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
>
>
>
>
>
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> --
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> /*
>
> Jason Philbrook   |   Midcoast Internet Solutions - Wireless and DSL
>
>   KB1IOJ        |   Broadband Internet Access, Dialup, and Hosting
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