Next Gen Technologist

Everyone wants a piece of Wi-Fi. Want proof? Flip through any wireless publication — including this one — and you'll find plenty: engineers searching for new ways to manipulate the technology; visionary opportunists creating innovative business models; carriers sniffing for a way to make the service profitable.

Gary Murray II is none of these.

Murray is founder and CEO of Landover, Md.-based WiSE Technologies, an 18-month-old Wi-Fi ISP that sets up hot spots along the East Coast. WiSE is in its infant stage, with just 42 contracted sites and 2000 unique users as of December 2002.

But entrepreneurial instinct is in Murray's blood, and good pedigree suggests he has what it takes to lead the company to bigger things. Murray's father, grandfather and great-grandfather have each started and owned businesses, and at age 26, Murray already has two start-ups under his belt: Clone PC, where he built computers using off-the-shelf parts, and Elite Entertainment, an event promotion company.

“I'm a fourth generation entrepreneur,” Murray said. “So I've always had some of that spirit within me.”

The creation of WiSE, to mangle a cliché, was a short, strange trip that began with Murray working as a call center staffer and ended thus far with him as a start-up CEO just a few years later. After graduating from the University of Maryland University College in 2000 with a degree in information systems management, Murray rose in four years time from help desk employee to working with defense contractor Northrop Grumman as a senior telecommunications engineer in charge of the company's Greenbelt, Md., offices.

But by then, Murray was tired of working for someone else. So he turned to his father, Gary Murray I, who founded a small venture capital firm called HumanVision Technology Ventures.

Murray asked his father if he could come on board at the VC firm to learn more about business. Murray I obliged, and he gave his son an analyst position in which he studied business plans and technologies, helping to decide which companies would be invited to present their business cases to the rest of the firm. It's through this work that the first seeds of WiSE Technologies were planted.

“I also had to seek out opportunities and look for industries we might not have been getting plans from,” Murray said. “I had to have a good overview of what was going on as far as what technologies were going to make it. That's how I found this Wi-Fi phenomenon.”

After researching the field, Murray decided it was something HumanVision should pursue. But he had to find the right opportunity to pitch the deal.

That opportunity came when Najib Kabbabi, managing partner at HumanVision, finally called it quits with wireline broadband. “There was a day when I came into the office particularly frustrated,” Kabbabi said. “I'd ordered DSL from an ISP [and] after a few months of waiting I got this e-mail that said, ‘Sorry, we can't do it.’”

It was then that Murray proposed an investment in the public access wireless space. Though the time was right for a pitch, convincing the firm that Wi-Fi was a good bet took some doing. HumanVision's investment philosophy is to put money into companies that solve fundamental problems; in contrast, Wi-Fi is a services play. So Murray read the research, crunched the numbers and evaluated the opportunities, which he then presented to HumanVision.

“It took me telling them over and over that we may want to bend the rules for this one,” Murray said. “They said, ‘Why don't you do it yourself?’”

Murray agreed, and with that he founded WiSE.

The business model for WiSE is a simple one. The company operates mainly along the Amtrak Corridor up and down the East Coast, setting up Wi-Fi hot spots at the usual locations: airports, cafés, apartment complexes. It currently has contracted out 42 sites and is in negotiations to set up hot spots with some companies that offer services nationwide.

The company recognizes that Wi-Fi is in its land-grab stage, Murray said. But with a regional focus, WiSE is in a position to analyze markets and cherry-pick the best locations.

Compared with other CEOs, Murray's professional experience is somewhat limited. But having worked in the VC field and seeing others fail, Murray said he's learned that WiSE simply can't set up these sites and expect people to come to them, especially within a nascent industry such as Wi-Fi.

“WiSE will nurture a location with marketing and customer service until it's profitable, then we'll move on and try to expand,” he said. “We're going to nurture each location, each zone and each region until it's profitable.”

The goal of cultivating a location until it's profitable is certainly smart business, and if successful, it should help WiSE become a solid company in the long-term. But Murray may have other plans for WiSE.

There are indications that Murray and HumanVision may be out to sell WiSE to a larger player. The description of HumanVision on WiSE's Web site says that the VC has “identified the public access wireless LAN industry to be one that will… experience consolidation, most likely within the next five years, which will provide excellent opportunities for exiting with favorable returns to the investors.”

That's a good analysis of the situation, said Sarah Kim, a wireless mobile technologies analyst with The Yankee Group. Given the pace at which new players are popping up and the value of nationwide hot spot providers that can offer roaming to business travelers, consolidation, she said, is inevitable.

“A lot of the carriers are getting much more interested in this space and a lot of the hot spot providers are going into this with the purpose of being bought out eventually.” For those looking to be acquired, she said, “it's about finding the locations that are particularly attractive to business travelers.”

Looking at WiSE's plans — the regional focus that allows it to find the most lucrative locations, the strategy of nurturing each location to profitability — through this lens shows it may in fact be setting itself up for an acquisition.

Murray said he'd like WiSE to be involved in consolidation, either as an acquirer or a seller. But the plan in any case is to create a successful company that could one day be attractive to larger players that want to join the Wi-Fi hunt, but don't want to start from scratch.

“Our goal is to build a nice, strong company,” Murray said. “Even if we don't get purchased, at the end of the day we're going to have a good company. If we do get purchased, that's great, too.”