My word is my bond! Really, Paul. (Money makes people funny.)

  Lydia

Ian

Musings of an original thinker – “My Word Is My Bond.” (Really, Paul?)

I remember sitting in Baton Rouge with my wild and crazy Ragin Cagin’ woman, Lydia – getting a call from the CEO of Sprint International – I had single handily increased the Sprint access and deal opportunity, in the Caribbean Basin – taking the business from MCI. This was done when I put the plan together, which would enable telephone companies to become internet service providers.

The only company at that time offering long line access to the internet was Sprint. I designed the network to connect with the Sprint internet gateway in McLean, Virginia, via the telephony gateway services of Telecom Canada – using their DMS-300 facilities in Nuns Island – Montreal.
It worked beautifully. Sprint got a seat at the executive table for all major telco’s in the Caribbean and took millions of dollars of longline business away from MCI – the sales group in Sprint were called geniuses for the good they had created; Hmmm. – of course, the Sprint sales VP – never mentioned Internet Associates International (IAI) – my company, run from Turks and Caicos – before anyone knew where Turks and Caicos was.

Anyway – I digress.

The CEO of Sprint – asked me to come to McLean Virginia – the world headquarters for Sprint International to speak with their major customers from around the world – they were the top executives from Singapore, Japan, Australia, South Korea, UK, and more. My wild and crazy lady – drove me to the airport in New Orleans and I was in a hotel in McLean that night.
The next day I had breakfast then walked to Sprint’s flagship headquarters – treated like gold, as I announced myself to the lobby receptionist, stating I was here for a meeting with the CEO.
Two of the sales directors and the VP of Sales were on their way down to escort me to the meeting room.
I signed in and received my visitor badge – introduced to the VP by the sales directors – known to me, and then we were on our way to meet the international customer chief executives and the CEO of Sprint.

Life is good, I thought – the female sales director complimented me on my shoes – which Lydia insisted I purchase – brown, black and fancy, lace-ups – priced at over $500! I thanked her and thought women do know how to dress men better than men dress, hoping my shoes would not be more impressive than I turned out to be.

We got to the meeting room – large screens, IP portals everywhere – deep leather seating – huge whiteboard, coffee, and tea – fruit and pastries. A comfortable place.
I was introduced to the CEO of Sprint, who then introduced me individually to each of the worldly top executives in the room.
There was also a little weasel type of guy in the room – the Engineering Director of Internet Development at Sprint, who looked at me with a scared and scowling look on his face.
Who is that person, and why is his body language hostile towards me, I thought as he shook my hand?

WTF.

Now, these were the days of the mid-nineties – when the internet was still a mystery to most. Telephone companies were not sure what to make of it – thinking it was surely a fad – a fly by night false flag.
I went to the front of the room – opened my laptop – brought up my internet presentation – and a media expert in the room connected my laptop to the overhead projection system.

The Sprint CEO opened the discussion with – “Ian, how can a local telephone company become an internet service provider and how is it possible to make money from internet deployment?”

Anyone asking that question today would be laughed out of the room, and would not be the CEO of Sprint International.

I knew Sprint had two business plans in play – the first was the most important to them at that time:
1. How do we increase long line access opportunities around the globe?
2. Could providing internet connection services to telephone companies around the world help us sell our long line solutions?”

Sprint International was thinking lines instead of networks.

They believed their long line business was the leading pitch. The long line business included undersea cable, some satellite, and terrestrial cables, with high capacity,  and private line economies.
Sprint International was the first long line company in the world to provide access to the USA internet gateway located in McLean, Virginia. This is the only reason I brought them into my solution.
Since most telephone companies in the Caribbean Basin did not use the Sprint long line product, but Telecom Canada did provide access to the Caribbean Telephone companies and also connected to the Sprint backbone via the telephony gateway switches (DMS-300) in Nuns Island. I selected Telecom Canada as the fastest and least number of hops.

But I digress.

I stood in front of this esteemed group and started talking about where the networks of the world were at present – with telephone company private protocols – SS#7 and “the intelligent network”, ensuring the telephone companies were secure in their control of devices and connectivity worldwide.
We had some discussion around this topic ending up with the conclusion, a high entry cost protected the world telephone companies from competition.

I went to the whiteboard – and drew two circles – one circle connected to computer devices where text, images, and some early voice applications would be done. The circles were not connected – they were different networks separated by different protocols, but the telephone network provided the lines and telephone gateways to connect and move the data of the internet. The telephone networks were ‘connection-managed’ by country codes, area codes, office codes, and finally subscriber line numbers.
The internet is connection managed by top-level domain names, including country domains like Canada (‘.ca’), where every device had a permanent or virtual Internet Protocol address.
This is called the “dotted quad” by some since every device has a tier-based address based on a set of four numbers with a dot in between each like 66.220.144.0 – this one is the gateway IP addresses for fb. Facebook has a few.
In those days, internet services were delivered from ISP’s which were not telephone companies – located in people’s basements, garages, and sometimes rented space – Modems, data multiplexors – network bus cards – a name server, a web server, and an internet gateway server. The internet gateway server was the path to and from the internet to and from the ISP. The independent ISP charged for internet services, including e-mail and data uploading/retrieving – gateway servers.

The telephone company provided telephone numbers for the ISP’s, and the ISP’s gave this as the connection number for the ISP customer. The ISP provided a complementary modem – not one on one – but through a formula well used by the telephone companies based on predictive connections. Some ISP’s would provide a ratio of say 20 to 1 – meaning there was one modem available for every 20 customers. If you dialed in and got a “fast busy” signal – it meant all modems in the ISP modem pool were busy – try again. Dial-up – unlike broadband was not an always-connected system like we take so much for granted today.
The data/internet connections blew the voice metrics out of the water though, since a data connection lasted much longer than an average phone call connection. Packet-switched data connections were more connection resource-intensive – but due to the multiplexing of packets, less network resource intensive.

BUT I DIGRESS.

After asserting everyone in the room understood the difference between the internet and the telephone network – (believe me when I say the internet was not understood by most telephone company executives back then) – I put up a diagram which eliminated the independent ISP model and moved the modems, digital line packet multiplexors, name servers, web servers, common bus cards, and internet gateway server onto the data equipment racks within the telephone company space.
I had successfully done this within the Caribbean Basin nations – and wrote the first business plan for a telephone company to become an ISP. You may be surprised to know the first telephone company in the world to provide its subscribers with telephone company provided internet connections is Cable and Wireless Antigua.

I then presented a controversial PowerPoint slide where the voice, data, image, and eventually video network would all usurp the telephone network and be delivered by the internet.

Some people laughed at this, going back to the discussion we had earlier, about the huge cost of entry for new telephone companies to start and compete with the status quo historical one-hundred-year-old companies. I reminded them about the two separate circles – the internet was not their network and they did not have the internal engineering skills to run a data network. The IT department engineers would be the new technical wizards of internet connectivity.

While sitting in my rented house in Brampton Ontario Canada – back in 1992 – 1994, after leaving Nortel, I put together the required skills of the virtual corporation required to install and came up with a list of possible companies I could bring together for their expertise in different parts of the network design and build.

For this work, I decided to use Sun Microsystems as the server suppliers. I sent a request to IBM, Digital Equipment, and Sun Microsystems – Sun was the only company to respond. Mr. Willian Steed called me back (still a good friend today) and we talked.
Mr. Kevin Kimsa and Mr. Paul Atkinson had put separate propositions into Sun Microsystems to become a system integration company representing Sun products – with a territory ranging from the west end of Toronto to London Ontario. Paul won the nod from Sun – and his company, Southwest Sun, won the day.

He realized Kevin would be an asset – asked Kevin to join him, along with two other partners who helped fund the start of Southwest Sun.
Southwest Sun’s clients were banks and such – working to supply and integrate Sun Microsystems “boxes” into the various Enterprise customer space. They were not an internet platform integrator (yet).
I met with Kevin and two other partners at the Holiday Inn on Eglington by the Don Valley Parkway in Toronto – gave them the block diagram of the internet platform I had put together and asked them for a quote for all Sun Microsystems items, including installation and system integration. They said their company name was Solect Technologies and I knew they had no contracts yet. It was a new venture using the talent pool from Southwest Sun spearheaded by Kevin and Paul.

In the previous month, I created and delivered the first Internet presentation to CANTO – Caribbean National Telephone Organizations, explaining to a shocked crowd the importance of the internet and how all services from voice to video and everything in between would morph away from the telephone network, the radio network, the cable network, and the tv network, onto the internet.
The presenter who followed me from Newbridge – told me and the audience I was wrong since each of those network products belonged to different industries.
During the panel discussion afterward, I explained the common thread was the digitalization of the network along with a worldwide standard protocol.
Having a background in large scale computer design with Control Data (7 years) as well as expert level experience regarding the telephone network, through my time with Nortel, (14 years) – I knew the guy from Newbridge was wrong. Through my work with Nortel and the high-level managers and executives in the audience, I won the day. They trusted me – they understood the possibilities of the internet and wanted to be part of the future.
Kevin got back to me within a couple of days – I added his material and professional services cost to my growing spreadsheet, which also had quotes from Motorola (Modems) and 3COM (Internet Gateway). Sun did not have an internet gateway server – not their customer space, at that time – 3COM did.
Within one week,  Kevin and I were in Kingston,  Jamaica, and we had our first letter of intent from Dr. Sadler, for a $500,000 deal. It would take time to get approval, but Dr. Sadler wanted to get this done. He was acting on the recommendation I had presented at the CANTO conference. Kevin later told me he had received $10,000 to pay for this trip from a business associate. Solect did not have operating funds to pay for business development travel. This individual was given Solect shares as remuneration for the $10,000. As a side note, these shares were worth about $40 Million when Solect was sold. Lucky guy! I will provide some details of the sale later in this life story.
I subcontracted Solect to be the system integrator and platform box provider. They already had a business agreement with Sun Microsystems, due to the work being done by their company, Southwest Sun, in Toronto. This was their first international jump and their first internet-centric contract. I think it was the first contract for Solect.
Dr. Sadler called me one day and asked if I could help Telecommunication of Jamaica, (TOJ) – do a billing system for the internet service he was planning to launch in Jamaica. I gave him Kevin’s number and told him to give Kevin a call – in retrospect, I should have called Kevin myself with Dr. Sadler – but he was my friend and I trusted him, and Paul too. As a result of this call – Solect was able to transition from a hardware integrator to an internet billing company – hardware-centric to software-centric.

Fujitsu Caribbean (Jamaica) Ltd., held the Sun Microsystems distributor agreement for Jamaica and therefor Solect had to make a deal with Mr. Kenneth Sylvester, the CEO – Fujitsu Jamaica. They needed to agree on the margin split and sales recognition points, related to the Sun Microsystems boxes to be sold to TOJ. Kevin and Ken made an agreement between them which I was not privy to, and this was fine with me since the margins to IAI were not affected. I knew the price Sun was charging Solect and Fujitsu and we all needed to be healthy.

I did not know nor was I told that Sun Microsystems gave more points depending on the amount of equipment sold in a territory. Sun Microsystems in Caracas, Venezuela (the Sun distributor responsible for the Caribbean distributors) were about to increase their sales in the Caribbean, with blue-chip clients (the telephone companies), and Solect along with Fujitsu were the enablers for Sun Microsystems — I did not know about the backroom deals going on between Ken and Kevin and Sun Microsystems until I received a call from Sun Microsystems in Palo Alto asking if they could meet with me. I forget the name of the person, but she was the VP or Director of channel sales (I think). She asked me to bring the Jamaica contract with me if possible. I was living in Turks and Caicos and The Bahamas and Baton Rouge at the time. We set up a private meeting room in the American Airlines Admirals Club at the Miami Airport. Four representatives from Sun Microsystems flew from Palo Alto to meet with me.

I showed her the contract signed by me on behalf of IAI and she shook her head. Kevin and Paul had told Sun Microsystems that I was their agent, working for them. We talked for about an hour about the business I had brought Sun Microsystems in the Caribbean, and they asked me if I wanted to work for Sun? I turned them down. I did mention my good friend who I had worked with as a logic design engineer, at Control Data – he was in the office next to me at the time – Mark Haakmeester, a graduate of Waterloo University – Director of Hardware Engineering at Sun Microsystems in San Diego. The five of us had a good rapport – nice people.

I was surprised when she told me Solect had become an exemplar for Sun sales and they did receive the benefit of a much better margin because of this. I asked how they found out about me? They said I had been heard on a radio interview which I had given to a San Francisco reporter, where I had detailed how IAI had signed contracts with 9 island nations in the Caribbean Basin. It always amazes me how truth has a habit of seeping through the cracks as Leonard Cohen sings – ‘that’s how the light gets in’.


My promise to my customers back then was we would provide a “Turnkey” solution. The telephone companies liked this since they did not have the data expertise in-house. My company was called Internet Associates International (IAI) – run from the Turks and Caicos Islands, and my motto was “One contact – One contract”. I would put the contract together and would be the one to call – if anything was not working as it should.
From my work with Nortel, I knew how a contract should look and what needed to be covered. I lifted the contract terms and conditions from the Nortel sales I had been involved with – and changed it when required to provide the terms and conditions required for the internet platform.
I remember sitting for four days in Baton Rouge – cloning, then honing the Nortel contract style to my own – as an Internet Associates International document. I typed every word of my document – knowing what was expected from the legal departments of the telephone companies.
Having the same structure as the Nortel contract, saved a lot of time and questions since the legal departments in the telephone companies were very familiar with the Nortel contract through their purchases of Nortel’s DMS products – a key to the growth of their digital voice network.
My price sheet was included in a one-page spreadsheet – easy to read – easy to agree to – time-intensive to design.
The price number in the top left-hand corner equaled the total cost at the bottom right-hand corner – I designed the sheet as a self-test of my calculations. I knew the price of the project – put it in the top-left cell of the spreadsheet, did the price minus cost for each of my subcontractors, including the margin given to IAI. If the final bottom right corner number did not match the top right top number, there was an error somewhere in the middle.
The point is, I ensured the contract document was easily understood, easily agreed to – easily signed. I talked with the contract administrator for Solect – Nigel Maund – who I had worked with in Miami Lakes when we both worked for Nortel CALA. Nigel told me he had no problems with the Solect contract since it was like the Nortel contract – I smiled inside.

But I digress, let’s get back to the Sprint meeting.

The weasel looking director saw me as a threat – he had a few good engineers working for him to develop an engineering and marketing plan for Sprint,  regarding all things Internet. He had a budget of over 2 Million dollars, and he had not produced an engineering or marketing plan – they were longline people.

In this small presentation, for which I was charging Sprint $5,000, I had already embarrassed him in front of his big boss. He never even asked one question.
So, most of the room agreed the internet was a viable opportunity, and the telephone companies should be the service provider.
The Sprint CEO then asked if I had a marketing plan which could be used as a template for revenue flow.
The weasel looking director looked at me and mouthed – NO, NO, NO. I was the only one who could see him do that since he was at the very back of the room.
I said, “Yes I do – but was it appropriate for me to present it?”
The CEO asked the group of customer executives if they would be interested and they all declared “Yes!”
I went to the whiteboard and laid out the marketing plan template – how telephone companies could make money on the internet. I had a business plan and I shared it with all.
The slide presentation included a chart with my virtual corporation subcontractors, including Solect – I gave them the plan and the contacts, for all subcontractors chosen to be part of my virtual corporation. It included the total cost of ownership (TCO) involved.
I have always been too generous in providing this type of information.
The presentation was a great success.
At the reception afterward – the weasel looking director came over to me seething – “You are a fucking asshole!” he hissed. “I told you not to present the marketing plan. You have embarrassed me, fucking asshole!” and he stomped away. This guy had issues.

The next day, the weasel contacted Solect back in Toronto – told Kevin and Paul to fly down to McLean, Virginia as soon as possible – they were in a meeting with the weasel the next day.
To Paul’s credit – I heard when Sprint asked Solect to act as their system integrator and billing software provider for their customers worldwide – Paul said, “Ian Lenathen should be in on this venture.”
The weasel said, “Ian Lenathen adds no value to this! Do you want to work with us or not?”
They did, of course.
I was cut out of the deal.

A few months before my meeting with Sprint in McLean, I was stopped by Paul in the hallway of the Southwest Sun office in Toronto. Paul stated if I could get Solect at the table with Sprint – he knew I was working closely with Sprint – it would be a huge deal and would be very good for me financially as well.  I asked Paul if I should get a lawyer and put the details in writing.

He stated, “My word is my bond!” I did get Solect to the table with Sprint – It cost me financially. and shut down my business concerning IAI. The sad part is, they know this.

To Paul and Kevin’s credit, Kevin did call me and offer me a position as General Manager of Product. I turned them down since I was pissed off with how things had transpired. If I had become the GM of Product – they would have had a much better product. I was a recognized expert on both the telephone network and the internet. They were Sun Microsystems box guys morphed into internet billing guys. They did very well, and I am happy for them.
Since the weasel had to sign-off on the payment of my $5,000 invoice, he never did. I did that presentation for free.
Ah well – I thought – at least I can create an original and interesting thought – not many people can do that.
I gave Solect their first 11 contracts. After hooking up with Sprint – they went big – fast – not just the Caribbean billing company anymore. To their credit, they sold Solect to Amdocs for US 1.2 Billion dollars. They were all rich and were now beacons on the Canadian start-up business scene. The best of the best. At the time, the highest exit payment amount paid for a private Canadian start-up. I remember reading an interview by Yahoo – Paul had been named a ‘Yahooligan’. They asked him how he had come to such great success so quickly, bringing internet billing to the telephone companies of the world. He answered, he had always known telephone companies were ripe and ready to become internet providers – he was there at the right time. I laughed at that, almost choked on the diet rum I was drinking.

I did lose confidence in myself lasting a few years after this transpired, made a fool of myself at some presentations, too nervous to talk.

All I had done seemed to be for nothing – but I am okay now.
It is all good. Our character is defined by what we do, not by what we say.
We do what we do and we are who we are.
I realized, in my life on many levels, I have been a catalyst affecting the lives of others without much change to myself.

I remember praying for this as a six-year-old in Scotland. “Please God, let me be a channel, bringing love, light – the choice to do what’s right, into the lives of others.”  We all have the choice to do what is right through truth and integrity – to first, be kind – to think higher.

My prayer is answered, always. To me, life is more than material gain. I strive to think higher.
I am happy with that.  I think I am the poorest smart guy I have ever met 😊

                                 P(x) = |ψ(x)|²         

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Globe and Mail Business Section October 22, 1998

Solect shifts gears smoothly
Consulting firm’s speedy growth driven by
software that helps ISPs onto info-highway

Mark Evans

Thursday, October 22, 1998 – Globe and Mail – Toronto

In any business, a sharp change in strategic direction can be difficult, if not impossible. One exception is Solect Technology Group Inc.

When Solect started in July 1993, it did consulting work, mostly for businesses that wanted to use Sun Microsystems Inc.’s computers and software. Solect’s customers included investment firms ScotiaMcLeod Inc. and Midland Walwyn Capital Inc., and first-year sales were an impressive $600,000.

Solect was turned upside down in December 1993, when Kevin Kimsa, its president and chief operating officer, was approached by Ian Lenathen, an ex-Northern Telecom Ltd. employee in Miami, with an intriguing business idea: to help telephone carriers in the Caribbean develop Internet access units.

At the time, the Internet was used mostly by the academic community, and Netscape Communications Corp. was a year away from releasing its Navigator software, which made surfing the Internet much easier.

However, Mr. Kimsa still remembers the day he approached Mr. Lenathen five years ago. “We met with him on Thursday and by Wednesday, were in Jamaica proposing a complete Internet service provider solution. The deal went through, worth $500,000, to turn them into an ISP.”

Solect’s transformation into an Internet company was completed four months later, when Cable and Wireless Jamaica Ltd., (then called Telecommunication of Jamaica Ltd.), asked for a system to bill its Internet customers. After a fruitless search, Solect offered to write, build, and install the required software.

Today, Toronto-based Solect is one of the leading providers of administrative software used by telephone carriers and ISPs to manage, support, register, and bill their Internet customers.

The 170-employee company had revenue of $13-million in the year that ended on July 30, compared with $6.5-million in 1997. Revenue is expected to more than double in fiscal 1999 to $30-million, Mr. Kimsa said.

Solect’s growth is being spurred by demand from telephone companies and ISPs that need specialized software to administer their Internet access businesses. They would rather farm out the job than develop the complex technology in-house.

There is already strong demand for this technology in Europe, where local telephone calls are billed on a per-minute or per-call basis, rather than the flat-rate system used in North America.

Many North American access providers, which charge a flat rate, are now considering software from Solect and rivals such as Cupertino, Calif.-based Portal Software Inc. and St. Louis-based Technology Applications Inc. to create systems that will allow them to charge more during heavy traffic periods and less during lighter times.

“Billing is important because if you can’t bill, you’re a charity,” said Bart Taylor, an analyst with Aberdeen Group, a research firm in Boston.

“This software has a new degree of importance in this market because whereas before, it was an industry back-office function, it’s now a strategic tool.”

A fledgling — but rapidly emerging market for Solect and its rivals is the on-line subscription business, in which Web site operators can charge customers a fee for the frequency or amount of time they visit a site. A newsletter publisher, for example, could use this software to charge for every article downloaded or printed.

The key issue for access providers, Mr. Taylor said, is the ability to have flexible systems that will allow billing rates to be quickly changed so they can offer special marketing programs and targeted sales pitches, or react to price changes by competitors. The billing system can then become a marketing weapon, as well as an administrative tool.

A big challenge facing Solect, Mr. Kimsa said, is managing growth as sales of software become a much larger part of the business. In fiscal 1998, he said, software sales accounted for 25 percent of revenue, and that’s expected to increase to 40 percent in 1999.

Another important issue for Solect is the development of software that works with Microsoft Corp.’s Windows NT operating system, which is gradually being adopted by corporations to run their computer systems. Solect said its IAF/3 product will fill that hole when it hits the market early next year.

This will let Solect keep up with privately-owned companies Portal Software, which plans to launch its Infranet IPT software later this year, and Technology Applications.

Mr. Taylor of the Aberdeen Group said Solect’s IAF/3 product also reflects the company’s ability to quickly develop improved versions of its software. While IAF/3 has lots of new bells and whistles, he said, its best enhancement is perhaps its ability to let users carry out targeted marketing campaigns.

“If you want to identify a group of people for a limited time with special pricing incentives, tracking and billing that information isn’t easy,” Mr. Taylor said. “It’s this kind of product that puts Solect alongside other companies like Portal.”

Solect’s first outside financial backer was San Jose, Calif.-based Cisco Systems Inc., one of the leading makers of data equipment, which invested $2-million in 1996 for a 6-per-cent stake.

In July, Technology Crossover Ventures, a venture capital firm in Palo Alto, Calif., bought a 10-per-cent stake for an undisclosed amount.

TCV’s other investments include Altanta-based LHS Group Inc. and an Irish company, Saville PLC, which makes billing and customer care software for phone companies.

“We looked at lots of billing companies and Solect was on top of our radar,” said Rick Kimball, Technology Crossover’s founding partner.

TCV, which has more than $300-million (U.S.) in assets under management, is no stranger to Canadian high-tech firms. Its investment portfolio includes Creo Products Inc. of Burnaby, B.C., and it used to own a stake in Open Text Corp. of Waterloo, Ont.

Although Mr. Kimsa said Solect is about two years away from an initial public offering, he said he wouldn’t be surprised if Saville or LHS decided to purchase the company to move into the Internet software administration market.

“The offer would have to be based on proper valuation,” Mr. Kimsa said. “I think right now, we wouldn’t get the value we want.”

COMPANY SNAPSHOT

Solect Technology Group Inc.
Toronto

Makes software used by telephone carriers and Internet service providers to bill, service, and support their on-line customers.

Employees: 170

Revenue:$13-million for the year ended July 30, 1998, compared with $6.5-million in fiscal 1997

Investors: Cisco Systems Inc. of San Jose, Calif., and Technology Crossover Ventures of Palo Alto, Calif.

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