Note to Patrick Scoble: Do some research first!
February 17, 2007
Robert Scoble is blogging about how he is trying to teach his 13 year old to follow his dreams. He recommends taking your ideas to Sand Hill Road instead of taking it to a big company. I was just taking to a very young programmer who spent the last year at our company yesterday and gave him some advice regarding his career.
This particular individual is very young (under 25) and is VERY bright. He didn’t go to college and has worked for a number of small companies learning a great deal about networking and programming in his short career. This kid is a great problem solver, but over the past couple of months it was clear he had gone as far as he could in our company. He found a new job at a company even smaller than ours that paid a little more and exposed him to new challenges. I am not sure how our conversation started, but I thought it might be a good conversation to blog.
I suggested that he consider finding a position with a large company (Fortune 1000). To start, larger companies usually provide great training for their employees (they might even send him to school). Second, later in his career recruiters who are seeking candidates with resumes from ‘Fortune Company No. 743′ will seek him out. It is unlikely that they will be looking for guys who previously worked for Big in Japan. Finally, if he is interested in eventually starting his own company working at a big company is a great way to figure out what to do. How?
Let me explain my own path to entrepreneurship. I worked as a salesperson at three telecom/internet companies when I was in my twenties. First, I started at ICG Communications, a compentive access provider (later a CLEC). The company sold local connections within municipalities. Their fiber optic cables connected buildings together. ICG’s customers were typically ISPs and IXC (LD providers). Their biggest problem? ICG rarely had connectivity to the ISPs or IXCs who wanted to buy their fiber. Deal after deal was lost by the sales team. Next I worked for IXC Communications, a long distance provider (selling long haul capacity between cities). IXC’s customers were typically ISPs, other IXCs and CAPs. Their biggest problem? IXC rarely had connectivity to their customers. Finally, I worked for Genuity (BBN Planet), the first Internet Service Provider (AS1). Their problem? Connecting their service to local businesses who wanted to buy.
By working for these huge companies I was in the perfect place to find a niche to build a business around. Had I spent time working for small niche players I may have never seen my own opportunity. My idea? What if you could create a ‘pooling point’ where IXCs, CLECs, CAPs, ISPs, ASPs and other internet/communication providers could connect? These sort of places exisited, but typically they were not neutral. My idea was to create a neutral location and allow each provider to ‘enter’ for free. The industry typically required providers to pay ‘entrance’ fees (i.e. buy it before you sell something). My concept was very simple - charge a premium fee AFTER a carrier sold a connection. Carriers could connect hundreds of fibers, DS3s and DS1s to our distribution frame for free. They only paid once they sold a deal. Within a couple of years we had almost every carrier as a customer (except Sprint).
Khali Henderson wrote about it in Xchange Magazine:
Beyond Real Estate
The virtual pooling point arrangement seems to be developing organically in the market at carrier hotels and neutral hubs. As critical mass is achieved at some of these locations, carriers are looking for ways to facilitate doing business with collocated carriers and other service providers. Neutral facilities operators are beginning to step up to the plate.
LayerOne Inc., which calls itself the first optical transport exchange, offers quick and simple provisioning of local and long-haul circuits among multiple carriers via neutral optical distribution nodes at carrier hotels. LayerOne had more than a dozen exchange sites in place at year’s end, and plans for more than 120 nodes within three years.
CEO Alexander Muse says LayerOne is similar to the metropolitan access exchanges (MAEs) at which ISPs have traditionally swapped traffic, but that those are at Layer 3, while it offers service at Layer 1–the physical and electrical level of the open systems interconnection (OSI) model.
By transporting traffic at Layer 1, carriers can achieve greater speed and gross throughput. At Layer 3, traffic is sent through routers and switches where each packet is read one by one and forwarded to the destination based on its unique address. At Layer 1, traffic is transmitted as pure light and, at the interconnection point, converted to electricity and back to light to resume its journey. A Layer 1 connection can be more efficient transport for traffic that has already been sorted into big streams heading toward the same destination.
LayerOne targets heavily populated carrier hotels that house multiple service providers, but lack an entity to connect carrier tenants within the building or to carriers’ customers outside the building that want access to these tenants’ PoPs, network access points or dark fiber.
The exchange sites, called NEXUS optical distribution exchanges, or NODEs, provide connections to everyone in the building using cross-connects from vendors such as ADC Telecommunications Inc. (www.adc.com). Muse says the seller of the transport connects on the "A" side of the cross-connect, and buyers hook up to the "B" side to access their services and bandwidth. The buyer pays LayerOne a monthly fee for the connectivity.
"We created the standard for the A and B side methodologies in our exchange," Muse says. "Today it’s on a one-to-one basis, but we want to create a one-to-many relationship."
In its first one-to-many agreement, LayerOne announced in October that Level 3 Communications Inc. (www.level3.com) will act as an "A" side provider of a variety of services in all of LayerOne’s markets. Level 3 will initially deploy in LayerOne’s Chicago, Dallas, Miami and St. Louis facilities and expand into additional NEXUS Exchange facilities as they become operational.
Since then, LayerOne has struck similar deals with Cidera Inc. (www.cidera.com), Enron Broadband Services, Metromedia Fiber Network Inc. (www.mmfn.com), Telseon and Qwest Communications International Inc. (www.qwest.com). Prior to that deal, LayerOne had only announced single-market deals with such service providers as Enron Broadband Services, NEXTLINK (now XO Commu-nications Inc., www.xo.com) and Qwest. The Level 3 deal "is tremendously valuable to us" because it creates lots of "inventory" for LayerOne, Muse says.
LayerOne keeps a database of what connectivity and services it offers and where from "A" side providers, so carriers looking for such services can quickly find and provision such services without lengthy carrier-to-carrier interconnection negotiations, Muse says. But, he adds, carriers have to interact directly to agree on pricing.
LayerOne eventually expects to provide the database information via a web interface, but currently the company’s engineers provide the information on request.
