Not Wired

Flash: The Internet is not the final frontier for way-of-life-changing industries. Such opportunities seem to be opening up every time you turn around. Next up: wireless services.
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12 min read

This story appears in the September 2000 issue of Entrepreneur. Subscribe »

"The opportunities today in wireless are much, much bigger than what I saw in the computer business back in 1983. Today's opportunities are tenfold greater," says Philippe Kahn, CEO of LightSurf Inc., a Santa Cruz, California, company that produces software for the wireless Web. And he should know.

Back in '83, Kahn was a pioneering software developer who quickly created two big hits-SideKick and TurboPascal-and thereby snagged an enduring place in tech history. But, he says, the possibilities that lie in the wireless information landscape are vastly richer than what he saw in 1983. For a very simple reason, really: "The numbers were so much smaller back then," explains Kahn, who recently sold his TrueSynch technology-for synching data between such devices as cell phones and computers-to cell-phone giant Motorola for an undisclosed amount. In the early '80s, PC users were sparse, which meant the market upside was funda-mentally tiny. But nowadays, he says, the potential audience for wireless Web products and services is already in the tens of millions of users. Says Kahn, "Today's landscape is explosive."

Explosive? You bet. The wireless Web will soon be in more hands than the conventional Web is. In 2003, predicts Datacomm Research Co., shipment of wireless-Web-ready smart phones will hit a stunning 350 million units. Factor in access via Internet appliances, wireless computers and more, and the number of potential wireless Web users just keeps mushrooming.

Although there will be many ways of accessing the wireless Web, the fastest growth area is widely expected to be via cell phones, mainly because "everybody wants to carry just one device," says Warren Wilson, senior analyst with Summit Strategies, a market research firm in Boston.

Granted, people are already carrying cell phone models and only newer phones feature wireless Web access, but the phone replacement rate is brisk. "Within two years, 30 to 50 percent of all mobile phones will have wireless data capabilities," says Rich Rifredi, an industry insider and vice president of the Wireless Internet Business Unit for Pixo Inc., a Cupertino, California, developer of mobile-commerce applications.

What's more, demand for the wireless Web will soar because it's triggering a revolution in information processing. "Wireless is enabling us to take the Inter-net with us everywhere," echoes Boris Fridman, CEO of Nettech Systems Inc., a Princeton, New Jersey, provider of wireless messaging software. "That's what's so exciting."

Think about that. This is about more than just "wow, that's cool" technology. At an initial glance, it may seem as though the big thing here is being cutting edge, but much more is at stake. "Over the past 20 years, businesses have spent trillions of dollars on IT, but the problem has been that as soon as the worker gets up from his PC, that investment is worthless," says Dave Rensin, chief technology officer at OmniSky Corp., a wireless-solutions developer in Palo Alto, California.

What exactly can be done with a wireless Net phone? Picture a few scenarios: What if you could keep your database of business contacts so that it's accessible whenever a cell phone is in your hands? How about accessing your calendar, too? Now dream bigger: Say you could get instant notification over the wireless Web when a stock hits a particular price-and you could also buy or sell shares in that company.

As many well know, those aren't dreams-all those functions can now be handled by digital phones-but this all-just scratched the surface. Books can be bought via with a phone; a few clicks on a phone touch-pad will bring e-mail to you; a few more clicks will show you the news headlines or weather . . . and none of this is technically difficult to do. "[That's why] people are beginning to view the phone as an important tool," says Ben Linder, vice president of marketing at, a Redwood City, California, developer of a minibrowser that enables cell phones to perform these functions.

But all the uses aren't so glitzy. "The big trend with Net-capable phones isn't so much Web surfing as much as carrying an information appliance in your pocket," says Brian Cotton, industry manager for telecommunications with international market consulting firm Frost & Sullivan in San Jose, California. Face it: Nobody is likely to enjoy thumbing through Web sites on a phone-where a very few keys have to do the job of a full-sized keyboard, and graphics are limited by a miniscreen displaying only shades of gray.

What exactly can these phones do? Think information retrieval, says Patrick McQuown, president of Proteus, a Washington, DC, developer of wireless software applications. Imagine a sales rep standing in a client's office and using a phone to do a real-time search for inventory to satisfy the order. "That can be done already," says McQuown. "This is where wireless will excel-in meeting real-time information needs."

The Potential Of Wireless

Cell phones bring a unique advantage to the information-retrieval equation: They know where you are. That's because a relatively obscure federal regulation, E911, requires wireless telephone companies to know within about 400 feet where subscribers are when their phones are on. The FCC promulgated that regulation for safety reasons. (The feature makes it easier to respond to "911" emergency calls.) At first, "the carriers looked at this as a real pain," says Cotton. Not anymore. "Now they see it as a money machine."

Chew on this: You walk into a mall and, suddenly, your cell phone beeps and up pops a special offer on the screen: 10 percent off any purchase you make in the next hour in that mall. It's not science fiction-such offers are already being made, says Scott Ferber, CEO and co-founder of, a Baltimore technology company specializing in new-media advertising. Says Ferber, "There's so much excitement about the possibilities wireless offers."

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Wilson agrees. "Location-based services will be particularly attractive to en-trepreneurs," he says. Why? He bets that many of those services will be offered to businesses by fast-moving entrepreneurs who can seize opportunities before larger corporations. "Conceive of a location-based service that could be offered by wireless," says Wilson," and you may gain first-mover advantage."

How big might this market be? Kelsey Group, a Princeton, New Jersey, advisory services firm, says its research finds that one in every four wireless users' requests for business listings from directory assistance leads to a purchase. That, the Kelsey Group points out, suggests that wireless just might take a big bite out of Yellow Pages' sales-and it projects that advertisements over the wireless Web from local businesses will amount to $5.5 billion in 2005.

Those are big numbers, but everything about wireless has the potential to be big. Fact is, the wireless Web is evolving faster than anybody could have predicted-and that means that attractive possibilities are sure to open up to you as a user or a business participant. Ask yourself this: What would people want to receive via wireless devices? The answers define business opportunities, and here are some of the brightest:

The Best In Wireless Technology

E-mail. "People definitely want to be able to get their e-mail on wireless devices," says Robert Newman, chief technology officer at CoolEmail, a Glencoe, Illinois, unified-messaging provider. "Once people know they can do this, they'll want it because it's so convenient." Traffic is growing fast, says Newman, whose service delivers e-mail-collected from accounts specified by users-to wireless Web phones where, with a couple keystrokes, it's easy to scroll through incoming mail and even compose responses. The market looks promising: Not long after its launch, CoolEmail already had one million users. Newman's prediction: "As the technology becomes more widely available, people will be doing more e-mail on phones."

PIMs. Lots of opportunities center around personal information manager services that will make users' calendars, to-do lists and address books all accessible via cell phones. Insiders say this niche could be among the richest, but nobody's staked out a lead yet. Perhaps that's because today's products tend to be either too costly to attract users or too complex. ("Every time a user has to press another button, you lose 50 percent of your audience," says Rifredi.) Early product entries have targeted sales to megacorporations, but big deals involving large numbers of users have proven elusive-other than landing deals to beta test. The good news: This niche is wide open to new competitors, and it's also open to entrepreneurs with visions for creating new revenue streams (like advertising-supported calendars).

Portals. Some of the biggest hits on the traditional Web have been the portals-such information-rich di-rectories as Yahoo! and Lycos-and now there's a rush to create a gateway site that will triumph on the wireless Web. Of course, the dominant traditional Web sites aren't sleeping-Yahoo!, for one, has already established a large presence on the Sprint PCS wireless Web, where users can send and read Yahoo! e-mail, read headlines and even check movie listings for their neighborhoods.

But start-ups are eyeing this market, too. Web2PCS, a San Jose, California, company that provides a directory of wireless-enabled sites, allows visitors to submit their Web site addresses to its directory and even offers a simulation that lets anybody see what wireless Web sites look like on their PCs. "Our aim is to be the Yahoo! for wireless," says Raza Kamran, vice president for strategic development. That's a lofty ambition, but Kamran projects that Web2PCS will have one million registered users by the end of 2000. With so many users flocking to this space, Kamran may be on the mark.

But many applications and services that will become tomorrow's hits on the wireless Web are nearly impossible to predict, because they couldn't have existed before the wireless Web (meaning the services that wireless technology itself makes possible). A vivid for-instance is the software developed by NearSpace Inc., a start-up in Petaluma, California, with fewer than 10 employees but dreams of making it big. Its program enables users to download customized maps to wireless devices. A trade show organizer, for example, might use NearSpace to make maps of the booth locations, while an airport employee might make a map of the terminals. The upside, say company executives, is just about unlimited.

The bottom line: Wireless technology is putting dramatically more information into our hands. Expect entrepreneurs in the coming years to score huge successes with products that sort and put this information to use. Then there's the fact that the more you use it, the more you need it. Says Fridman, "A few months ago, wireless was for me a novelty. Now I couldn't live without it."

Tomorrow's Trends

There is, however, a big obstacle in the path to wireless riches. "Cost remains a problem," says Wilson. "Pricing is very steep," agrees Rifredi. A handful of providers own the market: Sprint PCS, AT&T Wireless and GTE. Worse, simply navigating from site to site on the wireless Web is slow, due to a tiny keypad that imposes complexities and the fact that the wireless Web itself just seems slow. Add it up and it's easy to run into big bills-although nobody expects that to last. New providers are expected to enter the market (particularly so-called "Baby Bells"), and there's widespread expectation in the industry that flat-rate access is on its way.

Another trend that will translate into lower costs: More companies will be giving away wireless Net devices to their customers, predicts Ken Dulaney, a vice president and research area director at GartnerGroup. Devices will be customized to make things easy-say, stock trading at a particular brokerage, or banking at a particular bank. In that way, the devices represent a tangible link with customers, and the wireless Net becomes a new channel for contact. For customers, it's a cost savings that automatically makes wireless cheaper.

A second problem area: "Marketing in this space is getting ahead of reality, and that could turn off consumers," says Rifredi. The wireless Web is home to lots of "vaporware"-the tech industry put-down for software and services that are announced, usually with much fanfare, but never make it to market. Right now, in fact, offerings available to Web-ready phone users are few-even most Web sites won't display properly because they aren't in WML (wireless markup language). But more will become compliant, says Rensin: "There are challenges in creating sites that look good on a phone, but you're already seeing more and more."

That's why the future for the wireless Web looks ever brighter. "There were a lot of years when that wasn't so," says Rensin. "I tell people it's taken wireless 10 years to become an overnight success. But in the past year, it has gotten real enough that ordinary businesses can use it to do things better."

"Within five years," adds Rensin, "this space will be utterly different from what it has been. Totally different."

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