Attended a very interesting Caltech-MIT Enterprise Forum yesterday on The Wireless Revolution: The Next Wave of Opportunities. The presentation featured Jeff Black, CEO of iAtlas and Vision Ventures partner, Jaideep Singh of Clearstone Venture Partners and Valerie Buckingham of Nokia's Innovent. The program was moderated by Joe Platnick of the Pasadena Angels. Jeff is an optimistic serial entrepreneur and investor who believes that there are excellent and large opportunities in wireless equivalent to what we witnessed during the internet boom. Jaideep presented Clearstone's investment criteria that would be applied to wireless proposals. And Valerie provided an explanation of Nokia's partnering and collaboration efforts for Innovent - which is more incubator than investment vehicle. While the frames of reference for each of the presenters was very different, their view of the emerging wireless market spaces were strikingly similar.
Jeff Black has been involved with some of the largest Internet success stories - hotels.com, Alta Vista and resorts.com - successfully monetizing eyeballs. His current optimism about wireless is predicated on the scale of opportunity given 600 million handsets are sold every year. On Verizon Wireless network, 5.3 million BREW application downloads occur each week with the moderately successful app downloading 100,000 times per week according to Jeff. His steps on getting started:
Patent - protect your idea
Prototype - prove it works
Business Model - significant opportunities to innovate here; more important than the business plan
Find Experts - people who know more than you do and get them involved
Take Some Money & Build Quickly - any source to get into the market as quickly as possible
Your clock starts when you "Open your Mouth" - once you disclose what you're doing, you have to start running.
He recommends you don't dally and you especially don't publicize what you are doing by posting ideas on blogs and asking for input or review. His prescriptions for success are exactly what you would have tried to do during the Internet boom - get out there quickly with an idea and see how much attention you can attract. Note that much of the nonsense of irrational investment during the boom was not due to those that followed this process and succeeded - rather that the approach was applied indiscriminately to everything. Jeff's model is correct for certain types of businesses - as resorts.com and hotels.com are good examples. They don't work nearly as well for selling dog food or bricks. He is a firm believer in the pay-off from innovation and first mover advantage. And he protects what he is doing by not publicizing works in progress and believes in the power of patents to provide defense and for their intrinsic value.
Jeff is a tout for acting quickly and decisively. Jeff provided the example of people who went to business owners adjacent the local Starbucks and installed an Access Point and charged a daily rate at a small fraction of what Starbuck's official wireless partner offered. The same service, priced correctly for the occasional user - not the loyal user who repeatedly shows up and uses wireless access from the same location. Innovation comes in many guises and copying shamelessly and improving through non-traditional ways - via price discrimination models or as a convenience or even targeting occasional users can be very successfully exploited – if the numbers are big enough.
Jeff provided a brief overview of the areas that he thought were hot or not:
HOT - Content, Games, Business Apps, Location
NOT - Ring Tones
His list of opportunities:
VoIP - with reference to Vonage and Skype and their prospects and contributions to encouraging and promoting VoIP and combinations of tech (Cell + WiFi = mobile PBX for offices or combined in single handsets may cross from cellular to WiFi based on airlink availability and cost)
Ring Tones - not hot but still will make money
Color Tones - different pictures/graphics identifying incoming call
e-Commerce - enabling technology to encourage using cell phone for transactions
Micropayments - the big elephant in the middle of the room someone needs to capture
Content Enablers - getting around walled garden erected by wireless carriers, WideRay as an example
Short Distance, High Speed Relays - extending the perimeters of where and what work occurs
First Responders - RFID + Zone Mapping to locate within buildings or where other location technologies don't work well
Cell Services - Automobile traffic analysis based on cell phones connecting frequently to towers - map their locations and speeds and get instant traffic report
MetroNets and HotSpots - 250,000 hotspots and still not at critical mass; really interesting opportunities will develop when everywhere, all the time are linked and meshed.
MEMs Gyro - a Micro Electro-Mechanical gyroscope have been successfully developed (by a local aerospace firm) and may be deployed in handsets. As a compliment to GPS would allow precise positioning even when GPS was not readily available - underwater, inside buildings, etc. And it would go a long way toward improving battery performance in handsets as GPS is intensive application requiring CPU and MEMs Gyro is nearly passive.
Valerie's and Jaideep's presentations will be covered later this week.