Mike Tessler on UCaaS Heading True North
Dave Michels 0:12
Hello, and welcome to Talking Heads today Evan and I will be speaking with Michael tesslar, the managing partner at True North advisory. But before that heaven, everyone’s talking about return to the office. Now, I have a feeling that’s a long shot for you.
Evan Kirstel 0:26
Well, I live in a bunker, so there is no office to return to. But I’m a little surprised by some of the news I’m reading. I have an article here Google expanding into New York City with a $2 billion office purchase, you know, Google, what, what’s going on?
Dave Michels 0:43
Well, you know, I looked at various versions of that article. And none of them say whether this building they bought, if they got into the steel or not, my assumption is they got out of the steel, it’s lower Manhattan, it’s on the river. It’s a big building. I don’t know the building. I have a feeling Google got it for a song based on what’s happening in commercial real estate. And people are trying to trying to cast this into see the Office of safe return, everyone’s going to be returned to the office. I think Google’s got somewhere around 135,000 full time employees. I don’t think a I’m sure they can fill a building in New York, Manhattan. So I don’t think it’s really indicative of return to the office being back in full swing.
Evan Kirstel 1:23
That’s interesting. I mean, maybe New York City is leading the way but other cities, I just saw an article about Seattle, they predict will be kind of pretty empty downtown in the traditional office districts for quite some time. Is that what you’re hearing as well.
Dave Michels 1:40
I think commercial real estate in general is in a tough spot. I mean, before the pandemic, it was already losing retail that got accelerated malls are dying. As you know, during the pandemic offices have discovered they don’t really need as much space as they thought they did. And restaurants which of course, tend to be in prime locations with great parking. And they’ve discovered this, what they called ghost kitchens, that they can kind of move off into the background into a warehouse space, and don’t need cooking. Don’t need parking. Don’t need waitstaff. And so I think commercial real estate is getting squeezed in every direction, including, you know, movie theaters, the list goes on pretty much everything. So I imagine there’s some great deals out there and for big companies, and I think Amazon’s been expanding. I think Google has been expanding the Microsoft’s been expanding. So the big companies are kind of a no brainer. Let’s buy some space. But I think offices are going to get a lot smaller.
Evan Kirstel 2:32
Well, speaking of offices, and communications among offices, our next guest knows a lot about that. So why don’t we go to him and ask him for his opinion on the future of work?
Dave Michels 2:42
Well, that was pretty good. Except for that we didn’t ask him about his opinion on the future of work. But other than that,
Evan Kirstel 2:47
no one listens anyway, it’s fine. No.
TalkingHeadz is a semi monthly podcast with interviews of the top movers and shakers and enterprise communications and collaboration. Your hosts are Dave Michaels and Evan crystal, both of which offer extraordinary services including research, analysis, and social media marketing. You can find them on Twitter, LinkedIn, or at talking points.com. That’s points with a Z and Evan curse. co.com. That’s kr STL.
Dave Michels 3:19
Today we have with us Michael Tesler, a well known brand in our industry. Today, he’s the managing partner of truenorth advisory but no one knows about that. We’ll find out about that later. But what he’s mostly known for is the founder and CEO of broadsoft. He ran the company for almost 20 years until that fateful day in Arizona. I remember I was there when it was announced that Cisco would acquire broadsoft I think that was in the spring of 2018. Is that right? Mike?
Mike Tessler 3:49
That would have been deaf. Exactly. Correct. 2018. Yeah. All
Dave Michels 3:54
right. Well, welcome to our podcast. We got a lot of things to talk about. Let’s start off with your partner in crime, the other co founder, Scott, Hoffpauir, where did you guys meet?
Mike Tessler 4:05
We actually were just reminiscing about this a couple days ago, we both worked at the research arm of Northern Telecom. And we briefly met at BNR Bell northern research, but we really got to know each other when I joined a company that he was working at as CTL. That was a company called cell core in the thriving technology metropolis of Memphis, Tennessee, where we were building small, small, GSM systems. And we were distributing those GSM systems around the world. And I took over engineering operations, and Scott worked for me as the CTO,
Evan Kirstel 4:43
and the rest is history. So two smart guys get together you start a void company in the late 90s. Did voice even work back then?
Mike Tessler 4:53
Probably not. It was pretty early on one of the biggest debates that was going on this debate that was going on in the in the service provider industry around IP versus ATM and ATM was all the rage. And everywhere we would go out and talk about building a voice over IP voice network there were a lot of traditionalist that like this ATM model but unfortunately ATM had no it had no ability to kind of load services on it was a connection only model and so we push the whole IP model and and slowly the world move to that obvious conclusion that voice over IP or IP as as a transport layer transport layer was the key.
Dave Michels 5:35
I’m just thinking about you and Scott here so basically what you just said Nortel BNR cell core, I think Alcatel broadsoft obviously 20 years, Cisco now truenorth that’s a lot of companies for two guys, but you guys out lived, you know, I shouldn’t say out loud, but jobs and walls didn’t last that long together as a couple the gates and Allen i mean i mean this that’s a really rare thing to see what’s the secret?
Mike Tessler 6:01
I think we both have our our areas of expertise. And you know, like when anything else in any kind of team orientation, just a high degree of trust. I trust you know, Scott’s perspective, when we disagree, we hash it out without emotion with logic, and we try to get to the conclusion. And we both although we have our areas of expertise, Scott’s great in front of customers loves to talk to customers. He’s He’s not a kind of an inside guy. And, and I profess to be somewhat of the technical engineering guys. So we both kind of understand each other’s perspective and are able to kind of work through and come up with really great decisions.
Evan Kirstel 6:39
Fantastic. So you’re legendary in our industry, but most visionaries are legends, you know, jobs, Musk gates are really hard to work with. From reports, you seem like a really nice guy, a true Canadian. So are you a tough boss? I mean, were you Mr. Nice Guy around the office to
Mike Tessler 6:59
know I think people would not say I was a nice guy, I was I’m pretty demanding. I don’t like to micromanage. But I think kind of gear giving folks very clear idea of the expectations and what we wanted people to do what I wanted people to do, and then let them execute. But pretty demanding on on that execution, making sure people were pretty focused. And we were very fortunate at broadsoft, to build a really great team of folks that worked well together, we seem to be able to keep the politics out and keep every very, everyone very focused on the mission was a really rare, rare situation. And outside of just the customer, just outside the company itself, the employees and the team itself, we were able to kind of build a really amazing ecosystem of partners, which are clients or service provider customers, that really became part of the family. So it became a really interesting environment for us to work into and be successful. But I think that most people that you’ve interviewed them, I would say that I’m a pretty demanding person and push people pretty hard, hopefully in a nice way. I don’t know
Evan Kirstel 8:08
what it sounds like Dave Michaels,
Dave Michels 8:09
you guys are really on the frontier, the frontier is always a little fun, and your team is so important. There’s a reasonably compelling argument that broadsoft is was the single most important company to what we now call the UCAS industry, they’ve largely defined the tech define the business model. It’s even defined the endpoints. I mean, it didn’t make them but you worked with companies like Polly to help define them. You were part of the big expansion from voice to meetings, and even more you were getting into contact center. So after doing this for 20 years, why did you sell broadsoft? Why did you end this journey?
Mike Tessler 8:45
The story that are the kind of journey that ended with the acquisition of Cisco really started with a process that we really were working with on the board about what was the next stage for the company, we had successfully deployed the product and service providers around the world at that time, something like 80 countries and 500 carriers, that were really trying to figure out what was next and how we would really scale the business to the next level. And one of the things that we were dabbling with was this idea of, really, how do we get some part of our business to be direct to enterprise and really focusing on on larger enterprise customers. That strategy discussion, initiated a process by which we went out and started talking to companies about quiring, some a company that had an existing enterprise sales force. And as that discussion went on talking to private equity firms and about some of their companies, it became clear that a lot of people started coming into inbound, saying, you want to make this transition from wholesale service provider, kind of industrial visa, we’re calling industrial brand, to an end user brand. Maybe you want to make that transition as a private company, not as a public company. And that kind of started a process of inbound private equity firms talking to us about taking us private. And then that process just kind of got to swing. And eventually strategic started to kind of bid for the company. And before you knew it, Cisco had made an offer. And Cisco at the time, when we started talking to Cisco was it was interesting because everybody said, Hey, we you guys are our competitors. But we really, it was really a great fit between the two, you know, we had really kind of moved way ahead of everybody else in this cloud, you Cass market, multi tenant, large scale, Cisco had really a great lock on the enterprise side. And we were mostly focused on small and medium businesses through service providers. So together, we really felt we had a really amazing combination, and felt that we could be more impactful together as we came together. And so that was really the genesis of that combination.
Dave Michels 10:54
I always thought Cisco was it was a really good move for Cisco, it really filled a hole for them a lot, a lot of sense. It was a tougher sell. For me for the broadsoft side, I’m not 100% sure, about the broadsoft side, of course, we could look at a revisionist history and all that stuff. But But at the time, was there a lot of competing bids? Or was it just Cisco that was mostly interested in that from an acquisition perspective.
Mike Tessler 11:15
So when we had gone through the formal process, my recall is we probably had about 1516 engagements with different private equity, strategics, and so on, which, frankly, was extremely time consuming as you can imagine. And it stretched over a long period of time, we weren’t in a rush, we weren’t really trying to, like we didn’t have to sell a company, we were kind of going through the process of trying to find the right the right fit. At some point, that process just kind of went on a little too far too long. I went to the board and said, Look, you know, we have to really kind of push the process to closure or not, and just continue to as a public company, and standalone. And so we went to that group of folks that have been dialoguing with us, and basically said, We’d like you to make a bid. I don’t remember the exact date. But remember, it was a Thursday we had a board meeting and we said okay, by that Thursday, we’ll open all the bids, and we’ll we’ll choose, we’ll choose a path, or we’ll continue the path of being standalone. And that Thursday morning, we had three bids, Cisco being one of them. And really, Cisco bid was the best, not only financially, but it was really the best fit for really kind of making our customers long term successful. And making sure that kind of the vision that broadsoft started with continue. And then really giving the broadsoft technology and the team the ability to kind of really expand into new markets, new areas that we were really able to reach as broadsoft at that time. Great.
Evan Kirstel 12:48
So fast forwarding to today, UCAS is what we call it. Now that’s unified communications, as a service for my mom who’s listening. But what did you call it? When you started? What was there something else? Or whether names in between? How did you end up on UCAS?
Mike Tessler 13:04
Yeah, you cast is really a relatively late addition to the naming conventions took place. It was really a struggle. When we started we had we there was really no name. I think from an application perspective. For many years, we really kind of as an application, we would call it a hosted PBX, which was we use the PBX name and said, okay, being mature, 20 years later, we said, okay, it was a PBX application running in a different workflow, you know, running the workload in a different place in the network. Instead of being on the land, we used to say it was on the land. So those are some examples. But there was a whole bunch of other names for the technology, soft switch, which really, we didn’t invent and we didn’t love, we eventually kind of morphed the world to something called application servers. So you know, the platforms itself were a struggle, had a number of kind of, you know, incantations, a number of protocol changes for early days to, to later on. So there was a quite a bit of evolution of that. And then finally, you know, as the voice component became one part of the solution, we added messaging, which became an incredibly important part of the platform. That was probably the most important part of addition to the moving into that eucast world.
Dave Michels 14:20
What do you say messaging? Do you mean you mean voicemail? Or do you mean texting?
Mike Tessler 14:23
text messaging, text messaging? Yeah. If voicemail was was really kind of a to us was kind of a PBX checkbox, you know, it was not really like, wow, nothing, there wasn’t anything new and so on. When we introduced the first versions of what became you see one, from text messaging perspective, you can see the utilization even within broadsoft which have now been, you know, probably at that point, over 1000 employees. In 23. countries, the utilization of messaging inside the company exploded. We also saw the we were early in terms of utilization, but also Adoption of meetings, video meetings inside the company. We basically went from audio to almost, you know, full video, as we built that technology and started to adopt it. And so you know, the Hosted PBX no longer represented, really what we were offering to market. And so we started to kind of play with this, you know, unified communications, and then the whole, what I call the series of assets appeared, you can see pass, you know, see Cass all the assets. And so,
Dave Michels 15:28
well, that’s an extraordinary 20 years of a birth of an industry. But your success was never assumed, obviously, it’s easy to assume that now in hindsight, but but you had some real viable competitors along the way. You had Metis, which I guess Astros was a competitor at one point that Jen ban cilantro which ended up acquiring, which plenty of those worried you at various times, or do they all worry you or, or just seems like today, when we look back that there was there was never any competition to were brought up? kind of broke out. But there, I know, it wasn’t the case. All along. So what are your thoughts on that?
Mike Tessler 16:02
Good point, Dave, I think there was different phases of the market. I think, in the early early stage, we had the, you know, the rush of lots of small startups that happened to start, you know, relatively early. You know, if you look back and you try to map out the early when they’re going to 9899 2000, there was a bunch of companies talking about Voice over IP. So there was a real focus and just kind of getting out first and active. One of our biggest challenge was in 2000, almost every early adopter in the United States and see like market was in serious financial trouble. And we made the kind of interesting move to really move all of our sales engagement to Asia, not so much to make money. But as a company building a product, we needed feedback. So we started selling in Singapore and, and Australia and New Zealand, which turned out to be great markets for us. So we were able to kind of not to sit back and wait for the US market to return. But we started to kind of get really great customer feedback and started to continue to build a product. We then had this period of time where the pack started to thin out. We started to compete with the big guys, you remember these companies that are historical companies called like Lucent and, and Nortel and, and Siemens and an Ericsson and a whole bunch of these big telecom equipment manufacturers. That was a really interesting dance of collaborating we COVID with loosen sometimes Nortel fell into its own troubles. But you know, I tell the story like the first time we spoke to Verizon about a serious application, I was sat down by some senior executive who explained to me that they had to switch vendors loosen and Nortel and broadsoft would never ever get into the network. And the history books were written differently. But I think that was a period of kind of navigating through these large equipment manufacturers. And then we did that we were successful. We had a partnership with Ericsson and transitioned to take some of that business direct and navigated through Lucent navigated through Siemens that then merged and so and all those big companies had their own trials and tribulations and were able to navigate and continue to build credibility so that the larger tier one service providers around the world started to recognize us as a as a real player. And then, as you mentioned, about acquisitions, we did acquire two of our kind of pure play competitors, one being salon, and the other one being vocal data that at the time was owned by Biogen band that allowed us to really consolidate the market in 2008, during the kind of economic crisis, and we were able to kind of quickly move and get a little bit larger, we were able to kind of go take on a little bit more revenue. And that gave us some additional customers gave us some additional maintenance revenue, which then allowed us to kind of take the company public in 2010. And once we went public in 2010, that was really a big turning point. Because now big customers could look at us and say, Oh, these guys have a big balance sheet there, you know, we can check out that they’re financially capable to exist and continue, they could show they can see our success. And so it was a great marketing, but because of the transparency that being a public company gave us, and so from 2010, that that set of issues kind of went away. And then it was just kind of then at that point, not easily but continue to build the business grow the business. But at that point, we had very strong branding and marketing as a leader in that particular space.
Evan Kirstel 19:35
Indeed, and by the time Cisco acquired broadsoft most of those competitors, big or small, were no longer threats. But what was Microsoft ever a threat in 2018 or even zoom for others? Seems like the battle was already over. Yeah, I
Mike Tessler 19:52
think that the meetings business was a little bit differently. You know, what we were selling was really into the small Medium Business is kind of an integrated offered wasn’t the, you know, if you think about WebEx and then WebEx zoom has been kind of two players, it was really more of a mid and end and mostly in the enterprise market. And meetings as a standalone product was not really a big threat to us until I’d say, you know, very recently kind of more in the recent history. And Microsoft was constantly kind of a threat in the sense that they could just hold the enterprise market by saying we are going to build this we’re going to be in, we’re going to launch a PBX offer, never, ever really did. And it kind of went in ebbs and flows where customers and customers would say, Oh, well, I’m gonna, we’re gonna wait for the Microsoft product, you know, and then six months later, kind of the market felt like Microsoft was never gonna deliver on that. So then they started to procure, again, our technology through our service provider partners. So kind of what ebbs and flows as, as Microsoft kept promising and not delivering and promising and not delivering on kind of a full eucast solution. So that was kind of the experience with the Microsoft as a competitor.
Dave Michels 21:10
Well, let’s flip to the companies that broadsoft acquired during those 20 years, broadsoft acquired a lot of companies, I don’t even remember them. I remember eyelink I remember new global networks, team one transaero was a big one. Some real smart moves, I have to say some real smart moves. But I don’t want to ask you about the Smart Moves I want to ask you about the dumb moves will tell us which acquisition of all those was the big mistake the oops, acquisition?
Mike Tessler 21:35
That’s a good question. Oops, acquisition. I think one of the things is that we kind of decided never to acquire anything. That was what I like to call life threatening. So we didn’t do acquisitions. As you mentioned, we probably did 20 pretty close to 25 in the history. Wow, that’s a lot. We were just kind of reminiscing with Jim Tolan, our CFO for broadsoft. And he was the recipient of my dreams to hire of acquiring lots of companies, we probably looked at five companies a month, talk to lots of companies, and basically acquired on average, if you look at the tenure, we probably did about two a year. And I think the these integrations, these acquisitions really hard. They were really To be honest, in a lot of cases, it was an opportunity for us to challenge ourselves learn new things. And what was really exciting was, you know, when we sold to Cisco, I would say 90%, of the CEO leadership that we acquired was still working at broadsoft. So it was really a way for us. We never ever really thought about it until kind of reflecting back that we were basically acquiring teams and leaders, but we were. And so that’s kind of the story of the acquisitions, probably the most challenging, I can remember the most challenging is probably our entry into the hospitality space. We entered into that space, we acquired a company that really had the glue between the PBX function, the cloud, the hospitality property management system, company that had lots of experience good leader, at the time, when the market just completely collapsed on on that particular market. And we didn’t have any great natural channels, the service providers, we thought could sell into those hotel hospitality venues. But they really did very poorly. And while being recognized and authorized by Marriott, which would you think would give you tremendous traction that never really kind of delivered to its revenue potential?
Dave Michels 23:32
I’m really surprised that that’s the one that you come up with. I remember that acquisition, I thought, Okay, well, smart. It was just a matter of time until the hotel industry was going to go to void. I was really excited about it. But obviously, your recollection is pretty accurate because the website The first thing Cisco did was got rid of that.
Mike Tessler 23:48
And that was as we were talking to Cisco one of things that was really interesting was you know, I asked Cisco, okay, of all the various areas, what’s our hospitality coverage model and, and Cisco really doesn’t really spend a lot of time in that vertical and we were like, Okay, if you guys don’t have any salespeople, I certainly don’t have enough people chasing that. So let’s divest of that of that asset. Which one would you have picked? Dave?
Dave Michels 24:13
Oh, I you know, I’m only on the outside. I’m only on the outside. So I said I hospitality one, it made sense to me, I get it. But I’m expecting your answer to be based on the inside of the complexities and, and the results and the integration issues. I have no opinion on that.
Evan Kirstel 24:28
I don’t really blame Dave Michaels. Yeah, hospitality failure. He insists on a phone besides really is it’s like a dinosaur. He wants that handset next to the bed. But everything else your vision was really on the money. When you were cloud before cloud was cool. broadsoft got into video very early, when very few people were really using it in the enterprise and you got into contact center, which cloud contact center seemed pretty silly at the time, and you just acquired team messaging Have you early on, Flash forward to today? You know, whether it’s Cisco, Microsoft ringcentral, eight by eight others? Is it kind of like Groundhog Day, I mean, we’re sort of dealing with the same suite of applications and technologies has has much changed.
Mike Tessler 25:15
I think in the UK market has level I mean, the innovation i think is leveled off to some degree. And I was saying that a few years ago, I thought that you know, there were times when I probably didn’t say it that loud to my customers, but there were times where the products had a little like rough edges and there were some rough corners to the product. But you know, as we probably went 2016 17 it was really a sales and marketing execute. It was an execution game is no longer a technology game. It was not there’s very little technological risk. And I think that’s, you know, it’s even further now it’s scale and sales and marketing. You guys know this better. I mean, you know, you sit on five different meaning technologies during the day, feature differentiation is fairly muted, as far as I’m concerned. And so it’s no longer an innovation game. It’s mostly scale and some, and I think it just, that’s even further exasperated. And obviously, the pandemic has radically changed that you know, videos become the new dial tone. So if you go back to the early days of we talked about this Hosted PBX, we were always asked, Do you do all these like 250 PBX features and, and centrex features and all the stuff and, and you know, if you’re working at home, you need a ability to place a phone call. And that’s about it. After being in the eucast business for 20 years, I have to say, I do not have a phone on my desk. So video is definitely the new dial tone. And so I totally agree with that.
Dave Michels 26:41
I’m really disappointed to hear that my you’ve got to get a phone on your desk. Waiting
Mike Tessler 26:46
for waiting for all the endpoint vendors to hear this and send me phones.
Dave Michels 26:50
I’ll send you one of mine. I got like six phones on my desk. They’re all they’re all working.
Mike Tessler 26:55
When I moved I decided that was it. I’m no longer putting another phone on my desk. So I have scrapped the old phones that I had on my desk and went to video. I knew
Evan Kirstel 27:04
it. I knew. So you guys were pretty fun company to partner with you had great events in those 20 years. What were some of the funnest moments,
Mike Tessler 27:15
you made a comment? I think one thing that we we settled on early early in the company, I think it was around 2004, we decided to really make our annual users event called connections are really our major marketing investment for the year. And every year, it really drove our innovation cycle because it was our ability to demonstrate and bring to customers, our latest visions, our latest thinking, our latest products, many times, we were able to do acquisitions timely to the to the connections event, we were able to showcase at some point, maybe 8090. Partners, it was really a great celebration of the industry, of the partners of the team of the broadsoft team, we were really very proud to show up show off the company every year. So it was great to have this kind of annual celebration, we were well known for work hard and party hard. And so those events were always a good combination of of good fun, but then we let our hair down and we did some serious partying. And what was really special about these events was that all of the customers started become a family. I use that word loosely, but really a great family of friends and partners that got together once a year. So it was like a big family celebration once a year that we really enjoyed. The other big event in the life of the company was clearly going public in 2010. There was a special time, it was a really an opportunity for us to talk to investors in Wall Street. And it was incredibly exciting marketing event demanding and exhausting. But obviously a big, big event in June of 2010. Those are some of the kind of big events.
Dave Michels 28:57
I gotta emphasize everything you just said there about connections I’ve been to several of them. I seem to be mostly in San Diego and Arizona, always spectacular events. And you’re absolutely right. They were an interesting balance between really hard working and really hard partying. But they were more than just a big I mean I go to a lot of events. And your events were different. They were notch up, you know they were notch up in terms of class, he always had the best swag. He always had the best resorts. These were world class destinations. And you had some great speakers. I mean, I one of my all time favorite keynote speakers, I can’t remember his name, but one of your last events that are here protoman promise I think his name was but just really good events all around. And really, you just seem to have a really fun crowd. And one of the things that was different also about your events, because again, I go to a lot of events, I think it’s because of the carriers that you were working with. But you had a much more How do I say this correctly. There were a lot more women at your event. Most of the telecom industry events are very male dominated. And because of that the music and the dancing was funner just doesn’t work very well, when everybody has one gender. And so you were one of the few events that I attended that had a pretty good mixture of genders there,
Mike Tessler 30:08
it’s good, you may notice that I think that, you know, one of the things that we worked really hard on, and like I said, I think connections was important. For many reasons. It was a really, we pulled the company together. And we really challenged the sales teams. I mean, you could ask some of the sales folks, quite relentless on making sure that we had representation from service providers around the world, we wanted really, we wanted a global event, we wanted a mix of cultures, we wanted diversity of the event, you know, that was really important to me to have that. And even if it just was one person, that was that was good. We wanted as many countries we measured it every year, how many countries, how many carriers and so that diversity was really important. And I think the other thing is that people don’t realize is connections wasn’t a function of the marketing department, it was a function of the company, every little detail was sweated over by all of us. And so it came together, we would sit for weeks reviewing materials for consistency, we would talk to partners about making sure they would their messages were on cue and deliver their messages on cue. So they would get the most value from the event because they were sponsoring, they were paying good money to come. And we wanted to make sure that they got value out of that. And then you know, good food, good booze, good party, good music,
Evan Kirstel 31:26
all part of it. Alright, enough of all this uplifting party talk, let’s talk about the lean years, the hard years where maybe 2000, you know, the great crash or recession what 2010 or nine, what two years were the toughest.
Mike Tessler 31:41
2000 was pretty tough. But we were still in kind of product development, we really not, we’re really not in the market, yet, we were just still doing some proof of concepts. We’d scaled the business, there was a lot of money around, we were being pushed by our investors to go faster, harder. And when 2000 came, and we realized that, you know, that was just gonna, it was gonna take a lot longer, and there was not a lot of money around, they required us to pull back to kind of unfortunately, reduced staffing levels, which is never, never a fun experience. And to be honest, I wasn’t sure we were going to exit 2000 and survive that because we really need to raise money, and we were struggling to raise money. Well, we fortunately found some some sponsors to come in, it was probably the most kind of close to the wire that we were not going to we’re not going to accident in 2008, which was the next kind of major financial kind of external threat. There was a really challenging time, we were very fortunate. And I’d say it’s purely by coincidence, we raised some debt, literally a week before Lehman went bankrupt. It was a week later, we probably would have run out of money. And so it was just a really fortunate time. And it was a really sad, sad time. For companies that were coming to us we acquired I remember acquiring a company. And basically, the amount of intellectual energy of the startups were basically destroyed by the fact that there was literally no money, there was nobody putting any money into the market. Long story, very, very long story, which I love to tell sometimes is the acquisition of Sumatra, which really just lived across that boundary from pre 2008 financial crisis to post 2008 financial crisis. And it’s another great example of that, when we finally acquired the company, there was literally nothing left. You know, I don’t know if you know, the story is that when we acquired it at the time, so lotro in the market had a software product, which was released for two. And five years later, when we shut it all down, it was released for two, we did not even have the capacity to compile a new load, we could patch it, but we didn’t have any more eyeballs, everybody was gone. And so I remember being in their offices after we acquired and sitting in the lobby, with Awards on the wall and all of their swag on the wall. And, and I remember mentioning to one of the colleagues saying, you know, this could have been us, like we were neck and neck with this company, look at all the hard people that, you know, hard efforts and late nights that were put in, and obviously through some miscues and sales and marketing and strategy, they didn’t make it. So 2008 was a more of a wow, how many entrepreneurs kind of lost their, you know, kind of lost a lot of effort. We were fortunate that even though we suffered a little bit of financial stress because customers were struggling to pay us, frankly, almost all of our customers recovered fairly quickly started paying us again, it was actually in some, in some markets, an acceleration of the move to cloud as people downsize and moved and reshaped, etc. There was actually a spur of activity. As people finally were giving up, their PBX is moving to a A subscription model.
Dave Michels 35:01
My first implementation of Hosted Voice was it was this long intro project. And we were at the customer site installing it when my contact at level three, he called me and said, Hey, we’re discontinuing this product. And it’s like, Oh, great. That was awful.
Evan Kirstel 35:17
Thanks. Timing is since fanatical.
Dave Michels 35:20
Always start with rocks off. That’s the lesson learned. But it’s interesting. You talk about how tough it was. There were some times I’m sure where you made some bet the company bets. That’s pretty common to do that particular younger companies, but everything on some something and apparently you probably want all of those. Do you remember any of those bet the company bets that if it had turned out differently would have been the end?
Mike Tessler 35:42
Probably the most early very early was our decision to which became obvious later, that’s always the case with those kinds of decisions was to bet on as simple as our main protocol of choice. Yeah, it
Dave Michels 35:56
wasn’t proven back then.
Mike Tessler 35:57
And the funny story was that, I mean, the first monies that we had taken in from venture, you know, we were going to basically spend a chunk of it, acquiring a protocol stack. I don’t remember from who Scott probably does, on each tweet, a 323 stack, which was the prevailing protocol time, and we were negotiating and etc. And one day Scott came into my office and said, Hey, stop that, you know, stop the train, we’re not going to do that. And I was like, What? And he said, Oh, this is this new protocol. Let’s, let’s think about it. And I said, well, Scott, how many devices support sip today? And he’s like, none? Like, well, how do we talk to anything else?
Dave Michels 36:39
That’s got Yeah.
Mike Tessler 36:40
And so it was a bold move, it was the right move. But it was absolutely not a clear step at the time, a more cautious step would have been to say, let’s do 323. And let’s continue to monitors. But if you know, the HD 23 protocol, and you know, sip, the whole design would have been different. And that would have caused a tremendous amount of step back. And in fact, many h 323. Companies, few years later came and tried to say, Oh, you know, why don’t you acquire us and so on. And fundamentally, we just could not integrate their technologies, because they’re really a completely different state machine model, getting into technical stuff. But
Dave Michels 37:19
I’m really glad to share that, because it’s hard to imagine today that betting on sip was a gamble at one point, but of course it was. That’s, that’s great. Thank you.
Evan Kirstel 37:28
Let’s talk about Cisco. It must have been really challenging for you and Scott to build something from scratch and then become employees overnight. I’ll be the good cop, I won’t ask him to speak badly. Dave, we’ll do that. What did you like or appreciate about joining Cisco,
Mike Tessler 37:46
the thing that I learned during my time at Cisco is, is really a an amazing sales machine. The power and influence of the sales machine is quite extensive. I remember like joining Cisco after we finished the acquisition, and I think three days later, somebody called me, I didn’t know he was some salesperson and said, Hey, we’re gonna have a call with the CIO of Bank of America. And I was like, come on. Next day, we were on a WebEx call with the CIO and his team. And we were talking about eucast, the amazing ability and breadth of the sales team globally. And you know, just the size and the size and breadth of the of the sales organization is phenomenal. And it works, it really works really, really well. It obviously the challenge for any company that size is now that Salesforce is selling such a huge variety of products. That was kind of the the negative of the, you know, see a lot of products with a very big sales team. So you know, both are very big. And so getting your message into the sales team, getting attention was sometimes a challenge. But if they did there were super effective and super helpful. So that was really good. Just a general comment. For 20 odd years, I never had a boss. And so now I had a boss and it was Yeah, I could I could tell you one thing, I’m not employee material. So
Dave Michels 39:09
be expand on that a little bit. Make a word, this is a way that you can actually answer. Let’s see here. So looks like you and Scott both left Cisco almost exactly two years after you join there, which seems a little suspicious. So was your departure more, that you had to be the boss again, or more that Cisco wasn’t
Mike Tessler 39:29
meeting your expectations? Just be clear, I think the expectation all along when we started, and we negotiated our package was that I wasn’t going to stay more than two years. And I don’t think there would have been much things that would have changed that decision. You know, it was a 20 year voyage. I mean, I you know, that was a long time. And I really wanted to do something else. It was hard. It was like my baby and it was hard to kind of walk away from it. But it was 20 years and and so I really wanted to kind of do some new things. It was really kind of pre determined. The package, when we signed on really allowed us to stay one, two or three years we stay to, I think that was was plenty of time for us to transition the business into proper hands manage the transition. So there wasn’t any any kind of mystery behind that two year mark.
Dave Michels 40:22
Well, it was a really interesting two years for Cisco to I mean, the broadsoft acquisition going on, but you signed on with a with a shared vision with Rowan and Rowan left Not long after that. And there was a lot of other changes going on in the organization. So but it’s interesting that you would always kind of expect it to be around two years.
Evan Kirstel 40:39
Yeah. And onto present day tell us what direction true north is heading.
Mike Tessler 40:44
Originally, Scott, Tolan and myself had left Cisco, we would start to kind of talk about what was after. And we started to talk a little bit about working together as a team again, and working together on helping entrepreneurs, great entrepreneurs, scale their business, try to bring the skill sets that the three of us brought the broadsoft, and the experiences and so on. And so we formed a an advisory business in March 2020, just after I left Cisco, and we really didn’t have a lot, you know, we kind of said, Okay, that’s the mission, we’ll figure it out. I’ll talk about two things. One of them is, just in July, we added two friends and partners to the advisory. Dina dipalma, who’s well known in the industry, for the Acme days, was a very close partner, good friend of ours, and joined broadsoft in the last kind of 18 months to run sales for broadsoft as we were acquired by Cisco, and Andy Miller, who was well known as CEO of Tandberg, and Polly calm and, and some other spent a lot of time at Cisco, was on the broadsoft. board for early early on in the early 2000s. And also joined to work with us at broadsoft for a couple years, and he drove two strategic initiatives. One of them was our acquisition of you guys mentioned our acquisition of transair, and the contact center. So we asked Andy really to drive our expansion to host it into C Cass. And then the second thing was to drive amarr expansion into a direct to enterprise play. And both of those were valuable components when Cisco came talking to us. So there’s a team of five of us. And we basically help companies in kind of four, four or five areas. One of them is in strategy strategy, thinking through as the company the right strategy, evaluate strategic options. On a product level, what’s the what is the messaging for the market? What’s the point of differentiation? How do you message the company, we spent a fair amount of time on product product offers packaging. And then finally, a lot of work the companies had need help with on we saw go to market, but go to market really means kind of going from ad hoc selling to really scaling to kind of predictable funnel management, predictable sales machinery, and both Dino and Andy just have just a wealth of experience helping our clients with that. So those are the main journeys. And I’d say the other just generally kind of helping entrepreneurs with all kinds of questions, IP questions, financing questions, just, you know, bringing our experience to bear. Those are kind of the five main areas. And you know, the swim lanes we work in is primarily obviously collaboration. And probably a bigger focus right now for us as in the in the customer experience domain where we find more kind of more innovation, more small companies, more people innovating stuff, whereas collaboration is a little bit more about repositioning packaging, less innovation side. So we have clients on both sides of the collaboration and cx domain. And that’s, that’s what we were doing and most of our businesses, retainer, so we help companies on a longer term basis, we stick around for quite some time. And then we do ad hoc work for private equity firms around due diligence on m&a. So those are kind of our primary business models. Wow, that’s
Dave Michels 44:09
a lot of stuff going on there. Now, obviously, as a former CEO, you were doing nurturing and helping people and develop and broadsoft but but the CEO, the E stands for execution, your current role is more around nurturing. So do you nurture with a two by four? Or how do you find this new role?
Mike Tessler 44:28
It is challenging not to be in command and control. I have to admit it’s taken a little time. But in some ways, what’s exciting is it allows me to kind of be involved in a number of businesses, which I learned more I see more get more breadth. It allows me to do that something I like which is nurture and coach, the executives. There is often when we have a partner meeting. There is a consensus that it’s time for the mike Hart talk call. So I have some of those. Yes. Where I have to have the hard talk, you know, occasionally I missed the like building driving a team. So I have to do I have to get that thrill through others. But right now this is what we’re doing. And it’s pretty rewarding watching. You know, watching the companies get through that, that those kind of the next stage, you know, whatever stage they’re in there doing 10 million, we want to get them to 50 are pretty exciting to watch that happen. So that’s the reward these days.
Evan Kirstel 45:24
Awesome. Well, great hearing about your new venture. And hope truenorth emerges as like one of the next BCG or McKinsey that would be exciting. What’s it been like over the past 18 months for you and the team? Just out of curiosity? How’s your mental health these days? And I hope everyone’s Well, on the family side.
Mike Tessler 45:47
Yeah, you know, I have to say that probably getting engaged with you know, with friends, and working on projects, wasn’t like, Oh, geez, what am I going to do this month, you know, post was COVID start kind of, remember, we started this just as the COVID lockdown happened. And it was strange, because we were able to meet people and onboard clients and start helping clients fully, virtually, like we never met most of our clients. Yeah. And so it was, in many ways work was a great escape, you know, for us, because it kept us busy, kept us motivated, kept us talking to each other every day. Do you guys even have an office? No, we don’t have an office. We all work from home. A big event this week is we had our first physical meeting. So we all got together for the first time because now with Dino and Andy and, and myself and Jim and Scott were a number of different cities. And so we were able to all come together and meet and have our first official off site, which was, which was interesting.
Dave Michels 46:46
I think. I think Andy is also involved with journeys. We just had bread chocolate on last month and because I think they’re working together as well.
Mike Tessler 46:53
We’ve done some more talking to Brad about stuff. Yeah, we’ve done some stuff. And that’s definitely what breadth is doing. Definitely in that cx domain of exciting new stuff in the category innovation around security and fraud, etc. So definitely in the area that we want to work in more next gen cx stuff.
Dave Michels 47:13
All right, my lips been great talking to you. I think we we’ve went a little long on this one. But this has been a fantastic conversation. I can’t thank you enough for joining us on this podcast. And good luck with truenorth Thanks,
Mike Tessler 47:24
Dave. And thanks, Evan. It was lots of fun. Talk to you soon.
Evan Kirstel 47:29
Great chat with Mike Tesler. Really good guy. Really nice guy.
Dave Michels 47:33
Legendary. He’s so legendary. Okay,
Evan Kirstel 47:36
he is he’s a legend. Yeah, so one of the godfathers of unified communications, to say the least. So I look forward to what he and his team will do with the new venture.
Dave Michels 47:47
Thank you very much. Thanks, buddy. You gotta have a conversation. Man. You gotta get out of the phone. don’t know, man.
Transcribed by https://otter.ai