Interesting People mailing list archives
Re: Why Helio Didn't Connect
From: David Farber <dave () farber net>
Date: Thu, 3 Jul 2008 14:32:54 -0700
________________________________________ From: Jim Thompson [jim () netgate com] Sent: Thursday, July 03, 2008 5:08 PM To: David Farber Cc: Robert Berger Subject: Re: [IP] Why Helio Didn't Connect On Jul 3, 2008, at 12:20 AM, David Farber wrote:
The "money" quote: "If you look at wireless as a whole, it's represented a net destruction of capital for venture capitalists," grumbles William Frezza, a general partner at the Boston venture capital firm Adams Capital Management.
I think the VCs got what they deserved here. Rather than put a bit of money in, and receive an interesting ROI, they wanted to put huge wads of cash in, and get an even better ROI. Wireless scales sub-linearly. There are information-theoretic proofs of this. And most VCs invested on the promise (or perhaps what they demanded as a promise) of the technology trappings and non-limitations, rather than the actual E&M physics of wireless.
I suspect this is applicable to most wireless investments, even those beyond non-monopoly Cellular like Helios. I've now seen it personally at several in the Muni-WiFi realm and I think were going to eventually see it with wImAx. Infrastructure plays do not generate ROIs that Wall Street expects except for monopolies. - Rob
Perhaps "wireless infrastructure plays" is what you meant, because some of them did get very interesting returns from investments like UUNET and Level3 (though L3 took a long time to provide positive ROI, and the early L3 investors got screwed anyway.) ------------------------------------------- Archives: http://www.listbox.com/member/archive/247/=now RSS Feed: http://www.listbox.com/member/archive/rss/247/ Powered by Listbox: http://www.listbox.com
Current thread:
- Why Helio Didn't Connect David Farber (Jul 03)
- <Possible follow-ups>
- Re: Why Helio Didn't Connect David Farber (Jul 03)
- Re: Why Helio Didn't Connect David Farber (Jul 03)
- Re: Why Helio Didn't Connect David Farber (Jul 07)
- Re: Why Helio Didn't Connect David Farber (Jul 07)
- Why Helio Didn't Connect David Farber (Jul 07)