit trying to solve the talent crunch in computer science; startups such as Tinderbox and Lesson.ly; and other organizations, like the Indiana Sports Corp.
Dorsey is part of a group of successful entrepreneurs-turned-investors in the Indianapolis area who are putting their wealth and expertise to work shaping the next wave of startups and company builders. His peers include Karen and Mark Hill, who sold their financial technology firm Baker Hill to Experian in 2005, and now run Collina Ventures; and Bill Godfrey, who sold marketing software company Aprimo to Teradata in 2010 for $ 525 million, and is now a managing director of 4G Ventures, according to his LinkedIn profile.
Lesson.ly, which sells corporate-learning automation software, provides an opportunity for Dorsey to play the kind of role that Compton served for ExactTarget. Dorsey personally invested in Lesson.ly in November 2014, he says. He joined the Indianapolis startup’s board last week, about three months after it snagged a $ 5 million Series A round from OpenView Venture Partners, Allos Ventures, and High Alpha Capital.
“Scott is the mentor of a lifetime,” Max Yoder, Lesson.ly’s co-founder and CEO, said in a press release announcing Dorsey’s board appointment. “We speak candidly, we debate, we hug it out, and repeat. It’s exactly what Lesson.ly needs.”
For his part, Dorsey says he has a great relationship with Yoder, whom he says is talented, has a big vision for the company, and is a “joy” to work with.
“He’s one of these young entrepreneurs that’s extremely coachable,” Dorsey says. “It’s fun to work with people like Max and [chief operating officer] Conner [Burt] and the team.”
Lesson.ly doubled its staff from 17 to 34 employees earlier this year, with plans to add another 10 people by the end of 2016. It’s still early for the startup, but if all goes according to plan, Dorsey thinks Lesson.ly could form a significant piece of the growing local tech sector, which is anchored by firms like Angie’s List and Salesforce’s rapidly expanding outpost.
The Indianapolis tech scene looks much different today than when Dorsey moved there about 16 years ago and started ExactTarget, after getting his MBA at Northwestern University. One of the main challenges at the time was that Indiana had not yet adopted daylight saving time, which put it “off kilter with the rest of the country,” Dorsey says. “As silly as it sounds, it was a real barrier to working with partners … in a seamless way,” he adds.
The other big challenge, he recalls, was a “lack of connectivity.” He means physical, not wireless. There weren’t any direct flights from Indianapolis to San Francisco, for example; now there are, which helps startups access more sources of capital and potential customers.
Dorsey thinks Indianapolis now has a “vibrant” tech scene that is picking up steam. He points to a group of growing software companies, an increasing number of serial entrepreneurs, and more support for the tech industry from local and state politicians.
“We have excellent momentum that I was proud to be a part of creating,” Dorsey says. The latest example: Salesforce is hiring more than 800 people in Indianapolis over the next five years as part of a $ 40 million investment that involves renaming Chase Tower—the state’s tallest building—Salesforce Tower. “That’s a big flag to put into the ground,” Dorsey adds.
Still, there are plenty of things Indianapolis needs to work on. Like many of its Midwestern peers, the city lacks what Dorsey calls “scale-up capital” to help startups get over the hump to become thriving businesses. The area also needs a larger pool of experienced tech leaders, Dorsey says.
But he’s bullish on Indiana for many of the same reasons that investors like Drive Capital and AOL co-founder Steve Case have touted the Midwest as an up-and-coming startup region in recent years: its central location, low costs of living and doing business, strong universities pumping out talented graduates, loyal and hard-working employees, and a supportive business community.
“In smaller tech communities, there’s a level of closeness and cohesiveness,” Dorsey says. “That’s very significant.”