Their funded proprietary system provides high performance NLOS links for small cell 4G deployments, increasing data integrity within dense urban environments. We sat down with Kelman to learn more about what’s happening with this promising Minnesota tech venture:
MAX4G started as a remnant from a previous company called NextNet wireless that was here in Minneapolis. That company put together the first broadband network that was acquired by Clearwire at the time. NextNet Wireless was eventually acquired by Motorola and I spent some years there but my passion was always small companies that step to the next level of technology, so I founded MAX4G in 2008.
What is the business about?
We began with the basis of consulting but eventually we found an opportunity with the evolution of the market. Smart phones consume a lot of data which has pushed service providers and carriers to deploy fourth generation networks with more data throughput availability. This throughput demand is always on the rise and there is a challenge for operators to meet that demand.
Big companies innovated the core axis networks or base stations that communicate with the phones. For a small company like ours we can see the opportunity for how this data deployed around big cities, in areas of lots of demand, how is the data being delivered back to the core operator. In many cases there is no fiber backhaul.
What we came up with is a product that provides that wireless connectivity wireless without requiring line of site between the small cell and the point of presence of that operator.
What do you call the product?
This is our backhaul unit. It’s a very simple product; for establishing a link you need two of these units and they need an Ethernet connection to the base station and on the other side to core. They will establish a link automatically without having a line of site.
So the problem your addressing is the line of site factor in a dense urban environment?
That’s correct. There’s a lot of point to point solutions on the market. But if you want to address urban environments without clear line of site to the street level because of clutter, trees, etc. – you need to deliver high speed data without having that line of sight.
What is your innovation, how have you addresses this from a technical point of view?
We basically leveraged 4g technology. Think about it, your smartphone also doesn’t have line of site. So we started working with a startup company in Israel, DesignArt Networks, now acquired by Qualcomm. They put together a chip set that has characteristics to provide this non line of site. We built the firmware and software into it to do very high speed point to point backhaul. Obviously lots of know how from NextNet Wireless that we put into this to develop the solution.
Help me paint this picture. You have a cellphone tower – ATT, Sprint, Verizon – you have one on of these on one side of the tower at a street level which then connects to a small cell that goes to end users device?
Correct. Carriers like ATT install those little hotspots wherever they can get agreement with the city. Phones can communicate with that but then you need to get it from the base station to a point of presence where say ATT would have the fiber and high speed.
Is this proprietary or how are you approaching the IP part of things?
Yes. It is proprietary. On the outside we are compliant with all the standards, it operates like a bridge. Some aspects of it we did patent. We cannot patent the whole concept of non line of site point to point communications, that has been done through different techniques, even wifi for example. This does it much more efficiently, so what did patent were things that would make it very high speed and low latency. But how we deliver the data from one point to another it is very proprietary.
So it sounds like it really came together in 2011?
Yes, so in 2011 we started working on the product, using capital from other customers before that, and then we excited some investors here in the Twin Cities and Silicon Valley.
Most of our people are investors who the same people who invested into NextNet and who knew the team. We did not go after venture capital because…we know that small companies like ours cannot sell into large corporations like ATT, Sprint, Verizon.
Those large corporations buy from approved vendors who are usually big companies as well. We did not try to sell to them to create sales force channels or manufacturing. We focused on technology, all our investment went into innovation. Now, we are building those relationships with larger companies to take this technology to the next level — for production, manufacturing, and finally into the hands of large carriers.
What phase or stage would you say the technology and company is in right now?
This is kind of a second generation, we did a first generation simplified version that tested successfully in Europe and the United States. At that point, the market was not yet at the point where huge demand was coming for this product. So we decided to enhance the product. We did this by putting two radios into each box, and having a combination of two radios into one pipe, which enhanced throughput and flexibility for a carrier to deploy.
This year we plan to have trials on three continents in Asia, Europe and United States.
And that’s who you would eventually sell [the product] to is the major carriers?
Usually when we work with the major carriers and they like our technology, they introduce us to their vendors and then we work with the vendors creating business relationships to get our technology through their manufacturing process into the carrier.
We’re here in Eden Prairie Minnesota headquarters right now, how many people do you have and how is it structured?
We are very small, we are a 10 person company. Seven of us are in Eden Prairie, prettymuch engineering and one person in marketing/business relationships and we have three people working in Waseca, Minnesota. There is good talent in Waseca in the hardware/radio frequency development side and we knew some people from the previous company so we opened a small office there with three engineers there as well.
Some other functions such as mechanical design or board layout we outsource because its not a core competency.
If it is accepted by the carriers, what do you see as the market potential, that is what’s the big picture for Max4G.
My view is that MAX4G can be acquired by a vendor once the market gets there and demand is on the rise, so I think we have the chance to create a partnership or get acquired by a larger vendor of telecommunications equipment.
How much have you raised in outside investment?
$3.2m in two rounds, relatively moderate amount of investment for what we have achieved.
What do you see as the total capitalization need and what’s your run rate/strategy in that regard?
I think there is a very good chance that we will not need any investment moving forward. We’re either going to sign some sort of deal…there is an interest in licensing our technology…or all together maybe we’ll sell the rights or be acquired.
And you done that before?
We’ve done it before…and I hope it goes well this time. I think our investors really believe in what we do. I really believe in this market and they do as well. Either way I think that the company is going to be capitalized properly for achieving our goals and for success.
So to be devil’s advocate, what are the reasons why this wouldn’t be successful?
I think anticipation of the market growth was maybe too aggressive by all analysts a couple of years ago. We thought the market was going to come faster than it it did. I think the big operators went after the low hanging fruit, to upgrade their macro networks before they started building their small cell networks. It takes longer for them to get agreements with municipalities to install the small cell on the street level, and they prefer to go indoors into the malls where it’s easier for them to negotiate the rights.
But eventually now they are being pushed outdoors for what they call metro cells…so the market is a little delayed on one hand. That was a major delay in what we thought would come a year earlier.
So you’re ahead of the curve?
I think we were. On the other hand, we currently have a product that we can demonstrate and the market is ripe. Yes, maybe we were a little too optimist, but you know, when you’re a visionary, you innovate on something, you need to look forward and see…hope that the market comes at a point when the technology is right because if you’re too late, now you’re competing with everybody wants to be there.
I think that we are currently at the right point at the right time with the right product and the right size of the company to be attractive for larger vendors.
Sounds confident. Can you give us a little timeline base on your adjustment of where the market is at, where do you see the company in one year from now?
I usually don’t think that way. I think what is my next goal to achieve…
What is the next goal?
In our world, one year is a long time. It’s really dynamic and the technology is advancing so fast. Our current goal with this product, there are three defined large operators and I mentioned before that are interested in this and our goal right now is to have a successful trial with all three of them.
What does a trial look like?
It depends. So European outdoor trials usually last about 10 days. They pick scenarios where those installations would occur, they run it and then gather the results and information for review. US trial is currently scheduled to be…one week lab trial then deploy outdoors and keep it going to see how it operates for a month, month and a half.
Asian trial, we don’t have a test plan yet for the outdoor trial. Based on current discussions, the Asian trial is the most aggressive one because I think that if it works well they have immediate application to deploy whereas the US and Europe move a little slower, more methodical.
Anything else that you would like to add?
I think that we have great talent here in the Twin Cities and Waseca, group of people that understand wireless technology. It would be good if it would expand too. We have lots of good people and we want to keep them here to successfully compete with the rest of the world.