Charles, Excellent comment.
I'd argue though that its not a matter of customer count, but more about a revenue threshold to justify staying in business. I believe the first threshold is about $15k monthly. Unlessthat threashold is met, its not cost effective to stay in business, but if it is met, usually the owner can get an ROI over time if they let it sit, and stay a one man show. Who knows if they'll ever get a full return on their investment, but money is sunk, and justified to let it continue because ongoing revenue pays as much as a day job, so let it ride on. But your point was well heard, "how do you get to the next level?". The next level might be around the $40k monthly range. Now one can add a couple employees, and have decent capacity and coverage, core costs covered, be competitive and be cash flow possitive doing it. Life is easier, profit is better, sustainabilty likely achieved. Now theirs a chance the owner can get a decent ROI over time, and clearly pays better than the day job. But your point was well heard, and again ask, "how do you get to the next level?". The think is, if the owner stays as is.... focuses on new customers (rev) and not buildout (new costs), its easilly sailing. In past years, maybe 10 new business subs were needed to break even on a tower cost. A lot of work little reward. But now, 1 new business subs means it can cover a new car payment of luxury. But 1 more new business sub just bought you a beautiful new Flat screen TV. But 1 new business sub now makes a sizable monthly payment towards paying off finance debt. The owner sees the light, why change the new found pattern? Why grow? Or more importantly, Why spend? Even with the Free Grant money, is it worth it? The requirement is that the recipient CAN NOT use the revenue/profit to pay themselves. All funds have to be spent on supporting the capitol infrastructure for the next 3 years. Why would a WISP want to divert all their free time the next 3 years working for free AGAIN, instead of working on the easy sales on their pre-existing network that instantly translates to PROFIT and ROI today? Its costly to grow, whether its with your own money, or subsidized money. And its surely tough to decide to start all over again, going back into investment mode instead of payback mode. One of my favorite stories is of an experience I had back in 1997, waiting to pickup an order from a Computer Distributer. I ran into an old rival buddy of mine, we both just started our own businesses a year or two before. I was like "How ya doing, we got like 4 CNEs now", He was like, "yeah, well we got 5 techs now" He was like "Well we broke 1 mil this year". I was like "Well, we broke 2 mil last year". Then an old guy waiting at the counter stepped over, joined in and said, "Well, I've been in business for 15 years now, I have 1 employee he's been with me for 10, all I ever needed. I have a beautiful home, a great wife, time for my kids, you can see my nice car out front, my customers love me, I treat them fairly and my quality is top notch, I got plenty of work, probably half-mil yearly, and get to choose which work I accept, but most of all I have peice of mind, and I sleep really well at night. So who's the winner?" We thanked our new friend for his insight. My friend and I looked at our watches, and he just realizes he's late for his meeting with his divorse attorney, and I just realize I'm about to miss another kids soccer game, and off we went in our clunkers. I learned something that day, and made a change. Now 13 years later, I look into the mirror, and I see a resemblance of that guy, and I'm fine with that. I'm not saying, "dont spend, dont invest, dont evolve", I'm just saying, "bigger isn't always better". When it comes to WiMax, I ask the same question as Non-WiMax..... How is this choice going to make me more money today, with less effort? If the Plan shows it can, all is good. Tom DeReggi RapidDSL & Wireless, Inc IntAirNet- Fixed Wireless Broadband ----- Original Message ----- From: "Charles Wu" <[email protected]> To: "WISPA General List" <[email protected]> Sent: Tuesday, January 05, 2010 4:36 PM Subject: Re: [WISPA] Wimax gear > >Once you get to say 1000+ customers, things like having the staff for >>service calls and time to repair for customers are often more important >>than the brand of radio or the original cost of the radio. We do spend >>more on payroll than radios, despite deploying lots of expensive gear. >>Keeping CPE prices down is appreciated and important, but less tangible >>ongoing management, troubleshooting, and repair costs must also be >>considered. The reduction in support costs isn't an expection, it's a >>reality and requirement in many situations. > > When you're working as a startup, labor costs are essentially zero (and if > you're asian like myself, you can call on your kids/relatives/grandparents > to work nights and weekends -- the classic Chinese restaurant business > model =) > > However, when working with employees (and I don't care how smart / > hard-working / strong willed you are, there's still only 24 hours in a > day) -- labor costs become a bigger factor as the organization scales > > So this brings up a more interesting debate -- e.g., one-man band / > mom-and-pop vs. organizational strategy > > As an organization, trying to run a WISP with 700 residential customers is > a complete waste of time, however, as a one-man-band -- an 700 customer > WISP can be highly profitable > > The problem here is that there's a nasty chasm between what the one-man > band can handle and what an organization needs to support itself (e.g., it > doesn't scale linearly) > > The picture looks more like this > > 700 customers -- one-man band (or equivalent) -- highly profitable > > Then -- they start hiring employees to grow and scale the business > > Unfortunately, there's a minimum amount of overhead required, and what was > once a profitable business is now bleeding red ink and needs to reach > 2,000 customers before things get good again > > Which creates an interesting question -- if you're such a WISP, do you > just stop and sit tight at 700 customers? Or do you "go-for-broke" by > trying to grow? > > -Charles > > > -----Original Message----- > From: [email protected] [mailto:[email protected]] On > Behalf Of jp > Sent: Tuesday, January 05, 2010 10:36 AM > To: WISPA General List > Subject: Re: [WISPA] Wimax gear > > On Mon, Jan 04, 2010 at 05:28:49PM -0600, Wallace Walcher wrote: >> Having built my WISP from scratch with my own resources and currently >> being >> debt free in my operations, I often wonder who the people are who so >> quickly >> classify Mikrotik and Ubiquity gear as trash. I am making a very good >> living deploying such "trash". > > I'm not ashamed of calling their bluff when they say something is > "carrier class", and it's not even released yet and then has firmware > their either sets the timing wrong to the point of destroying the link > or doesn't do vlans, and the firmware isn't pulled offline because it's > the best stuff available. > > I've got a couple UBNT M links up and like them, and believe it has a > future. I just can't put my whole business on the line while they refine > a product. It is wise and irrestible to try the stuff though. > > I've got a downtown network of UBNT 802.11 gear, and the nanos and > bullets just can't handle the interference as I'd like. It was intended > to be an upgrade from the breezecom FH gear which was slow but reliable. > The UBNT is faster, but less reliable in the presence of local > interference. Now, if someone has an interference problem, we > immediately swap them over to Alvarion 5.4 gear. It is more expensive, > but we know we'll never have a service call after it's put in unless it > gets hit by lightning or the customer wants to upgrade. We would have > been wise to upgrade straight from the old stuff to 5.4. I'd still > recommend the UBNT CPE for truly rural use. > > Then MT is always making something wonky. A couple years ago, you could > crash the MT with a SNMP query. Now, if you put an N card in and upgrade > the firmware in your 433ah to 4.4, you might lose the ethernet ports. I > stay 1-4 months behind on their firmware because it's a mystery what you > might get. Changelogs show less than half of what they change. I do like > them for basic routing and also use their gear for a few links. I think > it's a step up from UBNT for ptp 802.11 based links. I also like MT > because it's pretty low power use, which has practical value for solar > sites or sites needing long battery backup. We don't have the time to > tinker to use it for everything. We tried 900 with SR9 then XR9 and the > reliability wasn't there compared to what we were accustomed to with > Trango and Alvarion. > > Once you get to say 1000+ customers, things like having the staff for > service calls and time to repair for customers are often more important > than the brand of radio or the original cost of the radio. We do spend > more on payroll than radios, despite deploying lots of expensive gear. > Keeping CPE prices down is appreciated and important, but less tangible > ongoing management, troubleshooting, and repair costs must also be > considered. The reduction in support costs isn't an expection, it's a > reality and requirement in many situations. > > A minor glitch that affects a few customers outside of town is not a big > deal, but if the glitch requires half a day on the road or requires > aircraft, boats, snowcats, or sleds, it could cost hundreds of dollars > and mess up a lot of customers. > > I'd fear for my welfare if everything was built on UBNT and MT though. > > We use Alvarion 900, 2.4 (not going forward), 5.4, 5.8, Trango (lots of > 900 installed, but not going forward), MT, UBNT, and now Solectek and > Radwin. > > My WISP is pretty low debt 100% privately owned and financed, and we > often choose higher end equipment. You do get what you pay for, but of > course there are diminshing returns the higher end you go. > > >> My perception is they are either people who are not spending their own >> money >> - they are working for the investor, or possibly borrowing or leasing the >> equipment, or they are a vendor promoting their own high margin goods. >> Those that are WISPs seem to have the perception that it is better to >> install higher cost equipment, no matter what the cost, if it will >> provide >> them an expected reduction in support costs. >> >> What I have found in my area is that people who deploy such equipment >> have a >> very hard go of it, mainly because the replacement costs during the storm >> season eat their lunch. My operational plan is different than some - I >> focus on residential customers on the outskirts of town that do not have >> access to Cable and DSL. Those focusing on business accounts in cities >> would understandably have a different perspective. But I feel very >> fortunate to have a sub $200 total CPE cost (sometimes sub $100) with the >> Mikrotik-type solution. >> >> >> -------------------------------------------------------------------------------- >> WISPA Wants You! Join today! >> http://signup.wispa.org/ >> -------------------------------------------------------------------------------- >> >> WISPA Wireless List: [email protected] >> >> Subscribe/Unsubscribe: >> http://lists.wispa.org/mailman/listinfo/wireless >> >> Archives: http://lists.wispa.org/pipermail/wireless/ > > -- > /* > Jason Philbrook | Midcoast Internet Solutions - Wireless and DSL > KB1IOJ | Broadband Internet Access, Dialup, and Hosting > http://f64.nu/ | for Midcoast Maine http://www.midcoast.com/ > */ > > > -------------------------------------------------------------------------------- > WISPA Wants You! Join today! > http://signup.wispa.org/ > -------------------------------------------------------------------------------- > > WISPA Wireless List: [email protected] > > Subscribe/Unsubscribe: > http://lists.wispa.org/mailman/listinfo/wireless > > Archives: http://lists.wispa.org/pipermail/wireless/ > > > -------------------------------------------------------------------------------- > WISPA Wants You! Join today! > http://signup.wispa.org/ > -------------------------------------------------------------------------------- > > WISPA Wireless List: [email protected] > > Subscribe/Unsubscribe: > http://lists.wispa.org/mailman/listinfo/wireless > > Archives: http://lists.wispa.org/pipermail/wireless/ > > > -- > Internal Virus Database is out-of-date. > Checked by AVG. > Version: 7.5.560 / Virus Database: 270.12.26/2116 - Release Date: > 5/15/2009 6:16 AM > > -------------------------------------------------------------------------------- WISPA Wants You! Join today! http://signup.wispa.org/ -------------------------------------------------------------------------------- WISPA Wireless List: [email protected] Subscribe/Unsubscribe: http://lists.wispa.org/mailman/listinfo/wireless Archives: http://lists.wispa.org/pipermail/wireless/
