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Fixed Wireless Business

Determining WISP Demand

Members of the ISP-Wireless list talk about the difficulties of determining demand for WISP services. Market research is expensive, but simple surveys yield unreliable results.

[February 27, 2002]

On the ISP-Wireless list in February, MS asked,

"How should I determine whether starting a wireless ISP in my area would succeed? Should I call a whole bunch of people, hire a survey company, or perhaps conduct a direct mail campaign and have people send back surveys? I'm looking for the optimal client base to serve, in order to reduce costs and increase profits as much as possible."

A number of respondents warned that surveys often return overly optimistic numbers:

[WB offered] "Don't make the mistake a friend of mine made with cable TV. He sent out a mailing, and got 2000 people who said they'd be really keen on his company. Seven million dollars later, he filed for bankruptcy. It's easy for them to say they'll do it, but that doesn't mean they will."

[PA agreed] "Be warned: everyone will say they want high speed, but few will pay for it. Whatever number you get, reduce it by 80 to 90 percent to get the actual number of customers to expect."

There was some disagreement as to whether demanding an advance commitment might work:

[WB recommended] "My suggestion is to offer some special deal under which they can sign up in advance. Agree that, if you provide the service and it is of a specific standard, then they'll sign up, but if you don't, then they don't need to. It's a no-lose proposition for them, so you'll get the ones that are keen."

[RF countered] "That sounds good in theory, but I find it hard to believe that many people would sign a contract for a service that doesn't yet exist."

BG suggested that it's worth it to spend some money on the survey in order to ensure accuracy:

"The secret to finding out how many are actually going to do it, as opposed to the number that say they are, is in how you word your questions and in the quality of the survey you do. If you're looking to lay out a sizable amount of capital, then you would be wise to hire a market research firm to do that work for you. I know it doesn't sound appealing to spend hard earned money on a bunch of numbers, but in the long run it'll save you quite a bit, as well as enable you to win financing. You'll win in the end."

—End