The Digital Skeptic: Your High Tech Doesn't Matter Without a Sales Staff

NEW YORK ( TheStreet) -- Dow Draper has this to say to Verizon ( VZ), Sprint Nextel ( S) or Dish Network ( DISH) investors spinning valuation castles in the air on talk of Clearwire's ( CLWR) possible spectrum sale:

"Technology is a marvelous thing," Clearwire's senior vice president and general manager of retail told me a month or so back. But the human factor is the real challenge. "It's all about the relationship."

Draper should know. This executive's desk is the one where the sales buck stops at the company, and this longtime sales pro turned out to be a remarkably candid on the challenges of turning a raw technological asset -- such as Clearwire's wireless spectrum -- into a real business.

His lesson? Relying exclusively on technologies such as the Web to sell a new technology simply no longer pays. Humans are the key.

"When you are selling a new idea in wireless, explaining how it works is not something you can find on the Internet," he said. "Face-to-face contact is essential. You need to proactively get to customers and find out what they want."

In Clearwire's case, that means a vast, pricey -- and utterly old-school -- national network of skilled human salespeople.

"We have an aggressive team of territories and sales reps," Draper said. "They go out and reach out to clients and make sure they understand the value."

Take Draper's latest product, called Clear Professional.

On its surface, nothing could be simpler technologically. Clear Professional mimics traditional wired broadband data services provided by a cable or phone company. But it does so without wires. Instead, a wireless cell modem is hidden inside a desktop data device that connects to Clearwire's wireless network like a smartphone. It offers reasonably fast Web access and backup services to small businesses. And while far from the fastest Web experience on the market, assuming there's coverage I would expect the service to be a reasonably good fit for many small firms.

The price is also most definitely right: Fees range from $24 to $45 per month. That's darn cheap for business data access.

But, in spite of its simplicity, to me Draper is clearly correct: Even something as easy as a cell modem disguised as a desktop router really is confusing for the average consumer. That makes a pricey sales and marketing team indispensable for Clearwire.

And it's something to think about for Verizon, Dish or anybody else trying to buy Clearwire's spectrum and offer services:

"It's very difficult to cut the middleman out this equation," Draper said. "Even the simplest things are complex to sell."

Humans still make the money
Suddenly the sky-high valuations whispered for Clearwire's spectrum assets -- the numbers here are in the billions -- get dear indeed, because, very quietly, smart money is betting Draper is probably right: Humans are needed, and teams of salespeople change dramatically the economics of launching services. (And in turn, the value of the underlying assets such as Clearwire's spectrum.)

Look around and you will find that by-hand selling is very much in vogue now in emerging tech. For example, last week, Bain Capital Ventures, the VC unit of the never-lose-a-penny Boston-based Bain Capital, announced a blockbuster $27.5 million investment in a New York-based small-business software service called Booker. Guess the answer when I stopped into its lower-Manhattan office to ask Booker CEO Josh McCarter exactly where most of these fresh millions were going:

Straight into salespeople.

"We sell the platform one business at a time with an experienced sales team," he said. "I need that team to grow."

McCarter explained that even though his product is about as simple to use as he could make it, he and his investors understood they needed to factor in the cost, risk and headache of complex human sales groups when trying to make money with a new product such as Booker.

"You need to have that handholding," McCarter said. "It's the only way."

All this raises sobering implications for investors dreaming of profits effortlessly gushing from Clearwire's wireless spectrum. Think about it: If Bain Capital is willing to pay for human sales teams for its technology investments, that means pretty much any shop with a new idea needs a pricey sales team. And that implies that no matter what company winds up with Clearwire's assets, it will face sales challenges like Clearwire did.

And probably similarly lean prospects.

"Tomorrow is a fabulous thing," Draper said. "But you still have to sell it."

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

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