Fast-forward 25 years, and he's the chief executive at Airgo Networks, a company developing chips to aid the transmission of high-definition video over wireless networks.
Now 42 years old, Raleigh's company is flush with $25 million garnered in a Series C round of funding, and he's probably making more than he did that summer. More importantly, his Palo Alto, Calif.-based start-up has additional money to manufacture high volumes of its Wi-Fi chips, based on multiple input multiple output (MIMO) technology.
Gear that uses the chips will be compatible with equipment based on current Wi-Fi standards and will make it possible to more than double the current fastest Wi-Fi transfer rates, according to the company. Airgo's technology would allow a corporate buyer, for example, to set up wireless access throughout a building with fewer access points while significantly boosting the amount of data that can be handled.
Get Up to Speed on...
Get the latest headlines and
company-specific news in our
expanded GUTS section.
"The winners will have the privilege of not making any money," said Dave Epstein, a partner with venture fund Crosslink Capital. "Companies will always be competing on price...Small companies will have a hard time under these conditions."
Raleigh counters that there is demand in the right segments and that his engineers will be able to build products that tap new opportunities.
"Innovation is everything.
Raleigh said those markets could be bigger than the current wireless networking market, which has largely revolved around the notebook PC; home users and businesses buy access points that provide Internet access to notebooks equipped with Wi-Fi cards.
Shipments of wireless cards and access points, an increase of more than 200 percent, compared with 2002, according to research firm In-Stat/MDR. Revenue from hardware sales was $1.7 billion, an increase of 140 percent.
"Airgo is not coming to market with a commodity product; they are offering a vanguard product," said Peter Wagner, a managing partner at venture firm Accel Partners, which has a stake in the start-up.
Airgo's multiple antenna networking technology and wireless networking chips--which are used in cards and access points--outperform the competition, even when used in a mode that adheres to strict Wi-Fi standards, Raleigh said. But pairing cards and access points using Airgo chips that operate outside the standards, he said, shows the real benefits of MIMO technology: Wireless speeds can reach up to 108 megabits per second and offer longer ranges than those of competing products, according to the company. Competitors D-Link Systems and Linksys boast similar transfer rates, but their solutions have been alleged to interfere with nearby networks.
A running start
MIMO is viewed as the next generation in wireless networking technology, and Airgo is the first company with chips based on MIMO. That gives the company a fairly big advantage, according to Craig Mathias, an analyst at research firm Farpoint Group.
"MIMO has the best chance of becoming the next big breakthrough in wireless technology," he said.
Mathias describes the benefits of MIMO as essentially making radio transmission and reception three-dimensional, which improves the reliability and performance of communications.
"The only other way to get more information into a signal is to cram more bits into the signal, but the more bits you cram, the less range you get," Mathias said. "What's being done is that multiple signals are being sent out and received, and a more reliable signal is being created in the end."
Throughput of data on wireless networks that use Airgo's MIMO technology will result in performance up to four times better, with a range up to three times longer--at an additional cost of about $20 per card, according to Airgo. The fastest throughput in the Wi-Fi market comes from products based on the 802.11g and 802.11a standards, which transmit data theoretically at speeds up to 54 megabits per second (but more realistically at 20mbps) for up to 300 feet.
Mathias said Airgo has about a 12-month lead over competitors in the MIMO market.
But the company isn't standing still. Airgo is already working on the second generation of its MIMO products, which will enable even higher throughput, more range and lower costs. If the first generation can handle streaming of one high-definition TV channel, the second will be able to handle multiple channels. As for the lower cost, Raleigh said he's not overpromising.
"Whenever you do a second-generation product, you learn from the first and you figure out how to do things more efficiently and more cost-effectively."
As with any start-up, survivability is a question. Airgo, with about 100 employees, has enough funding to make it through 2005, even if it has no revenue, according to Raleigh. Last year, the company announced that some manufacturers, including major notebook makers, were. Products using its chips are due out this year.
"There isn't a consumer electronics company on the planet that isn't looking to embed networking into their products," Wagner said. "The CE market is kind of large, compared to the networking world."
Companies such as Hewlett-Packard, Intel and Sony have already laid out plans forthat wirelessly connect to networks, allowing individuals to share resources such as broadband connections and printers as well as content on devices connected to the network.
And at this year's Consumer Electronics Show, some manufacturers demonstrated prototypes of devices that played back content stored on PCs that were connected via wireless networks. Wi-Fi gear makers, all showed devices due later this year that could connect home stereos to Wi-Fi networks. NetGear also had a prototype device that connected a television to a PC.
Throughput is but one of the issues that consumer electronics makers are concerned with on their products, according to Scott Smyers, vice president of network architecture at Sony Electronics. Other concerns include quality of service and interference, both of which Airgo takes into consideration in its products using draft versions of the 802.11e specification, which is set for completion by the middle of the year.
Still, Smyers said he recognizes that wireless has potential and that as the space "settles down," wireless networking will be a factor in product development.
The race ahead
There may be a window of opportunity for specialty markets, but small companies will have to be quick to fill them, and then they will have to move fast to stay ahead, according to Crosslink Capital's Epstein.
"In a standards market, being better than someone else isn't necessarily better, but catering to a market...there are opportunities there," Epstein said. "However, eventually, even those markets will be dominated by standards, so start-ups will have to innovate quickly."
Timing may also be a factor, according to David Aslin, a partner with venture firm 3i, which does not have a stake in Airgo.
"What we're not hearing is that bandwidth and range are not enough...It's a nice solution, but the problems they're addressing aren't there yet," Aslin said. "There is a timing question in my mind."
This isn't the first time that folks at Airgo have heard from detractors. The co-founders have been integral to the wireless-networking sector for years. Airgo's founding in January 2001 was a reunion for Raleigh and V.K. Jones. The two were among the co-founders of Clarity Wireless, which was acquired by Cisco Systems in 1998.
Richard van Nee was also among the co-founders and was made the director of signal processing at Airgo. Van Nee was involved in the development of what became the 802.11a and 802.11b standards.
Airgo is already promoting MIMO as the next 802.11 standard, 802.11n, which is expected to beby the Institute of Electrical and Electronics Engineers.
While the company doesn't expect its MIMO technology to be the specification approved by the working group, it expects to have something similar to what will become the standard.
"Whatever the standard eventually becomes, if it's based on MIMO, we'll be on our second generation of chips, giving us a good advantage," Raleigh said.