How the cofounder and CEO of Nextiva made his first million, lost it and then made nearly $1 billion

Fortune

Tomas Gorny, cofounder and CEO of Nextiva, shares his story of his entrepreneurial career, how he made his first million, lost it, and then made nearly $1 billion.

Transcript

00:00 I was doing whatever I had to take to survive on three bucks a day, but I never felt pity for myself.

00:05 I was living in the country and even in the city that I, you know, loved.

00:10 And so for me, this was a huge blessing.

00:13 My name is Tomasz Gorni.

00:15 I am 47 years old.

00:18 I'm the CEO and co-founder of Nextiva.

00:21 And this is how I made my first million dollars.

00:25 I grew up in communist Poland, but I was born in 1975.

00:29 And the first 14 years of my life, I lived there.

00:33 And I already knew around the age of seven that I want to come to America.

00:38 As I was growing up as a teenager, my exposure to the United States was really through textbooks

00:43 and American movies like Wall Street and 90210.

00:48 And that's ultimately what intrigued me, even more so, to come to America.

00:54 My parents were essentially factory workers.

00:58 Most people grew up in a poor environment.

01:02 My exposure to business and my exposure to entrepreneurship was non-existent.

01:10 This was just developed personally as kind of, was part always of my DNA.

01:16 Giving credit to my parents, I never felt poor.

01:19 I always felt that I am well taken care of and my parents always encouraged me to do more.

01:26 When we moved to Germany, I grew up during the era of the PC revolution.

01:32 And the very first PCs, if some of you guys still remember,

01:37 they had those big DOS manuals on your desk where you had to really write those long string command lines

01:42 on your computer to get anything done.

01:44 That was a pivotal moment in my life.

01:46 I said, I don't know what I'm going to do in my life,

01:51 but I want to be part of making tech easier for other people.

01:58 Because I saw how Windows opened the market to everybody, made it accessible to everybody.

02:03 And I love that idea and I wanted to be part of that type of revolution.

02:06 And already started a couple of businesses, going to college.

02:10 I really took advantage of the PC revolution and there were some big companies in Germany building businesses,

02:17 but I thought we can do it better with delivering personalized service right to people's homes.

02:23 And we started building that business and I didn't have any capital.

02:26 When I lived in Germany and I was building my businesses, the person who moved to America,

02:30 I was actually doing an inmandatory internship for him while I was going to school.

02:36 Then he decided to move to the United States and I even visited him.

02:40 As he was coming back to visit his family to Germany, he saw what I was doing with the businesses.

02:47 He was very impressed and he said, look, I'm just about to start a website hosting company.

02:53 We didn't know what the internet will do at that point.

03:02 And he says, look, join me. There are no guarantees.

03:05 I cannot afford to pay you, but I will give you sweat equity.

03:10 And just, you know, come over.

03:13 And I said, absolutely. Dropped everything, ended up in the United States.

03:17 I didn't speak English.

03:18 Essentially, I learned on the job.

03:21 I never went to school.

03:22 By answering emails and by interacting with people in the business, I learned to communicate in English.

03:29 While I was working at the business in the morning, at night I was parking cars,

03:34 cleaning carpets at restaurants and apartment buildings, doing various weird jobs at events.

03:42 I was doing whatever it took to survive on three bucks a day.

03:45 I remember I had a friend of mine that I met playing soccer in the park.

03:52 And, you know, we always on Sundays made the trip to Sysla, you know, all you can eat.

03:59 And then essentially it was like a seven dollar meal and we bunched our money together.

04:05 And then one of us was always going to the buffet, you know, and then by the time we were done,

04:11 you know, I was like a pigeon, you know, ready to fall over because I overate.

04:16 But that was our treat for the week.

04:19 When you come to America, what I underestimated that you actually have to build your own credit.

04:25 So I brought a little bit money from sales of the businesses.

04:28 But, you know, I didn't receive quite a good amount.

04:32 So I ran out of the money very, very quickly by putting down payment on an apartment,

04:37 by literally getting a credit card that my deposit was larger than the credit that they would give me.

04:42 So no, I didn't have any credit.

04:45 I, you know, at the beginning I didn't have a social security number.

04:48 Then I applied for, I needed to hire a lawyer so I stay legal in the country.

04:54 So all of that, you know, really put a big strain on my financial position.

05:00 I was kind of in somewhat of an unusual story because I, you know, unlike probably a 23 year old

05:06 that would go on a shopping spree and buy homes, cars and do private travel.

05:11 I didn't do any of it. The goal was really to focus on the business.

05:14 And we were very fortunate because we picked the right industry.

05:20 Eventually we knew that more and more people will have websites.

05:24 Having a website was still expensive.

05:26 We were one of the very first website hosting companies out there.

05:30 And very quickly the majority owner started getting pretty good offers for the business.

05:37 Although I was the minority owner and probably had more interest to sell the business

05:44 because I wasn't in control, I was advising him against to do this because I said,

05:48 "Look, this market is going to expand. Eventually everybody will have a website."

05:51 He decided to sell in '98, two and a half years later.

05:55 He honored the arrangement that we had and I ended up, you know, becoming multimillionaire literally overnight.

06:03 I bought a modest house where I put a down payment of less than $100,000.

06:08 I bought myself the very first car in LA for $40,000.

06:12 And if you know LA, you cannot rely on LA's public transportation.

06:17 And the rest I invested along with people that I trusted.

06:21 And unfortunately, that was part of my mistake.

06:25 SoftBank came around and invested in one of our businesses.

06:28 And I invested along with SoftBank to start the business.

06:32 This was all 1998, '99.

06:34 And two years later, you know, the bubble burst.

06:38 Some of the people that I trusted, I have made a mistake on.

06:44 And all of that money was essentially gone by middle of 2001.

06:51 I didn't know how to pay my next mortgage.

06:54 I wasn't down on myself.

06:55 I still saw the market as a huge opportunity.

06:57 And I said to myself that there's still a huge opportunity.

07:02 Nobody has done it what I envisioned to do.

07:05 Make website hosting easier for the non-technical users.

07:08 Taking the middlemen out.

07:10 Making it significantly more affordable.

07:12 I decided to start the business.

07:15 And at one point, the stock that I had, which was worth probably between 8 to 10 million dollars,

07:22 and crash, you know, was worth $6,000.

07:27 And I end up liquidating that stock, buying a couple of servers for the web hosting company.

07:34 Then I started the website hosting company on an American Express.

07:39 And then later, I have rented a very small closet in somebody else's office,

07:49 converted this to like little office, and then put a couple of people in.

07:53 And literally, within a year, the vision to make website hosting easier for every business.

08:01 And I remember still the very early days, where we were signing just three customers a day.

08:07 Because we were still developing our tech.

08:10 And they just paid us like $100 a year.

08:13 But I was thrilled.

08:14 Within a couple of years, we were the fastest growing website hosting company in the world.

08:18 Then together, we continued to build the business in 2011.

08:22 We have sold that business for nearly a billion dollars.

08:26 Then we took it public.

08:28 And today, it is the second largest website hosting company after Godaddy.

08:32 We don't live lavish life.

08:34 Main thing is frugality.

08:36 And my wife is actually significantly better at that than I am.

08:39 My airline of preference is Southwest.

08:42 That I travel often from Dallas to Scottsdale.

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