** Another article on Flarion**
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Doing More With Wireless
It was this new, faster-acting NVG that Rajiv Laroia encountered with his idea for what would become Flarion. The mathematician's studies in communications had led him to a radical concept for handling wireless data-and in October 1997, he started the Digital Communications Research Department to pursue it. Laroia's efforts went beyond e-mail and music applications, then coming into vogue, to include more sophisticated services such as videoconferencing and interactive gaming that he believed mobile people would soon want in wireless form. Planned improvements to conventional wireless systems-the so-called third-generation technology still under development-could conceivably accommodate such applications (see “Internet Everywhere,” TR September/October 2000). But traditional systems had originated to handle voice calls, which have different technical requirements from digital data transmissions. Voice systems can tolerate typical losses of up to 1 percent of a given conversation with no noticeable problems, largely because of the redundancy of speech. Data transmission is a lot more sensitive: The same small losses-even losses a hundred times smaller-can ruin a deal or end a game. And besides, Laroia reasoned, configuring voice-optimized systems to carry high data volumes was an expensive proposition affordable for businesses but not for the mainstream users he wanted to serve.
The way around this problem was to start from scratch with a system designed for data. (Adding voice to this would be relatively simple, since voice could be treated as just another form of data.) The key lay in improving on a well-known technology popular in wireless and digital TV and audio called “orthogonal frequency division multiplexing,” which tries to get around the “multipath” interference that happens when signals bounce off trees, buildings and the like. Lucent's big innovation was to add the “flash,” a term that refers to the ability to hop rapidly between frequencies. Essentially, the new system deploys multiple high-speed wireless signals virtually simultaneously over several frequencies. This spread-spectrum technique both optimizes bandwidth and minimizes interference.
Initially, Laroia's department consisted of himself and one colleague. But by mid-1998, he had hired several additional members-and things began to move. Within a year, the group was far enough along for Laroia to envision a commercial system consisting of a base station transmitter paired with a unified modem-chip set that could be integrated into cell phones, personal digital assistants and other wireless devices. He spoke with business groups about his concept, but they were squarely focused on third-generation technology and did not have the extra resources to develop such a radical alternative. Laroia felt it was far too important to let go, since if left to others it could ultimately usurp a core part of Lucent's wireless business. Still, he believed the idea had a significantly greater chance of success if it could be pursued in a more entrepreneurial environment.
That led him to New Ventures, where his proposal fell into the hands of J.C. Huang and Lars Johnnson. Huang, with a doctorate in applied physics, an MBA and consulting experience, heads up one of three core groups inside NVG. He had helped launch WatchMark, a firm specializing in network-management software. The German-born Johnnson was an entrepreneur-in-residence who had worked as a chemical engineer before joining NVG with a master's degree in technology management.
The pair liked the idea immediately and spent a couple months helping Laroia hone the concept into a workable business plan. Then it was time to meet the venture capitalists. Laroia had never been much of a pitch artist, but with Johnnson handling the business end and the mathematician touting the technology, together they wowed venture capitalists on both coasts. Backed by $12.5 million from Lucent and three leading VC outfits-Charles River Ventures, Bessemer Venture Partners and Pequot Capital-Flarion was launched this February. Johnnson signed on as director of business development, and Laroia became chief technology officer, taking his entire department with him. By summer, they had hired former NextWave and Bell Atlantic Mobile executive Ray Dolan as CEO and set up shop in a roomy 2,500-square-meter space in a modern office park in Bedminster, N.J. Even as workmen were converting an old mailroom into a systems laboratory, Flarion was up to 40 employees, and is heading toward 100 by year's end.
The initial focus is on perfecting the technology. Plans call for a prototype system to be ready late this year, with a commercial offering set for the second half of 2001. Flarion officials say they can't estimate the cost savings of their technology because it depends on network size, traffic volumes and other factors. But they stress that the savings will be significant-enough for that California family to do its Web surfing affordably. With conventional systems, quips Dolan, “I don't think anybody can afford both the automobile and the connectivity.”
Even presuming it can bring wireless data into mainstream use, Flarion doesn't expect to get the bulk of the wireless pie. First come the big carriers on conventional networks-the Nortels, Ericssons and Lucents. Flarion must also contend with startups such as San Jose-based ArrayComm, which has its own dedicated data scheme. Still, Dolan foresees winning a major, and increasingly important, portion of the wireless-data business. He envisions a future for data traffic that mirrors the evolution of air freight shipping. Commercial airlines began carrying freight because they saw the chance for extra revenue. But as air freight usage grew, a separate industry sprang up to serve it; freight takeoffs and landings now rival commercial airline traffic. So it will be with data, contends Dolan. Data may have started out on conventional wireless networks. However, he asserts, “The tidal wave of demand that's about to hit carriers of wireless data will require a Flarion solution.”
Back in the carpeted confines of NVG, everyone hopes Dolan is right. But it's only one of many seeds being planted, a fact attested to by dozens of paperweight-like deal icons-each commemorating successful financing rounds-covering a long birch cabinet in Tom Uhlman's expansive office. So far, Uhlman's people say they've examined nearly 250 projects in detail and launched about 25 ventures, though not all have been announced. Not every one has been a winner. Two didn't make it even to the spinoff stage. One particularly high-profile disappointment was Inferno, an attempt to develop a new operating system partially conceived by legendary Unix and C-programming-language pioneer Dennis Ritchie. The effort failed to live up to its buzz and was ultimately closed-though it has recently been reborn under a different business strategy and may yet find a way to survive.
No doubt there will be others that, as Uhlman puts it, “I wouldn't call failures, but didn't meet expectations.” But the New Ventures head isn't much troubled by that right now. Indeed, he's on a roll, helping Lucent do what few companies have been able to accomplish: find ways for people like Rajiv Laroia to challenge the status quo and bolster the establishment at the same time. That task may not make for the stay-in-one-job stability of yesteryear, but for big companies and their employees, it can provide a different type of security. |
