Ask Me Anything! with Michael Weening, President and CEO of Calix

Jase Wilson: All right. Yo, so, folks, it's a real honor and a privilege in broadband community to welcome a very special guest, Michael Weening, the president and CEO of Calix. And somebody that I've gotten the chance to get to know over the last couple of months as a leader and as a human, as a mentor, like, as somebody that I personally believe has something really, really big to offer to the challenge of getting folks connected to connectivity and broadband and to each other, and to the future. And Michael, it's a real honor to get to hang out with you, dude. So I really appreciate you making time. Thanks for joining.

Michael Weening: Thanks for inviting me. Appreciate it.

Jase: Yeah. And, my first question is like, what the hell is in the closet? What's...

Michael: It's funny, I keep moving offices around and my office used to be facing that way, but I have so many boxes over there now that I actually discover other way. So what's in the closet is a ton of books.

Jase: Okay.

Michael: A ton of books. It's actually, I used to have a book cabinet out, and that was my background that's actually over there. And now it's just filled with books.

Jase: Okay, understood. So, this is like, this isn't the Calix headquarters and this is like a Milton Waddams from office? 

Michael: No, I'm in my home office. No. So...

Jase: Okay.

Michael: We have a, by the way, if I was taking this in our, in our San Jose office, it's actually quite a fancy office and it would look very, very, impressive. No, this is my home office in the basement where I am seconded.

Jase: So this is in the basement. So back to this question, is this like office space where like maybe your wife is like, Hey, we're gonna need to move you down to the basement and, 100%, Keep having a new desk.

Michael: 100%. So, I've always worked from the home office for my entire career back, and I'm old, you're not. So I've been working in the, when home office wasn't that popular back in the early 90s when I came out of university.

Jase: Whoa.

Michael: Yes. And so right from the get go, I always had a home office and, I always tried to work in the home office because I found it more efficient. Like when you go into an office, it's great to collaborate.

Jase: Interesting.

Michael: But then, beyond that, there's too many people there. You can't have privacy. It's hard to just get focused. And I've always found home offices a great focus area. So every home we've ever had, I always make sure that there's a place where I have an office where I can, like, that door's closed.

Michael: Everyone knows when that door's closed, don't come in. Right. Send me a text message and, 'cause I'm in the middle of it. And it's a great way. And I've seen a lot of people say, I have a tough time working in a home office, and I can understand that. And, you have young children as you shared. When my boys were young, like, two and three years old, I actually had a lock on the door because there were a couple times where they would come through the door, so I would lock the door when I went in, so they couldn't get in. Even I'd hear the door wiggle, but they weren't allowed in.

Jase: Okay. 90s remote.

Michael: Yes.

Jase: Very uncommon.

Michael: Yeah. I would say there were a bunch of us. So my first role was, in the sales role, and therefore I found that the smartest salespeople actually didn't go to the office because they spent their time with customers. And then in the evening they would go back and work in their office and get, and it was an efficiency thing. Right.

Jase: I love it. Yeah.

Michael: Now there wasn't video conferencing like there is today, so we couldn't be connected like we are. So that was more of a problem in that, you're on a well, but also I had like a landline, right and a fax machine.

Jase: A what? 

Michael: Yes, exactly. And a fax machine. And because I was, I would invest in my home office, I actually had a laser fax machine.

Jase: Whoa.

Michael: And it was like this big.

Jase: You still, you don't have it anymore? Like we can't send [0:03:53.4] ____.

Michael: No, it's gone. No, 'cause when we, so when we moved to, we've done two internationals. When we moved to England, that was the grand purge. The boys were 10 and 11 years old. And so we got to get rid of all the things. We kept the things that we thought we'd want as grandparents, like Thomas the train and Lego, but then everything else got purged, including the fax machine.

Jase: Then maybe you'll regret that laser fax machine at some point.

Michael: Actually. Yeah, that's right. Well, a friend of mine just found a first series iPod. He was cleaning out his cables. He threw out like 1000 cables and he found an old iPod and he sent me a picture of it and I said, oh, that's a keeper. 'Cause it was in mint condition. I'm like, that could go in like a Smithsonian at some point, right? 

Jase: Yes. That's crazy to think about the evolution of communication technology. And we got a lot of ground to cover, Michael. But, I wanna start off like, who the hell are you? Can you tell us about you, 'cause I've gotten to know you, but I know that a lot of people on the call, haven't had that chance yet. Can you give us a quick background about you, life before Calix and, Sure. Sort of your background and context.

Michael: So, who I currently am, I'm the president, CEO of Calix. I've been with the company for eight years. I was recruited by our founder, Carl Russo, to help him transition the company from a networking company who did boxes to a software cloud and appliance company. And over the last eight years, we've invested, significant money. We're about 1.3 billion, $1.2 billion into this 13 years of hard work. And, the reason why I joined is three reasons. One, Carl as a mentor for me, this is his third multi-billion dollar company. If you wanna look at, look him up, he's hard to find. He's a bit of a hideaway with regards to the internet. He doesn't really do that. But, he sold his last company for 7 billion, the one before that for 2 billion. So.

Jase: That's not bad.

Michael: I figured when I met him, and he got accepted to university at 14. So when I first met him, I'm, he's the smartest person I've ever met. And I felt very, as one of the reasons why I came is because I thought it would be a great learning opportunity with someone like that. The second reason why I came is that the way they built the company, and he founded the company, was everything is about don't serve a big company. Go in. He actually founded explicitly in rural America, and he wanted to build it for the market of rural America. 'Cause he believed that if you build for markets, not for big companies, that's the way to build a great company. And then the third thing is, he's always been very customer centric and he really liked the mission of helping rural America.

Michael: And that's what we've been doing for a long time. And my previous history, I was at Salesforce for four, over four years before that in Tokyo and doing a global job. And then prior to that, I worked at Bell Canada for three years, turning a, one of their business businesses around a billion dollar, mobile business. And then prior to that, I was with Microsoft for almost 10 years. So my experience has recently varied, right? I was at Dell, for example, if you look at my LinkedIn when it was a 2 billion company, which was a very fascinating time to watch that company explode. So I've had a, who I am is, I'm a lifelong learner who has had a blessing of meeting and being around a lot of really smart people who have been nice enough to me to teach me and help me grow and learn.

Jase: Yeah. That is awesome, Michael. And that's really fascinating. You talked about that, that the sort of transformation between leading at Calix from, historically of creating hardware into a platform into a cloud. Set of clouds, can you talk more about that? Like what's your vision there and why are you doing that and who does it benefit? 

Michael: Yeah, so Carl had the vision 13 years ago that he felt that this market would disrupt in that, in the disruption that he envisioned was one where, every market will actually have two fast broadband providers for the most part other than in very, very rural areas. So maybe 5% of America. And in that scenario, what you're facing is a commoditization of the market. And therefore, if you're gonna be a successful broadband provider, you need to become the disruptor of the disruptors. Like if you think about telcos over the last 10 years, a lot of people have come over the top and done the cool things, right? And we firmly believe that actually that the broadband provider has this unique opportunity if you can really unleash the power of clouds and software to transform their business and become the innovator around experience, build out great experiences.

Michael: So make it so that you can go beyond connectivity at the farm and really enable things like, smart agriculture that everyone been talking about, but, not just do connectivity in the farmhouse, but how do you actually connect into the other, into the barn and out into the field and enable irrigation, and how do you enable those applications and really teach the farmer how to use that technology. And so do a lot more than just give a connection. And so that's in essence what our clouds and our platform are about, is that we've built that platform. We have a growing number of partners around it who offer solutions to the broadband provider to deliver these experiences that allow even the smallest broadband provider to be better than the big ones and move faster.

Jase: Oh, love that. I'm from a tiny farm town, Maryville, Missouri, or Merville, if you're from there.

Michael: Yep. I know of it. Yep.

Jase: Yeah, you got an amazing, actually the person that introduced us, an amazing human being, Darren Farin is...

Michael: Yes, right.

Jase: Deeply devoutly, convinced of Calix's power to help grow. And it's, it's cool to, to hear you talk about rural America and, and rural in general. Michael, and...

Michael: But I, by the way, I grew up the same way. So who I am, I grew up in a place called Brooks, Alberta, which is in, is, Alberta's our Texas, right? And so in between [0:09:57.4] ____ and Calgary, tiny little town of 9,000 people, and it was all farms and oil. So I've worked on the oil pipeline. I can drive anything, so I can drive a big eight wheel, Massey Ferguson. I used to, in high school, I would work for a farmer friend of ours, and I would disk with 50 foot disk on the back. And when we disked, it would be two hours one way, turn the tractor two hours back. And so, give me a forklift, a high hole, a tractor. So I grew up in rural Canada, which is same as rural America. And so I'm passionate about, I think we can do great things.

Jase: Let's do it. That's awesome. And you, you mentioned broadband provider. Michael, can you explain the difference between like a broadband provider and an internet provider for folks on the call? Like in your mind as it.

Michael: Sure. Well, I would, I would say we think of the market as, there's two groups. There's network operators who really are the extent of what they do is they operate a network and they provide a connection. And then a broadband provider from our perspective, is somebody who is a full service provider. And I think that there's a lot of folks, like you talked about Darren, you also talk about Tom Bigby and others who are embedded in their, or Paul Bunion who are deeply embedded in their community. And what they often talk about is, I wanna be a full service provider for the community. So I'm helping the consumer, the residential, but I'm also doing small business. I'm making medium business really successful. I'm helping education and the schools. So it is way beyond connectivity. It's actually how do I enable everybody as a broadband provider? So they have great experiences, but more importantly that you have a really, strong, flourishing community. Because in the end, not unlike electricity, water, broadband and access to technology to build a great business is what drives jobs, which then drives the vitality of a community. And...

Jase: Well said.

Michael: Yeah. And I'll, Dan maker three years ago, who's an electric cooperative in, rural America, he basically said they invested in their community 13th, the worst region in the United States. And the reason why they did it is because they recognize that when they invested in their community across all those elements, what they're doing is they can have a multi-generational impact on the future, which is really great. Raising people out of poverty is a very noble goal.

Jase: Spot on, man. That's awesome. A question from community, and this is from Nikki at Reddy, like, how do you envision the future of service providers in the era of rapid technological advancements, especially with introduction and rollout of, the resources that we'll be talking about later in the program that the federal government and the United States is spending, to make sure that folks get connected that fiber to the farm that you talked about and underserved and unserved areas like, and what role does Calix play in shaping that future? Like, can you talk about that a bit, Michael? 

Michael: Sure. I think back to my initial point on what the difference between a network operator and a broadband provider. I think you're gonna see the market bifurcate that way in that the people who just remain network operators are really gonna struggle because you're gonna see a commoditization of their service, and people aren't gonna, they're like, well, what's the difference if I've got two fire providers? What's the difference? Right? And so I think that's the big challenge that we're addressing, which is there's this huge opportunity for it to be, to move from network operator to broadband service provider, where you make it really simple for people to consume technology. And here's a simple example is that you can take services like, virus protection in malware. And if you think about the average senior citizen, right? And we read all these horrific stories about senior citizens who are being, attacked these days, right? 

Michael: And they're like, you hear your grandma say, oh, he just gave $10,000 to this church in Nairobi. And then you say, grandma, that wasn't a church in Nairobi, that's a Russian hacker, or someone out of North Korea. North Korea funds their entire environment through cyber malicious cyber attack. And you see all the cyber attacks that are coming out of India and Russia, right? Russia just hacked like a whole bunch of homes. And you see this and there's this great opportunity for the service provider really fill that gap where I'm not necessarily technologically adept. I would love to have these services, but I don't know how to do it because I don't know about you, but I, from my parents and folks like that, I've always been the IT support. And that doesn't, that's not sustainable. So they have this amazing opportunity not only for residential consumers to add services that make lives better beyond the connectivity.

Michael: And they differentiate. But then for businesses, like, there's great ways that if they invest and help businesses to secure their business, but also to expand their business. So for example, how can I create new business models for RV parks and mobile and all those different elements? Then again, if you make local businesses really successful, then what happens is you create jobs. And in the end, the essence of every rural community is what are the jobs. And the last thing which I'm really excited about that the government is in making the beat investments to reach out to those areas is, let's be honest, hybrid work, whether you're, is here to stay, and therefore when you create great ubiquitous connectivity across the United States, what you get is an opportunity where someone like you or me can work in a rural community because we have the connections, we have everything we need to do to do our jobs.

Michael: And what happens is, if I go move into that community and I take my jobs, most of the time, you don't take a cut and pay. And therefore what happens is now all of a sudden all my tax dollars, I'm, paying through my housing taxes, all those different things, and I'm, and now all of a sudden there's a new tax base moving into some of these rural areas with really good jobs, right? Like that San Francisco salary that I wouldn't necessarily get to your point out in rural Mississippi, right? Now sudden they're in there with, two and three times the economic means, and they can flow that right into the community, which is great.

Jase: That's a powerful, feedback loop. Michael, it touches on the, let's kick this up a notch. I brought us some, from some Friday afternoon non-alcoholic, beverages. So do you have any of these? 

Michael: I have apple cider vinegar, sparkling apple cider vinegar, kombucha. So thank you.

Jase: Okay. I gonna give you, by the way let this ferment a little bit longer and it will be all.

Michael: Oh, all right. I have Cheers. Cheers. Cheers. I'm gonna do my Humms. Let's get in this.

Jase: Gary, what are you drinking? 

Jase: This is is today's show, y'all is brought to you by Humm, sparkling probiotic, kombucha.

Michael: Oh, there you go.

Jase: You absolutely have, have to, do an AMA with Michael Weening. Like there is no substitute.

Michael: How new agey that we're both drinking kombucha.

Jase: Alright, I love it. So Michael, you on said, this is getting into a question that was just posed in the community by Dana Frost, you once said on a podcast I listened to. It was awesome. Folks, if you haven't yet, go listen to Michael's old podcast, like Wealth of Knowledge, seriously a very valuable use of time, a high leverage use of time if you're in connectivity to listen to this guy and go back and read some of the stuff that he's posted, especially as LinkedIn, which is pretty fire. And we're gonna ask some questions around some of those posts in a little bit.

Michael: But don't get me, don't get me Arizona and oh...

Jase: Damn, that's gonna be my lightning round. Come on, let's go. All right. But listen, you once said on a podcast that, speed is death. You said that as like, okay, there's a fixation on upload, download and bandwidth and stuff like that. And folks in broadband, for years and years we've been thinking about that. We have a great member of the community, Dave Tot, or Tate, Tater Tot, like I still don't know how to pronounce his name after all these years, but, he talks about quality of experience and, Dana asked the question, how does quality of service fit into what you're doing? And why is it more important than than speed? Can we talk about that for a second.

Michael: So what I've often said, and I said this two years ago at our conference, so Connections every October, we have about 3,000 people there. And two years ago, I almost got booed off the stage because I put up a slide and I said, speed doesn't matter. And the fixation on speed is because of the fact that network operators know networks, they know how to build them, they know how to run them really well. And then this concept of speed, all the vendors are like, go from one gig to 10 gig to whatever, blah, blah, blah. It doesn't mean anything. What matters to it, and I had this really good conversation yesterday, I was on the CEO forum and I had the CEO of Lumen and the CEO of AT&T Consumer. And we were talking about that and they basically said, what customers want is they don't care how it works, they just want it to be a great experience. And therefore, and it really makes the point, like, I don't know what my speed is, but I know what my experience is.

Michael: And people would fixate on speed when their experience was horrible. And then as the speeds just, a lot of people are investing in 10 gig networks. Great idea. You know why? 'cause no one's gonna need it over the next, it's gonna sit there for 15 years, you're not gonna be able to touch it. That's more than enough for the next 15 years. In fact, there are no real use cases that use it. If you look at AR, VR, look, if you're doing VR on a PS5, there's 15 teraflops of processing power inside that PS5. Everything is latency-based. And so this concept that I need more speed is not necessarily the case. It's actually, I wanna have a great experience. And the way that the experience manifests itself in is, am I being attacked by viruses? Can I actually get a great connection when I'm out by the pool or in the tree floor or at the shop or in the farm, right? And can you manage all those things for me? So this is where we really think that the transformation is from a network operator into a broadband service provider.

Michael: Fundamental to that is, what is a great experience? And it's gotta be indoors. It's gotta be outdoors. It's gotta be all over the place. It's gotta be in my basement. It's gotta be upstairs. All those kinds of things. And I want a service provider to provide me that experience and then give me those services that protect me. Like, I still can remember when the boys were in the house and they were teenagers. Like, we bought them new PCs and they're gamers, right? And so.

Jase: Yeah.

Michael: I popped open their... Well, and I'm looking at their machines and I'm watching them playing video games and I'm like, hey, where'd the McAfee go? 'cause I know that when you got this, I installed virus protection on there. And they're like, of course, we got rid of it, because it slows down the games. I'm like, but what if you get a virus? And they're like, I'll just wipe it and reinstall everything. Who cares? I'm like, yes, but you're a backdoor into the network and everything, right? And they're like, well, that's not our problem. So to that point, hey, I have yet to have, in my areas, have a service provider say, I'm gonna protect you by putting ubiquitous cyber protection into your home. So those are the types of things. You're in this trusted position where you should evolve to that. And some are doing it, but most aren't. They're still...

Michael: Because the easy thing to do is what I've done for the last 30 years. Hey, Jace, I'm gonna sell you a speed, even though you don't understand what it is. And if anyone who believes or doesn't believe that that's true, all you have to do is, how many gigahertz is the processor in your laptop? No freaking idea. But...

Jase: It's three, two.

Michael: Okay, well, maybe you do, but most of us don't, right? But if I was to go back 10 years ago or...

Jase: Oh yeah.

Michael: 15 years ago, I still remember my buddy buying his first computer. It was like $6,000 or $8,000. And it was a 386 DX. It had, you know...

Jase: No...

Michael: Exactly. So it's a 386 DX with...

Jase: 25 megahertz.

Michael: 16 gigs of RAM. Oh my gosh. And he has a 3.25 and a 5.25 floppy. And, all that kinda stuff really mattered. Why? 'cause it was slow. It sucked from a speed point of view. But at the time we were fixated on speed because that at every step was really important. But then you get to a point where you get to Pentiums and everything else and everyone starts, I don't really care about the processor anymore because that's not what's slowing me down. I care about the experience, which in the end is why Mac won, right? Like why is a Mac a multi-trillion dollar company? Because people like myself, I don't care about the processors. I care about the experience. I care about don't call. I don't, that if I call somebody, I can get it fixed. Everything works, right? 

Jase: There you go.

Michael: And that's the evolution of this entire industry has to be that I don't care how you get it done. Just get it done and give me great services on top of it. Make my life better.

Jase: And that's what you guys do at Calix, right? And we've met some of the Calix team we're working through, together on stuff. And like, it's an incredibly talented crew of folks at Calix, but like, that's what y'all do, right? It's like empower those folks to become broadband providers, to become that more sophisticated.

Michael: So let's take Tom Bigby, right? So Tom Bigby is an electric cooperative in rural Mississippi who actually became a broadband provider. They went end to end with us. And we've really, we give them the ability to become a successful broadband provider. And what they achieved in 3 years is a net promoter score of 92. And so if you understand the net promoter score model.

Jase: How many like standard deviations away from what would normally be for communication providers? 

Michael: A Comcast or a Charter is gonna be, it's either negative or.

Jase: Or minus.

Michael: Or negative, or you're rigid, right? And so when you're up against a Comcast who has like that really low net promoter score and you've got a 92. 92 is like, I'd like to join a cult. That's how loyal you are. And so in that scenario, why are they winning? Well, because of the fact that they've built the whole experience out. They actually have also put connectivity across the football field so that mom and pop, when they go in and little Johnny is playing football on Friday night, they actually see that Tom Bigby has ubiquitously covered, with safe Wi-Fi across that football field and they can stream it and watch the football game. And they're changing their community. Like they're investing in that way. They invest in the community. They just rolled out a ubiquitous Wi-Fi mesh for police fire ambulance.

Michael: That's when they're, which is, and the whole use case there was cell phone service can be very spotty. Wouldn't it be great if an ambulance drives up to a farmhouse and they've lost cell phone service. And if you're familiar with public safety networks, which run on UHF, I ran them across Canada and they can also have some challenges with regards to connectivity. So they've run out of communication. They drive up to that farmhouse, but Tom Bigby has put a 3000-meter fiber into that fire and it connects into a secure network, authenticates, and know all their devices work. And now that ambulance crew can go into that home and save a life. And they don't have to be running around saying, do you have a phone? Because they don't have cell phone service. And these are the types of scenarios that our customers are really brainstorming around.

Michael: Hey, it's not just about taking the government money to help us extend it to all the areas in the US, but also how do we use it in a creative way? 

Jase: How do you use it? 

Michael: Right. How do we get really creative? Right, and make it so that, the whole paradigm of telecom is that big companies were very advantaged because they'd have huge teams that could build technology. We are basically democratizing access to technology so that the smallest companies are actually now advantaged because we bring out new capabilities every 90 days. They can just turn it on. Like Tom Bigby turned on Bark, which is social media monitoring and they turned it on and got it up and running in seven days. Normally that kinda thing would take, months or years. And so...

Jase: Wait but maybe they would never know about a Bark.

Michael: Or Bark would never partner with them. That's the big...

Jase: Yeah.

Michael: One, right? They don't even... Yeah to your point, they wouldn't get access to it because they're not big enough, right? And they wouldn't be able to build it themselves. And 'cause Bark can only do, they integrate into us once and they get access to all of our customers and they can't go and integrate into a thousand small broadband providers, right? So...

Jase: How many customers roughly in Calix universe in the US? 

Michael: In North America, on our platforms, we have, according to last quarter, 1,031, I think is the number. And they range in size from very small to like, three, 5,000 subscribers to Verizon who five years ago sole sourced their entire next-generation fiber network to Calix.

Jase: Whoa.

Michael: Yeah, so.

Jase: Wow.

Michael: And that's, yeah, by the way, that's a pretty testament to Carl. Again, back to how we built the company. While we didn't build our technology for Verizon, if you build your technology right, which is you build for a market, then it scales up really well. And that's in the end, blatantly, it was the Salesforce model. Salesforce started with small companies and scaled up, right? And now everyone they're there, right? 

Jase: Well, Michael, we've been working together now for a few months and we've got a really awesome.

Michael: By the way, sorry. I don't know if you saw Mary St. John just wrote, we have no cell phone coverage at our front gate. I've helped lots of lost people in the neighborhood who had no cell phone, right? So, but that's the point. So Mary St. John, if you have one of our broadband providers providing you service, we basically, they can augment the service and then broadcast out to your area so that people can get roaming cell phone... Roaming wifi coverage in that area, which is a great example of how do you repurpose an existing capital asset into a very powerful way to help the community, right? 

Jase: There you go. Thank you, Mary St. John, for that cool question, and Michael for that reply. Michael, we have about 30, 29 minutes left. We have a really awesome announcement to make later in this call, but we have to shift gears into what's sort of the topic du jour for at least in America. Have you heard of BEAD? 

Michael: Yeah, have I heard of BEAD? Good one. Yeah, maybe.

Jase: I say BEAD, what do you think? Can you tell us a little bit about your thoughts on...

Michael: Beads of sweat? Is that weird? What do I think when I think of a BEAD? 

Jase: Some will have that.

Michael: Holy rosary beads, right? 

Jase: Yeah, but some will be holding those while they're applying. What is it? Can we talk about BEAD for a little bit? And how you see it.

Michael: So BEAD is kinda the last big push from the US government to provide connectivity across America to all the areas that are under-serviced. It's a great plan to help broadband, local broadband service providers extend their coverage into the areas which would not be economically viable. And the benefit there is that, think of this as an infrastructure investment in like you would in a bridge or a road. This is a very smart investment for long term. And by doing it primarily fiber-based, it provides a huge opportunity for long-term because the power of fiber is, look, it's expensive to put it in, but the value is it can last forever because it's life going down the strands and as the technology evolves and the light gets better, then all you have to do is change the two endpoints and you've gone to the next tier, the next tier, but you don't rip that fiber out. So 40, 50 years is a good life.

Michael: And it's the beginning of the life cycle of fiber far from the end. And so one gig goes to 10 gig, 10 gig will go to 50 gig, 50 gig will go to a 100 gig. So, and the great thing, it'll be on that same fiber strand. And it's a great investment for the long-term, not unlike a bridge.

Jase: Well, I love that. And the BEAD program and folks on the call, most of you probably know it's, as Michael framed it, that's, I love that you said last. We think about it as at ready is the largest ever and potentially last major investment that the US will ever make in broadband. And the thing that we were really drawn to all about for Michael and Calix's team is like the shared North Star to help make sure that folks get access to these resources. And there's a legacy of those programs not necessarily working the way that they were intended to work in the past. And the thoughtful folks at NTIA and folks that weighed in from FCC and Congress, they put that stuff together for the BEAD Act of Broadband Equity Access and Deployment Act.

Jase: What we see is like they really thoughtfully, carefully put a lot of thought into how to make sure that the places that want to go for those things and states that have proactive offices, like they can, they have the tools to do it. But the result of all of that is a program that's so crazy awesome and complex and daunting, frankly, to some of these smaller providers that we both worked with and talk about and help support. Like, what do you think of that, Michael? Like it's...

Michael: Well, I think that's the problem is that people are, it's daunting and there's a lot of complexity, right? And I think that's why we part... We were so excited to partner with your organization around how do we simplify it. So our mission statement has three components. One is simplify, innovate, and grow. And the simplification is not unlike what we've done with the platform, which is we're really focused on helping service providers of all sizes be, act as effectively as the biggest companies who have tens of thousands of people. And that's the power of technology, that you can really democratize access to it. So the partnership between Calix and Ready is around how do we make it easier for a broadband provider to submit for BEAD funding. And then the bigger one is over the next 10 years, as they deploy it, how do you make them compliant with the rules to ensure that...

Jase: Yeah.

Michael: They're compliant within the program, right? And we've done this over and over again. So if a customer has deployed our platform, we automate all the speed testing, for example. And we did that with CAF, we've done that with other programs. So it literally bundles it up really quickly and makes it so that they hit a button, they get the bundled report and they can send it out to the government to say, hey, you paid us, you invested in us and in the community to deploy this. We promised it would be at least this speed and here's the speed test proof so that you can actually be compliant. And that compliance part is probably the bigger part because we do submission, that's a big hump, fair enough. But it's a limited amount of time. I got a hump for six months and then I get it out, right? But the bigger one is, well, wait, what's gonna be my reporting responsibilities for the next 10-plus years? That's more scary because, hey, do I have to hire somebody full-time just to do this? 

Michael: Well, then I need to work that into the business case or two people or whatever. So our whole vision for our partnership and this is what you and I and the team spoke about, Jace, was how do we make it really simple so that even the smallest broadband provider can be effective using that BEAD funding, right? That's key.

Jase: Right. I really appreciate that, Michael. And it's an honor to get to work with y'all on that. We have some more questions coming in.

Michael: Well, I wanna ask one. So Sean McDowell kinda asked another question with regards to the Wi-Fi and that kinda feeds off of Mary's question with regards around Wi-Fi at the gate. So Sean, actually one of the use cases that came out of our customers was, how do you actually make that ubiquitous Wi-Fi? So we have a one-mile outdoor Wi-Fi router that's coming out. And the whole point there was, how do I make this...

Jase: One mile? 

Michael: One mile. And at a mile, it'll do 250 down, 1 trillion. A mile. By the way, for those of you who aren't in the United States or Zimbabwe, that's 1.6 kilometers.

Michael: I think, so that's it.

Jase: I had, yeah, I was gonna say.

Michael: That's one of my favorite jokes, right? So, one of the last countries in the world that still use miles, but...

Jase: I know, it's.

Michael: It's 1.6 kilometers. And so at 1.6 kilometers, that becomes a fascinating use case. And we're offering, we're gonna add a LoRa radio to it at the end of the year. A LoRa radio actually will reach 10 miles. And so our vision on that is like, a lot of people are talking about smart agriculture, but it's, how do you make it real? They all talk about it. I gotta put a SIM card in it, but if I don't have cell phone service, how's that gonna work? And cell phone, the satellites are over, they're already starting, the performance is dropping radically, just like we predicted it would. And so this case of putting a 10-mile LoRa radio on it and having one mile Wi-Fi, that really will start creating ubiquitous connectivity across rural America. And then the other thing that we're doing is, we will then bring all those service providers together into an alliance. And if you've seen, a bunch of these alliance organizations, like Shirley Bloomfield's organization that you've worked with, Jace, they, one of the big things about rural America is these organizations work really well together.

Michael: And what they told us is that if you build that ubiquitous Wi-Fi mesh for my broadband business, I would love to then become an alliance with other like-minded broadband providers across rural America to create this roaming mesh across America. And we will do that in 2025.

Jase: It's a beautiful vision.

Michael: Yeah, and it makes it really great so that, if I have got my broadband provider here today, I go to the town next door, I'm gonna go on a fishing trip or I'm gonna go camp, it'll allow me to roam over there, which would be great. It's a really interesting way to reuse all this extra capacity so that broadband providers, can act in essence like cell phone bribes.

Jase: There you go. I love it. So, Michael, if we could, like Sean, you've mentioned, asked another question that goes back to BEAD and he asked, do you believe that the current BEAD funding level is sufficient to reach 99% unserved, underserved? For folks that aren't familiar, the goal from NCIA is access for all.

Michael: Yep.

Jase: That's 100%. Sean's asking about, do we get to 99%. Do you think that the $42.5 billion that we've set aside for the BEAD program specifically is enough? 

Michael: I think it will. I think that's gonna get to probably 95%. And a lot of people ask the question about what about satellite? Look, I think satellite does have some benefits in some of these like places where you can't run, you can't run physical wire, right? And so honestly, that's where it should be. It should be on yachts. It should be on boats, it should be on, maybe the Unabomber's place up in the mountains. But, other than that, for the majority of us, the reality is the satellite doesn't scale. So if you actually take when SpaceX finally gets around to launching all their satellites, it will basically if you take the continental United States at any one point in time, it will be the equivalent of 4,800, 4,800 one gig connections. So.

Jase: Say again.

Michael: 4,800 one gig connections. In other words, bupkis. So, that'll be good if I'm in a very rural area. But for the majority of folks, 95, 97% of folks, we need that physical connection, and we should make that infrastructure investment. And that's what beetle do, right? Try and get us to like 97% or so. And then, there are always gonna be those outlying use cases. And so, hey, leave those to satellite, which fine.

Jase: I love it. Okay. By the way, you're taking all this stuff from my lightning round. You're just too damn good at this stuff, Michael.

Michael: Oh, sorry.

Jase: I got all is back pocket lightning round. I was gonna ask you like, I was gonna say one word, that phrases a question and one word would be satellite 'cause I know you got some good opinions about that. But like.

Michael: No, that's right.

Jase: Let's keep going. Okay, keep Going. Izzy Gomez asked a slightly terrifying question, which is like, what are your thoughts on providers who find the BEAD application process so complicated that they feel that enhanced ACAM and USF are better funding options? 

Michael: Well, I think that they, aren't they fortunate that they have those options, right? 

Jase: That's very good.

Michael: That's my answer is that, in fact we, I just on with someone who was talking about enhanced ACAM, even though it went down, it's over 15 years, therefore it's a good fending mechanism. And in their case, they will then, the one or 2% that would've been by BEAD, they're then gonna fund it out of their core business, and they can do that from the cash flows. So I really think, thank goodness that we live in a country where we have enough, the country has enough investment where you have different programs that you can apply for, and there are different ways to cut it. So as opposed to just one size fits all. So, and I think what you're gonna find is that there's gonna be a lot of, there's a lot of people going through that analysis of saying, which is the best funding program. Again, what a great opportunity where you can actually have choice.

Jase: Oh, perfect. So, and you said something to me in the first time that we met Michael a few months back, that, something along the lines of, the provider needs to go for BEAD or their competition will. Right. Can you say more about that? 

Michael: Well, so if, let's say you have your town and you've built out your town, and then, or you're planning on, upgrading your town, and then over on the side, there's, around the town is gonna be, obviously in the outskirts, is gonna be where BEAD is. And so, I think there's a brand element to this, and I also think there's a community centricity element. So if you don't build around that town and make that application, then someone else will, and that then just becomes a foothold. And if you've studied, the art of war and things like that, you're always looking for a beachhead. And so what you've done is you've actually given a beachhead to a competitor to come in and build your town, because what they can do is they can build all around it with government funding, and then they use that as a, basically an attacking point to go at you And by the way, if I was going after a competitor, I would do that, and then I would use all my branding to attack the person who just stayed in town and just say, well, I guess you don't really don't care about the town.

Michael: I'm just telling you what a good marketer would do. Right? And so in that scenario, you have to really, and you have to gameplay this stuff out. Well, if they're gonna go build all around the towns and they're saying, then, they become the community brand. And so much of this is who cares about the community, because in rural America, this is the big thing is that everybody knows everybody. It's about do they care about me? Do I bump into them in the grocery store? Do I bump into them at the playground? Like all that kind of stuff. And so, and if you're saying, well, I'm only gonna do the good part of the business and I'm gonna ignore the farms and everyone else, then you're seeding an advantage to a competitor and basically give them a tool, hold it.

Jase: I love it. You're the CEO of a publicly traded global company, Michael, but you get rural, you get how it works.

Michael: I grew up there. Right.

Jase: Well, There you go. Okay. So you talk a lot about these, the challenges that these providers face when they're like evolving to become a broadband provider. Calix is very helpful in helping them become their highest and best, potential. But you yourself, like do talk a lot about the sort of things that they need to do to build a really great business. You know, driving take a rate, like reducing churn, things like that. And that's one of the parts that we're very excited to team up with you on, ready, but can you talk a bit about that? Like what it takes to actually do that and, you know? 

Michael: Sure. So, it's fascinating. During the pandemic, there was this kind of gold rush of capital going into the business. And everybody talked about homes passed, homes passed, homes passed. And I had one CEO say, all I have to do is, build like crazy and get my homes passed and I'll keep my job, right? And I said, well, wait, if you don't have a plan, it's great to build the homes passed, but in the end you're gonna be judged by cash flow and also how many homes you've connected. Because if you go and pass a lot of homes, you don't connect to anybody, then you're gonna go bankrupt, right? And there was this concept from a use case, so I'm talking from a private equity point of view versus a community based, cooperative.

Michael: And there was this real push with regards to capital that, well, I can have a good use case at 25%. And what they're all realizing is that a 25% take rate for broadband is horrible. 'cause it doesn't drive the cash flows to build a good, sustainable, profitable business. And so, from our perspective, this is the point of the platform, first of all, to make it really simple to deploy it. But then the second part is to actually have a diverse business to serve the entire community and become that community brand where, again, you're not just selling a a pipe into a res, I'm doing all the things we talked about. I'm doing residential, but then I'm adding outdoor Wi-Fi and I'm making it so people can roam around town. I'm connecting police, fire, ambulance, I'm connecting education so that the underprivileged children, and I grew up poor, so, we were underprivileged, I couldn't afford.

Jase: Oh, likewise.

Michael: Right. Yeah, we.

Jase: Tough man.

Michael: Yeah. In high school, we lived in a townhouse with three bedrooms and there was six of us, right? And so, I would've been one of those kids during the pandemic whose parents couldn't afford those things, and I would've been at the Starbucks using Wi-Fi, right? And so.

Jase: That's the practice.

Michael: That's heartbreaking, right? And so if you, as a service provider out of the box with a platform can create a brand that is synonymous with the community. So you're doing those things. You're also, the one that the small business turns to for, to wire up the patio, to make the RV park work, all those to cover the eventing space in the football field, right? That, or the hockey arena, if you're in the northern areas, right? If you're the one who builds that diverse business, partners with government, business and consumers, then you become the brand that becomes dominant in the marketplace.

Michael: This is just market, This is just sales and good marketing. And it, one of the things that's true is that caring about the community is good business. And so, if you care and you invest and you do these things, you will get rewarded in the form of, like I said, with Tom Bigby. And I can provide 200 more examples of, where their, profitability, great net promoter score, great cash flows. And those cash flows allow you to continue to invest in your business and grow. And so the, this is why we did what we did, and we're really proud that, it's been proven right. And every 90 days we put out more technology, like, in the next 90 days is when that one mile router comes out, which we think is gonna be very transformative, right? And we have a whole bunch of other things with regards to cybersecurity to protect small and medium businesses and all these other capabilities, which will make it simple for the broadband provider to be the center of the community.

Jase: That is, incredibly refreshing, Michael, in an industry that, has been for decades, at least in the states, dominated by a group of folks that really haven't had that mindset or point of view, and that potentially are sweating beads, thinking about what's coming up with, the next steps of, of BEAD act as it rolls out. So I know we're at, almost a 10 minute Mark Michael. We'd love to go ahead and.

Michael: Oh Man, it's amazing how fast it goes.

Jase: Makes, yeah. It's, I wish we had another like seven hours with you, dude, but like I know you're very busy running.

Michael: Yeah, you're busy Too, so.

Jase: Yeah. But, just wanted to kick make a quick announcement here. Like.

Michael: Great.

Jase: We've been working for months on this thing. It's a real honor, Michael, to get to work with you and the Calix crew and everybody at the Ready.net team is super pumped about our shared North Star of helping those providers, have all the resources that they're gonna need to, get the job done. And, we've talked about it, but like, this is the year it's been a couple of years of us, watching and waiting for the BEAD act to sort of take place. Yep. 2024 though is a lot of people have been working for years behind the scenes to get it there, but 2024 is very much the year, that it's going down.

Jase: And, there's some really wonderful folks like the, like Beneath and Thomas and, the state of Louisiana, for example, that have been really at the forefront of pushing, to get these things in place so that they can be, first, and it's looking a lot like they're gonna start their process of, getting folks going into the BEAD program, towards the end of even next month or May, and that's exciting because that means that families that are waiting on those providers to get their share of BEAD and then to go and make the connection are gonna, be able to do so. But it's a real honor to get to announce with you on the call, Michael, like that we've teamed up with Calix to launch with what is a really important resource for anybody that's a current Calix customer, or, thinking about becoming a Calix customer at bead.calix.com.

Jase: If somebody can drop that into the chat too, that would be awesome. But, the main idea is like, to make sure that those folks, like we talked about Michael, the folks that you serve, those over 1000 providers that are in, operating in America that have, the devotion to getting subscribers connected and getting their, the families that they serve, that the resources they need, that they also have everything they need. Like you talked about the big team, that historically the incumbents have had, like, it's to make sure that the folks that maybe they don't have that big team, or maybe they don't have that giant balance sheet, but they, but what they do have is, the devotion to getting a job done, and they have a shot at getting their share of it if they can get their ducks in a row, so that's what bead.calix.com is about, go there and get it, enrolled.

Jase: If you're on the call and you're in the broadband service provider space and you're looking to do something in the BEAD, and maybe you're slightly intimidated by it and you think that it's not for you because you don't have that giant team like Michael talked about, or you're intimidated by the matching funds requirements or the, what was a letter of credit requirement that's now in most states gonna be a sufficient for a performance bond. Those are all the things that you're gonna be able to find, is a single resource and point of control for folks that are in the, Calix ecosystem and the Calix team. You have like some world class folks working there. You have a team of dedicated funding folks that are working their tails off to make sure that, folks have everything they need to succeed in the program. So, definitely wanna give a shout out to that and remind everybody that this is, as Michael said, something that's, it's almost certainly the last major investment that, America is making into, the sort of the last mile or kilometer if, Michael has his way with, getting us converted, like.

Michael: 1.6 kilometers.

Jase: The last 1.6 kilometers. If you are thinking about it or on the fence, then I would definitely listen to Michael. I would definitely, talk to the Calix team about this because, there is one thing that, and it's the fact that like, this act happens once and it happens soon.

Michael: Well, we have five team members, this is all that they do, and they're glad to support that. To your point, Jason, in that they'll actually work with you, connect with you and support you. They've done over 500 consults with, people considering BEAD and other programs to help them understand it. 'cause it's, to your points, it's complex. And that's, excuse me, that's all they do is help out.

Jase: Awesome. Well, it's real privilege to get to work with y'all and to do that to help your, folks like, help those mutual customers win. So, we have a few more minutes, Michael, and.

Michael: Sure.

Jase: This is the part of the talk where we kind of, kick up our, boots and get a little crazy, like it's a lightning round, you know? 

Michael: Yeah. Cheers.

Jase: So, cheers to that and like.

Michael: Cheers. Our kombucha.

Jase: We've... I have a question for you, on a personal note. Like, you have some boys that are older, I think that they're They're starting their careers and everything. I have a 3-year-old boy Wafer Way Wilson, www, do you have any like, gently use dad jokes? For, somebody whose humor has been described, by others as, good effort? 

Michael: Oh my gosh, you know what? I don't, I'm like drawing a, I'm like, sorry, I'm drawing a blank. I don't have a good dad joke. I haven't told a joke. I can't even remember the last time I told a joke. Now when I.

Jase: The Show's over, AMA's over.

Michael: When I look at funny, where generally I'm sharing YouTube videos with buddies, right? Like, so the things that I'll tell you what I find funny that might, that, the young people probably wouldn't be interested in as I've been watching a lot of F1 stuff and I like looking the F1 memes. Like, but I swear to goodness I don't have a good joke.

Jase: All right, well.

Michael: Do you Have a, well, why don't you give a good dad joke to share? 'cause you've got a 3-year-old.

Jase: Oh man. All the mine are like, PG like, we're kind raising.

Michael: Well, that's fine.

Jase: Yeah. I don't wanna, let's see, I'm drawing a blank too. So there's some really good ones in that sidebar though. But once You.

Michael: Wait. Well, here you go. So what do you call a pile of cats? 

Jase: What.

Michael: A meow tain.

Jase: Ooh, nice.

Michael: There you go. That's what the Google is for.

Jase: Why don't vampires like barbecues? 

Michael: Why? 

Jase: Come on, Scott. Let's go. We don't know, He is like, you ask the question.

Michael: Why don't vampires.

Jase: They're afraid of the stake.

Michael: Why don't vampires like barbecues? 

Jase: Okay, that's pretty good. Yeah, I know. That's actually bad. Okay, so, I'm gonna do a one word.

Michael: They are afraid of the stake, Oh, that's horrible.

Jase: I'm doing a one word. I'm gonna say a word. I'm gonna say it like a question. Okay. You just say the first thing that comes to mind. Air Canada.

Michael: Bad Wi-Fi.

Jase: Oh, that's all.

Michael: Always late, horrible permit.

Jase: You pinned one of the greatest missives ever inked on LinkedIn. And you're just gonna talk about the Wi-Fi.

Michael: Are you talking about the board of directors one.

Jase: Nah.

Michael: Yeah. Also, look, my problem with Air Canada is, my joke is it seems like every plane that I get on, it's a brand new plane and it doesn't have Wi-Fi. How is that possible? Right? And my joke is, I keep saying is that when someone was buying that $250 million plane, did they just forget to tick? Like add Wi-Fi? Like how is it possible you can spend $250 million on a brand new plane and it doesn't have Wi-Fi? I just don't get it. And when you ask the people on the plane, like the head steward or whatever they, they're mystified too and they're like, we don't know. They ordered a whole bunch of Boeing maxes and none of them have Wi-Fi and it's confusing. So.

Jase: Yeah, they also don't have bolts sometimes and other problems.

Michael: No, that, wasn't that Alaska where the freaking wall, the thing came out the other day. By the way, did you see the photo of that poor person? Like it was row 22? Did you see that? Where the wall came off? Oh, last week It was like, it was in Alaska Air and they had a Boeing plane and they.

Jase: I don't Wanna know.

Michael: Oh no, they, they took up, I think it was from Portland and then, you know the guy.

Jase: I'm not listening.

Michael: No, no. This is why you, but here's a public service announcement. Always wear your seatbelt because if that person literally a wall came off beside them when they were in the air, 30 minutes up, had that person not had their seatbelt on the kid's shirt got ripped off. But 'cause he was seat belted in, he didn't go flying. Always have your seatbelt on, on the plane.

Jase: PSA.

Michael: So that's my public service announcement.

Jase: Michael Weening. Remember kids get great broadband and buckle up.

Michael: And buckle Up. That's right.

Jase: Alright, back to the lightning round.

Michael: Go.

Jase: Family.

Michael: Important, very important. Everything. Yes.

Jase: Cloud.

Michael: Democratizing. So cloud for me is about democratizing access to everybody so that, big companies are not, are no longer at an advantage versus small companies. And in the end, I think that's what, that's really what, Salesforce taught the industry is it really democratizes access to technology. So a small company can act like a big company and not be disadvantaged. That's what I find exciting.

Jase: Damn, satellites.

Michael: Niche. So. Alright, speak American Niche, right? So.

Jase: Did you Say niche, what the hell are you talking about? 

Michael: You say niche.

Jase: Yeah, but I'm.

Michael: By the way, come on, the American way to say it is potato, potato. Niche. Niche, right? 

Jase: I've not met anybody that says Potato other than the guy that says the song like.

Michael: Well, thats true. Well see, I live in Canada.

Jase: If somebody was like, pass the potatoes in America? They'd be like, what are you doing? 

Michael: That's right. So, I think satellite, my worry with satellites is I think the government is, doing the wrong things. Like the problem with satellites is you're basically, if you've read anything about space junk, right? Space junk doesn't go away. So all that crap that's up in the in space, there's nowhere for it to go, right? Unless you have a planned deceleration of the orbit. And so, the problem is, that why is it that Elon Musk gets to put 12,000 satellites into the sky ruining by the way, our view of stars with, no control. And so it's funny, like we all, people are like, oh, I don't like the government controlling things yet, the government's not controlling the most important thing, which is the sky. And I just don't find, I find it unfathomable.

Michael: They should have significant controls over what Elon Musk does and what, and now Amazon is doing the same thing. They're basically going direct to consumers. So if you use Amazon Euro, just know that that'll, that there's a great opportunity for Amazon to change you out as the broadband provider and put their satellite behind it. 'cause they're doing the exact same thing SpaceX is doing. And it just is unfathomable that our governments are not seeing the threat that this is, because all, Elon's gonna go put that stuff in the air. He is gonna make money off it, and then he is not gonna care a hoot about the fact that it won't go away for a thousand years. So this to me is environmental awareness 101 and it's pathetic.

Jase: All right. That was a good one. I know we're at time, but we have two more.

Michael: Go ahead. I got [0:58:26.8] ____ go over. No problem.

Jase: Have three more folks that can stick around. It's probably worth it.

Michael: All right. Go.

Jase: Customers.

Michael: Everything, they're the center of everything.

Jase: All right, Calix.

Michael: Well, I think Calix is synonymous with customers. We start with customers, and we're really proud that our teammates, we as a culture really care about our customers and we care about the mission. I think, I say to people, customers all the time, the, we compete for talent with companies like Google and Microsoft and other folks like that. And the greatest differentiation is that, it's funny, like there's two parts to motivation. One is like, I need to get paid. But then the other part of motivation is, does my job have purpose? And I think younger people are more purpose centric than I was. Like, we didn't really have that as much when I grew up in the '80s and '90s. The '80s was relatively rapid with regards to, jazzercise and all these kind of things, right? As you saw the inception of.

Jase: Making a comeback.

Michael: Yeah, Well, fair enough. But you saw it was massive commercialization of, of lifestyles really happened in the '80s. But, today's kids really care. Like, my, kids care about a lot of things that I never really thought about when I was younger, probably because they have better educations and access to information and all those other things. So, when we recruit, we also say, Hey, by the way, here's what our customers do and here's the stories. And by the way, your job is not just about coding a cloud and doing those things. It's actually helping our customers change the communities they serve. And so when I think about Calix, I think the thing I'm proudest of is our culture and the fact that we care about our customers a lot. And in the end, history will put us down that we did good things.

Jase: Beautiful. One last, ready.

Michael: Incredible opportunity to partner and help small broadband providers and everybody get access to the funding in a simple way so that to the point of a number of the questions that were asked or those people who are scared or concerned about this opportunity and, holding back then in fact that what you're doing and hopefully what we're helping you do is making that easier so that they can do the right things to help their community. And the last thing any of us wanna see is, is that funding not get used. We wanna see it go to the right companies who are care about their communities and do those things. And so, I, again, I can't thank you enough for the opportunity to be on this call, but also to be partners because, you're doing great things and we're proud to help you do them faster.

Jase: You're a treasure. Michael, this has been awesome. I know there's some folks in the community that are sad that we didn't have more time, but you're running a global company air fist bump over the internet.

Michael: There you go.

Jase: Let's do this again. Sometime, you're.

Michael: We'll do this again. It was a lot of fun. Thank you very much for the opportunity.

Jase: Have fun with your, kombucha. I'll count on a couple of more for you too. So we'll see Y'all.

Michael: Thanks everybody for making time.

Jase: Thanks everybody.

Michael: Have an Amazing night.