DEL.ICIO.USUP CLOSE / CY SMITH, president and CEO, AirSage
AirSage CEO seeks traffic answers in technology
For the Journal-Constitution
Sunday, September 07, 2008
Cy Smith came up with the idea for AirSage, his second technology company, in late 1999 … just before the dot-com bust.
Though the market became difficult, Smith persevered. He also changed the business model significantly. These days, AirSage tracks traffic using cellphone signals, employs 40 people and claims customers such as the Georgia Department of Transportation.
SEAN DRAKES/Special
Cy Smith’s company, AirSage, tracks traffic by cellphone signals. His clients include the state Department of Transportation and the makers of GPS systems.
- Residence: Marietta
- Age: 46.
- Family: Wife, Dee (aka Fluffy); daughter Alex, 17; sons Max and Sam, 15.
- Education: Bachelor of Science in Industrial Systems Engineering — Georgia Tech
- Favorite movie: "The Edge"
- Last book read: "The Woods" by Harlan Coben
- Favorite quote: "Reality is merely an illusion, albeit a very persistent one." — Albert Einstein
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Smith’s idea was always to use cellphone signals to track the whereabouts of the people carrying them. Cellphone companies are mandated to have location capability technology so that if people call 911, operators will be able to send help to the right place. Smith’s original idea was to use the technology to help companies manage fleets of vehicles and service technicians.
Instead, AirSage measures the average speed of cars with cellphones inside. As long as the cellphone is on, AirSage’s technology can track it. With that information, the company can determine how bad the traffic is on a particular stretch of highway.
AirSage sells the information to clients, including companies that make GPS systems for cars, government agencies that manage roadways, and radio and television stations that provide traffic reports. Smith assures people with privacy concerns that the signals are anonymous and AirSage isn’t tracking specific individuals. Smith so far has a deal with only one wireless carrier — Sprint — though he hopes to sign another soon.
“We hope to be the leader in providing traffic information in the U.S. in the near term,” he said.
Q: I know AirSage is your second company. Prior to that you had a mapping-based technology company. Did you always want to be an entrepreneur?
A: I graduated from Georgia Tech and went to work at Southern Bell. This was in the early stages of the technology revolution, and I had a passion for new technologies and how to apply technologies to business problems. After about three years, I decided to leave Southern Bell and see what I could do on my own. It wasn’t necessarily a drive to be an entrepreneur so much as I liked doing new and innovative types of things, and it is tough to exercise that creativity in large, well-established corporations that like dong things in the same consistent manner day in and day out.
Q: Can you talk about how the market and AirSage have evolved?
A: I started the company in 2000, which was one of the toughest times to start a new company, especially in the technology sector.
Q: Did you know that at the time?
A: No. I started working on the business plan and getting everything ready in the January 2000 time frame, maybe even late ‘99, knowing I was going to sell my other company. I had everything ready more or less and was about to file my incorporation papers in April of 2000, which is when the dot-com bubble really burst. Nobody really knew the significance of that date at that particular time, but starting a new company and raising capital was really tough. So I basically had the business plan and the business model and was trying to raise capital for it. I realized there was no capital to be raised at the point in time. More or less, I just started doing the research for AirSage, which was looking at the fact that most people now were using cellphones and those cellphones have location capabilities that could be useful for a number of different things, a number of different applications.
Q: So how’d you end up tracking traffic patterns?
A: The company evolved basically because a friend of mine, who was a professor at Georgia Tech, asked me one day about whether we could use this location capability to determine how fast cars were moving on the roadways. I didn’t know that market at the time, but it is a market known as intelligent transportation systems, or ITS. We went to the Georgia DOT’s traffic management center in Grant Park. In essence, they received funding for that just prior to the Olympics, which allowed them to build the center and they buried fiber-optic cable along 40 miles of I-75/85 and they put sensors on the road to monitor the speeds with video cameras and message boards. The system was seeded with about $150 million from the Georgia Department of Transportation. Since that time, they’ve spent roughly $20 million a year to operate, maintain and expand that system. It now covers about 140 miles of interstate. So the Georgia DOT has about $300 million invested in a system that allows them to monitor traffic flow on 140 miles of interstate. To put that in context, Georgia has 1,400 miles of interstate and 35,000 miles of other roadways that people use to commute from Point A to Point B. It would be impossible to spend that same amount of money to expand to all those roadways using traditional technology.
That’s when I saw the opportunity. Traffic in Atlanta is a sore spot for most everyone who lives here, and it is the same in most other cities around the country and the world. It made terrific sense. About 260 million Americans out of a population of 300 million have cellphones, and it just seemed like a good way to monitor movement of vehicles in traffic. Every cellphone can act as a traffic sensor.
Q: When did you have this epiphany?
A: Late 2001, early 2002.
Q: Did it click for you all at once?
A: It did actually, when I went with this friend of mine down to the Georgia Department of Transportation and saw the investment they had made trying to monitor traffic and I understood that literally billions of dollars were being spent all over the world by companies trying to collect and distribute traffic information.
Q: You talked earlier about how you gave up the funding quest early on. Did you ever raise money?
A: I went a year and a half without raising any money. Then I managed to get some funding from friends and family. Then, in 2004, one of my neighbors called me and said he had a friend in from Zurich, Switzerland. His friend had just started an angel investment group in Zurich and got very interested in AirSage. He came by the house on a Sunday afternoon, and we talked. I gave him my business plan. The Switzerland group became my primary investment group.
Q: What advice would you have for a would-be entrepreneur?
A: Get ready for a roller-coaster ride. The highs are higher and the lows are lower. Some people are made for it, and some people aren’t. For me, I wouldn’t have it any other way.
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