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PointShot hits mark on trains | ||||
Wednesday, October 08, 2003 Shawn Griffin knew he was on to a good thing long before he arrived in Silicon Valley. A rival high-tech engineer phoned him soon after the news of his enterprise there leaked out. "We were thinking along those same lines," the voice at the other end of the phone told him. "Well, good for you," Mr. Griffin replied. "But we've done it." The fact that Mr. Griffin and his partner, Warren Gallagher, had the verve to go to San Jose and sell Silicon Valley on their idea was, for the Ottawa men, akin to Daniel going into the lion's den. Silicon Valley isn't known for putting out the welcome mat for players from outside. For a start, there's never a shortage of ideas in the Valley and when Mr. Griffin and Mr. Gallagher arrived there this summer, it was on the tailwind of a recession and a high-tech downdraft that tore hundreds of companies apart and threw thousands out of work. That's one of the great talking points in the PointShot Wireless story. It's not just about installing Wi-Fi connections aboard rail cars to give passengers access to the Internet and the ability to check e-mail on their notebooks and PDAs during their journey. It's also about the little Ottawa company with only 10 employees that dared to venture into the Valley and pitch their vision to Altamont Commuter Express Rail right under the noses of some of the world's sharpest high-tech brains. PointShot Wireless had something going for it, though. Its technology was already proving its value to business-class passengers on VIA Rail's Toronto-Montreal express service. Bell Canada was among the first to recognize the innovative technology for what it was worth and jumped at the opportunity to partner with VIA Rail and Intel, whose "Centrino" chip technology is being used. Both organizations issued gushing press releases in July when the service was launched. "This service is a clear demonstration of Bell's ability to align its resources, namely satellite, wireless and wired data networks ... that will provide train passengers with WLAN (wireless local area network) real-time onboard access," said Almis Leda, Bell Mobility's vice-president of corporate development. "Our research indicates that Canadian business people want to use their travel time to catch up with e-mail, work on presentations and do other work-related tasks," said Doug Cooper, Intel of Canada's general manager. So with those ringing endorsements in their back pockets, the PointShot Wireless team headed off to San Jose and the Altamont Commuter Express (ACE), which runs three trains a day down through the San Joaquin Valley from residential Stockton to San Jose. The 137-kilometre trip takes two hours and 21 minutes. The first train leaves at 4:20 a.m. and the last one at 7:46 a.m. The service carries 1,400 commuters daily and the laptop/notebook/PDA carrying passengers loved it. Laptops were being snapped open as soon as the passengers settled in their seats. "Adding connectivity to trains is almost a no-brainer," said Keith Waryas, an analyst with research firm IDC of Framingham, Massachusetts. "You've got captive business users who want connectivity." Mr. Griffin was fairly sure the ACE service would succeed. The team had surveyed ACE's riders and received 800 replies. "Fifty per cent of them had laptops and 31 per cent had wireless connectivity either at home or at work. The overwhelming reaction was that they wanted the service." There was also another incentive. California is a big booster of telecommuting and many companies credit their workers with half of their commute time as work time if they travel with a laptop. That was even before PointShot Wireless arrived. "Some of the people," said Mr. Griffin, "were telling us that they will now ask their companies to take all of their commute time as work time because they are fully connected. Many of them are spending three or four hours a day on the train, going to work and going home at night." The big attraction, of course, is the ability to surf the web and access e-mail on the move. "The killer app," said Mr. Griffin, "is e-mail. And for most of them, the advantage of taking their laptop or notebook with them on the train is obvious. "On the way in the morning, they can get a jump-start on their work, and at night the choice is often either stay in the office to finish some work and miss the train home, or take the notebook with them, finish the work on the train and send it back to the office before reaching home. That's why people commute with their laptops." The fact that PointShot had the Bell-VIA Rail contract gave the company "enormous credibility," Mr. Griffin said. "Nobody likes to be the first to sign up for something in case it's not a success." After the ACE deal, Capitol Corridor, which carries one million passengers a year and runs 18 trains daily between Sacramento and San Jose, signed on. The system was installed in late August and went operational Sept. 29. "Reaching the rail operators was much easier than we thought it would be," said Mr. Griffin. "They really want the product. It wasn't so much as a hard sell. The rail operators were telling us, 'We know. Let's get it done.''' So far, it's been a rapid rise for PointShot. Barely 12 months old, it has required only two rounds of seed financing totalling $1.5 million, small change compared to multi-million-dollar sums were being tossed around a few years back. Mr. Griffin and Mr. Gallagher are both industry veterans, having worked together at Nortel, Mitel, and SpeechFront, a speech-activated application company the two founded with colleague Bill Love in June 2000 and sold five months later to Nuance Networks of Menlo Park, California, for $10.5 million U.S. After taking a breather, the trio teamed up again to kick around some more ideas. "We knew what we wanted to do, and that it would involve Wi-Fi," said Mr. Griffin. "We saw it as a very important thing that was happening in the industry and we wanted to look at applications and products that we could build with it. We identified 20 markets and product opportunities. We looked at things like medical health care for wireless, museums and hot spot aggregators. "But the thing that we came up with as the single best product was really rail. We liked the market because it was a space where nobody was doing it and it was technically challenging. It's not easy; you cannot just run a 400-kilometre cable alongside a track. And it offered us the ability to go into a vertical market and offer a complete solution instead of just a simple product." The way it works is that the Internet connection is transmitted to the train from Bell ExpressVu's Internet satellite service to a satellite dome on the train's roof, and then to the laptop or PDA. The upward link is transmitted to the train's WLAN equipment and delivered over Bell Mobility's cellular network to the Internet. One of the interesting aspects of the job for the PointShot team was getting to know the rail operators. "It has meant getting involved with how they work and think and what's important to them," Mr. Griffin said. "The important thing for them is that they love their rail cars. Their cars are their bread and butter and they're focused on them, and they're very focused on passenger service and satisfaction. Both VIA Rail and ACE are doing this because they think their passengers want this. Rail is in competition with the car and with the plane, so intercity rail is really about pulling people out of airplanes and into the train." PointShot is now taking its show to Europe, where Eliot Burdett, vice-president of business development, has met with rail operators in Germany, Switzerland, Belgium and Britain. The talks have gone well, he says, and there's been lots of interest. Talks are lined up with operators in Italy and France. Anyone familiar with the European rail system will know that that a bonanza awaits for PointShot. "The opportunity there is huge," says Mr. Burdett. "It is 15 to 20 times larger than North America in terms of passenger traffic. Germany alone dwarfs North America." The congested road systems make it normal to hop an inter-city train for a journey as short as 40 kilometres. About eight million commuters a day pour into London, the majority by train from as far away as Bournemouth, 175 kilometres distant on the south coast. The scene is repeated in most European capitals. In France and Germany, inter-city commuter trains are packed and it's the same for the express trains that slice their way from one end of the country to the other. "Canada and the U.S. are great markets, and so is Europe," said Mr. Griffin. "We set out to build the product and show people that it works. The second step was to show that there was a demand for it, and that's what we're doing now. The third part is to show that there is a business model that works and that people can make money using the product to deliver the services. That will start in the first quarter of 2004." Rail companies now testing PointShot's technology get it for free. Once they find their passengers like it and, more importantly, want it permanently, the service companies will start charging. "We are nearing the stage where Bell, Sprint and Verizon or British Telecom can make money on our service," said Mr. Griffin. "The ability to work and be productive is an incentive for the business traveller so the rail operator is interested in terms of how this works. We don't sell our gear to the rail operator, we sell it to the service provider like Bell Canada, who then installs and operates the service with the rail operator." PointShot's next big coup is expected to be a deal with Amtrak in the New York-Philadelphia-Washington commuter triangle. Amtrak officials have visited Ottawa and are expected to decide soon. While the RailPoint division handles the rail business, PointShot has two other divisions. WayPoint looks after a remote wireless solution for travel malls and remote businesses. MotionPoint handles mobile wireless for vehicles. Among the first to make use of MotionPoint was Ontario Premier Ernie Eves who had them installed aboard his campaign buses for his staff and media on the election trail. |
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