When 2 Heads are Better Than 1
When 2 Heads are Better Than 1
May. 2, 2001 10:07 AM
WBT interviews John
Sculley and David Steinberg about InPhonic...
and in doing so takes us behind the scenes of a big player in the
fast-emerging "wireless management" space.
of Washington, DC, is the largest developer of virtual private wireless
networks in the United States today, specializing in enabling its enterprise
clients - large corporations and large member groups - to build a wireless
network to interact with all of their employees and end users. Partners
on the service side include AT&T Wireless, Verizon, and Cingular, while
on the manufacturing side they include Motorola, Nokia, Ericsson, AudioVox,
WBT: What prompted you to found InPhonic?
DAVID STEINBERG: Well, my last business was Sterling Cellular,
a wireless phone distributor and integrator, and it evolved from there.
It was clear that data would be the new frontier of the wireless universe,
but we also knew that if we couldn't wrap voice in with it, it would be
difficult. So even though we work with RIM devices, most of our clients
are still using wireless/WAP enabled phones as well.
What kinds of clients is InPhonic supplying?
DS: Quixstar is one current example - they have one of
the world's largest sales forces, with approximately 1 million independent
business owners working with them. They've hired InPhonic to build a virtual
private wireless network for them.What we're doing is enabling their user
group to disseminate information back and forth through different channels,
utilizing a WAP gateway and an SMS gateway.
How do you integrate InPhonic's solutions
with the client's existing infrastructure?
DS: We do it through a series of best practices and proprietary
applications, including device management securement and nationwide activation.
What we do is merge the client's products and services with our proprietary
applications and allow people to view, in addition to pushing information
out to the devices. We can actually allow people to view mission-critical
functionalities of their corporate Internet through their wireless devices.
How did you snag John Sculley for your
DS: Well, I first met John at a YPO conference two years ago.
I approached him after he'd given the keynote speech, explained to him
what we were doing...and he really liked the idea, so he invited me and
a consultant up to New York. We spent some time with John in New York and
he ended up not only joining our board but becoming my mentor. He wound
up investing in the company as well.
John, what was your first reaction when
you met David?
JOHN SCULLEY: Well, like he says, David and I met when I was
giving the keynote speech, in interview format with Larry King, at a YPO
event in Washington. To be frank, I've obviously met a lot of people over
the years that have come up and introduced themselves to me for one reason
or another, but that evening we ended up sitting next to one another at
dinner and he started telling me his story - what his dream was and what
he'd already done and why he thought it could work. And I became interested.
I said if you're up in New York, stop by and see me. He came up to New
York - I told him I'd give him 30 minutes. He wound up spending the entire
day with me.
What do you look for, then, in a potential
JS: First of all, I invest and work only with CEOs that are
on their second company. I like to work with someone who already knows
how to build a business successfully, so that he or she can focus on building
that business, not on learning how to be a CEO. What impressed me about
David was that he could really explain what he was able to do. And then
as I have gotten to know him, I've found he's extremely good at many other
things. One of the things that David is really good at is attracting very
good people who want to work with him in his organization, and he can actually
deliver the stuff that he is talking about. He's an amazing deal closer.
He's one of those people who can go in and tell his story and persuade
people why they ought to be a partner or a customer with him and he closes
the deals. And these are very big deals. I don't think a week goes by where
there isn't one or two big deals that David has just closed. So this is
a guy who has demonstrated to me that he not only has a vision in a very
hot space at the right time, but he knows how to deliver and he's doing
David, what was your life like before InPhonic?
DS: Well, I founded Sterling Cellular in my basement in 1993,
and we grew it into one of the largest distributors of wireless phones
in the U.S. before we sold it last year. What we did was to outsource service
contract work for wireless carriers - some of our partners on the carrier
side were BellSouth, Cellular One, Southwestern Bell, and AT&T. We
built the distribution through a series of retail stores and through telemarketing
What about John, what kinds of things have
you learned from him and his many years of experience?
DS: Well, in all frankness, John's one of the brightest guys
I have ever known when it comes to marketing and technology. He really
has the ability to capture very complicated technology and to make it very
simple, which is really the crux of marketing technology. He has taught
me a lot about simplifying - delivering a solution that people can not
only utilize but also understand.
What about bumps in the road - have there
been any yet along the way in your relationship?
DS: Not yet. John is one of the most amazing human beings I've
ever interacted with - not only incredibly brilliant but also one of the
nicest human beings you could ever meet. And for a guy who's considered
by many to be an icon in the technology world, he's just an incredibly
kind, nice person.
What expectations do you have for InPhonic
as it continues to grow?
DS: Our goal is to continue to grow InPhonic into the cutting-edge
wireless technology company that we have come to be known as today. How's
that for a line? The reality is that as wireless technology and communications
expand and change, we want to be on the cutting edge of that. Plus we are
going to have a big job over the next three to five years helping our clients
and our future clients integrate their legacy systems into a wireless platform
- that is what a big part of our mission is.
Do you feel that wireless as a technology
differs from other phenomena, like the Internet and previous technology
DS: Much like a lot of technologies, wireless is an evolution
of the Internet and other technologies that came before it. You know a
lot of people try to make wireless very, very complicated; it's simply
taking the wires away from what you are doing on the Internet. That's the
holy grail in the wireless space. The trick to making it work in the U.S.
is going to be switching from a circuit-switched world to a packet-switched
world, and enabling enough bandwidth, so that the type of data connectivity
that can come through high-bandwidth channels through the Internet will
be able to be broadcast through wireless devices.
How do you propose to avoid the slowdown/meltdown
of tech-stock prices we've been seeing already this year?
DS: This is the third company I've built - and we started running
this company from Day One on solid business principles, with real P&L
considerations from the outset. It's not to be confused with one of those
"dot-bombs." We didn't set out just to ramp up quickly, for example. We
started our company, on the contrary, with the aim of building a business
to achieve profitability. We haven't had to make a lot of definitive moves,
to cut back expenses, or to change our formula. At the same time we're
in a funding environment - we funded our last round in October and we'll
have plenty of capital on hand to do everything we need to do over the
David, what about you? What expectations
do you have for InPhonic?
JS: I'm frankly very bullish. I think that the biggest opportunities
in wireless are going to be focused, first, on enabling business and enabling
enterprises through solutions that really take advantage of communications.
So the company is nicely positioned, with its ability to first take e-mail
and then various future derivatives of it, like unified messaging services,
and help enterprises to implement that on a customized basis.
Dave and his team are able to build private
wireless networks and be the virtual wireless provider of this customized
service for very large organizations that are doing MLM (multi-level marketing).
I think e-mail is still a killer app. When you get to wireless, just as
e-mail is a killer app for the wireline Internet, it's going to be even
more so for the wireless world, with the one difference that with the wireless
world, you want to be able to integrate e-mail back into your legacy systems
if you're a large organization.
You also want to be able to customize it with
various kinds of other time- or location-based information, like, Is my
flight going to be on time?, How do I get directions?, all of those kinds
of location-based information content. These are all the things InPhonic
is set up to do.
So it really has soup-to-nuts, end-to-end
solutions and services, which puts it ahead of the curve in that we can
really deliver these services and are getting real traction with real revenue.
How involved are you in the day-to-day
operations of the company?
JS: I am not in the management of the company, but we talk,
probably at least three times a day. I'm more interested in being a mentor
than being a manager. I can really be more valuable to David as a confidant
and as an advisor, opening doors for business development opportunities
and things of that sort, along with marketing strategies, giving him advice
there as opposed to managing. That's how we work together. It seems to
How about the same question that David
answered earlier: Any bumps in the road with your working relationship?
JS: Nope. Partly this is because I only work with people I like
and with things that interest me. There has to be a mutual respect from
the very beginning. Plus I think we've both learned that we're working
together basically because we enjoy doing it. It's been a very natural
and easy progression. I'm having a lot of fun and I hope David is, too.
who inphonic works with Carrier Partners:
MCI WorldCom Wireless
Piper Marbury Rudnick & Wolfe
85 top-tier sites including:
Founded in 1999 by David Steinberg, former CEO and founder of Sterling
Cellular, InPhonic has become the premier B2B solutions provider in the
development and management of private wireless networks. As a wireless
infrastructure provider, InPhonic enables its e-business and Enterprise
clients to deliver wireless data and mobile commerce solutions to their
end users through a combination of wireless and Web-based platforms, products,
and services in order to maximize the communication and monetization opportunities
created within each private wireless network.
Complemented by an unrivaled fulfillment capability that includes device
configuration and activation, InPhonic provides a comprehensive distribution
network and back-end support program to companies seeking to implement
value-added wireless services. InPhonic offers its client companies the
capacity to distribute wireless phones, wireless services, two-way pagers,
has forged alliances with an expansive group of wireless device manufacturers
and carriers including AT&T, Verizon, Cingular, MCI, Nokia, Motorola,
RIM, and Ericsson.
InPhonic's president and
CEO, David Steinberg, has an accomplished career in the wireless telecommunications
industry. He founded Sterling Cellular from his basement in 1993 and grew
the company into one of the largest distributors of wireless communication
products nationwide, including management and operation in excess of 40
retail points of distribution.
Talented professionals that
have joined the management at InPhonic include John Sculley, former CEO
of Apple Computer Inc. and PepsiCo, Tom Davidson Sr., CEO of Davidson Capital
Group, and Bob Adelson, president of RAF NetVentures, one of the original
seed investors in the Internet Capital Group.
John Sculley is best known in the wired world for his
10-year tenure as CEO of Apple Computer, prior to which he'd been CEO of
Pepsi-Cola Company for six years. Since 1997 John has been what he calls
a "venture catalyst," with active holdings and participation in information,
communications, and entertainment start-ups both in the U.S. and around
the high-tech world. He divides his time between California and New York.
David Steinberg is founder and CEO of InPhonic, Inc.,
pioneer of Virtual Private Wireless Networks. He built his former company
into a $25 million-dollar operation in just six years and has a history
of creating cutting-edge distribution models for the wireless industry.