Nextiva CEO: Why Private Companies Innovate Best

Nextiva’s new communications platform will be a major differentiator for its partners.

That’s according to CEO Tomas Gorny who announced NextOS on Day 1 of Nextiva’s NextCon16 conference earlier this week. The platform, which Gorny said was two years in the making, aims to unify the multitude of communication applications businesses use.

Gorny, a Polish immigrant who founded Nextiva in 2006, sat down with Channel Partners to talk about NextOS, Nextiva’s partners and the advantages of being a private company.

The transcript has been edited for length and clarity.

Channel Partners: What feedback have you been getting about NextOS since announcing it?

Tomas Gorny: The feedback of NextOS was phenomenal. We knew before even coming here and announcing it — we have talked to several customers. Historically, when you go into those meetings, you’ve prepared for some pushback, you’ve prepared for upcoming objection. And that’s what we were expecting when we were going into a lot of those meetings. But what we got going in those meetings was something I’ve never experienced in my career and life. You go into the meeting, you present the product, and you still get asked a lot of questions from stakeholders, but ultimately the responses — we haven’t seen such a thing before. A couple of days later… you get an email saying, “When can we start testing it?”

In every scenario — we went to several meetings … different companies, different industries — all responded with the same emails. I sent those emails because we’re very proud of it. At the point we knew we had something. We knew we were solving a real problem. And that’s what we were working for for three years, and we kept it very quiet, because we wanted to make sure that this doesn’t leak out. It’s difficult to do in a company of 700 employees.

When I met with analysts prior the show — you get a lot of skepticism. “You’re going to compete with Salesforce. There’s Microsoft. There’s Cisco.” You get all of those different questions. I was trying to answer them as best as I could, but I don’t feel like I even did such a good job. After the keynote, we really alleviated all of those [questions]. Yesterday, every analyst I met — they said, “We get it. It just hasn’t been done before.” They frame it in all different ways, and they still ask me, “What do you mean about ‘collaboration,’ and what do you mean by this?” And it’s not for me always to determine the terms, what ‘collaboration’ means or what ‘engagement” means. What we’re giving is, solving pain points. I frame them…

…that way because they are those common terminologies, but ultimately, I don’t think customers hear how you frame those; customers care ultimately about what they get and what problems you solve and the pain points you address.

We saw the gap in the market several years ago, as I said in my keynote, because we have experienced these pain points. We saw this wide gap in the market. Today, you see technologies that have been built on all types of platforms. In order for them to create what they’re creating, they’ve got to keep adding applications on top of each other, and then they don’t even do that well together. And then on the other side, you have a lot of siloed technologies, especially coming out of the Silicon Valley area. Probably because the mandate is… “Look, if you build this, you can sell it to that company, or you can just take it public and then go sell it.” That’s just my hypothesis. And they’re more interested in integrating, and then everybody fights about who sits on the top. Everybody feels they can define themselves as a platform and sit on the top. To me, those are the wrong fights. To me, the main objective should be solving the pain points of the customers. Throughout my entire career, we have always focused much more on that, and that’s how we kept getting successful. There is not a magic formula to that. You can take care of your customers in many ways. Most people, when they say “taking care of the customers,” they mean customer service. We take care of our customers with technology, with service, with reliability.

CP: How will partners be involved with NextOS?

TG: Pricing is to be determined, but the partner feedback was overwhelmingly great. When you look at the channel — we believe we’re very successful and probably one of the most successful, if not the most successful company from pure VoIP players. And we don’t define ourselves, as I redefined who we are, as a VoIP player, but if I just look at the VoIP business, we’re probably the most successful in the channel. However, you’re still competing against a lot of commodities. Nobody wants to admit to it, but the bottom line is dial tone with features, and you make it maybe easy to use, maybe a bit better customer service. But ultimately, there’s a lot of commodity, and sometimes customers of our partners don’t see the differentiating features of Nextiva, such as amazing service and reliability and the ease of use, and they push our partners…

…to go with somebody else — with our competitors because the price is better. What this [NextOS] really clearly shows is, it’s a clear differentiation. It’s not just a soft differentiation of features, ease of use, customer service, but it is a differentiation in the way that it meaningfully helps businesses to be much better, much more efficient. It allows partners a lot of opportunities to take the revenue up. It allows them to provide professional services that they didn’t have before. I remember when we launched Nextiva Analytics. Our partners loved it because they knew they can differentiate themselves.

This is taking it to a whole new level. Because we’re taking it way beyond talking about voice; we’re talking about communication. We believe that for our partners, that’s going to make the biggest difference, even more so than for our direct business. They have the time to sit down with the customers and actually explain what it all means to their business. We will coach our partners, and we will train them and will educate them to do that.

We’re already separating ourselves in terms of product from the crowd, but separate ourselves entirely from everybody else in the channel to take the conversation. “Who do I go with? Do I go with Nextiva or the other couple of competitors that we compete with?”

CP: Do you think those other competitors are going to try to emulate this?

TG: Like in every market, people emulate. We have patents built around the core stuff. People are constrained also. We have the luxury; we’re a private company. We’re profitable. We have a run rate of 100-plus million dollars.  The company’s owned really by a couple of individuals, so we can do the right thing without the quarterly pressures, without the shareholders telling us, “You’ve got to [hit] the revenue, you’re missing expectations.”

When you’re a public company, you get boxed in. I own part of a company that is public today. We’re not even pivoting — that’s not how we’re looking at it — but for those companies that would be pivoting a business model, it’s much more difficult, so what they probably will do is acquire technologies. And again, it goes back to the same problem. You’ve got to make them work together.

I think we have a head start. It is a little bit of a race always. You cannot just stick in the same place. When Apple launched, there were imitators coming after. There are always imitators, but it’s up to us as an organization to make sure that we stay ahead of that curve…

…of the imitators. At that point, it’s much more than just the product, because it is the product, it is the pricing, it is the value that we provide them.

CP: Nextiva started 10 years ago. How has your company tracked along the “innovation curve?” Where do you see it 10 years from now?

TG: We hope that we have a say in where business communications is going. We don’t want to be just an observer of business communication. I say it to my team all the time — and we have very like-minded people in our organization — that I don’t find it exciting to come to work every day if the best we can do is to chase some other company that does the same thing. And a lot of our competitors focus primarily on just creating short-term shareholder value … while we really focus on creating the best product for our customers and enabling our staff to do the best work possible. Our DNA is that we truly believe that the rest will take care of itself. Those are not just empty words. This has always been our philosophy. We very rarely talk about revenue. The only reason I even mention here is to demonstrate that we’re not a little organization that just came up with that big vision. We have a lot of infrastructure and capabilities to execute on that vision. But that’s the first time since 8-10 years ago that I ever talked about revenue.

But to answer your direct question… I see it in 10 years from now that VoIP will be a feature. So will be chat. So will be CRM. That knowledge and automation will drive the future. That we will see a lot of true progress in AI. AI is not new. Bots existed for a long time; I even owned a company that was doing bot stuff several years ago. But doing it right and really putting it all together [10 years from now].

People focus too much, I believe, today — and again, it’s not my business what people focus on — but what I see very often is that there’s the tendency when companies feel they have to pivot, they try to push a direction. Maybe from devices to mobile. Maybe from phone to video. And I don’t think that’s how innovation really works. That’s just pivoting and trying to do the best for your organization. But the way innovation is really truly solving the pain point. When you solve a pain point like Uber did, people see it, and they respond to it, and that’s…

…what we want to do. We want to create technologies that people respond to, not because we’re telling them how great it is. When people look in and they start experiencing and living it, you get hooked. You’re going to say, “That’s what I want to use for my business.” And we have time. We’re not expecting people overnight to say, “I’m going to replace my entire technology and go with Nextiva.” I’m okay with it; I would be a skeptic as well, and we have time. We have a successful business that is growing tremendously, and we will show the value for our voice customers, and we will show the value for the rest of the customers.

But the bottom line is that a lot of the things that today are products and companies — they will be features. For instance, there’s calendaring software that you can plug into voice or CRM. With all due respect to those companies, those companies will have a very tough time existing 5-10 years from now, because those features will be built in to the solutions. We as humans have a very short-term memory, and we get used to the things that are today. Ten years ago, a lot of us had watches, pagers, iPods. Some of us had compasses in our house, thermometers. I can keep going on. Today, we don’t use any of it. If you’re using an iPhone or Android or any smartphone, it’s all right there. We have capability as humans to get used to new technologies very quickly if they’re really good. In five years from now, you will forget the time of taxis before Uber. [Uber] will be the norm.

That’s what I think communications will be in 10 years — looking very differently. Now, if you’re a VoIP company and you’re public, you cannot say that. Because you’re going to get destroyed by your shareholders. I can say that because we are the shareholders, and we already have the vision. What I have learned is that, if you ask all these customers what they want, they’ll tell you, “We want it a little bit better, a little bit faster, a little bit smoother.” They really don’t know how to jump the curve; you need to show them. And if you’ve got it – and it’s happened to me several times now — it’s an incredible experience. When you’ve got it, and you put it out there, and people start using it and they start recognizing it, it becomes viral. It really does, and that’s the effect that we’re looking for.