Bandwidth Pool Puts Internet Providers in the Same Boat for Buyers
We take Internet access for granted, but a reliable connection is crucial to the success of many businesses. Of course, a stable network with breakneck speeds isn't cheap—especially for larger companies.
Ben Anderson thinks he can save office-based buyers bags of cash—and a lot of grief—with his new venture, Bandwidth Pool.
"So often people will come up to me and say that they're still unhappy with their internet service," he said, "but they don't feel like they have any options."
To help businesses bypass the "shopping around" phase, the Cedar Rapids startup has partnered with 19 Internet service providers to create a bidding environment for its customers. A $99 deposit gets buyers in the door, where the site shows providers in their area, solicits bids from those providers, and allows the buyers to negotiate their contract directly. Bandwidth Pool then gets sales commissions from the providers, which vary widely depending on promotions and profit margins.
Think of it like buying a used car. If you found two 2005 Corollas with similar mileage at two dealerships in town, you could leverage the availability to work out a lower price. Bandwidth Pool operates with the same logic, only they simplify things further by putting important information in a single ecosystem.
Streamlining the process is helpful, but Bandwidth Pool stands out by convincing providers to compete.
"Internet access isn't anything that's new, and getting quotes isn't new," Anderson said. "But engaging the provider in a bidding environment that helps lower the price for the buyer, that's something that gets me excited."
The idea sprouted from challenges at Anderson's first entrepreneurial effort. After graduating from the University of Iowa, he founded X-Wires, a company that provides Internet access to multi-user environments like college dorms, in 2002. As the business grew, Anderson landed a partnership with a large student housing company and they tasked him with finding a provider in Texas.
So Anderson made calls, did research, and negotiated a contract.
One year later, the relationship crumbled. It turned out the Texas company wasn't as reliable as advertised, and Anderson’s biggest customer wanted out.
"That ended up losing us good business, a good relationship, and a good reference," he said.
Anderson built Bandwidth Pool specifically for that problem. After selling X-Wires, he hatched the idea for a feedback-based, information-rich Internet service constructed in a bidding context. Following almost two years of development, he launched Bandwidth Pool on Feb. 26. He's had $75,000 in angel investment from those who were with him for X-Wires and has put $50,000 of his own money into the venture.
Now, Anderson's main opposition comes from Internet brokers like X-Wires; plus, anyone can Google providers in their area. But he's betting that supplying customer reviews and a more competitive pricing structure will help Bandwidth Pool come out on top.
The buyer gets reduced pricing, but what’s in it for the providers? Based on current strategies, a way to optimize their resources.
"The statistics that we have show that for every 100 calls, about 3-5 of those calls actually turn into a closed sale," Anderson said. "We want to bring qualified buyers to the table. I can't wait for the day that we have enough data to show that we have a close rate of, say, 70 percent."
To hit that goal, Anderson wants to bring his two part-time sales people on full-time and add up to six full-time positions to target new buyers from there. Plus, that provider base is always growing: Anderson says he's in serious discussions with three new sellers, and believes there are more than 250 potential companies that could join the Bandwidth Pool system.
With seller support and customer value, Anderson's vision might finally bridge the provider-service Internet gap.