Exploring New Markets: Home Networking
I'm not a quitter, but I did just that recently when it came to setting up my own wireless home network.
After months of refusing to call in the experts, I came to my senses. But I wasted weeks before realizing that the first router I was trying to install was DOA and spent many moons more of my free time fiddling with software drivers and other setup problems.
Fortunately, my next-door neighbor happens to be a VAR concentrating on small businesses. Were it not for Nick Carrazza, I can guarantee you that I still would not have a working network that does double duty,allowing my children to share our broadband Internet access and serving as the network for my wife's small business.
Nick owns AAA Data and Networking in Hopkinton, Mass. We talk all the time, mostly about fishing, sports and other truly important things. But considering our work identities, the conversation often turns to what he is hearing and facing as a solution provider. We swap stories about vendors, distributors and business conditions.
I'm particularly interested in Nick's business right now because he is building a new company. For years he owned a company specializing in networks, but he sold that business a few years back at the height of the market and went to work for someone else. But Nick missed the thrill of building up his own business and decided fairly recently to strike back out on his own.
Nick, of course, knows how to run a solution provider business. He also knows enough to look closely at where the industry is headed and which technologies and vendors he wants to sell. So right now he is concentrating on three areas and looking for suppliers that are positioned to help him succeed.
Nick's core business is small-business networks.
We all know small businesses look to IT advisers like Nick to decide what they should buy, implement and maintain. I'm talking about truly small businesses,companies with 100 or fewer employees. I always laugh when someone identifies small businesses as companies with 1,000 or fewer employees or generating annual revenue of $100 million or less.
Nick is also building a strong business fixing Hewlett-Packard laser printers using non-HP parts and selling non-HP toner cartridges. The margins are better, and his customers are happy knowing that Nick guarantees his work.
Finally, Nick is looking seriously at home networks. For months, he and I have been discussing the opportunity in setting up home networks. Nick has been doing research and has shared some of his findings with me.
The bottom line: Nick thinks he can drive about $6,000 a month in business with roughly $2,000 in costs. He's testing that pricing model now and making decisions as to which products he wants to represent.
One of the beautiful things about the home networking market is that even homeowners with a fairly good understanding of PCs and operating system software often have trouble making all the pieces fit together. I'm a good example. For VARs, on the other hand, the setup is simple, and there is no question that the solution provider makes the decision about which networking gear to use. All in all, the prospective home network buyer is similar to a small-business customer.
If past history is any indication, many vendors will quickly grow frustrated trying to figure out this market. But the vendors that approach the home networking market much like they would the small-business market, and work with solution providers like Nick to develop it, should see dramatic growth.
Make something happen. I can be reached at (516) 562-7812 or via e-mail at firstname.lastname@example.org.