PEOPLE: The Next Tech Adventure
EarthLink co-founder Sky Dayton looks for latest Internet opportunity in new wireless ISP venture.
By CHRISTOPHER KEOUGH
Staff Reporter
Still just 30, Sky Dayton has seen the best and worst of the Internet world. He, along with Reed Slatkin, made a fortune from their 1994 startup called EarthLink. But he had less success with eCompanies, the incubator he co-founded with former Disney executive Jake Winebaum and which has had only limited success with its Business.com site. He also was one of the investors burned by Slatkin’s investment schemes.
ECompanies has ceased to operate as an incubator, now serving as a holding company for Dayton and Winebaum’s interests in business.com and Boingo Wireless Inc. Boingo is a wireless Internet service provider that is trying to capitalize on an emerging technology known as Wi-Fi. That’s the popular term for the wireless version of Ethernet, the cable used in computer networking. Wi-Fi technology allows for the transfer of 11 megabits of information each second, which is 10 times faster than a cable modem. The strategy is to sell access to wireless ISPs under the Boingo brand.
If it takes hold, commuters and business travelers would be able to go online anywhere via radio signal without the constraint of hooking into a landline.
Question: When did it occur to you that there could be a market for a company that puts together wireless Internet networks?
Answer: I’d been looking for a long time for what would become the next stage of the Internet. In late 2000, I got one of these Wi-Fi cards and I set up a network in my house. I realized that people are going to set up these networks, not only in homes and businesses, but also in public places. There was a promise of being able to connect to the Internet wirelessly wherever you were at high speeds. The light went off and I went to work.
Q: How long from the moment that light went off until you had a company?
A: I think I came upon the idea in late 2000 and I wrote a business plan and I started the company in February 2001. I got everyone together and said, “There’s the mountaintop. Everyone get their backpacks on and started hiking.”
Q: Why Boingo?
A: We were looking for a name that connoted the freedom you get when you’re able to connect to the Internet wherever you are and being able to bounce from location to location. We wanted a name that was really memorable and I guarantee when you hear Boingo, you’ll remember it.
Q: Because the wireless Internet is an unregulated world, what happens when too many providers crowd a single space, such as a hotel?
A: One of the great things about Wi-Fi is that one of its limitations is also a great feature. It has short range, so the potential for interference is limited. There are three different frequencies within Wi-Fi that you can have coexisting and they don’t overlap at all.
Q: How do you make money?
A: Boingo makes money by charging for Internet access. It’s an ISP-type model. We have three plans.
Q: How many wireless Internet carriers are out there?
A: There’s really an unlimited number of people who can go after it. The network, as a result, is going to be very entrepreneurial and very frothy and chaotic. Somebody has to come and organize that chaos and that’s what we’re trying to do at Boingo.
Q: The number of public spaces where Wi-Fi is available is extremely limited, isn’t it?
A: There are hundreds of locations today, over 700. I think that number will grow into the thousands this year. For people who do a lot of traveling, it’s there, it’s alive. It’s got enough locations that if you travel a lot you’re going to find a location and get connected. We’ve found that heavy business travelers will plan their trip around being able to get high-speed Internet access. Over the next couple of years I think every major public space is going to get a Wi-Fi network.
Q: Are you ahead of the market then?
A: I think we’re timed pretty much perfectly. We’ve arrived when the (wireless capable) cards are cheap enough, and that is something we had to wait for. There are enough locations. We added six airports this week. It’s happening.
Q: How much money do you have?
A: We raised $15 million in July from NEA (New Enterprise Associates), Sprint and Evercore.
Q: What’s eCompanies’ stake in Boingo?
A: That’s not something we’ve disclosed.
Q: What’s going on over at eCompanies these days?
A: We’ve really focused our attention on two companies: Boingo and Business.com. We have another three or four companies that graduated and moved out and are making it on their own.
Q: What’s the point of eCompanies if there are no more startups?
A: We’re not planning to do new companies at this point. The current market is a tough market and it requires passionate focus on one or two things. Boingo’s my first CEO gig since founding EarthLink seven years ago. I feel like I’m on the cutting edge again.
Q: What is eCompanies then?
A: All eCompanies ever was was me and Jake. eCompanies, as an entity, at this point is basically a holding company for me and Jake and the different investors we have.
Q: If Business.com succeeds, what will it look like?
A: Business.com is a business search engine targeted to business users. It’s a segment of the Internet they really own at this point. Because of all the carnage, they were able to survive and a lot of silly competitors fell by the wayside leaving them in a much stronger position. I like to think of them as the CNBC of Internet.
Q: Speaking of silly, any regrets about paying $7.5 million for the business.com domain name?
A: The way that that deal was structured, in reality, made a lot of sense. The benefit that was gained was instant tremendous brand awareness for that company. Would anybody do that deal again today? No. The world is different, but it was a stepping stone for that company and I think it served it well.
Q: What’s your relationship today with Reed Slatkin?
A: I’m a creditor. He owes me money. It’s a nice chunk of change. That’s my relationship.
Q: What’s your assessment of the progress of the Internet to date?
A: In ’94, when we launched EarthLink, we had to tell people why they needed to connect to the Internet. It was not obvious. Yahoo didn’t exist. Amazon didn’t exist. eBay didn’t exist. All these great things you can do on the Internet were just dreams in some entrepreneur’s head. Today, that question of why do we need to connect to the Internet is a preposterous one. I think the next phase of the Internet is making it much more ubiquitous and available to people.
Q: You’ve coined the term packet space. What is that?
A: It’s where the Internet is in the air you breathe. It’s just there, just present at all times. The Internet is actually passing through your body right now. Think about what you do everyday. You go to the caf & #233;. You go get a bagel. You go to the sports club. You go pick up your kids from school. You go watch a movie. In all those places you’re in a physical location and the Internet will be there in the next few years.
Q: What does that mean in practical terms?
A: I’m looking at your watch right now because I’m thinking of different things it could do if it was able to see a (wireless) network and use it. It could synchronize with the atomic clock. It could give you an e-mail or you could have an instant message session with somebody. Ultimately, with the processing power that these things will have you’ll be able to watch TV on your watch. That Dick Tracy thing will actually happen. Once that network is there it serves as a platform for innovation of everything else.
Q: What’s the next killer app on the Internet?
A: I said the same thing in ’94. I’ll say it again. I don’t know what people are going to do with this thing. You can’t even imagine what innovative entrepreneurs are going to do with this new (wireless) platform. The wireless Internet will spawn all kinds of amazing inventions. I’ve got different of ideas myself, but it’s not my job to create those things. It’s my job to give them a platform.
Q: What’s your next idea?
A: This is it, man. I’m doing Boingo. I’m happy doing a couple of things. I really like to focus. I’m doing Boingo.
Q: Where do you get a name like Sky?
A: Very artistic parents in 1971. New York City. Greenwich Village. My father’s a sculptor. My mother’s a poet. It was a little bit of a battle between Sky and Dylan not after the singer, but after the poet. My mom wanted Dylan and my dad wanted Sky and they flipped a coin and it fell on Sky Dylan.
INTERVIEW:
Sky Dayton
Title: Founder and Chief Executive
Organization: Boingo Wireless Inc.
Born: 1971, New York
Education: High school diploma, Delphian School, Portland, Ore.
Career Turning Point: Founding EarthLink 1994
Most Admired Person: EarthLink Chief Executive Garry Betty
Personal: Wife, Arwen, son 11 months
