Living with Boxes

If Saul Kato has his way, everyone will one day walk around pointing personal digital assistants and smart phones at a mysterious box with a big black circle in the middle and blinking red light in the upper left corner.

That box is the Jack, developed by Kato's company Wideray. The Jack is a futuristic-looking mobile caching server that beams customized content and applications directly to end users at broadband speeds.

It's simple. Anyone can write content and upload it to the Wideray server, which in turn sends content to a wireless network that broadcasts it to the Jack. End users, in turn, point their Pocket PCs, Palm PDAs and smart phones at the box and download content via infrared connections and through 802.11b and Bluetooth connections.

And the boxes can be screwed into any wall at any public place imaginable. At Best Buy, youngsters can load their PDAs with the latest music. At JC Penney, grandmothers can zap e-coupons into their phones. Doctors can download patient files, while IT directors can receive the latest sales figures.

In Hollywood's vision of the future, jacking into devices and networks has been around for a long time. Just think back 25 years to the original “Star Wars” when R2D2 tapped into the Death Star's central control system to prevent the trash compactor from crushing Luke, Han, Leia and Chewie. In reality, while the Jack-related scenarios are certainly less harrowing, it's useful nonetheless: Girls attending the Convent of the Sacred Heart High School can download testing calendars, sport schedules and daily bulletins on their school-issued PDAs. Attendees at most trade shows can point their PDAs at the Jack to get conference schedules. Or San Francisco Giants fans can beam down player stats and scorekeeping applications while they watch games at Pac Bell Park.

Kato and company recently caught the attention of forward-thinking Finnish operator Sonera, which last month signed a deal with Wideray to co-develop and commercially distribute the Jack by the first quarter of next year.

“This deal moves us out of start-up mode to becoming an important piece of the telecom world,” Kato said.

Half of Wideray's eight-person management team came out of Stanford University. At just 28 years old, Kato has earned a bachelor's degree in physics and a master's degree in electrical engineering from Stanford. The young scientist, who at 7 years old was working on computers while other kids rode bikes, also owns several patents in signaling and image processing techniques. And at 22, while other college graduates were living with their parents and looking for jobs, Kato launched a computer graphics company, Sven Technologies, which he sold in 1999 to Spatial Technology.

With that scientist/entrepreneur experience, Kato started contemplating the next big technological breakthrough. He approached Christian Leone, a friend from Stanford who at the time was trading high-yield telecom bonds in London for Goldman Sachs and is now Wideray's chief operating officer. The two realized that although the Internet offered a plethora of information, not everyone could easily access it.

“The answer to everyone's question lies out there in the sea of information,” Kato said. “But it's difficult to get it.”

For six months, the two tossed around business ideas that centered on Internet search engines and other Web-based solutions. They pulled two more members into the fold: Brandon Berger, Wideray's director of marketing, who had interactive marketing experience with firms such as Adidas; and another Stanford buddy, Peikwen Chang, Wideray's director of product design, who had developed products for Dell and Compaq.

“We all had different skill sets and we all were friends,” Kato said. “We were sitting around [talking] at dinner and it became evident that the exciting opportunity was having a practical way of delivering sticky content to people while they weren't at a PC.”

In the summer of 2000, Kato and Leone started visiting people that Leone knew in the telecom industry. The two managed to scrape together $2 million in seed money just months before the dotcom crash.

“We did a hurry-up and pulled the trigger on people to send in their commitments,” Kato said. “That was critical. Had we waited another month or two, we would have lost a lot of that financing and probably wouldn't have gotten the company off the ground.”

That autumn, more pieces fell into place. Scout Electromedia, a Vancouver, British Columbia-based company, was developing similar technology that would deliver city guides to people via pagers. When the company ran out of funding, Kato hopped the next plane to Vancouver and offered jobs to some of Scout's most talented device developers.

“I went up there, pitched them my idea, took over their offices and rolled over their employment agreements to us,” Kato said. “Overnight, we had a capable engineering team. We released our first product on that first $2 million funding, and we were able to do that within nine months.”

Wideray made four phone calls to four different companies it thought could benefit from the Jack. Astonishingly, all four called back: Sony Metreon, Pac Bell Park, Land Rover and Kato's alma mater, Stanford.

“They all were very receptive, as long as we demonstrated that there was not a lot of risk, and that they didn't have to make a heavy investment to get the product,” Kato said. “The most challenging thing for most of these companies was having someone print signage at each location.”

Now analysts say Wideray has a bigger challenge. While Sonera has validated the Jack, the company must convince a majority of the telecom industry that the Jack concept can go mainstream.

“It's a bit of ‘let's get real here,’” said Dana Tardelli, senior analyst with Aberdeen Group. “It sounds like it can be pretty cheap, but realistically, how much different is it than GAP kiosks? It has merit in niche markets. It's not going to change the world, but it can extend information to certain users efficiently.”

Sonera, however, believes the Jack could become a key component to the wireless Internet.

“We believe that GPRS and UMTS cannot viably deliver rich media like MP3 music,” said Timo Korpela, Sonera's vice president of corporate strategy and managing director the company's U.S. operations. “We think this is the next step in the wireless Internet business, which has been centrally controlled by the operator. The Jack turns that upside down. Now customers can decide content.”

That concept scares carriers who have always tried to control the content their customers can access. Many don't want to become dumb pipe providers. Yet Sonera believes that is the only way the wireless Internet will flourish.

“It's inexpensive to deploy, and I wouldn't underestimate those crazy Scandinavians who are always willing to try something new,” said Seamus McAteer, analyst with the Zelos Group. “But I just don't know.”

Kato's vision of the future is more concrete. “There is going to be a continuing proliferation of handheld and mobile devices that will have this computing and interactive capability,” he said. “Because of the integration with telephony and voice services, it's going to be something that everyone has in their pockets.”