BIG GROWTH FOR SMALL PRODUCT: Towerstream has increased its market share in Wi-Fi and small-cell rooftop tower network products, something that Chief Financial Officer Joseph Hernon must keep a handle on.
Since Joseph Hernon joined Towerstream Corp. as chief financial officer in 2008, its gross annual revenue has more than tripled, from $10 million in 2008 to more than $30 million in 2013.
The cause-and-effect connection implied by that statement is intentional: Hernon heads the company’s mergers and acquisitions work group. He is particularly proud of having closed five acquisitions across the company during his tenure, in addition to guiding the company’s organic growth.
“These acquisitions have fueled about 40 percent of the company’s growth over the past three years,” Hernon said. “It has been fun to complete acquisitions in cities like Las Vegas, Los Angeles and Houston and get to experience a bit of the local culture and energy of those communities.”
Towerstream is a 4G and small-cell rooftop tower company in Middletown with 159 employees. It owns, operates and leases Wi-Fi and small-cell rooftop tower locations to cellular phone operators, tower, Internet and cable companies, and it hosts a variety of customers on its network.
The company was founded in 2000 to deliver fixed-wireless, high-speed Internet access to businesses. At present, it offers broadband services in more than 13 urban markets, including the Greater Providence area as well as Boston, Chicago, Dallas-Fort Worth, Houston, Las Vegas-Reno, Los Angeles, Miami, Nashville, New York, Philadelphia, the San Francisco Bay Area and Seattle.
“Towerstream helps businesses connect to the Internet, and there is literally no business that doesn’t use the Internet on a constant basis to operate their business,” Hernon said. “The Internet is helping businesses improve their operations and increase profitability.”
The company’s growth “has placed tremendous challenges upon the organization, and Joseph has been a key leader in managing these challenges in an effective manner,” said Philip Urso, chairman of the board of directors for Towerstream, who nominated Hernon for a Providence Business News CFO Award.
“When Joseph joined the company, it was operationally unprofitable and generating gross margins less than 60 percent,” Urso continued. “The company improved gross margins to 75 percent and improved profitability for 12 consecutive quarters” up to January 2013, when Towerstream launched a new wholly owned subsidiary, Hetnets Tower Corp.
Hetnets was formed to leverage Towerstream’s strong network facilities in dense urban markets. Hetnets offers a neutral-host, shared wireless infrastructure solution, either independently or as a turnkey service.
Hernon’s workload also increased after November 2012, with the departure that month of the company’s chief operating officer, who previously had led the sales and marketing, engineering, customer service and installations departments. Hernon soon assumed many of the chief operating officer responsibilities, in addition to his CFO role.
In late 2013, Towerstream consolidated all of its employees into one newly renovated corporate office. Previously, employees were located in two buildings. Hernon said the consolidation has been a success on several fronts.
“First, we were able to significantly lower our monthly occupancy costs, including the benefit of substantial renovations to the existing office space into which we consolidated,” Hernon said. “Second, the consolidation has brought all of the staff into the same working environment, which has positively impacted employee productivity and morale, and the overall energy of the office.”
Hernon said he is blessed with an extremely intelligent, hard-working and dedicated staff of people who take pride in what they do.
“I think that an ability to communicate and collaborate with other employees is critical to an individual’s success in an organization,” Hernon said. “I also value individuals who enjoy working hard and value their work as an important part of who they are as an individual. I believe those individuals are inherently happier in life.”
Towerstream’s employees are mostly in their 20s and 30s, fostering, Hernon said, a young, energetic environment with a “work hard and play hard” attitude.
On the flip side, he said, staffing is always a challenge in the high-tech industry because the fast-moving and chaotic environment isn’t well-suited for every type of person. Hernon has had to let go some people who had solid education and work experience but couldn’t thrive in the working environment at Towerstream.
A bright spot, Hernon continues to see signs that businesses have migrated out of the “hunker down” mentality of the Great Recession, when there was a strong emphasis on controlling costs.
“Businesses are becoming more confident and beginning to focus on growth,” he said. “We have seen strong upgrades across our customer base as customers want more bandwidth to support their growth initiatives.”
Hernon admits that he was a late bloomer when it came to settling on a career path back in his college years. A year and a half into the highly touted engineering program at the University of Massachusetts Lowell, Hernon changed course and migrated to the general business program. After completing his degree and working for a few years as a staff accountant, he knew he wanted a career in finance.
The decision has certainly paid off. Hernon has enjoyed successful stints with PricewaterhouseCoopers, where he served in the assurance group for almost 10 years before taking on the role of CFO at Boston Life Sciences. Ten years after joining BLSI, he spent two years as CFO at AquaBounty Technology before accepting his current position at Towerstream.
With no intention of slowing down anytime soon, Hernon hopes to still be working hard and playing hard every day for years to come.
“I never think about retiring, and I hope to emulate others who have kept working into their 70s,” he said. “I am fortunate to have a lot of flexibility in my job so I can enjoy a great summer day on the beach or the golf course. Conversely, I’m often working on the weekends but mostly in small stretches at a more relaxed pace.”