Nice, Quiet Young Men

The CEO of Pinpoint Networks took a sip from his juice box. “I once heard a story about this guy who's building a brick wall, and he wanted to do it curved,” he said. “So instead of hiring bricklayers who are used to building in a straight line, he got people who had never built with bricks before. Maybe there's something like that here.”

Jud Bowman has never been to college. He has no previous work history. But he knows how to build things. Four years ago, he and Pinpoint Chief Technical Officer Taylor Brockman dazzled investors in North Carolina's Research Triangle Park area with their business plan to build a better search engine. They were in high school at the time. Though the luster of that early idea faded with the dotcoms, the company they founded has grown even more ambitious.

What the two built next was a middleware platform called Fuel that allows mobile operators to provision, scale and bill for various types of mobile data applications (WAP, J2ME, SMS, Pocket PC, etc.). Underneath it, they're also building a community of applications developers to fan the flames. With them, Bowman wants to do for American and European mobile carriers what famed data service i-mode did for Japanese carrier NTT DoCoMo: create a thriving, symbiotic bond between carriers and developers in which all parties share revenues and feed off each other — an organic infrastructure with the strength and flexibility of curved brick.

“We're trying to kick-start an ecosystem,” Bowman said. “Create an economy from scratch.”

He took another sip from his juice box.

Most of the walls in Pinpoint's Cary, N.C., offices are paneled with whiteboards bearing convoluted flowcharts and complex mathematical scrawlings, each one the solution to some middleware riddle. Most of it is for Brockman, who seems to prefer this graffiti to speech as a form of communication. In some places, employees have drawn right on the walls — in others, right on the windows.

In two places hang quilts with patches reading “Pinpoint.com,” both handmade gifts from the grandmother Bowman credits with his first introduction to the world of business. When Bowman was in elementary school, his grandmother taught him fractions using a stock ticker. Later, she taught him how to invest. Today she's a Pinpoint shareholder — one who doesn't hesitate to give feedback to management. “She'll say, ‘You need more customers,’” Bowman said.

Bowman wrote the original Pinpoint business plan in his dorm room during his senior year at the North Carolina School of Science and Math, a two-year boarding high school for gifted students (or, as one former classmate put it, “kind of a school for nerds”). After an MIT summer program piqued his interest, he came up with an idea for a search engine that would produce more relevant results. He recruited Brockman, who played alongside him in the school's orchestra and had a reputation for knowing Java better than just about everyone.

“Everyone agreed these guys were spectacular,” said Steve Nelson, Pinpoint chairman and partner at Wakefield Group, an early investor. “You can always surround spectacular people with experience as you need it.”

In February 2001, Pinpoint hired a middle-aged CEO with the hope that his experience and connections could help open doors to the top-tier carriers that have been Pinpoint's focus. Anthony J. Blake Jr. came recommended by Cleveland headhunter firm Christian & Timbers. According to published reports, he boasted ties to AT&T and a solid track record leading software start-ups to profit. Only weeks later, though, Bowman discovered Blake's “contacts” at AT&T had never heard of him, and the software firm he claimed he'd sold to WorldCom had in reality folded that winter. (According to Bowman, Blake even lied about his age; he was 47 pretending to be 41. Blake hasn't commented on the incident.)

After Blake was dismissed, Bowman reclaimed the CEO mantle, and he said there have been no plans to find a replacement. But the fiasco was a defining moment for the company.

“At that point, we realized that we control our own destinies,” Bowman said. “We couldn't say, ‘Oh, they'll bring in some senior guy, and he'll make it all happen.’ We knew it was up to us.”

Stripped of any security blankets but the quilts on the wall, Bowman rededicated himself, setting strict quarterly milestones and firing a third of his 45-person staff. He said he's thankful his company's adolescence came during the most harrowing two years telecom has ever seen, because it made him all the more fiscally shrewd. Pinpoint hasn't paid rent since it moved into its current office space two years ago because Bowman convinced the building owner (also an angel investor) to give him a free pass. And over lunch at a local steakhouse, when Brockman nudged his boss to leave more than a 12% gratuity, Bowman bristled: “Sorry, but I will not overtip.”

These last two years have also cemented Bowman and Brockman's commitment to the company. In the early years, the two never meant for Pinpoint to be more than a hiccup between high school and college. The venture's first round of funding came the week before they were to start their freshman years (Bowman had a full-ride scholarship at Stanford University, Brockman at the University of North Carolina).

Bowman always insisted he'd return to college one day, but he kept pushing back the deadline. In 2000, when he was 19, Bowman told the press, “I don't want to be 24 and say I've never been to college.” A year later, at 20, he told them, “I don't want to be one of those 25-year-olds who never went to college.”

These days, college is an “if,” not a “when,” especially now that so many of his friends are graduating and relating horror stories about the bleak job market. More than a few have given Bowman their resumés. After seeing how unprepared computer science graduates were for the rigors of the real world, Brockman outgrew his college plans as well.

Neither Bowman nor Brockman have plans to leave Pinpoint now. Like software, Bowman said, “people have a certain ability to scale. With people that have more experience, it's easier to predict because you can base it on their past. With me, it's harder to predict how far I can go.”

The two founders' roles have evolved a lot already, illustrating what Brockman calls their “polar personalities.” Bowman is the button-down workaholic, making frequent trips to Europe and working 12-hour days. Brockman is more relaxed, more the joker, insisting on 9:00 to 5:00 days and what he calls “an easygoing, beer-drinking culture that's not uptight.” Clad in combat boots, Brockman is always rolling beneath the company's undercarriage; he gave up his board seat to spend more time programming in his dark corner office.

Both founders turned 21 this year. But while Brockman remembers his birthday fondly (“Got drunk, sobered up, drove to Chapel Hill, got drunk again”), Bowman did nothing to mark the occasion.

“I think I was in London, working with [European mobile network operator] O2,” he said with indifference. “I'm not much into birthdays.”

Pinpoint's dogged execution under Bowman's watch earned the company $4 million in funding in October from no less reputable a source than New Enterprise Associates, the largest venture capital firm in the country. This latest funding is expected to be all Pinpoint needs to reach a profit.

NEA partner Suzanne King admitted she was skeptical of her firm's plan to invest millions in a CEO who wasn't even old enough to rent a car. But she changed her mind when she saw how well Bowman understood the global market and how well he could articulate his vision for the company.

“I went to meet him rolling my eyes, saying, ‘You've got to be kidding me,’” she said. “But the whole time I'm listening to this guy, I'm thinking, ‘When I was his age, I was very focused on who was having the party on Thursday night and whether I could get good seats to the basketball game.’ What I knew about the world compared to him just boggled my mind. I left there feeling quite inadequate about myself, but thoroughly impressed with him.”

One of Pinpoint's essential roles is as matchmaker between carriers and application developers. Carriers can save a lot of time by dealing with one intermediary rather than thousands of individual developers, and developers can save time by not having to juggle multiple carrier relationships.

But Pinpoint isn't alone. The market for helping carriers find and distribute data applications is being pulled in dozens of different directions by an overlapping panoply of software upstarts and handset manufacturers, each with a slightly different leaning.

Handango, Cellmania and Digital Bridges have amassed thick catalogs of ready-to-use applications. End2end and Mobilitec have made inroads as app deployment specialists. In September, WAP browser leader Openwave unveiled a “download manager” for J2ME apps, the fruit of its Ellipsus Systems acquisition last spring. And in October, Openwave announced an alliance with even more platform hopefuls, including Infospace and Mforma.

“They're coming out of the woodwork,” said Clint Patterson, Handango vice president of product marketing.

Pinpoint also competes with chipmaker Qualcomm, whose BREW platform reaches 2.5 million consumers worldwide. Motorola also became a competitor when it acquired 4th Pass (a former Pinpoint rival), as did Nokia, whose Smart Messaging platform traffics ringtones and other downloads. Pinpoint even competes with its own potential customers at times: Sprint and AT&T Wireless, for example, opted to build and distribute their own house blend of applications.

While competitors have dug footholds in various sections of the market (for example, Handango has become a leader in PDA-type apps, but it doesn't offer SMS or WAP), Pinpoint's business plan mimics its CEO's penchant for admitting what he doesn't know. Rather than predict which technologies will take off and which will die off, Pinpoint's platform can handle WAP, J2ME, SMS and others, and it allows developers to convert their applications from one acronym to the next. In theory, this would allow developers to sell their apps across several disparate networks without having to tailor them to each carrier.

“[Pinpoint] ends up being in a position to cover a larger space when it materializes,” said Jupiter analyst Dylan Brooks. It's that “when it materializes” part that's troublesome at the moment, however. The sale of Java-enabled phones this Christmas could help spur new demand, but for now, wireless data usage in the U.S. is sparse. Only 8% of North American households have a Web-enabled mobile phone, according to Forrester Research, and of that 8%, only 21% use data services — a figure Forrester calls “paltry.” Still, the research firm expects data services to be worth $1.7 billion for North American carriers by 2006.

The main flaw in Pinpoint's model, as some see it, is that it clashes with the way application developers typically think. Most app makers have already picked their favorite content type, whether it's WAP, J2ME or SMS. They're more likely to partner with the biggest name in that group (for WAP, it's Openwave; for PocketPC developers, it's Microsoft, and so on) rather than with a small, multilingual contender like Pinpoint.

“In general, support for additional protocols is not important [to developers],” said John Muchow, founder of J2ME developer consultancy Wireless Mind.

Brockman sees the biggest threat in Microsoft, with its indomitable brand and its tens of thousands of handheld developers. “Microsoft is trying to get into everything, and frankly it's scary,” he said. “They'll spend three or four years looking at others who are doing it and then crush them. That's tough for us. Our goal is to quickly grow to the point where we have a foothold — and can't get thrown out of the market.”

If Pinpoint can't build an appealing catalog of applications quickly, it will lose carriers' interest. Their current library contains about 400 applications (though Pinpoint won't say how many are of which type), which is downright shallow compared with, say, the more than 25,000 applications Handango claims or the 50,000 DoCoMo has. But big numbers don't necessarily win this game.

“It's easy to talk about quantity, but eventually it's going to boil down to who has a good eye, and who's best at spotting apps that are going to make money for carriers. That's not a question you can answer yet,” said Amy Schulman, president of HipnTasty, a developer that signed on with Pinpoint mainly for access to O2, Pinpoint's only European customer to date.

HipnTasty helps confirm what Bowman already suspected: that the more carrier customers he collects, the more developers will be knocking on his door.

But winning top-tier carriers won't be easy. Verizon Wireless has already converted to the church of BREW, relegating Pinpoint to pushing only free WAP applications on its network. (As with Pinpoint's other North American customer, Canada's Rogers AT&T Wireless, the arrangement allows developers to showcase their applications to a wide audience but doesn't bring them any money for it.) Nextel, with its close ties to Motorola, is relying on the manufacturer for much of its data application deployment. And Cingular, for the moment, has put its trust in Cellmania.

“We were looking for an outsourced solution. We wanted to do proof-of-concept in the most cost-expedient way,” said Roy Tarantino, head of Cingular's applications developer storefront. “Rather than committing millions of dollars to a platform and taking the time to deploy it, Cellmania provided us with a solution that we could just switch on very quickly.”

Pinpoint executives insist that none of the doors to these carriers are closed because carriers are free to use multiple platforms for various ends. But for the time being, Pinpoint's most fertile opportunities may be in Europe, where NTT DoCoMo has struck exclusive relationships with several carriers (one in each country). Remaining carriers will be forced to ramp up their own data offerings to compete, and they may turn to Pinpoint to do so.

O2 has been Pinpoint's biggest customer win to date; the carrier is the first to integrate the entire Fuel platform into its network and the first to deliver actual revenues to developers. But skeptics say even that relationship has a cloud hanging over it.

“They won the O2 deal I think in part because O2 had high hopes for the Pocket PC-powered XDA, which O2 bought 100,000 of,” Jupiter's Brooks said. “Word has it they have well over three-fourths of those still left in inventory. They're not selling a whole lot of those.”

Still, Bowman insists he has other carrier deals in the works and new color applications to drive usage. As for the XDA, Bowman points out that it's a first-generation device, and the first generation of anything is imperfect. Consider the first incarnation of Pinpoint four years ago, he said.

“We were so naïve.”