Ross Buhrdorf Built ZenBusiness Into a Skyrocketing Platform to Make Managing Small Business Easier

By Scott S. Smith | Friday, 10 December 2021 | Feature, Interviews, Startup

Ross Buhrdorf was the founding Chief Technology Officer at HomeAway (now known as Vrbo), the global leader in vacation home rental marketplace acquired by the Expedia Group in 2015 for $3.9 billion. He might seem like an unlikely corporate leader to help aspiring small business owners, but his growing startup, ZenBusiness, can induce a Zen-like calm during the constant crises of being an entrepreneur.

"The pandemic has permanently changed the world, and there has been a tidal wave of people who have taken the leap to follow their dream of becoming entrepreneurs or who want to create a side hustle," Buhrdorf told Startup Savant. "We want to help them change the world by making the bold leap into self-employment with less of a fearful experience."

Growing up in Lincoln, Nebraska, his dad bid on salvaging the contents of torn-down buildings (which he resold), while mom hung wallpaper, and together they did home renovations. Eventually, they extended their skills into becoming independent realtors.

They were good role models for a future hustler. Buhrdorf shoveled snow as a kid and paid expenses in college by chopping wood. While earning his computer science degree at the University of Texas at Austin, he interned at Data General, a booming microcomputer company. When a downturn resulted in layoffs, he stayed on because even though he wasn't being paid much, he delivered a lot of value.

"There was an early lesson that there are risks in being an employee of a thriving big company, so becoming an entrepreneur seemed to me like it would just be taking the risks into my own hands," he said.

But after graduation, he was married and needed some security, so he became an employee of Tandem Computers in Cupertino, California. However, his entrepreneurial dream was sparked further by being assigned to an internal startup that built the first fault-tolerant UNIX machine. These were multiple independent processors and backup storage devices that would be relied on by banks, stock exchanges, telephone switching exchanges, and others that needed maximum uptime and no data loss in the event of system failure (Tandem became part of Hewlett-Packard Enterprises).

His first startup from scratch was Hal Computer Systems, where he helped to build the first fault-tolerant SPARC chip, funded by Fujitsu, which acquired full ownership in 1993 (this type of chip was the key to the success of Sun Microsystems). This was followed by a brief effort to turn another startup, Salion, into a resource for managing the supply chains of automobile manufacturers, just before one of the industry's collapses.

He joined Excite, a web portal, in 1995, which became the sixth most-visited website two years later.

"Things were going so well in high tech, I decided to invest everything I had in Sun Microsystems and Cisco, which was the largest cap company in the world at the time," recalled Buhrdorf. "But then everything came crashing down in 2001, and Excite went bankrupt. That taught me that companies need to offer real value for customers with a business model that is about more than just having a lot of traffic to your site. You need to focus on unit economics, a scalable business, and how to out-compete the incumbents."

He had much better luck when he joined Austin-based HomeAway as the founding CTO in 2005. HomeAway invented the short-term vacation rental marketplace. It initially raised $160 million in venture capital and another $250 million in 2008. It came to global attention when it featured Chevy Chase and Beverly D'Angelo in a short film "Hotel Hell Vacation" and an ad campaign based on the movie "National Lampoon's Vacation," which was also broadcast during the Super Bowl in February 2010. Buhrdorf helped oversee 28 acquisitions during his time, and HomeAway eventually merged with Vrbo in 2020.

"HomeAway was a unicorn that delivered great results not only for investors because it was always profitable, but for owners of the vacation rentals, which is an example of why the business model is so important," said Buhrdorf. "I learned how to do successful acquisitions, but trying to merge the technical teams of two companies was always a grueling process, and I decided I never wanted to be a CTO again."

ZenBusiness Helps Entrepreneurs Change the World

That left the option of being booted upstairs at his next venture. Buhrdorf left HomeAway in 2017 and wanted to take time to reflect on what he had learned, but he kept being pestered by two friends who wanted him to join them in what was originally meant to be a way for law firms to have branded websites that would generate leads through search-optimized content (SEO). His experience with SEO as an online marketing tool to attract customers at HomeAway helped him see the possibilities, and he agreed to be CEO.

"Lawyers turned out to be a really tough sell, so we pivoted to our far more ambitious vision of the ZenBusiness platform, which helps any entrepreneur to form, manage, and grow a business. We handle all the back-office details, allowing them to focus on what they are passionate about," Buhrdorf explained.

The first round of seed money, including their own, was $15 million and in 2020, they raised another $55 million. In November 2021, ZenBusiness closed a $200 million Series C funding round, valuing the company at $1.7 billion. As the largest SaaS financing round out of Austin, ZenBusiness became the latest unicorn in Texas. The funding round was led by Oak HC/FT, with backing from SoftBank Vision Fund 2, and existing investors Cathay Innovation and Greycroft. The funding allows ZenBusiness to continue to invest in the products that help propel customer growth and manage ongoing success, including the ZenBusiness app and new embedded fintech capabilities.

By March 2020, ZenBusiness had 30,000 customers, and by the end of 2021 it had over 200,000.

"Our growth has primarily come from acquisitions that have provided us with new niches where we have acquired more high rankings in Google searches on educational, well-written articles, blogs, and now step-by-step video tutorials, explaining clearly to business owners how to be successful. We have really ramped up our content with the recent launch of ZenBusiness Academy."

What also makes its customers stay active is extraordinary service. Most corporations give lip service to customer service, while investing as little as possible in it and often outsourcing it overseas for less-than-ideal communication and results.

"Doing it right starts with whether you view it as a cost or as a pillar of your business," explained Buhrdorf. "We are emphatic that this is a pillar, and we pay above-market rates for our customer-facing people, who are supported by product managers and engineering teams who build the back-end tools. They have rigorous metrics to respond quickly to emails, chat, and phones. My father used to try to call me at HomeAway and complained about how hard it was to get anyone to answer. First-time entrepreneurs are engaging in a fearful endeavor and don't know what they don't know, so when they can't figure out what to do, they would love to talk with someone who understands their problems rather than trying to work with an automated bot or someone who doesn't speak fluent American English and doesn't know much about small business. We have each of our engineers, after they are with us for a while, do a tour of duty dealing directly with customer technical problems that need to be fixed."

Buhrdorf’s tips for new entrepreneurs include:

• When you start a business, know that it is going to be much harder than you imagine but also much more rewarding. Going in with eyes wide open, being flexible, and persistent in the face of adversity are the keys to overcoming fear and achieving success.
• Put your main focus on gaining revenue rather than other metrics of growth that don't necessarily put money in the bank.
• Really get to know your customers, listen to them, and always be honest.
• No matter what, have a positive attitude about what needs to be done, which will help keep up your energy to reach your short-term goals. Optimize your mental wellness.

In April 2021, ZenBusiness received the Silver Stevie for Startup of the Year for Business Service Industries, Buhrdorf was honored as CEO with a Silver for Business and Professional Services, and one of the other three co-founders, Shanaz Hemmati, now COO, was awarded a Bronze as Woman of the Year for Business Services. The company was also recognized by Quartz as one of the “Best Companies for Remote Workers” in September 2021.

ZenBusiness is organized as a Public Benefit Corporation, which prioritizes helping the communities it serves. As part of its programs in this area, it launched a grant program early during the pandemic, giving $1,000 to 100 customers impacted by the coronavirus. Many recipients told ZenBusiness it helped them survive.

Recently, ZenBusiness surveyed its customers and asked what the most important reasons were for taking the entrepreneurial leap. The answers, in order, were:

1. To change the quality of their personal and career lives.
2. To make more money.
3. To change the world.

"These are aspirational goals, and 89.9% told us they thought ZenBusiness would help them achieve all three," said Buhrdorf. "I love coming to work each day to help change the world through our core underserved segment of first-time business owners. We live to help them continue to contribute to the economy and the world."

About the Author

Scott S. Smith

Scott S. Smith has had over 2,000 articles and interviews published in nearly 200 media, including Los Angeles Magazine, American Airlines’ American Way, and Investor’s Business Daily. His interview subjects have included Bill Gates, Richard Branson, Meg Whitman, Reed Hastings, Howard Schultz, Larry Ellison, Kathy Ireland, and Quincy Jones.