290: Disrupting the Desk Phone and Taking on Google Voice, With Dialpad Founder Craig Walker

Craig Walker’s on a mission to overhaul the way businesses communicate, with cloud-based phone service Dialpad. As a securities attorney in Silicon Valley, Craig Walker met regularly with a who’s who of Palo Alto venture capitalists, startup founders, and investment bankers. He thrilled at their stories of big ideas and bold risks. Then one day in 1998, he decided it was time to live one of those startup stories of his own. When life offered him an opportunity to sit on the other side of the table, he said yes without hesitation. That decision shaped the rest of Walker’s life, first as a VC and soon after, as head of his own companies. Today, he’s the founder and CEO of Dialpad, a cloud-based business communications company that is rapidly approaching the coveted $100 million revenue benchmark. The San Francisco-based startup is changing the way businesses communicate, by shifting them from traditional desk phones to cloud-based service, and all the powerful features that come with it. In fact, much of Walker’s career after that fateful day has been all about improving business communications. He’s been disrupting the stodgy old office desk phone in some way or another for around 20 years, having laid the groundwork for Google Voice and Yahoo! Voice, and ultimately taking them on as a formidable competitor. From Attorney to Founder Walker was quite successful as a lawyer, but it was in that role that he became drawn to the prospect of starting his own business, and learned what it takes to make it happen. “Once I was a lawyer and I met a bunch of CEOs and founders, I realized there wasn’t any real magic to it,” Walker says. “It was just taking a risk or taking a chance and having a good idea and a good team to go along with you.” When a client asked him to leave his job behind and join a venture fund, he took the opportunity. But his time with TeleSoft Partners and Sterling Payot Capital, both of which invested in early-stage telecom startups, was only a combined four years. In November 2001, when an internet telephony service asked him to step in as CEO, again, he took the leap. And he’s been in the game ever since. That company was the first iteration of Dialpad, where Walker served as CEO and built relationships with his coworkers and others in the tech space, who would stick by his side through future ventures. When Dialpad 1.0 was acquired in 2005 by Yahoo! as the base for Yahoo! Voice, he took on his first role as a founder and launched a similar company, GrandCentral Communications. This was yet another foray into the world of online phone communication, but in less than two years, it was also acquired, this time by Google. For nearly four years, Walker continued on with GrandCentral, now called Google Voice, but before long it was time for him to move on once again. Having now laid the groundwork for both Yahoo! Voice and Google Voice, Walker was ready to challenge them for supremacy. Desk Phone Disruption A good name is hard to find. So when Walker and crew decided to found a new online communication company, they knew they needed to have a little chat with Yahoo! first. The owner of the first version of Dialpad agreed to sell the name back to Walker—including the all-important URL—and in 2011, Dialpad 2.0 was off to the races. His goal remained very much the same—the master the art of using the the internet as your business phone. As Walker boasts, Dialpad offers “all the power of a business phone system, but from anywhere in the world.” “The world has changed,” Walker says. "You’re working from anywhere at any time, and not having the ability to do that from your business phone system is crazy.” Using the latest iteration of Dialpad, businesses can toss their hardware to the curb and use the cloud to connect team members and clients. By importing existing numbers, companies can use a single system to manage all phone communications. There’s even an app that instantly transforms a cell phone into a work phone, allowing employees to port their number and merge into existing CRMs, productivity suites, and social networks. And with an AI integration that alerts supervisors of red flags like an irate customer, prompting them to step into the situation, sales teams could grow and improve with ease. Convenience was key, and customers of Dialpad rapidly embraced the new technology. After winning TechCrunch Disrupt and being featured several blog posts and articles, Dialpad saw a flood of new inquiries. But even with all the buzz around the new business, Dialpad wasn’t above the need to make cold calls. As you might expect, however, Walker’s approach to cold calling is a little different than just picking up a phone and hoping for the best. He explains that they first built a list of “modern-thinking companies.” Then, they investigated what tools those businesses were already using to accomplish basic day-to-day tasks. If they found a list of antiquated, on-premise technologies, they crossed the business off their list. If, however, they found that a company used other cloud-based technologies, they knew they’d found a lead and would reach out. “Ultimately you want to get up to the CIO, but building champions below the CIO is great,” Walker says. “The folks who are going to be actually responsible for managing the day-to-day of the product are great ones to start with.” As momentum built, so did Dialpad’s sales team and advertising budget, along with a loyal customer base. “I don’t see any other competitors on the horizon coming out of the startup world,” Walker says, “so now you’re just competing against the legacy guys that you know you’re ahead of and can out-innovate because you’re more modern.” Despite their edge as an innovator, Walker acknowledges that no business grows without facing its share of challenges. “On the road to success, there’s plenty of roadblocks and challenges on a daily basis, and I think every startup goes through those.” Staying Nimble The first major hurdle Dialpad had to clear was convincing major corporations to trust all of their critical calls to the cloud. This was back in 2011, when the concept was still fairly new. But even if they could achieve that goal, Walker had to struggle through the complex process of raising money, gaining traction, finding early customers, building a healthy organization, remaining innovative while serving existing customers, and so much more. Most importantly, Walker had to become excellent at making decisions. He insists, however, that this doesn’t necessarily mean being right all the time. “There have been many times I’ve been wrong,” Walker says. “You just need to adjust and move on, because you’re never going to always be right, and if you wait until everything is so clear that you’re always right, you’re going to be moving way too slow.” The key is to remain attentive and flexible. “One of the beauties of a startup is if you do realize you missed something or you moved too quickly one way or you moved too slowly one way, you can pretty quickly adjust it as long as you stay nimble,” he says. And, above all, Walker advises founders to trust their instincts. Even though he has spent the last two decades gathering a collection of trusted friends and advisors, he still occasionally throws caution to the wind and goes his own way. “The decisions all come down to you, and, because of that, I do think you’ve got to trust your gut,” he says. “You’re the one that’s going to live with the outcome. Don’t let people talk you into things that don’t make sense to you.” Walker explains that, because everyone has a different perspective, two equally intelligent and well-informed people can come to diametrically opposed viewpoints on a situation and what is best to do next. So his best piece of advice to new founders is simply this: “Stick to the North Star of what your idea was, and see it through.” Interview by Nathan Chan, feature article reprinted from Foundr Magazine, by Erica Comitalo Key Takeaways Why Walker, a Silicon Valley securities attorney, decided to transition into the world of entrepreneurship How the first iteration of internet telephony service Dialpad came to be How Walker became involved in companies that were eventually acquired by Yahoo! and Google The reason Walker decided to buy back the name Dialpad in 2011 Why introducing the cloud became a game changer for Dialpad and its customers Walker’s unconventional approach to cold calling Why it’s OK to make the wrong decision sometimes The best advice Walker can offer about staying nimble and trusting your instincts