Dan Merzetti worked for Sprint Canada when he saw how the Internet was shaping telecommunications. Then, new technologies such as Voice Over Internet Protocol (VoIP) were growing fast. “Everything was going toward an Internet base, throughout telecomm, IT, everything,” he says.
Merzetti launched DSM Telecom in 2002. His digital phone service eliminated the need for clients to purchase hardware and servers. It’s also less expensive than traditional telecommunications systems. DSM focuses on small- and medium-sized businesses that purchase the service on a monthly fee.
“We are basically business telecoms in the cloud,” he says. “Essentially it’s less upfront costs, all the latest features that you could want. You don’t miss out on any of the features.”
Based in Halifax, DSM offers services in Moncton, Fredericton, and Saint John.
What did you find most interesting about that technology at the time?
You could connect multiple devices at once. Cellphones had come in, so everyone had a cellphone and a desk phone. Everyone had a laptop or a tablet. You had three or four devices. Not only could you pour it all into one phone number essentially, and provide one phone number to the world, but you could make all those things work together.
You’re competing against much bigger telecoms.
What is that like?
One of the benefits is when the newer players come in, usually with newer technology, you’re a little bit more flexible. You can keep your costs down and challenge the existing market. In Atlantic Canada, there really wasn’t anyone doing this particular thing in a higher-grade method. But we invested in leading technology, which was hedging our bets in a way that this was the way it’s going. We did do it right. Now you’re seeing the major players across the country based in Toronto and these places, all going toward the same platform that we chose. It’s now become the standard. Nortel used to be the standard for telcos. Ours seems to be the new thing. We come in with lower cost, more features, and a bit more simplicity. Really, it wasn’t too hard because there wasn’t that many of us and there still isn’t.
When you were out there looking for clients, were people on board with the idea?
In the beginning there was a lot more education because they didn’t recognize our brand. You’re not one of the bigger carriers. It started with a couple of early adopters and then you build on references. That’s how we did it here.
Who are your clients?
Do they all have something in common?
A lot of them were clients who were faced with having to invest in another phone system. These phone systems only have a shelf life of five to 10 years. If they were aware of us and they were faced with this large capital outlay and having to manage the whole thing, they wanted all the new stuff. It would take a lot of costs and IT resources for businesses to know what to look for and how to manage the system and get the features they wanted. So, if we hit them at the right time and saved them the spending a lot of upfront capital, they were quite interested.
What are the benefits of an entrepreneur in Atlantic Canada in this kind of business?
Where it’s a smaller market, if you can see the trends coming, particularly in technology because Atlantic Canada lags in some of the adoption of the technology. It gives you a bit of a window to say, “Well, if it’s already happening there, it’s only a matter of time.” Being in the technology business, we’ve seen that.
As an entrepreneur, what would you like to see done differently in terms of the culture of support for entrepreneurs?
Encouraging and being supportive of entrepreneurs and when they start something in Atlantic Canada rather than have a mindset of not being as supportive. To give the new up-and-comers a chance because they often bring some really creative things to the table. It’s the mindset of the positive energy, the positive attitude.
If an entrepreneur called you today and wanted advice, what would be the first thing you said?
I would tell them to be persistent, tenacious, and be creative but never give up. You have to have an “I’m not going to give up” kind of fight. And you need to work systematically and work hard and focus not on too many areas, just one or two areas. If your lender is wise, they are looking for some wisdom in that [business] plan that shows you know what you’re doing, so try to stick to the plan. It’s never exactly how you envision it; there’s always something different, somewhere along that range. Not trying to grow too quickly and focus on key things really well.
What is the future for DSM?
We are continuing to grow and expand. We now count phone numbers across the country. Our client base has continued to expand. The cloud, you never even heard the word up until a few years ago, and now it seems to be quite mainstream. So I think we timed the market very well. As long as we provide a well-priced product with lots of features backed by good customer service, I think that is the winning combination.