After spending hard time covering last year’s net neutrality battles, it’s easy to get used to hearing telephone companies saying up is really down, and black is really white. That’s why we’re not going to even nibble at the pitch Qwest’s PR representatives sent our way Monday, an invitation to hear more about Qwest’s “broadband challenge,” a campaign “attacking the belief that cable broadband is faster than DSL,” says the email.
Pul-eeze.
Everyone from Nicholas Negroponte to Microsoft to Intel wants to help the poor kids in emerging economies by giving them a laptop, a phone or some frankendevice. No one seems to ask the question if the kids actually need it, especially when food and water should be higher on the priority list.
As we wrote earlier, “What is a kid who goes to a school with rampant teacher absenteeism, no infrastructure to speak of –like desks, fans or electricity to run those fans –going to do with a laptop?”
However noble these ambitions be, these are skewed elitist plans… but I don’t want to get political here. What is amusing is that how each one of the promoters is dissing each other - Negroponte recently complained about Intel being Intel on 60 Minutes, and accused Intel of undermining his one laptop per child plan with the $200-Classmate device. (Not that I think Intel is without blame .)
Competition in broadband - and I mean real competition not what passes for competition in the US - is such a beautiful thing. It works so well for the consumers. UK broadband is a perfect example.
A few months ago, NTL and Virgin merged to become Virgin Media, the largest broadband provider in the British Isles. They didn’t do such a good job of keeping their customers happy, and British Telecom surged ahead, leading to speculation that some private equity guys are going to buy out Virgin Media.
Sony unveiled a new 80GB PS3 model today, scheduled to launch this June in the broadband-pervasive South Korea. The news comes amid slow sales of the pricey console and just one month after pulling the cheaper 20GB version from North American shelves.
“At this time there are no concrete plans [to sell the 80GB model in other markets],” said one company spokesman, speaking with PC World. However, Sony also denied rumors of the newest PS3 back in March, despite filing a change request with the FCC that mentioned the 80GB’s existence.
We’d be hard pressed to ever admit that we would actually miss any telecom moniker, but still. . . . AT&T’s announcement this morning that it’s starting the final phase of its rebranding efforts from Cingular to AT&T, does make us pause. The Cingular brand, which Om says it cost nearly $4 billion to build-up, just fell into the dustbin of the rare well-known and now retired brand names.
While everyone has been waiting for them to make the change over, not everyone agrees it’s a good move. Analysts say that AT&T was disappointed with last quarter’s postpaid subscribers adds and partially attributes that to the re-branding efforts of its mobile service. That’s why the company is using the iPhone to put the seal on the branding play.
But a lot of folks also think Cingular would be a better branding umbrella than the staid phone company-conveying AT&T. Including our readers — 54% of them say Cingular is a better choice, while only 28% like AT&T better.
Updated: Alltel, one of the smaller mobile carriers has decided to go private in a deal that values the company at $27.5 billion ($71.50 a share in cash), a 23% premium over Alltel’s closing price on December 29, 2006, when the rumors of the likely deal first surfaced. The price offers a premium of around 10 percent over Alltel’s closing price Friday. The $71.50 a share offer pegs the valuation of Alltel at 9.4 times 2007 earnings and 8.5 times 2008E EBITDA.
The company is being acquired by two private equity players, TPG (Texas Pacific Group) Capital and GS Capital Partners (private equity arm of Goldman Sachs). The transaction is likely to complete in the fourth quarter of 2007 or by the first quarter of 2008, and Scott Ford, Alltel’s chief executive officer, will remain in his current role.
Mid-February 2006
After years of research and soul searching, I come up
with my revolutionary business model: it involves providing free wireless connectivity to local businesses. The service will be supported by an ad network that targets the businesses’ most frequent customers. I have no experience in marketing or advertising, so I set out to contract with a business that can assist with this aspect of the product/service.
I pick up a local business based publication and in it find a story about a new marketing startup, TaxiTop Advertising, which designs and makes those glowing triangular signs affixed on the top of taxicabs. Like me, the founder is young (in his early 20’s; I’m in my late 20’s), new to his industry, and new to the ways of the entrepreneur. Nevertheless, the article relates how he negotiated a deal with a local cab company and I am impressed. Viewing this as an opportunity to establish a B2B relationship with another entrepreneur who is open to new ideas, I pick up the phone and call TaxiTop’s founder. We setup a meeting.
Third week of February 2006
My initial plan was to find a company who could help design and facilitate a marketing plan for the product I am planning to develop. The meeting goes well. He quickly sees a business opportunity in blending his marketing savvy with my wireless idea. “We’ll make millions!” he says, “Let’s get to work!” (Sure but I’m thinking: I would like to simply make some monthly debt payments and maybe buy an new mountain bike!) Looking back, this is where I should have put some brakes on. But I was motivated in finding someone who shared my vision. He was accomplished and forward-thinking, which I felt was necessary to understand how to implement the wifi model. We start talking “partnership” on a completely separate operation.
Beginning of March 2006
There is no beta or even alpha of our product. Only an idea and vision on how it may manifest itself and what can be done. We begin brainstorming while setting up the legal details of our relationship and find a local property to test an initial implementation. We know that public accessed wifi is limited in the
Ozarks and there is opportunity in advertising to the crowds this mall draws. Some research into this property educates us on two major details. 1) This mall is one of Simon’s largest with regard to
overall foot traffic consistently ranking in the top 20. 2) They are in the last phases of planning for a new $30 million dollar makeover that will be finished by October.
April 2006
Throughout March and into April we solidify terms of our partnerhips and design our product:http://www.flickr.com/photos/matcatthomas. We felt that advertising over wifi might limit the possibilities in a large mall environment. The product had to be tangible. Something that added to the mall experience. We came up with the plan to develop kioks, called ShopIT units, with interactive mall maps. When used, the maps provide details on sales and buying opportunities in the stores the customer was interested in visiting. In addition, we sold the top screen advertising space to businesses outside the mall.
Eventually, with WiFi capablity, we imagine we can set ourselves up as an ISP for mall tenants, who might use web-based applications running off our ShopIT units to aid security or track sales. The possibilities seem endless and we are stoked to get started!
Mid April 2006
We name our business Xponix! (Think exponential.) Recognizing that time is of the essence, we begin negotiations with our beta property manager, Simon Property Managememt. Our naive plan was to woo the client while quickly snatching up some Small Business Administration (SBA) funding. What bank would not want to be a part of this? Boy were we wrong.
May, June, July 2006
Negotiations with Simon are sloooooooooowwwwww and we learn alot about their operations and overall use of technology within their massive organization. What is even more depressing is our inability to acquire funding from the multitude of banks in the area.
Bank 1-NO
Bank 2-NO
Bank 3-NO
Bank…NNNNO!!!!
When you are young and have no assets to use as collateral, the banks won’t lend to you. And while there are some great resources for education at SBA, banks still require your personal guarantee in addition to the federally backed SBA agreement. By the end of July we are able to finalize the agreement with Simon. Great! Now, where do we get the money for this?
August, September 2006
Where there is a will there is a way. I never experienced this
phenomena until jumping into business. It turns out that you can get A LOT of money when you have good credit. I believe in this business and am willing to sacrifice my financial well being see the beta installation happen. We have a deadline of October 15th to have our ShopIT units designed, delivered and installed before the grand opening of our beta mall’s face lift. Credit cards, lines of credit and leases are our final option — we go long on consumer credit card debt: somehow we source over $200,000! With money coming in, we begin to see our vision take shape.
So you may be thinking: “Why not contact an angel or VC investors?” Answer: Time and lack of investment interest in this area. Don’t get me wrong, we did try. We contacted professional investors and firms in St.Louis, Kansas City, and beyond. But given that we spent so much time developing a business plan for local commerical banks, a presentation requested of most VC firms could not be adequately designed before launch. Besides, we were getting money through credit cards and making the numbers work. So we decided to get a working product installed first. From there, we can roll out the other mall locations with Simon, and other real estate companies seeking this digital advertising medium. Then we can show the professional investors that what we have is worthy of their (now heightened!) interest.
End of September to Launch 2006
We have assembled a team including sales, HR, marketing and technology. Happily, most employees opt to work for free or on the cheap. Our custom units are due to be delivered on time and our custom map application is on target. Amazingly, everything has fallen into place! We have bootstrapped our way into
this business and formed a team that could carry us to more Simon
properties. This is sooooo exciting! Yet scary as hell. We have pre-sold a few advertisers and actually have revenue before our launch, yet we learn that selling the advertising is not as easy as expected. The lead time for landing a client is much longer than anticipated. Nonetheless, it is a start and we are happy to see it. Now it is
time to perform.
Launch Day
Our product is only a quarter complete. Despite a few software glitches and pulling an all-nighter the day before launch troubleshooting and installing the systems, we make it for the days festivities. David Simon himself attends the grand opening and gets the opportunity to experience our product! Our corporate contact acknowledges our efforts by letting us know he never expected us to make it but was impressed that we had. (Thanks…I think!)
January 2007
We are still in the mall and have almost broken even for this
implementation. We’re up and running, but being tied up with the roles of sales, tech, marketing and HR, we e have limited time to really pursue the additional investment capital we need. So we limp along. Between launch and the end of January, we lost several team members and struggled to maintain and make new sales. It was depressing.
However, a new insurgence in our product offering and sales occurred during a freak ice storm that left many businesses and residents without power for over a week. When a business has no power, they are not in the mood to invest in advertising. So, what do you do? Instead of twiddling our thumbs and waiting to be declared insane by doing the same thing over and over then expecting different results, we set out to change our product.
The Ice Storm Adaption
Within the period of a week, one of our team members taught himself some critical coding by reverse engineering our mall map application. With this, we revived our medium by increasing the interactive features and making it capable of tracking and reporting on its use by mall visitors. The detail we can give our customers on their advertising use by mall visitors is amazing! By quickly implementing these new features re-vitalized our sales and overall product offering.
A Founder’s Hangover
Alas, my over eager desires to get into business for myself have proved to be a misstep. My partner and I have been in discussions regarding my potential departure from the company. Ultimately, I went into this and invested much more than I should have. The brake should have been applied right after our first meeting.
But in the end, my fears of taking the entrepreneurial plunge have subsided dramatically. I have learned much about myself and what I am capable of doing. This gives me hope in future ventures I involve myself in. No matter what happens with Xponix, I believe I will make something happen. I am addicted to exploring the ideas I come up with. Ultimately, my family depends on my success and that is some serious motivation.
I am an engineer with good ideas for possible products, but I’ve struggled with how to make the break from my 9-to-5 job to build my startup.
What is the best way to make the transition from “9-to-5er” to founder?
Should I make the change slowly and gradually, or bite the bullet and do it all at once? If gradually, what is the best way to approach time management? How much of a workload should one take on for the new venture? What should the balance between my day job and the new venture be? How much of the startup work could/should be outsourced? I’ve assumed that getting funding, and other administrative things can wait until I really hit the cieling with site traffic/demand for my product. (Or this a misconception too?)
Last year, after visiting British Telecom (BT) and meeting with their executives, I left London with one key take away: BT was one telco that completely understood that it was facing uncertain times, and had no choice but to reinvent itself to survive.
The senior BT management understood that while broadband was a start point for its reinvention, it had to boldly go where no telecom had gone before, if they wanted to survive. They had to behave and think like an Internet-based software company.
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