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What's it like to be a startup telecom agency in today's converged technology world?

Kelly Teal

July 18, 2012

7 Min Read
New Agents On the Block

In May, Channel Partners editorial intern Lindsay Welnick interviewed five new agents about their experiences getting into the indirect sales channel for carrier services. Find out where they came from, where they’re going and how their businesses are ramping up.

Tony Greenberg
Founder and CEO


Start Date: Established company became an agency in January 2012
Staff: Domestically, 18; internationally, dozens of analysts and developers
Compensation model: I’m retained and then, when I get paid by the vendor, I pay it back to the client.”
Résumé: Started in telecom in 1996 at Exodus Communications, founded RampRate in 2000
Target customers: Companies with IT spend of at least 3 percent of their top-line revenue, usually exceeding 10 percent
Key suppliers: “Everyone. There is not a telecom or colocation we do not work with.”
Insights: Go deep and narrow: “[If] you focus on a vertical segment and their evolving business needs, you can do more [business] with one client than you can do with 50.”

Ed Nader
Technology Consultant
Start Date: November 2011
Staff: Two TelecoWorks founder Valerie Brauckman Bergess and Nader
Compensation model: Recurring and up-front commissions
Résumé: Entered telecom industry in 1989, selling long-distance for Sprint; later served as director of sales and operations. In 2002, was working at RCN when tech bubble burst. Moved into the M&A industry but returned to telecom in 2007. Worked for Verizon for 2.5 years and Comcast for 2.5 years before becoming a subagent.
Target customers: SMBs such as continuing care and retirement communities
Key suppliers: Windstream, Telarus
Services offered: Mobility, mobility management, data, hosted VoIP, metro Ethernet
Insights: “The autonomy is absolutely there. One thing about being an agent is it’s fun you work on what you want to work on and you’re always working on something different.”

Brian Moline
Founder and CEO
Carrier Consulting Group
Start Date: May 2011
Staff: “It’s a one-man show.”
Compensation model: Recurring and up-front commissions
Résumé: After graduating from the University of South Florida as a business management major, moved to L.A. and worked for a master agency
Target customers: SMBs using a lot of data; multilocation companies (finance, banking, IT, etc.) uploading sensitive data
Key suppliers: ACC Business, MegaPath, AireSpring
Services offered: Internet T1s, Ethernet over Copper, Ethernet over fiber, plus hosted
Insights: “We have fewer clients and we treat each client with a white glove service. Every client we have is so critical to our business that we are accessible to them 24 hours per day.”

Salvatore Orefiche
Founder and CEO
Black Wire Consulting
Start Date: January 2011
Staff: Four people
Compensation model: Recurring commission
Résumé: Started in telecom in 1996 working for Internet backlog companies. Moved to Colt Technology Services in 2001 and worked for that corporation until 2008. Went to work for MASERGY, developing that company’s channel program in New York.
Target customers: International energy and finance firms
Key suppliers: Perseus Telecom
Insights: “I think that everybody starting an agency thinks they can call their past clients. I’ve spoken to enough agencies to know that’s not the case. You run a business based on your reputation.”

Ron Hansen
Founder and CEO
Start Date: May 2010
Staff: Four people one administrative person, three sales engineers
Compensation model: Recurring commission and fees from professional services such as LAN management and telecom life cycle management
Résumé: Sold office products and textiles (uniforms, shop and restaurant towels, etc.) before entering telecom industry
Target customers: Any business with employees required to be licensed (think law firms and health care practices)
Key suppliers: Alteva, Level 3 Communications, XO Communications, MegaPath, Windstream
Insights: “I expected the agency business to be mostly transactional that is, you acquire a customer and then provide a service. The agency is more focused on helping businesses be more effective, which is not just a transactional model. There has to be ROI but it’s not about finding the cheapest way … [it’s about] finding the best solution for what businesses need.”

The telecom agent channel has been a haven for the self-propelled. Agents are attracted to the business by recurring and evergreen commissions, work flexibility and the ability to keep the money they earn. After more than two decades, the agent channel is still attracting newcomers driven by a desire to escape corporate America and control their own destinies. Channel Partners interviewed a few new ones about their experiences and challenges as the new kids on the block in a profession that is growing increasingly more complex than it was 20 years ago. What was most interesting is their challenges like their motivations remain largely the same.

The greatest shock for new agents continues to be the  amount of time it takes to turn a profit. “I didn’t realize it was going to take us nine months before we saw any money at all coming into the business,” said Salvatore Orefiche, founder and CEO of Black Wire Consulting, started in January 2011. “If you don’t have at least 19 months of funding, you’re going to run out of money.”

Ed Nader, who has been a technology consultant for TelecoWorks since November 2011, agreed. “There is no immediate gratification,” he said. “You have to have enough money to carry you over until your residual income is such that you can live on it, and that takes time.” When he was interviewed earlier this year, Nader had earned $1,800 total. He projected that number would soar to $10,000 within 12-18 months, as he focuses on large accounts.

Similarly, Brian Moline, who has been in business since May 2011, found it difficult to find and land new customers. “It takes a while to fill up the pipeline,” said Moline, founder and CEO of Carrier Consulting Group.

To that end, agents said identifying and executing on the right marketing techniques required tweaks and experimentation. “We thought we could put up a website and the clients would flow to us. That’s absolutely not the case,” said Orefiche. Ron Hansen, founder and CEO of ConvergenceOne, has been at the business a little bit longer two years. He recommended new agents play with different marketing strategies. “An author said only 3 percent of people are ready to buy today, so if you’re looking for those who are going to buy today, it’s going to be hard,” Hansen said. “It’s about renewing contracts and constantly changing marketing techniques.”

Learning the business and the products takes time. “It really took me about a year to get educated,” said Moline, who opened his own company after working for an L.A.-based master agent. The best way to handle the learning curve is to take advantage of all the training and education vendors and industry resources have to offer. “You have to read all the publications,” Moline said. Nader agreed. “We are firm believers in getting certification and education,” he said. “Wherever we can get the training, we get it.”

Because of the steep ramp up, it’s important to be patient and set realistic expectations. Tony Greenberg, founder and CEO of 12-year-old IT sourcing consulting company RampRate, admits he struggled with that. Wanting to be perfect for every client was the greatest challenge, especially since beginning to recommend carrier network services only within the last year.  “When we have the knowledge base and data set, [we] do things 100 percent, [but] we have to remember that [for now] doing things 90 percent is a much better value proposition,” he said.

While the basics of filling a pipeline and learning the business can take time, agents are optimistic about their options for growth. Take cloud and mobility management services, for example. Those are huge opportunities for Nader and TelecoWorks. “Everybody either has big pipes now or they’re going to have big pipes,” he said. Moline and Carrier Consulting Group are focused on metro Ethernet and hosted products, whether that means VoIP, firewall, content management or MPLS. “It’s all about fiber and hosted services,” Moline said. For Black Wire Consulting, growth lies in emerging markets such as Africa and South America. “What we have already set up in the U.S. is saturated,” said Orefiche. ConvergenceOne’s Hansen, meanwhile, is focusing on unified communications, converged networks and the cloud.

With reporting from Lindsay Welnick

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About the Author(s)

Kelly Teal

Channel Futures

Kelly Teal has more than 20 years’ experience as a journalist, editor and analyst, with longtime expertise in the indirect channel. She worked on the Channel Partners magazine staff for 11 years. Kelly now is principal of Kreativ Energy LLC. Follow her on LinkedIn at /kellyteal/.

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