The Ottawa Citizen Shane Young of SpotWave Wireless says there's room for more than one solution to the problem of cellphones not working in various areas.

It's maddening. You lay out $150 for a new cellphone -- and it works everywhere but at your cottage, the very place you most expected to use it.

Or your new third-floor office -- a sanctum for half your waking day. The cellphone doesn't work, not at all, though the signal was perfect back on the second floor.

For an engineer, that last 10 per cent of coverage, where the signal furies cry No and won't be pushed, now there's an opportunity.

"If you own a cellphone, you just want it to work, that's all,'' says Shane Young, CEO, president and founder of SpotWave Wireless, a startup that's got those furies in its crosshairs.

"And so do the carriers, who've told you you're going to get coverage within a certain area, and want to keep their word.

"With our product, they can keep their word -- and the solution is relatively cheap, won't be outdated by new technology, and works.''

That solution, the SpotCell, is basically a plug-and-play godsend that the company will begin shipping to wireless carriers sometime this fall. It's SpotWave's first product, an elegantly designed item that should save many a cellphone from the fate of becoming a plastic missile, launched from a furious consumer's hand.

The role of cellphone saviour isn't a new one for Mr. Young, who spent half his career at the Canadian Marconi Company (now CMC Electronics), the same crucible from which sprung his two co-founders, Paul Simpson (SpotWave's VP new products) and David Bongfeldt (chief technical officer).

The three were working on adaptive antennas (or "smart antennas,'' as some say) for the commercial wireless market. The fury they were smoking out was the interference -- say, from a building or misplaced hill -- that blocks the wireless signal and prevents a cellphone from operating the way it should.

Not quite the same, apparently, as the problem that prevents a cellphone from working on one floor of an office building, for example, but not on the next floor up. But close enough.

"In both cases, you have that big problem: How do you make cellphones work where you want them to,'' Mr. Young says.

"We had expertise and knowledge of the smart antenna market -- and we were pretty sure that what worked in one was a natural for the other.''

It's worked very well, in fact. The SpotCell delivers as advertised, a clear signal in every room, a contract of service unbroken.

Wireless carriers have always been able to correct these deaf spots, but often at a cost that is prohibitive.

Wireless signals originate at bay stations that ideally can provide complete coverage in a given surrounding area. That's fine for anyone standing in the line of sight. But geography (hills) and architecture (buildings) often make that impossible. The task is made more onerous when the cellphone user enters a building, its walls often dampening the signal to inaudibility. Maddening -- especially if only your office stands under the invisible cone of silence.

Now, a carrier, in principle, can easily solve the problem by putting in a closer bay station. That works, but is very expensive. And wireless carriers are businesses, as much concerned by costs as by revenue.

"When you call up a wireless service provider and say, 'Look my cellphone doesn't work at the cottage or office or wherever,' they have to decide whether or not to fix the problem based on ROI (return on investment),'' Mr. Young says. "And lots of times, fixing it doesn't make economic sense.''

Enter Young, Simpson and Bongfeldt. They figured there would have to be a market for a solution that worked well, at a cost significantly lower than the price of a new bay station.

The SpotCell, with its smart antenna, provides a "bubble of coverage,'' as the company puts it, within which the signal is strong and unimpaired. It's installed on the premises, close to wherever the problem occurs.

There are two units, in fact. One is mounted outdoors, to catch the signal before its attenuated by the walls of the building. The other, indoors, makes the signal available where it wasn't before. (There's also a coaxial cable that connects the two units, and a power adapter.)

Typically, one SpotCell can be deployed for areas up to 20,000 square feet, easily enough to cover an office with 10 to 20 employees. SpotWave is also working on a version for large enterprises in which more than one floor has spotty signal reception.

The set-up costs $2,500 U.S. for a complete, out-of-the-box solution. No additional tools for installation are required. That's far cheaper than installing a new bay station.

Mr. Young says the SpotCell is at least two or three times better in terms of price and performance than the nearest product a wireless carrier could deploy today.

"The idea is that, whereas before they couldn't solve the problem, now they can, quickly and effectively.''

And of course, it's the carrier and not the cellphone user that has to foot the bill.

SpotWave has completed beta trials on the SpotCell -- and the verdict of several large Canadian and American carriers has been favourable, says Mr. Young, who refuses to give the carriers' names.

"By the end of the year, our customers will be solving real problems,'' Mr. Young says. "Your cellphone will work -- and you and your wireless carrier will both be happy.''

"Fundamentally, today, this is a first, anywhere,'' Mr. Young says. "That's part of the reason carriers are so excited.''

Other solutions will take their places besides the SpotCell, Mr. Young says, a possibility that leaves him undisturbed. "This problem is so huge that there's room for more than one solution. There are literally millions of places around the world where people want to use a cellphone and can't.''

Potentially, he says, such devices are addressing a $15 billion U.S. market.

And as wireless carriers belatedly roll out the 2.5-3G technology, the need for good signals will become much more acute. Much higher rates of data transfer will show up deficiencies even more clearly.

The SpotWave, by the way, is "fundamentally format agnostic,'' as Mr. Young says. It's ready for the new technology so a carrier won't have to worry about investing money now and having a useless piece of equipment in a year or two year's time.

The Spotwave executives' experience with smart antennae gave them the expertise to give the SpotCell its own adaptive technology. It's designed to respond to changes in its environment and provide a constant level of performance.

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That, too, will save the carriers money; they won't have nearly as much need as they otherwise would to send an engineer back to make periodic adjustments.

"The carriers have to like this,'' Mr. Young says. "It's expensive to come back and tweak things just because the cellphone user has suddenly put up dividers and the signals aren't as strong or reliable as they were. That won't be necessary with a piece of equipment that optimizes its own performance, almost like there's a little engineer inside.''

Mr. Young pronounces himself more than pleased with the way the company's first 18 months have rolled out. And in fact, to an outsider, the story presents an almost eerie sense of ease.

The three founders were in no sense unhappy at Canadian Marconi. Each found the work interesting and liked their colleagues.

"But I thought, and I think the others felt, that I'd reached a point in my career where starting up a company made sense. You'd learned enough so that you had a hope of succeeding.''

Canadian Marconi itself was not going to feel the absence of three employees, he adds. And besides, the company was returning to a few core competencies -- and the work the three had been doing, while valuable, was not strictly within that narrow circle.

"You could never say the heart and the soul of the company was leaving,'' Mr. Young says. "We left, I have to say, on good terms.''

Mr. Young left on April 7, 2000. Mr. Simpson and Mr. Bongfeldt left a couple of weeks later.

They were winging it. At that time, they had no commitment for any kind of seed financing at all.

"The question was: Could we do it?'' Mr. Young recalls. "Obviously, we had families and homes and mortgages. All this was a calculated risk. So we gave ourselves till the end of July to raise money.''

In short order, they procured the investment they needed. True, there was a lot of networking, a lot of breakfast meetings and lots of pitches to potential investors. But the business case was elegant and obvious. Everyone knew that cellphones simply didn't work in many places; everyone knew it was annoying; and their resumés made obvious the fact that they could produce a product to solve that problem, if anyone could.

"It wasn't a question of having to sell some esoteric technology to solve some esoteric problem,'' Mr. Young says. "The problem was easily understood and we could plausibly claim to have unique capability in the technology that promised a solution.''

The seed round was completed in June. It brought in nearly $1 million, money used to develop the first prototype.

In the Series A financing round, which finished in early spring of this year, some $3 million was raised in a campaign led by Venture Coaches of Ottawa and Pimaxis of Toronto. This money funded full-scale product development as well as demonstration tours to carriers around the continent. So impressed were the carriers that several placed orders, months before the SpotCell could conceivably be shipped.

If the financial tours went swimmingly, so, too, did the search for advisers.

One of their first decisions was to meet with TimeStep Corps.'s Debbie Rosati, now a general partner in Celtic House. Ms. Rosati was known to have excellent advice for startups, a reputation that her encounter with the three SpotWave entrepreneurs only confirmed. She still works closely with them.

Ms. Rosati made several important introductions for them. They wanted the best legal counsel, and soon Ms. Rosati had them talking with Debbie Weinstein, who remains the company's lawyer.

For accounting and auditing smarts, Ms. Rosati introduced them to Lori O'Neil of Deloitte & Touche.

"Our philosophy was that we wanted to work with people who really understood startups,'' Mr. Young says. "These were the very best people, who we came to know courtesy of Debbie Rosati.''

She also arranged to have them meet three local angel investors -- Claude Haw, now managing partner at Venture Coaches; Conrad Lewis; and Luc Lussier, a founder of Philsar and a canny investor in several local startups.

"These people helped get the company off the ground,'' Mr. Young says. "It wasn't just money -- their advice was just as valuable.''

All of them helped shape the company's business case.

"There was never any question of the three of us locking ourselves into a room and writing a good business plan,'' Mr. Young says. "We leveraged all our relationships.''

They asked the carriers, who they'd worked with at Canadian Marconi, just what product they needed, precisely described. Potential investors were invited to critique the business plan as it evolved. And of course, the advisers were welcome to dispense any wisdom or insight that success had conferred on them.

"There's no one source that helps you fine-tune your business case,'' Mr. Young says. "It evolves over time. We're still refining our business model, even though we had a good notion from the beginning of where we needed to be.''

Ironically, one problem with the business case was that it was so easy to make. If things sounded so good, some investors said, why has no such product ever been brought to market?

"We couldn't, in answering them, simply talk about the neat technology we'd built into that box,'' Mr. Young says. "We had to prove to them that it would help their bottom line at the end of the day.''

The company has been located at the Communications Research Centre on Carling Avenue in Kanata from the beginning. Obviously, their quarters have served well enough, but with total staff now approaching 30, it's time to move to a larger space.

This fall, SpotWave will move to a permanent home, somewhere large enough to hold 70 people, a staffing level the company should reach within 18 months.

Most staff to this point have been engineers, long-time professionals well known to the company's principals. With sales beginning, however, many new hires will be chosen for marketing savvy and experience.

The Series B financing round is now in process and should be completed this fall. The goal is just over $10 million U.S., a sum required to scale the company up quickly.

A lot has happened in the high-tech world since the company was founded, of course. At the beginning, potential investors were still rather free with money, caught up in the frenzy of high expectations that crashed so suddenly in later months.

The current financing round is proving a bit slower than it likely would have a year or more ago, Mr. Young says.

"They're taking their time, and rightfully so. They want to make sure. But at the end of the day, it works out the best for both sides. They've done their homework and they really believe in you.''

Mr. Young and his cohorts don't expect the company to reach profitability much before the fiscal year 2003-2004, two years from now.

"We're not looking to build a small business -- we're looking to build a large one,'' he says. "We have to win the U.S. market, and then head off to Asia/Pacific and to Europe, where the opportunities are just as large.''

Profitability once achieved, SpotWave will likely move toward an IPO.

Mr. Young believes company revenues, five years out, could easily be $200 million. "I hope it's not hubris when I say that's well within our means.''

All told, not a bad ride.

"I have to say, even I am a bit surprised at the traction we've seemed to get,'' Mr. Young says. "You plan for this and you hope for this, but you can't really expect it.''

Would he do anything differently? This question forces a bit more pondering, a little more rubbing of the chin.

"Well, I'd certainly do it again. Something different? Well, I would very much want to spend more time raising money -- you just never know when things will turn the wrong way.''

SpotWave Wireless

Location: 3701 Carling Ave., Ottawa

Employees: 29

Entrepreneurs: Shane Young, CEO; Paul Simpson, VP new products; David Bongfeldt, chief technical officer

Product: Antennas to provide cell phone signals in hard-to-reach places

Quote: "There's no one source that helps you fine-tune your business case. It evolves over time. We're still refining our business model, even though we had a good notion from the beginning of where we needed to be."

-- Shane Young