Please welcome President and CEO Calix, Michael Weening.
Good morning. How awesome is it to walk up to that? All of your successes, the things that you're doing every single day, congratulations. It's absolutely incredible. We kick off the third day, our last day. Had a great time last night. I heard everyone loved it. Yes? Yeah? Lots of great feedback? Awesome. As I said yesterday, the theme, if we're going to put one slide up, this is it. There is no version of the future where AI is optional. None. As you contemplate this, you really need to think about what are you going to do as you leave today to take big steps forward. What are you going to change? Because now is the time. We've set it in place so that you can launch quickly, but you have to embrace change.
You have to embrace that the past is the past, I need to go to a different place. And I need to go to a different place fast, and I need to go hard. Because what got you here won't get you there, because this thing is going to change. It's funny, this morning, reading the news, again, there's all this great stuff that's happening. This is what I woke up to this morning. AI attack tools left the lab, weaponized a breach, huge cost. These are the types of things that you face if you don't get ahead of it. I'm going to tell you a little story. You sit at this point, this decision point, where your teams are going to come to you and say, "We can do all this cool stuff.
We have this tiny little vendor who's got a couple people, and you know what? They built some really cool agents. Those really cool agents can do some things we couldn't do before. I really want to go use them, and I want to let them proliferate through my business." That's actually where Calix was two years ago. We had our teams going out because it was this early stage of let's go try all kinds of cool stuff. Yeah, it's five guys and a ChatGPT agent, and they're building some things. But you know what? We can go really quickly. They're doing things that we never thought was possible before. Let's just go. It was shocking how fast that proliferated. Then we slammed it shut hard because here's the simple truth.
If you don't get on board with the people who are putting hundreds of millions of dollars behind putting security, trust, and making it predictable, it's like driving a moped on a 12-lane highway, and it's just a matter of time before you and your little moped get run over because this is what's coming. It is that stark. While I love entrepreneurs, there's no place for this next stage for playing games and playing with tinker toys, trying to build it yourself. The future is you got to align with people who are monsters and driving big trucks on that 12-lane highway and can protect you, but more importantly, are going fast. In our enterprise, our partners, w e run a business just like you do.
We have the products that Shane Eleniak and his team build, and I showed you all the investments that they made there. But on the enterprise side, we have very clear partners, and the number one choice with regards to who we pick is do they have deep pockets and can they go fast? I will tell you that we started to build a whole bunch of crazy stuff before I shut it down hard because of the fact that I would rather wait, for example, for Salesforce to show up six months later, but know that my company is not going to go bankrupt because all my data went loose. Because I don't look good in an orange jumpsuit. I just don't.
We're focused on who are the partners with deep pockets who are going to play for the long term, not the ones who have cool little tinker toys that can actually build me something that aggregates it and doesn't lead to long-term success. You really have to be pragmatic and really think hard about this, because the proliferation of technology in your business leads to complexity. If you didn't hear Shane West yesterday, he was in a business that had 400 IT people that had a ton of complexity and led to 40% higher truck rolls and an NPS that was 60-70 points lower than what's happening at ALLO. That complexity is cost, that complexity is people, and that complexity is your competitors crushing you.
You really, really have to think hard on who you partner with in this next stage, because the ones with the deep pockets are the ones that are going to win. That's also why I believe ChatGPT, everything in Anthropic and Claude, it's just a matter of time before they get beaten up and destroyed. You got to go with the deep pockets, and you got to go with the people you can trust, who are secure, and who are in it for the long term. That's what we've done. You made that happen. You made that happen because of the fact that you trusted us to partner. You gave us great ideas. When we had good ideas, you told us they were good. When we had bad ideas, you told us that why it won't work. Together, we've gotten to this point, and it was hard.
It's funny, people who learn about our company as we become more and more known with regards to what we're doing that's unique with regards to AI and disruption, they all go, "Wow, it's just like you guys have shown up and you're a new emerging talent." Bullshit. We've spent 15 years grinding away in the trenches with you guys to get to this point. None of you are flashes in the pan that showed up. The secret history of success is really simple. No one cares. Work harder. Get at it. You got to grind to success because nothing's easy. For us, $2 billion plus, this year we'll have $200 million of deep pockets to ensure that you get trust, security, and predictability.
In 2027, we will run everybody over from a competitive point of view because we're, together, going to put out more capabilities that allow you to crush your competition, and we're going to crush ours. Because none of them are doing anything like this. None. That's going to become clearer and clearer as we open up a big gulf between you and your competitors. Because the best way we're going to prove that is when no one beats you in your market. When you own the home, when you own the small business, it expands out to the medium-sized business. Go look at those switches. Who else is giving you a switch, a network product, and a Wi-Fi system that can control everything in the network? We've brought all that together because you asked for it.
By the way, the little switch that is in there, I told them I want two, they are not prosumer. That's for every consumer. I don't know what the price point is. It's less than $200. It's a pittance if you can actually not roll a truck with the price of gas these days. There's this huge upsell opportunity, churn opportunity, because once you get in there, everything can be reduced from a churn point of view. A great opportunity to grow your NPS and expand your business and dominate your markets because we've done MDU, and we're going to do it the best in the market. I was sitting with MDU customers. All they do is MDU, and they look at what they're doing.
They've been guiding us to this point, just like we've worked with all of you, and that product is going to be the best in the market. Absolutely flat out. Why? Because when you put it in an apartment building, it can go from the edge of the fiber in or whatever the transport is, all the way to the top of the building and everything in between. Small business, network, whether it's coax, fiber, or any other technology. It can do the Wi-Fi in every resi. It can do the small business if there's a convenience store in the bottom. The SmartTown allows you to wander around through the MDU product. So I can go to the gym and have great Wi-Fi. I can have my car connected and great Wi-Fi. I can go to the pool at the MDU, and I can have great Wi-Fi.
Building owners are going to become your best friends. They are going to love you. If they do not, as Shane and I said, if you give us a ring, if we are not stepping up and there is something that you need, all it has to do is hit the stack rank. Because we have a stack rank of requests on what is going to drive revenue and lower costs. Those are our two metrics, help you make more money and help you lower costs.
The lowering of costs is when revenue goes up, your OpEx stays flat, and you just get to gain the benefit, whether it is for your investors or your community. Embedded is all the things that you need from a capacity point of view. This is 15 years of investment waiting to turn AI on. As I said around the BNG, the challenge is out there.
Kill the BNG by itself. That is the motto in 2027. There is not a single person in here who cannot eliminate their BNG box and put access aggregation and BNG into a single system, and whose MPLS we cannot run, allowing them to buy a hell of a lot less from Cisco tomorrow. If you want that challenge, I take it. Call me. Call Shane. The two of us will get on there, and we will actually ensure our. We have an entire team that will do a gap analysis. You want to simplify your network? You want to save a fortune? Just do the math. A big PE router, a big BNG, an aggregation box, and an access box. That is four boxes. One E9-2 that does all those functions with a smaller PE router, 60% less power, 80% less power. Right? One team, not three.
Well, one and a half teams because your PE team is going to be half the size. So one and a half team versus four teams. Do the math and bet for the long term. Companies who win are not the ones who did what they did before. They are not encumbered by their team members who are in an existing job and do not want to change. Human nature is not to want to change. The leaders, the ones who win, are the ones who change. We are the easy button. We will help you architect it. We will help you build that next-generation network. We will help you save a fortune so that you can be successful and take those investments and put them into other areas. Those other areas are win the subscriber. Sales, marketing, reduce churn. We care about your sales teams.
We care about your marketing teams. We care about how you actually do personas. This morning, we had a customer in one of the leadership sessions talking about how they had a churn problem, and they engaged with our success organization. They put persona-based marketing in place. We helped them build all their content. They launched it, and they went from a negative to a significant positive. Frankly, you are the best in your industries. The only thing that you should have is zero points of churn with taking out the people with credit risk. Everybody else should be a zero churn. If you lose anybody to Starlink and you have a fiber to that house, my goodness, look in the mirror and say, "What have I done wrong? What have I done wrong?" You should never lose to Starlink, and you should never lose to Amazon and eero.
You should win every time. If you are not, ask us. We will help you. The reason why we can help you is not because we are really smart, it is because we are an aggregator of knowledge. This is a community that comes together. All of these wins are your wins. They are you executing, you doing incredible things. We got your back. We will make it simple. As you heard with where we are going with agents, you are going to see a proliferation of them, but more importantly, you are going to see everything that we are doing with regards to Workflow Studio, so that as you go re-engineer your business, you can say, "Here is how I am currently doing it.
With all the agentic capabilities and the simplification that Calix offers me, I can go rethink how I run my business, and then I am going to workflow it out." The future of leadership and management, some of the same things still exist. I have to set a vision. I have to have a strategy. I have to be able to execute with grit. The bigger one that is now emerging, I have to attract talent. Last, this new one, I need to be able to workflow my business top to bottom. For those of us who started in engineering or computer science, you have done lots of Visios. That is actually re-emerging as a great skill, because if you can workflow out your business, including sales and marketing and every function, then what you can do is identify where you insert agents to automate.
That, to me, is the biggest element of Workflow Studio that you have to contemplate. How do I take that tool to assess my business and say, "Hey guys, let us get in a room and figure out, how do we actually run every day?" That is what we are doing. We are actually going through every single function, and they are building out their top workflows, which have the top employees and the top complexity, and they are saying, "Here is how we do it today. What are we going to automate with our partners, Salesforce and others?" In your case, us and all the tools that we are going to give you. How am I going to automate those things step by step? The reality is, you cannot change if you do not know how you do it and what you want it to be.
That Workflow Studio is going to be incredibly important to you on how you change your businesses, and we will be there with you the whole time. That is why we have a massive field organization. Unlike others who kind of parachute in and parachute out like seagulls, we have been in this business for a long time. We have a massive team that is here to help you every single day. As you think about this as you go home, just remember, we are behind you the whole time. We want to become easier and easier.
We are the easy button. We will give you the AI. The key thing is you got to figure out what to do with it. If you need something else, we are all ears. Because this is a great time from a capacity point of view, where we can help you elevate your entire business top to bottom. Because the number one value at Calix is when you win, we win. We know that every single day. With that, let's kick off the show. Let's welcome Juergen to the stage. There you go, sir.
Good morning, everyone. In marketing, typically what you have is a lot of voodoo magic, right? Intuition, where you think folks go. Today I'm going to talk to you about the dark art of science, data science. Also I want to bring it back to the Oura sleeping real quick. I was stopped several times after my keynote yesterday how I achieve a perfect 95 every night. So next time I might have to deliver a wellness keynote to all of you and to the 45 recipients of the Oura Ring that hopefully you have already put to use. But if we look at data, and I'm a marketer, I geek out on data. It's part of my job description to ground my intuition on data points that are scientifically backed.
Michael talked about yesterday about the changing pressures of competition, the absolute insane speed of AI transformation that hits us all. Last year, if you have been here, we started to share out a study. It is actually a commitment of ours to do this five years in a row so that we get trends as well. Snapshots and times are great, but they do not tell you where it is headed really and what are the difference from year-to-year. It is my distinct privilege to share our second year findings here. What we are doing in this study is we are looking at switching experiences. What drives subscribers to behave differently? Last year we did it with a blind study of 2,000 internet decision makers at home. This year, because why not? Bigger is better, right? We did it with 2,600 subscribers.
Not only are we opening the funnel to be more representative of the demographics we are including, and we looked at rural, we looked at suburban, we looked at urban. Plus we took the entirety of the gene pool from Gen Z all the way down to the more senior type of decision makers. Those studies performed by DC and Gather really inform our insights. Plus, we are willing to share that with you and also provide that framework to you that if you want to run similar studies with your subscriber base, feel free to do so. Here are a couple of numbers. 16.1% of subscribers have already voted with their feet this year. So within the last 12 months, we have seen a 6.2% increase on subscribers actually switching. Bold data point.
What for me was a more striking data point is that 48.9% of the subscribers we polled are on the fence. They are in market right now. They might be loyal to you right now. They might be masked actually by good NPS and satisfaction scores, but 48.9% are actively in market. This means if they are approached with the right offer at the right time, meeting their economic needs, gone. Or I learned in business that this is a negative way to look at it. Has anyone learned this "yes, and" methodology? Anyone know? This means "yes, and" it means that your competitive subscriber base is up for grabs as well. Grab them right now, reach out to them, engage them. I have also learned, are there any Gen Z in here? No? Okay. We are somewhat safe with the statements. I got it.
Now we are somewhat safe in an environment here, but there is no loyalty baked into the gene pool of Gen Z. Absolutely not. This is where we see the highest vulnerability. If you do the demographics of your subscriber base, you might want to pay attention to this particular segment of your subscriber base because they are most receptive to be poached. This is this false sense of security I was telling you about. 93% have indicated they are actually really happy. This is an all-time high in terms of their commitment to their current provider. You could take a lot of comfort in this number, but if you pair it to the number I have shown you earlier, it does not mean that they do not opt for something better if the opportunity arises. So do not let this false sense of security sink into heart.
We also looked, tried to see where does the switching happen, where is it most dominant compared to last year? We found that in rural areas, it jumped just about 10%. It doubled. This is amazing. In the Midwest, it almost tripled. This might be a snapshot in time. This is why I was saying we're doing this year over year over year. I'm not saying this is an eternal truth, but every year when we release this study, we're going to go very deep on those data points to help you be sharper, potentially use the data points as you see fit, or run your own studies based on the data. 5G, it is a topic. I mean, 3.5 million- 4 million have changed last year to 5G. This is a big number.
The big companies are luring a lot of subscribers right now with potentially what is a good enough type of thing. The bundles, the offers that they put in front of them are luring them away. Bundles is also a topic that we try to dissect a little closer. What is it? What is the right composition that hits home in those type of offers? Streaming services tops the list. If streaming services are effectively bundled into an offer that's also matched with price and speed, a pretty good strategy it seems right now. The same thing is true for smart home features, comes in at a second place at 42%. Also the personalization, security, that comes in very hard. I would bet. Oh, that's hard. I'm just going out a limb here.
Bet is maybe not the type of word I would use. I might be proven wrong next year, but I would hunch some level, that security is going to go up next year as well. I think just the sensitivity we're seeing in the market around cybersecurity, and oftentimes we see a lot of folks working from home, so you want to be twice as safe with data type of points. But security, I think, is going to be increasing next year in our study as well. Network availability. If we take away the table stakes, price and speed, I mean, come on, this is, you need to have that. We need to define as to what's the right threshold for everyone, but price and speed always matters. Let's never forget that. But on top of that, network availability is a high factor of satisfaction and loyalty.
We see the degree of customer service that is being extended has a massive influence. That means everything, visibility, how fast your ticket is touched, which type of channel do you use, for example, to interact if you have a service issue. Increasingly, those channel mixes are changing. We're not talking just getting someone on the hotline. The in-mobile app experience actually is really dominant. We're seeing chat also rise to the forefront. If I take myself, if I can avoid talking to a human, I'll do that first. I help myself. I really try to help myself first. AI-powered chats have come a long way. Customer service and the channel mix is going to be very interesting. Then personalized packages. If I have the feeling the subscriber knows me, my demographic fit, based on my usage, what would be the ideal package? Big plus.
I'm an Xfinity Comcast subscriber. Sorry, I have to tell it. It's the only choice I have right now in my neighborhood. Fiber is not yet there. But every year, I call them and basically said, "What's the next best offer?" I test constantly, right? So personalization, I want to see if they know me. Do they really use telemetry to get to know me, the intimacy? Sometimes they get it, sometimes they don't. But I'll push hard for price. So this was my espresso shot therapy for the morning for you guys, who wanted to jolt you with a couple of numbers. The key takeaways from this study are here. I'll leave it at three, because three is psychologically a great number. Your customers are not leaving you because they are mad with you.
We have seen that 93% is a super high satisfaction rate, but they're going for better at the current time. What is relevant to them right now? Take economic hardship. If you can lower your price bill right now to offset diesel price, whatever it is, you might go for that. The second finding is move before the market. What I meant with that is if you know that roughly 50% of the subscriber base is actively in the market, you need to move faster than a competition. That was this yes and moment that I described earlier, right? It's not just shocking, but it's your opportunity to really aggressively go after those and make them yours. Don't sleep on 5G. The big ones are spending millions and millions and millions of dollars, and it's showing results. So those are the three takeaways.
If you want to learn more, everyone has access to this study, so if you have not seen it yet in your ConneXions app, I invite everyone to do so. I did something dramatic. I volunteered someone out of my team, Liz, to be the single point of contact. So she's going to have a lot of friends. Her email account is going to blow up, and I'm going to have fun. No, but Liz is fantastic. She has access to all of the data, so please don't hesitate to reach out. We also have DC, our design partner, and Gather working with us, that if you feel you want to run a similar study, the framework, the methodology is in place. Contact us. We're happy to run those type of studies with you.
With that, something for which we typically don't take nearly enough time because we're all operators. We're running the business very hard. We know what we're doing, or at least we think we know what we're doing. That is what I want to do right now. I want to introduce Melina Palmer to the stage in a second here. Melina has a really interesting title, behavioral economist. You don't see that on a lot of business cards.
I thought I was a super sharp guy in co-authoring a book, but this lady has not only one book, not two books, but three books, and really on trying to understand the psychology as to why your subscribers choose you. What can your customers not tell you, but you need to know that anyway? So this is not just a session for marketers. This is really an investment from us into the softer science on how can we get subscribers to choose us over and over again. I couldn't be more delighted to bring Melina on stage. Melina, stage is yours.
Thank you. Thank you so much. Hello, hello, and good morning. I'm so delighted to be with you here today as we're going to be talking about some brain science and how our brains really work. I have had the great joy of meeting several of you over the last couple of days, working with the GMs in a workshop yesterday, and with the Women in Broadband. You're all fantastic, and I'm just really delighted to be here with you today. Let's share a little bit about what your customers want and can't tell you, right? To start that off, I'm going to ask you a fun little question, something to take a look at here. What do you think this is worth? What would you pay for this guy?
Don't worry, I didn't make it, and none of my kids made it, so we got nothing there, right? Maybe you'd give me a dollar. Maybe. I know often it's like, "I would need you to pay me to take that thing," right? "I don't want that. There's no way that I want that." But of course, it depends. The value of this, what it is worth, depends on a lot of different things. This is actually part of a research study that was done. It's called the Significant Objects Project. What they wanted to do is they wanted to understand what would happen. They went out to flea markets and garage sales, and they went and got a bunch of junk, essentially. They bought 100 different items for a total of about $128.74.
They spent $1.29 each on these cool little trinkets, and they wanted to see what would happen if they were to go and resell them, in this case, on eBay. The only difference being that they gave them a story. If these now have a story associated with them, does anything change? Do people feel differently about these random pieces of junk, right, that we have out there? When they went to sell them, do you think they made their money back? Maybe double?
More. Triple. 5x . Don't worry, we're not going to get there. They sold them for $3,612.51 for this stuff, right? Our little friend, this guy right here, he was actually one of the most expensive things they bought at $3. They had the story about him being he was the patron saint of fast dancing, and he saved a whole town that was going to be in a blizzard, what have you. He sold for $193.50. The story here is that the story matters, and what people are willing to pay for something, how they value it, what matters to them, changes based on how you present it to them, and that's all that I do as a behavioral scientist.
Today, I'm going to be giving you three cheat codes of things that you can be doing in your business to help leverage behavioral economics in the work that you are doing to be more effective. The first one, building on our Significant Objects Project, is to think about speaking their language, communicating to people in the way that they want to be communicated with. I've got another fun little question shouted out moment. It's my favorite thing. I hope you enjoy them, too. I want you to imagine that you're going to order some breakfast, and you went there, and you love a yogurt parfait, by the way. You were delighted when you go look at the menu, they have two on there. They're almost identical. The only difference is that one is labeled as being 90% fat-free, the other as 10% fat.
Which one do you want to buy? 90% fat-free, right? Yes? I've given this presentation to thousands of people around the world. Everybody says that, right? Logically, I know it's the same, but it feels completely different, right? 90% fat-free is like, "Ooh, what a good decision I'm making for myself," and 10% fat is like, "Ugh, I haven't been to the gym in a year or so. I don't know. That's no good," right? If your messages aren't landing, if they're not resonating, if people aren't buying, it might not be the price or the product. You might just be talking about it like 10% fat, and if you could reframe that to be 90% fat-free, all of a sudden it takes off. Right? Knowing that how you say something matters more than what you say.
As you think about communicating with your customers, a main thing to really be thinking about is jargon. Every company's got jargon. Every industry has jargon. You all have some jargon. You know you do. Yes. As you think about lightening that up so people can understand, it actually makes it easier when their brain's not weighed down with stuff. Let's take an example, thinking about something like a megapixel. We all know what a megapixel is, but do you? Do you know what a megapixel is? Do I need 4.9 or do I need 25? Do I need 50.4? I don't know. Do I need 100? What will make for the best experience? When someone goes to buy, it doesn't really make much sense.
If you look for the opportunity to reframe in what they value, what they care about, if we instead say, "Hey, this is good for digital only. This could be poster size, or this you could blow up a billboard if you wanted to." I can very easily say, "Hey, I could take a pretty good picture. Maybe it'll be a poster, probably not going to be a billboard." That's all right. I can be a little humble, but I can make a decision in that way. All of a sudden, something that might've been a lot of debate, and they couldn't tell you why it was off, but now you know, okay, this is why. Now it's easier for them to make that decision because it's that smooth transition to something that matters to me.
If you think about streaming where nobody gets kicked off, and the Wi-Fi's always working, and you can do those Zoom calls no matter what, right? Whatever it is that people care about is really going to matter for them. In this case, your first action step on cheat code number one is change the words, and you change the value. What I recommend you do to practice this is pick one offer and rewrite how it's described with no jargon, and focus on what customers truly value and see what happens. Test something out. You'll be surprised at how impactful that can be. Our second cheat code is to be worth missing. We want people to remember us and to miss us when we are gone. We actually have a bit of an uphill battle as we're trying to do that. More questions.
How many decisions do you think you make on an average day? We remember how many decisions maybe we made yesterday. I usually hear two or 10 or a few hundred, maybe a couple thousand. But research shows we humans all make an average of 35,000 decisions each every single day. We are constantly in a state of choice, decision-making, and when you're putting out information into the world, and one, you got a lot of stuff that doesn't necessarily line up, or you say, "We sent the email. They must not want it because we sent one." Right? But there's more communication to be had.
One of my very favorite quotes is from Peter Seidel, that "A brand is a memory." If your brand is one where things aren't really lining up as you consider that omni-channel experience that you have, so when somebody calls you, is the experience what they would expect based on what they saw in an ad that you have out there? If they are using chat and communicating with someone, is it the same as what they're getting on direct mail? Or if they run into someone at a community event, or when they call, all these things. If it's not, you're just making it that much harder for people to do business with you. If you were to ask and consider inside of your own organization, if you were to say, "What are we about?
What do we stand for?" Would your employees all say the same thing? If they're not, your customers definitely aren't all saying and thinking the same thing. A favorite example here, got a picture. Okay. So we see this. What I'm going to tell you about this image is that it has no red in it at all. I'll prove it, and sorry for the front row, gets a little bit much on the big screen. If we still can't see, there's no red. Right? We now all know, no red. Let's zoom back out. Is it red? Even though it's super pixelated and weird, and there's nothing there, and you know it's not, you can't not see red on this Coca-Cola can when it's up there, no matter how much you try.
Because your brain is so ingrained to know that that is what Coca-Cola is supposed to look like. Which is amazing when we think about it. As we think about other brands, there are other opportunities for this as well. There was a really interesting research study done where people were shown a video, and there was just a flash of a logo that came up too fast for them to consciously recognize that they saw it. At this point, half of the people were shown an IBM, half an Apple logo, and then they went on and were doing a creative exercise. Those who saw the Apple logo were much more creative and innovative in the ideas that they came up with, compared to those who saw that flash of an IBM logo but didn't ever actually see either of them.
So the question I have for you with that is your brand strong enough that if people didn't even realize they saw your logo, it would actually change their behavior? Are you consistent enough on one thing that people know what you're about, that it could be standing that test of time? For a lot of companies, it's not the case. Not everybody has the budget of an Apple, but they went really consistent with something, and you can do that as well. So your action step for this one is knowing that when we change the memory, you change the game.
I would encourage you to ask five longtime customers, "If we disappeared tomorrow, what would you miss?" This can help to start to understand what people see about you that's deeper than what you might recognize, is how you're standing out in their mind, how they experience you, what they love about you, and what you can dial in on to help have more impact and lean into as that singular message of what you're about. What's great about these first two is it's really driving home that point that it's about what people value. I have a book called "The Truth About Pricing," in which I give you that answer on page three, which is the truth about pricing, it's not about the price. Whether or not people buy is not.
Everything that happens before matters so much more than that price itself, and understanding what people value and think about story, and how you're communicating what your brand is about, is a huge piece of that. Eventually, you do have to talk about price, right? It's going to come up at some point, and that's good. When you do, I recommend that you lead high. Let me show you an example of what I mean for this. I want you to imagine you're now going in to buy a couch. You've been looking for a while, you find one that you are very excited about. This is it. This is the couch. Amazing. You say to the salesperson, "Oh, how much is this couch?" They say, "It is $900. Oh, I'm so sorry, my mistake, it's $700." So that was experience one. We're going to rewind.
We're going to go back, same couch, same person. We walk up and we say, "How much is this couch?" They say, "It's $500. Oh, I'm sorry, my mistake, it's $700." Do you feel differently about the couch in scenario one versus scenario two? Knowing it was never $900 or $500, but in one case, it feels like it's a great deal, and the other one, you're like, "I don't know, maybe I need to make some calls. There are cheaper couches out there. Where is this thing $500?" It's now a very different experience. So making sure that the numbers that you put out, the way you present information, is so important in understanding how someone feels about the thing that you're actually selling to them. This is a concept known as anchoring and adjustment in behavioral science.
What we want you to do and to think about is how are you putting that information into the world? What comes first? Look for opportunities to do some bundles, like was talked about here earlier. Juergen was talking about that, right? Making sure you don't have 15 of them. Right? We have a few bundles, and the biggest mistake that I see companies make across industries all over the world, is that when it feels like we're putting numbers out in there, we want to start low and work our way up. You do not want to do that. Right? We have to start high and work our way down.
The other problem that I see that comes to this anchoring experience is that people will have the thing that you really want people to buy, what you know is the best one that they should have, is the most expensive thing that you offer. You should not do that because we want a point to be able to move down from, right? What I recommend everyone do in this case is to know what your best product is, the thing that most people buying from you should have, that you would like most of them to get, and give it a wingman. Create a product, a service, whatever it is that you are providing that is more expensive and that is clearly not the best value, per se. It is not something bad. We are not taking advantage of anyone, but it is something that most people don't need.
If you don't have a white glove service, you could add something in for that, or how quickly you're responding to people, for those who want extra hand-holding or whatever it happens to be. When you can lead with that item, and we know most people don't want or need that, its job is not to be bought. It's the wingman. It's there to make that best offer look good and for it to get picked up. That's the goal. When you know what those are, you start with that wingman that's at a higher number, and we work our way down to the real offer. It feels so much easier, just like we had with that couch, and makes it easier for people to buy from you. Your action step here is you consider that, knowing that when we change the order, you change the choice.
How you architect and present choices has a massive impact on what people select. You can just test some things, which is amazing. When you know your best offer, you can create a wingman for it and make sure you're going to anchor high and build it on that value proposition of what really matters to people based on what we've already been talking about here today. As we close, I know maybe we're thinking, "Wow, that was a lot of brain stuff. That's great, and where am I supposed to start?" Also knowing this is at the end of such an amazing event and conference, thank you to Calix for everything. Been so great, and I know there's a lot of stuff in your head. All the things you're thinking you're going to go back and do when you're in the office.
But if you're thinking you're going to do everything, you're so excited about all the stuff, you will do none of the things. Yes, we've all had that. I have a talk that's called "There's Nothing Magical About Monday," my TEDx, where we go back on that day on Monday, we think we're going to do all the things we learned, and then there's emails and meetings and all this other stuff, and we never do it. If you want to do something and make progress, implement what you've learned here, which I know you do, I say just pick one thing. One thing at a time, something to start with so that you know what you're going to focus on. You can talk with your team about it. Once you've completed and accomplished that thing, you can move on to the next. What's going to be coming after that.
But you get that progress, that momentum moving with you and your teams. I would recommend starting with our cheat codes. Let's show the three of them here again. One is to speak their language, knowing that when you change the words, you change the value. For two, we have be worth missing. You change the memory, and you change the game. Our third, to lead high, and know that when you change the order, you change the choice. These don't have to go in this order. If one speaks to you, lead with that. That's great.
But being able to move in and do something and know that these can have impact. You can start testing things. You could do a little reframe on your sales calls. You can have your teams doing different things, test some stuff out, and see really amazing impact across your organization without having to invest a lot of money, which is my favorite part of behavioral economics, personally. I hope you've enjoyed it. I've enjoyed being here with all of you today. I've been Melina Palmer. Thank you.
Wasn't that amazing? It's still trip-
Thank you.
Thanks for tripping with my mind, actually.
Yeah. You're welcome.
I still see red. Anyone did not see red? Come on.
Yeah.
Be honest. Maybe you want to pixelate your own logo and see if you have the same effect, but this is just mind-blowing for me. First of all, thank you so much for enlightening us. I have three questions for you.
Yes.
If I may. Generally, what we tend to do, we market functionality. Like multi-gig speed, managed Wi-Fi, symmetrical connectivity. What can we learn how we need to talk to our consumers somewhat differently? I think you had it up on the digital billboard, but what was the essence?
Right. Absolutely, yeah. Is to just think about that framing and things that people value. I can tell you symmetrical connectivity does not mean much to me, and I do have a lot of devices in my home and things like that. So if we think about communicating in that language that people understand, my son can still be playing on the PlayStation and on his iPad while the other kids are all doing things, and my husband is working, and I have to do a really important virtual keynote, and I am not going to lose that connectivity.
That matters to me. You can make sure that that reliability is there, these things that people care about. And even if others offer that as well, you can position it in a way, if you are talking about it, they realize, "Wow, that is amazing. I am so glad that you offer that. Thank you for letting me know.
Wow. Super distinct essence here, and hopefully, we can take that home. Second question I have for you is you've proven very effectively that our brain gravitates to what we know.
What we're used to, right?
Yes.
How can we remove this friction?
Yeah. The best thing, so knowing humans have a familiarity bias, we're really built on habits. When you can bring in that consistent messaging and communication that we automatically When I hear your name, we think what? I hear you, I think of this. That consistency across the messaging is something that's going to go so far for you. You think about maybe at Coca-Cola, they'd be sick of the color red and want to shake it up every now and again, right? But no. We have to be consistent in that way so that it holds through for customers.
Wasn't Coca-Cola Zero black?
Oh, no, not anymore. They've changed their packaging.
Sure.
Everything's red now, actually.
See? Tripping with the colors.
Maybe confusing, but yeah.
Yeah. In essence, what we want you to take home is actionable advice. For the leaders here in this room, what would be your guidance? What can we take home, implement at home?
Yeah. I end every episode of my podcast with "be thoughtful." I would say being thoughtful out in the community, saying, "Why would I open this? Why am I interested in this? How did I know that was spam?" That's one thing. Then know what you're doing and sending that might be in the wrong category. Also in that, just pick in something, any of those steps that I put up there, whatever resonated with you, just go try it. Do something and see the power that comes from that.
Fantastic. Once again, big thank you for Melina here.
Thank you so much.
Now, it's fantastic to oftentimes take a step back consciously and really think about what we're doing every day to reach our audience, our customers. I hope it gave you a couple of thoughts how we can think differently about it. Now, back to the agenda and to more hearing from your peers and hearing from your partners. Play the video.
Tri-CoGo is located right in the center of the State of Georgia. We've been around for five years now. We announced our project to build to the EMC members of Tri-County EMC. In March of 2021, the governor came in and helped us with that. Five months later, we served our very first subscriber. Tri-CoGo is just now implementing SmartTown, but it's really an extension of what we've been since the beginning. As an electric cooperative, we've always been invested in our community and the partnerships that we have.
We've been able to take broadband and just make that a further extension. From educational help to recreation complexes, local businesses, we've been able to take what we offer as 100% fiber network and really drive our local economy to make new opportunities for folks here in the communities that we serve. Once we started figuring out what some of these products were and how to implement them, Calix has had a team for us, the go-to-market folks, the field engineers. The whole team really came together to help us learn how to become a broadband provider, how to use the technologies that were available to us. We've just really seen Calix as a partner in almost everything we do.
Morning, Greg. Whats up Greg? What a great introductory video to a great story. When Greg and I were prepping for this interview, he told me that electric cooperatives have always been terrified of telling their story. I am glad you are up here today to share your story, Greg.
Well, thanks for the opportunity.
Let's go to the start. When we were prepping, we talked about the fact that electric cooperatives had always been really, really good at building infrastructure. They've been really, really good at building reliable services. But from day one, you knew that connectivity wasn't going to be enough. Tell us about that story.
Oh, yes. We're terrible at telling our story sometimes. I think we're humble to a fault, but all of a sudden, we're thrust into this industry. I guess we volunteered for it. But we're in an industry where I've got nine competitors in different places, so we've got to tell our story. We've got to talk about what we're doing, and centering that around experience has been really key for us. I tell our board all the time, "You can't fake local. You've got to get into the community and talk about what we're doing and tell how we're superior.
Yep. Great. I think being a trusted neighbor is a really important part of that equation. You talked about lots of competitors. You told me that when you actually launched your services, you knew that there were several well-established, really financially healthy competitors in your market. What was your strategy for dealing with that when you launched?
Well, it's funny you mention that. I was getting ready Thursday, and up pops an ad in social media, $19 a month, $300 gift card from one of our competitors. They just keep getting cheaper and cheaper and cheaper. We knew upfront that we had an opportunity to do something that they were failing at. Every time you look around, you would hear, "I hate my internet company. I hate my provider." And we didn't want to be the next provider that nobody liked. So we had an opportunity to really, from a standpoint of staffing, to bring in just an amazing team, and that's how we got here, was this fine team of employees.
We took a blank slate, really, approach and said, "Okay, if we could build the ISP of our dreams, what would we do?" Some of these guys came from our competitors, and I said, "Hey, bring the things you like. The things that drove you nuts your whole career, we can fix them, if we can just find a way to build that ISP of our dreams." That is what we did. We really have a fun time doing that, and we pivot almost every day. We now have 11,000 customers, about a 50% take rate, about a 50% gig take rate, which I am really proud of. Most importantly, and this is just a big point of pride, our NPS score for the last three years has gone 90, 91, and this year a 92. So we are just really thrilled and humbled about that.
Yeah, that is fabulous. Obviously, I think if I recall, five months to deliver first services and going to be profitable sometime soon, right?
Absolutely. Yeah. We were cash flow positive two years ahead.
That is fabulous.
We are thrilled with that.
Well, look, ConneXions is all about sharing stories and people learning and inspiring other stories. You told me when you left ConneXions last year, you were motivated and invigorated again to go do more. Tell us everybody about what you learned at ConneXions last year and what plans changed as a result of that.
Yeah. We had been watching what others had done with personas, with value-based selling. We knew we needed to go there, and we had some probably paralysis by analysis, but also some technical challenges, not just trying to figure out pricing in our marketplace, but also half of our system was XGS-PON, the other half wasn't. We had to come up with some dollars. We had to come up with some technical plans for how to deal with that out in the field, down to how do the techs deal with it doing the installs. It took some work, and we left here really challenged, motivated.
We are going to get this done, and we did. This spring, we kicked off five new plans. Unlike our competitors, we went up in price across the board, but we threw in a lot of value. We threw in ProtectIQ to every new account. Most of the higher tiers got experience as well, so we were excited about that. We also added multi-gig Wi-Fi 7, and we are going to be rolling out SmartTown here soon. The great outcome of that is in really just five months, we have raised our ARPU about $0.75.
That's fabulous.
We had budgeted for about a 5% take rate on our 4-gig product, and we're at about 11% now. We're thrilled with that outcome and really excited. We've got about 10% or 11% of our customers on one of the new personas already.
Look, we hear that all the time. When you compete on value, you deliver more, you really destroy the competitive story of just selling on speed and price. Well done. Your video talked a lot about the extension of connectivity beyond the home and into the community—
Yes.
—and the impact that that had. You also said you had just finished your plans to start launching SmartTown.
Yep.
Tell us all about what's going on there.
Well, our probably outdoor extender experience really came from some community needs. We had a local chamber of commerce that wanted to start a fireworks event, and everybody likes fireworks. Unfortunately, the location, a recreation complex where this was going to take place, had really almost zero cell phone coverage, maybe one bar most of the time. So the community wanted to bring in food trucks. We're Southerners. You cannot have a successful event without food. Probably fried food—
For sure.
—if I'm being honest. So, it was a real challenge. They turned to us and said, "Hey, you helped us with bringing broadband here. Can you fix this?" We took on the challenge, and I'm not going to lie to you and tell you that it was great at first. We put in a couple of APs, and we figured out very quickly that the human body is full of water. When you put 5,000 people in a place, it really kills signals. We learned from that, and we put up some more APs, and the Calix team was really helpful with technical support for that. Today, I'm proud to say we are one of the presenting sponsors. We're the internet sponsor for an event that draws about 5,000 folks on site. And as you probably saw from the photos, we gave away hundreds of beach balls.
See them up there.
And the person who MCs the event came up with the idea, "Let's play some games with your beach balls. Is that okay?" So you've got hundreds of beach balls flying around and kids taking beach balls home with our logo on them. So, not only did we meet a community need that's ongoing and something we can work off of, but we sent some swag and some branding home, too, so that's fine.
That's awesome. Well, listen, I want to say congratulations. It sounds like you not only built the ISP of your dreams, but a great business as well. And hopefully, this story inspires other people in the room here to go away and follow suit, so congratulations.
Thank you so much.
Thanks, Greg. Cheers.
This just in, two satellites have gone missing from Fingers Crossed Broadband.
Man, for all their spending to launch these satellites, sure doesn't seem to be going well.
Hey, Gary, do you know which way is north?
North? I am pretty sure it is that way. It is Jerry.
Yeah, whatever. The app says point it north.
Yeah. Hey, Steve, are not you concerned that the satellite is much slower than fiber?
Really? Is that true?
Yeah, and the downloads are much slower as well.
What about my Bitcoin trading group?
The real question is, what are you going to do when it snows? Isn't that going to mess with the connection?
Huh. Jeff and Elon never told me that.
Yeah, well, my fiber is incredibly fast, always up, and super secure. You know what? My broadband provider never had me scale the roof.
Whoa, whoa. I guess I should've gotten fiber.
Today at Hail Mary Rocket Base, another satellite launch suffered a minor technical issue.
Fiber. It's not rocket science.
United Fiber is a subsidiary of United Electric Cooperative. We started the fiber business in 2013. Again, a greenfield operation with some government funding that kind of started in just a few counties, and we serve over 45,000 subscribers. We're located just north of Kansas City, up to the Iowa border. Being a local company, SmartTown has really enabled us to get that community feel back again. We've done everything from county fairs to community events to local splash pads for youth.
This has just been a way for us to reengage and really get that excitement back. We're looking for ways to grow ARPU throughout the areas, and that's where Calix has been so important as far as bringing these new services to market for us. As we look further down the road, it's just to be that seamless experience provider and have a network in place that no matter what happens, we're set to handle what's thrown at us in the next 5- 10 years as we continue this journey.
Darren, hi. Nice to see you.
Yeah.
Thanks for spending some time with us under the big lights.
You bet.
I know it's not your first time, so I can imagine you probably have a pretty dialed-in morning routine. You fueled yourself well before we started?
Well, if Durocher asked, it was Domino's, right?
Okay. I won't ask what you were doing last night that made you need a Domino's for this morning, but alas, here we are. Thank you for joining us. United Fiber has become one of the most widely respected fiber providers in our industry, and the reason for that, or one of the core reasons for that, is your commitment to continually growing and evolving your strategy. Can you tell us a little bit about the evolution from being a fiber provider, through taking ownership of the experience inside of the home with managed Wi-Fi, and then most recently, including managed services in your model?
You bet. When we started off back in, we showed it on the graphic, but 2013 was our first subscribers, and like many, we're owned by an electric co-op, very rural area. We started to basically just get our members a good service. They really needed some type of an internet connection, and we've now given them a world-class one.
But we really started off with this with the concept came from Calix early on when Carl Russo, the first time I was here and heard him talk back in 2011, was about owning that customer experience because many people at the time were just putting the ONT on the side of the house and not wanting to mess with that. So we started from that premise that we wanted to own that experience. That's what we're all about as a company. It really helped us get started off on the right foot.
You are one of the people who stood up yesterday of being here 10+ years, so thank you for that commitment. I know that over the course of our partnership, you have shared with the Calix team many times that one of the pillars in developing your strategy is listening to your subscriber. In doing that recently, or more recently, you have uncovered a need that was a little bit unique to that from your residential subscribers. That was the small business owner. That led you to rolling out the Calix Small Business Solutions SmartBiz. Can you tell us a little bit about, as you have embarked on that process, when did you realize that providing for a small business owner was about more than a reliable connection?
Well, much like the managed Wi-Fi that we have done and outdoor Wi-Fi and all the things we have done for our residential customers, we saw that same need for our business customers as well because they were coming to us and whether that is phone service or different things, we have filled a lot of needs for those folks. What we saw was that natural progression. We had a very limited Wi-Fi connection for our business customers that really just did not seem to be hitting the mark. So when we saw SmartBiz, it is like, this is perfect.
This is that continued evolution into what we want to do as close as we want to be to the customer, that good partnership. So we really started off, our teams picked it up, and we started offering it. It is really been a natural progression, and I know we will talk a little bit more about some of the challenges we faced, but we hit some roadblocks early on, like we do in many things, but it is really become a very successful product for us.
Great. I love hearing that. I also love hearing you talking about the internal process as well as the end process, bringing the team into it, et c. I think one thing in this room we can all agree on, no matter what model business we are running, is that growth is on our mind. In one of my meetings yesterday, one of our customers said to me, "We know we need to further differentiate. We know we need to become or remain competitive, but we do not have margin to miss right now. Every investment we make has got to hit."
Well, how do we go about making sure or having a higher propensity for things to hit well? Look at this room. There are thousands of us in this room and thousands of you that are doing remarkable things and having wide success with it. Admittedly, there are also a few folks in the room who have stumbled along the way, and we need to learn from one another. So in the spirit of sharing, can you tell us a few of the lessons learned as you launched, and then I know you evolved your SmartBiz solution?
Yeah. We talked about listening to the customer. That's where it all starts. But then you have to listen to your teams because, frankly, I was probably the roadblock to start off. They came to us and said, "Hey, this SmartBiz thing, we can sell this, and I think we can get $30 a month out of it." I am like, "No way. I don't think you can do it, but I like your attitude." We talked about it more. We decided that we would give a range of $20- $30, and now, the success we've had is they've proven that, hey, we can do this. We knew the customer had a need.
They saw the need, and sometimes it's just listening to both sides of the house, like you said, and then making sure that everyone is aligned once you start doing this because that's the other piece of it is whenever you start something like this, if you just put it out there, this is just not a product you put out. This is something that you really have to talk to your teams. After our sales team did such a good job, then it somewhat became sometimes with the techs. They may not understand what the need was. When we became successful is when we simplified the message. We talked to our teams and put them all together in the rooms, and everybody got on the same page, and that's when it really took off.
Wow, I feel like there's so much to unpack there, but I heard a few key things. One, as a leader, you had to trust the people you'd brought in who were doing the research and maybe had some expertise or some ideas that you hadn't thought of before for ways to evolve or grow your business.
Right.
One thing I really liked you said there, every single unit of the organization had to understand why is United investing in this initiative, and how do I help it be successful?
Right.
You also had to understand why would a small business owner care about this and how does it improve their life?
Yeah. That's just it because there's two pieces to this. We want to be as close to our residential customers and our business customers as we can because that's why we're going to be successful in the long run. We cannot compete with every lowball offer we see out there and those type of things, and it's really just fulfilling that need, listening to your teams. And giving them the tools they need to be successful with it.
That is great. I think everyone in the room is either looking at their phone or looking at us, but I can be sure that on this giant screen behind me, everyone has seen this 125% year-over-year growth. Congratulations. I imagine you are going to walk off the stage and be inundated with people saying, Yes. Thank you.
Well, I want to say this has a lot to say about our teams, because they are the ones that have taken the ownership. They are the ones that have made these numbers happen, and that is really what you have to do, is trust them, trust that customer need, and put it out there. Like you said, we have to look for every revenue opportunity we can, and these things have just been such natural fits from the time we have done in-home Wi-Fi, outdoor Wi-Fi, just the security we provide and things like that. Again, we just look to continue this, and we are excited about the things we hear here. SmartMDU, the other pieces that we can bring to market and help us be a better company.
I love that. I think what I have heard overall is you need to continue evolving, continue growing. You need to keep the subscriber at the heart of your strategy. I think that feels like Game On. Thanks for the time.
You bet. Thank you.
The zombie apocalypse started on a Tuesday. Luckily, my internet didn't get the memo. Zombies figured out satellite antennas pretty fast.
All around the world, zombies are targeting communication networks.
Learned that around Wednesday. Since the Wi-Fi reaches the whole property, my perimeter is secured. Doors locked. Backup connection is active. I love my smart home. My wife's online Pilates class survived. My wife, sadly, did not. With full bars under 6 ft of concrete, I have time to ponder the important questions in life. Why are zombies obsessed with broadband?
Glad he left the guest network open. Check this out. I love this stuff.
I'm the Chief Customer Officer here at Blue Stream Fiber. We're headquartered in Coral Springs, Florida, and we've been serving communities for over 50 years. Today, we have 150,000 subscribers across 500 communities, primarily in Florida and Texas, and we will be expanding into Alabama and Georgia. We offer fiber internet, managed Wi-Fi, video, and phone services to HOAs, condos, multifamily, and new construction communities. Our biggest adoption is definitely fiber internet, and then when we partner that with managed Wi-Fi services, it's exactly what the customers want. Again, it comes down to that effortless experience that any consumer would want to have with their service provider, and Calix absolutely helps elevate that Blue Stream Fiber experience. Everyone's trying to give the best service, best reliability. Here at Blue Stream Fiber, our customer experience, we put that at the forefront.
We make sure that we're taking care of our employees as well with the tools that they have to make sure that they're servicing customers, and also that the customers have the availability with their own tools. Partnering with Calix and the software they provide us makes that a lot easier for us. In return, that elevates the experience that our employees can provide to our customers. Here at Blue Stream Fiber, I don't think anyone can do it better than us.
It's great to see you, brother.
You too, Dan. Thank you.
Thank you for joining us. Just before we start, I had a question. How was your makeup experience?
Interesting. I heard of the powder yesterday, but no one told me about the lip gloss. So that was-
The lip gloss? I learned it's like going to the dentist. You don't want to hear, "Oops," and when you sit in the makeup chair, you don't want to hear the makeup artist go, "Oh, boy." Listen, thank you very much for joining us. I thought maybe you could start off by telling us a little bit about Blue Stream, and in particular, you folks have been doing a lot in the bulk area and HOAs and MDUs. What has it meant for your business, and why has it been such an important part of your growth strategy?
Thank you for the question. Before I get into that, I just want to say thank you to Calix. Yesterday, we heard Michael and John thank the crowd. About three years ago, we came to Calix with a problem. We were just getting into the MDU market, and we needed to work on our resident experience. Our first property, called Oasis, installs were perfect, 4.9 out of five service experience, which was tremendous for our first community. Three years later, every community thereafter, 4.9 out of five.
Sorry. Can you move that please?
Is that better? Can you guys hear me? Three years later, 4.9 out of five in all communities, and if it wasn't for Calix and SmartMDU, that would not have been possible. Also, we have other vendors in the crowd that make a difference for us. A little bit about bulk connectivity and why we think that it's the model that really works for us. I'm going to break it down in three words: commitment, responsibility, and value. Commitment. Just imagine those decision-makers in the HOAs, the boards, the developers, the asset owners. They need to make a choice. Do I remove choice from my residents? How are they going to feel if I make a bad mistake? Our contracts with our communities range from 8- 10 years. That's a huge commitment.
That's guaranteed ARPU with the huge upside on upsell. We need to make it work. That's a lot of responsibility on Blue Stream Fiber, and we take it on. We know that service makes a difference. We provide a dedicated account manager for every community. We provide a dedicated phone number for every resident. We also make sure that all of our contracts, regardless if it's a 100-unit property or a master plan community of 15,000 units, all of our contracts have service level agreements that are the same. We have a 99.9% uptime guaranteed. We guarantee that we're going to pick up the phone in 60 seconds on every phone call. We also guarantee that we're going to get a field technician out to that property on the same day if they call us.
We want to take the burden off of the property managers, off of the asset owners, off of the developers that we need to build that trust with. Then the value. The properties, they're looking to have a differentiated amenity that they can provide to their residents. So we're providing them with the reliable future-ready connectivity. The residents are going to have dependable service across their entire community.
For us at Blue Stream, we're building on that 8-10-year contract, making sure that we're turning all of those properties into reference properties, which we're very proud of. We have a 90% reference rate, and we also have a high 99.5% renewal rate. That's really where it makes a difference. So at the end of the day, if the property, the resident, and us at Blue Stream Fiber are benefiting, it's a relationship that's built to last for a very, very long time.
Those are some impressive results. Backstage, you were telling me a little bit about how some of the expectations inside the unit by the residents is starting to shift.
Yes.
Maybe you could help us understand a little bit more about that.
Yeah, absolutely. If you speak to our sales team, the last couple of years, the conversation was always about speed and connectivity. At this point, fiber's all over the place, and speed, there's more speed the customers know what to do with. The conversation has really turned into a more stronger strategic conversation around the full resident experience.
Residents want wall-to-wall Wi-Fi, not just a connection coming into the unit. The properties, again, are looking for that differentiated amenity that makes it easy for them to get residents into their communities. They want the property management group to have less friction, the on-site staff, making sure that the move-in, move-out process is effortless for them. And then for Blue Stream Fiber, it's about being more proactive, being more responsive, and being totally focused on that resident experience. And with SmartMDU, all of those are green check marks, and we're ready to go.
About a year ago, you chose to start deploying SmartMDU, and growing very quickly, you've deployed thousands of units. What is it about SmartMDU that's allowing you to service these changing expectations?
SmartMDU allows us to manage around the connection, not just the connection going into the unit. It makes it very, very simple for the employees and also for the resident, and again, for the property. They're looking for that differentiation. We know that connected devices are going to continue to increase. We know customers are going to continue to stream and stream more. More and more people are working from home. We want to make sure that we have the answer for them so they don't need to look for another provider.
Again, at the end of that 8 - 10-year contract, we want them to renew with us. Technology's going to continue to matter, absolutely, but the expectations of the residents are also going to continue to increase. SmartMDU, I was just at the 8:30 session with Jacob and Brandon. The roadmap for SmartMDU is tremendous. It's solid, and I can't wait to get rock and rolling with those enhancements. It's really going to continue to make us a leader in the MDU market.
All right. Well, Milton, thank you so much. Appreciate the time.
Absolutely. Thank you.
Good luck making your flight.
Thank you.
Run, Forrest, run.
My buddy moved to this new place downtown.
Oh, man. This guy again.
Most move here for the nightlife, the restaurants, the shopping. Him, the broadband. Pool's got everything. Sun, Wi-Fi, and of course, swimming. State-of-the-art fitness center. He's on his third set of takes. This is the common area where the one thing in common they all have is unlimited bandwidth and a passion for research. With fiber everywhere, the residents spend a lot more time together. You know what they say, home is where the fiber is. Oh, and another thing, amazing security.
Scott, I told you, he has to come through the front with the mobile app.
Really? Again?
Please welcome Corporate Vice President, Partner Community, Calix, Stephen Eyre.
That's a big version of me. Good morning, everybody. Sorry for the voice. I am a little froggy, but I will push on through. Michael put us on notice yesterday morning that the word we would be hearing a lot of during this conference would be "together." I want to talk about a word that is very close to that and very near and dear to my heart, and that is "community." Specifically, the partner community that comes together to serve all of you every day as you deliver value to your customers and win in the market. For me, I am incredibly proud to be on the team that works with that community every single day.
What I want to do now, in building on Juergen's metaphor at the end of day yesterday, is remind everybody that that community is your extended bench as well to help you compete and win in the marketplace. Let us scope down now from the entire community to a single partner, and that is gaiia. We have got the CEO and co-founder of gaiia with us today, along with the CEOs of two of our shared customers. Without further ado, it is my pleasure to welcome to the stage the panel for today. Welcome, Timothy May, CEO of Direct Communications, Rachel Solomon, Chief Executive Officer of Wecom Fiber, and Marc Campagna, CEO of gaiia. Let us start with some introductions. Rachel, why do not you lead us off and tell us about Wecom Fiber, you and the team?
Sure. Thanks, Stephen, and thanks for having us here today. Thanks, Marc. My name's Rachel Solomon. I am the CEO of Wecom Fiber, and we are an Arizona-based fiber company. We have line of sight to about 270,000 passings in the future, and we're the largest BEAD winner in Arizona. We have a very exciting and very busy future ahead of us.
No doubt. Timothy, why don't you take it away and talk about Direct Communications and how you got into where you are today?
Perfect. Just like Rachel said, thank you to Calix for allowing us to be on this panel. My name's Timothy May. I'm the president of Direct Communications. We have operations in three different states, in Idaho, Louisiana, and Maine, and I know that sounds strange to be so far apart, but they're beautiful places to visit, at least that's my wife's saying so. We have about 17,000 broadband subscribers with about 16,000 MDU units that we service across the country.
Fantastic. Last but not least, Marc, why don't you introduce us to you and to gaiia?
I'm Marc. I'm Co-Founder and CEO at gaiia. We are the fastest-growing OSS/BSS in the industry in the U.S. right now. Everything we do starts with the customer experience, and we work backwards from them, so we help you create amazing customer experiences, grow your business, and reduce your operating costs.
Excellent. Let's turn our attention now to one of the themes of the conference, and that is, of course, artificial intelligence. I'd love to hear from both of you about how you're thinking about AI, how you're leveraging AI, and how you're thinking about leveraging the AI brought to you from Calix.
Yeah. Thanks. For us, AI, as I mentioned, we have line of sight to 270,000 passings, and if we have to hire in all the people to scale to that extent, it stops making economic sense for us to do what we're going to do. This is where AI comes in beautifully and helps us become the large fiber carrier that our vision is to become without the large fiber overhead.
That's exactly where Calix and gaiia are helping us. Perfect example of that, right now, 80% of our orders, when a customer enters, right from checkout all the way to the order hitting the tech, are done without human intervention. No human touch. That flows beautifully and allows us to, again, scale, but not necessarily with headcount, and it gives a better customer experience, quite honestly. We're just so excited about where we are today, where we're going, and what AI and this collaboration with you two is going to provide us.
That's fantastic. Timothy, what about Direct Communications?
For us, we look at AI as a tool. It's something that augments our people. It's not something that's going to replace them. It's something that's going to help them do their jobs better. We would love to be to the point that Wecom Fiber is at of being able to get those workflows on the back end to
We'll talk afterwards.
Yes, we will. Unfortunately. We're trying to get to that point where we can get our people to be able to handle the proactive side of it. We don't want them to be sitting behind, being reactive to the things that they should be doing, which is better helping our customers. They want the human touch, our customers do, and let's have AI handle a lot of the back-end stuff that is more menial and not as easy for them to handle. That's the way that we are looking at AI is it's a tool to let them do their jobs better.
I love that, and I know you were joking, but that's, again, back to community. That's one of the best parts about being in the industry and the community that we're all in, is that there is a lot of sharing going on.
Yes.
Right, and best practices. One of the things we heard about yesterday toward the end of the session was how, in our opinion, and I think probably in many people's opinion, that the best unit of labor today is really not person or agent. It's person plus agent. Right? It's employee plus agentic support. Building on that theme, how do you think about that as you think about leveraging AI within both companies?
Yeah. We really believe that install is the next frontier, and where we can go with that, because today, when you have a tech on site, and they can catch a problem quickly in the driveway or even better in the home, that's a five-minute fix. If they've already left the home and a week or two weeks later, a customer's the one calling in with a trouble call, that's a support call, that's a truck roll, that's a really bad first impression.
This is a fairly competitive business, I think as we all know quite well. That's not the impression that we want to leave. That's not the standard that we've set our eyes on. With AI, and again, the collaboration with all of our companies, what we look at is how can we leave that home in a perfect place for every customer, every single time, leaving the best impression possible. Then they become ambassadors for us in the communities that we want to serve.
Makes sense, tons of sense. Timothy, what are you thinking about?
For me, I look at AI and the partnerships that we can make. AI is going to allow us to have better partnerships, whether it's with Calix, gaiia, because we're going to be able to implement those partnerships a lot faster. We're going to be able to make that happen for our customers a lot faster. It's not going to be this one-year timeframe that we're waiting to implement some software or some strategy or process. It's going to be instantaneous with AI. For us, we want to see that be a faster process so that we can compete, because as Rachel Solomon said, competition is there, and we have to be ready to act quickly and make those decisions quickly. AI is going to be that differentiator that's going to allow us to do that.
That makes total sense. I want to pivot then, from talking about agents and people, to agents and agents across platform, and that brings me to a conversation with my friend Marc. I'll tell you a story. I was on stage last year in this panel, and we had different partners and different customers and it was great. I was approached by my friend here right afterwards and he said, "Stephen, why aren't we on stage? Why isn't gaiia on stage? We're doing amazing things, and we should be the ones you talk to." First of all, I love the energy. Marc and I sat down, literally at lunch after this, and for months after that, and really dug in to what they were doing and what we were doing and how we would do it together.
My boss, John Durocher, and I have met with his leadership team and understood how they're using AI, not just to build their products, but to build a company and really leveraging it to grow. That began a really deep partnership that culminated about two months ago, when we decided that you guys would in fact be a great partner to have on stage with some amazing shared customers. It wasn't enough when Marc and I were talking to simply say, "Okay, we can talk about all the times we've held hands and skipped through the grass together as lovely partners." What can we do? How can we roll up our sleeves and have something interesting and fun to talk about when we're on stage?
And so we got our engineering teams together literally 6 weeks ago and issued them the challenge to build something that we could talk about. First and foremost, something that wouldn't be a science project, something that was worthwhile actually having for important customers, and be the first of a series of workflows that we would automate. So the teams got together and shifted around priorities, and I think a quote that I remember from one of Marc's engineers was, "We don't mind working weekends." I'm like, "Okay, that's great." Let's dig in and see what we could do. The expectation wasn't we were going to show a demo, it was we would actually be working together to build these use cases that hopefully by, say, the end of the year, we can have you guys trialing.
So they dig in and did that, and we did some ideation about what would be great use cases, and we landed on the first one to talk about, which is network install, which is actually new service installation, which is something near and dear to all of our hearts, because selling new services and installing those services in the homes is something that's really important. So the teams dug in, and I was on their case to have something that we could talk about in time, and so about three or four days ago, the team sent me the detailed flowchart of what the workflow would be that they were working on. And I said, "That's great.
We can actually take everybody through that." So what I'm going to do now, and you guys are going to love this, is I'm going to show you in detail the work that they've been doing together to automate what they're building. But I'm actually going to show it to. These guys haven't seen this. Hold it, hold it, maybe for a second. And we're going to start when we're. So I should never turn my back to the audience. That's really bad form. So do you guys want to see? So this is perhaps not working out.
So maybe what we should, in fact, do is have Marc take you through a somewhat more abstracted version of the use case on the bigger screen. So let's get that one going. So Marc, as this renders, perhaps you take the audience through something not as authentic and detailed as this, but that does represent the work that the teams are doing together.
Okay. I won't read it all. This would be a long talk. But at the end of the day, we're all about the customer experience, Calix and us, and there's a lot of things that can go wrong by installing at customers. Unfortunately, as humans, we forget things. The coordination between the different departments gets complex, and that's where AI comes in. gaiia has great AI agents. Calix has great AI agents that takes part of the process and automate or assist your team to be able to deliver this amazing experience. That's what we're showing here. So there's four components. There's the installation prep. Do you want to elaborate a little bit on the installation first?
Yeah, I think one of the most important things is making sure that when the installer shows up to install the service that the customer's asked for, they have, I don't know, the right gear on the truck, the right pre-provisioned. The customer is in our customer database. Things are ready to go, so there's not a lag of, "Oh, I forgot. I don't know where I'm going," etc. So there's an agentic coordination between Calix Cloud and the gaiia platform to make sure that all the data that was asked for, perhaps in the call to the contact center or the interaction with the website, is available to the tech when they come. Then when you get to the actual installation day, obviously, this is a human behavior, so the installer shows up.
But you have agentic support, whether that's the Calix Install app, gaiia sitting in the background watching, to guide the installer through the rapid and well-done execution of the installation, ending with a birth certificate that is then pushed up to the cloud so we know what was installed and where. For example, endpoints weren't moved behind a refrigerator because they're ugly. That leads us into the third step, which is the follow-up checks. That gaiia and we run to make sure that the installation is as represented by the birth certificate.
Signal strength is still where it should be, service is well and functioning properly. Finally, the agentic collaboration ongoing between CommandIQ as the endpoint in the home, and the gaiia platform in the back end to ensure that as the customer enjoys and grows with the service, the service continues to perform, and we can identify new service opportunities—
Yeah.
—to sell them in the future. How does that sound? Does that sound like something that would be good for you guys?
I am ready for it tomorrow. When is it coming?
Hey, you people at engineering, get on your horses.
Yeah. It is fantastic because, again, this is the next frontier for us and you all, for this conference, your theme is Game On. This is game-changing for us, and we all know that our techs, when they are in a home, are the heroes for the customers. This and all that you all are doing, and the collaboration with us, and being great partners and listening to what we need in the field, you are literally putting capes on our technicians.
Love it.
Thank you.
Timothy, is this something you'd be interested in having at Direct Communications?
Oh, yeah. I think of some of our technicians and things like that. They are awesome people. They are out there. They are great with the customers. They're great with the individuals. But everyone has human error. Everyone makes a mistake. And so having something that's that check that's allowing them to know, "Hey, I can do this better. I can service this customer better." And it's an opportunity to upsell that customer. It's an opportunity to tell that customer, "Hey, we noticed this in your system. We heard this on the background." That partnership between gaiia, Calix, and us is going to be exponential for not only our company, our technicians, our employees, but also every customer that we service out there.
Yeah.
We love that, and we're very open, and we'd love to have a discussion after the session as we go along about what are the next use cases that we can collaborate on—
Yeah.
—to bring to you both.
Yeah.
I can see from the clock we're winding up at the end of our time, and we have another session coming up. As we transition, I want to thank the panelists very, very much, Timothy, Rachel Solomon, Marc. Again, I want to thank the partner community that works together and for you every day to help you compete and win in the marketplaces. As we transition from this session to the next one, I want to highlight some amazing work that's been done over the past year by showing you a video of the winners of the 2026 Calix Partner Innovation Awards. Let's run the video.
[Presentation]
Please welcome Chief Customer Officer, Calix, Nancy Tichbon.
Good morning. Good morning. Woo. Good to see you all. It has been a brilliant past couple of days, and I am absolutely thrilled to be standing with you all right now. When you are 5 ft tall, there is nothing better than standing in front of a 20-ft version of yourself, especially with a title like Chief Customer Officer shining there in bright orange. In a world, though, where titles are inflated, let's face it, what does it really mean to be the Chief Customer Officer?
I have the privilege of leading the team that support you all, helping you achieve outcomes, realizing value faster, and even in turn, that you delight every single one of your customers. Honestly, it is one of the best jobs that I can imagine. My North Star is your success, and I spent two decades walking a mile in all of your shoes, and you just cannot take that out of the girl. I wake up every morning with a relentless focus on helping you all achieve your outcomes.
You know what? When I think about the Calix team too, I know every single one of them are going to not stop until they have made sure that every dollar and euro or pound, I do not know who is in the room today, that you are getting a full ROI for all the investments that you have made in our solutions. You are at a phase now where you have probably heard quite a few times over this conference, "Compete to win." What I would like to do is be able to share with you the way that we are reimagining the customer success organization to help you take advantage of all the opportunities that you have seen over the past few days and really bring them to life.
My career, it's allowed me to see a lot of different success organizations, numerous ones from different angles, whether it be scaling success for millions of SaaS customers at Intuit, building award-winning consumer support at Virgin Mobile twice, or transforming the customer experience at the telecom giant Bell Canada. My compass, though, has always been one simple truth. You all choose us, and that is a privilege that I or my team will never take for granted. We serve you, and that is our job to be there to meet you whenever you are at or wherever you need us. When we don't have an obvious answer, we're going to make sure that we figure that out with you together, transparently. Lastly, my favorite one, we are your advocate across Calix, and I promise you that your voice will always be heard.
I might be small, but I'm a little bit mighty. I don't know how many of you in the audience have teenage daughters. If you do, I see a few nods, you probably know about Brandy Melville. Well, I can't make this up. They have one size for every item that they sell, and it's tiny, and it's one size. I don't know, but this world that we live in does not come in one size. Let's face it, you could put me in your suitcase, and I don't know, Scott Hendrix, are you out there? At 6'4", there's no way he's going to be fitting in anyone's suitcase today. My career-long motto has been, forget the golden rule. Don't treat the customer the way that you want to be treated, and treat the customer the way that they want to be treated.
It's because you are all different. It is our job to listen, understand, and then personalize the way we show up to drive your success. Juergen talked about the AI toolbox. It's chock-a-block full. It's full of Calix solutions and our partners and our customer success organization, and it is yours. It is yours to deploy and activate in any way that you see fit. If you're kind of a Home Depot DIY type and you want your teams to do it themselves, we'll train them, we will advise them, we'll assist them, and we'll get off the pitch. If, however, you want a little bit more specialized resources and you want us to come in and do it side by side and do it with you, we have engagement models where we can come in and make that happen.
Or you might be wanting to just say, "I am ready to hit the accelerator, and we want you to come in and do it for us." We've got teams ready to jump in right now and help make that happen. You get to determine the pace. You get to determine the investment. You get to determine the resources that we allocate. That is the organization that we are building for you right now today. Let me share with you the simplest equation that I know. AI plus PI equals ROI. We all know how powerful AI is. It can spot a subscriber that's thinking of leaving before they've even made their mind up. PI is people intelligence. It's the human judgment, human empathy. It's human experience. It's the context that only all of us can bring. It's because you know your communities inside out.
You know why your board wants you to go chase after a certain market segment within your region. AI without PI, that's products that people don't buy, it's support that people don't trust, and it's operations that go real fast, but in the wrong direction. AI plus PI is where the greatest return is at. I'd like to say to you all, before we do anything else, why don't you guys get your experts, I'm going to bring mine, and let's do the best work of our lives together. Our new structure that we're building is optimized to serve you. We are more focused, more nimble, and more strategically set up for the challenges that we're all facing in the industry today and what is ahead of us.
When we stepped back and looked at it, we realized we can't support an AI transformation and evolution if our organization is built on a legacy model. We don't just preach transformation. As John said yesterday, we are embracing it internally. Our new customer portal, we've just put it's live. I think it's almost live. It's super exciting. Thank you, Micah. I see you there. It is full of all the digital assets that you need in one place, when you need them. That's where we're taking our transformation to be there for you when you need us. Over the past year, you've been telling us about some of the challenges and opportunities that you'd like help with when you start to take on a transformation. Here's our favorite six, and I'll just step through them with you.
The first one is, I suggest you start with one meaningful outcome that you want to achieve, whether that be reducing call center costs, optimizing truck rolls, or accelerating acquisition. The second one is, train your people. This is new. This is fresh to all of us, and they don't yet have the skills around disambiguation, the machine having intent classification. How do you do best-in-class handoff to humans? The third one is around optimizing your data. We need the workflows and the automation to operate on clean data. What is the status of your contacts that you have for your customers in the CRM? What do the CRM logs look like? If that data is dirty, garbage in, garbage out. You do not want to be McDonald's, who turned on their AI drive-through and allowed customers to order bacon milkshakes.
The next one is measure the impact, know you've got it right. Lastly, when you have, repeat the success, scale, and make all of your customers' dreams come to life. Most people don't know this about me, but I used to be a competitive figure skater. I cannot explain to you the trepidation and anxiety when your coach, for the first time, comes to you and says, "You're going to do it today, a triple axel." It's terrifying. But in your heart, you realize that if you don't master that one specific element, you will never stand a chance of being on the podium.
As John said yesterday, we are at a point now where courage and confidence will be the defining factor for long-term success. I hope that I've made the case to all of you that we could join on this transformation journey together and be confident. I would actually like to just I have a special person with me here today, and if the crew in the back could play the reel, I'm going to show you what's giving me confidence.
[Presentation]
Everybody, round of applause for Roxanne. I'm going to ask her mom to stand up. She's in the front row. Congratulations. Come on, all stand up. It's good for your blood flow. Standing ovation for Roxanne.
Thank you.
That's for you. Enjoy it. Bravo. Bravo, Roxanne. And her mom. Hi. I'm feeling confident. I see green shoots. I see momentum building. With every new release, our functionality gets better, and our friction gets lighter. I also feel confident because we have some of the best minds in communications. Scrap that. The best minds in communications in this room, in your teams with our partners, and also with our team at Calix.
Lastly, I feel confident because every one of you in this room has made a promise to your community, a promise to stay modern, a promise to be competitive, and a promise to stay future-proofed. Our only purpose is to help you achieve that promise. In closing, it is an absolute honor and privilege that you call us your partner. Lean into us, lean into one another. This is our moment. This is our time. Let's do the best work of our lives together. Thank you very much.
Please welcome back to the stage Chief Operating Officer and Chief Unicorn Rider, John Durocher.
Has anybody seen my unicorn? I have been looking all morning for it, and I cannot find it. If you are no help, I am going to just bring the show to an end then with one more story about history and history being made by the bold. Every big idea has always been met by a chorus of naysayers. It cannot be done. It will never work. No one would buy it. The bold did it anyways. Because of that, we remember all of their names. Let us look at these moments of history. Thomas Edison. Thomas Edison told the world that he was going to light up New York City, and he did not even have a working product. Steve Jobs got up on stage and showed everybody the iPhone, right? We all remember this. 1,000 songs.
His competition laughed at him and said, "It has no keyboard. It will never work." My old boss, Marc Benioff, told people that it is the end of software. You are going to put all your data in the cloud. I was there, and the clients said, "We are never doing that." Clearly, that did not happen, right? They changed the world. What was the common thing that they all had? One is they had some breakthrough technology, right? Edison, the light bulb. Steve had the smartphone. Marc had the cloud. That was really important.
There are two other things that I think were really the thing that made that technology possible, and that was having a huge goal, audacious goal, and then having purposeful action. They committed to it. They were going to do it no matter what. That is how you execute. This room has done this before. You had audacity. It is part of your DNA.
You brought broadband to communities that said, "It does not make any sense to do it," and you made it happen. You connected these communities, and you created new opportunities for everybody that lived with them. This is why I joined Calix, because I was so committed to it. I moved away from my small town because this was not happening 25 years, 30 years ago. The other thing that you did along the way, and we have heard these stories in the last couple of days, is you challenged conventional wisdom.
I told you the stories about Domino's and Shopify and Oura, but you have done it as well. You have challenged what was in front of you and said, "We can do this differently." That is what makes it so exciting. The future is not about enabling AI, right? Or employing AI. It's about employing AI that you can believe in so that your customers, your prospects, your employees all answer these questions. Yes, I can trust it. It's secure. It's predictable. It's actionable. Because if they don't have that belief, there is a big problem. Let me show you a video.
I'm in a Waymo car.
Connected to rider support.
And—
This call may be recorded for quality assurance.
This car is just going in circles.
Hi there, Mike. This is Gab. I am calling from Waymo Support. I am just calling because I received a notification that your car might be experiencing some routing issue.
Yeah.
Please bear with me while I investigate.
Yeah. I got a flight to catch. Why is this thing going in a circle? I am getting dizzy.
I apologize. If you have your app pulled up, I need you to tap "My Trip" on the lower left corner of your app.
Can't you just do it? You should be able to handle it. Take over the car. You don't need my phone.
I don't have an option to control the car.
Oh my gosh.
Mike, I am really so sorry about this.
Well, can you stop this car?
I am going to pull over. I am trying to pull it over—
My goodness.
—right now. Apologies.
He says the honking incidents have happened at random times during both the day and night and have started to take a toll on him.
It's awful. Help.
Here's the question. Does he ever get in that car again? No way. It is all about that belief. It is critically important that you believe in that AI, and it meets all of these things. We talked about having a vision, being bold, but it is really important to have purposeful action, right? AI can do a lot, but I know there is one thing that it cannot do. It is not going to change your business. It is not going to change my business. Only we can do that, right?
Only we can reimagine. We heard all the stories yesterday about how that could be done, and then taking that and transforming and putting distance between us and the competition, breaking away. You guys have all been successful before you ever started working with us, and our goal here is just to continue to do that, right? We know that you have plans, your teams, your solutions, your offers, and all Calix wants to do is to be the rocket fuel to make it all go faster and higher. With that, let us make this moment. Let us make it happen together. Game on. Thank you.