Billion Dollar Time Bomb

It used to be a celebration to hit a billion dollars in revenue in the CLEC space. It was like they crossed the finish line, because after they hit the billion dollar revenue mark, they went for beers and never looked back. And these Billion $ CLECs tumbled.

Intermedia was the first. They ended up selling to MCI due to the amount of short term debt that was due. (Reminder: don’t acquire companies using an AMEX card!)

PAETEC hit a billion and sold to Windstream.

Cbeyond only made it half way there before looking for a buyer. Eventually Birch bought them.

EarthLink hit a billion. That is all. Tried a lot of stuff, not a lot worked. Today they are making a niche play in retail, while trying to figure out what to do with the fiber network.

XO hit a billion and became totally irrelevant for a long while until Verizon decided to buy them. That seemed to ignite a fire in the belly of XO.

Covad and other DLECs tanked quickly after Big IPO’s, because it was just too difficult to navigate the waters of telecom (especially without a C-Suite with that kind of domain knowledge. Next time hire a former SVP or EVP from a LEC!) Google Fiber is seeing those same problems, stumbling its way to less than 250K subscribers in 5 years of labor and marketing hype.

In Jim Collins Built to Last, some of the elements to lasting success are Culture, BHAGs (vision and goals) and home-grown management (talent development). It has to be about more than the race to a billion.

I see this with UC and Cloud companies. Many of them on a race to a Billion. It should only be a race to get 25,000 profitable customers. Then 35K, then 40K, then 50K. And that will be a big business right there.

But NO!!! It has to be a Unicorn! What a stupid attitude. I see it over and over. I want thousands of partners. I want to sell from 1-1000 employees. But the clock is broken. The systems and procedures suck. There isn’t a culture of excellence.

Heck, even college athletics departments know about building a culture of excellence.

I can see a couple of the big UC companies struggling and eventually failing. It isn’t about what can you sell. It IS about what can you Deploy and Support!

The process to deploy 20 seats is NOT the same as the process to deploy 500 seats.

BE A CLOCK BUILDER, NOT A TIME TELLER – Jim Collins

Tags: books, culture, deployment, financials, strategy
Related tags: culture excellence, deploy seats, billion dollar, process deploy, billion, culture