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Monday, January 12, 2004 - Page updated at 12:00 AM

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Wildseed: a startup on the cusp of success with teens

Seattle Times technology reporter

LAS VEGAS — Past the live karaoke demonstration, past the dealer selling inflatable mascots, past the computer innards laid out like fine jewelry, Wildseed sells promises from a corner booth.

At the Consumer Electronics Show here, the Kirkland company displays wireless phone boxes that hold no products and it shows off snap-on faceplates that aren't yet for sale. Wildseed is a startup on the cusp of something.

At a time when the U.S. wireless market hasn't effectively piqued the interest of young adults in ways comparable to Europe and Japan, Wildseed has developed a cellphone methodically designed for and tested by teens.

To be sure, if Microsoft and AT&T Wireless raised a hip and somewhat rebellious teenager, this phone would be it.

"It's quite interesting," said Timothy Lee, the general manager of Hong Kong-based cellphone distributor US Telecom, after receiving a demonstration Friday.

He said the phone would probably appeal to teens in China, where wireless-penetration is high. "Some of the features are pretty unique."

Wildseed is here on a cost-savings mission — to reach industry pundits, to reassure customers, to capture media attention and industry awards, all at the same time and in the span of four days.

But how does one get noticed at a trade show dominated by industry giants and which spans 38 football fields in a town with slogans like: "Seven deadly sins? We demand a recount."

Board member Jonathan Lazarus, a former Microsoft marketing executive who worked on introducing the ubiquitous Windows operating system, said part of CES's attraction is garnering industry attention. The other part is serendipity.

"I had a meeting with someone that runs 150 phone stores," Lazarus said. "He just happened to see (the booth)."

On the first day of the world's largest consumer-electronics trade show, Wildseed already was receiving attention. The company was named a 2004 Design and Engineering Showcase honoree and a nominee for Tech TV's Best of Show competition.

Its phone is showcased alongside products from the largest electronics companies, like pieces of fine art.

Some employees conduct demonstrations and hand out beach balls bearing the Wildseed logo. Others troll the convention for industry pundits, retail buyers and media to bring back to its booth. They sell a vision begun four years ago, one beach ball at a time.

Eric Engstrom founded the company in February 2000 after eight years at Microsoft. He co-invented Direct X, a precursor of sorts to gaming console Xbox, and served as general manager for MSN Internet Access.

The original idea was to create a wireless service for teens, but Engstrom quickly decided the existing operating platforms, ones that delivered software to cellphones, weren't compelling enough.

"We naively thought that building a phone would be easy," Engstrom said.

"Software was difficult enough. But the other parts were sufficiently difficult as well."

The company's first four employees spent a year conducting market research and brainstorming features for the phone.

Among the hundreds of ideas, some stuck, while others fell flat. Among its worst misconceptions: two-button Morse code as a means to more efficiently deliver text messages, a wildly popular feature among teens. (They scrapped the idea after teens rejected it in focus groups.)

Nearly four years later, the company is preparing to ship its first product, one protected by 100 patents.

Dan Shapiro, the company's lead program manager, who during his time at Microsoft worked on Windows XP and its still-developing successor, code-named Longhorn, said every feature was developed to appeal to teens.

A,b,c,d,e — oh, forget it

The phone, which at its heart is a computer running on the Linux operating system, resembles a kidney bean because that shape allowed the teens to more readily grip the phone with four fingers, while text messaging with their thumb.

Wildseed positioned the dial keys on top to emphasize instant messaging. Likewise, it switched the alphabet order for the number "3" key from "d-e-f" to "e-d-f" to accommodate heavier use of the vowel "e."

The phone includes a digital camera and FM radio. A feature called "air text" allows users to type a short message into their phone such as "Hey, cutie." When they wave the tip of the phone back and forth, it spells out the message in red, digital dots.

Beyond the phone's design, the company developed a snap-on faceplate called "Smart Skin" that lets users change the personality of their phone from the inside out, much in the way teens change outfits.

The various skins contain memory that alters the content of the phone to match the accompanying skin.

Its Nelly skin, for instance, displays songs, video clips, ringtones and screen designs from the multiplatinum-selling hip-hop artist of the same name.

Snap a French Kitty skin on the same phone and it transforms into fashion accessory replete with ringtones, a dancing game, icons and photos featuring the chic feline logo.

Wildseed said the company staff's Microsoft pedigrees helped ensure careful design of the product, while its marketing and sales teams have the wireless backgrounds necessary to interact with customers and the carriers.

"Nothing at Microsoft is an accident," said Lazarus, the board member. "It's a convenient way to think about it. (This product represents) a lot of very hard work, a lot of discipline."

The company has signed a deal with Korean equipment maker Curitel to manufacture the cellphones and Smart Skins. Wildseed has commitments from multiple U.S. wireless carriers to begin selling the phones in stores this spring, although the partnerships haven't been formally announced.

The wireless carriers will determine the retail price of the phones, but the company said they could run anywhere from $150 to $200, depending on rebates. The Smart Skins will cost $25 or more apiece, depending on the content carried on the phones.

Wildseed would receive a royalty for each phone and faceplate a carrier sells to consumers.

Barriers to cross

Still, the company faces significant barriers: convincing customers its software is cool enough to justify purchasing the phone (one doesn't work without the other), and that the phone is worth its price.

Engstrom said Wildseed hasn't relied on having one product depend on the strength of the other; it designed the faceplates as a stand-alone item.

Regarding the price, he said it falls under the $200 cut-off point for higher-end teen products. Whereas people might associate kids with inexpensive products, they're also apt to spend $100 or more on the right shoes or jeans, he said.

Regardless, employees say they feel optimistic. The look and feel of the Smart Skins packaging is in place.

At its last trade show — one held by the Cellular Telecommunications and Internet Association — the company compensated for not having a complete packaging design by dressing up as 1950s carhops, complete with roller skates.

Now, it's time to wait and see.

"It's absolutely way more ambitious than I thought it was," Engstrom said of the product's scope and the time it took develop it. "But when we all got done, it's working. I think frankly a lot of us are amazed that we made it."

Monica Soto Ouchi: 206-515-5632 or msoto@seattletimes.com

Copyright © 2004 The Seattle Times Company

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