__ When it comes to wireless technologies, anything is possible. At least that's what entrepreneurs will tell you. What follows are some principles I keep in mind when evaluating a company seeking funds.
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Let customers point the way Just because you can build it doesn't mean the customers will buy it. People are fundamentally reluctant to shift behavior - so if they don't have a compelling reason to change, they're going to stick with what they know. Take cell phone technology that allows me to compare prices on a box of Tide within, say, 500 feet of where I'm standing. I'm not going to bother; the possible savings are too small.
Keep it simple It doesn't matter if it has a color screen, a 300-MHz processor, removable storage, and a built-in camera - if you talk into it, it's still a telephone. The temptation to overbuild these new mobile platforms is only going to increase as the next generation of larger-screen color handsets sweeps this country. Services that do one thing, and do it simply, will rise above the rest.
Cater to social needs Mobile media will only increase the use of phones as a social tool. Dating services, which combine sex and communication, will likely become as popular in the US as they are in Japan. Multiplayer games are another area with strong potential.
Look to niche markets Unlike the Web, where a large audience is paramount for generating revenue, the wireless sector offers profits to niche marketers. There are two advantages here: It costs less to acquire customers, thanks to word-of-mouth sales; and these customers have greater loyalty, thanks to products that target a user's specific needs. As the wireless market matures, products will be tailored to particular segments of society, from teenage girls to young urban professionals.
Work with existing technology Startups often succumb to the lure of the new. They base their systems on soon-to-arrive third-generation networks. Meanwhile, their competitors are using what's already out there: achingly slow options with spotty coverage. Not too sexy - but perfectly adequate. For example, Japan's i-mode runs at just 9.6 Kbps, but that's plenty fast for delivering short messages, icons, ring tones, and snippets of information.
Build on proprietary protocols Wireless networks aren't based on an open environment like TCP/IP. Nor will they be for a while, because the companies that build wireless networks can't afford to open them up and risk losing control over who uses them and why. Instead, each carrier dictates the operating environment that services can run on. Those that are closely linked to the carrier's proprietary systems will be faster and easier to use. After all, there'll be no need for users to enter their location manually, and charges will be immediately added to their existing phone bills.
Innovate! One day someone is going to invent the Apple II for the mobile world. Creativity will always drive adoption, even when demand isn't obvious. After the Apple Newton debacle, there wasn't much appetite for PDAs. Yet the Palm OS is on track to be installed in 15 million units next year. Innovation creates new markets.
