Speakeasy Speaks Up — continued

[April 11, 2002]

In May of 2001, the Speakeasy Café was lost to a fire stemming from construction going on in additional office space within the building. While the Café suffered mostly water damage, it was beyond repair and shuttered its doors for good. Meanwhile, Speakeasy had to rebuild its internal billing, provisioning, technical, and administrative network functions from scratch.

Agpar told us, "We hung in with Covad and picked up some coverage with New Edge Networks. It was a tough time all of last year, so difficult dealing with the bankruptcies. We had just integrated with Rhythms about two or three months before they went down. We stopped our orders and we took notice of what was happening. On Feb. 28 we lived through the earthquake in Seattle. Then there was the fire in the Internet Café in May where we were converting the upstairs portion into our customer service center to handle our growth, followed by Covad concerns for bankruptcies," Apgar contined.

"Still we raised VC [venture capital] money in May from Granite Ventures," he said. "So we endured 2001. Then September and 9-11 stuck. Through all of that we were able to grow 350 percent in terms of year over revenue. About 200 percent in terms of subscriber growth."

When Covad was scrambling to pick up castaway DSL users around the country, Speakeasy launched its "Ellis Island" initiative, a program to assist customers of failing DSL ISPs. By providing a simple switch to the Speakeasy network, the company picked up more than 10,000 DSL refugees.

Apgar said the decision to stick with Covad landed Speakeasy on the good side of misfortune. "Maybe we got a little lucky when we picked Covad as our primary DSL partner. But it was the best possible choice we could have made at the time."

Refusing to buckle under related business burdens and an act of God, Speakeasy got busy and rebuilt its central office, resulting in the debut of a more robust, customer-centric back office system. Speakeasy's Operational Support System (OSS) incorporated the company's internal billing, provisioning, technical, and administrative functionalities, and streamlined customer service functions.

At the same time, Speakeasy diversified its DSL vendors, opting to partner with New Edge Networks, in addition to Covad. The move allowed Speakeasy to expand its broadband DSL services to residential users in 360 small- to medium-sized markets in 29 states.

As the result of Apgar's leadership, Speakeasy's support staffs resolve, and a little bit of luck, the company remains as nimble and customer focused as it was in the beginning. When asked what the future holds for Speakeasy, Apgar said the key is to remain technology agnostic and focus on customer support.

"Speakeasy is nimble and customer focused, so we're an ideal cable partner," Apgar said. "The cable infrastructure folks understand our value proposition. Right now our customer base is 70 percent residential and 30 percent business, so we're a good match for cable companies. "

Even if cable companies don't understand Speakeasy's value proposition, its customers certainly do. While its customers might pay a little more for its service, people like Mike Apgar make sure that Speakeasy customers get a little more than the average broadband user when it comes to quality connectivity and customer services.

"We actually charge a bit more than $40 a month for DSL access," Apgar explained. "Some residential users ask for our $200 a month plan usually reserved for businesses. We appeal to specific users—technology oriented career-focused types, programming hobbyists, and telecommuting professionals."

Apgar added that Speakeasy makes more of what broadband does for users than just offering a high-speed connection to the Internet. After all, Speakeasy isn't like a phone company.

"People will call us and tell us the phone company offers DSL access for x-number of dollars. They ask why we cost a little more." Apgar explained. "All we say is well, 'we're not the phone company.' We only do a couple of things here and we do them very well."

The one user we've heard of switching from Speakeasy to Qwest did so when he moved within Seattle—and was told by the Qwest technician that Qwest DSL would be provisioned two weeks faster than Speakeasy DSL.

Overcoming adversity isn't a reactive business plan for Speakeasy—it's a proactive mantra than sets its DSL services apart from others. The company has grown up over the years, from its first days operating with a rack of dialup servers in the back of a Seattle café to a nation-wide high-quality broadband service network.

Speakeasy's original customer base has been transformed from a handful of loyal e-mail and dialup users to tens of thousands of DSL, T1, webhosting, and dialup customers today. This small, Seattle-based ISP has grown up, but it remembers where it came from and the lessons that got the company to where it is today—do a few things well—deliver broadband access with a passion to be the best.

<Back to page one

—End