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October 04, 2012

Broadsoft CEO Michael Tessler Shares His Entrepreneurial Journey at StartupCamp6 Comms Edition

By Amanda Ciccatelli, TMCnet Web Editor

With more than 20 years of business strategy and technology experience as Broadsoft’s co-founder, CEO and president, Michael Tessler knows how to successfully “start” a startup.

Prior to Broadsoft, Tessler worked at several telecommunications manufacturers and later joined a wireless startup. A few years later, Tessler and the CTO of that startup decided to branch out on their own and create Broadsoft.

“When we started to look at the industry in the early days of VoIP, we saw a lot of hardware focus, but we knew that eventually the industry would move from the transport layer to the application layer.” said Tessler at StartupCamp6 Comms Edition this afternoon. “We always imagine ourselves as being in the app layer, so we tried to focus on the app and the end user and what would work well for them.”

A lot of startups have to make big changes to keep up with the industry, but Broadsoft has always had a consistent end user focus which has brought them a lot of success. Over the years, it has been fortunate to continue to build next generation apps on an IP Network.

Tessler and his partner took their vision and created the separation between apps and infrastructure using partners in the industry in order to deliver what they envisioned. “We didn’t realize we were creating a new category until later on,” said Tessler.

In 1998, there was money flowing and there were a lot of investments in the Venture community. Broadsoft was received Series A round funding $5 million dollars as a pre-startup and seated with enough capital to build their first concepts. 

“One of the dangerous things in that period leading up to the explosion of the market was companies were being formed, concepts were being launched, and companies were being bought and sold. We had a lot of pressure from investors to go public at that time. Twelve years later we finally went public,” explained Tessler.

He advises that if you are a startup, you should look at how much capital you have in order to gage just how fast you can go with your startup. Then, when you see market acceptance speeding up, you will realize you need to go faster.

In Broadsoft’s early stages, one of the company’s biggest decisions was whether or not to buy a 323 stack with its capital. But, Tessler and his partner decide it wasn’t the right way to go.

“He said there is this thing called SIP that people are talking about, and I think that’s the way to go. But, in 1999, there was absolutely nothing that spoke SIP. It was a pretty big risk at the time, but sometimes you need to take the risk,” said Tessler.

In the first downturn of the economy, the biggest challenge Broadsoft had was there wasn’t’ enough customers to engage because companies were out of money or filing bankruptcy. The marketplace was badly damage. So, it decided to selectively pick markets internationally and sell into those markets.

“We wanted to keep our team motivated, build a product, get customer feedback and continue to improve the product,” he said.

In 2001, Broadsoft was involved in an acquisition that was stalled out because the public markets died. So, investors were disinterested and Broadsoft needed to fund the company and restart. It was difficult for Broadsoft to get clarity from investors because they didn’t’ know what exactly they were looking for.

“It was a complex situation, but we figured it out and didn’t give up,” said Tessler.

Broadsoft was caught in another challenging environment in 2008 with the economical situation. But, now Broadsoft has made it through on the other side after confronting a lot of struggles to get here.

“We remained focused and aggressive to build out our customer base working with the most innovative startups in the market place. We had to earn our seat to get up there,” said Tessler.

Even after 14 years in the industry, Broadsoft still embraces its “startup spirit.” “Every day at Broadsoft is a startup day,” said Tessler. “We are still learning a lot in the changing industry. Every day is a new challenge and we are all having a lot of fun.”

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Edited by Amanda Ciccatelli
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