Clint Mohs
Hey, everyone, and thank you for joining us today. I'm your host, Clint Mohs. And I'm back in action once again to bring you an exciting new episode. Today I'm joined by a special guest, Mike Tessler. Mike was the co-founder and CEO of BroadSoft, from its early startup days to what we know the company as now--a global leader in cloud communications that really created and shaped the UCaaS industry. Widely recognized as a pioneer, Mike grew that organization to almost 2,000 employees serving customers in over 80 countries. Cisco acquired BroadSoft in 2018, and two years later, Mike left to start a new venture. Currently, he's the managing partner at True North Advisory, a consulting firm focused on helping entrepreneurs and enterprises to scale and grow their business. Welcome, Mike. Thanks for joining me today.

Mike Tessler
Hey, Clint, thanks a lot.

Clint Mohs
I know a lot of our partners will be eager to hear from someone with such a storied career in the cloud comms industry, so let's just get straight into it. I thought it'd be good, especially for some folks that may be a little less familiar with your story and with BroadSoft, to start at the beginning, what brought you to voice in the 90s? What was so attractive about the new technology do you

Mike Tessler
um, you know, in the, in the 1990s, there was quite a bit of activity in the communication space around exploring the shift from TDM to IP. And a lot of that was focused and centered around this idea of kind of reducing the cost of international toll and transit. And it was a very hardware-centric world at the time, lots of, you know, VoIP gateways and lots of lots of companies in that space. There was very little activity, thinking about how to leverage that shift from TDM to IP. From an application perspective, what could you do now that you had voice at a different, you know, voice transmitted and communicated in a different technology? And what would IP allow us to able to able to do from an application perspective, so and we, both myself and Scott, who co-founded we both were ex-Nortel folks, we both experienced building applications in the TDM world, and the complexity around that, and saw an opportunity to kind of leverage this shift from TDM to IP, to kind of introduce a new way to deliver applications.

Clint Mohs
Kind of thinking about that, right, as you said, a new way to deliver applications kind of that shift from TDM to IP, what was your sales approach with a bleeding edge technology? How much skepticism did you see since it was such a new innovation? And how did you respond to address that kind of skepticism in the market?

Mike Tessler
Yeah, I mean, early on, we really decided to take advantage of the, you know, using technology, but really delivering that technology to service providers as our primary route to market. And, you know, service providers, obviously, you know, deployed very large networks, you know, TDM networks, classified switches. And we thought they would be the most, you know, obvious path to market. And so we started to kind of, you know, work that sales approach by communicating and visiting service providers. And frankly, it was just really hard work about kind of hitting the road. And, you know, explaining the advantages of the move to IP, which most large carriers understood, but were far from really making major transitions from TDM to IP yet. And we were fortunate when we went out and started to talk to people about the opportunity to deliver communications in the cloud, which of course, these words didn't really exist back then. You know, it's like, you know, we struggled to find what was what we, you know, what did we call our thing, you know, and what do we call the applications and so on. And, so what we were very fortunate in the early days of the company, to actually discover and develop relationships with a large number of entrepreneurs who saw the opportunity to leverage this new technology to deliver a kind of next generation, enterprise communication service in the cloud. And they really built their businesses around it and that became really the engine for BroadSoft for a number of years, were these young entrepreneur companies that really built their whole business around the BroadSoft technology, they really kind of worked with us hand-in-hand to, you know, figure out the roadmaps and all that stuff. But also they were the the cold face that kind of selling to the small businesses. And it was nice, because a lot of these were regionally oriented. So you know, they picked the city, they pick a region, there was not that much overlap, so we could actually get together and talk together as a group. And really BroadSoft and our partner ecosystem really established this, what we now call UCaaS as a market.

Clint Mohs
Yeah, that's fascinating, right? You all are entrepreneurial, starting something new, and then kind of latching on to other entrepreneurs and other new people and sort of building this whole thing like almost from scratch, that's really, really fascinating. You know, I knew, you know, a fair bit about BroadSoft and BroadWorks and everything but didn't know didn't know that part of the histories. As you mentioned, right, like starting in a moment where there's not words for the software or the product you're trying to sell, obviously isn't the case anymore, right, especially on the back of what you all were able to accomplish UCaaS is really so widespread, and in many cases, kind of become the de facto communication solution for businesses that are looking to kind of upgrade or future proof their comms stack. Let's shift gears a little bit and kind of talk a little bit more about where the market is today. On this podcast, we've talked a lot over the past year about the role that mergers and acquisitions have played in kind of homogenizing the industry. I'm interested to hear what you see as some of the unique challenges that are facing service providers and resellers in the industry today.

Mike Tessler
Well, I think I think, you know, it's a really great, timely topic, talk about m&a because, you know, we've just seen two fairly large transactions occur in the UCaaS space, you know, or the greater cloud collaboration space. One of them, you know, Vonage being acquired, and today Fuze just got acquired.

Clint Mohs
Yeah, I was gonna bring that up. I just saw that this morning.

Mike Tessler
Yeah. So I finally I think, look, I think m&a at this point of the market, you know, the markets, you know, like, you talked about BroadSoft, you know, kicking the market off, that's, you know, 20 plus years ago, the markets definitely mature is, you know, m&a is being driven by scale. I mean, you know, the service providers today, if you're not in a large enough, or niche enough, either either end of it, you know, scale becomes a real challenge, you know, scale, lowers your cost of acquisition scale, lowers your operating costs, and, you know, increases profitability in a business that's quite mature. And so, you know, I think the m&a activity you'll see in the UCaaS market will continue to be about scale, you know, just how do I, you know, how do I get bigger? How do I reduce cost? How do I serve my customers better? And I think the day of a really small UCaaS provider, unless there have some very unique differentiation will struggle. So I think that's really, I think, you know, to me, the, the number one message, and I've been sharing that message for last couple years is that, you know, scale is gonna matter. And, you know, if you were subscale, you better, get worried about it and start thinking about it. And, and those that I think, you know, you saw a fair amount of m&a activity in this industry in the last couple of years. And I think you'll see now some of these bigger players get get acquired, because, again, you know, the scale factor is even bigger now. So,

Clint Mohs
Yeah, right, especially with everybody now, needing to work remotely, balance a hybrid office with an in-person office, all that stuff, all of these things rise to the surface, even more so than they already were. Right.

Mike Tessler
Yeah, I mean, clearly, you know, enough written about the shift of work from home on the pandemic. There were there were things that we, you know, for years and years, we at BroadSoft lead, push, and try to evangelize the use of video, we use it extensively inside the organization. People push back and then, you know, pandemic came and it became, you know, absolute mandatory capability. So I think that, yeah, things have changed dramatically. It's no longer you know, some obscure technology, it's mainstream. So it's, so then scale really, you know, becomes a very important factor. And I think you'll see a continued drive towards that in terms of companies trying to get bigger and more scale. Of course, the challenge is, you know, whenever you do these acquisitions is, you know, scale works if you integrate well, it doesn't if you integrate poorly. And so that'll be the stress point for a lot of these, a lot of these providers,

Clint Mohs
Kind of going back to addressing m&a as this kind of unique challenge right now, in the market. You had mentioned, it's either a issue of scale or an issue of niche. So what advice would you give to either somebody starting out in the industry or a smaller regional reseller, to make sure they're having a niche offering or able to compete with some of these other service providers that are just so large that they can just beat them on price 99 out of 100 times?

Mike Tessler
I think it's a really good question. I think it's one where you can no longer just be one of, you know, one of the few. What's become more important is your what is your differentiation? What would make what stick would keep, you know, what's, what makes you stand out from the rest? And I think the exciting part of the market is still there's a lot of, there's a lot of market to transform. There's a lot of people who are dissatisfied with their current solutions and can switch. And so I think there's an opportunity, if you really can build, you know, very, very clear differentiation and differentiation can be, you know, the product or product wrapper, it could be customer, customer care, intimacy, it, there's a lot of factors here. A lot of businesses still are challenged by kind of adopting the new technology, what does it mean? How do they use it? It's a little bit of a mystery. And so again, kind of customer intimacy on the sales and support side and create differentiation. But, you know, if you're going to do a high customer care, you know, business, you then can't compete on price against let's pick RingCentral. Or, you know, yeah, this doesn't work, you got to, like, you're gonna have to substantiate, you have to, you know, fight for a higher price point. Because you're gonna provide a higher touch service. So, I think it all comes down to it really analyzing the competition, analyzing the customers that you want to go after, how do you create that very clear differentiation? I think there's something there around vertical, I think there's something there around customer intimacy, that would allow you to be different than all the others. But that that's, you know, that would be the area of kind of offer differentiation that I think, if you want to be smaller regional that you'd have to do.

Clint Mohs
Yeah, I love that idea of like a two track approach, right, like analyze your region, your market, where is there an opportunity? And then analyze your competition and be able to say, you know, you might be paying two more dollars a month per user but XYZ, it's no comparison. I really like that approach. I think that's really good advice. And I think our partners will love to have that in their back pocket moving into 2022. Speaking of which, I'd be remiss if I was chatting with you, and didn't talk a bit about the future. So from your perspective, where do you see the industry going in 2022? And maybe more importantly, what do you see as some key sales or marketing efforts that could get a cloud comms brand there to meet the market?

Mike Tessler
I think 2022 tools will see a continued expansion of the market, more and more people moving towards cloud communications. Um, so I think that, you know, that's that's a good, you know, good tailwind for all the partners. I think the I think the thing that we need to start thinking about as an industry is, businesses today we get into a wait, you know, as we transition from early stage and you know, we get more into the mature part of the market. You know, frankly business owners are not looking for UCaaS or CCaaS or any other aaSes. They are looking for solutions and you know, we communicate in this very technical way. And you know what does a business owner want to do? They want to improve their operations, they want to lower costs, they want to improve customer experience. They want to do more with less, you know, we all can't pick up any journal without reading about labor shortages. And so how do you address that, you know, like, you know, businesses are trying to fundamentally make this digital transformation. And what's happened in the last 18 months? And what's happening right now is forcing businesses of all sizes to tackle this digital transformation, you know, five years sooner than they would have. And how do you help them in that transformation, and saying, "Well, we have the best UCaaS, or this or that," that's just not what the business owner, people just don't resonate, they're not technical, they're trying to, they're trying to sell more plastic or trying to, like sell more shoes, you know, whatever it is, it's really, it's about that, you know, and I think we have to kind of start to understand how we get more, we get closer to the customers, and we solve their problems. Versus all of us technology, you know, we and there's a tremendous amount of really exciting, you know, innovative technology out there to actually help companies with digital transformation, but the businesses don't know how to consume it, they don't know how to, they struggle with it, it's not that they're not technologists. And so there's that, that divide that chasm between the technology capabilities. And, and, and you see that, you know, like, in your personal life, you know, you try to get customer support or customer care, and just a terrible experience, and you're on the on the web, and you deal with one of these generation one chatbots. And you want to like scream like that this is really advanced technology. And, but that's, that's kind of the state of where things are. And, and there's tremendous amount of, you know, young, smart entrepreneurial companies doing all kinds of cool things, to solve some of that, but how do you get that to the market? So I think, I think, you know, generally, that's kind of where I think that the trends are, I think it's going to be, you know, you know, the big, as we talked about before, you're going to have the mega brand, the bigger brands with big scale, horizontal people will know about them, I think there's a tremendous opportunity to kind of get more, get closer to this digital transformation part of the business. You know, people don't want to make phone calls, they want to run their business. Again, remember that their, you know, the goal was not to make a phone call, the goal is to run their whatever that business is, I'm a lawyer, I'm an accountant, I'm selling, choose, whatever that is, that's my business. And how does the communications components help me achieve that goal, versus the technology being the forefront? So trying to turn that whole thing around? And how to think about that. So I think that to me, like that's, you know, both a trend and an opportunity for the industry to kind of think through and, you know, get get away from being a UCaaS, CCaaS, CPaaS, etc

Clint Mohs
I totally agree, as somebody who's just averse to jargon, in every walk of my life, it's enough with the acronyms like we need to talk like people to people. So kind of speaking of that, I'm really interested to kind of hear a little bit more about what the post-Cisco face phase been all about for you. So as kind of a way to cap things off. What led you to start True North and what are you up to over there these days?

Mike Tessler
So when I left, it was a fortunate set of circumstances. I left Cisco on March 1, 2020 and faced the world's lockdown. To be honest, I didn't have plans working March 2, I had plans of traveling. And that, you know, didn't happen. So along with two of my partners from from BroadSoft, Scott, my co-founder and Jim, our CFO, we started TrueNorth Advisory with the goal of helping companies with this journey of really understanding strategy, differentiation, go to market, how do we really help them scale their businesses? A lot of great technology, but sometimes struggled to kind of get it out to market. How do they bring that through the pipeline? How do they decide and get focus? One of the biggest issues we see is focus. We're very fortunate last summer to have two good friends join us. So Andy Miller, who was the CEO of Polycom and Tandberg and work with us and BroadSoft near kind of driving our contact center acquisition. And Dino Di Palma is also good long friend, who was one of the co founders at Acme, and, you know, close partner to BroadSoft for a number of years. And he joined the last couple years to run sales for me at BroadSoft. And so we now have five partners. And, you know, we're engaged with clients helping them through those transitions, whether they're small or larger companies trying to figure out kind of revisiting strategy. That's kind of what we do, we typically work on a longer range basis, we like to stay involved and get them involved. And that's kind of our business model. And we have been, we've been narrowing our focus, ourselves differentiation and creating a niche for ourselves around that whole customer experience area, and digital transformation of businesses. We think there's a tremendous opportunity there. There's, there's a tremendous amount of really exciting new technologies that are emerging, lots of great entrepreneurs in the space. And so we're trying to really work devote ourselves in that part of the industry right now. And so that that's kind of what we do. So we've got a couple dozen or so clients where we're then pretty closely helping them on strategy, messaging, and most importantly, go to market strategies.

Clint Mohs
That's great. I love that idea of not just kind of like parachuting in and out and saying, like, boom, bam, here's, you know, here's your PowerPoint template, we're out. I love that idea, very clearly, building out the scaffolding of how to actually like, sustainably grow, and also happy to hear that you're hopefully helping people not go to their customers and talk about UCaaS. But actually talk about, you know, what it's gonna do for them and how it's gonna help their business. So great. Well, Mike, thanks so much. It really was a pleasure having you on the podcast today. I really appreciate your time.

Mike Tessler
It was a pleasure, Clint. Have a great day.

Clint Mohs
Well, if you'd like to learn more about Mike and TrueNorth, be sure to give them a follow on LinkedIn and Twitter, where you'll find a ton of great thought leadership that they keep producing. For our listeners. Thanks so much for tuning in. Be sure to like this episode, and subscribe wherever you're listening. And while you're already there, write a review. It only takes a second and is a huge help to all of us here at Team 2600Hz. Until next time, thanks everyone.