Warren Buffett commented in 2005 about Peter Kiewit, an innovator from Omaha, Nebraska, who leveraged his construction company to start a competitive local exchange provider, Metropolitan Fiber Systems (MFS) [1]. Kiewit also built the State of Iowa distance-learning network [2] in the late 1980s, using Nortel Networks’ legacy SONET equipment, primarily the S/DMS TransportNode OC-48. Since then, that 2.4 Gb’s network with its critical DS3 feeds needed for broadcast quality video connections have been upgraded to 10 Gb/s transport with Gigabit Ethernet feeds.
Buffett said, “There was a guy, Pete Kiewit in Omaha, who used to say he looked for three things in hiring people: integrity, intelligence, and energy. And he said if the person did not have the first one, the latter two would kill him. Because if they don’t have integrity, you want them dumb and lazy.”
Buffett said, “There was a guy, Pete Kiewit in Omaha, who used to say he looked for three things in hiring people: integrity, intelligence, and energy. And he said if the person did not have the first one, the latter two would kill him. Because if they don’t have integrity, you want them dumb and lazy.”
As venture capital investors like Vinod Khosla and Promod Haque will tell you, when you invest in a company like Cerent, you’re taking an ownership position in the company and you have a stake in the business. Effectively, the company’s executive leaders have been hired and are on the venture capitalist’s (VC’s) payroll. Their performance on the job, on behalf of the VCs, for better or for worse, dictates the outcome of the ongoing investment. The marriage has to work in order for the outcome to be successful. If the management team lacks integrity, but they are brilliant and passionate about their endeavor, they could simply end up taking the VC’s money and leave the VC with nothing.
Fortunately for Kleiner Perkins Caufield and Byers and Norwest Venture Partners, the Cerent executives were not only smart people with great passion, they were a team with integrity that delivered on a transformative product and produced the largest internal rate of return ever for their investment partners.
And Cerent’s sales team [4] found success in supporting distance-learning networks too.
[1] According to George Gilder in his book Telecosm (2000): “[Bernie] Ebbers bought Wiltel in August 1994 and by 1996, he was the king of fiber. In the next two years he brought MFS and Brooks Fiber under the Worldcom name. This brought him UUNet, one of the best ISPs. Worldcom was perfectly positioned to shift revenues from the telcos (something that MCI had given him) onto the Internet through Worldcom’s IP, fax, data, and voice offerings.”
[2] “When it comes to connecting schools over networks,” wrote Denise Harrison in 2010 for The Journal, “Iowa's initiative was one of the earliest and most comprehensive . . . Things truly took off in mid-1989, though, when a state bill was passed and signed providing for the construction of a shared, statewide telecommunications network.” She adds, “Construction on Parts I and II of the Network began in late 1990. This consisted of installing one fiber optic endpoint in each of the 99 counties, an endpoint at each of the three state universities, another at Iowa Public Television, and one on the state capitol complex, for a total of 104 endpoints.” In 1994, Iowa Communications Network or ICN for short came into being and was augmented soon after with “full-motion video delivery for public and private school districts. By 1997,” Harrison adds, “the 500th full-motion video classroom was connected to the ICN, followed by the 600th classroom the very next year.” These were the years Fiberlane came into being and then Cerent emerged from the Fiberlane splinter, respectively, to more effectively accommodate the growing (transport) bandwidth needs of systems such as ICN going forward.
[3] When I connected with Promod Haque of Norwest, again in July 2017, he offered, “Since 2013 and the successful Cerent acquisition, we’ve invested in a number of innovative companies. We’re so proud to work with such talented entrepreneurs. This includes a number of AI-focused companies (CognitiveScale and Gong) that are making great strides in the category." Promod added, "We are also very active in the healthcare IT space and look forward to working with these entrepreneurs to make advancements that greatly improve clinical outcomes. Look to Qventus, Silk Road Medical, Science Exchange, and CareCloud for important developments in the health space.”
[4] Distance learning networks were one of the opportunities that Cerent’s Eric Clelland targeted with his Independent Telephone-centric sales team during the late 1990s.
And Cerent’s sales team [4] found success in supporting distance-learning networks too.
[1] According to George Gilder in his book Telecosm (2000): “[Bernie] Ebbers bought Wiltel in August 1994 and by 1996, he was the king of fiber. In the next two years he brought MFS and Brooks Fiber under the Worldcom name. This brought him UUNet, one of the best ISPs. Worldcom was perfectly positioned to shift revenues from the telcos (something that MCI had given him) onto the Internet through Worldcom’s IP, fax, data, and voice offerings.”
[2] “When it comes to connecting schools over networks,” wrote Denise Harrison in 2010 for The Journal, “Iowa's initiative was one of the earliest and most comprehensive . . . Things truly took off in mid-1989, though, when a state bill was passed and signed providing for the construction of a shared, statewide telecommunications network.” She adds, “Construction on Parts I and II of the Network began in late 1990. This consisted of installing one fiber optic endpoint in each of the 99 counties, an endpoint at each of the three state universities, another at Iowa Public Television, and one on the state capitol complex, for a total of 104 endpoints.” In 1994, Iowa Communications Network or ICN for short came into being and was augmented soon after with “full-motion video delivery for public and private school districts. By 1997,” Harrison adds, “the 500th full-motion video classroom was connected to the ICN, followed by the 600th classroom the very next year.” These were the years Fiberlane came into being and then Cerent emerged from the Fiberlane splinter, respectively, to more effectively accommodate the growing (transport) bandwidth needs of systems such as ICN going forward.
[3] When I connected with Promod Haque of Norwest, again in July 2017, he offered, “Since 2013 and the successful Cerent acquisition, we’ve invested in a number of innovative companies. We’re so proud to work with such talented entrepreneurs. This includes a number of AI-focused companies (CognitiveScale and Gong) that are making great strides in the category." Promod added, "We are also very active in the healthcare IT space and look forward to working with these entrepreneurs to make advancements that greatly improve clinical outcomes. Look to Qventus, Silk Road Medical, Science Exchange, and CareCloud for important developments in the health space.”
[4] Distance learning networks were one of the opportunities that Cerent’s Eric Clelland targeted with his Independent Telephone-centric sales team during the late 1990s.