Steven Mihaylo: The $3 Million Man

Q & A With Alumnus, Donor and Inter-Tel CEO Steven Mihaylo

Interview By Pamela McLaren '79
Images By Jeanine Hill

When Steven Mihaylo graduated from Cal State Fullerton in 1969, he left with a diploma and a dream. He had spent the last two years working full time and cramming every spare minute with schoolwork to complete his business degree. Although he had been offered an accounting job, he dreamed of making his own future with a company of his own.

Business Alumnus Gives $3 Million To College of Business & Economics

He moved to Phoenix and began his business venture selling intercoms and eventually, telephone systems for small and medium-sized businesses. By 1975, his company, Inter-Tel, had a sales revenue of $1 million. Five years later, revenue had grown to $10.3 million. Despite economic downturns, Inter-Tel continued to grow. This year, with the January rollout of its latest phone system platform, Mihaylo expects the company to reach $500 million in sales.

Thirty-plus years after choosing to follow a dream rather than taking a position in an accounting firm, Mihaylo has seen Inter-Tel become one of the world’s largest providers of business telephone systems.

Q:	When you started Inter-Tel, you were entering business with very little other than some financial support from a previous employer [who was an early partner in the company] and your own determination to succeed. With your entry into telephone systems, you literally risked everything on a warehouse of equipment that became outdated even before you sold it. Why do you think you were successful?

A:	Before I went to Cal State Fullerton, I served in the military and then I worked at a large company. I knew that I needed skill sets to jump ahead in business. I knew that in a large organization, it could take a long time to get established. With my degree and the experience I had working in the technical field and in sales, I felt that I had all the ingredients to be an entrepreneur. I did what I did because I couldn’t not do it. And then too, we never followed the rest of the pack. When our competitors were emphasizing technology, we emphasized solutions. There have been four times in the history of Inter-Tel when we bet the ranch: on the Key-Lux, our first phone system; on the rollout of the SPK product, a software-controlled system; when we gambled on using C++ before anyone else was writing in that code for telecommunications; and then at the introduction of a new platform in 2000, just as telecommunications went into a nose dive. What I found is that when we had problems, we gained strength; when everyone else was cutting back in research and development, we grew. I’ve been blessed.… I believe in the saying “No man is an island” by John Donne, which I think means that you can’t do it alone. I’ve brought in people a lot smarter than me and I think delegation is extremely important.

Q:	You also value loyalty. Only once in the company’s history have you had to lay off employees (in 1983 following a loss of $1.8 million).

A:	It’s important to take care of your employees. Layoffs disrupt lives. We do everything to run the most efficient operation possible. It means we work hard, but it also means that during the slow times, we don’t have to lay off anyone. Business is cyclical. When times are good, you have to think about the recessions and how to deal with those down times. We think of that all the time. Then too, I believe in teaching and mentoring and we do that throughout our operation. I look forward to being able to do that as part of my involvement with Cal State Fullerton.

Q:	If you had an opportunity to share your experiences with students, what would you say to them?

A:	Never to give up, never lose faith. You need a plan and you need to execute it. Push through your fears – don’t let them keep you from attempting to achieve your goals. Too many people are so afraid of failure they never attempt anything. It’s good to always be a little afraid – fear is a great motivator. All my life, everything that I did, I believe led to starting my own company and working to get it where it is. It was an evolutionary type of thing, not a sudden epiphany. I’ve always thought having some work background, in addition to a college education, is advantageous. To me it is important that many of Cal State Fullerton’s students are a bit older and already working – it introduces them to the reality of the business world and shows the importance, the value, of an education.

Q:	Last year, you donated $3 million to a new College of Business and Economics building that has been named in your honor. Was there a special reason for doing that?

A:	I think that it’s important to give back. For 25 or 30 years I’ve been involved with Junior Achievement and I’ve established a fund at my alma mater, Big Bear High. I encourage all alums to do something. There were dedicated people who helped us to get ahead, now it’s our turn. It doesn’t have to be big. Just think – Cal State Fullerton has about 150,000 alumni. If everyone gave $100 a year – that’s about $8 a month – if we all committed to that, we could raise an endowment for the university of nearly $15 million, every year! It’s so easy to say, “I’m going to get involved.” But you need to do something, write a check, meet with a dean. Nothing will happen until people do something. The strength of our country is in its diversity. We need to guarantee all of our students have the tools they need to be successful, and in return, help keep our country successful.