|| HQ: Seattle
Additional Offices: Chicago
Billable Consultants: 48
2009 Revenue: $2.4M
2010 Revenue: $4.9M
Revenue Growth: 104%
2011 Revenue: $6.4M (projected)
Client Industries: High Tech
Service Lines: Strategy
No path to consulting, it seems, is clearly marked. But Shanaz Diefendorf, president and co-founder of Derflan, came to consulting by way of a high school teacher in New York City.
As in, she was a New York City high school teacher for five years before leaving to pursue an MBA. “If you told that high school teacher back then that I’d be owning a consulting firm, I would never have believed you,” Diefendorf says. “But then again, the threads of similarity are there, and, for me, it was always about helping people.”
After business school, Diefendorf first worked for an Internet start-up, then in Microsoft’s marketing department focused on customer campaigns. Part of her job, incidentally, was hiring and working with consultants. Although she enjoyed the work, the travel was grueling, and she had just started a family. In 2002, Diefendorf decided to launch Derflan with Ellen Sova, a former business school colleague. The business model was to help small and medium-sized businesses, which couldn’t afford chief marketing officers, realize their full marketing potential.
“We would create the marketing plan and they would run with it,” or so she thought. “Funny enough, we started to get calls from bigger and bigger companies.” And, ironically enough, even Microsoft ended up being a client. “Microsoft’s interest was more the way we approached business; they wanted us to come in and rethink their strategy, almost as if it was a new business.”
Seattle-based Derflan had suddenly found its niche: bringing an entrepreneurial focus to much bigger companies, including Microsoft and T-Mobile. As a result, the firm grew faster than they expected. But the watershed moment for the firm occurred in the fall of 2008.
“The economy is imploding, especially in Seattle, and you’ve got this tech pocket here with highly-skilled workers from great, innovative companies—Starbucks, Amazon, Microsoft—laying people off, and many times those cuts were made in the marketing departments,” Diefendorf says. “So, the opportunity is two-fold: One, we have a lot of great talent looking for work; and two, these companies still have revenue goals they need to meet.”
So Derflan took the downturn and turned it into a positive. “Our message was—we get it. You may not have the resources right now to keep your full marketing staff, but you can rely on us,” Diefendorf says. “We’ll be that strategic advisor. We’ll be that staff augmentation you need to keep your business steady. We know you can’t afford that full-blown marketing team, but we both know you can’t afford to do nothing.”
Derflan grew from 17 consultants to 42 consultants in 2009 while more than doubling its revenue. “If you look at the history of other downturns, the companies that succeeded never cut back on their investment,” Diefendorf says. “This is the time to ask yourself what you are going to be. When we came out of this downturn, all of a sudden, we found that we had surpassed a bunch of competitors and made a name for ourselves.”
Even with all the success, Diefendorf says she doesn’t want the firm to get too big. Derflan will have 65 consultants by year’s end and is projected to earn some $6.4 million in revenue. “I don’t have an exact number for how big is too big, but I love knowing exactly the impact we’re having with our clients,” she says. “I’ve been at a big company, and I don’t want to lose that connection.”
She also says she never wants to lose the inspiration of what made her a consultant—and a high school teacher, for that matter—having an impact and making a difference. To that end, a portion of the company’s profits goes to the Global Fund For Women, which promotes women’s economic security, health, education and leadership.