A Place Wireless Startups May Call Home

Wireless startups got a pick-me-up Monday as eCompanies LLC and Sprint PCS Monday launched the industry’s first fully wireless incubator.

The development represents the latest foray by Sprint PCS to kickstart development of the wireless Web. Last week, the wireless arm of the long distance giant announced wireless Web service targeting the business community to complement its big push into the mass consumer market.

Sprint PCS now agreed to make a $15 million investment in
eCompanies Wireless and may provide the new incubator resources such as
Sprint PCS technology, leadership and its usability research. With its
licensing of PCS coverage to more than 270 million people, eCompanies will
benefit from Sprint’s dominating saturation in the wireless market

eCompanies said the new incubator plans on offering the complete package for
providing services, applications and infrastructure.

The companies said eCompanies
will leverage the seven-discipline process for building
businesses that eCompanies has employed to create companies such as Icebox and Business.com.

They are: strategy, finance, recruiting, creative, technology, business
development and marketing. eCompanies boasts of executives in each
discipline, so entrepreneurs can tap a whole team of Internet veterans.

Sky Dayton, co-founder of eCompanies LLC and founder of Internet Service
Provider Earthlink Inc., said his firm decided to create a safe harbor for wireless
startups to accommodate what he predicts will be a “brand new market

The firms said the products and service created within eCompanies Wireless
will be shared by all wireless service carriers — not Sprint PCS

Sprint PCS will also include eCompanies Wireless in its Application
Developer’s Program review process. With this, developers
can benefit from the Sprint PCS and eCompanies alliance by submitting their
ideas as candidates for possible incubation, further
development and accelerated deployment.

Mitch Lasky, eCompanies Wireless general manager, said the new firm welcomes
submissions to help grow businesses.

“Wireless applications need to go beyond simply translating the Internet
experience into a smaller form factor — it’s an entirely new medium that
requires dedicated focus by entrepreneurs living and breathing the medium,”
Lasky said.

Iain Gillott, a wireless analyst at International Data Corp., told InternetNews.com Monday that although other companies are incubating wireless firms, they don’t yet have specific ties to major carriers.

“It looks like eCompanies said come incubate with us,” Gillott said. “It’s an interesting play because it looks at how to stay in the value chain. And the developer program is interesting because if eCompanies goes around it they’ve got some problems. This could do very well for both companies, assuming there is some sort of exclusivity.”

As for eCompanies’ choice in a wireless carrier, Gillott said it was tops.

“Sprint PCS is averaging 800,000 new subscriptions per quarter and it’s growing fast,” Gillott added.

Gillott did say that other companies are incubating wireless startups. But eCompanies spokesman Christian Gunning said that while firms like IdeaEdge Ventures might cater to wireless endeavors on a large basis, eCompanies Wireless is the first pure cordless play.

“We sniffed around quite a bit about this,” Gunning told InternetNews.com Monday afternoon. “Through research we discovered that an independent wireless incubator involves a unique business model and a different discipl

ine than firms that offer a cross section of startups.”

Gunning said Ignition Corp., run by former Microsoft stars, also deals with funding wireless startups, but calls itself a venture capital firm.

IdeaEdge Spokesperson Liya Sharif said about 90 percent of IdeaEdge’s current clients consist of wireless startups. She said IdeaEdge, too, has a leading wireless partner in Qualcomm Inc. and that her firm does not see eCompanies’ deal with Spritn PCS as a threat.

“This is a new field with many opportunities for growth,” Sharif said.

Although eCompanies has star power at the helm in Dayton and co-founder and
former Disney.com Chairman Jake
Winebaum, the incubator made huge headlines when it shelled out $7.5 million
for the domain name Business.com last November.

As a pure B2B play, Business.com was the incubator’s mainstay until Monday’s
great wireless to-do. But eCompanies may be even more reknown for its
raising of $130 million of venture capital within two months of launching.
The incubator was born in June 1999; by August, it had secured funding from
Walt Disney Co., EarthLink and The
Goldman Sachs Group
, among others.

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