Faster than a speeding bullet! Or at least, faster than Time Warner. Google’s new 1 Gbps network so far appears to be more than 35 times faster for downloads than average U.S. broadband speeds, but Google’s ambition is to provide 100 times faster speeds, especially to homes and small offices where entrepreneurs are creating start-up companies. READ MORE
Southern California-based Aquatic Fitness Concepts often finds potential customers scratching their heads and wondering just how the company fits its 16-foot by 8-foot swim spas into backyards. “It’s surprisingly easy using a crane, but everyone is terrified of and fascinated by the process,’ explains Paul Roberts of West Coast Marketing, whose company handles marketing for Aquatic Fitness Concepts. “So, John Trzcinka, the owner, has started using his Flip camera to film these crane installations. It’s quite something to see.” The video is posted on Aquatic Fitness Concepts’ website, and potential clients are reassured — all for the cost of an inexpensive, hand-held video camcorder. Small businesses are leveraging video The proliferation of video across the Internet includes a multitude of business applications. Nimble, pocket-sized video cameras such as the Flip and the Kodak Zi line, coupled with consumer expectations about online video quality, are changing the ability of small businesses to compete with far larger companies, says author and analyst Scott Steinberg, who publishes the gadget/tech website DigitalTrends.com. “This is a potential game-changer,’ says Steinberg. “It used to be that you had to have thousands of dollars in video equipment to shoot something that looked semi-professional. All you need now is a good idea, a strong opinion and some inexpensive hardware.” Users say these factors explain the pocket video cameras’ appeal: • cost• portability• ease of use• ease of uploading and editing video Since the cameras are easier to use, business owners are more likely to exercise a little creativity and shoot video more often. The drawbacks are relatively minor and include lighting, occasional sound quality issues (the Flip lacks a jack for an external microphone) and the lack of a professional producer’s eye. The tradeoffs are well worth it in the age of online video says Andon Carling of PilmerPR, a Utah firm that specializes in public relations for small- to medium-sized businesses. “Some experts have calculated that TV-quality video can cost $2,000 a minute. The same minute with a Flip camera would cost a small fraction of the price,’ Carling says. “Furthermore, online viewers may not trust a high-quality, production-studio film as much as they would a grass-roots ‘man on the street’ production. From a public relations standpoint, a shaky picture adds a level of sincerity.” Five ways pocket video improves business Here are five easy ways you can put a pocket-sized video camera and that man-on-the-street sincerity to work: 1. Use video to raise your profile. Use a Flip to create simple instructional videos or to establish your expertise in your field, advises Steinberg. Video also raises your SEO profile. For less than $300 a month, Fliqz’ SearchSuccess offers a platform to manage video on your site and a suite of tools for submission to search engines, then tracking. Jason McAninch, who owns J-TEK, a small computer consulting firm in a Kansas City, Kan., suburb, says his videos are enabling him to brand his business. He has begun posting computer tips and tricks in a series of videos he calls TEK Talk. “I’ve had some clients call and say that it looks like a professional TV series,’ he says. “I can see this definitely being a powerful business tool for anyone.” 2. Create authentic testimonials. Mikey Moran, founder and CEO of Thai food brand Curry Simple, uses his Flip to ask customers what they think of his products, which include sauces made in Thailand and sold in the United States in stores such as Whole Foods. “The Flip works great for testimonials because of its small size,’ he says. “The smaller video cameras seem to be less intimidating for customers. People tend to freeze up with larger cameras but not with the cute, hand-sized Flip.” Moran has abandoned his two “prosumer” video cameras that cost $2,000 each. His Flip Mino HD was $200. 3. Provide quick feedback. Video can offer you feedback on how a client is using a product or a problem a client has in the field. It also allows you a way to demonstrate a point to a client. Maine-based pet behavior consultant George Quinlan uses his Flip Mino to record the behavior of both dogs and their owners. 4. Go behind the scenes. Create more interest in your business by telling your story. Show how a product is made or document the progress of a project. Don’t feel comfortable producing the video from start to finish? Companies such as Pixability will send you a Flip, then take your video and edit and package it with music, titles and logo. 5. Enhance news releases. It’s better to show than tell when it comes to new products, events or developments. Pyxl, a Knoxville, Tenn., marketing firm, mails Flip cameras to its clients when they have news to share. The clients shoot brief videos, return the cameras and Pyxl handles the videos, embedding them in online versions of news releases and social media releases. “You don’t need a production studio, you don’t need a crew, you don’t need a catering tray,’ says Steinberg. “The inexpensive budget digital cameras are a godsend when it comes to grassroots and viral marketing.”
Southern California-based Aquatic Fitness Concepts often finds potential customers scratching their heads and wondering just how the company fits its 16-foot by 8-foot swim spas into backyards. “It’s surprisingly easy using a crane, but everyone is terrified of and fascinated by the process,’ explains Paul Roberts of West Coast Marketing, whose company handles marketing for Aquatic Fitness Concepts. “So, John Trzcinka, the owner, has started using his Flip camera to film these crane installations. It’s quite something to see.” The video is posted on Aquatic Fitness Concepts’ website, and potential clients are reassured — all for the cost of an inexpensive, hand-held video camcorder. Small businesses are leveraging video The proliferation of video across the Internet includes a multitude of business applications. Nimble, pocket-sized video cameras such as the Flip and the Kodak Zi line, coupled with consumer expectations about online video quality, are changing the ability of small businesses to compete with far larger companies, says author and analyst Scott Steinberg, who publishes the gadget/tech website DigitalTrends.com. “This is a potential game-changer,’ says Steinberg. “It used to be that you had to have thousands of dollars in video equipment to shoot something that looked semi-professional. All you need now is a good idea, a strong opinion and some inexpensive hardware.” Users say these factors explain the pocket video cameras’ appeal: • cost• portability• ease of use• ease of uploading and editing video Since the cameras are easier to use, business owners are more likely to exercise a little creativity and shoot video more often. The drawbacks are relatively minor and include lighting, occasional sound quality issues (the Flip lacks a jack for an external microphone) and the lack of a professional producer’s eye. The tradeoffs are well worth it in the age of online video says Andon Carling of PilmerPR, a Utah firm that specializes in public relations for small- to medium-sized businesses. “Some experts have calculated that TV-quality video can cost $2,000 a minute. The same minute with a Flip camera would cost a small fraction of the price,’ Carling says. “Furthermore, online viewers may not trust a high-quality, production-studio film as much as they would a grass-roots ‘man on the street’ production. From a public relations standpoint, a shaky picture adds a level of sincerity.” Five ways pocket video improves business Here are five easy ways you can put a pocket-sized video camera and that man-on-the-street sincerity to work: 1. Use video to raise your profile. Use a Flip to create simple instructional videos or to establish your expertise in your field, advises Steinberg. Video also raises your SEO profile. For less than $300 a month, Fliqz’ SearchSuccess offers a platform to manage video on your site and a suite of tools for submission to search engines, then tracking. Jason McAninch, who owns J-TEK, a small computer consulting firm in a Kansas City, Kan., suburb, says his videos are enabling him to brand his business. He has begun posting computer tips and tricks in a series of videos he calls TEK Talk. “I’ve had some clients call and say that it looks like a professional TV series,’ he says. “I can see this definitely being a powerful business tool for anyone.” 2. Create authentic testimonials. Mikey Moran, founder and CEO of Thai food brand Curry Simple, uses his Flip to ask customers what they think of his products, which include sauces made in Thailand and sold in the United States in stores such as Whole Foods. “The Flip works great for testimonials because of its small size,’ he says. “The smaller video cameras seem to be less intimidating for customers. People tend to freeze up with larger cameras but not with the cute, hand-sized Flip.” Moran has abandoned his two “prosumer” video cameras that cost $2,000 each. His Flip Mino HD was $200. 3. Provide quick feedback. Video can offer you feedback on how a client is using a product or a problem a client has in the field. It also allows you a way to demonstrate a point to a client. Maine-based pet behavior consultant George Quinlan uses his Flip Mino to record the behavior of both dogs and their owners. 4. Go behind the scenes. Create more interest in your business by telling your story. Show how a product is made or document the progress of a project. Don’t feel comfortable producing the video from start to finish? Companies such as Pixability will send you a Flip, then take your video and edit and package it with music, titles and logo. 5. Enhance news releases. It’s better to show than tell when it comes to new products, events or developments. Pyxl, a Knoxville, Tenn., marketing firm, mails Flip cameras to its clients when they have news to share. The clients shoot brief videos, return the cameras and Pyxl handles the videos, embedding them in online versions of news releases and social media releases. “You don’t need a production studio, you don’t need a crew, you don’t need a catering tray,’ says Steinberg. “The inexpensive budget digital cameras are a godsend when it comes to grassroots and viral marketing.”
NewsCast, a British photojournalism company that specializes in photography syndication and online image libraries, has one less headache to worry about in its Manhattan bureau. Uploading and downloading images, a task that requires a lot of extra bandwidth due to the size of the files, has become a lot easier over the last year since the company switched to Wi-MAX to connect to the Internet. Wi-MAX — a loose acronym for Worldwide Interoperability for Microwave Access — is a telecommunications industry standard that can provide wireless connectivity over long distances. A related technology, Wi-Fi operates within a much smaller range. The standard is roughly divided into two solutions; Mobile Wi-MAX and fixed Wi-MAX. NewsCast uses fixed Wi-MAX as its broadband provider. “It’s the greatest thing since the invention of white bread,” says Jim Sulley, NewsCast’s director of photography. Before, NewsCast had a T-1 line that cost $800 a month for 1.5 megabits per second (Mbps) of bandwidth and the service was riddled with technical difficulties disrupting the flow of business. “It was that last mile that was killing us. There were so many problems with the T-1 line. I couldn’t be happier with WiMAX,” Sulley says. “It’s much more reliable. It’s faster. And the cost is much lower. We’re on the ‘Five for Five’ plan. We get up to 5 mbps for $500 a month.” Sulley says his business often needs that extra burst of bandwidth due to the nature of what they do; they move large numbers of image files online. Does it sound too good to be true? If your business is located in one of the major metropolitan areas in the country where fixed Wi-MAX is available (New York City, Chicago, and San Francisco, to name a few), then this technology can be a viable alternative to other forms of Internet service, such as DSL, Cable, or T-1 lines. Otherwise, you may have to wait. Wi-MAX: sooner or later “Wi-MAX is extremely limited in the United States right now and that’s not likely to change anytime soon. It may have some effect by 2010. Mainly it will compete against that last mile of DSL and Cable typically in suburbia where they still aren’t fully rolled out,” says William Clark, a research vice president from Gartner. Mark Tauschek, a senior research analyst from Info-Tech, a research firm based in Ontario, Canada, is more optimistic. He agrees the real rollout won’t happen until 2010, but does believe 2008 will be a big year for Wi-MAX. “There are a few things coming together this year that are going to make Wi-MAX ubiquitous,” says Tauschek, who points out the following: Sprint is committed to Wi-MAX.Sprint has already committed itself to the 2.5 GHz spectrum with the FCC, with the understanding it would be used for WiMAX. So despite recent headlines of Sprint’s delayed deal with Clearwire (the other company heavily committed to creating a nationwide Wi-MAX network in the United States), upheavals in upper management, reports of expected layoffs and even the possibility of moving its corporate headquarters back to Kansas from Virginia; don’t count out Sprint’s long term commitment to Wi-MAX. Industry support for Wi-MAX. By mid-year, laptops will be shipping out with Intel chip sets that support Wi-MAX. Competitive pricing. It’s an industry standard, which means no royalties. “It also makes it very cookie cutter to stamp out in volume. Prices will drop fast,” points out Tauschek. From Sulley’s story, it’s clear it’s already beating out T-1 lines handily in pricing. A technology that’s worth the wait According to Maravedas, a telecom research company based in Montreal, Canada, there are some 500,000 Wi-MAX users in the United States right now. Maravedas predicts that number will grow to 10 million by 2013. Those figures exclude the Sprint deal, which if it goes through would mean a coast-to-coast Wi-MAX network available to 100 million users. In addition to competitive pricing, here are some other possible advantages to using Wi-MAX as a fixed broadband provider. Covering the last mile — and 69 other miles. Wi-MAX carries at a range as far as 70 miles. Critics complain the signal weakens the farther out it goes and is really optimal up to about 10 miles. Even so, as a broadband solution it would be advantageous for businesses divided among several floors in one building, across a corporate park of buildings, or connecting employees who live in relative close proximity to the office. Here, there and everywhere worldwide.Wi-MAX has already hit critical mass in some countries and is quickly gaining steam in others. Eighty percent of Canadians have access to Wi-MAX now. Gartner predicts there will 48 million Wi-MAX connections globally by 2010. For the overseas business traveler, a universal standard across borders for connectivity could make life a lot easier on the road. Positive response where deployed.Sulley’s story about his experience switching to Wi-MAX is just one man’s opinion. But here are some numbers that indicate he’s not alone in his satisfaction with his new broadband choice. Clearwire serves the town of Kirkland, Wash., a suburb of Seattle and only a couple of miles from Microsoft’s Redmond, Wash. corporate headquarters. It has picked up no less than 90,000 subscribers in just the past six months. Drawbacks to Wi-MAX Clearly the biggest drawback to Wi-MAX right now is availability. But there are others to consider: If it isn’t broken, don’t fix it.Very few businesses are without a broadband option. For the most part DSL and cable lines have been dropped down to the last mile. The telecommunications and cable companies aren’t going to walk away from years of investment deploying that infrastructure. Since it’s already in place, that means adding a new user is virtually free for them and pure profit off the customer. Traditional broadband providers can afford to get in a pricing war when the time comes. Security. Since penetration is still low, it remains to be seen just how easy or difficult it will be for hackers to target Wi-MAX networks. Industry watchers see potential vulnerabilities in the standards making it possible for “man-in-the-middle” attacks, denial of service attacks, as well as weaknesses in encryption that could contribute to data leaks. Other emerging options.The first option that comes to mind would be a fiber optic network (FiOS). Because it involves rolling out that last mile of fiber building by building, deployment is slow. But a “lit building” is highly coveted office space. The fiber optics lines are already wired into the building and very user friendly for tenants, who receive lightening fast, reliable connectivity. Verizon is heavily pushing FIOS. Despite those obstacles, “I’m bullish on Wi-MAX,” says Tauschek. One thing he may not be taking into account is the bears: the ones plaguing Wall Street these days. A slow down in the economy could easily turn that last mile into the long mile for any new broadband provider trying to break into that market.
It looks like a large Styrofoam takeout container. The 14-pound box would fit into a backpack were it not for the two antennas, set well apart. It can withstand subfreezing temperatures and 165-mph winds; it’s even lightningproof. With the lid bolted down tightly, the box offers no clue as to what’s inside. But disassembled, it reveals intricate innards that look like nothing so much as a city viewed from a plane: A million tiny wires crisscross like streets and weave among square parks the size of your thumbnail. The magic of the box occurs when you mount it on the horizontal arm of a city lamppost, so that its long ears reach up to the sky. Install 30 of them per square mile (which isn’t hard, since an installer using a single tool can put up a unit in 15 minutes) and they immediately begin communicating with one another via radio waves. Data, the same information that flows through the wired Internet, begins traveling between them. Establish some hub connections to usher the data back onto the Net and you’ve created a wireless network that can transmit signals all over real, life-size cities–into parks, schools, juice joints, bars, offices, playgrounds, and homes. The boxes, known as routers or nodes, are made by Tropos Networks, a Silicon Valley upstart that’s landed in the middle of a burgeoning movement among U.S. cities to create municipal wireless networks, or metroscale Wi-Fi–essentially, an effort to deliver wireless bandwidth to the masses. Since Tropos began selling its equipment in 2002, dozens of municipalities have signed up. The Twin Cities suburb of Chaska, Minnesota, built a wireless network to cover its 16 square miles and serve all 18,000 of its residents. Corpus Christi, Texas, bought 300 Tropos nodes to cover 24 square miles and has since decided to expand to 147 square miles. As it rebuilds in the wake of Hurricane Katrina, New Orleans plans to cover the whole town with a Tropos network. This summer, Anaheim, California, will hit the switch, giving 325,000 citizens across 50 square miles ubiquitous broadband Internet access. Tropos-powered networks also are in the offing in Philadelphia and San Francisco. Launched with what Bill Gurley, a Silicon Valley venture capitalist and early Tropos investor, calls “four guys under 30 and an algorithm,” the Sunnyvale-based company spent less than $3 million getting its first product to market. Since then, it has grown into the leading equipment provider in this incipient market, with more than $15 million in revenue in 2005 and a projected $45 million in 2006. It has had roughly 350 customers to date–including some in far-flung locales such as Bangkok, Kuala Lumpur, and Doha, Qatar–and partnerships with EarthLink, Google, Motorola, IBM, and others. Given its recent contracts, the company is well ahead of competing equipment makers. Yet Tropos faces some difficult tests before it can realize its vision. The new, large-scale projects in San Francisco and Philadelphia will get the technology out of dress rehearsal and in front of a major audience. These launches will be key to the company’s fate. As hundreds of other cities look on, contemplating whether to install their own cheap broadband, and as a phalanx of massive data carriers like Verizon and Comcast glower over what may be a new threat, Tropos will march out onstage. Says CEO Ron Sege: “The best thing we can do is make sure the big cities do well, for everyone to say, ‘Oh, my God, it works.” “What Stops the Internet From Being Everywhere?” In San Francisco, there is a new café every year that has “the best coffee in town.” At the moment, it’s Ritual, a chic place in the Mission District with leather couches, wireless Internet, and PowerBooks on every table. The two founding engineers of Tropos–Narasimha Chari, who goes by “Chari,” and Devabhaktuni “Sri” Srikrishna–are sitting at a small table, drinking lattes and reflecting on recent news. About a year ago, the mayor of San Francisco put out a request for proposals, looking for the optimum plan for “unwiring” the city–that is, for creating a citywide Wi-Fi network. Just the day before, out of a half-dozen contenders, the selection had been announced–and Sri and Chari’s list of big wins had gotten one municipal contract longer. But the two men, both 32, scarcely stopped to rest. That’s because each successive contract brings them closer to answering a question that’s intrigued them since they met as undergraduates at Caltech about 15 years ago: “What stops the Internet from being everywhere?” The magic of the box occurs when you mount it on a lamppost. Install 30 of them per square mile, and you’ve created a wireless network that can transmit data all over a city. The inquiry arose out of mutual concerns about India and other developing countries. As a brainy boy growing up in Calcutta, Chari would take long excursions through the city searching for textbooks containing just the kind of math and science materials you can download in seconds today from the Internet; he knew that connecting people in poor and remote regions could be a profound form of change. Sri, for his part, had a deep desire to be useful and an appetite for solving engineering problems. So while attending graduate school in the late 1990s (Sri at MIT, Chari at Harvard), the two men would hang out in the bars around Cambridge and talk about how to get the Internet everywhere on the planet. The intellectual challenge soon became as enticing as the moral one. It was a problem of cost efficiency: How could you bring the power of computer networks to villages hundreds of miles from the nearest cable TV, places where people can’t even afford phones? It was a technical problem, of bouncing signals around in the air over large areas and then back to the nearest data wires. And finally it was a problem of overcoming natural physical limitations: the distance transmitted signals could travel, for one, and the amount of stuff that can be sent simultaneously. “It’s just a very fascinating subject,” says Sri. “We never really set out to start a company.” Any solution had to be dirt cheap. Even in the United States, broadband is so expensive, both to provide and to purchase, that its growth has not kept up with consumer appetites. Today many rural areas around the country have no high-speed data services, simply because it costs so much to dig up the streets and lay wire. Jupiter Research, a market research firm, estimates that 35 percent of Internet users in exurban or rural areas can get only dial-up connections. In some cases, the necessary conduits reach town, but jackhammering the last bit of pavement to serve a smattering of houses is more of a burden than it’s worth. “There are some places where the economics are prohibitively expensive,” says Brian Blevins, a Verizon spokesperson. For Chari and Sri, the alternative to digging would have to be radio, and while drinking beer and poring over dense technical books, they came across a radio technology developed in the 1970s for military uses. The technology worked on battlefields, but its inventors and the engineers who came after assumed that it wouldn’t scale. Sri and Chari thought otherwise. They suspected that if you could program the nodes of these radio networks cleverly enough, teaching them to move information around quickly, you could make the network as big as you wanted. Their idea was a variation on the principle of the bucket brigade or steppingstones. If you can’t get the signal to reach all the way to the wired Internet, make it hop from one transmitter to another until it does. And give it some basic rules for finding the most efficient pathway there. Here at Ritual, for instance, e-mail data comes in over wires to a base station or router somewhere in the room and then heads through the air to the nearby laptop. Everyone in the café is just one hop from the wired Net. This configuration requires every user to be within about 100 feet of the device that’s plugged in, and it’s why wireless broadband is generally limited to offices and cafés. But what if you told that router to select another router for passing along its message, and told that router to select yet another after that? If you taught those routers to make efficient choices that wouldn’t require arduous processing, eventually the Internet would spill out into the streets. Sri and Chari got hold of some Wi-Fi gear–a cheap type of radio technology recently introduced to the enterprise market for office environments–and started playing with their routing ideas. They mounted antennas on cars and tooled around Cambridge, testing the performance of nodes programmed to obey their new steppingstone rules. “When we started doing this,” Chari says, “people laughed at us, saying Wi-Fi is an indoor technology. But our approach has always been, don’t take anyone’s word for it.” The two men soon realized that they were no longer solving a math problem: They were developing a product. So they picked up and left Boston for northern California. They hooked up with two friends of friends who understood finance and formed a company. It was not a particularly opportune time. “In 2001, we were out there looking for funding. It was awful,” says Chari. But Bill Gurley, whose firm, Benchmark Capital, invested early in companies such as eBay and Red Hat, liked their ideas. “I don’t think anyone at that time was thinking about municipal wireless,” Gurley recalls. “But what was keeping Wi-Fi from going outside?” Even in the united states, More than a third of Internet users in exurban or rural areas can get only dial-up connections. Well, nothing. In the United States, most towns already own the infrastructure for suspending 14-pound boxes in the sky: lampposts, traffic lights, telephone poles, city buildings. The Tropos routers themselves cost only about $3,500 each. So with 30 per square mile installed in a city like San Francisco, you’d spend about $5 million on boxes to serve more than 700,000 citizens. According to a report by PricewaterhouseCoopers, building a fiber network costs $2,000 “per home passed,” in the industry’s argot; providing DSL costs a few hundred dollars. Compare both with Philadelphia’s estimate that the cost per home passed of its Wi-Fi network will be $30. On the user end of the equation, the hardware economics look even better. The Wi-Fi cards that early adopters were sliding into their laptops in 1999 went for about $2,000 apiece. Today the devices are preloaded into nearly all new computers and cost less than $10 each. Right now, as Chari and Sri drain their lattes at Ritual, there are an estimated 50 million Wi-Fi-ready computers out there. So Bill Gurley got onboard. He liked the open standards of Wi-Fi technology and how quickly the price on the user’s side was dropping. He loved Chari and Sri’s vision of teaching routers with limited range and capacity how to build bucket brigades and choose the most promising pathways, based on the condition of the network. “It’s very elegant,” Gurley says. He also liked the growth potential of the market and the focus on software. “As a venture capitalist, I love everything about the Tropos model,” he says. In January 2002, Benchmark Capital ponied up $2.2 million for the young company to work with. Other VC firms followed, including the Intel Communications Fund and Siemens Venture Capital. And so did Ron Sege. Good Enough Beats Best Ron Sege (pronounced seh-gee) is a tall stick of a guy with blue eyes and blond eyelashes, whose elaborately stitched jeans were meant for a younger man. At 49, he is on his second wife, his second batch of kids, and the fourth small company he intends to make large. In a sense, Sege is a Web 2.0 guy all around, bringing hard-earned experience to a young company with a still-unproven business model. As he puts it, “I’ve seen this movie before.” Sege began working in technology in the 1980s, but really hit his stride in the ’90s, as a manager at 3Com, the company that spawned Ethernet technology. 3Com had a few hundred employees when he perspective, good enough beats best,” he says. Ethernet, the protocol that allows office PCs to share databases and printers and storage in a small local network, was far from perfect. “But it was inexpensive, easy to use, and anybody could design to it.” Sege learned the beauty of this approach to business–float a quick and dirty product, let users and other product developers improve on it, and push it as a dominant shared platform. “Wi-Fi has many of the same attributes,” he says. After 3Com, Sege took a job as executive vice president of Lycos, one of the first Internet portals, where he helped engineer an Internet-bubble buying spree that included acquisitions of Matchmaker.com, Quote.com, and Wired Digital. “That was my media mogul period,” Sege says with a laugh. He left Lycos in 2001 and joined Ellacoya Networks, a company based in Merrimack, New Hampshire, that creates software to help broadband providers ease congestion in their networks. Bill Gurley, tipped off by a Benchmark partner who’d worked with Sege in the past, saw in the Ellacoya CEO someone who’d ridden small companies through significant growth and who understood a good deal about data networks. He contacted Sege and told him about Tropos. The company made sense to Sege. Taking off-the-shelf indoor base stations and sticking them up on power poles–that was a formula he understood. Sri and Chari had already come up with the tricks, the proprietary algorithms for handling data traffic and monitoring the system from one main PC, which would set Tropos apart from its direct competitors. (The company has 30 software patents and patents pending.) In 2004, Sege came onboard–”to do all the stuff not involved with writing software.” At first, that meant selling Tropos boxes and software to a small but eager market the start-up had identified: police and fire departments. After September 11, the consequences of poor emergency communications became painfully clear to city leaders nationwide, and many municipalities were attempting to do something about it. What few civilians realize is that their heroes with hoses and their men and women in blue have always relied on only one of their senses for passing information: their ears. They use the same two-way radio technology today that police departments adopted in the 1930s. Some forces have introduced computers into their cruisers for searching DMV or criminal databases, but these hookups are as slow as your first dial-up modem. Forget about downloading a mug shot. Maps, surveillance videos, traffic updates, real-time messaging? Impossible. What emergency responders need is broadband. And it has to be broadband that’s everywhere, broadband that moves. Tropos could deliver that. Sege traveled the country, giving presentations to police and fire departments, steadily signing up customers. Oklahoma City bought Tropos technology to build a network for its police department covering 620 square miles. In Milpitas, California, about 10 miles from the Tropos headquarters, a 40-node Tropos mesh allows police to look up DMV photos and monitor video surveillance of high-crime areas. So Sege and his team were surprised in the spring of 2004 when they got an order from Chaska, Minnesota, a Twin Cities suburb that wasn’t looking to serve its police force. The town’s city council wanted cheaper connectivity–for all of its residents, who were stuck paying $45 per month for high-speed access from Sprint and Time-Warner Cable. The goal was to provide broadband access for all of its citizens for no more than $20 a month. “Tropos was selling a system for public safety departments. Our IT guys thought, ‘Why couldn’t you do 3,000 connections instead of 300?” says Chaska’s city administrator, Dave Pokorney. For Tropos, this was exhilarating. Chaska had come up with this plan on its own, with no help from Tropos, which was focusing its efforts on public safety. The company had helped create networks designed to serve the general public, but only in parks or other circumscribed areas. Chaska was out ahead of them–and within three months, the city had a real-life metroscale network available to anyone in town. Sleeping Giants Everyone at Tropos agrees on what made the company take off. It happened in August of 2004, when Philadelphia, the largest municipality to date to do so, announced plans to blanket the city with Wi-Fi. The idea was to deliver cheap, and possibly free, broadband Internet access to the 1.5 million souls–digital haves and have-nots alike–who lived within the city’s 135 square miles. This was a bold, pioneering step, lauded by civic groups and techies around the country. But the news hit one party particularly hard: Verizon. At the time, the vast majority of Philadelphians who wanted fast connections to the Web had been coming to Verizon for DSL. Now the company would have a new competitor. The proverbial sleeping giant was caught off guard. It’s one thing to build a wireless network for 8,000 households in the suburbs of Minnesota. But it’s something else entirely to do so in one of the nation’s biggest metros. Verizon’s lobbyists marched straight to state lawmakers in Harrisburg and demanded action. And they got it. A telecommunications bill that had been lingering around the capital for more than a year suddenly came up for a vote, and it had a brand-new provision attached to it. The measure said that Pennsylvania cities intending to create high-speed data networks must give the dominant local phone company the right to build first. If the incumbent proceeded within 14 months, the city would be required to drop its plans. For the leaders of Philadelphia, that meant doing nothing for more than a year before getting their project under way. It also meant that cheaper service–some subsidized for the poor–would happen only at the whim of Verizon. But the prospect of an Internet cloud floating through every park and into the city’s overlooked neighborhoods had already intrigued many Philadelphians, and the state legislature’s intervention galvanized people to protect the idea. “The school district, the nonprofits that wanted to serve poor neighborhoods, even our tourism organizations saw the potential,” says Dianah Neff, Philadelphia’s chief information officer and a 14-year veteran of Silicon Valley businesses. “When the legislation came up, we put the pressure on. We had 3,000 people call, write, and e-mail the governor.” Tropos, which already had been tapped to install two pilot projects in public parks, watched the events unfold. Sege hired a Washington lobbying firm, which showed up in Harrisburg, attempting to sway leaders to spare local governments from restrictions. In late November 2004, just as the bill was approved, Philly’s Wi-Fi enthusiasts got a break. “It was almost like diving to get the catch in the end zone,” says Sege. The state agreed to exempt Philadelphia from the requirements. (All other Pennsylvania municipalities remain bound by it.) The way Sege sees it, Verizon’s in-your-face tactics were the best thing that had ever happened to the start-up. The giant telecom’s reaction made dozens of other cities take notice. If Verizon was so ruffled, people seemed to think, then Philadelphia must have been on to something interesting; the technology’s potential must be real. “The phone was ringing off the hook,” says Sege. Cities around the country, from Minneapolis to Tempe, Arizona, began announcing plans for wireless networks. Several months later, the technology was validated by another waking giant when Cisco announced it would begin building routers for muni Wi-Fi. Tropos sales went from 90 municipal clients in all of 2004 to 75 in just the first half of 2005. The next step in the Philadelphia project was to respond to the city’s RFP, and Tropos now had to get down to details. The company had the gear and the software for monitoring and troubleshooting the network, but there was a lot the small company was lacking. Customer service for one thing. And billing. And consumer sales. Rather than build those capabilities in-house, Sege began searching for an established Internet service provider with which to partner. EarthLink fit the bill. The ISP, based in Atlanta, had thrived as a middleman, buying wholesale dial tone, wrapping it up in an attractive brand, and selling it to Internet surfers. But as the world shifted to faster wires and fiber optics, EarthLink had little to offer. Unlike the phone companies, it owned no connections into the home. In January 2005, Bill Gurley paid a visit to EarthLink’s board of directors. He presented his case for a partnership, in which Tropos would provide infrastructure–the actual broadband network–and EarthLink would handle customer support and sales. In response to Gurley’s presentation, EarthLink sent a team to visit Chaska to see for themselves if the new technology worked. The group toured the town and climbed under tables testing the network’s reliability. They interviewed folks in bars. And they were sold on it. “Municipal Wi-Fi is really important for us,” says Donald Berryman, EarthLink’s president of municipal networks. “It’s one of the top three investments we’re making in future products. It can help us control our destiny because we’ll own the network.” Tropos and EarthLink have since landed deals with five cities and have proposals out to five more. But Will It Really Work? Not surprisingly, the Bells and other data-access providers haven’t backed down. Since the maneuver in Pennsylvania, giants like BellSouth and Comcast have fueled a fight against muni Wi-Fi across the country. Lawmakers in Ohio, Virginia, Kansas, and Oregon, among others, have proposed legislation to keep local governments from building their own networks or at least make it more difficult for them to do so. Fourteen states, including Florida and Colorado, have already passed restrictions. “We have not supported a ban on municipal networks,” says Verizon’s Brian Blevins. “But we’ve felt where there’s vibrant competition, the networks can undercut and disrupt a market that’s working very well.” Critics of muni Wi-Fi argue that if local governments participate in building broadband networks, they’ll exploit unfair tax and regulatory advantages, irresponsibly drain public coffers, and mismanage the services. To counter the legislative gambit, Sege and others have taken to evangelizing in Washington, D.C., and state capitals. They’ve made some progress. In June 2005, Republican Senator John McCain of Arizona and Democratic Senator Frank Lautenberg of New Jersey introduced a federal bill in answer to the activity in the states. The Community Broadband Act of 2005, still in committee, would “preserve and protect the ability of local governments to provide broadband capability and services.” Says one Lautenberg staffer: “The senator doesn’t think there should be obstacles–we’re 16th in the world in terms of broadband penetration.” A bill awaiting a vote by the House, on the other hand, would create barriers–for instance, requiring cities to partner with a private company. A restriction like that, though seemingly innocuous, would have prevented Chaska from building its network. These policy struggles are not the only hurdles Tropos is facing as it lunges for profitability in 2007. There are big technical questions. It’s one thing to build a wireless network for 8,000 households in the suburbs of Minnesota. But it’s something else entirely to do so in one of the nation’s biggest metros. “Nobody’s demonstrated that you can have 135 miles of Wi-Fi,” says Julie Ask, a research director at Jupiter Research. Radio signal is notoriously unpredictable. When your cell phone drops out every time you round the corner of Elm Street, that’s because the mobile provider didn’t predict a problem there. Home devices from cordless phones to baby monitors might cause interference. Tempe, Arizona, where Tropos competitor Strix Systems provided 500 wireless routers, discovered that signal wasn’t getting through house walls beyond 150 yards from the routers. Many Tempe users found they needed an additional $100 device to receive and send data from indoors. Tropos could face similar problems. Dozens of municipalities have joined in, but there is not much of a record. “As a mayor, why wouldn’t you say, ‘I want to bridge the digital divide’?” says Ask. “EarthLink wants to point to Philadelphia and say, ‘Hey, it works,’ but until there’s proof…” After a city government invests $20 million, no users will be happy if their connections go down or their webpages load slowly. The last thing Tropos needs is for annoyed customers to head back to Verizon. Another looming question is what business models will work. Will consortia like the EarthLink-Tropos team for San Francisco prove easy for cities and profitable for the participating companies? Will the Bells hedge their bets and start offering their own systems? Will cities build their own public Internet utilities, just as many today deliver power without the help of private entities? In any of these scenarios, Tropos’ business doesn’t change. The Bells, the city governments, the ISPs–they’ll all need to buy boxes from someone. As experiments are made and the best models emerge, Sege insists that Tropos will stay relevant. First, of course, he has to deal with Philadelphia, which is building its 15-square-mile test area this summer and plans to roll out the full network in 2007. “I honestly believe that a lot of people are waiting to say, ‘We told you it wouldn’t work,” Sege says. Philadelphia CIO Dianah Neff doesn’t seem to mind that tension. “There’s a lot of pressure on Tropos and EarthLink. But that’s to our benefit because they’re trying really hard,” she says. “It’s like you live in a fishbowl. It’s not just other cities, but the world that’s watching.” Martha Baer is co-author of Safe: The Race to Protect Ourselves in a Newly Dangerous World. This is her first story for Inc.
In the March 2003 Inc article, “Good Call,” Hamon Corp.’s move to voice-over Internet protocol (VoIP) helped the company more effectively — and affordably — handle intracompany calls. Though the Somerville, N.J., manufacturer’s switch went off with nary a hitch, it’s not always that seamless. Craft Diston Industries, a shower-door manufacturer in Wichita, Kan., first tried a VoIP system in 1999, hoping to cut the cost of calls between headquarters and 10 factories and distribution centers scattered throughout the United States. That initial system, which happened to be from AltiGen, ( http://www.altigen.com), a maker of Internet phone systems in Fremont, Calif., “was pretty rough,” CFO Michael Gayeski recalls. Calls echoed or faded or cut out; sometimes transmission was so slow that callers’ sentences overlapped. Craft Diston quickly switched to another vendor’s system, which also ultimately failed. Still desperate to control telecom costs, Craft Diston decided to give AltiGen one more chance, after the phone-system business assured its former customer that it had corrected all the quality problems. The result? “It’s 10 times improved,” says Gayeski of the new system, which was installed in mid-2002. “No problems whatsoever.” The 240-employee company, which had about $30 million in sales last year, now saves more than $9,000 a month on its phone bills. IT director Jesse Santana calls the system simple to use because it works on the familiar Windows NT network and doesn’t require any special training or equipment.
First place Sumerset Custom Houseboats (See ” Web Awards 2000: General Excellence.”) Second place Dollars for Dialing Company: DirectWireless.com Web address: www.directwireless.com Why it won: This unadorned site generates at least 10 times in annual revenues what it cost to build. Company revenues: $2.4 million Site-launch cost: $25,000 Judge’s view: “While this is not the most elegantly designed site … it puts forward a no-frills, get-down-to-business attitude that should appeal to active, self-directed shoppers.” –Mark Leiter In 1997, Rob Marler, who was selling Nextel cell phones in central Florida, was living the sales rep’s nightmare: his customers wanted to buy things he couldn’t provide. They were asking for accessories like batteries, chargers, and cases, “and there weren’t any,” he recalls. Those items were always out of stock. “It seemed like a forgotten sales opportunity,” Marler says. He and a Nextel colleague, Brian Bangle, quit their jobs to start a wholesale business selling accessories to Nextel dealers. Next, they opened their Direct Wireless retail store near Orlando, adding products for Motorola, Nokia, and other brand-name phones. In 1998 they launched a Web site. A year later they renamed the whole company DirectWireless.com, acknowledging some of their repeat customers’ growing preference for ordering goods online. Currently, only about 10% of their customers make their subsequent purchases online, a percentage Marler hopes to increase in coming years. Today the 10-employee company offers 750 products, including hard-to-find accessories for older-model phones and for the latest models of pagers and handheld computers. The Web accounts for about 10% of the company’s revenues, but Marler expects that figure to grow with the market. (He estimates that there are 100 million cell-phone users in the United States this year, up from 79 million last year.) Initially, DirectWireless.com outsourced all its Web work, but “it cost $150 an hour and took a couple of weeks to get a new graphic or text on the site,” Marler recalls. Now a full-time Web staffer does the same work in minutes. Not that DirectWireless.com focuses on design. Judges unanimously mentioned the site’s stripped-down look. “Designed to win sales, not art awards,” noted judge Mark C. Thompson, but he added that he found accessories for his own phone faster on DirectWireless.com than he did on the “much prettier Motorola site.” Marler, who owns but rarely uses a cell phone, now wants to attract a new generation of customers: teenagers. “If we acquire them as customers today and keep them until they’re 80, we’ll be servicing every phone they ever use in their lifetimes,” he says. –Anne Stuart Third place Sweat Equity Company: Affordable Supplements Inc. Web address: www.affordablesupplements.com Why it won: The site helped to grow the company’s business in nutritional supplements so quickly that they now represent 95% of sales. Company revenues: $250,000 Site-launch cost: Less than $500 Judge’s view: “The site loads quickly and lists products immediately; it has a clear search capability, clear information on products, and an easy purchasing method. The ROI is huge since they designed the site themselves.” –Mark C. Thompson Dave Gray of Colby, Kans., thought he could muscle more money from the bodybuilding supplements he and his wife, Kristi, sell at their gym, the Fitness Club. At the time, sweaty athletes fresh from their workouts were buying about $2,000 worth of the supplements each month. Gray figured he’d be doing well if he made one sale a day online. So with no experience, Gray cobbled together and launched an E-commerce site in March 1999. He saw results within days, making his first sale to a weightlifter in England. Within six weeks, Web sales matched over-the-counter sales. As their fall season began, the Grays were doing 95% of their supplements sales over the Web, averaging more than 32 orders a day for projected sales of $750,000 this year. They still run their health club, but online sales account for 80% of their revenues, which reached $250,000 last year. Gray developed the business by focusing on a specialty audience: serious athletes, primarily body-builders, weightlifters, and football players. “MotherNature.com sells vitamins and herbs. We’ve stayed totally away from that,” he says. “If we do sell a vitamin, it’s because it’s targeted specifically to an athlete.” He buys in volume so he can deeply discount products like mineral supplements, muscle-building hormones, and powdered meal replacements. And Gray, who is an experienced weightlifter, knows whereof he sells. The Grays and two full-time employees answer hundreds of E-mail questions on everything from effective exercises to the pros and cons of protein supplements. While he can’t yet cite figures, Gray believes those personal responses convert to sales often enough to justify the effort. Gray, who calls himself “really cautious, the do-it-yourself kind,” chuckles when he hears about E-commerce start-ups that have spent six figures launching their Web sites. “I didn’t even buy Microsoft Front Page,” he says. Instead, he built the site himself with shareware he found online, mostly at CNET Download.com. He spent about $300 for software that handles credit-card processing and $50 on a scanner. Gray maintains the site; two employees handle order fulfillment, and a third does the product photography. Judges felt the site’s look and feel reflected its skinflint roots. “Weak and confusing navigational architecture, cluttered purchasing process,” wrote Nicholas DiGiacomo. “Ugly in a Yahoo sort of way,” agreed Mark C. Thompson, but added, “It definitely achieves the company’s business goals.” –A.S. Conversation with Mark C. Thompson Judge: ROI Trying to keep up with Mark Thompson is like chasing a hummingbird. That’s because he never stops moving. During this phone interview, for instance, he’s driving from Silicon Valley to San Francisco. En route, he stops for lunch and polishes off a chicken sandwich, all while talking nonstop about why Internet ROI isn’t an oxymoron. If anybody knows about E-commerce investments, it’s Thompson. Currently, he’s chairman of Integration Corp. of Mountain View, Calif. Previously, he spent 12 years at Charles Schwab & Co., most recently as executive producer of Schwab.com. Thompson, 43, says return on investment relates to how well companies know their customers — and how well they treat them. More Thompson musings: On the winners: “These companies jumped out at me because they appeared to quickly solve the problem the customer would be coming with: They want to buy sports supplements. They want to buy accessories for a mobile phone. They want to custom-design a houseboat.” On the losers: “I’m always surprised when you can’t actually complete a transaction on a site. Most people aren’t coming to browse. You need to have empathy for the poor customer who’s trying to get things done.” On designing for success: “There’s going to be a shift away from the designer Web site — one that’s used to showcase a company — towards a new pragmatism. [For example] Yahoo is enormously successful. Yahoo isn’t pretty. It’s fast, it’s effective, it’s on target. That should be a lesson.” –A.S. Annual Web Awards 2000 General Excellence Marketing Customer Service ROI Innovation Community Judges Please e-mail your comments to editors@inc.com.
They needed it overnight. They wanted the best. In the race to build the first online hardware store, Peter Hunt and Rich Takata put their company in the hands of outright strangers The Company Name: CornerHardware.com Inc. Founded: Incorporated May 1999; Web site launched early 2000 Location: San Francisco Cofounders: Chairman and CEO Richard Takata; president and chief operating officer Peter A. Hunt Employees: 35 full-timers Mission: Creating an online home-improvement store, magazine, and community for do-it-yourselfers URL: www.cornerhardware.com The Developer Name: Xuma Founded: 1998 Location: San Francisco; with offices in New York, Los Angeles, and Las Vegas Cofounders: CEO Joe Cha; chief technology officer Jamie Lerner Employees: 250 Mission: Producing built-to-order Web sites for E-businesses URL: www.xuma.com In December 1998, Peter Hunt set out to tackle what should have been a simple, joyous task: building a tree house for his four-year-old son for Christmas. Hunt couldn’t wait to start the project. It wasn’t just that he welcomed the diversion from his high-powered job as an investment banker. It was more that, ever since he’d been a kid, Hunt had loved working with his hands: making model trains and airplanes, building furniture, fixing things around the house. As an adult he’d dreamed of buying a corner hardware store in some rural New England town, the kind of place with a bell over the door and shelves lined with hinges and screws and doorknobs, where he’d spend his days happily helping customers pick out the right paintbrush or handsaw. But with two kids and a top job at Montgomery Securities in San Francisco, the lanky, thoughtful Hunt didn’t even have time to stop into a local hardware shop, let alone wander through a giant home-improvement warehouse. He assumed he’d save time by buying everything he needed for the tree house — instructions, lumber, materials, and tools — online. So he went to the Web and looked for hardware sites. And looked. And looked. He found nothing except a loose network of like-minded tree-house enthusiasts, many similarly frustrated by their own fruitless online searches for supplies and information. From that experience, Peter Hunt, banker, suddenly figured out how to finally become Peter Hunt, hardware guy. Hunt’s thinking went like this: What if there were lots of little communities out there — tree-house builders and woodworkers and plumbers and fixer-uppers and even contractors — all hungry for online hardware and home-improvement advice? And what if somebody could provide it for them in one friendly, convenient location, sort of a virtual corner hardware store? In early 1999, Hunt, then 35, took a week off to write a business plan for just such a company. But he knew something was missing. He needed a business partner — a veteran hardware retailer, a real insider. When he asked around, he kept hearing the same name: Rich Takata. Richard T. Takata, then of Seattle, had been in the hardware business for 24 years. Takata, who’d most recently been president and CEO of Eagle Hardware & Garden Inc., had remained with the 41-store chain after North CarolinaÂbased Lowe’s Cos. had bought it for $1.4 billion. (In fact, Hunt’s firm had handled the sale.) Although reserved and soft-spoken, Takata, then 49, was hardly averse to risk; in his spare time he occasionally drove race cars. A lifelong do-it-yourselfer, Takata also knew his industry and its customers. Over the years he’d waited on thousands of people, even during store visits when he was the company’s CEO. And like Hunt, whose own company had been acquired by North CarolinaÂbased NationsBank, Takata was ready for a change. Xuma’s founders named their Web-development company after an ancient Chinese battle cry. In April 1999, at the urging of a mutual friend, Hunt and Takata met for dinner to talk about launching a big home-improvement E-commerce site. They discovered they had much in common. Both were quietly intense, articulate, committed. Both were customer-service evangelists, true believers in keeping promises and building long, loyal relationships. Both believed passionately in the Internet’s potential for business. And both had high — some might say almost impossible — standards for themselves, their companies, and those who worked for or with them. Of the two, Takata was more tactical and analytical, a manager with a keen recall of industry statistics and an almost instinctive understanding of business trends. Hunt, very much the money guy and deal maker, was also more sentimental. (He documents CornerHardware.com’s growth in a scrapbook filled with mementos like copies of the company’s incorporation papers and of its early bank deposits, and Polaroid photos of each newly hired employee.) From the start, the two men agreed they wanted to do more than lead the Web in sales of drill bits and deck stain. They wanted to re-create the old-fashioned corner hardware store of Hunt’s dreams and Takata’s experience: a place with well-stocked shelves, knowledgeable clerks, lots of how-to information, and most of all, a friendly, collegial, yes-you-can-do-it-yourself atmosphere. It would, of course, be called CornerHardware.com. They knew it was a big idea with hefty potential; pulling in even a small fraction of the $400-billion-a-year home-improvement business would yield a fortune. They were amazed that nobody had launched the kind of venture they envisioned, and they knew that before long somebody else certainly would. What they wanted to do — build a full-service online hardware store and community — would cost at least $2.5 million. Takata and Hunt knew they needed to move fast — and they did. Within three weeks of their first meeting, both men had quit their jobs; put up $250,000 each of their own money; raised about $500,000 more from angel investors, family, friends, and colleagues; and incorporated their business. But for all the partners knew they needed to do, there was still plenty they needed to learn. Chief among the lessons: just how tough it would be to build a big Web business in a matter of months — and how much tougher it would get when circumstances forced them to launch the site weeks earlier than planned. They didn’t know for sure whether a no-name newcomer like CornerHardware.com could compete with new and upcoming E-commerce arms from brick-and-mortar brands like Sears (which was already selling parts, tools, and appliances online), Home Depot (which plans to launch a full E-commerce site this summer), and Ace Hardware (which would begin selling merchandise online at OurHouse.com late in 1999). In addition, dot-com start-ups were also racing to market. Major projects included HomeWarehouse.com, then under development in nearby San Mateo, Calif., and Amazon.com‘s new tools and hardware store, which would also launch by year’s end. And it was entirely likely that some of those in the race would end up as roadkill. When it came to CornerHardware.com’s technology, Hunt and Takata knew they weren’t looking just for a speedy job. Sure, there was no time to waste — they wanted a beta site before year’s end, a quiet launch by March 2000, and a public launch shortly after that. But building their Web site would also be a big, complex, cutting-edge project. They needed transaction processing capability and complete descriptions and images of some 37,000 products, everything from penny nails to power saws to Phillips-head screwdrivers. They would shoot to double their inventory, which is distributed from a warehouse in Kansas, within their first six months online. True to their customer-service mission, Hunt and Takata also wanted, from day one, to offer how-to articles, visitor message boards, animated step-by-step project instructions, a massive glossary of hardware terms, a superb search engine, and live customer service, online and in real time. That last capability would become, in fact, the real cornerstone, so to speak, of CornerHardware.com. Using interactive windows, customers would be able to chat with service reps in real time — asking questions about products or about a bill, for instance. That kind of service, which the company would contract out to dedicated staffers at Boston-based eSupportNow, would be what Hunt and Takata believed would ultimately distinguish their company not just from other online hardware stores but from their brick-and-mortar brethren as well. As Takata pointed out later, there weren’t many home-improvement stores that were open 24 hours a day. Although Hunt and Takata knew what they wanted their site to do, they didn’t know much about the nuts and bolts required to make it happen. They needed professional help. And they needed it fast. The high-speed, high-stakes scenario isn’t unique to CornerHardware.com — or even to the online home-improvement industry. Today almost any new business-to-consumer Internet company must fight for a foothold in an already crowded market. (Witness the proliferation of online pet stores, drugstores, vitamin stores, and toy stores.) Being first online remains a competitive advantage. But there’s no point in being first without doing it well. As consumers on the Internet grow more sophisticated they’re less willing to tolerate sites that are slow, unreliable, boring, or tough to navigate. And they absolutely won’t return to sites that haven’t provided stellar customer service. E-commerce sites have grown increasingly complex in reaction to the industry’s ever higher standards and well-publicized successes and failures. In many cases, like CornerHardware.com’s, a business simply can’t hire its own team to build a site — even if it could find the right people, it probably couldn’t afford to pay them or retain them. So, like CornerHardware.com, the company opts to stake the future of its business on outside developers — people the company doesn’t know, people who must translate the entrepreneur’s dreams and plans into equipment and software and code. Xuma’s approach bridges the gap between standard and optional E-commerce components. As Takata and Hunt were setting up shop in rented space in San Francisco’s financial district, Joe Cha was building his own business just a few blocks away. About a year earlier Cha had been working at his third consulting job. A friend reintroduced him to Jamie Lerner, a consultant Cha had known slightly when both had worked at Andersen Consulting several years earlier. Like Hunt and Takata, Cha and Lerner found themselves thinking along the same lines. They wanted to try something new, and they didn’t want to create just another San Francisco Web-development company. Instead their thinking went like this: What if you could apply the same approach to building a Web site that Dell Computer applies to building a computer? What if you could create big, complex, flexible, reliable, customized E-commerce systems in record time simply by not reinventing the wheel for every single project? So Cha and Lerner founded Xuma. (The name, pronounced “zoo-ma,” is an ancient Chinese battle cry that the partners found perfect to describe their army of engineers charging into the E-commerce wars.) They adapted the Dell model: just as Dell combines standard and optional components to rapidly create computers, Xuma combines its standard and optional E-commerce components to quickly build Web sites. In the venture’s first year, the quiet, charming Cha (so charismatic that he was among 10 bachelors featured in a Women.com feature on “The Men of Silicon Valley”) sold Xuma’s services to customers ranging from health-and-beauty-products retailer More.com to home-furnishings site GoodHome.com. By its second anniversary, in April 2000, Xuma had launched more than 70 Web-based businesses nationwide and employed 250 people in four offices. But back in mid-1999, Xuma hadn’t yet tackled anything on the multimillion-dollar scale of CornerHardware.com. By the summer of 1999, Takata, CornerHardware.com’s CEO, and Hunt, its chief operating officer, had raised about $6 million in funding: close to $1 million from their own pockets and from family, friends, and angels; and the balance from the first round of venture funding. (A second round early in 2000 would yield an additional $21 million.) And the founders had begun building a staff. Their first hire: vice-president of engineering Steve Finer, who faced the daunting job of actually overseeing the Web site’s construction. (See “Chronicles from the Pit,” below.) Finer, then 33, was an enthusiastic, outspoken technologist who, in a previous life, had managed nightclubs in Boston. He knew something about risk: he’d cofounded an Internet start-up that later collapsed and eventually filed for bankruptcy. And he knew something about working hard; he was always either at the office or connected to it by beeper, cell phone, or computer. (Shortly before the CornerHardware.com launch, when Finer was working 12 to 15 hours a day, he came home one night to find that his lonely dog, Cassius, had disemboweled a sofa cushion.) After joining CornerHardware.com in August 1999, Finer faced his first and toughest task: getting his new bosses “to understand that you don’t build anything — whether it’s a car or a Web site — overnight.” Especially not something as complex as CornerHardware.com. And in Internet terms, what Hunt and Takata wanted was pretty close to overnight. So Finer immediately ruled out doing the job in-house. Given the tight market for top technology staffers, especially in San Francisco, he knew he couldn’t build the talented team he needed to even approach that timetable. Instead, at his recommendation, CornerHardware.com looked outside, holding what Cha describes as a “bake-off” for potential developers late in the summer of 1999. Xuma wasn’t the oldest or the biggest or the best-known contestant. But Hunt, Takata, and Finer liked what Xuma had cooked up. The decisive factor: speed. Cha, Xuma’s CEO, and Lerner, its chairman and chief technology officer, then both 29, promised to do the job faster than anybody else — within six months. They also promised to build systems and databases that would “scale,” or grow quickly without having to be replaced. That’s what CornerHardware.com needed — and that’s why Xuma walked away with a contract worth between $750,000 and $1 million. (Takata says the balance of CornerHardware.com’s launch budget went for interface design, software licensing, equipment, product photography, and related costs.) By Xuma’s standards today — less than a year later — the CornerHardware.com contract is a relatively small one. But at the time it was a huge coup, providing, if all went well, a link in the chain leading to bigger jobs. So Cha took the kind of risk that he would later say no developer should ever take: he went ahead without any built-in contingency plan — no plan B — in case of crisis. True to its own business model, Xuma would build the CornerHardware.com site using many preexisting components — a standard credit-card-processing system, for instance. Still, the Xuma team, headed by senior project manager Phil Lew, then 26, knew that building such a complex E-commerce site wouldn’t be easy. Xuma anticipated it would spend five to six months, beginning in October 1999, building, testing, debugging, and launching the site. The schedule, though ambitious, seemed entirely possible. That is, as long as nothing went wrong. Although CornerHardware.com and Xuma were both new, fast-growing San FranciscoÂbased start-ups, their cultures were entirely different. Sure, they both hired the best they could find: CornerHardware.com’s hiring coups included a Home Depot senior vice-president, a top producer from CNet, and several home-improvement authors and writers, while Xuma lured dozens of “rock-star engineers” away from other Web developers. But theirs were very different workplaces. At CornerHardware.com, a middle-aged artist or writer in a flannel shirt and jeans might sit in meetings with a college-age kid with a nose ring. It was rare for anybody to spend the whole night at work (with the possible exception of Finer, who worked around the clock in the countdown to the launch). In general, it was quiet, especially since most employees worked one or two days at home. (There wasn’t enough office space for everyone to be there at the same time.) In contrast to that relative calm, at Xuma nobody had a private office. Engineers racing to meet project deadlines spent days in the big war room known as “the pit,” living on trucked-in pizza or Thai food, working elbow to elbow at food-littered tables lined with computers. It was a noisy, messy, overwhelmingly youthful atmosphere. For Lew, it was exhausting, but it was also fun. His team bonded in a way that can come only from eating three meals a day together, working side by side until after midnight, then car-pooling home through unusually silent streets. And that bonding meant that together they felt they could do anything, Lew says. They would need to. In late fall, when Lew’s team was already spending most of its time in the pit simply trying to hit the original March launch date, something did go wrong. In mid-November, a CornerHardware.com competitor, HomeWarehouse.com, launched earlier than anybody had expected. About the same time, Amazon.com launched its home-improvement store, and Ace began putting OurHouse.com online. And funding was beginning to dry up for consumer dot-coms in favor of business-to-business ventures. Takata and Hunt decided they had no choice: they had to move the stealth launch from late March to January 15, and follow that with the public launch a few weeks later. They delivered the bad news to Finer, their liaison with Xuma. “They told me, ‘If we wait till March, we’re out of business,’ ” Finer recalls. “At that point I’m holding my stomach.” Finer reluctantly asked Xuma to shave close to six weeks off the initial launch date. Xuma agreed to try moving it up to January 15. “The trouble with being the vendor is that the customer is always right,” Cha says with a sigh. In this case, being right required heroics from Lew’s project team. “We had guys here that didn’t see their families, that were living here 24/7,” Cha says. (See Lew’s diary, below.) “We killed ourselves. But we got on-the-job training there. We learned.” What followed was a series of compromises made by both sides. Five days before the new launch date, the Xuma project team begged for an extension, saying they needed the extra testing time to make sure the site worked well. They asked for two more weeks. Takata and Hunt agreed to wait 10 more days. They knew they wouldn’t be doing themselves any favors by launching sooner if the site frustrated the very people they wanted to attract. Meanwhile, Lew was learning that both Hunt and Takata were demanding, detail-oriented, hands-on managers. “I used to say ‘Retail is detail,’ ” Takata says. “Now I say ‘E-tail is detail.’ ” Both Hunt and Takata closely tracked the site’s development, sometimes requesting changes that would take days of engineering time to complete. “Or they’d say, ‘We need 700 pages [of Web-site content before launch],’ ” Lew says. “We’d say, ‘We can do 200.’ “ Then there was the titanic tinkering on the day before the rescheduled launch. In the afternoon of January 24, Hunt decided the site needed another level of search hierarchy, or ways for customers to view products and information. While other team members frantically tested the site, one engineer spent six hours building in the new function, letting it go live around 8 p.m. After viewing the site that evening, Hunt changed his mind. Lew describes it this way: “Peter sees it. He doesn’t like it. I say, ‘It’s exactly what you guys asked for.’ He says, ‘I want it back like it was this morning.’ ” Lew asked Finer to intercede; Finer returned with this message from Hunt: “Sorry, but it has to happen. And you have to tell me when it’s done.” The same staffer spent the next three hours reversing his earlier work, finishing at about 1:30 a.m., just hours before the quiet launch. And yet Cha, ever the diplomat, doesn’t regard CornerHardware.com as particularly exacting. “All of our customers are very demanding,” he says. In fact, he adds, CornerHardware.com was a relatively easy client because, unlike many enthusiastic dot-com start-ups with ill-defined business plans, from the very beginning Hunt and Takata had clear ideas about what they wanted to accomplish. On January 25 at 3:30 a.m., Lew drove his entire team home from work, and, at 4:45 a.m., finally slept. CornerHardware.com had launched — without fanfare and without any major problems. It also launched without some of the things its founders had wanted. These were the trade-offs: CornerHardware.com had been photographing about 800 products a day, but even at that rate the company couldn’t shoot 37,000 products before the launch. Instead it posted a representative sampling from each category. (Says Hunt, “If you have 72 hammers on the site, do you really need pictures of all 72 from day one?”) It also launched with no way of issuing returns to customers’ credit-card bills. (Initially, refunds would be made by check.) And it launched with fewer products and less content than Hunt and Takata had wanted. But nothing crashed, and the products advertised were available, poised on the shelves in the Kansas City warehouse. Surprisingly, Takata rates the launch at about 95% of what he’d hoped for. “One of the lessons I have learned about the Internet space in general is that you can’t be a perfectionist,” he says. “The Internet is a game of weeks. If you can get your site up four weeks earlier and have a complete customer experience [even without some desired features], I’d say do it.” A month later the public launch went off without any major hitches. Since then, CornerHardware.com’s traffic has grown steadily, with Xuma continuing to run the site. Hunt and Takata won’t release figures except to say that they had more traffic in April than in the entire first quarter. As for the conversion rate — the percentage of people who actually buy something — “some days it’s 19% or 20%,” Hunt says. “And we have days where it’s 1%.” Meanwhile, the purchasing of big-ticket items has increased: in addition to batteries and lightbulbs, customers are buying bathroom vanities and power tools. These days the founders are still keeping an eye on the competition, especially that big orange company from Atlanta. “I’d be lying if I told you we don’t worry about Home Depot,” Hunt says. “But we don’t lose any sleep over it,” because, he says, he doesn’t believe the giant retailer will duplicate the CornerHardware.com business model or its real-time online customer service. As for that tree house, Hunt did build it much later. But he ended up creating it from a kit that he got from a brick-and-mortar retailer. Ironically, he got so busy starting up CornerHardware.com that he didn’t have time to build one from scratch. And in returning to that project, Hunt revisited one big lesson that he and Takata had discovered throughout the building of their business: it’s all about making compromises. Anne Stuart is a senior writer at Inc. Technology. Chronicles from the Pit Steve Finer, vice-president of engineering for CornerHardware.com, and Phil Lew, Xuma’s CornerHardware.com project team leader, each kept diaries for several weeks between the Web site’s “stealth launch,” in January, and its first major marketing pushes, in early March. Here are some excerpts: Steve Finer Thursday, February 17 At 3:45 a.m., we added another Sun Enterprise 4500 server with 16 CPUs. Serious horsepower! As I got off the elevator this morning my coworkers gave me a high five because the new server made the site so much faster. Wednesday, February 23 Two new applications went into alpha testing. One rotates products featured on the home page. The other is a media-tracking application [which tracks the effectiveness of promotional campaigns]. Unique visitors to the site have doubled since last week. Today the site was accessed from all over the world, including from Taiwan, Slovenia, Thailand, Malaysia, Israel, and Japan. Actually shaved for the first time in weeks. Wanted to be presentable for a taping we did today with Xuma and the Mark Bunting video crew [for a business video to be shown on United Airlines and TWA]. Thursday, February 24 Biggest challenge: preparing for the March marketing campaign [a newspaper and online ad campaign with coupons]. We need to be able to support the traffic. Friday, February 25 Added 6,000 new images. Finished quality-assurance process for media tracker and product-feature applications. Also [a New York Times] article gave us a nice boost in traffic and tripled the number of people who went to the customer-support line yesterday. Monday, February 28 We’re all really busy. The engineering team has a lot of projects that need to be completed, including the media tracker and the product-feature device. Tuesday, February 29 Public launch. It has been a difficult day. All departments are asking for additions to the site. It’s a challenge to satisfy all requests and prioritize them properly. Our lack of space [is a problem]. My job would be so much easier if we could hire people to supplement Xuma’s activities. Friday, March 3 We’re really focusing on driving traffic. We added a new disk drive to the development server and a new storage device to help manage all our images. We also added more than 40 new how-to articles. Don Johnson and Cheech Marin filmed their TV show, Nash Bridges, outside our office. We passed out CornerHardware.com hats to the crew, which they all wore during the filming. Saturday, March 4 Had one last meeting with Xuma and my staff to make sure we have the right staffing in place to support [Sunday's marketing campaign]. Monday, March 6 The marketing campaign went off without a hitch. We were able to support all the additional traffic. It blew my mind! Daily traffic today was more than double normal, and we had 10 times as many people buying products as we have on a typical day. Next week the campaign will branch out to a larger part of the country. Since everything today went so well, I’m not too worried. But it is still keeping me up at night. Phil Lew Thursday, February 24 Development seems to be going better than planned. [CornerHardware.com CIO Ken Hite] called me in the morning wanting to track an order number for an order where the money wasn’t captured. The problem was with the file from the third-party fulfillment house. Lesson learned: We need to build in more robust error checking. We cannot assume that the third-party fulfillment house will always give us the correct formatted file. The need to develop a robust process to keep the content and data fresh on the live site is giving me grief. [The process was so slow that when CornerHardware.com updated many items, it could take days for the updates to take effect.] We are working on another solution to load data but don’t know when that will be in place. The media-tracker application needs to be done by tomorrow (that is, in the hands of QA). Things are going great, but I’ve been down this road before. I need to keep the pressure on development to make sure that they follow through on our delivery dates. Friday, February 25 Had our first meeting with [new CornerHardware.com executive producer] Alice Hill. She had some fantastic ideas about the site direction. I look forward to working with her; she’s going to be able to streamline the decision-making process since we will not have to wait on [COO Peter Hunt and CEO Rich Takata] in the future for decisions about where the site is going to be heading. Sunday, February 27 What I’ll remember most about today: talking to Bill [Meehan, Xuma's lead engineer on the CornerHardware project] at midnight on a Sunday night about CornerHardware.com — again. We make this site go. Both of us take a lot of pride in that. We are both emotionally attached to this project and want CornerHardware.com to be the best it can be. That makes it easier to stay up late on Sunday nights to do things for CornerHardware.com. Monday, February 28 Everyone is very excited about the big day tomorrow [the official launch]. I think we have all done due diligence to get ready for this big day, but until the day comes you never know. Tuesday, February 29 Crazy, crazy day. In the afternoon, CornerHardware.com informed us that [there were] 40 additional content pages to be attached to a new front page. At 5 p.m., 6 p.m., 7 p.m., 8 p.m., this content had still not passed the QA check. The new front page will not be able to go up until tomorrow. Traffic was higher than usual. Two articles [about CornerHardware.com] came across my desk: one was from CNet and the other from ZDNet. Didn’t get much sleep, since we were at work until 5 a.m. Sunday, March 5 First thing I did when I woke up today was log on to the Internet via my DSL to check on the site [following that morning's newspaper coupon campaign]. I can see that the orders are already rolling in from Washington and Utah. By 10:30 a.m., we are already at 15 orders for the day. I called Steve Finer at home (I think I woke him up) and let him know the good news: people are hitting the site and buying things. Please e-mail your comments to editors@inc.com.
Options: Technologies on the Horizon The Internet now reaches your digital phone — without wires. But it’s not the Internet you know By now, you’re probably already aware that E-mail and Web surfing are available on digital phones and other handheld devices. Well, if the prospect of watching people in restaurants and ticket lines tap away at their mobile phones to exchange E-mail, shop, or trade stocks bugs you, look at the bright side: Would you rather they were talking? The top two tool-toys of the new millennium — the mobile phone and the Internet — have finally melded. Through Sprint’s PCS Wireless Web service, the itty-bitty displays of properly equipped digital phones now present live Internet E-mail, news, shopping, and trading. Sprint’s service tips an iceberg of wireless Internet services now coming online not only for phones but for pagers and handheld computers as well. By 2003, according to GartnerGroup’s Dataquest, 33 million people will add themselves to the ranks of those in the United States already sending and receiving E-mail and other nonvoice data — like that airline reservation to Omaha and your sister’s E-auction bid on that great Farber Bros. decanter — wirelessly. If you need anywhere, anytime access to E-mail and the services of the most popular Web sites (and only the most popular Web sites), Internet-connected digital phones, handheld computers, and other wireless gizmos soon to come promise powerful convenience. But don’t take promises of “the power of the wireless Internet in your hand” or “Web w/o Wires” too literally. None of these devices enable you to hop onto the Web and browse around wherever you will, as you can do on a bona fide computer. The “Mini” in the Browser Phones equipped for Sprint’s Wireless Web feature a “MiniBrowser” program. Pay close attention to the first four letters of that name. The “browsing” available from Sprint allows you to choose from among a list of popular Web sites — Yahoo, Amazon.com, CNN.com, and AmeriTrade, to mention a few — that have repackaged their content in a special text-only, simplified version for display on a phone. At this writing, the list features a few hundred sites, but that number is growing steadily. You do just about everything on the Wireless Web simply by pressing the phone’s dialing buttons to make choices from text menus on the phone’s display. Graphics are gone — including the banner ads that clog many sites. Going graphics-free not only permits practical use of a phone’s tiny display but also keeps performance snappy — which is important, since you pay for Wireless Web by the minute. (See “Early Adopter,” below.) In addition to using the featured sites, Sprint users can sign up for “Web updates” — data such as sports scores, stock prices, and auction status delivered to your phone automatically. You choose which updates you want to receive from the Sprint PCS site or from the site where the news originates (such as Yahoo Mobile). Unlike Wireless Web, Web updates require no special phone; all Sprint PCS users can sign up for them. But How Do I Type? On the wireless Web you occasionally have to do something other than choose from menus. Composing messages, telling Amazon.com which book to find, or selecting a stock all require typing text. And that’s when an Internet phone’s biggest drawback becomes most obvious. For activities requiring text entry (such as composing E-mail messages or adding a speed-dial name), each dialing button has four characters assigned to it; for example, press the 2 button once to type a, twice for b, thrice for c, and four times for 2 . Obviously, this is not the means by which you would want to ask Amazon.com to find Everything You Always Wanted to Know about Sex (But Were Afraid to Ask). But it’s tolerable for short search terms, stock symbols, and boilerplate replies such as “Thx 4 msg. Will call u.” There’s a stopgap to the text trouble: you can buy a cable ($100 to $200) to connect Wireless Web-enabled phones to a Palm or Windows CE handheld computer or to the standard serial port in a notebook (or desktop) PC. The phone then functions as a wireless modem, enabling the computer to dial up any Internet provider. That’s not as perfect a solution as it sounds: current wireless technology limits the connection speed to 14Kb, one-quarter the speed of a regular dial-up 56Kb connection and pretty poky for Web surfing — though adequate for E-mail. But the pitch is that users can do much of their work from the phone alone and need to resort to the cable scenario only rarely. Limitations notwithstanding, it’s surprising how much one can actually do on these downsized sites through the phone alone. Yahoo, for example, offers access to all its services (other than Web searches), including E-mail, a personal scheduling service called Calendar, and Web updates of scores, auctions, and stock prices. When your E-mail and calendar are on the Yahoo portal, you can access them from any computer (notebook, desktop, Palm, or Windows CE) that has Web access and from your mobile phone. Shopping sites generally offer catalog searches and full ordering capability — though without graphics, of course, you buy sight unseen. More Handheld Net Coming At this writing, Sprint Wireless Web is the only nationwide carrier offering anything approaching true Internet content over a telephone, although a few regional digital-phone companies (like Bell Atlantic Mobile) are rolling out similar Internet phone services. Some other telecom carriers provide limited sorts of wireless Internet-based services. GTE Wireless and BellSouth Mobility, for example, both let you compose a short text message on a Web site or in an Internet E-mail program and then send that message to appear on the display of a GTE or a BellSouth Mobility subscriber who pays for the optional text-messaging service. BellSouth customers can also get automatic news updates from CNN, similar to Sprint’s Web updates. But is all this the same thing as getting the Internet on your phone? Hardly. Other devices also provide their own versions of Web access to a limited number of sites. Some new digital pager models from Motorola and other manufacturers also access Web-portal content and retrieve E-mail from portals. And the Palm VII Organizer can connect to Palm’s own Palm.Net wireless Internet service to retrieve live Web content and send and receive text messages. But just like Sprint’s Wireless Web, Palm.Net doesn’t let Palm VII users wander the entire Web. Instead, Palm users can access only a certain number of sites (about 130, at press time) that employ a “Web-clipping” application. The program delivers selected data to the user in a format that the Palm VII can display. Of course, it’s appealing that you can access Internet services wirelessly at all. But today the lack of flexibility afforded to wireless aficionados is the biggest drawback to these services. At this moment, your choices are pretty limited. If you choose a Sprint phone, you get Wireless Web. If you choose Palm, you get Palm.Net. Do I Need It? When it comes to portable communications and the Internet, the “Do I need it?” question is moot. These things really come down to “Do I want it?” And you already know the answer to that, don’t you? But seriously, how useful are wireless portal services? Well, as they’re now configured, these services deliver the greatest value to subscribers who already use a portal as their E-mail hub and restrict their Web surfing mainly to such Ôbersites as Amazon.com or CNN — at least when they’re on the road. If you’re dependent on your ISP E-mail account (not a portal) and you really need to surf esoteric sites, wireless portals don’t offer you much. Consider coverage, too, when you’re deciding whether to plunge into wireless Internet. Although Sprint’s national PCS network covers all U.S. metro areas, many rural areas are not included. If you already subscribe to a digital-voice plan, like Sprint PCS or Bell Atlantic Mobile’s SingleRate, you’re probably aware that if you travel outside the digital service area, you can continue to chat, thanks to “roaming” agreements that send your call through the networks of other carriers. But Sprint’s Wireless Web functions only within the smaller confines of Sprint’s all-digital network, cutting out when you stray into roaming regions. Similarly, the Palm.Net network covers more than 260 metro areas but leaves many locations between the cities unserved. (You can examine coverage maps on the www.SprintPCS.com and www.PalmNet.com sites.) More important, watch for an industry association called the WAP Forum made up of more than 200 companies. The group, which includes every heavy hitter in communications and digital hardware, has developed Wireless Application Protocol, a new global specification that will standardize the way wireless devices exchange and display voice and data. Already in use in Europe and Japan and set to explode in the U.S. market this year, WAP defines a new language — WML (wireless markup language) — for creating Web pages intended for use by wireless devices. What does this mean to you? A variety of digital-phone makers, including Nokia and Ericsson, are building so-called “WAP-enabled” devices that are part phone, part personal digital assistant. When they hit the United States this year (priced at around $500), these hybrid handhelds should be able to display any Web page that’s been translated into the new language. To get the goodies from WAP, you must be holding a WAP device — meaning that virtually every U.S. user of an Internet phone at this writing will need a new phone (pardon, new device). The full transition to WAP will take several years. During that time companies like Spyglass and Digital Paths are delivering software that automatically converts everyday HTML Web sites into WML. The software promises to enable WAP users to see any Web site online, including the millions of pages that may not have been retooled in wireless-friendly WML. If you’re ready to run out this instant to visit Mel, the take-no-prisoners electronics salesman (“Want the extended warranty on that, pal?”), you’re probably also the type who’ll be drooling over sexy new WAP devices by year’s end. By then, your sexy pre-WAP communicator may seem as obsolete as a CB radio. You may want to hold on to your money until the new toys arrive. Ned Snell is a freelance writer living in Florida. He is the author of 16 books, including Teach Yourself the Internet in 24 Hours , Third Edition (Sams, 1999). Who Are the Players, and What’s the Cost? Wireless Internet service is sold in the same sorts of mind-twisting packages in which voice services are sold, although minute for minute it’s more expensive. For example, with Sprint, $50 will get you 500 voice-only minutes, and $60 will purchase 300 minutes that you can use for both voice and Wireless Web. The information below was accurate at press time, but prices in this market change rapidly. Check with providers for current details, and watch for discounts and special offers, which are common. DEVICES Internet-Ready Phones Digital phones compatible with Sprint Wireless Web start at around $130 and are available from several manufacturers. You can get them in all-digital or dual-band models. Major makers include: NeoPoint : 858-458-2800 Ericsson : 800-374-2776 Motorola (phones and pagers) : 800-453-0920 Nokia : 888-665-4228 Qualcomm : 800-349-4188 Palm Computers Palm Inc. : 800-881-7256 Palm VII Organizer: $500 (street) SERVICES Sprint PCS Wireless Web : Monthly plans range from $60 for 300 minutes (combo of voice and Internet) to $180 for 1,200 minutes. All such plans also include 200 Web updates. Additional minutes cost 25¢ to 30¢ each, depending on the plan, and additional Web updates are 10¢ each. You can add 50 minutes of data and 50 Web updates for another $10 to your existing voice plan of $30. (No matter how you work it out, adding data to the mix increases the per-minute cost. Sprint’s twist of plan options can make that hard to notice.) Finally, you may also sign up for a voice-only plan, purchase no Wireless Web plan, and still use the Wireless Web as needed for 39¢ a minute. (You must purchase a compatible phone for any Wireless Web; Web updates may be received on any phone used on Sprint PCS.) Palm.Net : Three plans are available, all tying cost to the number of “transactions” performed per month. A transaction is one message, one stock quote, one score, and so on. The basic $10 plan includes 80 transactions. For $25, you get 240 transactions. Up it to $40, and you can tick away 480 transactions. EARLY ADOPTER What’s the business benefit of tapping the Internet through a telephone? Well, have you heard about the guy who started a company while riding an airport courtesy bus? Howard Gerson, president and co-owner of Certified Safety Inc., a 200-employee Kansas CityÂbased maker of first-aid supplies, was itching for E-mail from a business partner in Israel. Gerson saw getting that message and posting a reply pronto as a vital relationship volley in founding a new “M-commerce” (that’s “M” for mobile) venture to be co-owned by Gerson, his family, and TeleVend, a one-year-old, Jerusalem-based company that supplies network services and applications to the vending-machine industry. But by the morning on which Gerson was packing up his family for a trip, the missive from the Land of Milk and Honey hadn’t arrived. After dropping his family at the airport terminal, parking the car, and boarding the courtesy bus to ride back to the terminal, Gerson connected to Sprint’s Wireless Web service through his NeoPoint 1000 digital phone. He opened the Yahoo portal from the phone’s MiniBrowser menu, retrieved his Yahoo E-mail — and breathed a sigh of relief. The message he’d been waiting for had finally arrived. Using the phone’s keypad, he quickly replied. Gerson says that the exchange — with “no cables connected, on a bus in the middle of Kansas” — was a critical step in the formation of Wirca Inc., which will develop and market wireless cash-transaction technologies. Gerson says Wirca’s products will make it possible, for example, to pick up a hamburger and fries at the local fast-food palace without handing over cash or a credit card — the transaction will take place automatically, wirelessly, as you drive through. Admitting that text entry is cumbersome, Gerson says it’s manageable enough for brief responses. For more full-featured E-mailing, he hooks his phone to his notebook PC through the optional cable and wirelessly dials his regular Internet provider. That comes in handy not only on the road, says Gerson, but also at home, where having four kids can make the availability of an open phone line “a challenge.” Tapping into the Web solely from his phone, Gerson has dipped into the MiniBrowser’s other offerings. He has made wireless transactions on AmeriTrade’s site and recently ordered a book from Amazon.com during a lull at a breakfast meeting. Though he has been a Yahoo portal customer for two years and an avid user of Yahoo mail, Gerson doesn’t manage his schedule on the portal, preferring to keep his calendar in his phone’s built-in, off-line scheduling application. Such phone features, along with the NeoPoint’s large (for a phone) display, blur the boundaries between mobile phones and personal digital assistants. The blur has come far enough for Gerson; a longtime Palm user, he has abandoned his PDA in favor of his phone.
