Q&A About Our Decision on Columbus
Jan 31st, 2023
Starry today announced its intention to voluntarily leave the Columbus, Ohio market. Our blog team sat down with Starry’s Chief Executive Officer Chet Kanojia to discuss why and what’s next for the company. Here’s a condensed version of that conversation.
This is pretty big news about Columbus. Tell us why this decision was made to leave the market and what it means for new markets?
CK: Deciding to leave the market was indeed a tough decision. Given the challenges in raising capital in this current macroeconomic environment and our focus on achieving profitability for the business, we made a difficult, but rational business decision to wind down the market and focus our energies and resources in our existing five core urban markets.
Since we went public last March, we’ve been very candid about the company’s need to raise additional capital to fund our expansion. Unfortunately, the capital markets over the last year have been very challenging for high growth, negative cash flow companies (perhaps all companies!), and we were not able to get the crank turned over one last time before profitability.
Our decision to leave Columbus reflects our broader strategy shift to focus on our existing very dense markets where we can reach breakeven and profitability at a much faster pace. The good news is some of our markets are already there. Once we get there as a company, we can contemplate growing outside of our existing footprint again.
We launched in Columbus with a big focus on bringing competition and choice to the market. Do you think we were successful? What do you think is the lasting impact of Starry’s foray into the market?
CK: Yes, I absolutely believe we were successful. Remember, we set out to build and launch a brand new ISP in the Columbus market from scratch. And we did just that, with a network that passed 350,000 households and thousands of subscribers served on that network. Our entrance and presence in the market made incumbents sit up and take notice. Competition - even just the threat of it - drives prices down and a higher quality of service up. I think Starry’s presence in the Columbus market had that effect. Our NPS scores and the customer feedback we received in the market back that up. Of course, I wish the circumstances were different and we were able to stay in the market, but our goal of driving and delivering a better ISP experience for customers was met.
What are some key takeaways from our experience in Columbus?
CK: My biggest takeaway is the amazing level of talent in the market. We assembled a team that was first-rate. From construction and deployment to engineering and tech ops, and sales and marketing, we were able to attract passionate, smart and dedicated people to our mission. Hiring in a new market can be challenging: your brand is unfamiliar and you’re entering new territory, but we were successful in attracting incredible folks who believed in our technology and mission. For a business like ours, you need to assemble a diverse array of humans with a diverse set of skills and we were so lucky to find some of the best talent in Columbus. It’s my hope that we’ll be able to bring along some of those folks to our other markets.
Another important takeaway was our ability to show that we could successfully serve single-family households. We launched our Starry Comet receiver in Columbus and its success there helped speed our rollout of that product in our other markets. While our growth in Columbus was slower than we would have liked, nailing down and proving our ability to serve single-family homes was a big and proud achievement.
The last takeaway I’ll mention is how badly consumers want and need competitive choices for broadband access. I can’t tell you how much feedback we received from people in Columbus just grateful to have another choice of provider, especially one with fair and transparent pricing and responsive customer service. Even when we had hiccups (like that bird nesting situation on our equipment), customers were just happy that they had someone that was responsive and communicating with them. The positive feedback on our customer service was really striking.
What do you hope people in Columbus take away from their experience with Starry?
CK: My hope is people continue to demand choice and competition in the ISP market, particularly families living in multi-family housing (apartment buildings) who often may have choices available to them, but are limited by whatever legacy deals their landlord may have struck with an incumbent provider. We’re leaving Columbus because of economic conditions we can’t control, not because we weren’t successful in bringing much needed competition and choice to residents. Competition works. And I hope that’s the takeaway for Columbus residents from their experience with us.
Oh, also, that your customer experience with your ISP doesn’t have to suck. In fact, it can be a delight and I hope that’s what folks remember from our time serving them.
Where is Starry focusing its energies moving forward?
CK: Our operations in our five core urban markets continue, unimpacted. Our business plan today is focused on serving those existing five core markets and increasing our efficiency as a company. Over the last several months, we’ve taken a series of steps to conserve capital and reduce spending and that reorganizing will help bring the business to profitability as quickly and efficiently as possible. Once we’ve achieved that, we’ll start to contemplate expanding our footprint.
It’s been a challenging time, but we’re moving forward, focused on our mission and growing the business.