Rob AriasLocal high-speed internet provider PAXIO celebrated 20 years in Emeryville recently. PAXIO considers itself an Independent, last-mile provider and are pioneers in bringing fiber networks to local municipalities. Their investments have helped fuel business growth in Emeryville and made it a more desirable location for tech and life science businesses that require this capacity.
Founder Phil Clark has been witness to Emeryville’s growth through his involvement in the Emeryville Chamber of Commerce, the Economic Development Advisory Committee and most recently with the Emeryville Commerce Connection.
We got Phil’s unique insights on what creating, and sustaining a thriving business in Emeryville requires.
This interview has been edited for clarity.
10 QUESTIONS: PAXIO Founder Phil Clark
1). So give us a bit about the history of PAXIO and how you ended up setting up shop in Emeryville 20 years ago?
When I found the company in 2003 my primary customer was Pulte Homes. Pulte saw a value in building fiber into their new housing developments. Our first project together was in 2001 in San Jose when I was with another company who went in another direction which led me to found PAXIO.
We came up with some terms that worked for both of us and I got an investor on board. It turned out the next few projects were up in Emeryville. Elevation 22, then City Limits and eventually Glashaus.
There was a data center nearby so we built fiber from those properties to this Data Center and that began dramatically increasing our capacity.
We were doing 100 megabit back in 2003 and increased this to gigabit in 2006. Once we started bringing gigabit to the home, our commercial business started picking up because you started having IT managers, some who were living in these new homes, realize that their home connection was 20-30 times faster than their office connection. Some of their companies were growing fast and they began turning to us for their commercial needs.
By about 2008, our revenue was split 50/50 between commercial and residential. Today, almost 100% of our business is commercial.
Throughout the years, we’ve pretty much built capacity for every street north of Powell, now we’re almost in every street south of Powell. We have multiple fiber rings around the bay and a backbone running from Downtown San Jose all the way to Berkeley, over 50 miles of our own dedicated infrastructure.
2). In layman terms, explain why fiber is superior to other forms of internet connectivity?
A good analogy I heard when I was working with fiber optic engineers at Dow-Corning, you think of the capacity of a single copper wire as an 8 x 11″ piece of paper. The capacity of a coaxial cable is an 11 x 17″ piece of paper. The capacity of fiber on that same scale? It would take you to the moon. The amount of capacity in the fiber strands dwarfs the other two media.
Wireless is easy to install but it’s in an unprotected medium. It has to contend with noise, interference and loss. Fiber is protected, insulated. It wins in every comparison.
The speed of light is the only threshold. We’re still not close to the theoretical capacity of fiber. The optical technology is still improving.
3). How many employees does PAXIO currently have and does PAXIO do anything unique to retain them?
We’ve grown to 32 employees with a mix of full-time, part-time and contract workers.
Some people have the experience we’re looking for but they have other things going on in their life. We determine how they can contribute and find the right fit on our team. I think it works well. Work-life balance and flexibility is important to most workers and we try to accommodate them.
Over the last few years, I’ve really tried to focus more on how I want the company to be a good steward of the community. We have a pretty unique plan where half the company is in the employee’s hands. Having an ownership position is something that I realize is more important to some people than just receiving a paycheck.
I want everyone to understand how we need to value our customers, how we need to perform better in the field and in service. I want every employee building value together in the company, that’s a key piece.
4). In the last two decades, what’s gotten better about doing business in Emeryville and what would you recommend the city work on to remain attractive to businesses and help them thrive.
Emeryville is a great story in how they’ve reshaped themselves in the past few decades. Hats off to Wareham for bringing in Biotech and to the city for bringing in new residential.
The permit process is much more straightforward than it used to be. I don’t have to go to Civic Center very often anymore. They’ve lowered the thresholds and made them more consistent. Knowing what they wanted last time is the same as what they want this time. Some of the other cities are less consistent and that makes it harder for us to manage expectations with our clients.
In general, I’m very happy with the city especially over the last 5-6 years.
5). The city and some entities are trying to kick start a “Chamber Lite” business meetup called the Emeryville Commerce Connection that PAXIO employees have regularly attended. Why do you think business networking in Emeryville is important?
It’s great to see the city’s reengagement with the business community.
Emeryville has a lot of unique things going on. A lot of unique businesses so it’s great to see and interact with what’s out there. Ultimately, a rising tide truly lifts all boats.
Ultimately we’re in the business of connecting. Not just connecting business, but connecting people and we want to encourage our employees to be part of it. With more of us working remote, fostering this connectivity is even more vital.
6). It’s safe to say you are the “David” to the “Goliath” that is Google, Comcast, AT&T, etc. What allows you to compete in the same arena as these tech juggernauts?
The difference is our superior technology and strategically targeting areas where we have a competitive advantage. Our focus is more aligned with the local communities and business districts.
We get intimately familiar with the permit departments and understanding the unique needs of each city. We’re always trying to deploy the best and newest gear. So you have better economies and better scalability of this gear.
We are at our core a Bay Area company and have no ambitions of being a national company.
Being smaller allows our service to be more accessible. Our ability to work with customers and find a unique solution like creating a dark fiber network between their locations. We’re not boxed into the same solutions that big corporations are.
“Local Supporting Local” isn’t just a tagline for us.
7). How has the pandemic and remote work changed your business model?
Sadly, we’ve lost a lot of our smaller businesses. It was really tough to see happen and it’s going to take a while to build back up.
It was great for a period for me personally in that there was nobody on the roads. It made it much easier to build stuff.
When you’re not in the office every day, meeting over zoom, connectivity is even more important people realized. Now we’re seeing and appreciating the value of being in the office even if we’ll never go back to being in the office five days a week. Everyone needing to be connected all the time and for more things will continue to drive our business.
8). So you recently divested your residential service. What was behind this decision and have you completely closed the book on the residential connectivity space?
Residentially will always be near and dear to my heart but we had to make a decision to be more laser-focused on commercial. Residential was 10% of our business but 80% of our support.
For us to deliver the best product, we had to choose where we wanted to focus.
We still have a big presence in residential as we still provide the fiber to the buildings and we continue to see a big demand for it from the carriers we provide fiber to.
9). What is the one thing about your industry that keeps you up at night?
Wanting our network to be the best is what keeps me up at night. We want our uptime to be 100% and our latency to be near zero. We want to continue to keep the bar high.
Quantum connectivity might be the next technology on the horizon but we’re still a ways off from that.
10). Do you think the idea of having citywide wifi in Emeryville is dead?
I hope not and we did truly try to bring it to the community.
There are different players and different objectives. Buildings operating their own wifi and 5G through carriers has addressed this need for some but I believe universal connectivity is still something that needs to be out there.
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