September 27, 2004
Next: Local connection | Fletcher Kittredge Founder and CEO, Great Works Internet, Biddeford
By Dorothy Ogrodowczyk
In the late 1990s, many small, venture capital-backed telecom startups were crushed under the weight of their own debt. But Fletcher Kittredge's healthy distrust of VCs' demands kept his company, Great Works Internet, in his own hands. And that Yankee skepticism has paid off: Now celebrating its 10th anniversary, GWI has grown to become the oldest and largest locally owned Internet service provider in the state.
It's done so in an industry rife with consolidation and dominated by national and international corporations. But Kittredge, 43, has been unafraid to take on the big guys, most recently in a public scuffle with Time Warner over GWI's connection speed. Not only did Kittredge claim that GWI's high-speed Internet service is faster than Time Warner's ˆ a conclusion based on independent, if controversial, research ˆ but he refused to back down despite Time Warner's threat to sue. Perhaps that's because he's never been overly impressed by those with deep pockets. "I used to go to MIT's entrepreneur club meetings," he says, "and venture capitalists used to give presentations about how wonderful [VC financing] was. But it seemed to me to be like, 'here's a lot of money. All we need is for you to sign here in blood.'"
Instead, he self-financed the company, which he founded as Biddeford Internet Corporation in 1994. He started with $43,000 in personal funds, then reinvested revenues back into the company, allowing it to grow slowly. The business model forced him to build a solid customer base and stay out of debt, rather than following what was then the conventional telecom startup wisdom of using venture capital to buy equipment and facilities, and worrying later about getting customers. "Their idea was you have to get big to be profitable," Kittredge says, "and ours was to be profitable and maybe eventually get big."
In the grand scheme of things, GWI still is relatively small. It offers dial-up Internet service to the entire state, and high-speed DSL service to clusters of towns roughly within a radius around Biddeford extending north to Norway, Farmington, Lisbon Falls and Camden, and south into New Hampshire. About 30% of its customers are businesses. Kittredge is working to expand broadband coverage to include more of the state ˆ something business and residential consumers likely would welcome, since GWI's high-speed Internet service costs less than what the big guys charge.
Many of GWI's current clients switched to the local ISP after being abandoned by those high-flying startups in the late 1990s. So many people had been orphaned by their ISPs that GWI's television ads proved unusually successful for luring new subscribers. The biggest problem, Kittredge says, was "making sure there were enough phone lines so [potential new subscribers] didn't get a busy signal when they called."
Kittredge's skillful management practices extend to his dealings with his employees as well. In 1997, he offered his employees a stock option plan while personally retaining almost three quarters of the shares. The strategy helped Kittredge build a team of loyal employees. And, lately, Kittredge has been able to sidestep another disturbing trend in the telecom industry: offshore outsourcing of technical support staff. Kittredge says while all of GWI's major competitors have call centers either out of state or offshore, he has been able to maintain his support staff at the company's headquarters. "We told the staff here, 'Either we need to get more efficient or we need to move things offshore,'" he says. "And we [got more efficient]."
With GWI's growth under control ˆ the company now has about 100 employees, with plans to hire five to 15 more early next year ˆ Kittredge recently turned his sights to industry advocacy. As the founder of the Maine ISP Association, a group of a dozen small, Maine-based ISPs seeking to enhance their bargaining power by joining forces, Kittredge is spearheading an ambitious effort to keep Maine friendly toward to small ISPs.
At stake are proposals to tax Internet access since a moratorium on such taxes expired last November; anti-spam laws, which Kittredge says may cause more harm than good; and lowering the fees that power companies charge for attaching communications wires to their poles. "It used to be that [small ISPs] competed with each other," he says, "but now we compete with the cable and telephone companies. Inevitably, there are situations where they want one thing and we want another, and they bring a lot more resources to the table. In order to defend our common interests, a group of us have banded together."
Kittredge's ability to see the big picture serves his company, his customers and his counterparts at small ISPs well. And his engagement with the issues shows no sign of decreasing. Between public policy questions and global competition, Kittredge says, "it's getting pretty exciting these days."
It's done so in an industry rife with consolidation and dominated by national and international corporations. But Kittredge, 43, has been unafraid to take on the big guys, most recently in a public scuffle with Time Warner over GWI's connection speed. Not only did Kittredge claim that GWI's high-speed Internet service is faster than Time Warner's ˆ a conclusion based on independent, if controversial, research ˆ but he refused to back down despite Time Warner's threat to sue. Perhaps that's because he's never been overly impressed by those with deep pockets. "I used to go to MIT's entrepreneur club meetings," he says, "and venture capitalists used to give presentations about how wonderful [VC financing] was. But it seemed to me to be like, 'here's a lot of money. All we need is for you to sign here in blood.'"
Instead, he self-financed the company, which he founded as Biddeford Internet Corporation in 1994. He started with $43,000 in personal funds, then reinvested revenues back into the company, allowing it to grow slowly. The business model forced him to build a solid customer base and stay out of debt, rather than following what was then the conventional telecom startup wisdom of using venture capital to buy equipment and facilities, and worrying later about getting customers. "Their idea was you have to get big to be profitable," Kittredge says, "and ours was to be profitable and maybe eventually get big."
In the grand scheme of things, GWI still is relatively small. It offers dial-up Internet service to the entire state, and high-speed DSL service to clusters of towns roughly within a radius around Biddeford extending north to Norway, Farmington, Lisbon Falls and Camden, and south into New Hampshire. About 30% of its customers are businesses. Kittredge is working to expand broadband coverage to include more of the state ˆ something business and residential consumers likely would welcome, since GWI's high-speed Internet service costs less than what the big guys charge.
Many of GWI's current clients switched to the local ISP after being abandoned by those high-flying startups in the late 1990s. So many people had been orphaned by their ISPs that GWI's television ads proved unusually successful for luring new subscribers. The biggest problem, Kittredge says, was "making sure there were enough phone lines so [potential new subscribers] didn't get a busy signal when they called."
Kittredge's skillful management practices extend to his dealings with his employees as well. In 1997, he offered his employees a stock option plan while personally retaining almost three quarters of the shares. The strategy helped Kittredge build a team of loyal employees. And, lately, Kittredge has been able to sidestep another disturbing trend in the telecom industry: offshore outsourcing of technical support staff. Kittredge says while all of GWI's major competitors have call centers either out of state or offshore, he has been able to maintain his support staff at the company's headquarters. "We told the staff here, 'Either we need to get more efficient or we need to move things offshore,'" he says. "And we [got more efficient]."
With GWI's growth under control ˆ the company now has about 100 employees, with plans to hire five to 15 more early next year ˆ Kittredge recently turned his sights to industry advocacy. As the founder of the Maine ISP Association, a group of a dozen small, Maine-based ISPs seeking to enhance their bargaining power by joining forces, Kittredge is spearheading an ambitious effort to keep Maine friendly toward to small ISPs.
At stake are proposals to tax Internet access since a moratorium on such taxes expired last November; anti-spam laws, which Kittredge says may cause more harm than good; and lowering the fees that power companies charge for attaching communications wires to their poles. "It used to be that [small ISPs] competed with each other," he says, "but now we compete with the cable and telephone companies. Inevitably, there are situations where they want one thing and we want another, and they bring a lot more resources to the table. In order to defend our common interests, a group of us have banded together."
Kittredge's ability to see the big picture serves his company, his customers and his counterparts at small ISPs well. And his engagement with the issues shows no sign of decreasing. Between public policy questions and global competition, Kittredge says, "it's getting pretty exciting these days."
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