Fon: a billionaire Wi-Fi Utopian and his Blog Chorus

Few start-ups encapsulate the desperate utopianism of the times so much as Fon Technology.

Created by the Argentinian dot.com billionaire Martin Varsavsky, who built and sold the Spanish portal Ya.com and ISP Jazztel before the bubble burst, at the heart of Fon is a soulful of hope.

Fon sets out to create a virtual 'roaming' network based around individual subscribers (and friendly ISPs) opening up their Wi-Fi networks to strangers. It requires special software, which only works with a couple of modems at the moment, but Fon is betting that for participants, the rewards outweigh the pain and the risks. Honoring the dot.com tradition, Fon will be buying $50 Linksys routers, and selling them to members for $25, reported Fortune magazine.

Last week Fon announced it had raised $21.7 million from Google, eBay (via Skype) and Sequoia Capital.

It certainly faces problems aplenty. Ubiquitous 3G data networks have relegated Wi-Fi to a few captive niches, and elsewhere it's either a loss-leader or a second-rate service for the needy. There's little gain for margin-squeezed ISPs to invest in the venture, and convert potential customers into freeloaders, and punters risk their pristine networks clogged by P2P traffic and porn downloads.

In short, it's a venture that requires a huge leap of faith.

But the story took a further twist as the week progressed, when the Wall Street Journal reported that Fon's paid "advisory board" heard the penny drop, and rushed to their blogs to praise the venture.

This so-called "advisory board", it transpires, is rather short on data communications technology experts and hard-nosed business experts - only one, David Isenberg has any chops in either area. But it boasted of an abundance of technology utopians, the kind of people who form the backbone of any conference about blogging. Not only is Esther Dyson represented, but the board also boasts no less than three "Fellows" of the Berkman Center, a sort of new age think-tank attached to Harvard Law School: Isenberg, David Weinburger and Dan Gillmor. The irony of discovering this professional blog 'A-list', one that usually never shirks from advising others on "ethics", itself being caught shilling, did not go unnoticed.

But this isn't the most intriguing part of the story, which Varetsky inadvertently highlighted when he defended his happy blogging board.

Veretsky said none of the payola bloggers wrote about Fon "because they're going to get paid," he told the WSJ "These are people who love what Fon is about."

Undoubtedly so, and therein lies the problem.

With a traditional business, an advisory function should be bold enough to bring the executives the bad news, which is often painful, and ensure executive decisions are made with due diligence. Can a board comprised of happy-clappy, true believers perform this role? Hardly. Utopian faith will trump rational decision-making at every opportunity.

The real role of Fon's "advisory board" is really that of public relations operatives. In today's Observer, John Naughton points out several of the deep flaws in the thinking behind Fon, and reminds us how a private bathroom-sharing start-up ("Pee.com") would fare. We need only note that none of these issues were raised by Fon's own "advisory board".

And this is how business is conducted today. For, by and amongst true believers. ®

Related links

Fon

Blog Buzz on High-Tech Start-Ups Causes Some Static -[WSJ]