In March 2010, Robert Armstrong was finishing a workout at the local 24-Hour Fitness in Honolulu, Hawaii, when he noticed an ad for the gym’s new iPhone app.
“Does Gold’s Gym have an app yet?” was the first thought that entered his head.
The App Store had opened to the public in June of 2008. In the following years, aspiring tech entrepreneurs created iPhone apps for about every use case imaginable.
“They had so many fart apps that Apple stopped publishing them,” Robert says, laughing.
But there was one niche most app sellers hadn’t thought of yet: enterprises. Robert had just finished a five-year career in enterprise tech sales for Oracle. When he returned home, he called Gold’s corporate office and pitched his idea: “24-Hour Fitness has a phone app – do you guys want one too?”
To Robert’s surprise, Gold’s said yes, and in that moment, his corporate app-building agency, Appstem, was born.
Today, after 15 years of work, Appstem brings Robert and his team of 25 engineers seven figures in revenue. Their client list boasts Fortune 500s and other large businesses like Tesla Motors, Johnson & Johnson, Lionsgate, and Caesars Entertainment. Many of them treat Appstem like an extension of their internal teams.
But Robert didn’t always dream of becoming a successful founder. He pursued a career as a professional salesman until the crazy sales cycles pushed him to seek a more tranquil existence as his own boss.
Once he started Appstem, Robert had to navigate a rollercoaster of changing app trends while building for different interfaces (including Blackberry). And while today US-based tech companies are increasingly hiring abroad, Robert has always employed staff at home.
Here’s how Robert started his career and how he recommends building a great agency that outlasts the trends. Also, he reveals his insights into what corporations look for in apps, and where he thinks they’ll be going in the future.
A Salesman’s Life for Me
Robert’s early life was heavily influenced by the world of sales. His father had built a career selling tech products like computers for Honeywell (back when they did computers). He also pushed products for other early tech greats like SAP, Motorola, KPMG, and Verisign.
Robert’s father advised his son to follow in his footsteps – a career that rewarded hard work and tenacity, unlike most white-collar jobs with fixed salaries.
With his father’s advice ringing in his ears, Robert studied Business Marketing at California State University, Chico, a lesser-known Golden State University with a slightly more well-known business school. Chico would, in fact, later count Bootstrappers and Acquire.com founder Andrew Gazdecki among its ranks of successful alumni.
“It’s funny,” says Robert. “I hire people from all these top schools, many of whom wouldn’t look twice at Chico, but it does crank out a number of entrepreneurs.”
Robert graduated in 2003 and moved directly into sales. His first job was a classic, boots-on-the-ground door-knocking role for LaserCycle USA selling things like printer paper. Selling not-so-glamorous goods taught Robert the language of sales, which came in handy when selling ERP software for Oracle just a year and a half later.
At Oracle, Robert entered an intense sales environment that would legendarily go on to forge household names like Mark Benihoff (founder of Salesforce). For four and half years, Robert learned all there is to know about selling to large enterprises while fattening his savings account. He continued until 2008 when the App Store changed everything.
Apps Everywhere
Apple released the iPhone in June 2007 but wouldn’t open the App Store to third-party developers until June 2008. Thereafter a flood of new products entered the market. The App Store was the new Wild West, where aspiring devs built anything they could think of to earn a few bucks.
“People in the Bay Area are crazy early adopters,” says Robert. “I’d wait in the Apple Store and watch people line up to try the newest thing.”
Most apps on the Store at the time were for the small consumer, but Robert was already thinking bigger. He was selling enterprise software to clients who might be interested in building their own applications, too.
By 2010, Robert decided to leave Oracle. He’d profited well off the intense sales culture, but at businesses like that, you were only as good as your next sales cycle. He was ready for a break.
He turned in his resignation letter and immediately went on vacation to Hawaii (that’s how it goes in sales). Six weeks later, he’d landed Gold’s Gym and was the first enterprise app builder in the Bay Area.
The Only Horse in the Race
Robert was part of a new movement. All he had to do was offer a mobile app to an enterprise and they’d more often than not say yes.
“Back then, apps were so new that we didn’t need to get too focused on verticals,” says Robert. “We also had mobile devs and most other people didn’t.”
For example, Robert and his team answered a request for proposal from Enterprise Rent-a-Car to build an app. Of the seven applicants, six didn’t specialize in mobile apps.
“Just saying you knew the best practices for UI and UX was enough to separate yourself back then,” says Robert.
In under a year, Robert and his cofounder earned the equivalent of Bay Area salaries from their mobile app-building contracts. From there, the business grew steadily and profitably, adding a client or three every year and hiring just enough developers to maintain the contracts. After three years, Appstem cleared seven figures in revenue.
Finally, in 2014, Robert bought out his cofounder who wanted to move on to other projects. He looks back at their time together fondly.
“I think cofounders are nice because you have a sounding board,” Robert adds. “But you can also get that from your management team.”
What Makes Enterprise App Sales Different?
Robert was able to become a successful enterprise app creator because he understood what enterprises wanted. When working with large organizations, he argues, set expectations upfront and avoid hard selling.
“From the sales side, we have a pretty soft approach,” he says. “There’s a lot of AI and automation and pitches and cold calls. Being a boutique firm, we focus on relationships. We like to give a lot of information.”
Back in the 2010s, just being specialized in building apps made a huge difference, but it takes a lot more than that now to impress a Fortune 500, Robert says.
“Fifteen years later, there are millions of apps so industry knowledge is more important,” says Robert. “For example, we now specialize in medical tech because we have lots of experience operating within industry regulations.”
He also notes that enterprises are rarely the clients you want to pursue if you like being on the cutting edge of new technology.
“You saw a year ago Apple launched the Vision Pro,” he says. “We don’t have enterprises looking for Vision Pro integrations. They want things that already have a strong user base and utility.”
However, he believes there are a handful of new technologies that are hot for enterprises today.
“Natural language processing and voice inputs as a way to be more efficient will be big,” he says. “Another one we see is touch screen kiosks, especially in the QSR and hospitality spaces.”
Proudly Based in San Francisco
While some of the largest tech businesses in the world are scrambling for affordable engineers in other countries, Robert has pushed to remain a San Francisco-based company while promoting a remote work culture. And, as most people in tech know, paying 25 Bay Area programmer salaries is no small feat.
“I’m extremely proud of the tenure of the team members,” he says. “The average employee has worked with us for over four years. That was a focus for us. I wanted to create a good company culture and work-life balance and make a place where people like working. People enjoy working here, and I enjoy working with them.”
In his opinion, the US still needs local engineering talent, and he is having trouble understanding why the job market has so many jobless programmers. He believes hiring local helps him obtain those coveted enterprise contracts.
“We work in healthcare with a lot of proprietary technologies,” he says. “It makes more sense to use trustworthy coders on our team. I’ve heard the horror stories of hiring poorly trained offshore teams. We go to market much faster due to how we operate.”
Robert encourages aspiring entrepreneurs to build their ideas. He thinks it’s only getting easier.
“We have a lot of new things today that weren’t available fifteen years ago,” he says. “I can’t write code but I can quickly start a product or software product to go to market with.”
He also thinks you either need to learn sales or team up with a salesperson.
“You need to get to market and compete.”
While Robert’s story reads like a stroke of fortune, his past deeds contributed to his eventual success. Once he’d captured the enterprise app-building industry, he slowly built his business by focusing on what made his clients successful. While fortune plays a part, Robert made the most of his opportunities, and as a result, grew into the successful founder he is today.
