This notion was amplified with the second addition to Terry Brown’s Cerent sales team, Jeff Santos, as Sales Director.
July 6, 1998 marked the arrival of Jeff Santos , about two months after Eric Clelland started, and one month before I (Rob Koslowsky) started. Jeff worked from his home office in Texas and immediately hit the ground running. His initial task was to add to the first few early Cerent 454 orders secured by Terry and Eric, in a whole new market segment – Competitive Local Exchange Carriers (CLECs) and all newcomers trying to take advantage of the recently signed Telecommunications Act of 1996, which enabled local competition for telecom services.
Jeff recalls, “A lot of the business that we won, as [I] started to move away from the IOCs and got into the CLECs, [came from] actual customer circuits. Some of these were going out from their network to a customer [premise] and that’s a lower risk [for the telco] than doing a backbone play. These were real quick transactions [for Cerent]. If it took Nortel two weeks to give them a quote, and us only two hours, you can see how that worked to our advantage.”
Sales Responsiveness Gets Orders
Indeed. Cerent’s responsiveness to its prospects and customers gave them a competitive advantage and in hundreds of cases, Cerent secured the optical transport order with its product availability.
Tools of the trade, or sales aids, enabled many of these selling advantages too.
Jeff observes, “Between the Cerent 454 product configurator , the product shelf itself, the GUI demo to show how things worked, and then, just the whole sales model . . . maybe ‘portable’ is the right word . . . [gave us an advantage over the incumbent suppliers]. Trade shows were portable, the product was portable, your laptop was portable; everything was quick, quick, quick.”
Jeff became animated as he relayed his positive experience with Cerent’s sales support, “Our competition was still in the mode of, ‘Oh, you need a sales presentation? Hold on. Let me get my technical marketing guy up there. He can fly in from Dallas next Thursday. How does that look?’ In the meantime we’re in and out and giving them a quote and actually shipping the system already. The whole space became very portable, based on how we were able to set up.”
Imperfect Products Made Possible With Software and Future Upgrades
Jeff highlighted the importance of having the right product for the customer at the right time. One aspect of this rightness, for Cerent, was that its product was imperfect, which led to rapidly increasing sales numbers.
Yes, the Cerent 454 product was NOT perfect. Jeff explains: “Products weren’t perfect anymore. There was a time in telecom where, if your product wasn’t perfect, you didn’t have a shot.”
Jeff continues, “As you remember, there were a lot of Nortel products that were introduced that had very limited functionality and then you just kind of grew the functionality through software. And that was another wave that was going on technologically, the fact that you could sell a product that was not ready for prime time and now you could upgrade it through software and you didn’t have to send anybody to the field to do the upgrades. And so, I think Nortel helped to set the market [through its large switching products] in that culture, and it certainly played great for the Cerent product because think about all the different software upgrades we did over time.”
Industry Product Shortages Boost Startups
The demand for optical fiber and the optical transport products that lit the fibers to transport the growing Internet traffic in 1998 led to a global shortage of transmission equipment. The established suppliers of optical transport were struggling to meet demand. Jeff recalls, “All of the products were getting so popular that Nortel couldn’t even make enough of their products. There was a lack of supply, which also played really big into our favor. Look at this little [Cerent 454] box; we could produce them like popcorn.”
Well, at least at first, Cerent’s “two week after receipt of order” delivery times were met by its contract manufacturing team – PCB Assembly.
Jeff and his newly hired sale people empathized with their CLEC customers during 1998 through 2001, “You’d wait six weeks minimum for product [from Nortel] and then on week 5 [Nortel] would tell them it would be another 4 weeks. There was a time that they’d have an open order with Nortel and other vendors for five weeks, and they would literally cancel those orders . . . and if you can ship it and we receive it, we will cancel our orders with Nortel [and deploy the Cerent 454]. I want to say that Nextlink was one of those customers.”
And Cerent’s sales team was not offended by playing the understudy, waiting for a chance to deliver after another company failed to perform and honor its deliver promises. Opportunistic? Or ‘vulturistic?’ Or both?
Better Pricing Helps Sell Too
Getting out in front of customers was priority one with Terry Brown and his sales directors. Jeff recalls those early days of “dialing-for-dollars.”
Jeff chuckles when thinking about the ‘454’ demo model, “When I jumped on a plane I had to check in that damn box in luggage and try to figure out how to fit it in the back of the rental car.”
Jeff loved the marketing aids, “The pitches were all very crisp and very clean and very straightforward. It was just, ‘Look, you need transport, you need Ethernet, you need better economics, it doesn’t have to be complex, it doesn’t have to be big and bulky, and this is what it is’ . . . And you’re pulling the box out and putting it on the table.”
It was impactful for the prospects. Jeff continues, “I remember several customers saying that whatever the price was, you know, at $30,000 I’d be stupid not to try it. If it doesn’t work, I’ll throw it away for $30,000. They were paying $150,000 for Nortel. It was kind of funny, that it was seen as a throwaway product, which was unheard of in the telecom space. Here we are, 15 years later, and there is [now] a lot of throwaway electronics.”
“We were able to minimize a lot of people’s risk in the way that we approached it and the way that we put it out there. It was easy to get a lot of guys to try it.”
And a lot of customers did try the ‘454.’ As Carl Russo said about our early repeat customer business, “[The] dog liked the dog food and would come back for more dog food.”
Cerent was on its way to a blockbuster sales year in 1999, which would repeat in 2000.
Thank you, Jeff and his merry band of early Cerent sales professionals – Bert Soto, Dave Hardesty, Todd Bremner, Dave Cesca, and Bruce Hollett.
 Jeff Santos remembers his initial meeting with Terry Brown at Supercomm in May 1998, “The first time I met Terry was at this trade show and he’s looking around at this brand stuff we’re doing with optical networking at Alcatel. He asked, ‘Who did it?’ I said, ‘Me and my team.’ He says, ‘That’s interesting, why don’t you come out and talk with us at Cerent.’ I met Terry, I met Hatfield, and I met Corker, and I said, ‘This sounds pretty good.’ And then they said, ‘The position is here in Petaluma.’ I was less than a year into my move to Texas from California. So that’s what led to the discussions with Terry and I about taking on part of the sales responsibility as opposed to marketing as I had some sales in my background because of my time at Nortel.”
 The Cerent 454 product configurator was initially developed by Eric Clelland and then evolved by Rob Koslowsky and his colleagues in marketing. It was simply an Excel spreadsheet. Jeff noted, “The bid process was very quick, very simple, and some guys would call back and say, ‘Is this it?’ ‘Yes, there are only nine part numbers.’ [Customers were] used to getting a bid for a product with 49 part numbers and they could barely figure it out. [Instead,] we’d spit out this little configurator and it would list the 4 or 5 parts, and show you a picture, and that’s it, so just sign here, and you’re done.” Ken Carter, a Cerent salesman recalls the power of showing off the simplicity of the Cerent 454 system and then using the configurator to price a system for his customer, “And there we are showing them a box and how simple it was and then give them a quote in five to ten minutes, it was sweet. It helped close the deals.”
 The “box in the trunk” refers to what Ken Carter called the “Big Honking Box.” It was the Cerent 454 mockup model that fit inside a large airport carrying case. Although the Cerent 454 was small by industry standards (just the size of a microwave instead of refrigerator-size products offered by competing vendors), it was still a chore to lug it through airports and stuff it into car rentals (compact cars were not rented by Cerent sales people). Dave Cesca’s secret was that his ‘454’ shelf actually worked, as it was equipped with working plug-in modules.