The following transcript has been edited for length and readability. Listen to the entire discussion here on The Broadband Bunch. The Broadband Bunch is sponsored by ETI Software.
Pete Pizzutillo:
Hello, and welcome to another episode of the Broadband Bunch. This is Pete Pizzutillo. I am live at the Calix Connexions 2022, and I’m joined by Brad Moline, who’s the founder, and CEO of Aloe Communications. Brad, thanks for joining us today.
Brad Moline:
Well, thanks for having me.
Pete Pizzutillo:
Have you been to this event before?
Brad Moline:
I’ve been here many, many times.
Pete Pizzutillo:
Yeah. And so, thinking of the progression of those events, how’s it changed over the past few years?
Brad Moline:
Well, the biggest thing is it just gets bigger and better every year. Far more attendees and deeper across the industry in a variety of different types of providers as well as vendors. And so it’s really become a great industry conference. And of course, a few years ago being during COVID, it wasn’t so good.
Pete Pizzutillo:
And you were on stage in the past couple of days. What were you talking about?
Brad Moline:
Yeah, I was on a couple of different things, but largely just talking about the evolution of what we do. Initially, it was, “Hey, let’s get people connected.” And a simple connection and almost survived with that connection. And then it became, “Hey, we got to have really good Wi-Fi.” And Wi-Fi six hadn’t come out yet, so we survived that. Now wifi six is out, and the in-home in-business experience is phenomenal. Well, how do you push it to that next level? So you’re taking care of your communities, your customers, and really creating what we call the gigabit society so that how the hospitals and their patients work together, how the cities and their residents, or maybe most directly, how the businesses and their customers, but now their employees all operate in a professional, exceptional experience. And we believe that as we develop that, that’s where you’re truly valuable to, not just on a customer basis, but on a society societal basis.
Pete Pizzutillo:
So how long have you been on this journey?
Brad Moline:
Well, next year will be our 20th anniversary of operations, and then I was with another company for about five before. And so while I still feel young, I’m one of the older guys in the industry now.
Pete Pizzutillo:
Did you ever think we would get to this point in time? Do you feel like we’re at an inflection point at all?
Brad Moline:
You could see it about five, or six years ago where things were moving, and that’s what our bet was. We’re a little unusual in that people say, “Oh, fiber to the home.” And I say, “No, it’s fiber to the premise.” We get bigger market shares in governmental and business than even residential, but it’s how all three work together. And we’ve been pounding that table for three or four years. It’s just the technology hadn’t quite caught up, and now we’re seeing the technology catch up, and then where do we go from here? And some visionaries in the world, whether it’s the Metaverse or, oh gosh, machine learning or augmented reality or whatever is going to happen. And then as we take it into the home, from work from home, every part of your network has to be exceptional. And the quote, garage-based ISP just doesn’t exist anymore.
Pete Pizzutillo:
And so it’s interesting because I think looking around this event, there are ISPs from all different levels of maturity, from rural to different, even more rural. What are some of the things that you’re encouraged by that you’re seeing being introduced in the past, this event in the past few years, that are helping folks that may not have 25 years of experience but need to rise to the occasion to help their communities today?
Brad Moline:
Well, a couple of things that Calix provides are game-changers. One is the wifi six products. So that gets your wifi in good shape. And then their IQ products are a blend of several different things. Software base that security, parental guidance, those types of things that just tighten up the service offering. But the best part is it isn’t just available to the bigger companies, it’s available to anyone. And so that no one left behind attitude is then created, oh, a common solution across a vast part of the United States or even world that then you can do some things too, “Hey, that footprint could be valuable to others.”
Pete Pizzutillo:
But there are a lot of expectations around funding and how the money is going to help close this digital divide. But as you look here, this is where the fight is going to be won. So what are your thoughts on the folks that are waiting on funding and newly hoping that they can rise to the occasion? What can they be doing today to start moving in the right direction?
Brad Moline:
Well, I’m pretty passionate about this. The construction is the easy part. Even getting funding for construction is easy. Operating for the next 20, 30, or 40 years is where you have to be awesome. So figure out your operations, your billing, and the value prop for your customers way before you get the government grant or whatever, because some of those grants are just one-time deals. You have to have a professional efficient operation for the future. Now, we believe our service platform could apply to many of these people, but for those that are standing their own up, it’s complicated. That’s the hard part, and that’s where I’m seeing the people who started 3, 4, 5 years ago that are now getting their markets generally built or a market generally built. They’re having a whole lot of difficulty with the operations.
And whether you work with us or work with the advisors and team from people like Calix or other partners in the industry, you got to figure it out. Or all of a sudden you’ll have this great network that you built. Maybe you did a great job negotiating with the government or whomever to get it built efficiently, but if the op costs are bigger than you can handle, you did it all for not. So as I like to say, it’s not a sprint, it is a marathon. It’s a long marathon because the inputs change every year.
Pete Pizzutillo:
And one of the themes around here is around partnering with unique partnerships and ecosystems. How important has that been to you guys in your success?
Brad Moline:
Well, specifically for this conference, we went in all in with Calix about six years ago. There are two schools of thought on technology providers. One is you go all in and really, really develop a tight relationship with a partner or the other is to have two or three or four and manage them all and then it’s a competitive environment.
Well, to me, in your core electronics of an internet network and communications network, that’s too complex to bring in a bunch of partners. Partner with one that will take you all the way there. And I like the format that Calix has provided, obviously, because it seems to me that they pay attention to all forms and all sizes from the very largest to the company that may only have a few 100 customers. And it works, and it’s generally scalable throughout. So that’s a great partner. But then there are many others that are here, whether it’s the fiber providers or the OSS, BSS, the billing systems. You need to have a good partner and a good plan, and people who will help you ensure your success.
Pete Pizzutillo:
So you all went on about five or six years ago, and that’s when Calix describes the journey away from the box manufacturer into data and software. So when they started talking that way, did you see the light or was it, what is going on here?
Brad Moline:
Well, I’m an ex-CFO and accountant by trade, so I don’t know what the term is, maybe as an auditor, you have skepticism. That’s healthy skepticism. That’s what you’re supposed to have. Well, and sometimes even as an auditor, you have unhealthy skepticism. And so it was really a bet because things had to move a long way. And they said their vision, but they weren’t performing it at that point. And the last two, three years, they’ve been performing it. They’re hitting, well, they’re just doing what they say. And that’s really all you can ask for a partner.
Pete Pizzutillo:
A 100%. Where do you think, a year from now, what are you excited to see come to fruition here, both from Calix and also in the marketplace?
Brad Moline:
Well, I just think that just the constant evolution of the gigabit society. Well, I was even involved in the.com days, and back then it was all about feed or miles of fiber that you’d put in the ground. Nobody knew what you were going to do with it, but it was such an interim number. Then it became cost per pass here or maybe RGs and those types of things. And so they wanted the triple play and all of that. Now it’s finally getting to what is the ultimate market share and what’s your cash flow. And I don’t like these interim steps, these interim numbers, because they’re really not beneficial. You have to have some KPI to say you’re progressing. But construction companies can get a really good cost per pass, but that doesn’t mean what they’re building is efficient to operate. Some efficient operators can’t build or don’t have a culture of overbuilding.
And so it’s the entire package that’s starting to come together. And that’s exciting to me. And then I think there’s a natural consolidation coming and everything we do as a company is to be a consolidate or not a consolidate, and whether it’s systems, scalability, talent-based programs, those types of things.
Pete Pizzutillo:
Yeah, it’s going to be interesting to see how that is. And what I think is really interesting, and I hope it doesn’t get lost, is the community’s local commitment and connection to the customers, and then you start regionalizing that. And so the same thing that made a company up to 5,000, 10,000 subscribers, does it scale from there?
Brad Moline:
There are great examples of business processes and programs so that every community and every customer maintains its value. And I think the cable and telco industry’s done a particularly bad job at that. We put bonus programs for some, NFL City. Well, the NFL City is part of a region that may have towns of 25 and 50,000. Well, nobody’s bonus is made or lost based on those small towns. It’s all the NFL city. So you have to structure your organization. So every community has a strategy, every community has its expectation, and there’s a responsible party. And it’ll see if we learn. We haven’t for 40 years. So we’ll see if as an industry we learn.
Pete Pizzutillo:
Yeah, well, there’s a lot of change going and there’s a lot of new blood coming into, which I think is really interesting too, to see other industries infiltrating this for good or for bad. So we’ll find out.
Brad Moline:
Yeah, hey, this is a great industry. I’m having more fun than I’ve ever had in my life. I’m 55 and somebody asked me when I’m thinking about retiring. I said, “Well, hopefully never.” And I heard a CEO on TV one day talking about what he was working on, and he was much more accomplished than I am. And he said, “I’m trying to arrange my work structure so it’s preferable to retirement.” I thought, “Wow, that’s pretty interesting.”
Pete Pizzutillo:
That is pretty interesting.
Brad Moline:
He said, “So I can keep doing this, what excites me. And it’s better than playing golf.”
Pete Pizzutillo:
Yeah, that’s a great goal.
Brad Moline:
It’s a great goal, and it’s definitely what I’ll be working on for the next 10, 15-plus years.
Pete Pizzutillo:
All right. Well, we’ll have to check back and see if you figured that one out.
Brad Moline:
There you go. Well, thanks for having me.
Pete Pizzutillo:
Yeah, that was Brad Moline from the Allo Communications. Thank you, Brad, for giving us your insight. Appreciate it.
Brad Moline:
Thank you. And enjoy the beautiful weather here in Vegas.
Pete Pizzutillo:
We will. Thanks.
