In 2022, the founder of software company Domo stepped down as CEO after he was accused of sexually assaulting an employee on a work trip, an allegation he denied. A year later, he came back to lead the company.
Since then, the troubles of the once-hot startup have worsened, rocked by executive departures, new competition from AI agents, and the drunken-driving arrest of its founder and CEO, Josh James.
James was arrested last year on a charge of driving under the influence of alcohol after crashing his BMW into a mailbox, according to bodycam footage and a police report reviewed by Business Insider. He pleaded not guilty and has an upcoming hearing scheduled for July. The incident hasn’t previously been reported.
In December, James said on an earnings call that he had checked himself into a residential substance abuse treatment center and was reducing his duties to “focus on recovery.” Then in January, the company said its chief operating officer, Mark Maughan, had resigned with a multimillion-dollar separation agreement to settle allegations of physical contact. The company didn’t provide any further details on the incident.
The company’s share price has fallen about 80% over the past year, knocked in part by a downturn in software stocks driven by advances in artificial intelligence.
Domo said in June that its annualized recurring revenue no longer met the minimum required for its loan covenants and that it didn’t have enough cash on hand to repay its outstanding balance of $137 million in principal and related fees. Domo entered into a forbearance agreement giving the company until July 31 to enter into an agreement to sell the company. Domo, which formally began exploring strategic alternatives in February, said in June that it was in advanced talks on a potential transaction.
Domo was once valued at $2.8 billion. Its market capitalization on Friday stood at $133 million.
Analysts say the leadership changes, along with threats to the business posed by artificial intelligence, have contributed to Domo’s share price decline.
James controlled 76% of the voting power at Domo as of April 30, thanks to supervoting Class A shares that give him 40 votes per share, compared to one vote per Class B share sold to the public, according to a company filing.
This story about James’ second go-round at helming the company he founded, and the decline of one of the most influential software companies in Utah’s fast-growing tech hub, is based on interviews with more than a dozen former employees, as well as internal documents, company filings, and police records.
Through the company, James declined an interview. Domo didn’t comment on the arrest, Maughan’s departure, or the company’s decline in revenue. Domo’s board members didn’t respond to requests for an interview. Maughan, through his lawyer, declined to comment.
Early Domo investor John Richards, managing partner at Startup Ignition, said James and his founding team in the early days were “excellent entrepreneurs in terms of looking out for their investor interests.” Richards, who has since sold all his shares, noted that other companies have improved their fortunes by bringing back a founder into the CEO role, as Apple did with Steve Jobs.
“Companies have to move faster,” Richards said. “They need kind of a benevolent dictator. Is Josh the right one? I don’t know… If his personal issues prevent him from being that Steve Jobs-like character, they should see if they can find another strong leader.”
A car crash
Shortly after 4 a.m. one morning last August, Sandy City police arrived at a quiet residential neighborhood south of Salt Lake City where a gray BMW iX had crashed into a mailbox, scattering mail and stone debris. The driver — a man with disheveled hair, wearing an olive green polo shirt and cargo shorts — was James.
He stumbled as he walked around, arms crossed, and spoke with the police, the video shows. Red and blue emergency-vehicle lights flashed over the scene. James told the police that he had been drinking alcohol, the police report says.
Later, during his blood test at the police station, James told officers he had sponsored police softball teams.
“I clearly fucked up, or I wouldn’t be here,” he added.
James was a prominent entrepreneur in Utah’s Silicon Slopes tech hub. He made his name by founding the software firm Omniture and selling it to Adobe. James founded Domo, a data-analytics company, in 2010. Its aim was to deliver live business data to customers through dashboards and apps.
The company was backed by VCs like Benchmark, BlackRock, GGV Capital, and Glynn Capital. It went public in 2018, and by 2021, its valuation had reached $2.8 billion.
Many analysts expected Domo to be the next big cloud acquisition after Salesforce bought Tableau, a major rival to Domo, and Google snatched up the similar Looker. James held onto his company.
A former employee accused James of sexually assaulting her during a business trip in November 2021. James was never charged with a crime related to the allegations, and investigating officers concluded that there was insufficient evidence.
James stepped down as CEO in March 2022. An interim CEO, John Mellor, took over.
A year later, James was back at the helm. Around the time of his return, a slew of company leaders left, including Mellor; the chief operating officer, Catherine Wong; the chief legal officer; the chief financial officer; and three board members.
James had a single-minded focus on sales. In a booklet distributed to employees upon his return in 2023, titled “Josh James Startup Rules,” the founder told staffers: “I only care about sales. Don’t talk to me about marketing, booth, HR, comp, legal, etc. Can be fixed later with $$$$$$$.”
In a 2024 memo to staff, James said he had returned to the CEO role because Domo was facing challenging business headwinds, “and as the person who is most intimately familiar with the company’s operations, the Board and I felt I was best equipped to help us overcome them,” according to a copy of the memo reviewed by Business Insider.
In the same memo, which James sent to staff after Business Insider reported on the 2021 sexual assault allegations, James denied the allegations, saying there were no interactions between him and the woman involved “that could even be mistaken as inappropriate contact or non-consensual contact.”
James’s return to the helm didn’t bring the stock turnaround that investors had hoped for. Domo’s revenue growth was slowing. And things were about to get worse.
On September 29, OpenAI published blog posts sharing how it was using AI-powered sales, support, and contract tools. Investors saw them as a threat to software-as-a-service companies, causing a stock sell-off among software companies, including Domo.
‘Alleged physical contact’
In December, James spoke to analysts on a conference call about the company’s quarterly earnings results. The company’s bottom line wasn’t the only topic on the call.
“Over the past several months, I’ve taken a hard and honest look at my relationship with alcohol,” James said on the December earnings call. “I periodically used it as a crutch during moments of stress. And once I started drinking, I sometimes struggled to know when to stop.”
Referring to his Mormon faith, he said: “This pattern doesn’t align with the person I want to be for myself, for my family, my faith, or the people I lead.”
Domo appointed Chief Technology Officer Daren Thayne as interim principal executive officer, following James’s reduction in duties. Thayne didn’t respond to requests for comment.
In January, the company said it had agreed to part ways with its COO, Maughan. The separation agreement included a cash payment of $1.5 million, accelerated vesting of Maughan’s restricted stock units, and another $1.9 million in stock over the next three years, according to a company filing.
The payout was “made in part to settle accusations of physical sickness arising from alleged physical contact” to Maughan’s person, the company said. Domo and Maughan’s attorney declined to provide additional details on the incident that precipitated the settlement.
The SaaSpocalypse
In February, the SaaSpocalypse hit. Software stocks slid because of investor fears about the impact of competition from AI tools.
It started when Anthropic introduced a new plugin for its Claude Cowork AI agent that could perform clerical tasks such as tracking compliance and reviewing legal documents. That sparked a sell-off in software stocks that snowballed into an event that tanked the whole market.
The S&P Software & Services Select Industry Index, from which Domo was recently removed because of the drop in its market cap, declined 10% over the past year. Domo’s stock fell about 80% in the same period.
Patrick Walravens, a Citizens JMP analyst, said fewer customers are renewing their Domo subscriptions, and “there’s almost no growth” in Domo’s business.
Although the company has incorporated AI into its products, Walravens said, it faces competition from larger companies with competing AI solutions, such as Microsoft, Salesforce, and Snowflake.
“The world is moving on from traditional business intelligence,” Walravens said. “It’s still nice to have some dashboards and some graphs, but for so many things, you just want to ask someone. You want to ask your application.”
James returned to his full-time CEO duties in April. In June, Domo reported a 1% decline in quarterly revenue to $79.4 million. The company has reported losses every quarter since it went public in 2018.
James and his wife — whom he met when she was a junior salesperson at Domo — have spent most of their time in Japan in recent months, former employees said. The couple listed their house in Utah for sale in September, according to real estate listings.
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