Wireless Wealth

Maximizing Your Return

No matter how you decide to get into Wi-Fi, you will have a vested interest in getting people to sign up and log on to the network. That will require marketing. Hundreds of thousands of people pass through hot spots each day and don't realize that a broadband Internet connection is available. Every day, almost 150,000 people go through Dallas/Fort Worth International Airport, 100,000 through Denver International Airport and 75,000 through Seattle-Tacoma International Airport-three of the largest hot spots in the country. Yet in-terminal surveys show few people know the network is there.

You can't see Wi-Fi, and neither can your customers. You have to actively promote it in the venue. Placing highly visible signage where customers can see it--in the window, on the tables, near the cash register--can dramatically increase hot-spot activity. Even in premier locations, a noticeable drop in sign-ups and connections have been noted on the days that the owner/operator forgot to place the sign in front of the hot spot.

If you remember when mobile phones were monstrous "car" phones hard-wired to vehicles, then you can see where Wi-Fi is today. At that time, people couldn't imagine having a small, handheld phone they would carry and talk on everywhere they go. Today, small omnipresent Wi-Fi devices are on their way, and their owners will be looking for wireless connectivity.

Imagine the prospect of earning a nickel or even a penny for every minute of local cellphone traffic if you had placed a cellular tower on the top of your business office during the last wireless revolution. There's a new opportunity just as compelling but much less expensive to get into with wireless data. Entrepreneurs can benefit by establishing hot spots and providing the cellular towers of Wi-Fi. With hardware manufacturers' dedication to proliferating wireless devices of every kind imaginable, it won't be long until everyone is carrying Wi-Fi devices and looking for Wi-Fi networks in order to get connected. Now is an ideal time to start putting the network in place for all those people in search of Wi-Fi.

The Surf's Up

Rick Ehrlinspiel, 44, founded San Francisco-based Surf and Sip Inc. in 2000. After just three years, the company is already recognized as one of the largest hot-spot operators in the country, with nearly 250 locations in the United States and more than 100 in the United Kingdom.

Funded with about $1 million in angel capital, Surf and Sip designed and deploys a proprietary hot-spot device, plus its own back-end network monitoring, authentication and billing services. "We worked with an engineer to build this device--an access point and server together in one box, about the size of a DVD jewel case," says Ehrlinspiel. "We brought our costs down to about $200 per location."

Early on, Surf and Sip recognized that people wanted Internet access at cafes and other hot spots, but few folks actually carried laptops with them. The solution? "Rental laptops," says Ehrlinspiel. "Without the revenue stream from rental machines, we'd have had no value proposition to the shop. There were just too few wireless users, and I wasn't going to sit here for three years while people decided to bring laptops with them." With just five employees, the combination of access and equipment seems to be working for Surf and Sip. Says Ehrlinspiel, "We have some coffee shops that gross $2,000 a month, and we split that revenue with the shop owners." -D.W.

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This article was originally published in the July 2003 print edition of Entrepreneur with the headline: Wireless Wealth.

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