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Interviews with interesting local tech companies.

Minneapolis-based RemotePipes began as a way for businesses of all sizes to have affordable, reliable Internet access–and that’s still the company’s mission. CEO Doug Bonestroo talks about why such a basic service can be so crucial.

How did RemotePipes get started?

I was working for Verizon selling global dialup Internet access solutions, and I was not that impressed with what we were selling. I noticed that the prices we were charging for toll-free 800 dialup were very high and that there was an excellent arbitrage opportunity presenting itself.

The second reason resulted from my day trading experiences while at our cabin in Brainerd. I was paying $20 per month for a dialup account plus $6 per hour for 800 toll-free dialup access and the bills got pretty expensive. Between the two reasons the idea for RemotePipes was born.

The final step in the decision to start the company was to meet with representatives from a large wholesale buyer of toll-free 800 dialup to see if they might be interested in being a customer if we could provide the right rate plans. They were very interested, so we founded the company and started raising money to build our 800PipeR network that has served us well since June 2000.

What got you personally interested in doing this work?

I have always had a strong interest in technology and I discovered that I enjoyed selling high-tech solutions. After being in tech sales for over 20 years, I have not lost my passion for it. Starting RemotePipes gave me the opportunity to sell a service demanded by the public and defined and developed by me and the rest of our team, so we get to sell a service that we really want to sell.

Why do you feel there’s a need for what you provide?

We knew intuitively that there would be strong demand for a best-of-breed remote access service and we were right about that. That said, InStat/MDR has published research that states that remote Internet access is the number one telecom-related need of SMBs. This research just got us even more excited about what we are doing.

Additionally, we sign up dozens of new customers every day from countries around the world and all we do is advertise on the Web. This shows that there are people everywhere that are actively searching for a service such as ours, that they are finding and signing up for the service, and that they are willing to continue to add funds to their accounts over time. The need is huge, and the difficult part is letting people know that we are here to meet that need.

What makes your company unique?

Our company is unique in that we are the only global aggregator of Wi-Fi and dial-up services that is focused on small and medium-sized businesses and organizations. Our competition focuses on the Fortune 2000, and we are happy to work with the small entities.

Our workforce is unique in that we are a bunch of self-motivated people that do not need or want to be micro-managed. Everyone has a job and they do it well, and we all have learned to trust each other with regard to the skills that each brings to the table. We are very team oriented and highly productive with zero extra baggage.

What type of trends do you think the next year will bring in your industry?

Mobile wireless will continue to grow in popularity and everyone will be hearing more and more about 3G and WiMax. These will be the biggest news topics.

What kind of challenges is the company facing?

Like all telecommunications companies worldwide, we have been through a tough four years and we are just now seeing some optimism in the industry. There is still too much capacity which is putting severe pricing pressure on all telecom related services and that will not change in the next few years.

Our cost of capital is also way too high, relative to the cost of capital paid by larger public companies. As a result, we will most likely merge with another [slower growth] telecom to lower our cost of growth capital and drive out costs.

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