As part of Fuze’s commitment to innovation and leading the enterprise UCaaS space, this past summer Fuze appointed two new independent Board members. David Baum, one of these two Board members, joins Fuze’s board after 17 years at Goldman Sachs, running the M&A practice and serving on numerous private and public boards.
Fuze’s CEO, Brian Day, sat down for a conversation with David to discuss his thoughts on Fuze’s role in the UCaaS market today:
Brian Day: Hello, everyone. Thanks for joining us. I'm Brian Day, the CEO of Fuze. And today I'll be talking with one of our newest independent board members, David Baum. David, welcome, and thanks for chatting with me today.
David Baum: Thanks, Brian.
Brian Day: Tell us a little about your background. How long have you been in the technology space, David?
David Baum: Well, as you know, Brian, I spent 17 years at Goldman Sachs in investment banking. The end of my career was spent running the M&A business in the Americas. And sort of over that span of my career, I crossed lots of industries, and many of the companies that I did work with had been in the tech sector. Since leaving Goldman, I'm a very active private investor, strategic advisor, and board member to a number of companies, some of which are in the technology space. And then as you also know, I spent five-plus years building a digital media company that was focused entirely on the golf space, and that business we successfully sold to NBC Sports about three years ago.
Brian Day: Well, golf is something that's near and dear to my heart. I wish I was a better player, but I still enjoy the game. And I'm going to come back and visit that one in a couple of minutes, because it's something I want to dig into a little more.
Back to Fuze for a second, David, you and I started talking about Fuze last winter, just as the COVID crisis was starting to unfold. What attracted you to our board? I know I had to talk to you a few different times and talk to you about what Fuze's future was, but what was it that made you decide to ultimately join our board?
David Baum: Well, it's funny, Brian, so three things really come to mind. First of all, you mentioned COVID. Obviously, this has been a horrific human tragedy and financial tragedy for many individuals and companies across the globe. But sort of perversely, if there ever was a business built for a post-COVID world, arguably it's Fuze. I can't think of that many companies that are better positioned to help solve what are now the distributed communication needs that companies are facing all around the world. And many companies do a great job sort of addressing one segment of that market, but there aren't many companies like Fuze that have the ability to address multiple segments of that market. I think that's going to ultimately prove to be very important and very positive for the company.
So secondly, as you know all too well, I spent a lot of time with you and Rob before ultimately making the decision to join the board. I don't want to give you a big head or anything here, but I was very, very impressed with you and Rob. You guys clearly have your fingers on the pulse of the business. I clearly buy into the direction that you're trying to take the business, and that had a big impact on my decision. And finally, it's really impressive when you look at the quality of the investors that are behind Fuze today. Very frankly, very few companies of any size really have an all-star sort of cast of first-team investors like Fuze has. I know the average person on the streets doesn't resonate with the names of your investors. I think about whether it's Bessemer, Summit Partners, TCV, Wellington, or Greenspring, while people don't know those firms necessarily by name, they are well aware of the companies that they have backed, names like Netflix, and Uber, and LinkedIn, Peloton, Pinterest, DocuSign, Box. The list goes on and on. And when I saw those were the firms that are standing behind and advising Fuze, that said to me, you guys must really, really have something going here or they wouldn't be putting their capital, their expertise, and direct reputations on the line.
Brian Day: Yeah, I think it's a great comment. It actually kind of resonates with me because back when I originally joined Fuze, I thought the same thing. I mean, number one, I thought it was a great, great market, a huge TAM, or total available market. Those are hard to find, good opportunities with large TAMs. But I was really impressed with the quality of the investor base, and in my opinion, was pretty important as well. So strategically, David, what do you believe are the implications of having financial backers like that for a company like Fuze?
David Baum: Look, Brian, in my view, it's invaluable. These firms have incredible institutional knowledge and experience, have worked with lots of companies like Fuze over time. They know how to build a team, scale a business, work with you strategically, think about various M & A opportunities, all the things that you need to be successful over time. It's kind of funny, and I think back to particularly my Goldman days and even now as a very active investor. When you look at a public market investor, so frequently they could be so fickle quarter to quarter. You miss earnings by a penny, and the stock gets crushed. And by the way, it can work the other way, too. We kind of see this movie every quarter when earnings come out.
When you have investors like you have that are private venture capitalists, they tend to be more patient. They're long-term investors. They understand that the road to success is, typically, filled with potholes, not necessarily paved with gold. They can kind of be there for that journey with you. And importantly, they're always going to be smart with how they manage their affairs. Look, these are firms that have deep pockets. And to the extent it's ever necessary, these are the type of people who can provide your capital in the event the company requires ongoing funding as it makes its way down the road to financial independence.
Brian Day: So shifting gears a little bit and thinking about the future, what do you think the next five years in the UCaaS industry are going to look like given everything that has happened so far in 2020?
David Baum: Well, it's just hard to believe that virtually every company on the planet today, in light of what's happened with COVID, isn't thinking about how they are going to function on a distributed basis going forward? And I'm not at all suggesting that the office environment's dead. By the way, I don't think the office environment's dead. At some point, we're going to get to the other side of this COVID situation. And by the way, I don't think it's going to go back quite to what it was, but I don't think it's going to be necessarily dead either. But the days of having kind of all of your employees under one roof or multiple roofs for multinationals and the like, those days, I think, are over. At a bare minimum, companies are needing to have a backup plan in place in the event you end up into another COVID-like situation. So look, the future was bright and very robust for UCaaS pre-COVID. I just think it's even much stronger in this post COVID world.
Brian Day: Will there be consolidation in this space?
David Baum: You've got to imagine there's going to be. It's sort of funny. Stepping back for a minute, when COVID broke, and I give a ton of credit to Zoom, but Zoom had a product that was just ready-made for the initial days of COVID. It was quick and easy, just the way to reach out and get an over-the-top band-aid solution for video communications. I mean, look, Zoom has become a verb at this point. However, I think as we move into the next phase of sort of post-COVID life, companies, I believe, are going to step back and think much more comprehensively as it relates to their communication needs. It's not just going to be video. It's going to encompass all company-wide communications. And the play in that market, I think what you're going to see is that the platform play is going to become absolutely critical. For companies out there that are only providing solutions in sort of one slice of the market, my sense is that, I'm not saying things won't be good, but I think things might be tricky. And my sense is you're going to see consolidation as players look to become, frankly, a little more Fuze-like where they can play across the spectrum of a company's needs.
Brian Day: All right, that's great. Listen, before we wrap up, I do need to circle back on your golf business. I was fortunate to get a round in with you at your home course on Martha's Vineyard this summer. It was great. And during the round, you told me the story of your digital golf business. I now know where your true passion is. Can you share with the audience what that business was all about?
David Baum: Yeah, look, that business, it was all about tapping into the passion of the core golfer. My partner and I, we shared a vision that there's... Kick around what the number is, but there's probably 24 million people playing golf pre-COVID. I think it's more now, but roughly a quarter of those people are really, really passionate about the game. They care about trying to get better, so that means they wanted instruction. They were interested in equipment. And these people tended to also travel. We really designed a business to cater to that very, very passionate individual. We didn't follow the tour. We didn't talk about who Tiger Woods might've been dating that week, and any of the gossip or other stuff that's out there. We really went for that core passionate golfer. We were able to amass a huge audience really focused on those individuals. And now, that business is in the very capable hands of the Golf Channel on NBC sports and has evolved in some other areas, but it was really a great deal of fun, and I loved doing it.
Brian Day: Yeah, I think I was on that site several times long before I met you. In my own little way, I contributed to your outcome there. So, David, thanks for joining me today for this chat. It's been great.
David Baum: Excellent. Thanks, Brian.
Brian Day: Take care, everyone.