
Launch HN: Necto (YC W18) – ISP Starter Kit - montasaurus
Hey, we&#x27;re Ben and Adam, the founders of Necto (<a href="https:&#x2F;&#x2F;nectolab.io" rel="nofollow">https:&#x2F;&#x2F;nectolab.io</a>). We&#x27;re enabling local entrepreneurs to start their own Internet Service Providers by providing network engineering, monitoring, and business support as a service. We&#x27;ve seen huge improvements in last mile distribution technology in the last few years (cost, reliability, thoroughput, ease of deployment), but it hasn&#x27;t translated into an explosion of ISP operators. We want to change that by allowing non-network-engineers to deploy their own networks and compete with the incumbents. Necto handles the networking setup, deals with the backbone providers, helps with distribution planning, and provides ongoing monitoring and support. The operators pick the markets, set the prices, and provide a great overall experience to their customers.<p>We started our own ISP here in the underserved San Francisco markets of Bayview and Portola, with more neighborhoods to come. If you live in SF, we&#x27;d love to be your ISP (<a href="https:&#x2F;&#x2F;joinnecto.com" rel="nofollow">https:&#x2F;&#x2F;joinnecto.com</a>). If you&#x27;re interested in starting an ISP, we&#x27;re looking for an initial batch of 5 operators. You can learn more about that here: <a href="https:&#x2F;&#x2F;nectolab.io" rel="nofollow">https:&#x2F;&#x2F;nectolab.io</a> .<p>Our product is a combination of a few important requirements for running an ISP effectively: a centralized Network Operations Center (NOC), a Operational Support System (OSS) to manage the subscribers and get visibility into issues, and an Operator&#x27;s Handbook that covers the how-to&#x27;s of running an ISP (both technically and our advice on the business side). Our NOC will handle things like BGP, routing, reachability, hardware issues, upstream connectivity, and distribution provisioning. The OSS supports managing subscribers, diagnosing common issues, and performing installations. Our handbook provides a list Standard Operating Procedures for day-to-day management of the ISP and, in combination with our community of ISP operators, strategies on how to effectively launch and grow an ISP.<p>We charge an initial setup fee and an ongoing percentage of revenue. The initial setup fee covers us designing your initial network, sourcing your backbone connection, and the cost of the core routing stack. The ongoing percentage of revenue aligns our incentives with our operators and covers monitoring, the NOC, and ongoing enhancements for the software and community. The exact numbers depend on the scale of the network the operators are building.<p>We&#x27;re staunch supporters of Net Neutrality and increasing broadband penetration without sacrificing privacy. We don&#x27;t sell personal information or throttle traffic (and our operators won&#x27;t either). We believe that the future is in highly localized ISPs competing on service quality. We&#x27;re excited to tackle this problem because we&#x27;ve had to deal with poor internet service before, and we now know that you can make a great business out of providing better quality access. Our backgrounds are in enterprise automation technology and the home services industry (air conditioning, plumbing, electric). We&#x27;re happy to answer as many questions about any of this as we can! If you&#x27;re at all considering starting an ISP in your neighborhood after reading this, let us know at nectolab.io and include your HN username!<p>Thanks,
Ben &amp; Adam
======
toomuchtodo
Is what you're offering substantially substantive above
[https://startyourownisp.com](https://startyourownisp.com)?

I won't mince words: you're asking customers to outsource the core pieces of
their business (netops, backhaul, billing) that they should be competent in,
which puts them in a precarious position if you exhaust your runway, decide to
move on to another venture, or are acquired by a less-than-ideal org.

Full disclosure: Muncipal/coop broadband proponent.

~~~
montasaurus
We definitely want to make sure that nobody's left high and dry in any set of
circumstances. Obviously, we hope to happily partner with our operators
indefinitely, but we wouldn't ask someone to commit their capital and ask
their customers to depend on them without having these contingencies covered.
Companies have started & run ISPs before Necto (of course), but there are
significant cost and knowledge hurdles that keep a lot of operators out. I
think of it like with Squarespace, where the knowledge of self-hosting a
website may be outsourced, but the end result is broader access to the
benefits of having an internet presence.

Also, big shout out to Graham (the author of startyourownisp.com). We met, and
he's super knowledgeable. I encourage anyone interested to read his guide,
it's very good. We don't see our offerings as directly competitive, and share
a common goal of increasing connectivity.

~~~
toomuchtodo
Great to hear. A rising tide lifts all boats. Appreciate the reply.

------
dsl
Starting an ISP is relatively easy... get an uplink, some rack space
somewhere, a router, hire a smart high school kid for tech support, and you
are off to the races.

The really hard part is last-mile connectivity. You are either on someone
elses lines (cable, DSL, etc), dealing with NIMBYs to bury your own lines, or
working around line of site to do wireless. It isn't clear that you've solved
this problem (or even from your website what you are using for last mile).

~~~
montasaurus
It's largely an infrastructure business at the end of the day, and not without
its challenges. The real problem is that there are people willing to take on
these challenges, but they get stuck as early as the "get an uplink" part of
that process.

Just digging into that piece, there are a lot of decisions. Burstable or
dedicated? Why are they billing based on 95th percentile? How much bandwidth
should I budget per subscriber? The typical uplink quote we've seen has 6
different tables with like 80 different prices on it. If you've bought it
before, you know what the tradeoffs are. If you haven't, that's a steep hill
to climb just for step 1 of the process.

We deploy fixed wireless here in SF, mainly 60GHz and 5.8GHz. They require
line of sight, but something like Baicells could be a good fit for areas where
that's more of an issue. It's not just the NIMBYs when you go to hang/bury
your own lines, the incumbents will box you out on power poles and generally
make things difficult for you.

~~~
dsl
Thats like saying you are helping people start a taxi business because they
get confused when it comes to warranty options on buying their first car. If
they don't have the fortitude to work out a transit contract, the ISP business
might not be for them.

I think it would be better to frame your business as a franchise opportunity.
At the end of the day it really sounds like your customers are a capital
source.

~~~
montasaurus
I don't think of it as a question of fortitude as much as opportunity cost.
We're looking for operators that would be successful running other types of
businesses instead. We want them to choose the ISP business over one that they
might be more familiar with. No doubt they could come to understand a transit
contract and all the other components, but it's frictions like those that
reduce the number of people who decide being an ISP is the right business for
them. If you can 1) find customers and 2) provide a great service experience,
we want you selling internet! You can spend a lifetime getting good at those
two things. We'd rather our operators do that, and we can handle the
networking for them.

------
kbaker
Interesting project. With ARIN effectively out of IPv4 space, where do you get
IPs from for a new ISP? Does it have to be transferred/purchased from an
existing block? I am assuming you are setting up IPv6 as well for your
customers, are you deploying some sort of CGNAT?

~~~
montasaurus
We've been able to source enough IPv4s for our needs so far, but we don't
expect that to last forever. ARIN is cutting off the allocations, but there
are still a decent amount available for lease.

------
BroadcastSunny
Net Neutrality has expired but remember it's on the senate floor this week to
bring it back. If you are for net neutrality, contact your senator. (You can
find their contact information in the upper left hand corner at
[https://senate.gov](https://senate.gov) )

Despite that, I'm glad to see that you're doing this even if net neutrality
does come back. I remember the days of Earthlink and Mindspring. Now the ISP
companies have become "too big to fail" and I'd like to see alternatives.

------
slovette
If you guys haven’t, you should really look at
[http://Sonar.Software](http://Sonar.Software)

That piece of software has been an amazing addition to our WISP here in
Colorado. Simon and his team have made extreme strides in provisioning and
IPAM management and continue to make bizops more and more turnkey.

The real magic though is the whole thing is VERY API focused. The entire
platform can be automated and made more powerful with a little dev time.

We do a ton of 60Ghz (ignitenet), 24Ghz, 11Ghz and 5Ghz (ubnt & mimosa) links
to cover about 200 Sq miles. We’ve been mostly following a modified webpass
model with redundant PTP and multiple interlinking. A few PTMP hub/spoke exist
too where needed (SFH).

We’ve been at this for a few years and have a dedicated lab and geo region
that we test all kinds of new ideas and equipment both wireless and new fiber
tech (10g GPON, bonded RF).

------
patrickg_zill
I was under the impression (would be happy to be wrong) that the real problem
was the last-mile of fiber, or DSL over copper and the dealing with the ILEC
that involves. Basically the ILEC won't sell you DSL at a price that allows
you to make any money. Am I correct about that?

~~~
montasaurus
Getting good terms from an ILEC that you're directly competing with will be
difficult. We advocate building your own last mile infrastructure where
possible to get around that. Here in SF, we're using fixed wireless to do
that.

------
atourgates
How do you guys handle the physical side of network operations with your
partners?

I live in a rural area in Idaho, and we've got a pretty great WISP here. But,
I know that the owners and employees are close to retirement age, and I've
often thought of approaching them to see if they have any plans to sell the
business.

How do you handle physical, local network management with your partners?
Things like installing hardware customer homes and businesses, managing
outages at broadcast sites, and all the rest. Is that totally up to your local
partners, or something you provide training/management for on any level?

~~~
montasaurus
We monitor your infrastructure (out of band, where possible) and let you know
when things go wrong and how to fix it. When the fixing requires physical
intervention, we guide you through that. Similarly for installations, where we
teach you how to do them and you (or your employees or contractors) perform
the physical installation. We'll help you more generally with the business as
well, and share advice on how to effectively run an ISP.

Let us know if you speak with them--we're interested in having an existing ISP
in the batch.

------
nickreese
Ben & Adam — Solid work. Maybe we can help expand the reach of the companies
you partner with. We love helping small ISPs get their networks found by
consumers looking for choice. Reach out to us at
[https://broadbandnow.com](https://broadbandnow.com) and let's chat.

------
yodon
In case you haven’t found this lead yet, Microsoft has had a number of funding
initiatives in the past looking to encourage startups to provide better
connectivity to underserved markets. The first link google found on the
initiative [0] is fairly old but I’m pretty sure this was/is a multi-year
effort that is likely still active and if not probably still has significant
advocates within the company that are worth finding if underserved markets are
relevant to Necto.

Full disclosure: co-founder of a Seattle-based startup that was invited into
the Microsoft Ventures Accelerator and found it an incredibly valuable
experience

[0] [http://fortune.com/2015/11/16/microsoft-cheap-
internet/](http://fortune.com/2015/11/16/microsoft-cheap-internet/)

~~~
montasaurus
Very cool program, thanks! There are a few programs (both public and private)
that will provide funding for starting ISPs. It really shows that access to
capital isn't the main roadblock people face when starting ISPs. Or rather,
that other groups are working to solve the capital access issue--we're working
on solving the others.

------
fiatjaf
If you're hacker looking to start your own micro-ISP using cool stuff, I think
you should take a look at [https://altheamesh.com/](https://altheamesh.com/).

~~~
montasaurus
I saw a demo of this in Oakland a few months ago. I thought it was super
interesting, especially the way they're extending routing concepts. It feels
like a very elegant technical solution.

------
csmajorfive
Very cool, congrats guys. I am a Monkeybrains customer with a bunch of their
equipment on my roof (I signed up for their enhanced "FTTH" campaign) and have
wondered about replicating the service for myself and my neighbors if I were
to move elsewhere.

Do you have an operating model for these small ISPs? Specifically I'm curious
what the breakeven point is.

~~~
montasaurus
Thank you. How many neighbors are you thinking? It really depends on how many
buildings they are in / how far apart they are, and what percentage use you as
their provider. At smaller scales, it's much better to have an "in" with the
building (HOA, owner, etc.) so you can market more effectively, outweighing
the revenue risk of having a small number of customers.

------
willart4food
This is interesting, I do have a few questions that I could not find in your
FAQ:

\- how do you provision the last mile? Copper? Fiber? or Wireless?

\- Do you rely on the Local Exchanges? or is it on a case-by-case basis?

\- Is your typical ISP customer selling to business? Individuals? or is best-
fit an apartment complex/business building?

Thank you.

~~~
montasaurus
We use fixed wireless for our last mile (60GHz and 5.8GHz in SF). We haven't
been reliant on Local Exchanges. We'd typically be selling to residential end
users (single family homes and/or MDUs).

------
komali2
From what I've read so far, this is fucking awesome. I have a couple questions
about your "operators":

1\. Do you mean Comcast/ATT i.e. is this only a last-mile solution that must
connect to some hub of theirs?

2\. "We don't sell personal information or throttle traffic (and our operators
won't either)" \- how do you know this is true now, will be true in the
future, and if your operators are comcast/AT&T why did they agree to this?
(given that they are hell incarnate and would sell a baby to satan for profit
;) )

~~~
montasaurus
Thanks! Going through Comcast / AT&T isn't the only path to the internet,
plenty of other companies sell the backhaul services that we need--Hurricane
Electric, Zayo, Cogent, CenturyLink, etc..

Monitoring traffic and throttling it are both network-level interventions that
we won't implement or support in a way that can be abused like that. We don't
want to expose our operators to the liability of even collecting this type of
info.

------
manav
What kind of residential density would you require? Is this only feasible for
MDUs?

~~~
montasaurus
It makes sense for a wide range of densities. Getting MDUs is really nice,
because your marginal cost to serve another customer in the building is really
low. Downside is that it may be more competitive. Rural areas present a
different business model, where you may have to go long distances and charge
enough to support the infrastructure that requires. Single family homes in
suburban/urban densities are right in between.

Each of the cases can work, you just need to make sure you're running the
right kind of ISP for the market.

~~~
manav
What about backhaul? Is it wireless or is it designed as using a wireline
fiber backbone to wireless clients?

What kind of bandwdith levels are you targetting with your product and
hardware?

I think in the Bay Area you would want to be looking at near gigabit to be
competitive.

------
lsiebert
How does your join necto privacy policy compare to local ISPs like Sonic? What
about ISPs you help get started? Because your writeup about privacy is about
net neutrality and throttling.

I see nothing about limiting data retention, not selling member data, or
refusing to provide data voluntarily.

[https://www.sonic.com/privacy-policy](https://www.sonic.com/privacy-policy)

~~~
montasaurus
Sonic has a fantastic privacy policy. For comparison, we follow all the same
tenets and believe that both contractual and technical safeguards are the best
way to ensure our operators do as well. We should definitely be more public
about that to non-customers though--both so prospective customers know and to
make sure there's public accountability behind it.

------
icedchai
What's $25k get you? One tower / roof top location?

I'm real skeptical that this is profitable on the low end.

------
uniclaude
Great! This has the potential to help a lot of Americans (and more people,
even).

Quick question regarding your business model. Do you intend to charge forever,
or is there any option for your customers to get out after the setup if they
decide to grow their business with their own resources?

------
arrel
Amazing idea! I'd love it if the site could give some sense of how profitable
the business could be, and over what timescale. I don't need specific numbers,
just the fundamental expectations for a model: How do I calculate ongoing
costs? How many customers does it take to get to breakeven? What's the
marginal profit for a customer after that point?

It would be great to see a blog post about how joinnecto.com got off the
ground. "Be the savior the Internet needs and start your own ISP" is a good
slogan, but "Start a great business and save the Internet in the process"
seems even better.

------
djweis
"the underserved San Francisco markets of Bayview and Portola"

Next time you fly over the midwest, look at density. If you can see your
neighbor, you're probably not underserved.

~~~
terravion
I don't think he meant low density, he meant that even though there are a
bunch of people the incumbent telcos don't actually offer service there. The
Bay Area's internet is surprisingly fragmented. We couldn't get fixed
broadband at the old office when I know for a fact we were less than 100ft
from municipal 10 gig fiber.

------
whalesalad
It's a bummer that this looks to be a turnkey kit that does exactly what I
would imagine is the most fun part of building an ISP: network engineering,
building routing hardware, etc...

I see that your own ISP relies on PPPoE... is that a decision you intend to
rely on for the necto lab customers (other ISPs) or was that something you had
to do specifically in your own case? Have you seen any downsides to that? I
know as a consumer PPPoE is kind of a pain in the butt.

~~~
rjsw
What don't you like about PPPoE ?

~~~
montasaurus
When someone resets their router, it clears the auth details and their
internet stops working. With DHCP, it'll "just work" when the device comes
back up. You just need to be a bit smart about figuring out which device
belongs to who. DHCP Option 82 is a tagging mechanism that allows you to do
this without creating a hard dependency on the physical address of the
customer's router.

------
amelius
So how much money do you need upfront to start an ISP?

~~~
stefantheard
According to their on-boarding questionnaire $25,000USD

------
xur17
I'm really interested to see what comes out of this.

It's interesting to see you list apartment complexes as one of the target
markets - I've always wondered why more complexes don't just provide internet
access as a perk instead of outsourcing to Time Warner, AT&T, etc.

------
deepnotderp
Just wanted to say congrats!

Is this still bay area only or are you ready to expand to other areas?

------
z3t4
1) Roll out fiber to every house hold 2) Lease a few fibers to the nearest
Internet exchange. 3) Negotiate as much peering as you can, and buy Internet
transit 4) Profit 5) Work towards tier 1

------
SandersAK
This is so dope - I would love to do this in east oakland

------
goatherders
Having run a very large enterprise channel in the past, I'm a big fan of
powering new businesses this way. Good luck

------
wasd
Is it $25k per site? Suppose I want to ISP several buildings. Should I budget
$25k per building? How far apart can be?

~~~
dyeje
An ISP would be a total network I think, so it doesn't matter how many
buildings you connect to.

------
RyanShook
What about US markets outside the Bay Area?

------
WrtCdEvrydy
Can you guys bring it to Miami, I will be the first one signing up for
personal internet and an ISP.

------
kizer
I live in Bloomington, Illinois. So... I assume we'll be eligible in a month
or two?

------
notyourday
This is a solution for optimizing existing small ISPs that are overwhelmed by
growth, it is not a solution for starting an ISP.

If one cannot figure out how to solve all these problems himself or herself
that ISP will go out of business in a matter of months.

------
martinald
Is this wireless or FTTB? Can't really understand.

------
gonzo
Curious what your “routing stack” looks like.

------
osrec
Do you cater to the UK market as well?

~~~
montasaurus
Unfortunately not in this batch--mainly because of travel and regulatory
differences.

------
akskos
we really need change in the isp business (yeah, captain obvious here)

------
wittedhaddock
this is so awesome thank you hope it takes off in a big way

------
Rotdhizon
[redacted]

~~~
jarito
They mention several times that they require you have $25k of capital to join
the program. However, that probably only covers network deployment and other
costs like marketing so I would expect the actual outlay to be quite a bit
higher if you want to be successful.

