Telecom pioneer and investor Farhi Diner set out to solve the problems with Wi-Fi and wound up building a business that is redefining the smart home category and improving the internet connection experience for major Communications Service Providers (CSPs) and their subscribers.
Plume is the Palo Alto, California-based business Diner created out of his personal frustrations with Wi-Fi. “I appreciate what it takes to bring connectivity and reliable broadband to our homes and businesses. Plume really started about six years ago out of frustration. I need to solve this to kind of finish the job from a personal perspective,” says Diner, referring to what he calls the last two meters of connectivity. Diner has the unusual title of Chief Servant to Plume’s people, customers and stakeholders and has spent a career building and investing in optical networks and telecom equipment that brought broadband to the home and businesses.
According to Diner, the last “two meters” points to the problems the CSPs were having in creating reliable, high-speed internet connections due the vagaries of the Wi-Fi connecting devices to the cable lines coming into the home or business. The problems were magnified by the proliferation of devices in the home and the advent of data-intensive applications like gaming and live streaming.
While most sought to solve the problem with more hardware such as Wi-Fi extenders. Diner saw the problem from a different perspective. “I recruited some of the other people that were in my previous start-ups and decided that it was more of a software problem. Wi-Fi needs to work in space in time and across different types of loads. That to us said that while we need a lot of compute and storage to do this, we can’t put supercomputers in people’s homes to solve this problem. So, that led us to the cloud,” says Diner.
Plume is the result of that thinking. Founded in 2015, the company positions itself as the creator of the world’s first SaaS experience platform for Communications Service Providers (CSPs) and their subscribers. The platform is deployed in more than 30 million locations globally. And, according to Diner, is the only open and hardware-independent cloud-controlled SDN (Software Defined Network) solution that delivers self-optimizing Wi-Fi, AI device security and a host of other “smart home” applications.
The company is growing fast and recently announced that it had surpassed more than one billion unique client devices that have been managed by Plume’s cloud controllers globally. It counts Comcast, Charter Communications and more than 200 other CSP customers in the US, Canada, Europe and Japan. Of its cloud solution for connectivity, Diner says, “I would submit to you today that we’re probably the best at it in terms of bringing you ultra-reliable networking and connectivity for all of your devices, for every person in the home, all of the time.”
In solving the Wi-Fi problem, Plume is also helping the CSPs increase customer satisfaction and reduce churn. “As I started talking to them in terms of taking Plume to market, I realised that they had a massive problem in that the bundle of services that had been selling to the consumer, what they call a triple play voice, video, and internet, that bundle was starting to really melt away,” says Diner.
So, while the carriers were boasting increases in customers, fewer bought bundled services, leading to higher customer turn over. Internet customers were growing but churning at some 30% per year. “Turn rates are very high. So, what I realised is that next big play was really the living room, the home set of services that these guys would need to provide to the home. And that played right into our hands. We controlled the network. Now we’re in the best position to offer all sorts of new services on top of a very reliable home network and Wi-Fi,” says Diner who further states that Plume homes turn at about 30% less than non-Plume homes.
The company’s growth trajectory and massive market opportunity has attracted $447.4 million in financing to date, including its most recent $270 million E Round financing through Insight Partners, plus past investors Charter Communications, Liberty Global Ventures, Comcast and Jackson Square Ventures.
“We started from fixing the Wi-Fi problem that required a platform. Then we open-sourced part of it. We realized this required putting software in other people’s boxes. We used to charge for that. About three years ago, we created this open-source framework called OpenSync™. Think of it as the SIM card that connects any sort of a Wi-Fi device to our cloud, the open source that today it’s the fastest growing framework of its kind,” says Diner.
Diner says the company is adding a million households a month right now. “That’s the pace at which we’re growing. And just to give you a sense of the market opportunity, they’re about 1.2, 1.3 billion internet connected homes in the world. There’s no reason why we can’t be in all of them,” says Diner .
According to Diner, the company is a high gross margin business, which gives him operating leverage to continue to invest in R&D, where they spend more than anyone else in the category, providing the opportunity to continue to innovate in direct to consumer and data services.
Diner’s path to telecom entrepreneur and investor is anything but typical. He was born and raised in Cyprus, the son of a chemical engineer and owner of an olive oil business. One of seven, his father was the first in his family to go to college. “I grew up on a sleepy island and then I went to the US on an exchange program,” says Diner of the move that would change his life. He lived for a year in High School outside of Boston with a family whose host father was an MIT graduate electrical engineer.
“That was the transformative year, I believe, in my life. I was 15 when I decided two things: I fell in love with America and I decided to become an engineer,” says Diner. He went back to Cyprus, but his father didn’t have the means to send him to school in the US. He was able to get an academic scholarship to the Florida Institute of Technology. After graduation he immigrated to Canada to work in a start-up.
“My first job actually was in a little optical component company. I got fired from my first job,” says Diner. Undeterred, he went to work for Nortel and then Pirelli working in undersea cable networks. From there he went to Siemens, and then left to start his own company, Qtera, a pioneer in ultra-long-haul optical networking. The company was acquired by Nortel for $3.5 billion 2001.That exit led him into venture capital as a managing partner at Sigma Partners where they have $2 billion under management in early-stage tech companies and remains there today. Though he says he is not currently making any new investments for his firm, he feels being an investor and a CEO helps to be better at both.
As to whether the company will go Public any time soon, Diner says, “We can be a public company in the next two years. We have enough scale and growth leadership in position.” However, he points to ready access to capital and the secondary markets as possible reasons to remain private. “So, I may not need to go public.”