Good morning, and thanks for being here. I really appreciate the opportunity to be here with you. I do believe today is the best time to be selling what you’re selling for a number of reasons. But most importantly, it’s because I tried playing with this stuff over 20 years ago.
Now, free will dial up back in 1995 was an experiment that tested the waters on a lot of things. And it was a foreshadowing for what would happen in the future. In addition, free will dial up effectively gave birth to Vonage. Because not only did I start free will dial up – but I’ve never been actually at a conference where there was a session about how to compete with a company that I started. I find that fascinating. Makes me like, try to figure out who you really are.
It’s because you don’t think about these things when you do stuff and I came here to share my story about my journey of how I ended up on stage here today, but I will tell you that up until the day before Vonage launched, there was a fight in the company whether or not to launch consumer service or business service. Literally up until the launch date, there was an internal fight. So you know, it’s not so obvious necessarily what people do or how they do that. But what led up to the creation of Vonage, free-will dial up had three different iterations. And I was actually extending and expanding FWD back in 2000. And I ran across somebody who I’ll explain later, he ended up taking another company of mine and flipped it into Vonage.
But before I get there, just curious how many people in this room are either ham radio operators or grew up with someone who was a ham radio operator in their family, or a relative? Wow, some people actually know this stuff – good. Usually I, particularly when I talk to kids, no one knows what I’m talking about. I just spoke out at a junior high school in Bermuda, 22 kids, and nobody had any idea what I was talking about. But, I was trying to explain it to them, because I asked them how many people use WhatsApp and, like, they all raise their hands. I said, how many of them use FaceTime or Messenger and they understood that. And then I had to tell them, “Well, it’s probably your parents who appreciate this, but it’s free.” And they said, “Yeah.” I said, “Well, you’re welcome because I did that.” Because I did.
And the whole thing about innovation, I believe it’s starts inside. And for me, the way I ended up playing with, say computers and telephones, is as a kid I actually played with radios and telephones. So when I was in fourth grade, fifth grade, it’s kind of blurry – I grew up in a world where I didn’t have too many friends. Now, maybe all of you had the most amazing experiences in elementary school and junior high school and high school – I didn’t. I grew up in a world where sometimes I had to be my own best friend. And that was just who I was. And so my parents empowered me and my sisters to explore our inner creativity. We got to become who we were by finding our hobbies, discovering our passions, and I’m very fortunate for most of my adult life to be able to live my passion. Although, I don’t necessarily know what that is at any moment in time – it shifts, but I shift with it.
But the thing with me is that an early indication of my in my interest in programming was, I had a next door neighbor who lived across the street from me, my friend Robert Sherman. Now I don’t know if you’ve ever had friends in your life who, you call them on the phone and every conversation is predictable. You know exactly what’s going to happen and ultimately just hang up. So when I was like, eight, I had a tape recorder. And I would for six months, run this prank where I’d call my friend Robert and pre anticipate his response for an entire conversation on his phone to play. Stop, play, stop, play, stop, play, stop, play, stop, hang up. He never caught on. He never caught on.
And so that was my first own experience with AI and telephony, and it’s kind of like there’s a foreshadowing that I had a chance to play with stuff. And that was the same time of my life that I was building model rockets. We built estes rockets – and if any of you guys build rockets, right? And sometimes we build them, they go up the parachute and come out and we lose them.
Occasionally, if it was a clear field, maybe, maybe they go horizontal. And it was also a time of growing up where we had a chemistry said, I did not need a permit from Homeland Security to experiment. And I do think we suffer a little bit as a society that we don’t blow enough things up as kids. We’re not allowed to be creative, that we don’t have that chance to explore who we are by playing. And I’m not saying to do harm to anybody, or to ourselves, just to play.
So there I was, without too many friends. And if I had friends in school, I just didn’t like them. So it was my choice to stay away. And what I my father for the longest time, told me to call his brother, my Uncle Fred and I never did. And I don’t know how you were as a kid, if you actually listened to your parents, but there’s some things I listened to and some things I just didn’t listen to, and to call my uncle was just not my thing.
It turned out my uncle was a pioneer in cable television. He actually had a factory in the 1960s. He was one of the first people to build cable TV test equipment. And he had built a business, took it public on the New York Stock Exchange in the 70s. He had a factory on Long Island where he manufactured stuff. And lo and behold, one day I come home from school and there’s my Uncle Fred waiting in the kitchen to see me. And I have not seen him since the last holiday family gathering, and I’m like, “What’s up?” And he takes me for an hour from where I lived in Queens out to his office in Farmingdale. And it’s like, this is just weird. And I get to his office and he has a factory and you know, it’s like, I meet everybody in his staff and they’re all nice to me, but I’m his nephew, so of course they’re nice to me.
And then my life changed forever, about 15 minutes later. Because 15 minutes later, I walked into his office which was maybe this size, maybe a little bit bigger. It was not that big on the factory floor but he had a desk and he a box on that desk. And I didn’t realize till a little bit later that on his side of the box, he had a microphone. On my side of the desk there were two chairs. And he flipped a switch and all of a sudden the box started to glow. I didn’t realize there were radio tubes, I had no idea what was going on. But then, after it started to glow, there was noise that was coming out. And the big thing was – he heard voices, I heard noise.
And as you tune the dial, he would acknowledge the noise, and I’m just like, I have no idea what he’s talking about. And then he started speaking a very cryptic language, because he found the clear spot. And he said, “CQ, CQ. This is KTQQ, I’m calling CQ.” And he would repeat, “CQ, CQ this is KTQQ, I’m calling CQ.”
I’m like, “What?” But I’m mesmerized by the fact that my uncle speaks another language. And then he lets go of the microphone, and I could not believe there was a queue of people for over an hour. My uncle sat there while I was listening, talking to people saying his name was Fred, he’s in Farmingdale, New York. And he gave a signal report, relative, which I learned later about. I had no idea what “5 9” was, “5 7” was, “5 5” was…but he gave a signal report of how loud the voice was. So I had no idea that my uncle had spontaneous friends from all over the world that everybody, no matter where you live spoke English, whether it was USSR, South America – didn’t matter.
And as I’m sitting there, I realized that my uncle actually had the cure for loneliness. And that if I simply were to take his radio and put it in my bedroom, that I could have friends before school and after school. The school itself would be tolerable because I can connect with people outside that world. So after I sat there, politely listening to my uncle make all these friends, he explained to me that when he says CQ, that’s in Morse code is da de da de da da da. And for those of you familiar with 70s disco music, it turns out to be the disco beat for many 70 songs. Apparently there’s the correlation between musicians and amateur radio in the 70s, at least for the baseline. And so the CQ is from the telegraph – CQ as in “seek you”. So it’s putting an outcrying for a call, for a request to have a conversation to the world. You know, to a world where I was growing up and we’re not supposed to talk to strangers, all I did was was listened to strangers, talking to strangers, and ultimately, I would be one of the strangers reaching out to others.
And so, those of you who are who are old enough to appreciate the early days, the internet, you remember ICQ? Yes, some of you? Maybe? So ICQ, my friend, Yossi Vardi son, was one of the four founders of ICQ and its name was really internet CQ. It was the first successful messaging service on the internet. And Yossi happened to be a ham operator, they named it ICQ. But there I was, asking my Uncle, could I take his radio home and put it in my bedroom and play with it? And he said, “No.” I said, “Wait, wait, I just want to borrow it. I want to set it up. I’ll get an antenna. I promise I’ll be I’ll be kind to it.” He said, “No.”
And that kind of blew me away. Like, why? I’m a nice nephew. Like, what? I’m his favorite. I think his only one, but why?
Because he explained to me that in order to use this radio, I need a license. But I actually had to study college level physics. I had to teach myself Morse code at the time. And I had to study parts 97, one of the rules and regulations to be an amateur radio operator, as published by the Federal Communications Commission. Like, oh. I still asked another time, but I still had no.
But he told me I can come to his office anytime I wanted to listen to him and watch, but you know, the thing about growing up in my family is that I learned how to be obsessive about hobbies. And passionate, and sometimes I’m passionately obsessive, it’s hard to tell. But I also, when I was growing up, learned about failure.
And the one thing I’ll tell you about failure, because to this very day when I’m successful in doing something, I don’t really know why I was successful. But when I fail, I know why. And I learned as a kid, that my definition, my definition of failure has not changed since I was a kid. That to me, failure is not learning from failure. That’s it. We can all make mistakes. But if we don’t allow ourselves the opportunity to learn from where we came from, and not repeat that mistake over and over and over again, because I think that’s what Einstein would consider insanity. Anyway, that’s the only thing about failure.
So, as me as a kid, nine years old, tried to get ham radio license and it didn’t work. But I learned about radio. I was a maker. I built radios. I took a tape recorder that I used for my friend Robert, I took it apart, unfortunately, as my sisters always like to remind me, we started a fire because I didn’t put it back together right. But it was fun experimenting. And finally, it took till I was to a 12 and a half years old to finally got my ham radio license. And when I got my license to communicate, my life changed. Literally, my life changed. I actually had confidence to be who I was. To learn to find my own voice. To understand that my ideas maybe mattered a little bit and just follow that path.
And I spent a lot of time being lonely and isolated while I was trying to teach myself these rules and regs. But when I got my license to communicate, I like to think that I had a voice and I haven’t really shut up since. And that inner voice gives guidance, and one of the first things I did as a ham operator is play with phone patches.
So, you’re probably old enough to remember the TV show Mash, maybe. And Radar O’Reilly, he was not at all someone I ever looked up to. But on the TV show, he was the one who was doing phone patches during the Korean War back to loved ones. And I thought, this is cool. So I got a phone patch. And I also would find people overseas who wanted to talk to loved ones in New York City, in some cases outside New York City, and I just patched it in. My parents never complained about the phone bills. And there I was, living my life, in my own world, because not very many people had any idea what I was doing, but it gave me options for creativity. It taught me a hell of a lot about innovation. It taught me a lot about determination and taught me a lot about believing that if you learn to believe in yourself, anything becomes possible. Even the craziest, craziest things can happen if you believe. And sometimes if someone else believes in you before you even know how to believe in yourself, that’s even a bigger gift. I thank my father for that.
But as a kid going to junior high school on ham radio, I was geeky enough as it was. And of course, I didn’t have too much in common with too many people, but I let this slide. And when I was in high school, I actually started three different businesses, naturally, organically – it just happened.
I used my ham radio for a nefarious purpose once. I think the statute of limitations is been there already, so I don’t have to worry about this too much. I ran an underground radio station on shortwave on stormy winter nights. And on federal holidays for about 10 years, I was “Ray Haber coming to you live from somewhere on the east coast. This is WARG as in ‘we are really good’.” And I operated, you know, I told my sisters to watch out for white vans. My sisters to this very day – if they were here, you can interview them – they’ll tell you when they see a white white van, they run because I told them that was the FCC coming after us to shut us down to arrest us. Now we never actually did anything bad. We didn’t do anything bad on the air. We didn’t say anything, we didn’t curse, unlike some other people, I didn’t curse, I wasn’t against the government. We were just having fun. This whole idea of using technology for fun is something which I don’t think enough of us engage in. But I was having a great time being a DJ.
And when I was in third grade, I read a book that changed my life called Steal This Book. It might be out of print by now, but it’s by Abbie Hoffman. If you remember Abbie Hoffman, he wrote about loop lines. Those of you who have who are from the telco world, you might remember loop lines. But there was an interesting combination that if you call 212976977 on one side, you get a very annoying “Ehhh!” If you call 212976979, the noise went away and the loop line connected. And that particular pair traced back to a phone booth in the South Bronx. So when I was “WARG coming to you live from somewhere on the East Coast”, and Ray Haber, I would take requests. Unfortunately, they didn’t come too much. Can anyone guess in the 1970s what these loop lines might have been used for other than me trying to take requests for my radio station? What do you think?
*Audience responds*
Right, but if you’re a nefarious character, what business what you might also be using it for? It was for drugs and it’s for prostitution. My sisters whenever they got on the air and we got a hold, most of the people calling were yelling at my sisters to get off because they were impeding on their business. And then I used to subscribe to a very geeky newsletter, a shortwave listeners newsletter, and the one time WARG ever gotten any mention, the only comment was ‘announcer loves his own voice’. That was it. Nothing about the programming, nothing about the music, just ‘announcer loves his own voice’. I was like, oh God – but it was fun. And that was what I did.
So, it turned out that I had like no social life in junior high school or high school. But girls who would not invite me to their sweet 16 paid me money to DJ their parties. So that was my first business. And then my father had a data channel, a mini computer in the house, which I broke into. I learned how to program. And I started using – amateur radio, as geeky as it is, is also a very competitive hobby. And I learned how to write code, particularly to do contests where we would wake up on Friday morning, go to sleep Sunday night and to talk to as many people as possible in many different places of the world. And while you could have done it with pen and paper, I figured we should use a computer program for that. So I learned to code. And then going into the 12th grade, I noticed the deficiency in the language that I was playing with which was data general business basic, it didn’t have any floating point arithmetic. So I created a module that added floating point arithmetic to data general’s language, and I started a software publishing company. That was me in high school, and I did a lot of other things but somehow in my life, I ended up on Wall Street, which I still don’t quite understand. But I ended up on Wall Street. And I taught myself.
I didn’t take calculus in college but I had to teach myself calculus when I was doing software development, because I learned how to program financial functions, and became an expert in fixed income mathematics. And I had to learn about McLorran power series expansions and all sorts of other stuff. And so I had to code this. In order to code it, I had to understand it. And that was one of the things I learned a lot, I taught myself. This is way before there was YouTube. I actually had to go to the library, got the books and read. There’s no one to actually explain to me, give me the download of exactly what there was – I had to actually engage and all that.
And one day I’m reading the newspaper on my way to work. And I read about CU-SeeMe, coming out. This is in 1994. And CU-SeeMe, anyone here ever use CU-SeeMe in 1994? One or two. So remember, that was a 120 by 160 square. It gave you maybe four, five, six, seven-second frames per second video. That was hot. That was on a high speed line.
And so I started playing with all that. And then in ‘95, I learned that a software product was coming out, that’ll let you talk on the internet. And that’s all I knew. And on February 12, 1995, the software comes out, I happen to conveniently be home from work that day. I download that software, and oh my god, I could talk on the internet. And what was oddly bizarre to me was about 20% of the people online, were using ham radio call signs as their social media identifier, some WA to BOT, and there it was picking off people all over the world, and we’re pretending to be on the radio, but we’re on the computer. And this was weird, but cool.
And I very quickly created a mailing list called the iPhone mailing list, so it was called internet phone. But the people who use – anyone here use iPhone back in the day, anyone? We called it iPhone, so the first iPhone technically really didn’t come out in 2007, it was from ‘95. And I use this mailing list as a bridge. So people like me could find each other when we’re not online. And, oddly enough, people started asking questions about how this product works. Now, my background, I went to college, I have a BB in accounting, I know nothing about telecom. But somebody asked the question, how’s the software work? No one else is responding. I respond. Within three months, I’m like the subject matter expert on the software. I should remind you that no one from the company itself ever came online to answer questions. So it was me. And I was having fun.
And then in September 1995, a question comes across from a guy in Italy with the subject “enterprise computing”. And a simple question was: Is it possible to interconnect a telephone and a computer? And I took out my old phone patch, and it worked. I said yes. What I didn’t know was that there was somebody lurking on my mailing list who was an engineer in Jakarta, Indonesia, who was an engineer who was very familiar with a certain type of modem. Back in 1995, there were two types of modems, one that used Rockwell chipsets and one that used Cirrus Logic chipsets. So this guy in Indonesia, wrote some code for a Cirrus Chipset Logic modem that turned dial tone into IP, basically let you flip. So if I put two of the sound cards in a computer: one gave me internet, one gave me dial tone. And what that meant was, I can now configure in September 1995 a gateway, a year or two or so before these actually worked. And what I was able to do through the iPhone mailing list, is launch something called free world dialup. Literally, it was free, it connected the world and around on dial up. And it was simply a phone patch extension.
So if you were in New York and you had somebody in California and you want to call a friend, you could do that, or if you’re sitting anywhere in the world. We had about 500 active nodes. And this was a company with no business model. I used to work at One World Trade Center. And if you were on my mailing list and you said you wanted to set up a node, I would buy the node for you and FedEx it to you. It was costing me more in FedEx charges to send it than the modem did. But I sent out modems all over the world to people who participated. And within a few weeks – now, back in 1995, the internet only had 16 million people on it. And, I can’t tell you how noisy it was. And how scary this was, like, oh my god.
Now, most of you are, I’m guessing that some of you are engineers. So you could appreciate if I told you that there was no jitterbug for no echo cancellation, it had sucky quality of service. It just didn’t sound so good, but it worked. It worked, it was a foreshadowing. And so I launched free will dial up in October ’95, 24 years ago almost to this very day, and the world goes nuts. The business media – I’ve never had more press in my life, than in the next two months, because as word got out about this, about what was going on, the media took immediate attention to this.
I remember in November of ’95, the Sunday Times of London had a story about Bill Gates and the road ahead. On the back page, was the story about free world dial up and the threat to the future of British Telecom. What? Really? Really.
Now, talking about fake news, that was actually true news. Someone actually thought we were a threat. Which leads me to one of my life lessons, which is do non-scalable projects. Do projects that no one else would ever think, or if anyone else thinks that you shouldn’t do them because it doesn’t scale, try it out. If you want to innovate, if you want to disrupt, if you want to be an innovator, you want to actually do this stuff that others don’t expect. If you do the unexpected, because we had no business model, we didn’t raise a diamond venture funding. I was funding all of the modems out of my salary from working at Cantor Fitzgerald securities. And there’s no business model necessarily associated with having fun. But oh my god, it was mind numbing. And what happened in six months, I learned all about the FCC all over again, because six months later, 300 phone companies in America went to the FCC. And this was in March of ’96. The answer was two simple things: the sale and use of internet telephony software to be banned in America, and the makers to be regulated as phone companies. And on my mailing list, these people who were lurking and people who were actively just talking, they were saying “what was I going to do about this?” And I said, “I don’t know. I don’t know anything about politics. I don’t know anything about the FCC, except that they gave me my ham radio license because I qualified.”
That wasn’t enough. And I started to have self doubt. But I remembered being a kid and I decided, you know what, I’ll take a stand. So back in ’95, ’96, you can make things up and get the three letter domain for it. So in 1995, I had the domain for VON. VON.org, VON.com, VON.net. And I decided depending upon my mood that VON was either “voice on the net” or “video on the net”. And in about 10 days, 110 companies from all over the world decided we’re going to join the Voice on the Net Coalition to say no, let’s fight this petition at the FCC.
What I didn’t know until about a year later is like how scary we appeared to be to the FCC. Because it turned out we were able to keep Voice over IP unregulated in America for nine years. For nine years. And never before in the history of lobbying, at least in Washington, had a group of people assembled through the ether. And you may wonder, how could you do this, Jeff? You have no background in telecom, you have no background in lobbying.
Well, this is a reason why a friend of mine in Tel Aviv considers me the Forest Gump of communications. Because sometimes you just do it. And you just you happen to witness the beginning of something. And so I took the lead, and I did it and it was fun. It put me on a journey which I’m still on. Because once I started representing free will dial up, and fighting the act of petition. These lobbyists did not know what to do with me. I was the name but they never saw me. They couldn’t really see what it looked like, or even if I was real. And then in May of ‘96, there was a New York Times business section. And on the front page was a story about – I worked at Cantor Fitzgerald Securities and unfortunately that year, Mr. Cantor was dying and Howard Lutnick was fighting Mrs. Cantor for the reigns.
And page eight was this huge picture of me on a computer talking about internet telephony and how wonderful it was. What I didn’t realize that was that was my exit strategy from working on Wall Street. I had no idea. But a few months later in, like around July sixth or seventh, after a fourth of July weekend, I’m at work. And if you guys ever worked in an IT department, at Cantor we had 1,000 people. There were maybe 125 people in systems. I was the one person in systems responsible for new technology. There are 124 people responsible for keeping things working.
In ‘93 to ‘96 when I was at Cantor, it was a fireable offense if you put an IP device on the production network during trading hours. You could be fired if you’re caught. It was, like, pretty clamped down. And I had a really hard time introducing anything new. But the department loved to reorg. They loved to reorg. So I show up five minutes before a meeting, I look at the org chart and I raised my hand. Yes, Jeff? There’s a typo. What’s the matter? I’m not on the org chart.
Then the guy said, “Didn’t you fire him? Didn’t you fire him?” That’s how I found out I got fired.
And I had the kind of job on Wall Street where I could have lasted all summer before they realized I was fired. But I had to raise my hand to draw attention to the typo, and then I was like, “Okay, what am I going to do?” I didn’t want to go back to Wall Street. I had spent seven years of my life prior to going to Cantor building trading systems, real-time market data distribution systems. But I had this passion. And I decided to take a chance and live my passion, which is what I hope – any of you guys living your passion today? Yes, maybe? Yes? Right. Those of you not raising your hand, during lunch talk to the people who raised their hands because seriously, if you could find a way to find your flow and live your passion, life is different.
The rules may be similar. You may have to figure out how to pay your bills, you may have to figure out how to live. But you know, being your own boss, setting your own culture, learning to listen to your inner voice and having the confidence to be who you will become, is an amazing transition. So what I decided to do is I decided to run a conference in New York City. Oddly, the dates I picked were September 9th and September 10th, 1996. And all I did was advertised this conference on my mailing list. And I got a response but I never knew how many people were going to show up. And the thing was, in the summer of ‘96, it was the summer my father made me grow up.
See, what I didn’t mention before, is when I ran the software company, when I was 23, 24, 25. My father guaranteed payroll. My father figured if you’re silly enough to work for me, your salary was secure. Didn’t matter how much I was paying you. I only had seven or eight employees, but it didn’t no matter how our sales were, my father guaranteed payroll so everybody was okay. But when I got fired, I didn’t have savings. I was married at the time, I had a relatively high burn rate. In fact, I had fiber to my house in ‘96. I was paying more for my internet access than my mortgage. So I knew the internet was going to be big. I didn’t know how big it was going to be. I wasn’t going to give that up.
And so, I realized in order to make this conference happen, I needed $15,000 because I had to put down a deposit for the room rental and for catering. And my father won’t give me the money. A VC I went to didn’t give me any money. Ultimately, it was American Express. I had an Optima card. And back in the summer of ‘96, I went to JFK Airport. I put my credit card in and walked out with $15,000 in traveler’s checks. That’s how I funded my event. And surprisingly enough, 224 people showed up at the first conference, from all over the world. A few of those people within a years time would start companies that have billion dollar market caps and more. It was a conference of innovators, of thinkers, of doers. And it was something, which was just, I was too shy. I would not go on stage. I didn’t even say “hi” to anybody. I helped with the invitations, a friend of mine from London helped be the MC. And then I had a fight with him. And I learned from me anyway, partnership are hard. Stand up for yourself. But it’s also because I didn’t know anyone from England. I didn’t realize every time he was saying “brilliant”, he wasn’t being sarcastic. Any one of my friends, if they said something was brilliant, they were saying it wasn’t brilliant. But he kept on saying “it’s so brilliant” and “so brilliant”. I realized, oh my god, I can’t handle this guy. He’s being so mean to me, when he’s actually being nice. But I didn’t know. I had not really traveled the world so much. So we broke it up.
So then in April of ‘97, after the conference, I go to Silicon Valley and I meet a few people. Ultimately, I found someone to help me run a conference. And then I changed the name of the conference to VON, to Voice on the Net. And it was held April 1st to the 3rd in ‘97 in San Francisco. 500 people showed up. One of them though, was sort of like me, he was an entrepreneur. He was from Dallas. He grew up in Dallas, and he had this theory that for his startup, he thought people who traveled away from their hometown would want to go on AM radio and tune into the radio stations that brought them home.Their high school sports, that got them to tune into the local happenings. So he came to my conference to pitch. His name is Mark. And his last name is Cuban. And three and a half years later, he sold his business to Yahoo for $4.6 billion.
He changed the name of the company from, I believe it was Audio Net to Broadcast.com. Then I, theoretically, I understand he may have made more money shorting Yahoo stock after that. But, that’s Mark. And there are a lot of people like Mark who came forward to do stuff. And what I found myself at the center of, was opportunity. Where we can dream and the dreams can manifest into something bigger than us. But we had to allow ourselves a possibility that it didn’t matter if we fell down, because we could pick ourselves up and try something else. And the conference business for me only occupied maybe 15% of my time. I started investing in startups, I started doing startups, I learned a lot about failure, oh boy.
But I also learned a lot about who I was and about believing. And it’s that belief that once you understand who you are, we’re not invincible. But we can do so many other things that we necessarily are known for. I mean, I’m not qualified based on my education to be successful. But I also don’t allow that type of thinking in my mind. When I was doing the VON conferences, the crazy thing happened was – so the first conference Mark shows up and 500 people come, to then we had I think, approximately 800 people in Boston in the fall of ‘97. And then we got to 1100 people. In fact, I knew that VON was going to be successful because we were at the Fairmont Hotel in 1998, in the spring of ‘98. Back then, it was before broadband, everyone’s using dial up internet. The community of people who stayed at the Fairmont Hotel crashed the PBX there, every day. They never experienced it. They never had such demand for dial out because there was optimized, you know, for phone calls for short phone calls, not for long bursty communication. So we’ve successfully, two things happen. One was we crashed their PBX and then they started this policy of how long could be on the phone. And, but it was interesting.
And then the other thing I started doing at my conferences, I started inviting the Federal Communications Commission over to the events. The FCC started hosting town hall meetings. Because what I noticed, was a lot of noise in Washington, because when I experienced these 300 phone companies going against my simple project, I realized they’re things called lobbyists. And they like to lobby. And there are these big phone companies out there. And they like to keep their market position. And they don’t like startups. They don’t like, they couldn’t even spell the word disrupt. Disruption would come from somewhere, but not from them. So I made sure that if any lobbyists were whispering in the ears of any of my friends in the government, I invited the government people to the conference. So we could bypass the lobbyists, and they can hear for themselves and see for themselves what technology is.You’re welcome for that too, because that actually helped a lot because lots of people try to get into and stop the innovators. But when we cut out and provided facts, then the lobbyists started coming to the conferences. Which is just funny. And you know, ironically, when I ran VON, it was basically a three and a half year cycle that went through. And the event went from being 224 people. I mean, in 2000, and in ‘99 in Vegas, we were to literally 2,000 people. And it was just an intense community and lots of innovation happening.
In the early days, it was vendors talking to vendors. Not because they weren’t customers, it’s because the ecosystem had to be built. And then the next year ecosystem was being built because if you’re making ships, you need to be on boards. If you’re a systems integrator, you need the boards you need to write software. Then we need the appliances, then we need the devices. So in 1995, I was playing with modems, putting them in a PC and then dial logic comes out and starts to harden this stuff. In 1998, I noticed something very strange happening at my conference. I was so proud of the fact that people would show up and listen to the people speaking. And I’m very into hallway conversations where people, you know, mingle in the hallways and they chat. And some of the best conversations, best content you get is in the hallways.
But out of the blue, people coming to my conference wanting to rent meeting rooms. And it really bothered me. Like, why? Is it the people they’re going to meet not good enough? Is it that the sessions aren’t good? Why do you want to have these meetings while the conference is taking place? So it turned out that in real life, I had so many entrepreneurs coming to my conferences, and they were putting gateways down in all these cities. So somebody basically had a gateway in Tokyo and Sydney and London, in Santa Domingo, somebody else had Miami, New York, LA, Chicago, and these people are coming to my conferences to try to extend their networks. And back then we didn’t have interoperability because if you had one type of gear and different type of gear, nothing really worked.
But I realized, this is interesting, and I know markets. So based on my experience on Wall Street in 1998, I created the minutes exchange. If you basically had a presence in different cities, you could put a bid asking for termination into your city. And I ran a matching engine to help make people do business. And that was going well, very slow, but steady growth. Then in the year 2000 there was so many people going public with B2B exchanges. I was feeling so left out, so left out. So while I was running the conferences, I reached out to a friend of mine, who introduced me to this guy named Jeff Citron, who had started Datek online, he started Island ECN. And he was living in Brielle, New Jersey. And so he came to my office. And he fell in love with the idea of of making a minute’s market. He was very successful in equities. And he decided to take his magic to minutes. And the thing was, before I met him, I went to Edison, New Jersey. My office was on Long Island, I went to Edison, New Jersey, I found the office space because I figured if I want to be successful in communications I had to be in Jersey, near AT&T. That’s where I can get good engineers. But Long Island would be good for aerospace engineering but not so much teleco. And Citron came into my office, and then one day – so free will dial up was evolving. Eventually we didn’t touch the PSTN ever, we would just enter an IP. And I thought it was interesting, just to connect people endpoint to endpoint, don’t touch the phone network. And Citron was really into the minutes business. So they move out. And I got a phone call after the move out saying, “Jeff, you know, this minutes exchanges is interesting, but it’s at best a multi-million dollar business. And I want to be a multi-billion dollar business. So we’re going to change our focus, and that broadband telephone company that you were talking to Henry about in the hallway? We’re going to do that.”
I said, “Oh.” And then in April of 2001, I found out that MinEx changed its name to Vonage. Where VON was “voice on the net”, Vonage was “age of voice on the net”. And so that’s how I accidentally became the person who started Vonage. And ironically, we prototyped the services on free will dial up on Cisco 79, 60 phones. We played with 8186 ultimately when we were rolling it out, but all the prototyping and free will dial up itself, free will dial up was the first UCaaS service in the world ever. We were cloud based, literally. Our customers self provisioned. The nice thing about SIP is, anyone who wanted to volunteer to help people with SIP had a 55555 number that I gave the password to anybody who wanted to have an endpoint, sip endpoint. Anyone can connect. I also interconnected with Asterix at the time so we had the largest Asterix/SIP network ever, and that ran for a long time until it didn’t.
But you know, I did a lot of things where I didn’t care about business models. What I cared about was, could we make a change? Could we move the needle, can we affect something positive? And we did that. And it worked. And, you know, for every company that I’ve ever been successful in, I never did a business model for it. I never did forecasts or projections. I had to figure out, is this something disruptive? Eventually, sure, you have to make payroll. Sure you need to understand your expenses. But, you know, after investing in over 400 startups, I can tell you that most entrepreneurs don’t have a clue how much someone is going to cost. At the best they can do, is they could tell you maybe what the expenses might be. So whenever I see entrepreneurs with a full deck of projections, I tell them they’re showing me science fiction, because unless they have a crystal ball where they really see the future, I want the crystal ball. I don’t want their startup, I want the crystal ball. I want to know exactly what’s going to happen because any of you guys have – so you all own your own business? Many of you have your own companies? Yes?
So, any of you, like, put together decks to show other people to bring in investors sometimes? Well, those of you who ever do, or have friends that do, there are two things I’ll tell you. That most decks have a hockey puck in it, where at some moment in time, things take off, you know, geometrically for no real reason. They do. Not in real life, but in the forecast. And the other thing is, for those of you familiar with Gartner graphs, most startups always put themselves in the upper right-hand quadrant, always. You know, I’ve never seen anyone with the tenacity to put themselves in lower less and say, but we’re awesome at that. Why is that? Why can’t we be awesome in the lower left? Because if you put yourself in the upper right, I don’t believe you are. Because we put yourself up against all these other companies, maybe you strive to be, maybe you mentally think you are. But you have to show it by execution, by doing. But if you’re already starting in one place and you know grow someplace else, that’s much different. But I do a lot of coaching with startups. I I found that after investing in so many, I can at least provide some feedback to those so they have a clue.
Although, being clueless to me is a strength. I will tell you that some of the best things I’ve achieved in my life was not knowing I couldn’t do it. In fact, Vonage happened that way. That when we went out to hire engineers once money was raised, most of the senior engineers that heard the proposition said, “No, we can’t do it.” They didn’t get hired. It was only the people who didn’t realize he couldn’t do something, who were the ones who were hired. And I both strongly believe in that. There’s a fine line between being clueless and being intelligent without having the negativity associated with making stuff happen.
I also find being vulnerable is a good thing. That while you may want to be super strong and super present, that if you allow yourself to be vulnerable when you’re talking to somebody, maybe it’s a customer, maybe it’s somebody working with, that they understand that you’re human too. Because it’s so easy for us to lose our feelings. It’s so easy for us to have a wall up. And when we drop that wall and we allow ourselves to be vulnerable, customers realize we matter, that they matter to us. It’s like how often when you’re talking to a customer, do you say, “Hi, how are you?” Do even pause long enough for them to answer? I mean, you prepare for them to say I’m having a bad day. How many of your customers do you ask about their kids? Do you ask? I mean, like, how personal do you get? And it’s not that personal. But it turns out that in life, you can either look at every customer as a line in an Excel spreadsheet, that represents something to your bottom line. Or maybe they mean something to you much more.
We could also learn from our customers as much as we can learn from our kids. You know, there’s an entire generation that’s been born that’s out there that I don’t think many of us, you, we, service, are millennials. I have a niece she’s 25, my niece Emily. I tried working with her a couple years ago, but she and I do not speak the same language. She speaks in emojis. She speaks in lower case lower words, no capitalization, no punctuation. Like, where was I? When did this happen?
And I think that, you know, when you look at Unified Communications, we think about how we want to connect people. That we actually want to find ways for everybody to communicate. It’s not so much about a gender or race. But there’s a generation that’s probably one of the biggest challenges we’lll have into the future, to figure out ways to help empower meaningful conversations millennial to millennial.
I’ve always had about one to one, one to many, many to one and many to many conversations. We throw millennials in the mix, and it makes it so much harder. It’s so much harder, and if any of you are a parent, uncle, aunt, relative, grandparent, you understand. It’s just so hard to communicate. I’m a very strong believer that voice will forever be the killer app. You know, being able to see somebody close up and say, “I love you”. There’s so much meta information being shared in your voice. Forget about what Google might be tracking or what Facebook might be tracking. But the ability to share, in voice, something is incredibly powerful. If you can’t be there in person, if you can actually have a meaningful conversations that they can hear you, that’s amazing too.
Yes, a picture has 1000 words. Sharing video is an amazing experience, but the face-to-face – you know, in 1996 when I started my journey, I was in awe of people like Moore’s Law and Metcalf’s Law that I wrote down on my mailing list, I shared something called Pulver’s Law, which I have never promoted. But I’m being reminded of it when I’m here. And I wrote down that in ‘96. I wrote that the more virtual we become, the more we need to have face-to-face meetings. I think it’s even more true in 2019 going to 2020. That if you’ve ever send someone an email and got them angry without the intention of making them angry, or a text, because you missed a comma, or they read it wrong. Unless you see them face to face, it’s really hard to hug it out. It’s very hard to communicate effectively, in a way that we have. I mean, to me the challenge is not can we have the best platforms out there? Can we service the customers the best? But it’s like, how are they communicating? How are we communicating with them? And how do we connect? And that’s something which is not gonna be about chatbots. It’s not gonna be about the AI. It’s about you.
And I strongly disagree with a speaker who I listened to a little bit yesterday, when I was a Cantor Fitzgerald Securities, my office was used, my little cube was used for training over the weekends. Every Monday morning I walked back into the office and there were three words: relationships, relationships, relationships. And we were a broker’s broker, so we actually made markets between brokers. And the only way that we were able to generate revenue was taking people out. Like, if you were a broker at Cantor, six days a week you took customers out all the time. And on unemployment Friday when it came out, hopefully you did get more trading volume from the people that you took out the night before. And then every day they do that, and you see exact responses. Because we had six competitors and if we didn’t treat people right, someone else would. And it’s those relationships that get you through hard times and good times. Those are the relationships that you have, sometimes for life. And they’re meaningful in every way. For some people, yeah, it’s a percentage of how much my bonus will be. But for others, it matters. And you know for me, part of this journey was not to give up a good fight.
And something amazing happened to me – I don’t know any of you guys are willing to admit that you sometimes get premonitions? Sometimes? Maybe a little bit? I’m a strong believer. I acknowledge premonitions. I’m a very strong believer in serendipity and synchronicity. I believe that if you meet somebody, there’s a reason maybe that you met that person, even if you don’t understand it at that time. And then if you make a wish, you can manifest a dream. I’m saying it out loud, so I’m making it real for me. I host breakfasts around the world, particularly in New York City, and Tel Aviv, where I bring people together, where generally I only ask people to say their name, and what they’re passionate about. What they’re doing for a living is interesting, but that only leads to a transactional relationship. And I found that passion-based networking is some of the best networking you could ever engage in. For me, though, I found myself in a particular situation that in the December of 2000, I got a phone call from a competitor asking me what my exit strategy was. I should mention that in three years time, my revenue went from zero to almost 18 million. My EBITDA got to about 6.6, 7.5 million. So it’s pretty fast growth. And this is from a competitor who runs a conference business. He says, “What is my exit strategy?” I had to say to him, “what’s an exit strategy?” I didn’t know. Because I never I did – I did everything bootstrapped. I didn’t have any investors. I didn’t know any of it.
Apparently I was a benevolent dictator, as people called me. Because the nice thing about being a startup is you can set your own culture. In the culture that I had, I learned to take having fun seriously. I was very much into music. So Fridays in my office between Memorial Day weekend and Labor Day was pizza karaoke Fridays. Where from 12 to two, you bring the pizza in, and when people were tired of pizza, whatever else they wanted, and we would sing. And it was fun. Eventually I opened a record label, so I used it as a way to showcase talent. But it was a fun way to show that we could have fun, and at the conferences for me were all about fun. It was a fun plus business and it worked. And, so anyway, this guy asked me what my exit strategy is. And I said, “I don’t know.” So he says, “Why don’t you consider selling your business?”
I said, “Cause, I’m having the best time of my life.” And if he had known anything about my background, he’d understand that I’m having the best time of my life. And then I hung up the phone, and then I went to thinking and said to myself, “you know, maybe I should sell.”
So I felt, like, disloyal to the community at large, because by 2000 VON was taking place twice a year in the United States, and I was in Europe. And I was expanding, and I felt so scared to sell. But it’s like the voice of God, or someone, saying, “Maybe check it out. Maybe you want to.”
Because my father died. My father passed away in April of ‘98. My father was diagnosed with cancer in April of ‘97. He was told he had one year to live. He told me to continue on my business, continue doing what I do. And I had my first offer to sell in ‘98, my father’s trying to tell me to sell but it was only for $5 million. I try to explain it to my dad, even though he didn’t hear me so well. I could do a little bit better.
I kind of regret that I didn’t spend more time at home that year because my sister’s, my mom, they dealt with my dad ultimately in hospice, and I hope I don’t cry, but it was really hard. But so in 2000, when I heard to sell, I decided I’m going to sell. A negotiated deal in July of 2000 in LA. Crazy enough, the deal closed in September, closed on September 10th. So being lucky is ok. I learned, never apologize for being lucky. Never apologize for being lucky. And for one day in my life, it was an amazing exit until the next day was September 11th. And the thing is, I worked at One World Trade Center. Almost 700 people died from the company I used to work for. When I looked at the people who passed away from Cantor, I knew almost about 400 of them. So I was never so grateful to be alive. I’ve never been so grateful for being fired. Whenever people tell me they’re fired. I think say, “Congratulations, getting fired can save your life.”
And, I only found out three years ago that my mom and one of my sisters got a phone call from Cantor on 9/11 or 9/12 that I died. I think I was in Atlanta for a press conference with the guys that were doing COMDEX to announce the acquisition, so I didn’t die. But they had to deal with this heaviness. And then on, September 12th, is my birthday. So I had some three messed up days in my life, totally elation, total devastation, and I had to celebrate my birthday.
And then when I sold my business, it turned out that even though I had a great exit, I was so depressed. Because I went from having so much fun to selling to a company that did not understand my culture. And I had so many other businesses around me in an orbit, like one core company, but it had like all these other companies and everything was based around that. And when you take that planet out, everything else falls to the ground. But I was so bad – I’m still so bad at firing people. That I wasted about $3 million on payroll until everybody quit. And then 17 months later, I had a chance to actually buy the company back two weeks before the company I sold it to went bankrupt. So I bought it back. And I relaunched my business again.
But I never expected to that depression. And then in January 2003, I woke up with a premonition. And this is a crazy, badass premonition. Because we had been through the.com crash, been through 9/11, been through the telecom crash. And I had this crazy idea to go to the attorneys who I worked with on the VON coalition…”Can we go to the Federal Communications Commission and ask a simple question?”
And that’s that voice communication, if it originates just on the internet and doesn’t touch legacy phone network, for it not to be regulated as telecom? And these lawyers said, “Sure, we can do it.”
It took five weeks, they file a petition. I remember calling and speaking that night saying, “Okay, so when’s the fight going to begin?” And they said, “What fight?”
I said, “You know, the fight for the cause.”
“Jeff, if you hear martian signals in your ears, you could file petition the FCC, but it doesn’t mean they’re gonna take any action on it.”
I said, “Oh.” But then, like, sort of like, be careful what you wish for, cause 10 days later, the FCC took my petition, put it out for public comment. And for any of you who’ve ever been through a pleading cycle, you’ll know that the first 30 days, people around the world attacked me. They attacked me personally, they attacked in business merits, the need for the petition, mostly for the lobbyists who were trying to be friendly with, and then I fought back. And then in May of 2003, the Department of Justice and the FBI went after me. They accused the free will dial petition to being a way to harbor Al Qaeda. And so we had a meeting in a so called undisclosed location. Back in 2003, the government repossessed MCI as buildings. So we were in an old MCI building, and it was like three people from the government, 10 of us – because I had the CTO of free will dial up and legal team – and it was very, very uncomfortable to go this meeting, go to the second floor. It says Computer Crimes Division. I felt like I was on the set of Law and Order. And I go in, and they open the conversation saying, “Hi, we’re not here to talk about the merits of your petition. Our comments are of public record. But do you mind asking a few questions?”
And my poor CTO, Ed Guy, was there. I think in about 25 minutes, he lost two or three pounds of water weight. He was sweating profusely, and I jump up and say guys, “Listen, if you think that free will dial can help you get the bad guys, it’s now yours. Host it. Whatever you want. It’s yours. If you want to own it, you want to host it.”
And I was serious. Like, if I can help you capture one bad person, it’s yours. So it was a little creepy that only two out of the three people in the room from the government introduced themselves to us. But I left that meeting at least with one new friend. The next day we went to the White House, to the West Wing. President Bush had a telecom czar, and I’m telling you, it’s very much like Forrest Gump. Or Walter Mitty, I don’t know. But I go to the White House, West Wing with the telecom czar, and as we’re leaving and he’s telling us all this BS. Yes, it’s good for America and everything else. And then we’re leaving the meeting and he sees the doors – we had to go upstairs to this two-floor elevator, I don’t know why but he had glass walls – he opens the door and he just yells as the doors closing us, “Thank you for not asking for subsidies!”
I’m saying, “Crap!” We could’ve gotten subsidies for this! Who knew? But on February 12th, 2004, in a slightly controversial vote, Michael Powell, the son of Colin Powell, issued something called the Pulver Order. That’s why today, in America, Facebook, Microsoft, Apple and Google are not regulated as telecom providers, and that’s why our kids are able to communicate for free. It’s because of this. And the Pulver Order is actually honored in over 100 countries around the world. And, you know, if I had any idea how impossible it was to go to Washington and effectively in a year plus, make this happen, I probably never would have started the process. But because I didn’t know it was impossible, it happened.
These days, I spend my spare time looking up at the night sky. You know, in the last 20 years, we’ve gone from having a billion stars in our universe to 100 billion stars. This is a photograph I took in Turks and Caicos and middle Caicos, looking up at the Milky Way. And allegedly around every star, there are five exoplanets. So, what you’re looking at is the edge, that’s about 23 million miles away. And that represents 100 billion stars and 500 billion exoplanets. So, there’s probably life out there somewhere.
Anyway, that’s my journey. I appreciate the opportunity to share with you my story, with the hope that someone here is inspired. That if you’re fighting someone, even if it’s yourself, listen to yourself, and give yourself the benefit of the doubt that magic can happen if you believe. And maybe encourage someone else to live their dream. Life is very hard. But doesn’t mean we can’t dream. It doesn’t mean we can’t do anything. And I’m telling you, after doing the first Unified Communication platform globally 19 years ago, there’s never a better time than today for you to actually make this happen.
Back at the VON conferences, we used to dream of services we could deliver to customers. Now you’re living that dream. Those things that we once said what we could do are now possible. I created a term back in 2002 called “purple minutes”, because most people I was running into, executives at telecom operators who were buying soft switches, they were simply replacing their hard iron with soft switches and simply delivering the same services – which I call black and white minutes. I said, “Why don’t you do something purple? Why don’t you do something never before possible, or at least beyond possibilities?”
Today we’re living in a purple world, maybe it’s a rainbow world. But you guys are in a position to service customers, service their needs and help them empower their dreams because we never needed communications ever before than today. You also have the idea that, you know, 20 years ago, 24 years ago, we only had 16 million people on the internet. Now you have 3 billion. So, you know, you could really connect the world and provide as many services to them as you can dream, and maybe connect. Anyway, thanks for your time. I’m Jeff. I’ll be around for a little bit.
