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November 27, 2005

Life vs. Reality

Friends (and others) often ask Mary and me how much of what I’ve written in my novel hackoff.com is true and how much is fiction.  Since I’m blogging, I must be alive; so murdered CEO Larry Lazard can’t be autographical even though Fred Wilson has spotted a few resemblances here and there.

The truth is that truth and fiction are all mixed up.  The characters are fictional but the background is Internet Bubble 1.0 with a little exaggeration for effect, the dull parts left out, and a murder mystery added in for fun.

One character who is extremely fictional is George Wrobly, Chairman and CEO of hackoff.com’s bitter rival antihack Inc.  So far he’s only shown up briefly as he and Larry passed in the hallway of mutual fund Semper; but readers of the serialization will see more of him.  He’s not an admirable character.

When I ran VoIP wholesaler ITXC our principal rival was a company called iBasis (OTCBB: IBAS).  The CEO of iBasis then and now was and is Ofer Gneezy.  Ofer is an admirable character as well as a very good CEO.  I was lucky to have him as a competitor.

Why, you might ask, would I want a competent CEO as a competitor?  Why not someone incompetent?  There were, of course, times when I wished Ofer were a little less competent.  But, when you are starting a new company in a new field and trying to change the way an industry does business, there is lots to be said for worthy competition.

For one thing, you and your competing companies share the burden of educating your potential market about your product – in our case wholesale VoIP.  With both of us telling similar stories and delivering a similar competent product, traditional telcos were more likely to listen and more likely to try VoIP than if there had been one voice in the wilderness.

If iBasis or ITXC delivered a bad product or delivered a good product poorly, it would have reinforced the telco perception that voice over the wild and untamed Internet could never be reliable.  Both companies cared passionately about quality and both companies were honest about what we could and couldn’t deliver. We managed to overcome enough of the suspicion about VoIP to allow us to take a substantial chunk of the world’s international traffic long before consumers even knew there was such a thing as VoIP.  Before the merger of ITXC with Teleglobe in 2004, both iBasis and ITXC were among the top ten carriers in the world in terms of minutes of international traffic carried.

Ofer and I competed fiercely.  We have the same favorite story:

Two men are in a tent.  They hear the sound of a hungry bear approaching.  One man starts to lace his running shoes. “You can’t outrun a bear,” says the other man.

“I don’t have to outrun a bear,” says the man whose shoes are now laced.  “I just have to outrun you.” And he’s off.

As fiercely as we competed, we also competed fair.  We could each be very articulate about why our own company was the better supplier or the better investment; but we didn’t badmouth each other. We didn’t allow our people to run down the competition.  This isn’t only honorable; it’s good business. You sound better and more honest when you can say good things about the competition; you boost the stature of your company; and you certainly help your industry.

Like the fictional Larry Lazard and George Wrobly in a not-yet-published episode, Ofer and I were together on September 11, 2001 discussing a possible merger.  Obviously, those particular discussions ended when we heard the terrible news and turned to watching the horror unfold on television.  Somehow being together on that day – even frustrated and helpless – cemented our personal relationship.

I’ve often regretted that we didn’t find a way that we thought was fair to both sets of stockholders to merge our companies.  But perhaps ITXC was better off having iBasis as an worthy competitor.  I’d much rather have competed with Ofer than with the weakling George Wrobly.

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