Good Job. But it only confirms what I expressed and what just about anyone knows. The dropouts will come back when they see cable modem. This data is more bullish than my somewhat conservative estimate suggested. Again, you are just repeating what many are doing daily. The problem is that any factor has a 10 - 50% error. Trying to assemble a Markov Chain at that error rate is futile. I don't consider market size as a key to @Home's success. It is a given.
The challenge for @Home is to manage an exponential growth of gargantuan proportions. They have to hire guys local to any community to go out and install nics (most people won't open up the backplane), they have to have billing, they need content, screen presentation,advanced parallel networking, ATM to the desktop,etc.; all of this is easy if we're talking 5000 homes, but 5,000,000? You can absolutely bury yourself in costs if you don't execute deftly. A lot of this will be born by the cable carriers like TCI, but after all, it is @Home's service. If you slow your growth to be able to avoid disaster, you open the door to competition. So you have to bust a-- and work 24 hours/day for months. After a few months everybody in the company is drained and you still have 3,000,000 to go! An advanced system like this will take years to fine tune so that it's really delivering. Meanwhile you have to crawl to MSFT because TCI ran out of seed capital, those that don't have the service(like me) are fuming, and you get an influx of payment so large it knocks the accounting system into a cocked hat for weeks.
Perhaps you can see why investors are skittish. This is a new company and they have to train on the battleground. You might look into the CEO's competence. What is the book on him? Seems trivial but is usually critical. |
