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WiFi’s Red Revolution Works for Entrepreneurs

By:
Date: 2009/01/21

Running a business on the run? Want to stop at a hotspot for some coffee and to dash off a message or two to customers, using the coffee shop’s free internet service? Well, here’s how it has become possible for businesses to find innovative solutions to offer a global standard of service without compromising their profitability.

Bandwidth Barn and CITi provide the platform for RedButton to change the local WiFi landscape.

A visit to a Starbucks coffee shop in Europe usually means free access to the Internet in addition to great coffee. In South Africa, hotspot visitors usually have to pay to surf, and while some hotspots offer free access, the service is often erratic because they have to find ways to manage the high bandwidth cost.

RedButton, a local WiFi service provider, has devised a model which enables coffee shops and other WiFi hotspots to offer sustainable, stable and free wireless access without compromising their bottom line.

According to Barry Steyn, finance and operations director at RedButton, this was possible because of the support from the Bandwidth Barn and the Cape Information Technology Initiative’s (CITi) VeloCITI programme.

While entrepreneurs at heart and technically strong, the team at RedButton had limited business management skills. In 2007, they entered the VeloCITI programme which offers mentoring for IT entrepreneurs. They were the top performer, exceeding revenue targets by 62%. The programme gave them the skills to launch their revolutionary product to the market. Today RedButton has 162 hotspot sites, almost a quarter of which offer free Internet access.

RedButton’s solution enables a hotspot to control when and how WiFi is given away for free. For example, a hotspot may choose to only offer free WiFi in quiet times as a way to entice further customers. Alternatively, a hotspot may choose to cap a user’s access in peak times – once they reach that limit they are prompted to switch to a prepaid solution.

“This gives the hotspot the ability to offer free access without putting their entire business at risk,” says Steyn. “It protects them from customers who buy one cup of coffee and chew up all the bandwidth by downloading a lot of data. It also gives the hotspot additional marketing tools to attract customers in slow times.”

“In the same way that we do this for our clients, the Bandwidth Barn does this for us,” he says. “The Barn has provided an affordable space, critical services like a receptionist that we share with other tenants, and all the infrastructure we require for a professional business. This, coupled with the skills we gained through VeloCITI, has given us the building blocks for a successful business.”

With over 10,000 users on its system, a year-on-year growth rate of 125%, and clients including Wimpy, Kauai and Primi Piatti, RedButton is on its way to painting the town red.

About the Bandwidth Barn

A subsidiary of the Cape IT Initiative (CITI), The Bandwidth Barn is a Business accelerator for information and communications technology start-ups in the Western Cape. The Bandwidth Barn started as an ICT incubator in 2000. Now, widely recognised as the most successful IT incubator in South Africa, the Barn has morphed into a fully-fledged Business Accelerator. A key element of this success is that the Bandwidth Barn supports companies by practically reducing the cost of overhead services through its shared office environment while also providing networking opportunities for entrepreneurs. More importantly, the Barn offers business development programmes to equip tenants with all the skills required to move from start-up to profit-generating stable companies.

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