Small tech companies, big wins

[ Thanks to Carla Schroder for this
link. ]

“When Ricochet was introduced it was a hit: wireless mesh
Internet at 128kbps. Customers were freed from their phone lines
and could roam freely inside the network. We take this for granted
today, thanks to the broadband cellular network, but back then it
was all new. Metricom had ambitious plans to go nationwide, and had
over 50,000 customers in 14 states who were happy to pay a premium
rate of as much as $75 per month. But their growth was fueled by
venture capital and debt rather than revenues; the money ran out
and in July 2001 they had to file bankruptcy, leaving debts of
nearly a billion dollars and assets worth maybe $140 million. Paul
Allen, the multi-billionaire co-founder of Microsoft, and other
investors sunk over half a billion dollars into Ricochet.
Eventually Ricochet was sold for about $8 million, and became part
of Proxim, Inc.

“Meanwhile back at the ranch (literally), Marlon Shafer of
Odessa Office Equipment in Odessa, Washington wanted to bring the
Internet to the Odessa area. The telcos, cable companies, and
big-time Internet service providers were uninterested in serving a
rural population. So in 1997 he borrowed $15,000 — that’s fifteen
thousand, not million or billion– and hired a Spokane ISP to build
Mr. Shafer his own ISP in Odessa. He figured out how to set up DSL
without the telcos, homebrew DSL, and for awhile life was good.
Until the telcos caught on and decided to squash him. Never mind
that they didn’t want to serve the area; he was making money and
having happy customers, and that was intolerable. So they raised
the prices of dry copper circuits until Mr. Shafer was forced to
look for an alternative. In 2000 he launched his first wireless
rollout. His first antenna was mounted on a grain silo. It wasn’t
easy, and he made mistakes, but he did what Paul Allen and other
Ricochet investors couldn’t do — turn a profit delivering wireless
Internet.”

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