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Originally published on 03/27/2002
Inside the PC Forum conference hall, like other conferences I've attended recently, my cell phone can't get a good signal, although a Wi-Fi (802.11b) wireless network is up and running. But who's running this network, and why?
Fast Facts:
Joltage
www.joltage.com |
| CEO |
Michael Chaplo. Previous job: SVP of marketing, ServiceWare |
| HQ |
New York, NY |
| Employees |
14 |
| Product |
Wireless access |
| Funding |
Angel funded; looking for $7M A round |
| Profitable |
No; projected for Q1 2004 |
| Tidbit |
Founder Andrew Weinreich was CEO of Six Degrees |
Today's Wi-Fi provider is the startup Joltage, and while it's not charging PC Forum attendees for access, it does have a clever revenue model. Unlike the first generation of wireless bandwidth providers, Joltage doesn't install access points. Instead, it pitches businesses to install and run Wi-Fi hardware, and provides the software to manage log-in and billing. It pays location owners half of the revenue wireless users generate at their "hot spots." And there's a multi-level marketing twist: If a user who first signed up at one location uses another business' Joltage hot spot, the owner of the original location gets a cut of that revenue too. Users pay $24.99 a month for access to the network.
There is a legal problem with the model: bandwidth providers don't generally include permission to resell their capacity in the terms of service. A direct relationship with an ISP, like Covad, is a way around this. Also, Joltage doesn't do much for free Wi-Fi access. However, it is still a good thing for wireless users, since it gives business owners (of cafes, hotels, airports) a strong financial incentive to set up wireless access points. And the network effect of the model is very strong: the more Joltage hot spots there are, the more likely consumers are to sign up, generating revenue for Joltage franchisees at all locations.
Another wireless hot spot aggregator, Sky Dayton's Boingo, also provides single sign-on and shares revenue with access point owners. The difference is that Boingo aims to unify existing wireless ISPs and has a stronger focus on security and corporate access.
Boingo is a quicker business to get off the ground (its first group of access points are already installed), but Joltage makes it easier for any business to set up Wi-Fi access -- and potentially profit from it.
- Rafe Needleman
email: rafe-needleman@catchoday.com
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