Thread by @TelcoDR

When I announced that I was investing $100 million into @Totogi, everyone wanted to know:

-Why so much, so soon?

Here are 3 good reasons to invest $100m in @Totogi.

Let's start with the most important reason:

We want to build a great product company and not be hostage to tier 1 CSPs. Simple.

The standard playbook for a telco software startup is getting a pilot at a tier 1 and raising a round of funding off that. Every VC wants to see tier 1 traction, so the CEOs sell their soul to get deals with tier 1s.

Unfortunately, most startups get tier 1 deals too early in their product lifecycle. The product isn't mature enough and can't handle the tier 1 use cases. So the startup starts to concede to MASSIVE custom extensions and ceases to be a product company right out of the gate.

One of the biggest problems in the telco software space is that these "software companies" aren't really software companies at all.

In reality, they are custom consulting shops.

Need some proof? Read this article on why PE doesn't like to buy telco SaaS.

(TLDR - They aren't SaaS companies, they are custom consulting shops.)

lightreading.com/ossbss/why-do-…

Giving @Totogi $100m is my way around that problem.

Totogi doesn't have to chase tier 1 deals outside their sweet spot. They can make sure they are a PRODUCT-driven company.

With the TelcoDR investment, @Totogi has the funding to tell tier 1s the truth:

"Our product isn't ready for this RFP and we will wait to bid until it is. We are building a product, not acting as a consulting arm of your IT group."

My second reason is based on credibility and commitment.

A CSP making a charging decision is a TEN YEAR commitment. CSPs need to know the supplier has the backing to be there for the long haul. @Totogi can't be the old Silicon Valley way to funding of, "here's a little bit of money, prove yourself, then here's a little bit more" way.

The CSP needs to know that Totogi has the financial backing to invest and build a great, LONG TERM business.

My third reason is PEOPLE.

I wanted to make sure we're getting the best people.

Historically, in telco software startups, you haven't been able to attract the best players because the equity component is rarely a home run like Silicon Valley standards. The best people in telco are skeptical of an equity-heavy compensation mix.

They want cash.

So @Totogi comp is cash-heavy. We are hiring the best people and can afford to pay them from day one.

Building the BEST team is always worth it.

So that's it! My 3 good reasons to invest $100 million in @Totogi: to stay product-driven, show commitment to the industry, and hire great people.

#MWC21 is 3 weeks away and OF COURSE @Totogi will be in #CloudCity. We can't wait to show the world what we've been working on and hope to see you there!