Year Founded: 2001
Annual Revenue (2013): $39 million
Category: Technology Solutions
What It Does: Secures backup data, protecting home and business files.
Matthew Dornquast has had an entrepreneurial spirit for a long time now. In the early 1980s, when he was still a teenager, he founded his first software company. It was a learning experience—with some lessons harder learned than others—but it foreshadowed the success to come. Three decades later, Dornquast is the CEO of Code42, the rapidly growing software company he co-founded in 2001.
CrashPlan, Code42’s flagship product, protects valuable endpoint data—specifically unstructured data, which entails everything from photos and websites to medical records and spreadsheets. Code42 originally developed CrashPlan as a business application so that companies could keep sensitive information secure across various platforms. Dornquast knew the business world well: His IT career has included stops at several Twin Cities-area companies, such as Control Data, Blue Cross Blue Shield, and Minneapolis ad agency Fallon Worldwide.
But Code42 found that the Midwestern business response was tepid at best. At the time, Dornquast says, companies didn’t see protecting data as a major concern. Code42 changed its tactics in 2007, repositioning CrashPlan toward home users.
Since then, more and more businesses have come to realize the importance of keeping data secure. Code42 now protects information on millions of devices and is used by more than 30,000 businesses around the world; customers include Adobe, Target, Procter & Gamble and NASA. Code42 has been named to Forbes’ America’s 100 Most Promising Companies list twice; since 2009, revenue has increased 101 percent.
So even though it took Code42 a little longer to gain traction than Dornquast and his team first imagined, when growth happened, it has happened in a big way. “The biggest challenge—and it’s not over with—is staying true to your values while growing the business,” Dornquast says.
Code42’s core values are all about providing customers with products that fit their distinctive needs, maintaining a talented and motivated workforce, and building the Minnesota tech scene. CrashPlan is constantly evolving as business technology changes, and keeping up with that while not losing sight of the mission is a constant concern. Code42 was bootstrapped at the beginning, but when the company needed to scale quickly to meet market demand, it debated whether to take in outside investors. Ultimately, Dornquast and his team decided to hold a round of funding in 2012, which netted $52.5 million from Palo Alto, Calif.-based Accel Partners, with participation from Minnesota venture firm Split Rock Partners.
“I think we made the right call,” Dornquast says. “But it was still a big thing to overcome. We now have other people that we need to think about. What’s interesting, though, is that it’s not that we keep them happy; we both want the same things. The difference is we want to do this for the long term.”
One of those like-minded investors is Michael Gorman, a managing director at Split Rock Partners and a member of Code42’s board. Gorman had been using CrashPlan at home and the office for years; given Split Rock Partners’ focuses on the software and cloud-based tech, the investment partnership was a natural fit.
Gorman credits the company’s success to world-class talent and Dornquast’s leadership. “He’ll be the first to say he’s been fortunate to work with great people,” Gorman says, but “it does require leadership for all that to coalesce.”
Dornquast, Gorman adds, brings an authentic personality to everything he does and adapts to new challenges. “He has a voracious appetite for new information and learning.” Gorman notes. “He keeps an open mind to input and actively seeks out other perspectives that will help him build the business.”
To Dornquast, part of building that business is putting Minnesota back on the information technology map. Code42 sponsors local tech organizations such as Minnebar, the Minnesota High Tech Organization and the Minneapolis chapter of Girls in Tech.
“I think a really important question entrepreneurs need to ask themselves is what will you do when you’re successful? What’s your exit strategy?” Dornquast says. “We’ve never had an exit strategy. What’s driving the vision is what kind of difference we can make in our community.”