Think Big, Stay Small

You have to admire the chutzpah of FishGrin, aka FG Communications LLC of Danville, Calif., which recently began marketing its home-grown back-end software for multiple dwelling unit (MDU) Wi-Fi systems.

A press release announcing the launch of the product notes that it will be supported by FishGrin’s “Managed Services group.” Given that the 18-month old company has exactly two employees — its founding partners, Michael Fishman and Tom Grinstead — the notion of it being divided into groups, (a la Microsoft) is slightly risible.

There is nothing wrong, of course, with little companies trying to look and sound like bigger companies. It’s done all the time, and may often be a necessary deception. In this case, though, the company’s real size may be a better recommendation of its product.

Given the limited resources at their disposal, if Fishman and Grinstead hadn’t developed pretty effective software tools, they could never have succeeded to the extent they have in FishGrin’s core business of providing Wi-Fi services to MDUs. (MDU is real estate industry jargon for apartment building.)

FishGrin has six apartment buildings it manages, comprising a total of about 1,000 units up and running under a number of different business arrangements. Only two are in the San Francisco Bay area near the company’s Danville network operations center (NOC). The others are in Scottsdale, Ariz. (one) and Texas (three). Thus, FishGrin calls itself a national operator.

In all cases, it manages the service and the technology for its customers — often from a considerable distance.

“The software provides a host of diagnostic and management tools that allow us to constantly monitor connections and users to make sure everything is going status quo,” Fishman says.

“Then we subcontract all the work that needs to be done on site. Plus, as we go out and do installs, we work with apartment managers so they can do some of the basic [on-site maintenance and problem solving] stuff.”

FishGrin, truly a lean, mean, virtual machine, also outsources the Help desk services it offers MDU customers and their tenants.

That the company has been even this successful is a credit to the savvy of its two principals, as well as the effectiveness of its software. Fishman has a background in information technology consulting, Grinstead in marketing and sales. (Get it? FishGrin — FISHman, GRINstead?)

It is still a very small company, but it is set to get bigger, Fishman says. One of its six MDU owner customers, unnamed for now, owns multiple properties with a total of 25,000 units. It is currently working with FishGrin to identify others of its buildings where it could provide Wi-Fi-based high-speed Internet service.

“Depending on which ones we choose, we could be serving in the range of 5,000 units by the end of this year,” Fishman says. “Ideally, we go into MDUs where only dial-up is available, and then it’s really a slam dunk.”

In buildings where only dial-up is available, FishGrin reaches a penetration level of about 30 to 35 percent fairly quickly. In the one or two where it competes against DSL or cable providers, it takes a little longer but eventually gets to the same 30 to 35-percent level, Fishman says.

By our calculations, this means FishGrin currently has between 3,000 and 3,500 subscribers — not bad for a two-man operation.

The company works with MDU owners under three different types of arrangements. With some, FishGrin owns the Wi-Fi infrastructure and manages the service, charging the owner a wholesale rate. The owner may give the service away as an amenity or include it with a bundle of other paid services such as cable or satellite TV.

In other cases, FishGrin owns the equipment and bills tenants directly, charging about $40 per month. Fishman is slightly evasive about financial details, saying only that it can share subscription revenues with owners — the implication being that it doesn’t always.

In still other cases, the MDU owner owns the Wi-Fi infrastructure and FishGrin manages the service, charging the customer a wholesale rate or management fee.

“The best from our perspective is where we own the equipment and charge a wholesale rate,” Fishman says. “It’s easier if we don’t have to bill the end user — we avoid all the usual bill paying problems. And owning the equipment allows us more flexibility — since some of our installs aren’t local, it allows us greater control of the equipment.”

FishGrin has used technology from more than one vendor, but recently standardized on Cisco access points — the Aironet 1200 series — and routers, where they’re needed. In some cases, if the backhaul is a T1 line rather than business-grade DSL, the T1 provider supplies the router, Fishman notes.

It also supplies client equipment where needed, USB and PCMCIA Wi-Fi network interface devices, mostly from Proxim. It charges only a refundable deposit. “But more and more subscribers are using their own,” he says. “There’s less and less need for us to provide it.”

FishGrin’s WISP business appears stable and on the point of growing. Fishman says the company is in talks with other single- and multiple-property owners.

The MDU market, however, is not an easy one.

MDU owners are typically not looking for suppliers of this kind of service. One reason, Fishman says, is that many were burned in the 1990s by providers that promised wireline-based solutions, but couldn’t deliver — in some cases after the owners invested in the technology provider.

There is an upside and downside to this. FishGrin doesn’t often face competitive quoting situations. In fact, Fishman insists the company has few direct competitors. On the other hand, MDU owners — once burned, twice shy — often need to be educated or re-educated on the benefits of providing tenants a high-speed Internet service, and the lower risk involved in using Wi-Fi.

Some also balk at paying FishGrin to provide the service. They want to do it themselves — which is one reason the company decided to license its back-end software. Besides do-it-yourself MDU owners, it hopes to sell the product to other service providers as well.

The software will allow do-it-yourself MDU owners and service providers to register new users or let them self-register. It sets up the necessary security within the wireless network — after verification of payment in cases where the owner is charging for service. New users can get online within 10 minutes of signing up.

The product includes “complete CRM functionality,” tightly integrated with help desk services. This includes an automated process for escalating technically challenging problems.

Help desk agents access the system via a customized Web-based interface that allows them to troubleshoot user issues, access all network components for remote diagnostics and view customer information from the CRM system as well.

System Administrators can get a view of an entire network on one screen, making it easy to detect problems before customers call in. They can also e-mail or page tech support agents from within the program.

The software includes automated billing functionality. It can either automatically bill credit cards or create monthly invoices through integration with the popular small business accounting package Quickbooks from Intuit. The package also generates reports on all aspects of the business.

Could FishGrin end up cannibalizing its WISP business by selling its secret-sauce software? “Sure, if we did it wrong,” Fishman concedes. He has no intention of doing it wrong, however. The company will only sell to non-competing service providers — those working in RV parks and marinas, for example — and it will only sell to MDU owners it can’t convince to let FishGrin manage the service for them.

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