Phone 2.0? A New/Old Way to Get Out the Word

One-to-many dialing service uses VoIP to broadcast your alert or reminder to all who need to hear it.

By Adam Stone | Posted Sep 15, 2008
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Here's an unlikely proposition. What if technology had made a tedious task faster and more efficient, then you came up with a product that essentially returned to the old way of doing business?

It sounds a dicey proposition, but that's essentially the business plan behind Phonevite, a one-to-many phone dialing service.

Contemporary wisdom says the fastest way to convey a message to a large group of people is via e-mail. The Phonevite premise is that a good ol' fashioned phone call sometimes can be a lot more effective, even in these BlackBerry days.

"When you need to cancel an event or change the venue at the last minute, e-mail doesn't do it. The phone is still the best way to reach everyone immediately," said John Nahm, Phonevite CEO and co-founder along with Kalvin Kim.

The company opened its doors in January 2007 and launched its beta service six months later, inviting users to test drive the program for free. A premium service went live in February 2008, though the free service continues to operate.

At present, the free service allows a user to call 25 recipients at a time, while the pay service accommodates 2,000 calls at the cost of a nickel per successful call. The free service tacks on a Phonevite promotional blurb at the end of each call. There are no paid ads.

"We might do [ads] in the future and we definitely have the ability to do it, but right now we are focusing more on our own growth. Once we have a good amount of calls, then we might open that to advertising," Nahm said. "But currently there is enough uptake of our premium service that it provides a cushion to run the operation in a margin-positive way."

Nahm isn't disclosing user numbers at this time.

Phonevite's operation is entirely VoIP based, something Nahm says gives the company a certain degree of operational comfort within which to operate. Basically, IP creates the potential for more reliable high-volume calling.

"Our servers are sitting here in San Jose and we have to place 1,000 calls in New York City. The traditional phone network would have all those phone lines tied up, all going long distance all the way to New York. When we use Voice over IP, our servers convert all those audio files into voice over IP format and we actually send those calls through VoIP all the way to the last mile."

If reliability is the upside of a VoIP-based system, there are nonetheless some cautions to consider. In particular, Nahm thinks a lot about security.

"Voice over IP is a very customizable technology if you know what you are doing," he said. "If we wanted to, we could broadcast thousands of calls from the 'White House' caller ID."

Users could likewise find ways to make trouble, if they were sufficiently determined. Thus Phonevite takes various precautionary steps. A new user is given a security code upon registration, a code that must be re-entered before one can begin using the system. This verifies the user's affiliation with a particular phone number.

First-time users connecting to the service via a Facebook or Google widget likewise go through a call-back routine as they begin using the service.

Phonevite also explicitly prohibits commercial use of its service: That is, no telemarketing.

In fact, recipients of Phonevite calls will hear a short message giving them the option to opt out of receiving further calls from a particular user. If a single user draws too many opt-outs, system managers likely will assume misuse and block that user.

"There has been a lot of consumer backlash against these kinds of calls as well as a lot of regulation prohibiting that kind of usage," Nahm said. "It could be a legal quagmire and so we want to really proceed cautiously."

"Maybe when we hire 10 lawyers we will do it," he quipped.

Looking ahead, Nahm is optimistic that people will come to recognize the limitations of e-mail for certain kinds of communication.

"We see a big demand in this kind of service. Today we have e-mail, and a lot of that goes one-to-many, but there is no well-known feature or service that allows you to do 'to all' over the phone," he said. If people buy the premise, "we could do one million calls an hour, based on demand. We could easily scale to that level."

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