How Ultra Mobile Grew to be #1 on the Inc. 5000 List | EP 6.2

Okay, so today we are talking to my friend, partner, CSO, which is Chief Strategy Officer, and co-founder of Ultra Mobile. This is Rizwan Kassim. Rizwan, how's it going?

Pretty good.

Great. So, I mean, let's talk about this a little bit. I mean, why— I mean, you're one of the co-founders of the company. There's 5 of you, right?

Yes.

Okay. So what was the impetus of starting this company and kind of where are you guys today?

So this same group of 5 people had a calling card company. that we started about 10 years ago, and all of us were at an earlier point in our careers. We built that and it became a fantastic business, kind of more of a lifestyle business at a certain point, right?

What does that mean?

It would distribute some cash, we all got paid our salaries, we didn't all necessarily have to work 40 hours a week, and it was 5 people with 1 person helping with customer service, and that was it. So there was a lot less of the stress that you have at a larger company. We kind of got comfortable with that. One of our partners kept saying, look, we're selling calling cards to Indians online. for this market. We should do something bigger.

So you guys started with India first?

Yeah.

Okay.

And that was calling cards only. Typically, there's some cultures that are very price sensitive to getting the best deal possible. And in fact, we'll share it with everyone else. I actually did an analysis of our Indian customers. I found there was a lot right by USC. There was a lot right by Bentonville, Arkansas. We couldn't figure it out until we realized it was Walmart headquarters. So one person there who was coming in probably on a visa, found our website through SEO. And then 300 people heard from that person, and those were all organic ads, saying, oh, if you wanna call home, here's the way to do it. So there was a lot of virality there. And when we looked at the virality between certain cultural groups, certain ethnic groups, especially first generation, and we looked at the fact we were getting $5, $6, $7 from these subscribers, but they were still paying for cell phone service. We thought, why don't we have the cell phone service? Why don't we bundle the two together?

Mm-hmm.

Took about 2 years to get a deal. Just putting that together, finding everyone. The business model is called an MVNO, Mobile Virtual Network Operator. So we don't have cell towers. What happens is that we purchase airtime from one of America's cell carriers.

Got it, so you're partnering up, you're not building that all out because that would take forever.

Yeah, and billions of dollars in spectrum. And it's a pretty common model overseas. So let's take one of our competitors. AT&T has their AT&T brand. They charge $60 for bad unlimited and $90 for good, and they have their tiers.

Mm-hmm.

But they've got spare network capacity and they want extra customers, so they have a prepaid brand. You have to pay in advance. There's no credit check. You and I both have cell phone service that our Social Security number's in there. If we miss a payment, they'll just send us a letter. It's not a huge deal. These guys are prepaid. They've still got excess capacity. And they say, well, what if we can use it for people who can reach into markets that we can't? An excellent example is the Vietnamese in Southern California. There's a lot of word of mouth in the community. There's also not a lot of cell phone stores in that community that's catering to their needs, either by language or by apps or just what they want. So sub-MVNOs under AT&T are kind of a— they fill in the cracks, right?

Mm-hmm.

The big swath of the business is taken up by the Big 4 and their prepaid brand. It's— there are 330 million people in the US. By having a million of them in there, you can have an incredibly healthy business. If you are in Canada, niche marketing to a subgroup of subscribers in wireless turns out to be pretty difficult because they've got, I would say, 12 million— they have 20 or 30 million people. It's not a massive market if you find a percentage point of that. A percentage point of the US market is 3.3 million people. That is a massive number of people that can be interested in your service.

Hmm.

There are over 40 million people in the US that are foreign-born and have emigrated here. That is a massive possible customer base. So we had this idea and we start talking to the networks. And the MVNO business sounds a lot cooler than it is. It's a great way to get high revenues, but the pricing and the competition can be very difficult. So we talk to them, we get in line, we attempt to partner with a network. We decided early that we needed a GSM network. There's 2 technologies.

What's GSM?

There's CDMA, which is Verizon and Sprint, which is pretty much a US-only technology with a couple of exceptions. And there's GSM, which is where you have SIM cards. Now it's all LTE, so they've kind of combined. But if you're coming overseas, you've got a phone that can take a SIM card. So we needed a service that allowed you not to have to come and buy a phone, but to be able to put your own SIM into your existing phone.

Got it. So here's another key takeaway, and it's something that I latched on to, which is When you start a business, Rizwan talked about targeting Indians specifically in the beginning, right? You think about Apple. Apple has the iPod, they have the iPad, they have the Apple TV, all this other stuff right now. But they started out with the Apple computer first, right? And then they started to break out from there. And now you aren't just targeting Indians anymore, you're targeting a much bigger segment of people, right?

Yeah, and you know, you can think it sounds very much like an MVP, and in a way it is, right? What was the minimum product we had to launch to see if people were interested at all? The very first customer segment for us that took on were Bangladeshis. We launched with 8 people. There's 140 at Rakovera now. We had this small group. We kind of said, look, let's launch this. We don't know if this is gonna take off or not. So the rest of the year, couple years, was playing catch-up on hiring and development and resources. But we bootstrapped very much, also financially bootstrapped the entire business.

Interesting. So I wanna talk about that. I mean, just backing up a second, looking at the The 5 co-founders that you have. I mean, how did you all meet first off? And then, you know, how do you all work together like that? Because 5 people sounds like a lot to deal with.

There's a gentleman named David Glickman who has started a number of telecom companies, multiple massively growing companies, and he had an idea. He reached out to some friends and got 2 of my partners, Chris Furlong and Dave Schofield, from another business saying, hey, these guys would be great for this. I was on a science fiction list at UCLA, and a friend of mine who's also involved with David sent an email saying, we need someone to rack some servers and put it in.

Mmm.

And I had another job at the time, and I said, well, you know what? Money's good, and I wanted opportunity, and I wanted to see where this was going. So I signed up to do something that I didn't fully understand how to do.

Mm-hmm.

I'm an engineer, but I'd never done cable wiring for that. Went and learned, went and installed it, and found myself continually to be more and more useful. And then there's Jesse Anderson, who has a telecom background and knows how to find the best rates for all of us and has been trained significantly in that. So suddenly we've got this team. It is a team of very strong personalities.

Yes.

We're friends. You know that I have a particular style. I'll be honest about myself. There are times I'm super intense and I can get a ton of work done. There's other times where I've kind of fallen out of orbit a little bit and I'm taking care of other things in my life or trying to regather energy.

Yep. So how do you deal with all that? Because what I'm trying to get at is like these personalities are so powerful, they're gonna clash no matter what, right? Just like we're in, you know, this entrepreneurs group and there are strong personalities in there too, right? So how do you deal with that? You're gonna fight sometimes and then you have to come back to work and you just see the same person the next day. Yeah, this is for years and years. How long have you been doing this?

10 years.

10 years, okay, with the same group of 5 people. Yeah, I mean, what kind of stories can you share?

How do you deal with it? Oh, I've— and, and I think it happens in multiple phases. So I'm gonna talk about the first 5 years first, when we had this business that was a lot of work, but it ended up becoming a lifestyle business. First of all, we were all remote. We literally all were at least 2 hours from each other, somewhere in New York, somewhere in Minnesota.

Mm-hmm.

Weekly conference call. So we had our separate sections. So as long as I was trusted to do my part well enough, we didn't have to conflict that much. But it happened, and it happened much more than you'd imagine. There'd be frustration on the phone. And I learned the amazing power of a retreat. Every quarter, we would pick up and we would go to someplace nice. Whether it's someone's condo in LA, we'd go out to someone's house in Maine, we'd go to Hawaii for a trade show, and we'd have a good time.

And there was no agenda, it's just, let's just go have a good time and meet up.

There was a light agenda, we need to do work, but there was a day's worth of agenda and 3 days of time together.

Got it.

I actually remember being frustrated by this because I had another job at the time too. And I'm like, I'm taking time off from that other job to come out and we're not doing work. We have all this to talk about. Yeah. Single best lesson I've learned because by going out— so if the trip cost $5,000, we would easily come back with $5,000 of business value from an idea.

Totally. Easily.

But the other part is by going out and having drinks together, By going out and having nice food together, there was a connection that was built, and it helped fix the previous 3 months of animosity. 'Cause we know this now from internet chat and everything else, by sitting face to face like this, oh, that's right, you're a human being, this is what you're like. It's easy. You get to deconstruct the model of like, fuck, this guy's just messing with me.

Yep.

And now you're like, oh, this is a person, they want this, I want this. You'd have a couple of long talks later over drinks.

Yeah, you just get over it so quickly.

So we'd sit and do napkin math or throw up Excel spreadsheets Excel on the screen and say, oh, we can afford to do this, here's some code changes, and we'd roll out releases right then and make strategic choices.

So it sounds like it's— the agenda is light, kind of, okay, here's the issues high level and let's just talk through them.

Yeah.

Okay, what about the second half, the next 5 years?

Teams that know each other incredibly well can move at a speed that is not 2x but 10x that of a team that's just been introduced to each other.