Joe Starling's Blog: Tomas Gorny of Nextiva: Identify a Gap in the Market Then See If There’s a Market in the Gap

Nextiva, an industry leading cloud communications platform provider, held their first ever NextCon event this week in Scottsdale Ariz. Over 2,000 attendees came to hear from the likes of Apple co-founder Steve Wozniak, Guy Kawasaki, and a host of leading voices in business, including Nextiva co-founder and CEO Tomas Gorny.

Gorny, an immigrant from Poland, shared with me a bit of his incredible rags to riches … back to rags, and finally bigger riches story, in a sit-down interview during the event. He discussed how the Movie ‘Wall Street’ made him want to come to the United States (and live in Beverly Hills 90210), how he got started in business, and lessons learned from losing his first fortune — which helped him find even greater success in co-founding companies like SiteLock and Nextiva. Gorny also discusses Nextiva’s new customer engagement platform NextOS, and why, based on his previous business experiences, he feels the company can go up against the likes of Salesforce.com and Microsoft in the very competitive CRM market.

Below is an edited transcript of the conversation. To see the whole conversation, check out the video below. To hear the audio of the conversation, click on the embedded player below.

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Small Business Trends: Maybe give us a 30,000-foot view of how you got here today.

Tomas Gorny: I was born in Poland. I grew up in Poland, while it was still communism and early on already I had a dream to come to America.

I think it was like six seven years old, my parents reminded me on recently, saying I am going to America. We had relatives in Germany and at the age of 14 I moved to Germany, because I wanted it to ultimately go to business school.

I ended up going to high school and into college and I got more exposure to the Western world and the United States.

And when I was 16 I decided to come out to the United States to California to visit. And the reason why I was fascinated with America is because I love movies. And I was watching the “Beverly Hills 90210” and “Wall Street.” And so “Wall Street” — not the corruption of course but the capitalism – intrigued me. And then “90210,” I said that’s the place where I want to live.

And so I ended up coming to California to visit when I was 16 and I love that. And at that point in time I decided I would move to the United States.

Early Business Endeavors

Tomas Gorny: I started my first business in Germany. I was trying to save as much money as possible. And then while I was doing I was going to college, and eventually because I was already on the journey knowing that I will end up in the United States I was building relationships and connections. And an opportunity presented itself before I even graduated. And so I decided ‘I’m leaving everything behind.’ Sold my business for just little money; just enough to come to America and arrived here at the age of 20. And I was fortunate because somebody took me on in their business.

I became a minority shareholder of the business and I was working my ass off. And … for two years you know. I wasn’t making any money and I actually ran out of money and had to literally live off of $3 a day. I was doing valet parking and carpet cleaning, and any job I could do just to survive. But I didn’t feel pity for myself. I felt I am in the land of opportunity, where I want to be, and this is the journey I want to go on.

Then a couple of years later we sold the business. So I was very excited and then this gave me an opportunity to start new businesses. And we did. And then long story short, three years later because of some unfortunate events in the business (including September 11 and the economy) I went from having nothing to becoming a multimillionaire, to really not knowing how I would pay my next mortgage payment in October of 2011.

Second Go Around

Tomas Gorny: So I decided to go back to the industry where I originally started which was web hosting because when we sold our business the web hosting industry didn’t evolve more. I expected that it would evolve significantly more.

My passion is about solving problems and with technology and my passion developed in the early years … you know my family was relatively poor. But at the age of 11 my dad saw how fascinated I was when I saw an Atari at somebody’s house. He scraped together his last pennies he had and bought me an Atari.

That’s when my passion for computers started; at what computers actually can do. And then later on when I came to Germany he actually took a loan to buy a PC; a Model 286. And it was just DOS and then it was just on the age of the transition from those to Windows.

Reaching a Turning Point

Tomas Gorny: I think that was a pivotal moment in my career, that actually carries me until today. Because I looked at this and said you know all of this complex commands that I have to type in. Now I can execute with a click on the mouse.

I was fascinated by that experience. And so web hosting was as complicated as DOS in 2001. And I said to myself there’s a much better experience needed. People still needed web design or web programming. It was expensive for people to build a website. And I said I can change that. And we did.

Finding Success Again … and Again

Tomas Gorny: We built a large company, and later we merged with a smaller competitor and then took the company public in 2013. Today it’s one of the largest web hosting companies in the world with about a billion dollars in revenue.

Then in 2008, I saw the same gap in the website security market where websites were being compromised and the web hosting providers said this is not our business. This is the website owner’s business. And the website owner said I sign up with you guys so protect me.

So, I saw that gap in the market. And I always try to identify the gaps in the market and see if there is actually a market in that gap. And there was, and there was nobody serving it and we developed the company. Today it is the largest website security company in the world, SiteLock, with 8 million websites that we protect.

Small Business Trends: Tell us about Nextiva.

Tomas Gorny: With Nextiva the opportunity we saw was that business communication hasn’t really evolved for many years — in almost 50 years. There were incremental changes but there was a huge attitude of protectionism; of protecting the revenue stream of those big companies. And really didn’t allow every business to take advantage of the modern technologies. And we pride ourselves in democratizing technologies.

That doesn’t mean we only make technologies for SMBs, but it means we wanted technology to be available for everybody. And we want to level the playing field of tech. So we love that challenge and that’s where we started Nextiva with the most fundamental service which ultimately was the phone. But early on in 2010 we knew that one would be significantly more than just a voice company.

It took us longer to anticipate it to build the voice product and voice functionality because we came with no experience into the industry; we just came pretty much from the perspective of just wanting to solve the problem.

Today we’re a good side business; One of the leaders in voice communication. And then we’re transitioning into full business communication because we truly believe that you know voice eventually will be just a feature of business communication like many other things like chat and like calendaring and maybe even CRM. And we want to provide that complete solution but without you know making it feel like this heavy overhead of an enterprise solution.

Small Business Trends: There are a lot of players in the CRM space. You have the big guys like Salesforce and Microsoft. But I like something you said — you jump into a business because you see something; you see an opportunity. So what opportunity did you see in the CRM/customer engagement space that the big guys may not be doing.

Tomas Gorny: A lot of CRMs focus on the sales aspect versus supporting and nurturing the customer. And more solution are transitioning to do support and customer relationship part as well but historically where Salesforce found their success was on the sales side of the house. But this is not necessarily where we saw the opportunity because we expect that the world will evolve and that people will look at all aspects of serving customers from sales all the way to supporting them. But where we saw the opportunity is that a lot of the solutions in the market today were built on dated technologies. We believe that you cannot solve today’s communication problems with dated technologies; just building applications on top of each other, or with siloed technologies.

A lot of individual products in the marketplace promise they will work nicely together but they ultimately don’t. And integrations, regardless of what people promise, today are still clunky and they never give you the holistic view of the customer in one place. And we believe that in an organization you truly need the holistic view of the customer; not only a view of the customer but the customer at the individual level and in real time. And then you’ve got to be able to provide that information throughout the entire organization. And it has to be actionable information. Everyone in the organization has to have it from the customer facing employees all the way to the CEO when they need it.

The CEOs can look at the reports and stats, but the people who deal with the customers, they need it right now. And I think there is a big gap in the market that really doesn’t solve the problem. And we have developed a lot of patent pending technology we’re very confident will get approved that is solving that issue; really understanding the customer in real time.

Everybody talks about it. There are many keywords; tracking the customer journey and understanding the customer. They need it to create this excitement, but really making it work is a different thing than just talking about it. And that’s exactly what we are doing here.

So we have developed a proven system that we believe will serve organizations well and that’s what I think is the big gap in the market; because ultimately tools are a commodity. If they are not today, they will become commodity.

Small Business Trends: Talk about your approach to analytics, machine learning, etc.

Tomas Gorny: Our main approach to this is that it is ultimately all in one place. Because it is not only about the customer experience but it’s also about the employee experience, and the organization. A lot of the solutions that today are in the market, are still … built on siloed technology that are not well integrated. They are trying to be integrated and be plugged in. But it’s ultimately about knowing how to use them effectively.

We are extremely focused to design products that are very appealing. And we are very conscious about the user experience because users will stare at a product 4, 8, 10, 12 hours a day. And if you look at something for 10, 12 hours a day you know make sure you’re not going to get sick of it and that you want to be looking at it. In a way, we I believe in that Apple experience; that you just gotta feel that experience. And I think that’s where we differentiate ourselves.

Small Business Trends: And about going up against the big boys in a competitive CRM market?

Tomas Gorny: I get asked that question all the time about other companies and what they do, how they do this. Early on when I was in web hosting, people said Google is going to kill you. And later on in security it was about McAfee and the other guys. And what I have learned is I cannot focus on things that I cannot control. I almost put them to the side and ignore them. I can maybe learn from them, but I really focus on what the customer pain point is. And a lot of products in the market are designed to sell technology, not to solve pain points.

Secondly we are living in a very competitive world. And we are building an enterprise grade solution without that enterprise overhead and feel. But at the same time we’re pricing it very consciously so that everybody can afford it. And I think is going to be a competitive advantage as well.

Small Business Trends: Last question. It sounds like what you just described — going against these big guys going into these industries that are big competition. But being able to find a way to succeed, that sounds like a rule breaker kind of thing. So give us your best rule breaker for small businesses that are trying to find their niche, trying to find their way to be successful.

Tomas Gorny: I always encourage businesses, especially small businesses, is to focus on the value they provide to customers, versus on an exit strategy. Too many businesses today when they start they focus on the external outcome and if you focus too much on an external outcome you may forget to do business. But if you focus on building your business your external outcome may be significantly better than you have ever envisioned. And that is my number one rule in business.

Personally, we were never focused on selling businesses or going public, or merging. We were focused on the customer. And the one time I shifted my paradigm and focused more on wealth creation, that was the time I failed.

This works for me. I don’t think this will work for everybody, but generally speaking I feel that being focused on business and creating value is the best thing any business owner can do. And then good things will happen.