Adventures in Marketing, Collaborations, Joint Ventures and Merger Flirtations

Thomas Conner • Oct 24, 2013

It's kind of like high school- who likes whom; who's doing what to get whose attention; whose parents are allowing whom to do what and when with each other. Except no curfews and everyone wanted the geeks. 

As 1998 evolved, Telalink Corporation became very visible in Nashville, thanks to a big contract that we signed with Bohan Carden & Cherry. We hired Chris Ferrell (then, a young, popular Metro city council member and now the CEO of SouthComm, Inc.) away from Citysearch.com as our marketing director and he embarked on an ambitious spending campaign with the Bohan Carden & Cherry team to make Telalink ubiquitous in Nashville. The cartoon-styled Telalink logo started showing up all over town on bus benches and a major ad campaign had our staff members appearing in The Tennessean all the time. I remember awaking one morning to read the paper and, as I sat down at the breakfast table, I did a genuine “spit-take” with my coffee upon viewing a quarter-page ad showing Hagan Rose (posed in front of a barnyard background) in overalls and talking about farming, giving blood and playing soccer...oh, and selling Telalink services. 


“Wow!” I thought, “How much did all of THAT cost?!” 


It turns out that we had developed a whole series of ads with Hagan the farmer, Michele the Chef and I can’t even remember the rest of the campaign but it was REALLY expensive. I think one ad placement in The Tennessean was $7,000.00 not to mention the actual ad production costs. I don’t think we had spent that much for an entire year in the past. All of those ads and bus benches enhanced our branding and awareness, for sure, but I was very uneasy about such a hit to our cashflow. Before it was all over, I ended up having to work out a payment plan with Bohan Carden & Cherry because we had racked up a $150,000 debt with them! We were growing but not fast enough to pay for those kinds of bills.


It was about this time that partnerships and collaborations started coming into focus for us. First, our relationship with Nextlink (later to be called and now known as XO Communications) was essential. They loved us and we loved them. Nextlink’s CEO, Don Hillenmeyer, and Telalink’s president, Bill Butler, were talking openly about how great it would be for Nextlink to acquire Telalink. Nextlink had gone public in 1997 and was spending a lot on building out its own fiber network in various markets but they were also looking at strategic acquisitions with some of that cash. To Don, acquiring Telalink was a no-brainer and he solicited Kevin Crumbo to assist with making the case for an acquisition. However, the Nextlink HQ leadership, which included Craig McCaw of cellular phone success (he sold out to AT&T for many dollars), was not as hot on the idea. Nextlink had already acquired an ISP in Atlanta and it didn’t go so well. They didn’t want to repeat that debacle, especially in a smaller market. We believed that it was a bad comparison but it didn’t matter. Nextlink soon after announced plans to enter into a collaboration with PSINet, one of the first large, commercial ISPs in the country. PSINet prided itself on NOT being a phone company and only being an internet company. Much of the internet traffic of the world traveled through PSINet’s network. In the early days, Bob referred to them as “pissy-net.”


“Well that’s that,” I thought. “PSINet’s going to squeeze us out of the relationship with Nextlink and we’re going to lose.” 


It was around this same time that we started thinking about having someone represent us to potential buyers. 


“If Nextlink can’t buy us, then maybe PSINet will, especially, when they see how much we can already bring to the table with Nextlink in Nashville. They don’t have nearly the depth that we have in this market. We could be a great acquisition for them,” so I thought. During that same time, we had retained Mr. Frank Woods, a local business broker, to represent Telalink to actively search for buyers.


“Frank, can you see if a company called PSINet would be interested in buying us?” I asked. 


“Absolutely, Thomas! I‘ll let you know what I find out” replied the always-dapper, gentle-spoken Frank. 


Within days, Frank called with bad news. “PSINet says Telalink is too small and they’re not interested. I’m sorry. We’ll keep looking for a better fit.”


While the marketing/ad campaign and Nextlink adventures were in full swing, we were also cultivating a rather interesting and innovative partnership with one of our main Nashville competitors- ISDN-Net (now called The Nexus Group). Born around the same time as Telalink (but we claim the earlier birth!), ISDN-Net was a very different feeling operation. While the Telalink team was younger, more playful and unconventional in its style, ISDN-Net was more serious, traditional-sales focused, offered consulting services and they just seemed more serious. Let’s just say our two cultures were very different. I mean, ISDN-Net probably forbade office cats and white Russian Fridays and probably didn’t have a cuss jar. The two owners, Jerry Dunlap and Ken Russell, were not likely to show up at a meeting in shorts or sandals ("He's wearing 'Jesus shoes,'" remarked someone at the golf course about Bill one day) like Telalink people. However, we DID respect each other as competitors and there was no doubt among anyone that Bob Collie was the most brilliant networking expert of anyone...and that’s how NREP was born.


Nashville Regional Exchange Point was a 50/50 joint venture between Telalink and ISDN-Net. Basically, it was a carrier-neutral data center. Customers could lease space on racks and have their servers that much closer to the highest speed telecommunications lines in town. Internet traffic that only needed to occur locally could now occur. I always compared it to the old “bank clearing house” model. At the end of every business day, local banks would meet up and exchange items that were drawn on one another. For example, if a check drawn on Bank A were presented for cashing at Bank B, then the two banks could settle up directly with one another that evening rather than through a more elaborate network involving other banks. The concept was the same for internet traffic except instantaneous. If I wanted to send an email to someone in Nashville but my provider was Telalink (meaning we were using Sprint internet “upstream” and Nextlink phone lines) and the recipient’s provider was ISDN-Net (let’s say they were on BellSouth phone lines and using UUNet internet), then my email would travel all over different networks and through multiple servers all over the country before landing in the recipient’s mailbox. NREP made this process much easier. The safety, redundancy and maintenance of data center services was projected to be one of the next big things so we were ahead of the game on this concept in many ways.


NREP sat atop One American Center in space that was once occupied by a mobile services company. I can’t remember which provider it was but we determined it was perfect for our needs... and oh-so-convenient to Telalink. This was an added benefit since Bob was running NREP and he could easily walk the block up the hill to One American Center to meet customers and show off the facility to prospects. By all measurements, NREP was almost an immediate success. We even hosted a ribbon-cutting ceremony in which then-mayor Phil Bredesen officially announced this as a huge step for Nashville advancing as a formidable player in the tech industry. 


With such great publicity for NREP, an obvious hit with the service and its implementation, not to mention a good feeling all around about our work as a team (i.e. Bob was clearly a desirable team member for ISDN-Net), it wasn’t too long before Ken and Jerry were openly talking about what a merger of ISDN-Net and Telalink might look like.


“We’d be the biggest game in town and no one could enter this market without contending with us,” said Jerry, with an enticing tone in his voice. 


“And just think about what kind of multiple we could earn on our sales revenue if we sold out,” said Ken.


"Interesting. Verrrrry interesting.....” thought Bill, Tim, Bob and myself. “Marriage made in heaven or clash of two hopelessly different cultures?” 


“Let us talk more about this marriage.” 


To be continued...


By Thomas Conner 16 Sep, 2014
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By Thomas Conner 20 May, 2013
My first day at Telalink Corporation, October 11, 1995, was fascinating. I had not been in the office for more than an hour when I received my first phone call. Actually, my desk, computer and phone were not actually set up yet so Mary Watkins, Bill’s mother, took the call. “It’s someone from the Winchester Police Department. Evidently, the neighbor whom you paid to clean out your basement and garage broke into your house and stole a window air conditioner,” said Mary. “The policeman wants to know if you want to press charges.” One of my neighbors was battling a drinking problem. When he was sober, he was a great guy. When he got drunk, he became somewhat mischievous. I gave a hundred dollar bill to another neighbor who agreed to be the escrow agent. If neighbor #1 (the beer lover) cleaned the basement (it was really a cellar. This was a century old house that had belonged to my grandmother) and hauled off all of the trash, neighbor #2 would transfer the $100 to him. Neighbor #1 performed to expectation. Neighbor #2 paid neighbor #1. Evidently, neighbor #1 then proceeded to liquor store #1 and perhaps liquor stores #2, #3 and #4 where he proceeded to convert the $100 into another form of liquid asset. He imbibed the rest of the day and found the courage to claim a small window air conditioner as a bonus. Neighbor #2 was able to watch neighbor #1 break into my house and find his way to a second floor bedroom before the commotion erupted during the air-conditionerctomy. “No need to press charges,” I said. “Tell him to put the AC back and stay out of my house. I’m about to rent it out and if he does something like that again, I’ll have to take a more punitive approach.” Sadly, my new renter proved to be a colorful enough character in her own right but I will save that for another day. Much was happening at Telalink in those days. Joel Moses was dedicating his weekly column in the Nashville Scene to all things Internet. He was giving Telalink plenty of good coverage and Channel 4 (WSMV) traded out commercial spots (“Internet! Twice the Speed! $35!”) in exchange for their own website and access. In fact, not long after the web came along, local news stories about porn on the web were gaining in popularity. It seemed like Tim, ordained by the Nashville media as the foremost authority on Internet porn, was always on the news, discussing the latest trends in the more salacious content on the ‘Net. Bill once commented that he knew that we were on to something when pornographers, gamblers and churches all wanted on the Internet. By this time in the story, Tommy was out, although he was still in. Still an equal shareholder with Tim and Bill, and still a resident of 110 30th Ave N, Tommy decided that this was no life for him and he opted to take a full time job with Vanderbilt. Not long after I arrived, we all agreed that the best arrangement was for me to simply buy him out. That would free him of any responsibilities as a principal and it would validate the importance of my position, not only as the financial officer, but hopefully as leader, negotiator, organizer, and strategist. For example: Issue #1: ITS Communications found out about Telalink and approached Bill about reselling Telalink service as its own service in the Nashville market. Telalink would get paid $10/month per customer. ITS would sell and support the service. While this sounded like an easy deal, ITS sold the hell out of the service and, if I am not mistaken, they sold it unlimited internet access, a still-new concept. Telalink customers were only allowed 30 hours a month but that was soon doubled to keep up with the competition. You see, unless we had an available phone number for every customer to be able to dial into our service at the same time, the first hapless soul to dial in when all of the lines were occupied would get a busy signal. Remember the early ads “no busies?” So, part of the challenge was to limit usage and kick people off after a certain amount of time online. We also gambled that not everyone would dial in at the same time. However, when ITS private-labeled Telalink service, the model was nearly blown up because they were selling accounts faster than we could add phone lines and ITS support was terrible. Back then, customers needed a lot of help, and some luck, to get online. Telalink had created an installer kit that got users set up and it included a free version of Netscape Navigator. ITS customers started to figure out that they were actually just dialing into Telalink and, because they could not get adequate assistance from ITS, they would just call us. Bill was not happy with the arrangement so I read the contract that they signed. It looked pretty simple to me. All we had to do what was give ITS 60 days notice of our intent to cancel. So, I wrote a letter to ITS, referenced the agreement, sent it overnight and added that we would only agree to renew at $35/month per customer. We got an instant response. They argued that this was the same price at which they were selling the service and this would kill their model. We agreed but showed no signs of letting up. If I recall, we were able to triple our ITS revenue for about 4 months while slowing down our phone line orders to a more reasonable level, not that Bellsouth was cooperating with our requests anyway (see paragraph 5 of http://www.thomasbconner.com/post/2013/02/28/whats-an-internet-again.582282). ITS decided to leave us and we were happy to dissolve our association. Suddenly, we had plenty of capacity to grow our customer base. Issue #2: As I recall, Bob was traveling back and forth to “Convent Place” quite a lot in my first few days at Telalink. Part of the reason was related to sheer brilliance. Telalink worked a deal with Charles, the owner, who had converted an old convent into an eclectic assortment of offices, yoga, banquet space, etc. The deal was that we would feed the entire building with a big pipeline of dedicated internet access and then break out lines to individual subscribers throughout the building. It would be a very cool amenity- one of the first “wired” buildings in Nashville...and Telalink’s margins would be very attractive. The not-so-brilliant part was the idea that we would move half of our personnel to Convent Place. Now, at the time, Telalink occupied two condos, conjoined by an enclosed upstairs landing. That’s a total of two kitchens, 4 bathrooms and total of 7 rooms (one was already our server room) that could be used for office space/work stations. Why would we need to split up our team and occupy space in another building? While it first appeared that we had no room, it was also true that Tim and Timmy still lived there. Bill moved out and his bedroom became our shared office along with Scott Holden, “aka Splotchy.” To learn more about Splotchy, go here . In addition, Vanderbilt friend, Dave Tempero (currently IS Business Manager for Network Systems at Nintendo), had his consulting business, Sector 3, operating out of one of the rooms. Finally, there was one more consulting company called Nvision, owned by Shawn Yeager, and I really never knew him or what his company did. He was sort of like Lazlo from Real Genius. Ever so often, I would see Shawn come and go with nothing more than a “Hey, how are you?” and then he would disappear. My point was that it seemed really important to me that we should try to work near one another (i.e. in the same office space), at least until I got a little more familiar with the basics- the who, what, where, when, why, and how of Telalink. In other words, it might be time for some other folks to move out so that we would have enough room for Telalink staff. No move to Convent Place. Issue #3: No insurance. None. On anything or anyone. All I can say is that the first insurance sales person who cold-called me was a lucky man. Until I could get a business commercial liability policy, workers compensation insurance and health insurance coverage for everyone, I went to bed dreaming of catastrophes, injuries and other unsavory workplace disasters that would render Telalink to the status of defendant or debtor. Issue #4: No staff meetings. What I remember were one-on-one conversations and debates between Bill and Robert Beckett, Bob and Robert, Bill and Bob, Splotchy and “the fat guy,” as he was occasionally called and almost everyone had some kind of crude comment to share with Tim in the event that Feisty (Tim’s cat) pooped on a cable or someone’s work area. Izzy, the other office cat, was generally well liked, as was Feisty, but Feisty was unbelievably artful in her fecal distributions throughout the office. I decreed that we would have weekly, face-to face meetings and, accordingly, would take notes. This proved to be a challenge. First, Bob spoke too fast. Secondly, it seemed like everyone spoke in code with letters: TCP/IP, HTML, ISDN, T1, T3, FTP, 56K, 28.8, Bitsurfr, blah, blah blah. At one point, in the midst of a spirited debate between Bill and someone, probably Bob or Robert, his passionate argument boiled down to one Shakespearean moment when he declared, “The Radius MUST authenticate to the Sparc!” He even used hand gestures. I had scribbled indecipherable comments throughout our first staff meeting but there was one thing that resonated, “The Radius must authenticate to the Sparc.” I thought to myself that if there is one thing that you take away from this meeting today, you will believe with all of your heart and all of your soul that the “Radius must authenticate to the Sparc.” The moment came for the scribe to report what was said earlier about something so I re-read my notes. “Bob said something about something that I did not understand. Bill disagreed. Robert disagreed with Bill but said Bob was wrong too....Let’s see, something, something, something and, oh, Bill says, ‘The Radius MUST authenticate to the Sparc.’ That’s really all I got.” Everyone laughed. It must have been funny. Don’t ask me why. Seventeen years later, I still don’t know what they were talking about. By the way, Robert Beckett is now Services Technical Leader for Cisco Systems. You can see him, still talking code, here.  Our meeting adjourned and we reconvened at either Harvey Washbanger's or Rio Bravo. I forget which but it HAD to be one or the other.
By Thomas Conner 03 May, 2013
was really glad to get some feedback from the Telalink intern graduates following my last post . There were a few posts in response on my Facebook wall that I thought needed to be merged into my blog so that’s what I am doing today. Before I do, though, I was listening to a story on NPR about how women novelists in the US were being classified in Wikipedia ( http://n.pr/16eApbn ). I was only half listening when the word “Kaldari” rang out and I realized that Ryan Kaldari was being interviewed! Ryan was one of the original “unofficial” MLK interns who attended UC Berkeley before working for Sitemason for many years. He left us to work for Viacom and he now calls San Francisco and Wikipedia his home. One day, I’ll write about how, as a student, Ryan wrote a $2.00 counter check to Rio Bravo to pay for his soda but he either forgot to sign the check or wrote so illegibly that no one could figure out how to contact him, which was only necessary because the check bounced! The Rio Bravo team knew the Telalink crew well enough to venture a guess that the $2 mystery check writer was somehow associated with them. And now, let’s hear from some of Ryan’s colleagues from MLK. First, Paula Pfleiger Thrasher writes: “I think I mentioned in the other post, not quite the full story on how the internships started. Carl Tashian was the first MLK intern, but I think he may have even started before the first official school co-op internship thing for school. Carl can fill in details there. I didn't start until October-ish timeframe in 1995. I had originally lined up an internship downtown that fell through right as the school year started, then ended up instead working out at the McClures in Belle Meade in the receiving department doing data entry on bill of materials/invoices/etc. I did that for at least six weeks then my boss got arrested for tax fraud. Plus it was mind-numbingly dull. So I was looking for a new internship when Carl invited me to Telalink. I started working help desk, and there was a paid employee called Rich (I think - I forget his name? Anyone else remember?). He was kinda passive aggressive and a little jerky. At that time Bill (Butler)/Bob (Collie) were sick of answering customer calls so they put up with him. He eventually quit (got fired?) and at one point the entire help desk team was pretty much me and Bill's mom (Mary Watkins). Crazy. Then we hired Scott (Sears) and later Marc (Powell). I never wrote any real sexy or famous sites, but I did write that dang support website complete with filemaker database backend (I think? can't remember) along with a little homegrown ticket system. Didn't make Time magazine though - ha.” [editor’s note: I am not disclosing the name of the jerky guy but I can state that he was not fired. He left for another position with another company] Daniel Templeton writes: “I was at Sun until it became Oracle and about a year and a half longer. I'm now two Years at Cloudera, the leading Hadoop distro provider. I did indeed marry Cari, and she's now been at Google for six years.”  Finally, Carl Tashian shares this fantastic memoir: Starting around 1993-4 I had dialup Internet access via CTRVAX and later via PPP from Vanderbilt's CS department. I paid by the CPU hour or something. Which at first was expensive, but once I moved to PPP it was actually the wrong way to bill things, so I could be on all day and would barely pay anything in terms of CPU. And perhaps that is why, at some point, Vanderbilt limited access to the university community and shut down outside accounts like mine... But I was hooked to the Internet at that point. I was running a MUD and writing code for it, running a BBS w/UUCP that needed nightly Internet access, I was playing with the first generation of web browsers, I was a newsgroup junkie, and I couldn't imagine giving all that up. I think I got an AOL account for a minute, but that didn't work out--it wasn't close enough to the metal. So I found Telalink. It was exactly what I wanted, but too expensive for me. Something like $40 per month? Way out of my price range. So (and I honestly think this is the first time in my life that I'd ever done this) I cold-called Telalink and invited myself over. I came up the back stairs and climbed a ladder to the roof, where Bill and Bob were grilling up some food and working off of RoofNet, which was really just one ethernet cable snaked through an open window. Anyway, that first meeting was a little awkward, because I was a shy kid so new people were a challenge. But after chatting a bit we went downstairs and I remember Bob showing me around-- the Linux boxes, the Cisco routers, ISDN modems, etc. It was definitely a wonderland for me, and the fact that Telalink had a 256k link was a huge draw. I remember telling Ryan and Paula about it. Anyway, I'm not sure how it came up but I started spending more and more time at Telalink. This felt like it was way before the official internship, which would have been from Sept 1995 to June 1996, where I worked about 25 hours a week at Telalink. Tim, Bill, Bob really stayed out of our way as interns, gave us full access to everything and pretty much let us explore our curiosities as long as we didn't get in the way too much. I think in particular Bill is a great leader in that way--very trusting. And that's how the HTML guide came to be--just by being curious and having the time to follow it through. It felt a lot more like a real job during the Official Internship period. I think it was Ryan, Paula, and I. At some point, before we hired Kelly Setzer, it seemed like all of the web & DNS servers were my responsibility. Bill gave me a pager. I took it very seriously. I'm sure I made a lot of mistakes, and I remember, when Kelly came on board, realizing that he was a Real Sysadmin. I learned a ton from him. Telalink was a great learning environment across the board, life-changing for me. And I think things like the HTML guide got me into college, ultimately. Because I wasn't that psyched about school, didn't take it seriously, and didn't test well. I wanted to make things people would use. Still do. BTW the Telalink Virtual Tour website is still up ( http://tashian.com/virtela/ ). I it threw together by scanning some pics from an old book on telecommunications from the school library. It’s stories like these that remind us just what a frontier it was back then but, maybe even more importantly, what great relationships, vocations and contributions came out of this “internship” community. So much passion to learn and create. I hope that we can get some more stories from other Telalink graduates. I also wonder where and how these stories are happening now.
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