Built at Light Speed

You would think that the stunning price-performance advantages of Cogent's service would be enough to sell it. Schaeffer thought so too; then he had to think again. In July, the company's newly formed sales force began knocking on doors. Many decision makers were enchanted by Cogent's story, the sales force reported -- but finding the right person within a law firm, a bank, or a property-management company could be maddening.

Receptionists are trained to ward off any vendor without an appointment, observes Michael McGuire, 47, Cogent's director of retail sales. Corporate telecom managers have heard so many pitches about cheaper phone service that they steer most salesmen into voice mail and don't return calls.

Unwilling to give ground, McGuire and Barry Morris, 41, Cogent's vice president of sales, set up regional sales offices in 13 cities and then told the company's newly hired sales reps to make 250 cold calls a week. That pace might sound grueling, McGuire conceded, but he thought that a good salesperson could hold to the target count. In fact, he said in August that he wanted representatives to make 17 face-to-face visits each week as well. The top salesperson each quarter in each office would get the keys to a Porsche sports car for 90 days -- before giving up the car to the next quarter's ace.

By September, Cogent had decided to slow down the sales treadmill a bit. In Chicago, sales manager Jim Bubeck said he was happy when representatives made about 200 calls a week. In less than two months of prospecting, Bubeck's team had already won more than 20 accounts, mostly by offering customers two free months of service, with a third free month if customers urged their landlord to tell other tenants about Cogent.

More and more, the Cisco connection became a big part of the Cogent story. Not only did Cisco sell routers to the startup, but it helped introduce the little company to big potential customers. Cisco also provided $280 million in financing -- which let Cogent buy the routers without needing to borrow money from banks or from the capital markets. Such support wasn't merely a gesture of kindness. In the hotly competitive market for optical equipment, Cisco didn't have nearly the dominance that it had shown in other markets. If Cogent did well, it stood to reason, the spillover benefits for Cisco could be huge. As Kummer, Cogent's CTO, gleefully put it: "We've become the poster child for Cisco's optical strategy."

To attract customers, Cogent is now unleashing a second sales strategy as well: trying to get major landlords to offer the service to all their tenants. Cogent quickly landed Jamison Properties Inc., which owns several buildings in Los Angeles, and it zeroed in on some East Coast prospects. But Cogent's VP of real estate, Scott Stewart, 37, says he needs to keep cautioning colleagues that such prospects aren't won overnight. The culture of the real-estate industry is to haggle over deals for nothing more than the sheer fun of haggling, he observes. That can take months, even when talks are going well. And if Cogent ever gets impatient and pleads for a quick decision, the other side smells blood, he warns. "They'll start making all kinds of new demands.''

Rivals in the business-Internet connectivity market haven't done nearly as much to build high-speed networks, but they may be farther along in wooing developers. BroadBand Office Inc., a San Mateo, California company, is partly owned by more than 80 commercial real-estate companies, including giant Hines Interests LP. Such competitors as Allied Riser Communications Corp., Cypress Communications Inc., Eureka Broadband Corp., and Yipes Communications Inc., are targeting the same customers that Cogent wants. Those companies typically offer Internet connections of up to 20 megabits per second, with a sliding price scale that lets customers match T-1 performance and save money, or else lets them go for a somewhat faster connection and perhaps pay a premium.

By contrast, Cogent's sales proposition involves a leap of faith -- that at some point business users really will want to access the Internet at 100 megabits a second and will feel that even a T-1 line is unbearably slow. It's hard to make that argument for most current Internet applications. Static Web pages and standard applications, such as email, work fine at lower speeds.

But Cogent executives argue that Internet users for the past decade have constantly wanted faster and faster connections as new applications were released. In particular, if online videoconferencing takes off, they contend, then Cogent's speed advantage will have immediate, practical benefits.

While Schaeffer himself isn't going on many sales calls, he is getting a sense of the company's dual battles -- to prove that its technology works and then to snap up enough paying customers to justify the business model. This past summer, he spent nearly an hour on a conference call briefing Lee Doyle, an influential industry analyst at International Data Corp. in Framingham, Massachusetts. Almost all of their conversation focused on the technical features of Cogent's system.