“WiFi is a resource that can be collaboratively consumed.”
That’s the oracular wisdom that Robert Gaal, co-founder of Karma, dropped on me halfway into our interview. Let’s have it sink in for a bit before we continue.
Ready? Karma is the wireless hotspot — like a MiFi — that comes with social sharing as part of the offering. It also has a more sensible pricing structure than competitors. Bandwidth is pay-as-you-go, $14 a gigabyte, and your credits don’t expire. That is a refreshing change from telco access points that lock you in to contracts. Even the month-to-month data plans (like you get on iPads) seem onerous in comparison. So props to Karma for rationalizing the hotspot space.
The social and collaborative part of the product is the connection sharing scheme. Every Karma hotspot is part yours, and part the community’s. “Your” hotspot provides 100MB of data to any and all visitors for free, after which they can sign up to pay for the service just like you. And for every 100MB of data that visitors use, you get 100MB of bandwidth added to your account.
So it pays to leave your hotspot on so others can use it. And it gets even more communal. While Karma won’t let a hotspot owner see traffic from guest users, it does tell you who is using your device and bandwidth. Owners get guests’ names and links to their Facebook profiles. Gaal says that often, when owners see they have a guest, they will try to find that person and be helpful. “It’s all to get guests engaged in the community.”
Karma is, to a point, a refinement on some other community bandwidth products. It can be compared to Fon, which distributes fixed, ethernet-to-WiFi routers. The model is similar: Owners get priority access, and guests from the network (other Fon users) can use a portion of the bandwidth when they’re not at their own home. Fon is having some success working with carriers, for whom it can help create a better consumer experience. Karma’s Gaal, likewise, thinks that his product can make a carrier’s bandwidth more pervasive and affordable.
I love these communal resource plays.
I’m also closely tracking Open Garden, which turns your Android (or OS X or Windows) device into a community hotspot on its shared WiFi network. In other words, everyone in range of an Open Garden-equipped device can share bandwidth. (And sharing can happen over Bluetooth, so endpoint users can save on battery life.) it is an awesome solution for people with both an Android phone and a tablet. It would be good for iPhone + iPad users too, except getting low-level networking stuff like this into iOS isn’t doable.
And then there’s Space Monkey, which does a communal bandwidth thing with storage: It puts the file storage “cloud” into homes of users. Those who have a Space Monkey storage appliance in their home get half of the storage for themselves, and the other half is encrypted and shared by other Space Monkey users. It’s a mesh of storage nodes, essentially, and it’s elegant and robust.
The challenge with all of these ideas is getting the owned/shared ratio right. Too much sharing will turn off individual device owners, who do pay to run their slice of the community network, either in bandwidth fees or diminished battery life. Too little sharing and the economics don’t work for the provider company. So everyone in this space goes a step beyond feel-good community sharing to give the owners something extra: Free bandwidth (Karma), an extended network (Fon; OpenGarden); or increased reliability (Space Monkey).
And then there’s the danger of running afoul of the network owners. That’s why the companies that aggressively partner with telcos have the best chances of success, even if doing those deals can really slow down roll-outs.
But the real challenge is that all these community plays, while technically beautiful, are fighting macro trends. The costs of bandwidth and storage are dropping; the pervasiveness of wireless is increasing. The economics that may work now will not work forever. Anyone doing a community resource sharing play has to carefully surf very choppy waves, and companies that fall off their boards may have a hard time getting back up.
Audio version of this column
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