Amy Sherman had the chance to interview Eric Stumberg, CEO of Tengo Internet. He founded the company in 2002 and today it has 30 employees. Eric’s company provides commercial grade, outdoor Wi-Fi services. Tengo Internet works with the owners of RV parks, camp grounds, and other outdoor recreational facilities to provide consistent wi-fi for the travelers using their facility and enable business operations automation. Tengo is headquartered in Austin, TX and operates a network operations and call center in San Antonio.
Eric participated alongside his vocational pastor and another businessman from Christ Church Austin in the Vocation Learning Community hosted last year by Flourish San Diego. Amy talked with Eric about his life and work, and experience in the Learning Community.
ALS (Amy Sherman): Thanks for taking time to talk today, Eric. I’d like to start by commending you for the intentionality you display in operating your business. That’s something I was easily able to pick up on as I got to know you through the Flourish San Diego Learning Community. And one of the examples of that intentionality had to do with your decision in September 2015 to move into new office space for TengoInternet. You’ve said that that decision was influenced by a commitment to the biblical concept of hospitality. Can you explain what you mean?
ES (Eric Stumberg): My wife Keri and I have been able to offer hospitality in our home because we’ve had an extra room. And that’s been a real blessing for us personally. So when I was considering the office move, I wanted to take seriously the concept of gleaning from the Old Testament—you know, leaving some margin—and discern how we could apply that principle in our office space. We wanted to think about those who might need office space so we could offer hospitality there. And honestly this was a big step for me because most of the time with my business I’ve been pretty frugal around space—you know, how many people can you cram into a space! But this time around, I was trying to ask: How can we provide a more beautiful space for our employees and also have something more that we could offer to others? So we have a co-working space approach.
ALS: Tell me what that looks like.
ES: When we designed the office there were seven private offices, two conference rooms and an open co-working space. And we designated two of the private offices to be for someone else. It was kind of like a tithe. One of the offices we lease at a below-market rate to a nonprofit organization called Allies Against Slavery, which fights sex trafficking. It’s been pretty neat to have this company that’s about offering hospitality to the modern-day traveler—you know, internet while you’re on the go—and a nonprofit that’s engaged in fighting modern-day international trafficking sharing the same space. It’s been great for those two cultures to intersect.
ALS: And who uses the other office?
ES: That one we have shared with a church planter named Father Peter Coehlo. He is the Rector heading up Church of the Cross, a new Anglican parish supported by my own congregation. And he was just working from home and coffee houses and we thought he could be blessed by having an office and a place for his many books, which his wife did not want to bless their home. Also, he and my friend from Allies Against Slavery can use our conference space and the co-working areas.
ALS: I’ve heard you say that this office arrangement has been a win-win. It’s pretty clear what the win is for someone like Father C0ehlo, but what’s in it for you and your company?
ES: The win for the company has to do with the fact that work is sacred and it’s a visible sacrifice of space. And so having a priest there in the office is this really meaningful presence. It’s a powerful symbol. Not all of our people are Christian, so I think it’s also demystifying for them to see a collared priest come into the office—or a priest who’s coming in wearing shorts and T-shirt. Peter has developed pastoral relationships here informally with our employees and that’s been really wonderful. And Peter actually conducts a weekly noon-day prayer service for us at the office. It’s open to anyone who wants to come. For me, it reminds me that this place—Tengo’s offices—is one of God’s sanctuaries where I get to practice my priesthood.
ALS: In addition to thinking through your office design intentionally, I’ve also appreciated the careful way you’ve considered the whole question of employee care—how to treat your people fairly and how to help them thrive. And I know that for you this has involved a very deliberate process of thinking through the compensation of each one of your employees at Tengo Internet.
ES: Compensation is an important topic for a lot of reasons. And in the private sector, there’s a lot of pressure to pay people the minimum that you can pay them; whatever the market is. But compensation is also a theological issue. Everything we do is based on our theology, and so compensation is too. We started paying people full benefits four years ago, because I didn’t want people to be unable to get medical care. That was baseline for me. If you’re sick, you should have the opportunity to get healthy. And in 2014, we did a compensation benchmarking to make sure we were paying a living wage. If we were going to take their full day’s work, then they should have a full day’s wage to live.
ALS: And you did that bench-marking again in 2016, right?
ES: Yes. But this time we looked at every single job classification and we went to each employee to explain the philosophy of our compensation, so we could find out whether and how they valued that.
ALS: What did that process look like?
ES: Compensation is an expression of a value. We looked at the market value of each job in the company. We met with every single employee and walked through what their compensation was, and what the market was, where they fit. We explained what people’s base comp was, what the monetary value of their benefits was, and we talked about their professional growth opportunities and what their profit-share was when the company was successful. We also talked about the work flexibility that we could give when people needed to take time off for family, or to get refreshed, or maybe to go to school. It was great for me to have to articulate what the philosophy of our compensation package was and for them to really see how we valued them in their role. It created some really good conversations.
ALS: This very intentional process of bench-marking compensation has moved you to think further about turning your company into an employee-owned company over the next few years. Can you tell me more about that?
ES: Like everyone, we ask our employees to act like owners. We want them to. But they’re not, right? And that process of sitting down one-on-one with them really exposed that in some cases. And so that just really made me realize that if I want my employees to act like owners then maybe they need to be owners.
For me this has also been about my exit strategy. For me, the succession of the company is based on creating new owners, not based on selling the company. I’d like to build a business that can keep on going beyond me. So starting next year we’ll be doing the planning towards becoming an ESOP. There’s logistics questions involved. Do you give ownership to people? Do you allow them to buy shares of ownership? If so, do you subsidize that or not? Those of sorts of questions.
ALS: Are you thinking of starting up a new company once you leave TengoInternet? Do you see yourself as “serial entrepreneur?”
ES: I’m not sure. I know that I really get excited about transformational ideas, solutions and relationships with people. But I still feel called to TengoInternet and I’m not sure I’m called to start fifty new companies! I have been walking alongside some amazing entrepreneurs and participating in a social impact institution and what am I seeing is that I can befriend a number of men and women who are starting new things and encourage them and maybe disciple them and try to share with them the knowledge that I’ve gained along the way.
ALS: So this is a season of mentoring for you, it sounds like.
ES: Yes. I’m almost 50 now and I’ve been thinking a lot about the stewardship of my influence. I’m trying to be more intentional about that. As I get to know these entrepreneurs, I’m listening for where the gaps are. If I’m able to fill one, that’s great. If not, maybe I can get them connected or directly help. It’s all just been really fun. Because they’re just really excited about the possibilities of business doing good, and business solving problems and integrating this as part of their call. So I am passionate about starting new things, but I maybe don’t have to do all that myself!
ALS: I don’t know you real well, but I see that shepherding gift in you, so this resonates with me that you’d be involved like this, in this kind of role in the latter half of your life.
ES: My church has 300 entrepreneurs or ambassadors. And if they are secure in their identity and in their gifting and calling, and you send them out, you will change a lot in the society because all of their work will be advancing the kingdom. That’s why the renewal of the church is so critical. If we just send out our people really well, with vision, with holiness and wholeness , there’s almost no telling what would happen.
ALS: A mentor’s credibility only goes so far as his own example. And what I love is you’re really trying to practice what you preach. There at Tengo you’re trying to discern what this looks like, what it means to advance the common good, what you can and can’t do, what you can do that might look differently from the rest of the market, and so forth. Like with the living wage. I find myself on the one hand really passionate that workers make enough to live on, but on the other hand, don’t want the policy world determining a “living wage” that puts a business out of business.
ES: Yeah, it’s a tricky conversation. Should the living wage be voluntarily implemented because it’s the right thing to do? Should it be mandated by the government? I know I’m feeling a lot of mandates already in our business because of the regulatory climate and the mandates have a lot of unintended and negative consequences.
ALS: Before you did the bench-marking process, did you complete a financial analysis to discern whether the company could actually afford to pay everyone a “living wage”? I mean, did you have to sit down and figure out if you were going to go bankrupt if you tried to do this?
ES: Well, we looked at every category of our employees. Some of them are at the call center level. And the market pays those folks $9 an hour. But in our locale—San Antonio—a living wage is $11, if you add health care benefits. So that was $4000 per person more per year, and with us having 8 of those people, that was $32,000 that we just had to take out of our margin. So we had to think about whether we’re just accepting lower profitability, but also whether we might expect higher productivity. In this instance, it’s really my bottom line we’re talking about as the owner. So it’ll be interesting, as we move to an employee-owned model, what the thinking will be on these issues. But for me, I just personally could not operate a company that wasn’t providing people the health care benefits they needed and the salary they needed to live on. I was committed to figuring out a way to make that work.
ALS: So that makes me wonder. Is this something that the Christian business owner can do from the get-go, or is there something of a sequencing issue? You know—where you’re thinking to yourself, ‘Well, in the early years of the company we probably won’t be making much so it might be difficult to pay a living wage. That’s something we’ll aspire to down the road when we are profitable.’
ES: So that’s where I think topics like your variable compensation and your flex time and the like come into play. In some companies where everyone is a founding owner, they are often willing to trade off some monetary compensation for some other value—maybe it’s stock or options or deferred compensation. I do think it’s an evolution. You might have to start with a base rate that is below living wage but you have some sort of variable compensation plan in which, if the company hits its numbers, then that takes you over (to a higher salary). So it’s a value to say that we want to pay our people as much as we can, but the operating structure of the business may need to express that in different ways at different times. It’s process and there’s sometimes tensions. I don’t think there’s a cookie-cutter response for everyone. Everyone has to really think about it and be really intentional in their context.
ALS: I love how you think theologically about being a business person. Your understanding that compensation is a theological issue is a great case in point. Where did you learn to think like this?
ES: It’s been a process. I do remember coming back from one of the Learning Community retreats and thinking: If the earth is the Lord’s and everything in it; if everything we do is an offering to God, and everything we do is in response to something that God has done, then literally every decision we make is a theological decision, right? Do I say hi to that person or not? Do I get up now or later? When I eat breakfast, am I eating eggs that are from organic, free-range chickens—
ALS: Happy chickens!
ES: Right! Happy chickens or oppressed chickens? So I just really came to realize that every business decision is a theological one. What you pay people, what your HR policies are, those are theological matters. How do you integrate justice into what you do every day? If you have an employment policy that says you have to have a college degree to get a job, you’ve just written off all these people that don’t have college degrees. If you have a policy that says you can’t be an ex-offender, then you’ve just written off that person from getting a job. And what prices you charge people—that’s a theological question. I remember what Don Flow in the ReFrame series said. He owns an auto dealership and they found research that said that white, well-educated people negotiated better than others. They got better prices than others. And he didn’t want to be a part of that. For him, that was wrong.
Everything flows from values. Either ones you’re conscious of or ones you’re not. As Rev Dr. Bruce Baker (from Seattle Pacific University) has taught, there’s good theology and there’s bad theology — there’s no neutral. If your business isn’t consciously operating from a good theology; if you’re not thinking about God and His laws and His heart; then you’re operating from a bad theology. It’s binary. Is your business going to reflect Kingdom values or not? It’s hard. But we’ve just got to keep trying. And you need people walking alongside you in this, because it is hard.
ALS: We’re back to mentoring again.
ES: Yes. It’s really about the relationships. I’ve been mentoring four entrepreneurs. One of the things we did was have three of them and their spouses in our home and we went through the ReFrame series together. And real-life stuff comes up. One of the guys had a big problem with a co-founder who wanted to do something that was ethically questionable. In the end, my friend had to quit because he just wasn’t comfortable with what was being done. And it was really costly for him personally- broken trust, job loss, back-salary, deferred compensation and the loss of business idea itself. So we’ve been talking about everything from what is justice and how do you lament. And we need to be in these relationships with one another to help get through things like this on this side of the New Heaven and Earth.