©1998 EyeWire, Inc.

Ottawa's wireless companies are more concerned with building their customer base and expanding their sales and marketing teams than they are with pursuing either venture or government funding.

That is the conclusion of a report issued Monday that challenges many of the assumptions about the city's wireless sector.

When asked to rate the importance of various success factors for the next two years, 58 per cent of the companies surveyed said investment such as venture capital and angel funding were not important priorities for their businesses this coming year. Only 29 per cent said they were important. Nearly the same number, 55 per cent, said government financial assistance was not important, while 30 per cent said it was important.

The survey was conducted by the Ottawa Wireless Cluster, in conjunction with OCRI and the Canadian Association of Management Consultants.

The highest rated priorities were developing new markets, and improving sales and marketing teams. Both scored an average of 3.5 on a scale of 1 to 5. The third-highest priority, with a rating of 3.0, was building capacity to meet customer demand.

"These results contradict commonly accepted notions about the local wireless sector," says OWC chair Neil Knudsen.

"Does it mean our local wireless entrepreneurs have lost faith in venture capital or do they simply recognize that they've first got to get customers before VCs will even look at their business plans? Or are we seeing second- and third-generation entrepreneurs bypassing venture capitalists, bootstrapping new ventures with the profits from previous efforts?"

The survey also challenges the belief that most of Ottawa's wireless companies are involved mainly in the development of hardware. Nearly nine out of 10 respondents said they are working either on software-only or on software-hardware applications. Only 11 per cent were developing hardware-only products.

"The best margins and market opportunities are in high-value applications that run on existing wireless devices and networks," Mr. Knudsen said. "This is where our companies clearly are focused."

The OWC plans on releasing the full survey along with a comprehensive report in the fall. The report will contain comparative analysis of the results and insight into anticipated activity for local wireless companies over the next 12 months.