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Summary:

Forget Web 2.0, and think VoIP when it comes to start-ups that are kicking the bucket. Tello, a San Mateo, Calif.-based start-up that launched with much fanfare back in January 2006, is no more, becoming one of the first high profile causalities in the voice over […]

tellologo.gifForget Web 2.0, and think VoIP when it comes to start-ups that are kicking the bucket. Tello, a San Mateo, Calif.-based start-up that launched with much fanfare back in January 2006, is no more, becoming one of the first high profile causalities in the voice over the Internet space.

An early player in the “presence” market, the company had all the buzz it needed to get started. Like most others, we were guilty of getting too impressed by the long list of luminary backers, and wrote about the company when it launched about 14-months ago.

Tello was the brainchild of Jeff Pulver, a VoIP visionary and founder of the VON conference. The company was launched in 2004 and raised about $5.5 million in series A funding from the likes of Eagle River (Craig McCaw’s investment arm), Evercore Partners (Michael Price’s investment vehicle), Rho Ventures (former Apple CEO John Sculley), and Intel Capital. That was followed by a $10 million series B round last July, led by BCE Capital and including all the previous investors.

Acting on a reader tip, we made a few calls and were able to confirm that the company had indeed pulled down its shutters. We decided to check out their offices in San Mateo and there was no “presence” of Tello, so to speak. (See accompanying photo!) The real estate company managing Tello’s space said the company had vacated the offices about a couple weeks ago.

tello2.jpg

We were not that sanguine about the company’s chances, given that it was in an increasingly crowded space where leviathans like Cisco, Avaya and lately Microsoft roam with abandon. Here are few lines from our original post:

Buzzwords, and pedigree of the investors might help ensure headlines, but it is hardly a slam dunk. Tello would need a lot of things to go right before it can be declared a success … My initial reaction to the service is that it might suffer from feature creep, and will be tough for actual users to adopt. And who really knows how well it will scale.

Anyway the company did not run out of money, but instead had a mutiny of sorts. Apparently the feature creep was enough for the engineering staff to up and quit, instead of grappling with ‘visions.’ A hallucination is more like it! So who’s next?

By Om Malik

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  1. …well, Om, they may not be next…but look–they’re already gathering wood for the Vonage casket…and the headstone’s on a flatbed truck heading for the cemetery…

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  2. I think preparing for Vonage’s funeral is a tad premature, though I wonder about their timing …

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  3. ….Add Glophone to the VoIP graveyard as of March 13, 2007, as per announcement on their site. http://www.glophone.com

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  4. Thanks Patrick. Just posted ….

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  5. just voip? just web2? all of the trash around the valley is only floating due to the high tide of the stock market, just like in 99.

    the tide is going out, any company that was “marginal” as of march 2007 is just running out the clock. 2008 is going to replay 2001. expect applicants to start seeking “solid” companies again.

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  6. Looks like DOT com companies again. All the big successful upstarts shutting down, but in this case, they did it to themselves. VoIP in general is here to stay, though. Lets hope the more innovative companies stick around long enough to help it progress.

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  7. [...] Tello, a complicated company with a complicated product around “presence” (letting people find you when you want them to, and not when you don’t), has quietly disintegrated. [...]

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  8. Vonage will be eaten by a competitor, sooner or later. Likely sooner. Once their ear acqusition burn rate gauge nears E, they’ll be snapped up. My first guess is AT&T. Second and third is a tie between Verizon and AOL.

    But the big question is who owned (owns?) Verizon’s fancy digs in Holmdel. Could it have been part of the Death Star at one time?

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  9. Verizon’s fancy digs in Holmdel?Did you mean Vonage? If so, it was owned by Pridential. It was never part of Death Star.

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  10. Errmmmm…looks like they just moved offices to Campbell. Take a look at their “contact” page now.

    Cheers,

    uraslacker

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