This story appears in the February 11, 2013 issue of Forbes.
To find John Duffy, 3Cinteractive’s cofounder and CEO, walk past the motorcycles and graffiti-splattered guitars, past the chain-link- fence cubicles and a conference room wrapped in corrugated metal. In a sunny corner office at the headquarters in Boca Raton, Fla., beyond a coffee table topped with a book of Van Halen photos, sits “Duff,” in front of a polished concrete wall and yet another custom guitar, this one a Gothic-black instrument with a human skull and bones sculpted in relief on the sound box.
When I point out the larger-than-life John Duffy “Fathead” that employees secretly plastered to the window of his office, he’s momentarily bewildered. “Christ, I didn’t even f–ing see that!” he says. “That’s awesome!” Taking a closer look, he has second thoughts. “But why couldn’t they have gotten a picture with less chins?”
Even without the effigy, 3Ci is unmistakably John Duffy’s company. The rock ‘n’ roll decor–Duffy, 47, sports a head of spiky gelled hair and a wrist full of multicolored string bracelets–distracts from the unalterable fact that 3Ci is an enterprise technology company, dealing in third-party software integrations, mobile payment processing and client work flows, among other things that David Lee Roth never sang about.
When it comes to making money, though, 3Ci sings. Founded by Duffy, President Mike FitzGibbon and COO Mark Smith in 2005, the company grossed 60% on $28.7 million in sales in 2012; this followed 70% compound annual growth over the last four years. Driving that expansion: corporate clients like Walgreens, ESPN and Best Buy, which pay 3Ci upwards of $10,000 a month, not including transaction fees, for software to help them reach customers on their mobile phones.
Want to send an SMS text to remind a patient to refill his meds at the pharmacy? 3Ci links its software with drug chains’ customer management systems, automatically sending hundreds of thousands of prompts each month. Utility companies use the tech to warn customers about imminent shutoffs. A link in the text takes late payers to a mobile Web page to surrender a credit card number. The heat stays on, utilities get their cash, and 3Ci, meanwhile, gets a small cut of each payment.
The company delivers mobile news alerts, sports scores and fantasy sports updates from mass media brands. For retailers, 3Ci powers mobile “showrooming,” letting consumers pull product information and compare models by scanning QR codes in stores.
“They do stuff that’s real,” says Forrester analyst Julie Ask, while a lot of panicky boards struggle to flesh out mobile strategies beyond the app. For corporate customers the basis-point improvement in customer retention and engagement that 3Ci delivers is “worth a significant amount of revenue and, really, earnings per share,” says FitzGibbon, Duffy’s spit-and-polish lieutenant–and ultra-straight man.
Yet Ask cautions that the mobile messaging industry is messy: “fragmented,” “in flux” and “immature.” Just where 3Ci, a strong and early player, fits in is far from certain. A list of entrants in the amorphous market ranges from blue chips likeAT&T to smaller outfits like Phizzle, another member of America’s Most Promising Companies. Duffy admits he sees so many different types of companies battling for deals he can’t even name his chief rivals. “If we don’t see some competitors pop up in the next 12 months, I will be worried,” says John Sculley, the formerApple CEO and PepsiCo president who has invested in 3Ci and serves as its chairman and Duffy’s chief sounding board.
Chaos? It’s part of the origin and continuing dynamic of 3Ci. Today there’s still creative tension between Duffy, the overwrought visionary, and FitzGibbon, the crisp executor of strategy. Smith, whom Duffy has called “the janitor,” rounds out the trio by mopping up the back office and h.r. clutter.
It goes back a long time. As a sales rep at MCI in Boca Raton, Duffy had also been starting businesses and making investments since 1995. His most successful venture was iBill, which handled online credit card transactions in the early days of the Web. Duffy never took an operating role, but he came up with the idea, put up seed money and hired the team, including Smith as vice president of sales. Founded in 1997, iBill ended up selling its services mostly to porn sites, much to Duffy’s embarrassment. He came away with just under $1 million when it sold for $100 million five years later, his stake heavily diluted by subsequent investments. “I see it as a lost opportunity,” he says. “When I look at what PayPal did at the same time, that’s what I would measure it against.”
Leaving MCI in 2000, two years after its calamitous merger with WorldCom, Duffy nurtured smaller ventures, including a string of comedy clubs and real estate investments, while keeping an eye out for talent to run the next company. FitzGibbon, who’d taken over and expanded Duffy’s MCI accounts when he left, caught his eye. “I said, ‘There’s someone you can build a business around,’ ” Duffy recalls.
A stocky, close-cropped 39-year-old, “ Mike’s the drill sergeant,” Smith quips. “He’s tactical, very process-oriented.” In the office by 7:30 a.m. each day, he wears neatly pressed button-downs and slacks, out of place next to Duffy’s baggy uniform of golf shirts and jeans.
Invited to the CEO’s office in Delray Beach, Fla. in October 2004, FitzGibbon listened as Duffy evangelized about a big opportunity. “He said, ‘I’ve got the next tollbooth!’ ” FitzGibbon remembers. “ And then he pushed over a box of business cards with my name on them.” The company was called SMSaging–pronounced “S-M-essaging”–which inevitably became “smessaging” or “SMS Aging” in the mouths of the uninitiated. Duffy, who went on to invest $2 million in the venture, made clear that FitzGibbon would enjoy almost complete control as president, including name changes. The only guideline: The business had to sell a mobile-based service to help companies reach customers.
Leaving his job in sales, FitzGibbon turned to three salespeople he had once hired at MCI. “I said, ‘I can’t afford you guys right now. Keep your day jobs, but you need to start prospecting for deals.’ ” The team commandeered MCI funnel sheets to keep track of leads and secretly holed up in a company conference room every Friday for calls with FitzGibbon. In August 2006 they nabbed their first customer, providing JM Family Enterprises, the largest distributor of Toyotas in the U.S., with a way for employees to check into a centralized database via text messages after hurricanes. FitzGibbon wrote the contract and later whipped up a makeshift invoice using Excel.
His ad hoc approach soon got its comeuppance. During a disastrous meeting with the mobile division of Viacom in New York that October, the division’s chief prodded FitzGibbon, “ Come back when you have a real company.” He returned to Florida in a rage. “Mike came in and just smashed everything off my desk and said, ‘This is bulls–t!’ ” Duffy remembers. FitzGibbon demanded more people and more cash for the business. The two sat down, wrote up an investment prospectus and sent it out to the network of investors Duffy had acquired over the past 11 years. They raised $1 million in a month, some checks arriving in the mail without a follow-up phone call.
With new capital, 3Ci took more definite shape. FitzGibbon hired his sales team and established a technology office in Uruguay, a burgeoning tech hub where Microsoft and IBM have offices. Mark Smith, 47, joined as a partner in 2007, taking on a “ handyman” role to figure out payroll, accounting and gritty internal operations. “Mark is the glue in this business,” FitzGibbon maintains. After signing ESPN in January 2008, the company finally began to stitch its messaging technology into a scalable platform rather than build requirements from scratch for each client.
Long distracted by other ventures, Duffy became more involved as 3Ci showed promise. In 2007 he wound down his investments and became fulltime CEO–his first such stint. Still, day-to-day ops belong to FitzGibbon and Smith, who manage sales, execute strategy and handle internal operations; Duffy maintains relationships with carriers, investors and the media. “The three of us together make one normal person,” he observes. “A pretty kick-ass person, too.”
A few more KAPs wouldn’t hurt. First turning a profit in 2009, 3Ci now handles a billion mobile messages each month–during which 25 million Americans engage with a voice recording, text or app–a figure set to double by midyear. The company intends to exploit these numbers by charging clients on a per-customer basis. Next quarter 3Ci is introducing tools that integrate social media and big data services into its existing products.