Report from the Field: Ken Berger
Ken Berger is a regular and well-informed correspondent on issues Wi-Fi-related. He's a consultant (LogX Technologies) and an active member of BAWUG (Bay Area Wireless Users Group). In what is more or less a first for this blog, he sent in a comprehensive guest report:
The Wireless Ventures conference overall was terrific, if for no other reason than it had a large percentage of existing U.S. wireless startups and interested venture investors all together in the same place. Richard Shaffer (VentureWire's editor-in-chief) has got to be about the best moderator I've ever seen, with a soothing yet authoritative orator's voice. The timing on the presentations was efficient -- about 10 different rooms in close reach, each with a company's CEO madly trying to compel his company's overview in the 20 minutes allotted, strictly enforced. The downside was that there was little or no time to get questions asked and answered, this particularly frustrating because many of the presentations left gaping holes in the pitch's substance.
Buzz. I read another blog or two about the conference talking about the sense of the Next Big Thing (NBT). However, I could, for the most part, largely sense an air of desperation. It's tough out there, and you can immediately feel it in here. Most CEO's seemed to be grasping for credibility -- you could tell that they know about the unknowns they face even as their words paint a rosy picture. The mood is not quite futile, but it clearly isn't fun, and very few presentations are punctuated with any humor or jokes. Even smiles in the hallways seem to be scarce compared to at other conferences, even venture-oriented ones. The attendee ends each session faced with a card on which to place their vote (from 1 to 10) on the company's prospects. I spoke to few people who put more than a 5 on any of their cards.
The Amway of Wireless? I found Joltage's presentation notable here. They stated they will neither own nor operate any of the system's AP's (access points), and that their business model rests largely on utilizing the AP's of private residences and businesses-- folks like you and me. So there's nothing stopping a house husband from hosting using Win95 over a dialup AOL connection, and even most advanced users are likely not going to have nearly the right equipment to scale for more than a couple simultaneous users. This is a not un-fathomable situation if the service does take off and the host lives, say, across the street from a Starbucks on 34th Street in Manhattan. Hell, I've used a Wi-Fi connection across the street from a souped-up host AP (not a Joltage one) with a high-powered antenna in San Francisco and the signal cut every time the shiny steel MUNI car came past!
I had time at the end of the session to bring up this serious QoS (Quality of Service) issue, where folks would get inspired to sign up for this mult-level-marketing (MLM)-style program (that phrasing in this part of my comment went unopposed), and then not necessarily be able to keep up their QoS, thus compromising the users' experience of the system in general. The question was deferred to the tech guy, who sprang up responding that substantial monitoring would take place, and centralized support would "talk the offending AP owner through resolution." Hmmm.
In my opinion, Joltage and Boingo may have something-- namely marketing -- but what they have for now is only a piece of the puzzle, albeit an essential piece. Other companies presenting here, SkyPilot, MeshNetworks, and Sputnik (I love Sputnik's term "rogue AP detection" -- sounds like something from The Terminator) have another piece of the puzzle. If that same AP goes down, just re-route to find alternative AP's. Perhaps the combination of these pieces is necessary for either model-piece company to survive, although I've run this thought by a few VC's and they feel that the economics may not pencil out. But before we lose faith, did you read this? Nicholas Negroponte has joined Joltage's board.
Out in the hallway, I ran into a prominent VC to whom I pitched an idea over a year ago. It was pretty much the same concept as Joltage, then later with a variation that more resembled Boingo, and he winced at the time. But he's now bullish on Boingo, saying that "If you're gonna do something like that, you better have a big bullhorn, and Sky's got one!" Glenn's aside: Ever since Sky told me about Boingo, I've said if it was anyone but him, they'd be wrestling with bodies in the dotcom graveyard. As it is, Sky's entrance validates the field initially, but Boingo still has to prove itself.
HereUare. This one really left me incredulous. The entire presentation preached to what should seem an obvious choir the merits and revolutionary aspects of hotspot networking and 802.11. But almost nothing was said about HereUare's specific place and future in the space. At the end, with no time left for questions, I muttered, "OK, but what do YOU do?" At least 4 people laughed aloud, thinking that they were the only one(s) thinking that as well.
WiFi Metro. Similar feel to the HereUare presentation. And I wanted to ask, "This didn't work for AirWave, tell us why it will work for you." I hope it does. Glenn's aside: One of WiFi Metro's advantage is that they took over spots and service without having wasted the sums of money of their predecessor; that's an advantage they have to maximize.
Unexpected winners: Leap Wireless and Vocera. These two were not named in the concluding session's top 10 but drew surprise interest. Leap Wireless did a lunchtime presentation and pretty much blew my socks off. Their innovative program is called 'Cricket', sort of a Southwest Airlines play for the cellphone industry. Nothing fancy (at least for the moment): just offer voice, unlimited minutes, about $32/month fixed, paid in advance. Pick a niche, including young folks, families. Only do it in secondary markets (Buffalo, Merced, Chattanooga, etc). Keep the device lineup small ("If you don't watch it, devices will kill you," was a quote from an ex-CellularOne exec the speaker mentioned), sell them in supermarkets and shopping malls. Brilliant. They will however need some serious additional investment in the near future (they've been public for a few years -- it's not just startups here). I'm tempted to reach for my checkbook.
Vocera makes a cool gadget that you can wear in your shirt pocket or on a necklace (think: doctor in a hospital or worker in a warehouse). When you talk, the mic picks up your voice and transmits it VOIP to the nearest 802.11b receiver, through the building's or area's system and broadcast out thus allowing communication walkie-talkie style to other hospital staff. I'm buying the CEO's story that this is highly useful today, and that hospitals and other in-building implementations may well embrace the product.
Blackburied? Eric Benhamou, Palm CEO, and Richard Shaffer had a little one-on-one chat, punctuated by a point that stuck with me. The tidbit stems from a data point whereby Research in Motion has sold a total of only 300,000 Blackberrys. Is this possible?? It sometimes seems like there's that many active on any business day in VC-rich Menlo Park alone. If the number really is that low, then the point being made on stage seems reasonable: questioning the value in going after this market after all. Shaffer made a poke about the i705's underwhelm; perhaps this point mutates the i705 fiasco into sour grapes. Glenn's aside: a reader added some detail. The 300K figure includes over units that RIM supplies service to. Worldwide, approximately 1.4 million Blackberrys are in use under different brands and via different service providers.
Stop here (concluding session). I really felt for the four panelists up there. No one wanted to be too hard on any company or technology; no one seemed to want to rave much either. There was a 10-most-likely-to-succeed listing, partly calculated from the voting cards turned in from the sessions. Actually, you really can stop reading here if you want, the following is just a few random notes from the closing session:
WLAN, 802.11b/a/g (I actually think I'm hearing it now referred to as just "bag" -- Glenn's aside: Alert Wired's Jargon Watch) has clearly the most interest, and the majority of the companies here are centered around it. The panelists seemed to agree that it's the near-term winner, though only one really spoke up for the hotspot companies, and he admitted that their business models were 'troubling'. Europe will want SIM-based WLAN cards, US doesn't and won't care. T-Mobile (VoiceStream's rebranded US name taken from their European service) will at some point run with their U.S. hotspot expansion. Wireless is no longer 3G; 3G dead in U.S. for at least three years. Were you planning to start a company to make 802.11 chips? Window is now closed! Bermai interesting in this area. Any exits will be overwhelmingly acquisitions, IPO's unlikely for most (any?) of these companies in the foreseeable future. Glenn's asides: See my analysis yesterday on 3G's future; day before on Bermai and Marvell.
Some of the winners:
Airvana: System to enable carriers to do something better. Doing well in Asia.
Cyneta: Data acceleration/optimization.
Rosum: Challenges conventional wisdom by using television signals for LBS (location-based services). TV signals are 1,000 times more powerful than the typical cellphone signal. But problems exist with the infrastructure.
Netmotion Wireless: LAN/WAN integration.
Mesh Networks: (Gee, what do they do??) Great idea, although will take a couple more years to get it right. Originates from military uses. Good solution in places where there are no alternatives.
Other News for 5/3/2002
Shel Israel files a summary of the Wireless Ventures event: he emailed the article out, but the link isn't yet on the site for it. Watch for it.
Helen, Sweetheart of the Internet, kipes some Wi-Fi: this comic strip is close to my heart, and the cartoonist is a real geek. Today, Helen acts like the rest of us (myself included) and steals a little bandwidth on a bench.
More on Best Buy's wireless cash register problems: the registers were used only when normal lines were overwhelmed. Still, who turned off the security?
Coming early next week: An overview of Proxim's latest technology, the potential for HomeRF, and other tidbits gleaned from a lunch with Ken Haase, Proxim's Director of Product Marketing, and the general manager of the HomeRF Working Group.