If you Build it, They will Phone
InnerWireless CEO Ed Cantwell looked at Shanghai's concrete jungle and saw a promising new business model.
(Business 2.0) – Ed Cantwell had high hopes when he became CEO of InnerWireless in 2000. The fledgling company sold antennas that cell-phone carriers could use to boost indoor reception, which the managers of large buildings were already coveting. But aside from a few small projects for AT&T Wireless and T-Mobile, Cantwell found carriers to be poor marketers of his equipment. "Until early 2003, we were basically in survival mode," he says.
A former Air Force pilot, Cantwell didn't give up. In the hopes that Chinese carriers might be interested in InnerWireless's gear, he flew to Shanghai in March 2003. There he checked into the Grand Hyatt, the tallest hotel in the world. From his room on the 82nd floor, he saw a morass of gigantic cranes, steel girders, and massive cables giving birth to hundreds of new high-rise buildings. Looking down on the construction, Cantwell imagined how his business might be different in a city erected from the ground up. "I thought, What if our product could become part of a building's nervous system from the beginning, like plumbing or electricity?" he recalls.
On a notepad, Cantwell jotted down ideas about what InnerWireless could do if it started serving building owners directly, almost like a utility. Rather than simply boosting cell-phone signals, he could offer a range of in-building services, including Wi-Fi, BlackBerry, two-way radio—even wireless temperature sensors. Freed from telecom middlemen, he could accommodate multiple standards, like GSM and TDMA. Building owners would profit too, by leasing the network to tenants. Cantwell even came up with a new tagline: "Improving life in the great indoors."
His first high-profile implementation of that vision is inside the new Time Warner complex in midtown Manhattan. There, in late 2003, InnerWireless installed servers in the basement, antennas on every floor, and radiating coaxial cables along the core of the building—including stairwells and elevators. The building is already leasing out the infrastructure to cell-phone providers like T-Mobile and Sprint PCS, and to tenant companies for Wi-Fi. Personal trainers in spas at the adjoining Mandarin Oriental Hotel use the network to pull up client data on PDAs. InnerWireless has contracted to provide similar services for Chicago's Sears Tower and for Bobcat Arena, the new basketball stadium in Charlotte, N.C. The Johnson City Medical Center in Tennessee is planning to use InnerWireless technology in its intensive care unit to wirelessly track patients' vital signs.
Cantwell says his company's sales are still less than $20 million and it will take 18 months to reach profitability. But investors are intrigued: InnerWireless closed $12 million in financing in March, bringing its total venture funding to $38 million. It's also formed a strategic alliance with Johnson Controls, the $22 billion behemoth of facilities management. As a result, the company is hoping to provide wireless services at Beijing's Olympic Village in 2008. "When I first shared the utility idea with my employees, they were kind of scared," Cantwell recalls. "But that eventually opened our minds and let us ask some bigger questions." — SIRI SCHUBERT