The Karma is a Different Kind of Hotspot – 3 Observations

About a month ago, I decided to buy a Karma Wi-Fi hotspot. I was curious about the idea of a social hotspot, so I wanted to get a sense for how the experience works. The concept is pretty intriguing and simple. You buy a Karma hotspot and it comes with 1 GB of data. When you need more data, you can buy it from Karma for $14. Unlike subscription plans, there’s no concept of monthly usage or rollover – once you’ve bought or earned extra GB of data, they’re yours to use until you’ve used them up.

I am a bit of a data junkie, so I bought the Karma to supplement the Verizon HotSpot I have on my Samsung Galaxy S3 and the LTE data plan I have for my iPad Mini. More on the differences shortly.

The social part of Karma is what does make it different from other hotspots. When your Karma hotspot is on, other people (strangers) can connect to your hotspot. When they connect to your hotpsot, you and the person who connect earn an additional 100 MB of data for your account.

After using the Karma for about a month, I have a few observations to share:

Karma is not (yet) a replacement for a traditional hotspot based on my needs – The one big drawback I found with the Karma hotspot is the current coverage network. The Karma network runs on Clearwire’s network, so it’s not available everywhere. It works fine in my home area of San Francisco, but it did not work in San Diego. Having a hotspot that doesn’t work in the places where I live and travel means that it will remain a supplementary device for now. Probably not an issue if you live within a coverage zone and don’t travel much.

The social elements of Karma changed how I use the device compared to other hotspots– With my traditional Verizon hotspot, I only turn it on when I want to work. With my Karma, my behavior is really different. I leave it on all the time. I basically leave it on all of the time because I want other people to connect to it and use it (and get some free bandwidth for myself). This is actually almost the polar opposite of how jealously I guard the several megabytes I get per month from Verizon. Having observed my own behavior on this front, I can see how (at scale), Karma could build out a network of access points in urban areas where a consumer would have a reasonably good chance of being able to find a Karma connection nearby. All you would need is a sufficiently dense collection of users who leave their devices on so that others can connect. It’s a pretty clever way to hack building out a mesh or community network of Wi-Fi access, subject to the coverage network that Clearwire can offer.

Also, I have to say that getting an email telling you that someone else is connecting to your hotspot initially felt creepy. But over time, it started to actually feel kind of cool – it was nice to know that I was able to share some Wi-Fi with others and give them Internet access without cutting into my own data budget.

The pre-paid model is a great deal for casual users – Karma is not the only company that could or does offer pre-paid hotspot service. The challenge with hotspot subscription services is the cost – they aren’t cheap and if you don’t regularly use data on the go for a tablet or laptop, it might not be worth it to subscribe. But the Karma offers an interesting bridge – it’s fairly cheap to purchase, extra GB of bandwidth are expensive if you’re a heavy user ($14/GB on Karma vs $20/6B/mo on Verizon) but a deal if you’re only an occasional user and willing to share. I suspect this product will appeal to a different set of customers.

Overall, I think the Karma is an interesting product. Not perfect, but definitely feels worth the money and has given me a new way to think about sharing and getting Internet access.

As always, you can leave a comment below or chat with me directly on Twitter @chudson.

*Disclaimer – I am not an investor in Karma nor do I have any relationship with any of the principals at the company.