Happy New Year! 2022 was an incredible year, and I will start by thanking all our customers for their partnership as we completed our transformation to a platform company. It has been a long journey, but, as I stated in our investor letter, now that we have achieved that milestone we can move faster to contribute to your success.
Looking into 2023, the Calix team sees three key trends shaping our industry:
Speed-based price wars in competitive markets will fail at a faster pace for legacy providers, while purpose-driven broadband providers thrive
If you joined us at ConneXions in October, thank you. The event was our biggest and best ConneXions yet. Everyone who was there walked away with one message: In a market with more than one (fast) broadband provider, speed as a go-to-market strategy will not succeed. I shared in my keynote that, in a sampling of 100 fiber-based broadband providers that offered a range of speed tiers, only 17 percent of subscribers went for a 1-gig service. Why? Because, while technologists love speed, the average consumer does not care.
Since October, several legacy providers have proven the case. Frontier released a 5-gig service for $149 while discounting their 2-gig service 25 percent to $109.99, Google discounted 5-gig to $125 and, if you ask the provider who has launched an 8-gig service how many customers they have, the answer is “not many.”
Consumers do not understand speed, and legacy providers are teaching them that they only need to think about one thing: price. All bad.
What do consumers understand? They understand experience, and they talk about it to their friends all the time. They understand when you have a simple operational model, deliver reliable services, and are appealing to their needs with new services that are fully managed and hassle free. That is why we have invested over $1 billion in our platforms: to deliver simple and exciting so you can grow.
Over the past three months, differentiation has been the number one topic I have discussed with fellow CEOs. In this Beacon, Darren Farnan, CEO of United Fiber, shares how they are differentiating through business purpose and services. Jimmy Todd, CEO of NexTech, shares how they are partnering with Calix as the early adopter of the new SmartBiz™ solution to drive differentiation in their markets for the businesses that are key to their community.
In 2023, our platform will expand at the fastest pace yet to ensure you can differentiate from the competition by addressing the residential, business, and smart-community needs.
Purpose as a business strategy—a topic for ConneXions 2023 Leadership Track
Whether a not-for-profit cooperative or a for-profit business, purpose is a powerful motivator for team members and the community members who interact with your brand/business. Our team had Daniel Pink, award-winning author who headlined ConneXions 2022, speak to the team about purpose and how powerful this is as a motivator. He commented that Calix is very fortunate to be serving the success of broadband service providers (BSPs) that are transforming the communities they serve. It is part of the message that Darren Farnan shares in his article as he describes their team purpose.
As we seek new team members, we have found that, when we explain your mission and how we are supporting your success, that they get very excited. For Calix, this is a true differentiator in hiring and in inspiring our team members to go that extra mile for you.
Which is why we are so excited to have Daniel Pink returning to ConneXions in 2023 as part of the Leadership breakout. In that breakout you will have the opportunity to ask questions and discuss purpose with Daniel in a private session for CEOs and GMs.
In this Beacon we have also included the registration link for the upcoming Simon Sinek webinar for leaders, where purpose will be discussed at length.
Talent and the changing environment
I constantly get asked what I am most focused on for the year ahead, and every year it remains the same: attract the best talent, improve the performance of the team, and remove those who are not aligned. If we have a great team, then we will achieve our goal of making every single BSP customer more successful.
In the technology market, many companies have been lax in their operational discipline—leading to layoffs at Salesforce, Microsoft, and Meta (to name a few). While we empathize with those impacted, this also represents a great opportunity for your teams to actively recruit talent. As one broadband CEO shared, he is no longer wed to the idea that new talent must live in his community, as work-from-home has proven effective and has been a boon for broadband.
He went on to state that he has hired several remote employees and it is working very well, as he has been able to attract a talent level that would have been hard to get if they had been forced into his small community.
As we go into 2023, there is a huge opportunity to attract people to your community (through the power of your amazing broadband experience) and diversify your employee base as candidates learn about your purpose and the opportunity ahead.
On the Calix front, we are continuing our growth trajectory and continue to grow our team at a time when many people are looking. There has never been a better time for you and our team to attract people to our industry!
To that end, the head of Calix Talent and Culture, Parul Kapoor, has also launched our 2023 intern program, which will see around 60 virtual interns join our team. If you have a great candidate, please do not hesitate to email me, and I will ensure they get into the process! If you are interested in building out your own virtual intern program, we would be glad to share best practices.
2023 is shaping up to be an even better year than 2022, as your success moves at a faster and faster pace. The Calix team will continue to invest to contribute to your team’s success and bring the best leadership speakers and best practices to the forefront for your consideration—culminating in the Leadership track at ConneXions in October.
I had the honor of joining many of you at ConneXions 2022 to share some of what I’ve learned over the past 20 years studying organizations. In conversation with Michael Weening on the main stage, as well as in discussions as part of the Leadership Track, I explored two of the core questions businesses everywhere confront:
At the heart of those questions is the concept of “purpose.” We know from two decades of research that purpose is the most cost-effective performance enhancer leaders have. When people know why they’re doing what they’re doing—when they know their efforts make a difference in the world or make a contribution internally—their motivation deepens and their productivity and creativity climb.
Small, Incremental Changes Make a Big Difference
Leading with purpose needn’t be complicated. It requires clear goals, simple language, and basic humanity. Here are a few ways to instill a purposeful culture and support employees to find meaning:
Align Your Organization Behind Your Higher Purpose
Being purpose-driven gives you an edge. Focus on doing a little better every day. And, where you can, think like a scientist: Form a hypothesis, test it in an experiment, see what you learn, then do it again. Remember: You’re much more likely to regret what you didn’t do than what you did. So have a bias for action. And use purpose as your North Star.
I’m excited to be coming back for ConneXions 2023 to further explore how these insights can help you align your organization, increase sales, and strengthen relationships with your subscribers.
When we turned up service a decade ago, United Fiber was focused on bringing fiber broadband to the rural Missouri members of our parent company, United Electric Cooperative. Fast forward to today: We serve 27,000 residential and business subscribers in 44 communities in northwest Missouri. And, over the next 12 to 18 months, we expect to grow our subscribers by another 50 percent as we expand into other underserved communities.
Partnering with Calix from our early days has been critical. We’re leveraging the Calix end-to-end platform to transform our business. We’re no longer delivering fiber broadband connectivity; we’ve become an experience provider. We’re setting ourselves apart from the competition—and living up to our cooperative values—by leading with our whole-home managed Wi-Fi services combined with our local service and support.
Building the United Fiber Brand—and Driving an 11 Percent Increase in Subscribers
Calix has been integral to our expansion into the city of St. Joseph. Leveraging the expertise of Calix Premier Success Services and resources in the Calix Market Activation Program, our marketing team developed a wildly successful omnichannel marketing campaign that generated more than 20,000 unique landing-page views in one week. Even better, we received more than 3,000 signups for United Fiber service—an 11 percent uptick in subscribers—in just the first month.
Even as we expand beyond our electric cooperative membership—80 percent of our subscribers are not United Electric members—we have not lost sight of our mission to enhance the rural way of life for Missourians. Here are two ways our partnership with Calix enables us to live our purpose every day.
Ensure the wellbeing of our members and subscribers by offering managed services. As a co-op, our primary focus is to take care of our members. That’s why every United Wi-Fi BLAST subscriber gets ProtectIQ® to keep malicious websites, viruses, and intrusions away from their homes. They know we’re protecting them; they can see in the United Wi-Fi BLAST app how many threats have been blocked. But we don’t stop there. We offer ExperienceIQ® to help subscribers control access and filter content, and we’re exploring other services like Arlo Secure connected-camera-based security and Bark social media monitoring to give members even greater peace of mind. With United Wi-Fi BLAST, subscribers get amazing whole-home Wi-Fi, with home network security, parental controls, and self-service capabilities—and the possibility for additional new services is nearly endless. On top of that, we manage everything for them, with 100 percent local service and support. That’s not something they’ll get with the faceless Tier 1 players, and it makes a difference.
Enhance the lives of our members and our communities. We’re connecting largely rural communities that have previously gone underserved or unserved, providing access to essential services like education and healthcare, and increasing economic opportunities. We’re giving businesses—large and small—the connectivity and services they need to serve their customers. Working with Calix, we can build on this; we’re excited about new services like SmartBiz for our small businesses, and SmartTown™ for community-wide Wi-Fi.
We put our members and subscribers first in everything we do. We take care of them just as we would family and friends, because that’s what they are. This member-first approach is fully embraced across our entire organization, and it shows—from the 3,000 new signups for service in St. Joseph to our Net Promoter Score℠ (NPS®), which stands at +62 compared to the average telecommunications industry score in the 30s. At United Fiber, we’re living our cooperative values—and thriving.
Watch the replay of the webinar, “Managed Services with Exceptional Experiences: How Broadband Providers Win,” to learn how service providers can transform their value propositions with managed services.
Net Promoter®, NPS®, NPS Prism®, and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., Satmetrix Systems, Inc., and Fred Reichheld. Net Promoter Score℠ and Net Promoter System℠ are service marks of Bain & Company, Inc., Satmetrix Systems, Inc., and Fred Reichheld.
Much has changed since we started out more than 70 years ago as Rural Telephone to provide better service for the rural areas of northwest Kansas. What hasn’t changed? Our passion to make life better for our friends and neighbors—our members. Among the thousands of customers we serve, we work with more than 5,000 businesses not only in our home state of Kansas, but nationwide. We deliver enterprise solutions, including cloud services, cloud phone, network security, managed IT, physical security and surveillance, marketing solutions, and network operations monitoring.
Managed Services: Meeting the IT Needs of 34 Million Small Businesses
But 75 percent of our business customers are small businesses. These are the companies that line our country’s Main Streets and fuel our local economies. There are 34 million small businesses across North America today. And I can tell you the technology solutions used by medium and large enterprises are just not suited for these companies. They’re too complex, too expensive, and too hard to manage.
Small businesses deserve the same capabilities that larger enterprises enjoy: high-performance Wi-Fi, innovative productivity services, robust security, network resiliency, etc. And they should also have choice in the solutions available to them—because a bakery has different technology needs than an auto shop, a hair salon, or a doctor’s office.
Unfortunately, most small businesses can’t afford sophisticated IT solutions, and they don’t have dedicated IT managers to support them. That’s where the new Calix SmartBiz managed service comes in.
Nex-Tech has been successfully selling this vision with our managed service offering in the medium and large business market for years. As part of the Calix Leadership Advisory Board, I was able to share the insights we gained working with our enterprise and small business customers. Now, with SmartBiz, we (and other service providers) can easily bundle a fully managed offering for small businesses that need more than just phone and internet access. SmartBiz delivers the business automation and productivity applications that small businesses need. And it keeps the cost down with a managed service that scales with the efficiency of residential services.
Getting the Fundamentals Right Helped Us Push Satisfaction to 98 Percent and Nearly Eliminate Churn
Of course, no business can be successful without the right foundation in place. Here are three fundamentals we focus on in our business:
Developing the best network: Having the best technology is essential, and we’ve invested heavily to develop the most advanced broadband network and cutting-edge technology solutions for our business and residential customers.
Delivering exceptional services: As a cooperative, our members expect us to provide great services. Every Nex-Tech employee—from our technicians to our leadership—is 100 percent committed to delivering an exceptional member experience.
Building the strongest team: A company is only as good as its people. Just as we invest in our network, we invest in our people, so they have the education and the knowledge they need to provide outstanding customer service.
Our focus on getting the fundamentals right has helped us create extremely loyal customers. Thanks to our company-wide efforts, we’ve cut our churn rate to 1.1 percent, we have a customer satisfaction (CSAT) score of 98 percent, and our NPS is +73—outperforming industry averages in all categories. By focusing on the needs of our customers, staying ahead of technological developments, and exploring exciting new offerings like SmartBiz, as well as Calix SmartTown community-wide managed Wi-Fi, we’ll continue to build on that success.
Ready to learn more about SmartBiz managed services? Sign up for a consult here.
With so much funding available to support growth, the broadband industry offers a golden opportunity for those just starting their careers. And here at Calix, we’re still at the very beginning of our growth as a cloud and software platforms company. Therefore, much like all of you, we’re looking to attract the best and brightest talent.
That’s why we launched the Calix Internship Program five years ago. Since then, we’ve grown our number of recruits by more than 1,000 percent—with 81 interns hired globally in 2022. The program has been a valuable way for us to build a strong pipeline of talent. Many of the folks in these roles end up applying for and attaining contract or full-time roles. Last year, 18 interns converted to contractors or full-time employees—a 29 percent increase year over year.
Our interns become core members of the award-winning Calix team, not just paper pushers. Even before signing an offer letter, each intern will already learn what project(s) they’ll be working on—and who they’ll be working with.
Here are the highlights of our program:
All students must be actively enrolled in a college program
The program runs from 10 weeks to 90 days, between the end of each spring semester and the beginning of the fall semester
Internships are paid, and all interns work remotely
Our executive series gives every intern a chance to meet with our senior executives
We have roles available across a variety of functions—from supply chain, to marketing, to cloud sales, and much more. The 2023 postings are here and updated continuously as new roles become available. Our goal is to have 60 roles posted and filled by March 3, 2023.
If you know students who would like to be considered, please have them check our careers page or contact Jonathan Mortara at Calix. Or, if you’re interested in building your own internship program, get our expert advice in this webinar recording, “Five Best Practices for Building a Successful Intern Program.”
For more information on the Calix internship program, visit our internship program page.
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