Failure Analysis
Starry's death was a textbook case of capital-intensive hardware scaling colliding with venture-backed growth expectations. The company burned through $312M in nine years while...
Starry \USA
Starry was a fixed wireless internet service provider (ISP) founded by Chet Kanojia (previously of Aereo) that aimed to disrupt the broadband oligopoly using millimeter-wave active phased array technology. The company deployed proprietary wireless infrastructure to deliver gigabit internet to urban apartment buildings without laying fiber, targeting underserved multi-dwelling units (MDUs) with transparent pricing ($50/month unlimited) and superior customer experience. The 'why now' was the convergence of affordable beamforming technology, urban density economics, and consumer frustration with cable monopolies. Starry raised $312M from top-tier investors and expanded to six cities (Boston, NYC, LA, DC, Denver, Columbus) between 2016-2022, positioning itself as the anti-Comcast with millennial-friendly branding, no contracts, and same-day installation. However, the capital-intensive infrastructure buildout, limited geographic density, and brutal unit economics of last-mile connectivity proved insurmountable without achieving massive scale.
Discover the reason behind the shutdown and the market before & today
Market Analysis
The US broadband market in 2024 is a tale of two worlds: the infrastructure layer has consolidated around three winners (fiber overbuilders, carrier 5G...
Startup Learnings
Last-mile infrastructure is a capital trap, not a software opportunity: Starry proved that fixed wireless ISP economics require $500M+ and 7-10 years to reach...
Market Potential
The US broadband market remains a $100B+ annual opportunity with 130M+ households, and the problem Starry targeted—cable/telco monopolies with poor service and opaque pricing—has...
Difficulty
Starry's failure was rooted in physics and capital requirements that remain unchanged today. Building a fixed wireless ISP requires: (1) Proprietary hardware R&D for...
Scalability
Starry's business model had fundamentally poor scalability due to linear infrastructure costs. Each new building required: (1) Site survey and line-of-sight analysis, (2) Rooftop...
Rebuild & monetization strategy: Resurrect the company
Execution Plan
Phase 2
**Step 2 - Customer Acquisition Platform (Validation)**: Launch a paid tier ($500/month) that includes: (1) AI-generated Facebook/Google ad campaigns with hyper-local targeting (building-level), (2) Landing page builder with A/B testing, (3) Lead qualification chatbot (credit check, address validation, installation scheduling), and (4) CRM integration (Salesforce, HubSpot). Offer a 60-day free trial to the 100 most engaged WISPs from Step 1. Goal: 10 paying customers at $500/month ($5K MRR) within 90 days, with 50%+ reduction in CAC vs. their previous methods. Validation metric: customers must acquire 20+ new subscribers through the platform to prove ROI.
Phase 3
**Step 3 - Full-Stack SaaS Platform (Growth)**: Expand to a $2K/month tier that includes: (1) Network operations dashboard (real-time outage detection, capacity planning, subscriber usage analytics), (2) Churn prediction and retention automation (AI identifies at-risk customers and triggers win-back campaigns), (3) Self-service customer portal (billing, support tickets, speed tests), and (4) Integrations with ISP equipment vendors (Ubiquiti, Cambium, Mimosa) for automated provisioning. Goal: 50 customers at $2K/month ($100K MRR) within 12 months, with 90%+ gross retention. Growth loop: ISPs refer other WISPs in exchange for 10% revenue share for 12 months.
Phase 4
**Step 4 - Marketplace and Moat (Defensibility)**: Launch a two-sided marketplace where: (1) Consumers enter their address and receive quotes from all available alternative ISPs (powered by BeamOS network planning data), and (2) ISPs pay a 5-10% take-rate on first-year revenue for customers acquired through the platform. This creates a flywheel: more ISPs → better consumer coverage → more consumer traffic → more ISP signups. Simultaneously, build proprietary datasets (building-level penetration rates, churn predictors, optimal pricing) that become increasingly valuable with scale. Goal: $1M ARR from SaaS + $500K from marketplace take-rate within 24 months. Moat: network effects (ISPs won't leave because their competitors are on the platform) + proprietary data (5+ years of penetration/churn data that new entrants can't replicate).
Monetization Strategy
**Primary Revenue Stream**: SaaS subscriptions with three tiers: (1) **Starter** ($500/month): Network planning + customer acquisition tools for WISPs with <5,000 subscribers, (2) **Growth** ($2,000/month): Full platform including operations dashboard, churn prediction, and customer portal for WISPs with 5K-50K subscribers, (3) **Enterprise** ($5,000+/month): Custom integrations, white-label customer portal, and dedicated success manager for fiber overbuilders and carrier FWA divisions with 50K+ subscribers. **Secondary Revenue Stream**: Marketplace take-rate of 5-10% on first-year revenue for customers acquired through the BeamOS consumer portal (similar to Zillow's Premier Agent model). **Tertiary Revenue Stream**: Data licensing to equipment vendors (Ubiquiti, Cambium) and infrastructure investors (Digital Colony, Brookfield) who want building-level broadband penetration data for market analysis. **Unit Economics**: $500-2K monthly subscription, $200 CAC (content marketing + ISP conference sponsorships), 12-month payback, 85% gross margin (pure software), 90%+ net retention (high switching costs once integrated into operations). **Path to $10M ARR**: 200 customers at $2K average = $4.8M from SaaS + $2M from marketplace take-rate + $500K from data licensing = $7.3M ARR within 36 months. Exit valuation: 8-12x ARR = $60-90M acquisition by T-Mobile, Verizon, or Google Fiber seeking to accelerate their alternative ISP strategy.
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