Tuesday, October 07, 2003

Shane Young, CEO of Spotwave, aims to bring cellphone users in from the cold with devices that allow wireless signals to work in areas that have hitherto suppressed them.


As another winter approaches, smokers won't be the only ones braving the cold outside their offices. They'll be joined by some who will need to venture into the great outdoors simply to make a call with their cellphone or other wireless device.

That's because many modern buildings are constructed of materials that are not conducive to receiving wireless signals. Enter Shane Young, president and CEO at Spotwave Wireless Inc., an Ottawa wireless coverage company whose aim is to eliminate those gaps, or so-called "dead zones" in the workplace, at home and in vehicles.

"This problem started in the workplace. There are buildings with tinted glass that have almost a metallic finish, plus lots of steel and concrete that cause radio waves to bounce back off and prevent the signal from penetrating. So people have to go downstairs and stand outside with the smokers to make a phone call, but that's not what anybody wants," Mr. Young says.

To combat this problem, Spotwave has developed, marketed and sold a series of products known as SpotCell in-building solutions, which are designed to respond automatically to changes in the network environment and solve the frustrating coverage gaps encountered by many wireless users. The SpotCell products have been built to function equally well in an environment that uses the CDMA protocol most common in North America, or the GSM protocol prevalent in the rest of the world.

The company's second-generation products -- SpotCell 200 and SpotCell 210 -- operate in and provide coverage solutions for the 800 MHz (cellular) and 1,900 MHz (PCS) frequency bands respectively, and are designed to cover up to 50,000 square feet in office areas and 100,000 in large, open areas, double that of their first-generation products.

Spotwave's first products -- in its SpotCell 100 adaptive repeater series -- were introduced to the market in early 2002. All of the company's products use "smart-antenna'' technology and adaptive techniques designed to maintain the integrity of the network.

"We're a wireless coverage company and our mission is to make phones work in all the spots where they wouldn't otherwise work," Mr. Young says of the company, incorporated in May 2000 as DPS Wireless and renamed Spotwave Wireless the following year.

The company was co-founded by Mr. Young and Paul Simpson, its vice-president of business development. Both men previously worked together at Canadian Marconi Company. Mr. Simpson came up with the idea of teaming up to leverage their collective expertise in using smart antennas to solve interference problems and apply that knowledge to solve coverage problems for wireless devices.

Moreover, the environment in mid-2000 was still ripe for a startup.

"The bubble hadn't burst yet and there was still a lot of venture capital flowing into Ottawa, with wireless being perceived as a good sector to invest in.

"We felt that there was a real problem and therefore we had a real opportunity, with both our market and technical expertise, to build a company around it, if we could secure investment," Mr. Young says.

In order to get the early investment deemed so critical to Spotwave's survival, the executives' strategy was to leverage their contacts to obtain early seed money, which they succeeded in doing, lining up about $1 million only a month into their existence.

But the investors provided much more than just cash, something the founders remain grateful for. "In Ottawa, there are a lot of people who are willing to give back to high tech and help promising young companies get off the ground. We were able to leverage these contacts for not only money, but also importantly for advice and networking, etc. That was really critical," Mr. Young explains.

That mentoring became even more important a few months after the company was established, when many high-tech sectors began to enter what turned out to be a serious slowdown.

Altogether, Spotwave has so far raised about $27 million, counting the seed and two additional rounds of financing in 2001 and 2002 -- money that marketing vice-president Steve Adams says has been put to optimal use.

"Raising money at a time when nobody really wanted to invest in anything was a clear disadvantage. But at the same time we have never been a company that dealt with any of the excesses we saw with the bubble companies. We don't spend money easily and that's kept our real focus on the essentials -- our core technologies, customers and relationships."

With financing securely in place, Spotwave has been free to concentrate on strategies to develop its technology.

The founders thought initially the answer would be to deal directly with end users who were having trouble acquiring wireless signals. But they quickly learned that the correct sales channel involved selling through the carrier.

"At the end of the day, we realized that an essential part of our strategy was to target and work with the carriers, and through this channel the end user would ultimately be satisfied. What we've fundamentally done is allow our carriers to address trouble spots in areas that are less than 100,000 square feet in a manner that makes economic sense. This has (previously) been a fundamental barrier to providing ubiquitous in-building coverage," Mr. Young says.

Furthermore, the company's patented SpotCell product technology enables carriers to solve their problems without incurring significant engineering and operational expenses, "which has to be the single biggest element that's allowed us to drive forward and be successful to the point we are at now," he adds.

Major clients of Spotwave include several North American wireless carriers, including Rogers, Telus and Bell Mobility in Canada, along with Verizon Wireless, AT&T and Sprint PCS in the United States.

"The carriers are the focal point of our universe, but we're also pleased with the names of corporations using the product, who range from the Fortune 500 to smaller companies. Furthermore, there are a lot of home and home office deployments. People want to make sure they can use it for Blackberry (handheld computer devices) and things like that, so it covers a gamut in terms of size and our product is flexible enough to adapt into those different environments," Mr. Young says.

CanJet Airlines of Halifax deploys the SpotCell at aircraft repair facilities, so that, for instance, mechanics working inside a large metal hangar can be paged without electronic interference if they are required to make a crucial repair on short notice.

About 90 per cent of the company's revenues -- in the single-digit millions -- are earned in North America. "Our market strategy has been to win in North America, then go to Asia and Europe," says Mr. Young, who adds that Spotwave already has clients in China, India, Thailand, Mexico, Chile and Antigua, with plans to crack the European market in early 2004.

Spotwave, which was listed in Telecommunications Magazine's April 2003 issue as one of several companies involved in offering the "10 Hottest Technologies," has 40 employees in Ottawa, plus another 10 U.S. sales employees in Chicago, Boston, San Diego, Seattle and Dallas.

Over the next 12 months, the company plans to introduce the SpotCell 400 family of products that will enable coverage of up to 100,000 square feet in commercial buildings. The company also anticipates introduction of a smaller product design for home applications, as well as continuing work on its SpotCell Mobile, designed to provide constant connectivity inside vehicles.

© Copyright 2003 The Ottawa Citizen