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HarborLink Network News & Events
April 18, 2003
 Download this article (DBJ_HL_Article.pdf)
from the April 18, 2003 edition of The Dayton Business Journal
Patience pays off
Wireless business waits for market to mature
Brian Womack DBJ Staff Reporter
Rick Tangeman and his partners started their wireless Internet access business before there was much business to
be had.
In the late 1990s, it was still too expensive for most average consumers to adapt a laptop computer for wireless
surfing. In the meantime, Tangeman's 30-year-old company, R.B. Tangeman, continued to install wireless networks
to corporate and public customers, such as NASA.
Now, as the cost of hardware falls and the number of Internet users rises, Tangeman says it's time to enter the
business more aggressively, under its HarborLink division.
HarborLink's strategy is this: Install equipment for wireless access for free at restaurants and airports, for
example, which then can offer it to patrons for no charge. Tangeman says he'll make his money from advertisers
whose Web sites will come up when a user logs on through a HarborLink connection. Venues that offer his service
also will benefit -- they get a cut of the advertising revenue.
This is a different approach from that of most of his competitors, he said, and he plans to roll HarborLink out
nationally this year. He expects his company's overall wireless sales to increase by about 200 percent this year
-- the majority of which comes from HarborLink -- and for his workforce to nearly double. He said he is in talks
with national advertisers who say they're interested in spending money with him and with national retailers that
would like to offer his service.
"We have raised everybody's eyebrow," he said.
R.B. Tangeman's patience early on could be paying off now.
The number of wireless Internet access "hot spots" rose and fell with the tech market, Tangeman said,
but has resurged in recent years. There are now 10 million hot spots across the country, up from just 20,000 in
1999. Some studies show that revenue for wireless Internet access companies should double annually for the next
three years.
"They're starting to pop up like weeds," Tangeman said.
Laptop owners with wireless cards are increasingly more common, and they're gravitating toward public places such
as restaurants and airports that give them wireless access, he said. Home users are even setting up their own local
wireless networks for multiple computers.
Logging on board
Founded in 1970, R.B. Tangeman acts as manufacturers' representatives. It started getting into wireless access
in the mid- to late 1990s to pursue a higher-growth business, Tangeman said.
The company landed its first restaurant client late last year and its first advertiser this year.
Buffalo Wild Wings' five Dayton locations now offer their customers free wireless access, at no cost to the Minneapolis-based
chain. And Budweiser signed a one-year ad contract with HarborLink.
In the late 1990s, local owner John Slaughenhaupt saw the rise of the Internet cafe and thought the service would
work well in his restaurants' casual atmosphere. But he didn't like the idea of computers eating up table space
or charging customers for Internet time.
"The wireless access ... kind of allows us to give that Internet cafe feel without having to install all that
hardware," he said. "It works really well. It was important to me that it be free and that it be fast."
Tangeman said he's in discussions to set up his service at Buffalo Wild Wings around the country as well as at
other retail chains, airports and marinas.
One analyst acknowledges that the industry is growing but she doubts a wireless company can rely on advertising
sales to drive business nationally.
"There's a certain place for it (locally)," said Sarah Kim, an analyst with the Yankee Group in Boston.
"I personally don't think there is a way for these guys to control the costs and to be able to deliver an
enterprise-grade solution." However, she also said making laptop users pay a monthly fee of $40 or more --
like some of Tangeman's competitors -- may have trouble catching on, as well.
Nevertheless, Jim Evans, president of AirwaveWiFi.com in Dayton, said he has more than 70 customers that pay for
his fee-based service, which runs at $40 a month. He provides service at Dublin Pub in the Oregon District and
is looking to add Zola's in downtown Dayton soon.
But he, too, said the advertising model just doesn't work.
"It hasn't worked to this point, and I don't expect it to work now," he said.
No time for skeptics
Tangeman said he's confident that HarborLink's strategy is better than that of competitors whose service users
have to pay for. Wireless access at Starbucks, for example, costs laptop users who want the service to pay 10 cents
per minute or nearly $40 a month through a service provided by telecom giant T-Mobile (though not yet available
in Dayton). He said charging rental fees to people who are spending $4 for a mocha won't find the customer base
that HarborLink's free service could build.
"There's still too many that believe they'll build it, and they will come, and they're not coming," Tangeman
said.
Slaughenhaupt said he's seen the demand first-hand at his restaurants. "People rely more and more on the Internet
everyday, and we wanted to offer our customers a fun atmosphere in which they could take care of their Internet
needs," he said.
E-mail bwomack@bizjournals.com. Call 222-6900, ext. 115.
© 2003 American City Business Journals Inc.
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