CHIEF EXECUTIVE OFFICER, PHONE.COM | NEWARK, NEW JERSEY
Long before the era of Skype or Vonage, Ari Rabban was reimagining what it meant to be on the phone.
After earning a law degree in his native Israel, he practiced in Tel Aviv for two years before coming to the United States to earn his master’s degree. The entrepreneurship-focused courses were his favorites.
While serving in the Israeli military, Rabban spent four years in the signaling corps, working with engineers on a new phone system that represented cutting-edge technology for the time. When a Tepper School classmate attempted to call a contact in Argentina over the internet, Rabban’s interest was piqued. Within two years, Rabban was working for what was then known as AT&T Network Systems — now Avaya — and then for the pioneer company of the voice-over-IP industry as head of business development before striking out on his own to pilot startups at the dawn of the VoIP era.
“We did a lot of evangelism,” he recalls, traveling around the world to explain the service in India, Europe and Thailand.
In 2007, he founded Phone.com, a cloud-based phone service designed to give small businesses — typically 10 employees or fewer — the same commercial telephone capabilities that a large corporation might have, for a fraction of the price.
Today, more than a decade after its inception, the company has close to 80 employees and about 30,000 customers, and remains on the hunt for more.
What is your elevator pitch?
We cater to an underserved market. Services like Skype exist for individuals, and there is Cisco for big businesses with modern switches and many other services in between. But small business, as we define it, only had small landlines or cell phones with no separation between private life and business, and they couldn’t transfer calls. We offer a service that is priced right for a professional look and feel to your business: a number that greets customers, has extensions, music on hold, call forwarding. All of these functions are appealing to a small business because they want to be nimble and have these capabilities. You can look like a million-dollar company. Today we also add many APIs and integration to other services that appeal to developers as well.
What skills did you have to learn to get this off the ground?
Patience — a lot of patience. We are 10 years old; I like to say we are a 10-year startup, because we are still growing and changing. Things don’t happen overnight; you do have challenges, and you do have to work with partners, so you have to coordinate among a lot of parties. For example, we are headquartered in New Jersey, but we have a big office in San Diego after partnering with a company that did a lot of e-commerce. Over the years, as you grow, you have to do a lot of HR work; you have to know a lot of people-management skills.
How do you stay relevant?
You’ve got to keep innovating. We have a solid service: It’s good, but we didn’t invent the wheel. What’s unique is how we sell the service, which is completely online. That involves a lot of e-commerce. People don’t knock on the door, and customers don’t call for a proposal, although we do have a call center in San Diego that addresses customer questions. A lot of innovation has to do with market automation, CRM solutions, records of customers, accounting, finance, HR — we integrate with a lot of services like that. Young people totally get the fact that they don’t need a “phone guy.” They can set up technology online. I think that is where the market is going.
What were your pivotal moments?
The worst experience was also the best. Three years ago, we had a huge denial of service on our entire network. It was overloaded, so we couldn’t complete calls. We even involved the FBI to try and solve it. I had to calm down customers and support my engineers, then bring in third-party experts. I traveled a lot between New York and San Diego. It took a few months to fix, but it made the network better and the team stronger. Customers appreciated what we did to address it. I think you learn from those situations.
What skills did you have to learn to keep things moving?
Sometimes it’s easier said than done. You hire the best and the brightest, which is hard in tech. They all want Google and Facebook; they want the unicorn. But you have to get the bright people on your team, who are like-minded and think carefully, especially as you grow. You have to be frugal and spend strategically. People hedge a lot, or do things because they think they should.
What key piece of information gets overlooked when getting started?
Choose the right partner — that’s a big deal. Have the right idea: Sometimes it’s hit or miss. Consider how to execute the concept or who you work with. You can’t be an entrepreneur without an idea, but it isn’t just the person who came up with the idea who fits that definition. If you have the spirit and help push it forward, you are also an entrepreneur. Help your partners think through ideas as well as how to handle funding.
How did business school help shape your company?
A really big part of it was the environment and being around top-notch people who shared the experience of learning how to think. I remember certain professors and classes, particularly strategy and entrepreneurial projects. But it was working with the right people. You feel something — a way of thinking, a way of understanding. It allows you to analyze things the right way without addressing them emotionally. Another advantage was being part of the International Business Club, which allowed me to meet people from around the world.
What is the best advice you have received?
Learn how to analyze and think, but at the same time, don’t overanalyze; learn when to go with your gut as well. When you’re the boss, you have to make decisions. A lot of people are afraid to do that and equivocate. With startups, you know the opportunity is the right one when you want to work on it around the clock. You have to be passionate. You also have to know when to say, “Enough,” and move to the next project. If you have ideas, don’t be afraid to share them.
What “big ideas” would you like to pursue next?
It’s been 10 years, and we are having fun, but there is always interest in acquiring the company. So the question becomes: Should we exit and move on? You have to look at the chessboard and decide if you can win. If you have the excitement, then continue. If not, there’s always something.