Ep.175 Business Blueprints: Lessons from Leaders in the Channel with Rob Hale of Granite

From bankruptcy to billionaire, listen in as we hear the incredible lessons Rob Hale, CEO of Granite, shares in this episode. Business owners and leaders across all industries will gain valuable insights from Rob that are hard to come by anywhere else. This is a man who competes for the thrill of winning and isn't shy about sharing the misfortunes he has experienced in his incredible journey to making billions.

Episode Transcript

(00:01):
Welcome to the podcast designed to fuel your success selling
technology solutions. I'm your host, Josh Presto, SVP
of Sales Engineering at Telaris,and this is Next Level Biz Tech.
Hey, everybody, welcome back. We got a special episode for you
today. We're doing business blueprints,
lessons from founders and who better than to have on Mr. Rob

(00:24):
Hale, CEO and founder of Granite.
Rob, welcome on man. Josh, I'm happy to be here.
Thank you for having me. Appreciate you, appreciate you
making time. You know, this is about helping
our partners and our advisors that are out there building
businesses understand how peoplehave built struggles, you know,
strategies, all that kind of good stuff.
So walk us through for anybody that doesn't know, you know,

(00:46):
you've built granted into this billion dollar plus powerhouse
after some setbacks early on. So walk us through the early
parts of your journey and kind of what fueled this comeback.
Sure, I'll I'll give you my checkered history.
Anybody who's considering partner with with granted
probably should know it. I graduated in 88.

(01:08):
I went to work for MCI, the longdistance company in sales loved
it. There was a opportunity called
aggregation which was bulk buying of AT&T services and, and
our customers, my customers asked me about it.
I said, I don't really know whatthat is, but I'll look into it.
And as I looked into it, I said to my parents, I, we can do

(01:29):
this. And so I, I, it's very important
to me to tell you that my parents put up 400,000 bucks in
1990. You know, there's a lot of zeros
around granite and me and it canget lost in the shuffle.
But 400,000 bucks in 1990, they bet the, they, my parents bet
their retirement on me in 1990. So they were the funders and I

(01:52):
was the founder of a company called Network Plus 1990.
We lost money from 91 to 98. We grew profitably by 98.
We'd grown probably be about $150 million business.
We net 10 eleven, 1213% every year.
We had an awesome business. I just know how great it was.
Goldman Sachs, the investment bank called, called me and said,
hey, Rob, you want to do a bond offering?

(02:13):
And I said, listen, I'm a phone guy, not a finance guy.
I didn't even know what that means.
They said if you do a bond offering, you could do an IPO
and you you will be a a billionaire.
And I was like, yeah, yeah, I definitely want, I want to do
that bond offering. Yes, please.
And So what they said was going to happen, happened.
We went public. Goldman was our lead bank.
In June of 1999, first trade of the stock was supposed to happen

(02:36):
at $16.00 a share. The demand was so high there was
no trade until $26 a share. Over the next eight or nine
months, it got up to $63 a share.
I own 27 million of those shares, so I had a billion for
next to my name. According to Forbes, I was the
7th wealthiest guy in the world.Under 40 March of 2000, a bubble
burst. It felt like it burst, you know,
primarily in my face. So first eight or nine months

(02:58):
stock goes like this. Next 18 months stock goes like
this fall of 2001, Goldman and Fleet CSFB called me and said,
hey, you, we had a credit line, you have a credit line when it
expires, we're not going to renew it.
Bad luck. And and I said, hey, listen,
we're a bit of positive. We never missed a covenant.
If they said we don't bank C Lexanymore, you're out of luck.

(03:20):
So February 4th of 2002, we I hit bottom.
February 4th of 2002, the when we declared bankruptcy, all of
the equity became 0. So that to lose all that money,
it hurts the you know, it hurts really badly to think, hey, if I
peeled a tiny bit out of that out, I could have taken care of
my family for life. And, and to let that opportunity

(03:44):
slip to your fingers, man, it hurts.
It hurts bad. That morning it got worse.
I, I think I run the sales forcehere at Granite.
I thought that I ran the sales force at network plus we'd
gotten debtor in possession financing, which is financing
you take into bankruptcy. It had a contingency which was I
had to tell 400 tales people that I think you trusted me.

(04:05):
That's probably why you joined. I have betrayed you All 400 of
you are let go on a phone call and then afternoon calls got
worse. My wife was at home with a 2
year old, 4 year old and a six year old phone rang in the guy
in the end of the call when she picked it up said because of
what your husband's done, I'm going to come over and kill you.
So I've been to the bottom, you know, accepting your health.

(04:28):
I'm not sure if anything business wise can happen worse
than what I've seen. I mean, we had a string of bad
luck. Now I'm not passing the buck.
I drove the bus. I made all those decisions.
But I think we had a string of bad luck in the year or two
preceding our failure. But we had a string of great

(04:48):
luck for the next couple of years.
So we were sold at we are bankrupt February 4th of 2002,
sold at auction March 15th, 2002when we started granted June 3rd
of 2002 and when we by the way, I would have started faster, but
this as you guys know, in this business, it's a regulated
business and so you needed stateand federal approvals to be in

(05:10):
the business. But we started granted and and
our industry said that the only way you could create value was
to control the customer, which was to build a switch based
architecture where the customer ran through your apparatus.
And I'm telling you the truth. That's what we were intending to
do at the beginning of brand. I'm telling you that's what we
were doing. And we did wholesale with

(05:32):
Verizon just because the only way we could get in the game was
to do wholesale. And so we did wholesale with
Verizon and, and Walmart and Walgreens said, hey, listen, if
you, if you want to beta test the idea of consolidating and
discounting our phone lines in the Boston stores, go ahead.
We did it a month or two later. So far so good.

(05:54):
Let's consolidate and discount the phone lines in our New
England stores. So far so good.
Let's consolidate and discount the phone lines throughout the
Northeast. Then almost to the same day they
brought us the Bentonville into Chicago and they said, hey,
this, this consolidation, this is good for us.
We're going to do this for the rest of the country.
We may or may not do this with you, but we are going to do this

(06:15):
for the rest of the country. And so by the time the wheels
touch home, we I got to make a decision, are we going to do you
know, now our industry in Wall Street said the only way to
create value is to control the customer with which was for the
switch based solution. But we thought well, the number
one and the number 5 retailer think there's a need for
essentially national consolidation, you know, the

(06:35):
aggregation model, which by the way in 2002 didn't exist.
And so we created aggregation and, and we get lots of awards
for Entrepreneur of the year. We've created 2000 American
jobs. We got a lot of cool things that
happened at granted and people say, how'd you get that awesome
idea? The truth is, we didn't have
that awesome idea. The big customers did.

(06:58):
You listened. Yeah.
You listened to the customers, right?
It seems like there's a, it seems like there's a common
theme in that all these great products, all these great
inventions start out here. And then inevitably the thing
that makes it becomes this, thisproduct.
So you listen to the customers. That's it.
So you know, when and as I mentioned, we had a string of
bad luck, We had a string of great fortune, which it like I'm

(07:19):
telling you, we, I'm certain I would not be sitting here with
you today having all the fun that I have in, in my job if we
had not had the opportunity to, to begin that relationship with
those two great companies and then listen to them.
So the great, the good fortune that we had was listening,
getting those opportunities, getting those partnerships and

(07:40):
then listening to them. And it's created the path to all
of our progress. I love it.
I love the story. Thank you.
So, so if you think about then you know, you, you, you started
out in this, you know, the, the,the, that piece of the business,
right? And you've moved now innovation,
you've kind of foster this culture of innovation in what

(08:00):
might have started out as something transactional.
I mean, how do you, how do you keep this culture of innovation
and continue building? What's the what's the mindset
from your perspective? I think stay true to your core
and then and again listen to thecustomer.
So what we learned in 2002 threeO 4 O 5 and so on was that what

(08:25):
we are good is for multi location big business.
That's what we're good at and that's what Grant is good at.
So if you got a lot of devices and you got a lot of locations
and you want someone to help youdrive uniformity, consistency,
replica replicable skill sets, you know, scalable model with
cost efficiencies, we're your guys.
If you got, you know, 1 great big building and you just need a

(08:46):
couple of data pipes in in a hosted solution inside that
building, I don't think we're your guys.
So I mean, I know that no one's ever gotten the show before and
said, hey, don't give us that piece of the business, but I'm
telling you, we are what we are,multi location, big business,
lots of devices. That's what we're great at.
Beyond that, I'm not sure where the right solution.
And so the way I look at this iswe know what we are, but then

(09:09):
within that church, we should move to different pews.
And so when we talk about innovation and you talk about
the award-winning edge boot product, which is the rebooting
product, again, I'd love to tellyou that we invented that.
I'm telling you the truth. TJ Maxx is the one who cat.
I have a very bright teammate who created that product, but TJ

(09:30):
Maxx is the one who catalyzed that idea.
So everybody in this call has certainly had times when this
location goes down and the rebooting will restore the
service. But they can't get to it because
the circuit that went down was the access to to that box.
And TJ Maxx said to us, the problem is when that circuit

(09:52):
goes down, I got to sell a manager, tell a manager, stop
selling sweaters and go start pushing buttons and she doesn't
want to do it. Or, or I got to wait for a tech
and it's 400 bucks and it's tomorrow.
They said to us, wouldn't it be cool if you could do this
wirelessly, if you could access this box because the wire line
went down. Now let's come through the sky
and get to it. And we said, yeah, that'd be
cool. And and we scoured the earth and

(10:14):
it didn't exist. And so we built, you know, a
patent first created the product, then patented edge
boot. And it's as you know, it doesn't
exist in our space today. And it award-winning and booming
in on the sales side. I'd love to tell you, Oh my
goodness, that, you know, we concocted that in some lab.
I'm telling you that TJ Maxx, which is the, you know, the

(10:36):
biggest retailer in in Massachusetts, they're the ones
who catalyze the idea. So listen, listen to that multi
location big business and they'll keep helping you.
They'll keep they'll keep creating growth.
I. Mean it says a lot too kind of
about how you guys go to market with these customers of clearly
they trusted you. They were in a spot where they
thought, hey, I wonder if these guys can help with with help us
with us and and you know they didn't try to figure it out

(10:58):
themselves. They said, hey, you guys have
been a great partner for us. Maybe you guys maybe you can
help with us and you're saying you're going Oh my gosh, this is
a great idea product, right, coming from a guy that grew up
in IT the how many times does resetting something fix
something? I mean it's it's phenomenal.
So let's make it easy. So, you know, kudos to you guys
for figuring that out and thank you just listening and being in
that spot to be aligned. Thank you.

(11:20):
Yeah. I mean, that's, that's
culturally we're private. So we're we have the luxury of,
of taking a long term view, which is which is luxury.
And we have a bunch of right teammates and we're willing to
invest today to be rewarded tomorrow.

(11:41):
So we can take 10 guys and say, hey, for the next four months,
you're not doing anything. You figure out how to make this
thing work. And is that a a cost?
Of course, but is there and by the way, are we going to come up
with some things that don't work?
Yeah. But the ones that do, man, we're
gonna be awarded for rewarded for the long term.
So we we have that luxury. Yeah, yeah, the long, the long

(12:04):
game always wins. People don't play the long game
enough. So I'd love that.
Great to hear that. Thank you.
So think about, think about the nature of ATA, right?
They're they're entrepreneur, they're hungry, they're
aggressive, they're ready to go.And so that that's kind of the
audience, right? That's the TA base.
And so they're out there, you know, struggling through some of
the things in different forms offashion that you've mentioned.

(12:27):
So so you're here, you know, you've built this multibillion
dollar fortune, you've got ownership in the Celtics.
You've, you've achieved this level of success that you know,
I love. I love seeing founder LED
success down this route and seeing founders still involved.
What's what drives you? What's, what's your advice?
You've reached that level of success that you think is, hey,

(12:49):
this is where I want to be and you're still out here grinding.
You're still in there. You know, Bednar tells me you're
still in there every morning early.
How do you how do you want partners to to take away with,
you know, them doing how you're doing?
So I would correct you when you said, hey, this is where I want
to be, this is not where I want to be.
Like to, to be clear, you know, with the, whatever the numbers

(13:09):
they say in the Internet are, they're probably true.
I want more and like, and it's not and I, I, you know, I'm
probably oversharing, but I don't, I don't have a fancy car.
I don't have fancy things I don't need to spend money on.
You know, you know what might most people might think showy
items. I don't care about that.

(13:31):
I like the competition of the game.
I'm being honest, like the idea of, of doing more than other
people have ever done before in,you know, in our space that that
feels intoxicatingly exciting tome.
The idea of making granite bigger, you know, and we're a
billion 75 every day makes me get up and, and I, you know, as

(13:55):
Kevin said to you, I, I get to work at 5:45 every morning.
As you could see, I sit in a queue that the team is right
over the other side of that queue, you know, 200 or so
folks, I work and, and it's because I want to compete and,
and I and again, I don't need money to buy stuff.
I whatever I need, I have it's and candidly, I think granted's

(14:18):
most well renowned for philanthropic initiatives and,
and I'm being honest, that's likely where the rest of you
know, my fortune and overtime goes.
But the idea of, of excelling where others have said we
couldn't, it matters to me a lot, a lot.

(14:41):
And so the most fun of my job isin a meeting with your Tasmania
and doing deals and meeting withmy teammates and doing deals and
then over the years developing long term friendships with the
customers. I love that, like that, that
that's a, that's the best part of my job and I can't get enough
of it. And so I'm, I promise you, I'm

(15:03):
pedal to the metal and you can count on that.
I love it, I love it. I love the energy.
So, you know, from a hard decisions process, things like
that, right? Everybody's out there building
businesses, they're going to come into problems.
These things, things are hard, right?
We have to figure out how do we work through them?
Everything, you know, everything's just an opportunity

(15:24):
just disguised in work clothes, right?
What's your framework? When the stakes are high, the
path isn't clear, What do you kind of use as your guiding
principles? Is it, is it a mentor?
Is it a, you know, past lessons?What's your framework there?
I there are a couple rules that help guide us.

(15:48):
So one of them, two of them cameout of that bankruptcy, right?
And and so first one, as I thinkI mentioned you, we, you know,
from 1991 to 1998, we had grown network plus it was private.
My father owned half, I owned half.
We used to think about it. You have $130 million business

(16:11):
with your dad and net and 10/11/12 percent a year.
Like, I mean, how could you haveit any better than that?
I had that and then I listened to Wall Street and I screwed up
my bad like my mistakes. But what, what I, and we got
away from was sales and customerservice.
We got into building local networks and we raised, you

(16:32):
know, through a bunch of different vehicles, hundreds of
$1,000,000. But local networks cost billions
of dollars. And if you don't, if you don't
have the back half of the bridge, the front half of the
bridge isn't going to do a wholelot of good.
And so we got out of the customer business and into the
network business. And so I vowed, you know, after
that bankruptcy, if, if, if I ever get a chance to start a

(16:54):
business again, number #1 we're going to stick to our knitting.
So we're, we're in the customer business, get and keep
customers. Generally it's a wholesale
business generally where, you know, the underlying fabric is
some other carrier. And we cobble together a whole
bunch of location specific solutions to give the best of

(17:14):
each geographic solution to a multi location big business.
But somebody else's network. It's some of the company's
physical structure. What we do is the secret sauces
pull it all together and add an elite level of customer service.
And so number one, that I made amistake getting away from that
in 9798 and got into the networkbusiness, which required that

(17:38):
you get into the finance business.
Granted's 22 years old, we just turned 23 a week ago.
You know, we're a billion 75. So you do the math.
We've grown about 90 million a year, 20 years in a row, right?
It's kind of straightforward stuff.
It's not sexy, it's consistent, it's hard work and it's sticking

(17:58):
your knitting and our knitting is taking great care of
customers and and the lesson I learned just don't leave that
and I'm not gonna to. The lesson I learned from that
painful experience is preceding 9798.
My father and I own network Plusand we were beholding to our

(18:20):
customers and our teammates. And then I made the mistake of
letting you know, others invest in US and I didn't, you know, I
didn't know at the time, but youknow, you let them in and then
they can control things. And so I vowed again, if, if we
have successes in that next company that we're not going to
let anyone else in. And so we, I look you in the

(18:42):
eye, we don't have any debt. We've never had a penny of
outside investment. We've made a singular
acquisition, which is a great product.
The company called Epic, it was Pretty Little.
It's gotten pretty big, but we bought it to replace analog
lines, not to get big, but to help our customers transition.
But we're not an acquisitive company, so we don't make
acquisitions. We don't have outside investment

(19:03):
and we don't have debt. And so I'm still a cool, I'm
accountable to the Telaris partners, I'm accountable to
your customers, I'm accountable to our customers.
Those are the people we're accountable to.
So we control our destiny and I want to keep it that way.
And the last one that I learned is integrity matters.
So long winded story, but you know, in 19 and 2000, 2001 a

(19:31):
couple of the guys from Quest called me and said, hey, Rob,
you want to do fiber swaps. And I was CEO of a public
company and fiber swaps is essentially taking CapEx from
them and making it our OpEx and taking CapEx from us and making
it their CapEx from us and making it their OpEx.
It's it's dirty and but I, you know, I was a history major.

(19:52):
I didn't know what that really meant.
So I asked our CFO, Hey, what does this mean?
And he said I wouldn't do it. And I'm forever indebted to Bob
Kabuzi for that. Old Salt had been around, you
know, a couple of times around the blocks before I said, can
you ask price Waters Cooper's Price Waters Cooper said, Rob, I
don't think you should do this. So I called back Quest and I
said, Quest, we're not going to do this and.

(20:12):
A day or two later, the guy calls me and goes, Rob, you're a
piss hand little reseller. You know, $250 million, we're a
$20 billion lack and we have Arthur Andersen.
That's the same big 5 as price water as Cooper's.
How can they do it? We can do it and you can't do
it. I'm like, I don't know, good
point. I went back to Bob and I went to
PwC and I'm like, guys, don't you think we should do this?

(20:33):
And they they said, Rob, I don'tthink you should.
Now I'm CEO. So I made the decision.
We decided, hey, we're not goingto do this.
And I promise you as CEO of a public company, a couple
$1,000,000 worth of of found earnings is like pennies from
heaven. Would it have made us last 1/4
or two longer? It may have, It may not have, I

(20:55):
don't know. Would we have failed no longer?
I do think we would have, but Socrates said better to fail
with honor than succeed through fraud.
What I learned from that is keepyour integrity.
So the guys from Quest jail banned from public industry for
the rest of their lives. Me, we failed and it hurt and

(21:15):
it'll never not hurt. But because you keep your
integrity, you get a chance to play the game again.
So cut born out of those failures. 3 important lessons.
One, stick to your knitting likebe good at what you're good at.
2 control your own destiny. Don't let you know if it takes
longer, that's fine. But if you control your own
destiny, you're you're you're going to in the long run,

(21:36):
benefit from it. And three, keep your integrity.
I love it. Final thoughts here.
I want to go back to, you know, legacy impact.
Some of the things that you talkabout.
You're, you're, you've done someamazing philanthropic things,
you know, 350 million plus Cancer Research, education.

(21:57):
And you know that that's the area that hits home for me.
And I, I'm, I want to think of if you look forward 10/20/50
years, what do you want? What do you want the legacy to
be? Number one, good dad start
there. We talked about it a little bit

(22:19):
earlier. Like the real reason I compete,
first of all, I just compete because like I'm born to do
this. Like I like it.
We talked about the financial resources.
I again, I don't need things. I have whatever I have.
I need I whatever I want, I already have.
I'm great with that. I would like to be able to put a
dent in pancreatic cancer and that's, you know, that's a, a

(22:41):
potent disease. We, we fund 80 doctor scientists
and researchers solely focused on the eradication of that
insidious disease at at Dana Farber.
That's the largest lab solely focused on that in the United
States, the Hill labs. And I'm telling you we have
things in headed to FDA approvalthat are going to make early

(23:02):
detection, which is the problem with pancreatic cancer is that
it's the early detection. If you don't get it,
unfortunately it gets you and it's almost undetectable.
We're going to make early detection accessible to millions
and and if that's the case, and man, that's a great.
Legacy. I love it.
I love it, man Awesome, Rob. I think that's where we wrap it.

(23:24):
Appreciate all you're doing, youknow, just out there in the, in
the community with, with the partnership with Telaris, just I
love your, your hunger and your ability to get on deals and then
of course, all the, all the philanthropic pieces as well.
Thanks for all you do. Thank you.
It's an honor to work with you. It's an honor to work with
Telaris. And to anybody who's considering
partnership with Granite, pleasedo and let me know if I can help

(23:45):
you. Awesome.
Hey, go Celtics too, right? Thank you, Josh.
All right, till, till next time.Thanks everybody.
Rob Hale, CEO, Founder. Granted, I'm your host, Joshua
Presto, SVP of Sales Engineeringat Polaris.
Next Level Biztech has been a production of Polaris Studio 19.
Please visit polaris.com For more information.