Donald Burns

Not to be confused with Donald Burns (umpire)
Donald A. Burns
Residence Palm Beach, Florida
Nationality American
Other names Don Burns
Education University of Maryland
Occupation Entrepreneur, business executive, philanthropist
Years active 1980s-present
Known for Founding Telco Communications Group Inc. and YMax Communications
Board member of magicJack VocalTec Ltd
Website Donald Burns on Twitter

Donald Burns is an American entrepreneur, business executive, and philanthropist know for his activities in the telecommunications and real estate industries. After working as an executive for telecommunications companies such as ATX Communications, Inc. and Mid Atlantic Telecom, Inc. ("Mid Atlantic"), he co-founded Telco Communications Group, Inc. ("Telco") in 1993.[1] Telco focused on providing long-distance phone service during Burns' tenure as president,[2] also inventing[3] and popularizing the 10-10 dial-around system for long-distance calls.[4] Burns was appointed Telco's chief executive officer in 1996,[1] and the following year Telco was sold to Excel Communications, Inc. ("Excel") for $1.2-billion[5] in cash and equity.[6] Retiring after the sale of Telco,[3] in 2006 Burns and Dan Borislow founded YMax Communications Corporation ("YMax"),[4] a communications and equipment service.[7]

Burns was YMax's president from March 2007 until February 2008, and served as chairman the following year.[8] YMax's profits come from the production of the magicJack, a long-distance calling device[9] that Burns co-created.[10] With Burns serving as CEO of the magicJack brand,[3] the Israeli telephone company VocalTec Communications Inc. ("Vocaltec") acquired YMax in 2010.[9] Burns became a director of the resultant magicJack VocalTec Ltd. on December 21, 2010,[1] and is currently the company's chairman.[1] Burns remains involved with various real estate projects,[11] and in 2011 a penthouse in a Manhattan building owned and renovated by Burns was sold for around $18 million.[11][12] Burns founded and remains president of the Donald A. Burns Foundation, Inc.,[2] a non-profit organization which seeks to "promote educational and social institutions." Through the foundation, Burns has donated equipment to schools[5] and supported organizations such as the Gay and Lesbian Leadership Institute and the Palliative & Supportive Care of Nantucket.[6]

Early life and education

Donald A. Burns[5] was born circa 1964.[13][3][14] After attending the University of Maryland,[8] in 1985 he began working in telecommunications at ATX Communications.[1] From 1988 until October 1992 he was director of operations at Mid Atlantic Telecom, Inc. ("Mid Atlantic"), and in October 1992 he began a tenure as Mid Atlantic's chief operating officer and executive vice president.[1] A shareholder in Mid Atlantic, he retired from the company in July 1993 when it was sold,[1] earning about USD$300,000.[13]

Business career

Founding Telco Communications Group, Inc. (1993-1995)

Using the funds he'd earned from the Mid Atlantic sale as his seed funding,[13] in July 1993 he co-founded Telco Communications Group, Inc. ("Telco"), becoming president, secretary,[1] and director.[1] Other seed funding came from Signet Media Capital, which lent $25 million to the startup. Burns ended up owning 23% of Telco's shares, more than any other individual shareholder.[13] During Burns' tenure, the telecommunications company focused on providing long-distance phone service.[2]

Based in Chantilly, Virginia,[15] Telco's business model did not ask customers to switch their primary long-distance providers, instead using "dial-around services" to reach a desired number.[15] With "dial-around services," the company invented[3] and popularized the 10-10 dial-arounds for long-distance calls.[4] As Telco grew in size, it merged with the smaller discount phone company Long Distance Wholesale Club ("LDWC").[13] Partly with its Dial & Save subsidiaries,[6] Telco then gained enough of a market share in the mid-1990s that in some regions it competed with AT&T.[2] The company was also "the only company in the dial-around business that [owned] phone lines and switches."[13]

Telco management and sale (1996-1997)

Burns was appointed Telco's CEO in April 1996, at which point he ceased being secretary[1] and was also appointed vice chairman.[1] Telco first sold stock to the public in August 1996, with Burns making several millions in profit.[13] With revenues of $428.6 million in 1996,[15] by early 1997, Telco employed about 350 people in its direct sales force.[15] According to The Washington Post, the company had also grown to the be the largest company in the "dial-around" long-distance business.[13] In March 1997, Telco spent $170 million purchasing the right to use a national fiber optic network from Advantis, which was a joint venture between IBM and Sears.[15]

Telco was sold to Excel Communications Inc. ("Excel") in 1997 for $1.2-billion[5] in cash and equity.[6] It was reported that when merged, Telco and Excel would "create the nation's fifth-largest long-distance company, with more than 6.3 million customers and annual sales of $2 billion."[13] Burns reportedly earned "about $111 million in cash plus a block of Excel stock worth about $118 million" upon completion of the merger,[13] with Burns afterwards retiring.[3]

YMax and magicJack (2006-2009)

See also: magicJack

Burns and Dan Borislow created YMax Communications Corporation ("YMax")[4] in April 2006 as a communications and equipment service,[7] financing it largely themselves[4] by sharing the payment of $25 million needed to start the company.[3][16] Burns was appointed a YMax director and the company's president in March 2007. He remained president until February 2008, when he was instead appointed chairman of the board, a role he retained until June 2009.[8]

"You could buy the magicJack, select a northern California telephone number, mail the MagicJack to your family member in Scotland and they could have a North American phone number in Scotland and use it like they were next door at home."
— Donald Burns in 2007[17]

YMax's profits come from the production of the magicJack, a small device which can be plugged into a computer's USB port.[9] Burns was hired as magicJack's CEO[3] and co-created the device,[10] which comes with its own selectable phone number and allows making and receiving calls for free[17] in the United States and Canada,[11] with free calls to magicJack devices in other countries.[17] According to Burns, the product is often purchased as a complement to a cell phone in areas of poor cell coverage.[4] The invention of magicJack led to the creation of VoIP, where internet connections are used to connect standard phone lines.[10]

magicJack was extremely cheap compared to competitors, requiring $40 in the first year of service and $20 each year thereafter.[18] In March 2007, Burns and Borislow purchased SJ Labs, Inc. in Solon, Ohio, a competitor that licensed similar software to magicJack.[3] Before a television campaign in January 2008, the company sold less than 1,000 magicJacks per day. By June 2008, the company was selling 8,000-9,000 per day and had roughly 500,000 subscribers in total.[4]

VocalTec Ltd merger (2010-2016)

VocalTec Communications Inc. ("VocalTec"), a telephone company headquartered in Netanya, Israel,[19] acquired YMax in July 2010. Since Burns and other YMax businessmen contributed most of the equity, they retained a large degree of control over the merged business, which kept the "YMax" moniker. VocalTec was a publicly traded company, so YMax went on Nasdaq following the merger.[9] Burns became a director of the newly formed company magicJack VocalTec Ltd. on December 21, 2010.[1] After the merger, magicJack continued to operate as a unique brand, and Burns joined the magicJack board of directors in 2010.[6] In September 2011 the company introduced magicJack Plus, which does not require the use of a computer after its initial online registration and account set-up procedure.[20] Officially appointed chairman of magicJack VocalTec Ltd. on January 1, 2013,[1] Burns remained chairman of magicJack as of 2016, also serving on the company's audit committee.[6]

Real estate career

Involved in various real estate projects, Burns purchased a building in Manhattan[11] on Broome Street in 2004, which he subsequently redeveloped as loft rentals. The original building had been designed by the architect Griffith Thomas and built in 1873, and was designated by the New York City Landmarks Preservation Commission as part of the SoHo-Cast Iron Historic District Extension.[21] After 2008,[5] Burns had the building renovated into high-end condos featuring four full-floor apartments.[21] A penthouse in the building sold for around $18 million in 2011.[11][12]

In 2011, Burns purchased the "Razor" house in La Jolla, California for $14.1 million. The residence was designed by San Diego architectural designer Wallace E. Cunningham,[11] with Burns later opening it up for use as a photo and film shoot venue.[22]

Philanthropy

Burns founded and remains president of the Donald A. Burns Foundation, Inc.[2] Based in Palm Beach, Florida, the philanthropic non-profit organization seeks to "promote educational and social institutions," and has donated equipment to schools in Florida, Massachusetts, and Mississippi.[5] The foundation has also supported the Gay and Lesbian Leadership Institute and the Palliative & Supportive Care of Nantucket,[6] the latter of which is designed to improve the lives of individuals with life-threatening illnesses.[2] The foundation has also supported the Boys & Girls Club of Palm Beach[23] and The Glades Academy, among other organizations.[24]

While he has never held office himself, Burns has involved himself in American politics through donations, largely to the Republican Party and occasionally to Democrats such as John Edwards, as well as to the Gay and Lesbian Victory Fund.[5] In late 2008, he attracted notice in the press for donating significant amounts to Florida Red and Blue, a political action gorup fighting Florida Amendment 2, a ballot measure that sought to ban gay marriage in Florida.[5] Also involved in local issues, in 2016 he donated funds to Palm Beach Residents for Undergrounding, the "first pro-undergrounding PAC formed."[25]

Personal life

Burns was based in West Palm Beach, Florida as of 2008,[5] with a history of summering in Southampton, New York. He also owns a residential compound in Nantucket, Massachusetts, which contains 12 small cottages designed by Jacobsen Architecture, LLC.[26] Burns has commissioned a number of megayachts,[27] at one point also securing partial ownership in a shipyard.[6] First Draw,[28] a yacht purchased by Burns around 2010, was built by Christensen Shipyards, Ltd.[27] and is 120 feet long. Burns commissioned a 160 foot yacht from Christensen Shipyards, LLC in 2012, which was one of the first "US flagged yachts with the capabilities of commercial charter in Europe for up to 12 passengers."[28]

See also

References

  1. 1 2 3 4 5 6 7 8 9 10 11 12 13 "Donald A. Burns". Bloomberg. Retrieved 2016-07-13.
  2. 1 2 3 4 5 6 "Donald Burns". Linkedin. Retrieved 2016-07-13.
  3. 1 2 3 4 5 6 7 8 9 Greenberg, Herb (March 7, 2007). "Going after Vonage, Skype". MarketWatch. Wall Street Journal. Retrieved October 5, 2010.
  4. 1 2 3 4 5 6 7 "Cheap phone service calls customers". Youngstown Vindicator. Associated Press. June 18, 2008. Retrieved October 5, 2010.
  5. 1 2 3 4 5 6 7 8 9 Liberto, Jennifer (October 15, 2008). "Two wealthy Republicans are fueling both sides in the fight over Amendment 2". Tampa Bay. Retrieved 2016-07-13.
  6. 1 2 3 4 5 6 7 8 "About Donald Burns". Donald Burns Official Blog. Retrieved 2016-07-13.
  7. 1 2 "New Businesses". The Providence Journal. ProQuest Archiver. April 6, 2006. Retrieved October 5, 2010.
  8. 1 2 3 "The Magic of Donald Burns". TecheHow. Retrieved 2016-07-13.
  9. 1 2 3 4 "Company Behind MagicJack To Banish Calling Costs". CBS News. Associated Press. August 13, 2010. Retrieved October 5, 2010.
  10. 1 2 3 "The Significance of VoIP Services in Business Relations". PC Tech Magazine. January 13, 2016. Retrieved 2016-07-13.
  11. 1 2 3 4 5 6 "Donald A. Burns Purchased Home For $14.1 Million". 10News. December 23, 2011. Retrieved 2016-07-13.
  12. 1 2 Leung, Lily (December 22, 2011). "Buyer of 'Razor' home in La Jolla identified". The San Diego Union-Tribune. Retrieved 2016-07-13.
  13. 1 2 3 4 5 6 7 8 9 10 Knight, Jerry (June 16, 1997). "Cashing in When Opportunity Knocks". Washington Post. Retrieved 2016-07-13.
  14. ↑ "Company Overview of magicJack VocalTec Ltd.". Bloomberg. May 22, 2016. Retrieved 2016-07-13.
  15. 1 2 3 4 5 Schiesel, Seth (June 7, 1997). "Excel Agrees to Buy Telco for $1 Billion". New York Times. Retrieved 2016-07-13.
  16. ↑ "magicJack VocalTec Communications' CEO Discusses Q2 2012 Results". Retrieved August 22, 2012.
  17. 1 2 3 Hardy, Ian (October 5, 2007). "Gadgets showcased in New York". BBC. Retrieved 2016-07-14.
  18. ↑ Kritsonis, Ted (March 12, 2008). "MagicJack casts fair spell". The Globe and Mail. Retrieved October 5, 2010.
  19. ↑ "VocalTec and YMAX/magicJack Announce Merger". YMAX. July 16, 2010. Retrieved 13 May 2011.
  20. ↑ Furchgott, Roy (September 1, 2011). "Skype Now Wants Your Landline". New York Times.
  21. 1 2 Kershaw, Sarah (November 18, 2010). "SoHo Building Where Heath Ledger Died Is Turned into Condo". The New York Times. Retrieved 2016-07-13.
  22. ↑ "Razor House". therazorhouse.com. Retrieved 2016-07-07.
  23. ↑ "Barefoot on the Beach Raises Over $350K". bgcpbc.org (Boys & Girls Club of Palm Beach). April 24, 2015. Retrieved 2016-07-14.
  24. ↑ "Glades Academy Foundation guests raise $1.1M for two Pahokee charter schools". Palm Beach Daily News. January 27, 2015. Retrieved 2016-07-14.
  25. ↑ Dargan, Michele (March 6, 2016). "Utility PAC reports in: Civic Association gives $20K, who else donated". Palm Beach Daily News. Retrieved 2016-07-14.
  26. ↑ Colman, David (May 31, 2014). "An Ingenious Vacation Compound on the Island of Nantucket". Architectural Digest. Retrieved 2016-07-13.
  27. 1 2 Johnson, Brooks (February 7, 2016). "Christensen Shipyards trying to leave recent troubles in its wake". The Columbian. Retrieved 2016-07-14.
  28. 1 2 "Tonya Lance Luxury Yacht Charter & Superyacht News". Charter World. November 6, 2012. Retrieved 2016-07-14.

External links

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