It all started in Stratford, Ontario.
See, if you lived in Stratford, calling someone on the phone in Kitchener, the city just to the east, you were charged for long distance.
You could practically see the place, yet the phone company was going to ding you 40 cents a minute for calling right next door? That’s insane! That’s outrageous! That’s disgusting!
But for two local buddies, Jody Schnarr and John Stix, that was awesome!
They saw an opportunity that no one else had. They would cobble together some basic tech to hook up the two communities, charge customers a flat fee, and allow them them talk all they wanted.
It was a win-win for sure. So what they did was knock on 700 doors in town and asked if anyone would be interested in a service that allowed them to talk to Kitchener all the live long day for a flat fee of only $10 a month.
Practically everyone said “yes,” so with that market research in hand, they spent all the money that had between them, about $15,000, on this new switching gear and their brand new phone business was born.
…and then precisely none of the 700 who said they would take it, took it.
Panicked, they spent the next two months “calling, begging,” and in the end, they had managed to sign up a grand total of 70 customers.
Which was enough to guarantee that they would go broke. Their monthly carrying costs were $1000 a month so it wasn’t looking too good, but then they came up with a new plan.
The “free” plan.
“We thought about getting someone to pay the $1000 monthly bill, to let everybody use it for free,” said Schnarr.
What they needed was an advertiser. They pitched local car dealer Gary Stockie with the simple concept: Anyone making a call would dial a custom branded number and after hearing a brief advertisement, they would be able to make a free long distance call.
Gary went for it, so Schnarr created an easy to remember phone number, 662-GARY, and launched their first PR campaign.
Next-day coverage in the local newspaper prompted 4000 people to use it that first day. “The town just went nuts. At the end of it, we had 8000 household using it a day,” said Stix.
Up, up and away in fact. This elegant “free” calling plan was quickly picked up by communities across the province, and then by companies like Labatt and the Toronto Star.
Flash forward to today and these two local guys, Schnarr is the CEO and Stix is the CMO, have built one of Canada’s largest coast to coast networks that supports over 300,000 customers a day. They have over 200 employees globally with their head office in Cambridge and two international offices located in Sofia, Bulgaria and Puerto Plata, Dominican Republic.
Yet that concept of “free” is never far away. The concept that built the company goes into every product they offer today.
Be it all the free calling features or the free long distance for Worldline digital home phone customers, or the free unlimited bandwidth for High Speed Internet customers, it’s everywhere, and it will remain so in whatever they come up with next.
It’s a very non-traditional business model, and one that leaves many in the industry scratching their heads.
But for Jody & John, free works, and after all, it’s their company, they’re free do whatever they want.