>Even here, I eventually expect >competition to enter my market. It would be nice to know the "secret >sauce" so I can be better prepared for that day.
What has WISPA came up with to help WISP's get in on the broadband stimulus package? Throw me some bait? As I promised before, my membership fees(after tax season) are sitting here... give me something to bite. Not being an A**, but I belonged to one place(not WISPA), but didn't get much out of it. I did receive an invitation from Double Radius to help me get in on this. Just wanting to know if WISPA got anything going on, before I jump on that opportunity? One of my regular suppliers that I trust. Scottie ---------- Original Message ---------------------------------- From: RickG <rgunder...@gmail.com> Reply-To: WISPA General List <wireless@wispa.org> Date: Sun, 24 May 2009 13:00:41 -0400 >I find the "secret sauce" of converting a customer a very interesting >subject as well. For the most part nearly every WISP I have run had a >monopoly. The ones that didnt had a niche of some kind. My first >owner/operator venture was not good because it was in a highly >competitive market and I could not overcome the "go with the big >company" mentality. My customers said I gave great service but even >they succumbed to price. Therefore, I sold that and went back to the >monopoly world (read boondocks). Even here, I eventually expect >competition to enter my market. It would be nice to know the "secret >sauce" so I can be better prepared for that day. > >-RickG > >On Sun, May 24, 2009 at 9:33 AM, Charles Wu <c...@cticonnect.com> wrote: >>>All I can say is if you are "holding back" on doing more installs because >>>you can't afford it, you need to find some financing and get installing. >>>Once that customer is installed with something else (DSL, >Cable, >>>competitor), it's 10x harder to get them to switch to you. You have to get >>>the customers NOW. >> >> Now that's a more interesting discussion >> >> What's the business plan for customer acquisition? Do you still keep >> building out into unserved areas (e.g., "first to market")? >> >> At this point, I would guess that most areas have competition - so then is >> the business model based upon arbitraging attrition and moves? >> >> e.g., the average American moves every 7 years - so that means 12% of the >> population is available "yearly" as a "new customer" >> >> So, say you have 5,000 customers in a market of 100,000 >> >> You'll churn 1% / month (50) - but there's a market of "new adds" of 1,000 >> customers every month due to just organic moving activity...so assuming 20% >> market share, market equilibrium would be 20,000 subscribers >> >> Not necessarily a bad thing =) >> >> That said, I'd be curious to talk about "secret sauce" methods to convert >> customers from the competition >> >> -Charles >> >> >> >> Charles Wu wrote: >> >> Hi Scott, >> >> >> >> Regarding debt...I've found that there's a "scale inflection point" in >> running a WISP (or any business for the matter) that needs to be reached -- >> the main purpose for taking on debt (because due to interest, you end up >> paying more in the longer term instead of buying cash), is to accelerate >> growth so one can progress beyond this point >> >> >> >> e.g., if you can organically fund 30 new installs a month with cash, if you >> take on debt, you could leverage yourself and now do 100 installs / month >> >> >> >> Now, from a business perspective -- in looking at the WISP >> >> >> >> As a stand-alone sustainable business -- it costs a minimum of about $30k / >> month to operate a small WISP -- now, I'll argue that that $30k/month in >> operations remains relatively constant and whether it's supporting 300, 800 >> or 1500 customers -- however, at 300 customers, the business is bleeding >> cash...at 800 customers the business is just about at a break-even, and at >> 1500 customers, the business is a cash machine >> >> >> >> -Charles >> >> >> >> -----Original Message----- >> >> From: wireless-boun...@wispa.org<mailto:wireless-boun...@wispa.org> >> [mailto:wireless-boun...@wispa.org] On Behalf Of Scott Reed >> >> Sent: Saturday, May 23, 2009 4:20 PM >> >> To: WISPA General List >> >> Subject: Re: [WISPA] Quesiton on Funding / Financing / Capital Availability >> >> >> >> So I will take option 4 from a previous post since Travis made the point. >> >> "Up to 60 months with $1 buyout is the same as a 5 year bank loan." >> >> I want to run debt free as soon a possible. That being the case I don't >> >> lease and have not leased to keep debt down. I do have a start-up loan >> >> that is being paid on a little slower than I would like, but we have >> >> paid off 1/2 of it in < 5 years and based on our payments, we are cash >> >> flow positive. >> >> Granted, my WISP is a lot smaller than many that post here and our >> >> growth rate is small, but some of that is managing growth to stay >> >> cash-flow positive. >> >> I have seen several companies die because they became cash rich, but >> >> still could not cover the debt. >> >> >> >> Travis Johnson wrote: >> >> >> >> The banks can sell a car with little effort. They already have >> >> relationships with dealers and auctions. And often, if the consumer's >> >> credit is questionable, the dealer will guarantee to take the car back >> >> if the loan defaults. >> >> >> >> Who is going to buy a $10,000 radio that has been repo'd? Even for >> >> $5k, I wouldn't touch it. I'd buy a new radio with warranty, that I >> >> know is good and hasn't been fried or broken. >> >> >> >> The banks will never loan on the equipment alone. There is no security >> >> there... but again, why do you need a bank loan for equipment when you >> >> can just lease it and get the same results? Up to 60 months with $1 >> >> buyout is the same as a 5 year bank loan. What's the difference? >> >> >> >> Travis >> >> Microserv >> >> >> >> Tom DeReggi wrote: >> >> >> >> Maybe when talking about CPE. >> >> >> >> But what about when one is talking about a $10,000 Part101 radio? >> >> >> >> Just like a car, all that the lender should need is to "hold the title" of >> >> the radio until paid off, and get a down payment of $2000 to cover the cost >> >> of tower climber/repo man, and a signed letter of authorization from lanlord >> >> stating the location of the tower gear is installed on and they acknowledge >> >> that the gear is not abandoned equipment. (So it does not automatically >> >> become property of landlord in 4 months, and teh landlord knows the >> >> equipment owner has first rights to the gear). >> >> >> >> Think about it... Wouldn't repo costs be reduced when the repo man knows >> >> exactly where to find the radio? A car can easilly be relocated and >> >> hard-to-find, when the owner skips town. >> >> Plus the home likely has an owner with a shot gun or a big dog, which the >> >> tower/MTU likely does not. The MTU building might even have a security >> >> guard to escort teh lender safely to the roof :-) >> >> >> >> >> >> Tom DeReggi >> >> RapidDSL & Wireless, Inc >> >> IntAirNet- Fixed Wireless Broadband >> >> >> >> >> >> ----- Original Message ----- >> >> From: "jp" <j...@saucer.midcoast.com><mailto:j...@saucer.midcoast.com> >> >> To: "WISPA General List" <wireless@wispa.org><mailto:wireless@wispa.org> >> >> Sent: Friday, May 22, 2009 11:13 AM >> >> Subject: Re: [WISPA] Quesiton on Funding / Financing / Capital Availability >> >> >> >> >> >> >> >> >> >> In a worse case scenario, a car is probably considerably easier to repo >> >> than the antenna on my roof and radio in my attic. And the car would be >> >> worth a magnitude more money. The installed infrastructure is worthless >> >> if it costs a huge amount to get to it. >> >> >> >> On Thu, May 21, 2009 at 07:27:09PM -0400, Tom DeReggi wrote: >> >> >> >> >> >> I've never found a lender willing to lend against using the in-place used >> >> equipment as colladeral. >> >> It is the biggest double standard. >> >> I find it highly ironic that they'll use a car for colladeral that looses >> >> 50% of its value the day it leaves the lot, and has a rate of failure and >> >> risk of damage higher than just about any product on the market, and it >> >> has >> >> a huge cash burn (gas :-). but yet lendors won't put equivellent value on >> >> wireless gear, that holds its value, Ebay boasting easilly 50% after 3-4 >> >> years of use, even after fully depreciated. >> >> I'll never understand the lending market. >> >> >> >> Tom DeReggi >> >> RapidDSL & Wireless, Inc >> >> IntAirNet- Fixed Wireless Broadband >> >> >> >> >> >> ----- Original Message ----- >> >> From: <rea...@muddyfrogwater.us><mailto:rea...@muddyfrogwater.us> >> >> To: "WISPA General List" <wireless@wispa.org><mailto:wireless@wispa.org> >> >> Sent: Thursday, May 21, 2009 1:55 PM >> >> Subject: Re: [WISPA] Quesiton on Funding / Financing / Capital >> >> Availability >> >> >> >> >> >> >> >> >> >> Answers in-line. >> >> >> >> >> >> ++++++++++++++++++++++++++++++++ >> >> <insert witty tagline here> >> >> >> >> ----- Original Message ----- >> >> From: "Charles Wu" <c...@cticonnect.com><mailto:c...@cticonnect.com> >> >> To: "WISPA General List" <wireless@wispa.org><mailto:wireless@wispa.org> >> >> Sent: Thursday, May 21, 2009 8:49 AM >> >> Subject: [WISPA] Quesiton on Funding / Financing / Capital Availability >> >> >> >> >> >> >> >> >> >> With all the hype being generated by the stimulus bill, we have been >> >> approached by a multitude of third party financial organizations that >> >> have >> >> a renewed interest in potentially financing rural broadband...now, >> >> specifically, for WISPs, in the past, equipment leasing has been a >> >> very >> >> popular option for financing, but in looking at our numbers over the >> >> past >> >> year, I've noticed a marked decline in the amount of leasing that we >> >> do - >> >> that said, I have the following questions for the listserv about >> >> financing >> >> >> >> Assuming that WISPs are still need to buy equipment... >> >> >> >> 1. Are you able to just purchase equipment out of cash-flow >> >> organically >> >> generated from operations >> >> >> >> >> >> Other than originally starting with our own personal seed money, that's >> >> what >> >> we've done. >> >> >> >> >> >> >> >> 2. Have you gone to more traditional forms of money (e.g., bank / SBA >> >> / >> >> RUS loans)? >> >> >> >> >> >> I could not qualify for any of them. >> >> >> >> >> >> >> >> 3. Are you doing more vendor leasing programs (e.g., Motorola 3% >> >> financing >> >> deal) >> >> >> >> >> >> Never sought any. >> >> >> >> >> >> >> >> 4. Have you not been able to borrow money due to the credit crunch >> >> (e.g., >> >> not deploying as aggressively) >> >> >> >> >> >> My corporation hasn't ever been able to obtain hard money credit. In >> >> fact, the "credit crunch" start last Fall raised my "30+ day past due" >> >> amount from a piddly $1200 to at one time to almost $13,000 in just >> >> four >> >> months. That almost put us under, and we're still barely scraping by >> >> until >> >> our seasonally variable cash flow revives come August, with still >> >> several >> >> thousand on the books that's very slowly getting chipped away at. >> >> >> >> >> >> >> >> 5. Are you holding off on deployments because of the economy >> >> >> >> >> >> No, we're holding off due to lack of cash flow. We have plenty of >> >> people >> >> waiting for us to build infrastructure out to them. >> >> >> >> >> >> >> >> 6. Have you gone to Agility...<cough> Louie the loanshark =) >> >> >> >> >> >> After much discussion, being some of the first people Agility >> >> contacted, >> >> we >> >> have not done any business with them. In my estimation, they wanted >> >> control over our business and day to day decisions, which we concluded >> >> was >> >> both unwarranted and unwise. >> >> >> >> >> >> >> >> Or any other thoughts / comments on this topic? >> >> >> >> >> >> >> >> WISP equipment is not really a "commodity" in that there is almost no >> >> market >> >> for it outside of the "maker-vendor" relationship. Other than Ebay, >> >> and a >> >> couple of people who attempt to do it piecemeal, there is no "market" >> >> which >> >> stabilizes the value of used equipment, making them a commodity you can >> >> borrow against. >> >> >> >> Perhaps it would be more useful, if vendors had the ability to get >> >> capital >> >> and create stable working and short term credit relationships with >> >> their >> >> buyers, kind of like the used car market. >> >> >> >> >> >> >> >> >> >> >> >> -Charles >> >> >> >> >> >> -------------------------------------------------------------------------------- >> >> WISPA Wants You! 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