Ron Mudry runs a different kind of startup. True, he went from one employee -- himself -- to 100 in just over a year. But he also started a fiber optic company with an 1,100-mile network already in place. "It just seemed an unbelievable opportunity to start something new where the chances for success were high," says the 38-year-old executive.
Mudry runs Progress Telecom, the Florida Progress subsidiary that sells excess capacity on the electric utility company's 1,100-mile internal communication lines to phone companies and Internet service providers.
FPL Group and railroad Florida East Coast Industries also have started up telecom subsidiaries. All see money. Montana Power, perhaps the most precocious utility when it comes to telecom, got $100 million in revenues from telecom in its most recent year, compared to $458 million from electricity sales. Central Maine Power and Northeast Utilities took stock in fiber route builder NorthEast Optic Network and provided right-of-way. Such early backers got in at an average of $1.61 a share. The stock recently topped $75 a share. "Progress Telecom could do the same thing," says Nortel Networks' Mike VonDerHaar, who directs equipment sales to utilities from a base in Atlanta. "Everything we're seeing is being driven by the Internet."
Circumstances help. Telecom deregulation in 1996 provided an entrance for utilities. Demand surged in Florida thanks to the state's fast growth and because undersea phone lines make landfall here. That creates more demand for "carrier's carriers," such as Progress Telecom, to funnel traffic to the rest of the nation. Utility lines run to lower-tier cities that wouldn't be economical for new network builders to reach. The trick is to be the low-cost provider, have the most up-to-date equipment, get to market fast and be reliable.
For that, Florida Progress recruited Mudry, a 15-year GTE veteran. He had a reputation for creativity and wide experience -- everything from marketing to mergers and acquisitions. "He's not a person who looks at things the same way over and over," said Frank Dame, president of GTE Leasing in Tampa.
Infrastructure: Digs It
Steve Nielsen
Dycom Industries
Age: 36
Position: Chief executive officer
Business: Publicly held Dycom Industries, based in Palm Beach Gardens, operates in 40 states, installing lines for cable and telephone companies.
Background: Became CEO in March of last year when long-time Dycom boss Thomas Pledger, 61, scaled back to just the chairman's job. Nielsen joined Dycom in 1993 to run its Atlanta office. "In a dot-com world, I've been here for about forever."
Key to job: Managing growth. Back in 1996, Dycom reported a $4.6-million profit on $145 million in revenues. This year, the expectation is a $50-million profit on $630 million in revenues.
Comment: "We're an easy way to play technological change without taking any risk. We don't care whose technology we're putting in the ground."
Goal: 15% to 20% internal growth plus "disciplined acquisitions."
1999 salary and bonus: $674,862 and awarded options on 187,500 shares.
On being chief executive:
"It has its ups and downs."
Speed Racer
Thirteen years in Beijing with France's Orient and China company. Adviser to the Italian and Argentine governments. Co-founder of a hot-cold-hot again telecommunications company in Sunrise. Anything else? "I am speedboat passionate." Indeed, 45-year-old Italian native Luca M. Giussani raced speedboats.
In the race to be a major player in Internet telephony, Giussani goes full-throttle. He co-founded Ursus Telecom in 1993 with now Chief Operating Officer Jeffrey R. Chaskin -- "the telecom guy" -- to exploit the call-back market. (A caller in a high-priced foreign market dials an Ursus exchange, hangs up, gets called back by Ursus with an open line at a cheaper rate.)
Nifty idea -- until competition drove down foreign rates -- and Ursus' stock price. The company went public in 1998 at $9.50 per share and within a few months was down to $3.
Giussani and Chaskin switched business models, creating Thestream.com, an e-business site that also carries the Internet telephony link -- a real attention-getter with investors following rival Net2Phone's smash IPO in September. Ursus now has its e-business site on the Web portals of leading Internet providers throughout Latin America, including Universo Online, the largest Latin America portal, and ZAZ, a major Brazilian portal. All told, Ursus -- Latin for "bear" -- has a presence in Germany, France, Latin America, Lebanon, Egypt and South Africa. "We're having quite a lot of success," Giussani says.
Giussani grew up in northern Italy. His grandfather owned Italy's largest tannery and shoemaker until an Allied bombing raid destroyed it. As a consultant, he advised the Italian trade minister and counseled developing countries on debt restructuring. He got the itch to go into telecom in the U.S. and found Chaskin.
Giussani, a South Beach resident, keeps a Cigarette boat but the company's keyman insurance policy forbids him from racing. "When you have a lot of things on your mind and go 145 miles an hour, you risk your life," Giussani says.
Self-Made Experts
Business ACT
Base: Orlando
Co-Founder: Jerry E. Perkins, 30, president
Education: Bachelor's, accounting, University of Miami
Previous career: Gulf War, sergeant, U.S. Marine Corps
Co-Founder: John L. DeLozier III, 28, executive vice president
Education: Bachelor's, management, Palm Beach Atlantic College
Previous career: Salesman, Aaron's Rents & Sells Furniture, West Palm Beach
Meeting: DeLozier needed tax help as a college student with a $33,000 part-time job. He went to the North Miami family accounting firm where Perkins worked.
Idea: Sell long-distance service.
Success? Low commissions; DeLozier became a waiter; Perkins a security guard.
Solution: Switch to finding errors in the phone bills of large users and negotiate new calling plans. Take a 50% cut of past and next year's savings. Consult on telecom purchasing and systems design.
DeLozier's business insight: None of the suppliers had the whole answer. "We knew as much as these people, and we knew nothing. We educated ourselves."
Perkins' business insight: "When I was in the Marines, you never quit, you never gave up. Nothing's impossible."
Big break: They pitch Orlando timeshare czar David A. Siegel of Central Florida Investments Inc. to let them audit CFI's phone bills. Siegel tells them they're wasting their time, but agrees. Perkins and DeLozier return three months later with $800,000 in savings. "My reaction was, 'I owe these guys a lot of money,'" Siegel says. He hires them to run his telecom business, including designing a call center in Ocoee with growth potential up to 2,000 seats.
Today: $4 million in annual revenues, 20 employees.
Partnership: A shared office, half decorated in sports memorabilia for DeLozier, half decorated in military memorabilia for Perkins.
DeLozier on Perkins: "I'm reading SI at home and Jerry's reading Cable & Wireless at home."
Perkins on DeLozier: "John does sales exceptionally well. I'm the computer geek."
Pay Phones: Don't Hang Up
For Sarasota pay phone maker Elcotel Inc., the cell phone you gab on represents a traveling disaster. Telephone companies slashed their pay phone purchases as cells, calling cards and competition rendered many phone sites unprofitable. Click. Elcotel, the leading domestic pay phone provider, was cut off from profits.
Enter Michael J. Boyle, the new CEO who will lead the rollout of Elcotel's Grapevine pay phone, which features a 5-inch video screen carrying advertising. The hook for phone buyers: Rely on advertisers, not loose change, for revenues.
Boyle, 54, a graduate of Northwestern University's Kellogg School of Management, came to Elcotel from Phoenix Wireless Group, the Maitland communications company sold during his tenure. Before that, he took Fujitsu's telecom equipment unit from losses to profits.
The 17-year veteran of the telecom and computer business thinks he and the Grapevine can reinvent the pay phone industry. Elcotel has filed 27 patent applications for the phone and e-Prism, the server that rotates the video advertising and manages touch keys that provide restaurant listings and other information. The products cost $8 million to develop last year.
Elcotel has installed Grapevines at the Sarasota-Bradenton and Venice airports. An unidentified Baby Bell is conducting a trial. Canadian Pay Phone Corp. placed a $125-million order for 45,000 of what its CEO Bruce Clark termed "the most exciting innovation" in the business since the pay phone itself.
But the trend away from pay phones remains strong. Dallas-based analyst John Bain says the industry "needs a revolution because right now it looks pretty grim."