In the dynamic world of entrepreneurship, success stories often unfold in unexpected ways. Dave Dickerson, the founder of Accurate Background, epitomizes the resilience and ingenuity that can turn a humble beginning into a thriving business empire.
In this blog, we unravel the fascinating journey of Accurate Background, a company that started with a mere $3000 and has now achieved annual revenues exceeding $400 million, all without the aid of venture capital.
Let’s dive into the narrative of a man who defied conventional paths and transformed challenges into opportunities.
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From a Hispanic Household to Sauna Sales
Dave’s background, raised by a single mom and grandmother in a Hispanic household in LA, reveals the roots of hard work and belief in the American Dream.
His journey took an unexpected turn during college when he stumbled upon the world of home fitness equipment, where he would learn about saunas and steam rooms.
Leaving a fitness company, Dave found himself selling and eventually constructing saunas for clients, showcasing his entrepreneurial spirit. His initial foray into manufacturing saunas provided valuable lessons and attributes, including the importance of inventory control and marketing strategies.
Despite the challenges, the venture was a crucial learning experience, offering insights to shape his future endeavors. The economic downturn of the early ’90s led to the closure of the company, but the lessons learned proved invaluable.
Dave recalls learning to listen to his customers’ needs and translate them into different industries and territories.
Pivoting to Consulting and the Accurate Background Genesis
Dave’s journey continued into the consulting realm, working with pharmaceutical companies and other sectors. His initial position was with a small pharmaceutical company in Orange County that was looking to build an inside sales program.
Dave was hired to build that whole program, which he executed within the one year he was with them. He joined another company, which was a public records aggregator that sold skip-tracing services to banks and private investigators, also trying to build an inside sales program.
The turning point occurred when he identified a gap in the background screening market when working with private investigators. Recognizing the need for streamlined criminal records processing, Dave seized the opportunity, laying the foundation for Accurate Background.
Building a Tech Solution from Scratch
Accurate Background’s inception is a tale of resourcefulness and determination. Armed with minimal technological know-how, Dave, with the help of his wife, created a database system that would automate and streamline the background check process.
A weekend of programming had the product ready for launch the following Monday morning. Dave and his wife continued to build on this initial product, and the company took off from there.
The company initially focused on wholesaling and providing information to other companies before a West Coast retailer’s inquiry marked a pivotal shift towards serving end users directly. The retailer wanted speedy information with a 48-hour turnaround.
Dave was able to deliver most of the data they needed within 24 hours, and it was more accurate than what they had been purchasing at that point.
That’s when the client signed them on, and from that same point, over the next five years, Dave transitioned away from the wholesale side of the business.
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Developing Accurate Further
Dave would spend time talking to the clients to understand the products they needed. Then, he would devise customized solutions.
Eventually, Accurate started developing educational verification, employment verification products, driving records, and a candidate entry process that is widely used today.
Clients onboarding new candidates order background checks directly through the Accurate system, where they can log on. About 80% of the requests come through integrations with their clients’ applicant tracking systems.
All that information is parsed over to Accurate, which will run the report and then send it back to the client. Dave talks about how they continued developing the network, making it better, streamlining it, and making improvements to improve both client and candidate experiences.
Navigating Growth and Operational Challenges
Dave reveals how they started the business with just $3000. But now, Accurate Background’s growth trajectory has involved doubling revenue every two years and navigating various business cycles.
Strategic hires, including industry experts and skilled sales personnel, played a vital role in propelling the company forward. Scaling to 2800 employees required a keen focus on culture building, ensuring a harmonious and growth-oriented work environment.
The Accurate Background Culture
Dave attributes Accurate Background’s success to its unique culture. With a team that values open communication, customer-centricity, and continuous learning, the company has fostered an environment where employees thrive.
The emphasis on hiring individuals with diverse experiences has contributed to the organization’s adaptability and resilience.
Resisting Venture Capital and Partnering with Private Equity
Dave recalls how back when they started Accurate, the background screening industry industry wasn’t as big as it is today, which is now estimated at over $10B. Automation has played a big role in its exponential growth.
However, Venture Capital firms were not investing in the industry back then. So, his strategy was continual reinvestment into the business from the profits.
Despite Accurate Background’s remarkable growth, Dave initially resisted the idea of venture capital and private equity. However, in 2013, recognizing the need for additional capital, he strategically brought in a private equity firm as a partner, raising only debt.
Eventually, that firm approached Dave, wanting to acquire a small minority piece of the business. That partnership has been fruitful, with the firm retaining its stake for over a decade, showcasing the power of strategic collaboration.
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The Future of Accurate Background and the Industry
Dave envisions continued growth for Accurate Background within the fragmented background screening industry. With an eye on consolidation, he foresees the industry evolving similarly to credit bureaus, emphasizing individual ownership of data as the future.
As technology continues to advance, Accurate Background remains poised to adapt and lead in this ever-changing landscape. At the time of this interview, the company was earning over $400M in revenues.
Lessons from the Journey
In hindsight, Dave reflects on the advantages of staying true to his instincts, continuously grinding, and resisting external pressures.
The decision to forego early venture capital, driven by a lack of industry knowledge but resourceful problem-solving skills, ultimately became a defining factor in Accurate Background’s unique success story.
Dave Dickerson’s journey from saunas to scaling Accurate Background is a testament to the power of perseverance, adaptability, and strategic decision-making.
As the company continues to make waves in the background screening industry, it serves as an inspiration for aspiring entrepreneurs, proving that unconventional paths can lead to extraordinary success.
Listen to the full podcast episode to know more:
- Dave Dickerson’s journey started in sauna sales but pivoted to founding Accurate Background, showcasing the unexpected paths entrepreneurship can take.
- The closure of Dave’s first venture taught crucial lessons about inventory control, marketing, and resilience in the face of economic challenges.
- Accurate Background’s inception involved a DIY tech solution created with minimal knowledge, highlighting the power of resourcefulness in building a successful business.
- Scaling to 2800 employees required strategic hires, emphasizing culture building and bringing in experts at each growth phase.
- Accurate Background’s success is attributed to its unique culture, fostering open communication, customer-centricity, and a continuous learning mindset among employees.
- Dave’s decision to resist venture capital initially and later partner with private equity showcases the importance of strategic financing choices tailored to the business’s needs.
- Accurate Background envisions continued growth in the background screening industry, anticipating industry evolution towards individual data ownership and emphasizing adaptability to technological advancements.